Risecomm Group Holdings Limited — Proxy Solicitation & Information Statement 2002

Jul 26, 2002

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 Singamas Container Holdings Limited, you should at once hand this circular, together with the enclosed form of proxy, to the purchaser or other 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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SINGAMAS CONTAINER HOLDINGS LIMITED

(Incorporated in Hong Kong with limited liability)

CONNECTED AND DISCLOSEABLE TRANSACTION ACQUISITION OF 46.22% INTEREST OF SINGAMAS REFRIGERATED CONTAINER LIMITED

Independent Financial Adviser to the Independent Board Committee

Dao Heng Securities Ltd.

This circular gives you further information of the conditional purchase and sale agreement dated 5 July 2002 entered into by Singamas Container Holdings Limited. A letter from the Independent Board Committee is set out on page 12 of this circular. A letter from Dao Heng Securities Limited, the independent financial adviser, containing its advice to the Independent Board Committee is set out on pages 13 to 19 of this circular.

A notice dated 26 July 2002 convening the extraordinary general meeting of Singamas Container Holdings Limited to be held at 9:00 a.m. on 15 August 2002 at Unit 604-606, 6th Floor, AXA Centre, 151 Gloucester Road, Wanchai, Hong Kong which is published in The Standard in English and in Hong Kong Economic Times in Chinese on 26 July 2002, is reproduced on pages 24 and 25 of this circular. Whether or not you are able to attend, please complete and return the enclosed form of proxy in accordance with the instructions printed thereon as soon as possible and in any event not later than 48 hours before the time of the meeting. Completion and return of the form of proxy will not preclude you from attending and voting in person at the meeting should you so wish.

26th July, 2002

CONTENTS

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
The Agreement dated 5 July 2002 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Information on Singamas Refrigerated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
Reasons for the Transaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
Connected and Discloseable Transaction and
Waiver From Requirement of Holding a General Meeting . . . . . . . . . . . . . . . . . . . . . . .	10
Independent Advice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
Letter from the Independent Board Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12
Letter from Dao Heng Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	13
General Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	20
Notice of Extraordinary General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	24

– i –

DEFINITIONS

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

• “Agreement”

the conditional purchase and sale agreement dated 5 July 2002 made between the Company, Singamas Refrigerated and the Sellers

• “Board”

the board of Directors

• “Business Day” a day (other than Saturday) on which banks in Hong Kong are open to conduct business

• “CFC” an abbreviation for Chlorofluorocarbon

• “ChinaVest” ChinaVest IV, L.P., ChinaVest IV-A, L.P., both limited partnerships established under the laws of the State of Delaware, U.S.A. and ChinaVest IV-B, L.P. a limited partnership established under the laws of Bermuda

• “Chine Investissement 2000”

• a mutual fund organized under the laws of Luxembourg

• “Closing”

• consummation of the transactions contemplated in the Agreement or the events to take place on the Closing Date whereupon the parties thereto perform their respective obligations as set out in the Agreement

• “Closing Date”

• the Business Day following the date on which the condition precedent to the Agreement has been fulfilled or such other time the parties mutually agree either orally or in writing

• “Company” Singamas Container Holdings Limited, the shares of which are listed and traded on the Stock Exchange

• “Consideration”

• the total sum of US$9,506,000 (equivalent to approximately HK$74,146,800) and US$1,300,000 (equivalent to approximately HK$10,140,000) to be paid by the Company for the acquisition of 9,506,000 redeemable preference shares and 4,083,333 ordinary shares of Singamas Refrigerated

• “Dao Heng Securities”

Dao Heng Securities Limited, an investment adviser and securities dealer registered under the Securities Ordinance (Chapter 333 of the Laws of Hong Kong) and the independent financial advisor to the Independent Board Committee in respect of the Transaction

• “Director(s)”

the director(s) of the Company

– 1 –

DEFINITIONS

• “EGM” the extraordinary general meeting of the Company to be held on 15 August 2002, notice of which is set on pages 24 and 25 of this circular, including any adjournment thereof

• “Garden Capital Limited” a company established under the laws of the British Virgin Islands

• “Group” the Company together with its subsidiaries

• “Independent Board Committee” the independent board committee of the Company comprising Mr. Ong Ka Thai and Mr. Soh Kim Soon, established for the purpose of advising the shareholders

• “Latest Practicable Date” 23 July 2002, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained herein

• “Listed Shares” the Shares or such shares as may in the future be issued in exchange for such shares or as adjusted for reclassifications, consolidations, split shares or the like

• “Listing Rules” Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited

• “Option” the put option granted to ChinaVest by the Company under the Shareholders Agreement to sell the Purchase Shares to the Company at a price to be determined by a formula set out in the Shareholders Agreement

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

• “Purchase Shares” an aggregate of 4,083,333 ordinary shares and 9,506,000 redeemable preference shares of Singamas Refrigerated

• “Redeemable Preference Shares” redeemable preference shares of Singamas Refrigerated which do not carry any voting rights and holders of which are not entitled to any dividends. According to the Shareholders Agreement, these shares would be fully redeemed by Singamas Refrigerated at the price of US$1.00 per share on happening of certain event

“SDI Ordinance” Securities (Disclosure of Interests) Ordinance (Chapter 396 of the Laws of Hong Kong)

– 2 –

DEFINITIONS

• “Sellers” ChinaVest, Chine Investissement 2000 and Garden Capital Limited

• “Shanghai Reeferco” Shanghai Reeferco Container Co. Ltd., a company established in the PRC

• “Share(s)” Share(s) at the par value of HK$0.10 each in the capital of the Company

• “Shareholder(s)” the holder(s) of the Share(s) Shareholders Agreement” a Subscription and Shareholders Agreement entered into amongst the Company, Singamas Refrigerated and ChinaVest dated 15 September 1995 as amended by a Assumption and Amendment Agreement entered into amongst the Company, Singamas Refrigerated and the Sellers dated 22 December 1995

• “Singamas Refrigerated” Singamas Refrigerated Container Limited, a company incorporated in the British Virgin Islands and 53.78% of its entire issued share capital is held by the Company

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

• “Strike Price”

• an average of the closing price of the Shares for each of the 45 trading days prior to the expiry of 12 months from the Closing Date

• “TEUs” twenty-foot equivalent units, a standard unit of measurement for one container

• “Transaction”

• the proposed transaction under the Agreement whereby the Company agreed to acquire from the Sellers an aggregate of 4,083,333 ordinary shares and 9,506,000 redeemable preference shares which represents 46.22% of the issued share capital of Singamas Refrigerated

• “Transfer Documents”

• share certificates, instruments of transfer, contract notes and such other instruments facilitating transfer as may be reasonably required, duly endorsed for transfer but undated

• “US$” U.S. dollars, the lawful currency of United State of America

• “%”

• per cent.

For the purposes of illustration only and unless otherwise stated, the translation of US dollars into Hong Kong dollars is based on the exchange rate of US$1.00 = HK$7.80. Such translations 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.

– 3 –

LETTER FROM THE BOARD

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SINGAMAS CONTAINER HOLDINGS LIMITED

(Incorporated in Hong Kong with limited liability)

Executive Directors: Mr. Chang Yun Chung (Chairman) (also known as Mr. Teo Woon Tiong) Mr. Teo Siong Seng (Vice Chairman) Mr. Hsueh Chao En Mr. Teo Tiou Seng

Non-Executive Director: Mr. Kuan Kim Kin

Registered Office: Unit 604-606 6th Floor AXA Centre 151 Gloucester Road Wanchai Hong Kong 26th July, 2002

Independent Non-Executive Directors: Mr. Ong Ka Thai Mr. Soh Kim Soon

To the Shareholders

Dear Sirs or Madams,

CONNECTED AND DISCLOSABLE TRANSACTION ACQUISITION OF 46.22% INTEREST OF SINGAMAS REFRIGERATED CONTAINER LIMITED

INTRODUCTION

On 5 July 2002, the Company announced, among other things, that it and Singamas Refrigerated had on that day entered into the Agreement with ChinaVest IV, L.P., ChinaVest IV-A, L.P., ChinaVest IV-B, L.P., Chine Investissement 2000 and Garden Capital Limited under which the Company agreed to purchase from these entities 4,083,333 issued ordinary shares (with voting rights) and 9,506,000 Redeemable Preference Shares (with no voting rights) of Singamas Refrigerated which together represent 46.22% of entire issued share capital thereof.

As ChinaVest IV, L.P. and Garden Capital Limited are substantial shareholders of Singamas Refrigerated, the transaction contemplated the agreement constitutes a connected transaction for the Company under the Listing Rules and will require Shareholders’ approval.

The purpose of this circular is to provide you with further information in relation to the Agreement. The recommendations of the Independent Board Committee to the Shareholders regarding the Agreement are set out on page 12 of this circular. A copy of the letter from Dao Heng Securities to the Independent Board Committee containing its advice in relation to the terms of the Agreement is set out on pages 13 to 19 of this circular.

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LETTER FROM THE BOARD

BACKGROUND

Pursuant to a Shareholders Agreement and other agreements incidental thereto made in 1995, ChinaVest was granted an option as agent for itself, Chine Investissement 2000 and Garden Capital Limited, to sell an aggregate of 4,083,333 ordinary shares and 9,506,000 Redeemable Preference Shares of Singamas Refrigerated to the Company in the event that Singamas Refrigerated has not sought listing within four years from the date of the Shareholders Agreement of 15 September 1995 by serving a notice on the Company within a period of three years from the expiry of the said fouryear period.

As ChinaVest intended to exercise the Option under the Shareholders Agreement, discussion had taken place among the parties in connection with the exercise and the Agreement had been reached for the acquisition by the Company by stages an aggregate of 4,083,333 issued ordinary shares and 9,506,000 Redeemable Preference Shares of Singamas Refrigerated.

THE AGREEMENT DATED 5 JULY 2002

Parties

• (1) The Company

• (2) Singamas Refrigerated

• (3) ChinaVest IV, L.P., ChinaVest IV-A, L.P., ChinaVest IV-B, L.P., Chine Investissement 2000 and Garden Capital Limited together as the Sellers.

ChinaVest IV, L.P. and Garden Capital Limited hold 17.92% and 12.48% of the issued ordinary shares (with voting rights) of Singamas Refrigerated respectively. The Transaction therefore constitutes a connected transaction of the Company under the Listing Rules. Save for their respective holding in Singamas Refrigerated, they are not connected with the Directors, chief executive and substantial shareholders of the Company and its subsidiaries and their respective associates (as defined under the Listing Rules). The remaining interest of 59.17%, 2.06%, 0.85% and 7.52% are held by the Company, ChinaVest IV-A, L.P. ChinaVest IV-B, L.P. and Chine Investissement 2000 respectively. ChinaVest IV-A, L.P. ChinaVest IV-B, L.P. and Chine Investissement 2000 are not connected with the Directors, chief executive and substantial shareholders of the Company and its subsidiaries and their respective associates (as defined under the Listing Rules).

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LETTER FROM THE BOARD

Assets to be acquired

The Company agreed to by stages an aggregate of 4,083,333 issued ordinary shares (representing 40.83% of issued ordinary shares (with voting rights)) and 9,506,000 Redeemable Preference Shares of Singamas Refrigerated which together represents 46.22% of the issued share capital of Singamas Refrigerated with particulars as follows:–

Individual Seller ChinaVest IV, L.P. ChinaVest IV-A, L.P. ChinaVest IV-B, L.P. Chine Investissement 2000 Garden Capital Limited Total	Redeemable Preference Shares Total number of % in entire Redeemable issued share Preference capital of Shares to be Singamas purchased Refrigerated 4,171,000 14.19% 480,150 1.63% 198,850 0.68% 1,750,000 5.95% 2,906,000 9.88% 9,506,000 32.33%	Ordinary shares
		% in entire Total number issued share of ordinary capital of shares to be Singamas purchased Refrigerated 1,791,666 6.09% 206,250 0.70% 85,417 0.29% 751,718 2.56% 1,248,282 4.25% 4,083,333 13.89%	% of voting right 17.92% 2.06% 0.85% 7.52% 12.48%
			40.83%

The Company currently holds 53.78% of the entire issued share capital of Singamas Refrigerated (inclusive of ordinary shares and Redeemable Preference Shares and 59.17% of the voting right therein). After the purchases of the said shares, Singamas Refrigerated will become a wholly owned subsidiary of the Company.

Consideration

Pursuant to the Agreement, the Company agreed to pay US$9,506,000 (equivalent to approximately HK$74,146,800) for the Redeemable Preference Shares and US$1,300,000 (equivalent to approximately HK$10,140,000) for the ordinary shares by instalments with details as follows:–

• (1) US$950,600 by cash (equivalent to approximately HK$7,414,680) on the Closing Date (expected to take place within 3 months from the date of Agreement) in consideration of the transfer of 950,600 Redeemable Preference Shares;

• (2) US$1,425,900 by cash (equivalent to approximately HK$11,122,020) on expiry of 6 months from the Closing Date in consideration of the transfer of 1,425,900 Redeemable Preference Shares;

• (3) On the expiry of 12 months from the Closing Date:

• (a) US$1,901,200 by cash (equivalent to approximately HK$14,829,360) in consideration of the transfer of 1,901,200 Redeemable Preference Shares; and

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LETTER FROM THE BOARD

• (b) US$1,300,000 (equivalent to approximately HK$10,140,000) in consideration of the transfer of 4,083,333 ordinary shares which shall be paid by the issue of that number of Listed Shares at the Strike Price determined by reference to an average of the closing price of the Shares for each of the 45 trading days prior to the expiry of 12 months from the Closing Date (shall be converted to US$ at the then prevailing exchange rate) in lots of 2,000 shares as would be equal to such purchase price. Consideration remaining due to lots less than 2,000 Listed Shares shall be paid in cash;

• (4) US$2,376,500 by cash (equivalent to approximately HK$18,536,700) on expiry of 18 months from the Closing Date in consideration of the transfer of 2,376,500 Redeemable Preference Shares;

• (5) US$2,851,800 by cash (equivalent to approximately HK$22,244,040) on expiry of 24 months from the Closing Date in consideration of the transfer of 2,851,800 Redeemable Preference Shares.

Based on the closing price of Shares of HK$1.70 per share on 5 July 2002, the Listed Shares required to be issued by the Company to the Sellers will be 5,964,000 shares. Such consideration shares represent approximately 1.31% of the existing issued share capital of the Company and approximately 1.29% of the enlarged issued share capital of the Company immediately after the sale and purchase of the ordinary shares of Singamas Refrigerated. Issue of the consideration shares as aforesaid is conditional upon the Listing Committee of the Stock Exchange granting the listing of and, permission to deal in the said shares. Application has been made to the Stock Exchange for the listing of the said new Shares.

The said consideration shares will be issued under the general mandate granted to the Directors at the annual general meeting of the Company on 12 June 2002.

The Company intends that the cash consideration will be principally funded by internal resources of the Group. However, as the Group has to maintain daily working capital, circumstances may arise whereby bank financing may be needed.

Closing

At Closing, the Sellers shall deliver share certificates to the Company against payment made by the Company to the Sellers to effect the transfer of 950,600 Redeemable Preference Shares for the consideration of US$950,600 (equivalent to approximately HK$7,414,680) as stated under item (a) under the heading “CONSIDERATION” above.

The Sellers shall deliver to an escrow agent, a party not connected with the Directors, chief executive and substantial shareholders of the Company and its subsidiaries and their respective associates (as defined under the Listing Rules), appointed by the parties under the Agreement who shall hold as agent for all parties and shall deliver to the Company such Transfer Documents for the purpose of effecting each portion of Purchase Shares to be transferred to the Company on each of the dates as specified under items (b) to (e) under the heading “CONSIDERATION” above.

The Company shall pay such portion of Consideration then due against delivery of such Transfer Documents by the escrow agent on each of the dates as specified under items (b) to (e) under the heading “CONSIDERATION” above and shall issue the Listed Shares due to be issued on

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LETTER FROM THE BOARD

the expiry of 12 months from the Closing Date against delivery by the escrow agent of the Transfer Documents to effect the transfer of the ordinary shares to the Company.

Other Terms and Conditions

The obligation of the Company to purchase the Purchase Shares under the Agreement is conditional on the fulfilment of the following condition precedent on or before the expiry of 3 months after the signing of the Agreement:–

• (1) the passing by the shareholders of the Company in general meeting of an ordinary resolution approving the Agreement and the transactions contemplated therein; or

• (2) the obtaining of approval to be given in lieu of a resolution passed at a general meeting.

Closing shall take place on the Business Day following the date on which either condition precedent to the Agreement has been fulfilled or such other time the parties mutually agree either orally or in writing.

Upon the payment of the Consideration in full by the Company and the transfer of the Purchase Shares by the Sellers, the Shareholders Agreement shall terminate. The rights granted to the Sellers and to ChinaVest under the Shareholders Agreement shall continue in full force and effect until the Shareholders Agreement is so terminated.

Each of the Sellers undertook to the Company that it will not dispose of the Listed Shares within one year from the date on which such Listed Shares are issued and allotted.

Basis of determination of the Consideration

The Consideration has been arrived at after arm’s length negotiation and on normal commercial terms by reference to the terms of the Shareholders Agreement and the latest financial performance of Singamas Refrigerated for the year ended 31 December 2001.

The purchase price of the Redeemable Preference Shares of Singamas Refrigerated is determined with reference to the redeemable price of US$1.00 as set out in the Shareholders Agreement thereof pursuant to the Shareholders Agreement.

Based on its audited results, Singamas Refrigerated has net liabilities of US$7,683,000 (equivalent to approximately HK$59,927,400) for the year ended 31 December 2000 and US$3,945,000 (equivalent to approximately HK$30,771,000) for the year ended 31 December 2001.

The purchase price of the ordinary shares of Singamas Refrigerated is determined with reference to the attributable interests of the Sellers in the net profit of Singamas Refrigerated for the year ended 31 December 2001 as set out below. Based on its audited results, Singamas Refrigerated reported a net profit (after taxation, extraordinary items and minority interests) of US$962,000 (equivalent to approximately HK$7,503,600) and US$3,738,000 (equivalent to approximately HK$29,156,400) for the years ended 31 December 2000 and 31 December 2001 respectively. Based on the net profit of Singamas Refrigerated for the year ended 31 December 2001, the price earning ratio of Singamas Refrigerated is 6.26 times (on the basis that a total of 29,400,000 shares (including ordinary and Redeemable Preference Shares) of Singamas Refrigerated are issued).

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LETTER FROM THE BOARD

The Board (including the independent non-executive Directors) considers the terms and conditions of the Agreement are fair and reasonable and are in the interests of the Company insofar as the Shareholders of the Company are concerned and are on normal commercial terms.

INFORMATION ON SINGAMAS REFRIGERATED

Singamas Refrigerated was incorporated in December 1994 and its only business is its holding of a 88.64% equity stake in Shanghai Reeferco, which is a company formed in the PRC for the purpose of carrying on the business of manufacturing refrigerated containers in Shanghai, PRC.

Shanghai Reeferco specializes in the production of environmentally friendly CFC free refrigerated containers. There is a reported significant growth in both turnover and profit by 80.5% and 287% respectively in 2001 over 2000. After its technical collaboration with Hyundai Mobis in July 2000, Shanghai Reeferco’s production facilities and processes were fully upgraded in December 2000 and its efficiencies have greatly improved with daily production capacity increased from 12 units to 30 units. In 2001, Shanghai Reeferco produced 11,209 TEUs as compared to 2000’s 5,240 TEUs.

The shareholding structure of Singamas Refrigerated will be as follows before the Transaction and after the completion of the Transaction.

Before the Transaction

Singamas Container Holdings Limited		China Vest IV, L.P.		China Vest IV-A, L.P.		China Vest IV-B, L.P.		Chine Investissement 2000		Garden Capital Limited
Singamas Refrigerated Container Ltd. Shanghai Reeferco Container Co., Ltd. [59.17%] (53.78%) [17.92%] (20.28%) [2.06%] (2.33%) [0.85%] (0.97%) [7.52%] (8.51%) 88.64% [12.48%] (14.13%)

• [ ]% represent % of ordinary shares or voting rights of Singamas Refrigerated

• ( )% represent % of the entire issued share capital of Singamas Refrigerated

– 9 –

LETTER FROM THE BOARD

After completion of the Transaction

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

Singamas Container
Holdings Limited
100%
Singamas Refrigerated
Container Ltd.
88.64%
Shanghai Reeferco
Container Co., Ltd.
----- End of picture text -----

Upon completion of the transfer of the Purchase Shares, the Company will hold 100% equity interest in Singamas Refrigerated and will therefore indirectly hold 88.64% equity stake in Shanghai Reeferco.

REASONS FOR THE TRANSACTION

The Group is one of the world’s leading container manufacturers and logistics service providers. Its container manufacturing business captured 16% of the world market and 20% of the PRC market in 2001.

The Transaction strengthens the Group’s network and market coverage in the PRC and is thus in line with the Group’s principal activities and business objectives.

The Directors believe that by entering into the Agreement, the Company can expand its network and market coverage in the PRC and therefore enhance the Group’s overall profitability.

As Singamas Refrigerated has net liabilities of US$3,945,000 (equivalent to approximately HK$30,771,000) for the year ended 31 December 2001, the net asset value of the Group will be reduced by US$1,610,744 (equivalent to approximately HK$12,563,803) upon the completion of the Transaction.

The Directors (including the non-executive Directors) believe that the entering into the Agreement is in the interest of the Company and in line with the Group’s business objectives and the terms of the Agreement are fair and reasonable insofar as the Shareholders of the Company are concerned.

CONNECTED AND DISCLOSEABLE TRANSACTION AND WAIVER FROM REQUIREMENT OF HOLDING A GENERAL MEETING

As ChinaVest IV, L.P. and Garden Capital Limited are substantial shareholders of Singamas Refrigerated, the transaction contemplated under the Agreement constitutes a connected transaction for the Company under the Listing Rules.

– 10 –

LETTER FROM THE BOARD

As the aggregate value of consideration given represents more than 15% of the consolidated assets of the Group, the Transaction also constitutes a discloseable transaction under the Listing Rules.

As the Transaction constitutes a connected transaction and a discloseable transaction of the Company, it is subject to shareholders’ approval.

Pacific International Lines (Private) Limited, the controlling shareholder of the Company currently holds 62.64% of the issued shares of the Company, is not interested in the Transaction other than its respective shareholding in the Company. As a result, it will not be abstained from voting at a general meeting required to be held to approve the Transaction. Pacific International Lines (Private) Limited has undertaken that they will vote in favour of the resolution to approve the Transaction. In order to save time and costs in convening a general meeting and on the Group as aforesaid, application has been made to the Stock exchange for a waiver from the requirement for the Transaction to be approved by the Shareholders at a general meeting. On this ground, the Company has applied to the Stock Exchange for a waiver from the requirements under the Listing Rules for the Company to hold a general meeting to seek shareholders’ approval in respect of the Transaction. However, the Stock Exchange has not granted the waiver to the Company. In this connection, the Company convenes the EGM to seek Shareholders’ approval on the Agreement.

EXTRAORDINARY GENERAL MEETING

An EGM has been convened to be held at 9:00 a.m. on 15 August 2002 at Unit 604-606, 6th Floor, AXA Centre, 151 Gloucester Road, Wanchai, Hong Kong at which an ordinary resolution will be proposed to approve the Agreement. Please see the notice convening the EGM published separately on 26 July 2002 in The Standard in English and in Hong Kong Economic Times in Chinese.

INDEPENDENT ADVICE

Dao Heng Securities has been appointed as an independent financial adviser to advise the Independent Board Committee on the Agreement. Your attention is drawn to the letter from Dao Heng Securities set out on pages 13 to 19 of this circular which contains its recommendations to the Independent Board Committee in respect of the Agreement and the principal factors and reasons considered by Dao Heng Securities in arriving at its recommendations.

The Independent Board Committee, having taken into account the advice of Dao Heng Securities, considers that the terms of the Agreement are fair and reasonable so far as the Shareholders are concerned and are in the interests of the Company and the Shareholders as a whole.

ADDITIONAL INFORMATION

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

By order of the Board

Singamas Container Holdings Limited Chang Yun Chung Chairman

– 11 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

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SINGAMAS CONTAINER HOLDINGS LIMITED

(Incorporated in Hong Kong with limited liability)

26th July, 2002

To the Shareholders

Dear Sir or Madam,

CONNECTED AND DISCLOSEABLE TRANSACTION ACQUISITION OF 46.22% INTEREST OF SINGAMAS REFRIGERATED CONTAINER LIMITED

We have been appointed as members of the Independent Board Committee to advise the Shareholders in respect of the Agreement, details of which are set out in the letter from the Board in the circular dated 26th July, 2002 to the Shareholders. Unless the context otherwise requires, terms defined in this circular shall have the same meanings when used in this letter.

Having taken into account the advice of Dao Heng Securities, we consider the terms of the Agreement to be fair and reasonable so far as the interests of the Shareholders are concerned. Accordingly, we recommend the Shareholders to vote in favour of the ordinary resolution which will be proposed at the EGM to approve the Agreement.

Yours faithfully, Ong Ka Thai Soh Kim Soon Independent Board Committee

– 12 –

LETTER FROM DAO HENG SECURITIES

Set out below is the text of the letter of advice from Dao Heng Securities to the Independent Board Committee in connection with the terms of the Agreement prepared for inclusion in the circular.

Dao Heng Securities Ltd.

26th July, 2002

To the Independent Board Committee of Singamas Container Holdings Limited Unit 604-606 6/F., AXA Centre 151 Gloucester Road Wanchai Hong Kong

Dear Sirs,

CONNECTED AND DISCLOSEABLE TRANSACTION ACQUISITION OF 46.22% INTEREST OF SINGAMAS REFRIGERATED CONTAINER LIMITED

INTRODUCTION

We refer to our engagement by the Company as independent financial adviser to advise the Independent Board Committee with respect to terms of the Agreement, details of which are set out in the circular to the Shareholders dated 26th July, 2002 (the “Circular”), of which this letter forms part. Terms used in this letter shall have the same meanings as those defined in the Circular unless the context requires otherwise.

On 5th July, 2002, the Company entered into the Agreement with ChinaVest IV, L.P., ChinaVest IV-A L.P., ChinaVest IV-B. L.P., Garden Capital Limited and Chine Investissement 2000, pursuant to which the Company agreed to purchase from these companies (i) 4,083,333 issued ordinary shares (“Ordinary Shares”) at a consideration of US$1,300,000; and (ii) 9,506,000 Redeemable Preference Shares of Singamas Refrigerated at a consideration of US$9,506,000, which together represents approximately 46.22% of the issued share capital of Singamas Refrigerated.

By virtue of the fact that ChinaVest IV, L.P. and Garden Capital Limited hold approximately 17.92% and 12.48% respectively of the entire issued Ordinary Shares (with voting rights) of Singamas Refrigerated, a 59.17% (with voting rights) owned subsidiary of the Company, ChinaVest IV, L.P. and Garden Capital Limited are connected persons (as defined under the Listing Rules) of the Company. Accordingly, the entering into the Agreement, amongst others, by the Company, ChinaVest IV, L.P. and Garden Capital Limited constitutes a connected transaction of the Company under the Listing Rules and is subject to the approval of the Independent Shareholders. Upon completion of the Agreement, Singamas Refrigerated will become a wholly-owned subsidiary of the Company.

Our role as the independent financial adviser to the Independent Board Committee is to give our opinion as to whether the terms of the Agreement are fair and reasonable so far as the interests of the Independent Shareholders are concerned.

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LETTER FROM DAO HENG SECURITIES

In formulating our recommendations, we have relied on the accuracy of the information and representations contained in the Circular, which have been provided by the Directors and have assumed that all information and representations made or referred to in the Circular are true and accurate in all material respects and that all intentions of the Company or the Directors will be met or carried out as the case may be. We have no reason to doubt the truth, accuracy and completeness of the information and representations provided to us by the Directors and have been advised by the Directors that no material facts have been omitted from the information provided and referred to in the Circular. We consider that we have reviewed sufficient information to reach an informed view and to justify relying on the accuracy of the information contained in the Circular and to provide a reasonable basis for our advice. We have not, however, conducted any independent investigation into the business and affairs or the future prospects of the Group (as defined below) or the Sellers.

PRINCIPAL FACTORS CONSIDERED

In arriving at our advice in respect of the Agreement, we have considered the following principal factors and reasons.

I. Reasons for the Transaction

• (1) Background of the Transaction

As stated in the letter from the Board of the Circular, pursuant to the Shareholders Agreement and other agreements incidental thereto made in 1995, ChinaVest was granted an Option as agent for itself, Chine Investissement 2000 and Garden Capital Limited to sell an aggregate of 4,083,333 Ordinary Shares and 9,506,000 Redeemable Preference Shares to the Company in the event that Singamas Refrigerated has not sought listing within four years from the date of the Shareholders Agreement of 15th September, 1995 by serving a notice on the Company within a period of three years from the expiry of the said four-year period.

In addition, an announcement (“Announcement”) was made by the Company when it entered into the Shareholders Agreement with ChinaVest on 15th September, 1995. As stated in the Announcement, the Shareholders Agreement provided, inter alia, that in the event that Singamas Refrigerated has not sought a listing for its shares on the Stock Exchange, or another internationally recognised stock exchange, within a three-year period commencing four years from the date of the Shareholders Agreement, ChinaVest shall have the Option to require the Company to repurchase its entire interest in Singamas Refrigerated at a price to be determined by a formula set out in the Shareholders Agreement. Upon exercising the right to exercise the Option, the Company shall have the right to satisfy payment for such shares by payment in cash or, at the election of the Company by the issue to ChinaVest of the Listed Shares, or by a combination of cash payment and the issue of the Listed Shares.

As regards the abovementioned price formula of Singamas Refrigerated for purpose of the Option, we have reviewed the Shareholders Agreement and noticed that the purchase price

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LETTER FROM DAO HENG SECURITIES

was based on valuation of Singamas Refrigerated made on an “as if go public” basis in accordance with the following schedule:

Price earning ratio
(“PER”) of the
Company (times) (Note)	Price earning ratio of Singamas Refrigerated
0 – 5	No discount to the Company’s PER
5.01 – 10	20% discount to the Company’s PER or a PER of 5,
	whichever is higher
10.01 – 15	25% discount to the Company’s PER or a PER of 8,
	whichever is higher
15.01 – 20	30% discount to the Company’s PER or a PER of 11.25,
	whichever is higher
20.01 and above	35% discount to the Company’s PER or a PER of 14,
	whichever is higher

Note: Average historical PER of the Shares traded for the 30 days preceding the date of exercising the Option

It was stated in the letter from the Board of the Circular that as ChinaVest intended to exercise the Option, discussion had taken place among the parties in connection with this exercise and the Agreement was thus entered into between the Sellers and the Company whereby the Company agreed to acquire from the Sellers by stages the Purchase Shares.

(2) Business activities of the Group

As stated in the 2001 annual report of the Company, the Group is principally engaged in (i) the manufacture of marine dry freight containers, refrigerated containers, collapsible flatrack containers, bitutainer containers, other specialised containers and container parts; (ii) the provision of container storage, repair and trucking services, serving as a freight station, container/cargo handling and other container related services; and (iii) the provision of midstream services.

Based on the business scope of the Group as mentioned above, we concur with the Directors’ view that the Transaction strengthens the Group’s network and market coverage in the PRC in respect of its container manufacturing business and is thus in line with the Group’s principal activities and business objectives.

According to the terms of the Option under the Shareholders Agreement that ChinaVest was granted the Option to require the Company to repurchase its entire interest in Singamas Refrigerated within a three-year period commencing four years from the date of the Shareholders Agreement, that is, on or before 15th September, 2002, we concur with the Directors’ view that the entering into of the Agreement was to facilitate the exercise of the Option by ChinaVest, the terms of which are basically in line with those of the Option under the Shareholders Agreement, which was entered into by the parties in 1995.

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LETTER FROM DAO HENG SECURITIES

II. BACKGROUND OF SINGAMAS REFRIGERATED

As stated in the letter from the Board of the Circular, Singamas Refrigerated was incorporated in December 1994 and its only business is its holding of a 88.64% equity stake in Shanghai Reeferco, which is a company formed in the PRC for the purpose of carrying on the business of manufacturing refrigerated containers.

As stated in the letter from the Board of the Circular, Shanghai Reeferco specialises in the production of environmentally friendly CFC free refrigerated containers. It reported a significant growth in both turnover and profit by approximately 80.5% and 287% for the financial year ended 31st December, 2001 as compared with those for the financial year ended 31st December, 2000. After its technical collaboration with Hyundai Mobis in July 2000, Shanghai Reeferco’s production facilities were fully upgraded in December 2000 and its efficiencies have improved with daily production capacity increased from approximately 12 units to 30 units. The production output of Shanghai Reeferco increased from 5,240 TEUs in 2000 to 11,209 TEUs in 2001. As stated in the letter from the Board of the Circular, the net profit (after taxation, extraordinary items and minority interests) of Singamas Refrigerated increased from US$962,000 (equivalent to approximately HK$7,503,600) for the year ended 31st December, 2000 to US$3,738,000 (equivalent to approximately HK$29,156,400) for the year ended 31st December, 2001. In light of the improved profitability of Singamas Refrigerated in recent year, the Directors are of the view that the Transaction is in the interest of the Group.

III. BASIS OF THE CONSIDERATION

As stated in the letter from the Board of the Circular, the Consideration has been arrived at after arm’s length negotiation and on normal commercial terms with reference to the terms of the Shareholders Agreement and the latest performance of Singamas Refrigerated for the year ended 31st December, 2001.

(1) Redeemable Preference Share Consideration

As stated in the letter from the Board of the Circular, the consideration for the Redeemable Preference Shares (“Redeemable Preference Share Consideration”) is determined with reference to the redeemable price of US$1.00 as set out in the Shareholders Agreement. Based on 9,506,000 Redeemable Preference Shares to be sold by the Sellers, the Redeemable Preference Share Consideration amounts to US$9,506,000. Hence, as the Redeemable Preference Share Consideration is equal to the redeemable price of the Redeemable Preference Shares as set out in the Shareholders Agreement, we concur with the Directors’ view that the basis of the Redeemable Preference Share Consideration is fair and reasonable so far as the Company as well as the Shareholders as a whole are concerned.

(2) Ordinary Share Consideration

As stated in the letter from the Board of the Circular, the purchase price of the Ordinary Shares (“Ordinary Share Consideration”) is determined with reference to the attributable interests of the Sellers in the net profit (after taxation, extraordinary items and minority interests) of Singamas Refrigerated for the year ended 31st December, 2001. Based on the audited net profit of Singamas Refrigerated of approximately US$3,738,000 (equivalent to

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LETTER FROM DAO HENG SECURITIES

approximately HK$29,156,400) for the year ended 31st December, 2001, and the Sellers’ interests of approximately 40.83% in the total Ordinary Shares, the attributable interest of the Sellers in such net profit was approximately US$1,526,225 (equivalent to approximately HK$11,904,555), to which the Ordinary Share Consideration of US$1,300,000 represents a discount of approximately 14.82%.

(3) Consideration

As stated in the letter from the Board of the Circular, based on the net profit of Singamas Refrigerated for the year ended 31st December, 2001, the PER of Singamas Refrigerated is approximately 6.26 times (on the basis that a total of 29,400,000 shares (including 10,000,000 Ordinary Shares and 19,400,000 Redeemable Preference Shares) of Singamas Refrigerated are issued).

In order to assess the reasonableness of using the net profit or PER method as reference to determine the value of the Purchase Shares, we also consider other commonly used valuation methods, namely net asset value method and discount cash flow method. According to the information provided by the Company, Singamas Refrigerated was in a net liability of approximately US$3,945,000 as at 31st December, 2001 but it recorded a net profit (after taxation, extraordinary items and minority interests) of approximately US$3,738,000 (equivalent to approximately HK$29,156,400) for the year ended 31st December, 2001, hence, we consider that it may not be practicable and appropriate to use the net asset value of Singamas Refrigerated as a basis for the Consideration. Discount cash flow method determines the value of a company by discounting its future cash flow stream to present value through using an appropriate discount rate. Although Singamas Refrigerated reported a significant growth in both turnover and profit for the year ended 31st December, 2001, we concur with the Directors’ view that it is prudent for the Company not to use discount cash flow method as a basis for the Consideration as it is difficult for Singamas Refrigerated to compile a reliable stream of future cashflow projection.

Based on the above, we consider that it is an appropriate method to use the PER of Singamas Refrigerated as reference to determine the value of the Purchase Shares. The PER method determines the value of a subject company by multiplying its earnings by an average PER of market comparables, which are engaged in similar businesses with the subject company. However, we note that at present there is no straight listed comparable whose business is engaged in the manufacturing of containers, except the Company. Given that the average historical PER of the Shares traded for the 30 days preceding the date of signing of the Agreement was approximately 8.88 times and the Shares as at the date of signing of the Agreement were traded at a PER of 9.64 times, the valuation of Singamas Refrigerated would be subject to a PER of approximately 7.10 and 7.71 times respectively pursuant to the Shareholders Agreement, details of which are set out in the paragraph headed “Reason for the Transaction” above. Given the historical PERs under the Agreement mentioned above are lower than that calculated by the formula set in the Shareholders Agreement, we consider that the basis of the Consideration is in the interest of the Company so far as the interests of the Shareholders are concerned.

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LETTER FROM DAO HENG SECURITIES

IV. PAYMENT TERMS AND LIQUIDITY

As stated in the letter from the Board of the Circular, the Redeemable Preference Share Consideration will be satisfied in cash in instalments and will be funded by internal resources of the Group and bank financing while the Ordinary Share Consideration will be settled by way of issuance of new Listed Shares. The five instalments in respect of the Consideration will be paid in the following manner:

Date of payment 1st instalment Closing Date 2nd instalment 6 months from the Closing Date 3rd instalment 12 months from the Closing Date 4th instalment 18 months from the Closing Date 5th instalment 24 months from the Closing Date Total	Payment Shares to amount be issued US$950,600 – US$1,425,900 – US$1,901,200 Shares equivalent to US$1,300,000 to be issued at the Strike Price US$2,376,500 – US$2,851,800 – US$9,506,000 US$1,300,000	Payment Shares to amount be issued US$950,600 – US$1,425,900 – US$1,901,200 Shares equivalent to US$1,300,000 to be issued at the Strike Price US$2,376,500 – US$2,851,800 – US$9,506,000 US$1,300,000
		US$1,300,000

As it can be seen above, the Redeemable Preference Share Consideration will be payable by the Company through five instalments upon the transfer of the relevant number of Purchase Shares by the Sellers to the Company within 24 months from the Closing Date. We have looked into the cash position of the Company that the Group recorded a consolidated bank balances and cash of approximately US$18.42 million as at 31st December, 2001. Having considered the latest cash position of the Company, we concur with the Directors’ view that the instalment payment for the Redeemable Preference Share Consideration pursuant to the Agreement will not exert any significant adverse effect on the cashflow position of the Company and is in the interest of the Company.

In addition, the Ordinary Share Consideration shall be paid by the issue of that number of Listed Shares at the Strike Price determined by reference to an average of the closing price of the Shares for each of the 45 trading days prior to the expiry of 12 months from the Closing Date (shall be converted to US$ at the then prevailing exchange rate) in lots of 2,000 Listed Shares as would be equal to such purchase price. Consideration remaining due to lots less than 2,000 Listed Shares shall be paid in cash. As stated in the paragraph headed “Reasons for the Transaction” above, the Company shall have the right to satisfy payment for such shares upon the exercise of the Option under the Shareholders Agreement by payment in cash or by issuance of the Listed Shares or by a combination of cash payment and the issuance of the Listed Shares. We consider that the instalment payment and issuance of the Listed Shares for the Considerations are in line with the terms of the Shareholders Agreement. Further, we consider that the determination of the Strike Price by using 45-day-average closing price as described above would allow sufficient time to avoid any abnormal fluctuation in the Share price. As such, we consider that the instalment payment, the issuance of the Listed Shares for the Consideration and the method to determine the issue price of the Listed Shares are fair and reasonable so far as the Company is concerned.

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LETTER FROM DAO HENG SECURITIES

As stated in the letter from the Board of the Circular, upon the payment of the Consideration in full by the Company and the transfer of the Purchase Shares by the Seller, the Shareholders Agreement shall terminate. The rights granted to the Sellers and to ChinaVest under the Shareholders Agreement shall continue in full force and effect until the Shareholders Agreement is so terminated. Besides, each of the Sellers undertook to the Company that it will not dispose of the Listed Shares within one year from the date on which such Listed Shares are issued and allotted.

Based on the closing price of Shares as at the Latest Practicable Date, the Listed Shares required to be issued by the Company to the Sellers as a part of the Consideration will be approximately 6,070,000 Listed Shares, representing approximately 1.33% and 1.31% of the existing issued share capital and the enlarged issued share capital of the Company immediately after the completion of the Agreement. The shareholding of the public shareholders of the Company will be decreased from approximately 37.36% as at the Latest Practicable Date to approximately 36.86% upon the issuance of the aforesaid 6,070,000 Listed Shares for the fulfillment of the Consideration. Given the one year non-disposal undertaking provided by the Sellers as regards the Listed Shares, we consider that such dilution in the shareholding of the public shareholders of the Company will be acceptable and minimal.

V. PARTIES TO THE AGREEMENT

The only reason why the Transaction constitutes a connected transaction under the Listing Rules is that ChinaVest IV, L.P. and Garden Capital Limited hold equity interests of approximately 17.92% and 12.48% respectively in Singamas Refrigerated, a 59.17% owned subsidiary of the Company, which are regarded as connected persons under the Listing Rules. As advised by the Directors, ChinaVest IV, L.P. and Garden Capital Limited and their associates do not have any shareholding in the Company and hence no Shareholder is required to be abstained from voting on the relevant resolution to be proposed at the EGM to approve the Agreement. Upon completion of the Agreement, ChinaVest IV, L.P. and Garden Capital Limited will no longer be the connected persons of the Company pursuant to the Listing Rules.

RECOMMENDATION

Having considered the above principal factors and reasons, we consider that the terms of the Agreement are fair and reasonable so far as the Independent Shareholders are concerned and the Transaction is in the interests of the Company and the Shareholders as a whole. Accordingly, we recommend the Independent Board Committee to advise the Independent Shareholders to vote at the EGM in favour of the resolution relating to the Agreement.

Yours faithfully, For and on behalf of

Dao Heng Securities Limited

Stella Fung Venus Choi Executive Director and General Manager Director

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GENERAL INFORMATION

(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 enquires, that to the best of their knowledge and belief, there are no other facts the omission of which would make any statement herein misleading.

(2) SHARE CAPITAL

As at the Latest Practicable Date, the authorized share capital of the Company was HK$75,000,000 divided into 750,000,000 Shares of HK$0.10 each, of which 456,001,760 Shares were issued and fully paid up and such total amount paid up is HK$45,600,176.

All the Shares currently in issue rank pari passu in all respects with each other, including in particular, as to dividends, voting rights and capital.

Save as disclosed herein, no part of the share capital of the Company is listed or dealt in on stock exchange other than the Stock Exchange and the Singapore Exchange Limited and no application is being made or is currently proposed or sought for the Shares to be listed in or on any other stock exchange.

(3) DISCLOSURE OF INTERESTS

As at the Latest Practicable Date, the interests of the Directors in the equity securities of the Company or any associated corporation (within the meaning of the SDI Ordinance) notifiable to the Company and the Stock Exchange under Section 28 of the SDI Ordinance and including interests in which a Director has taken under Section 31 or Part I of the Schedule to the SDI Ordinance or required to be entered into the register under Section 29 of the SDI Ordinance or required pursuant to the Model Code for Securities Transaction by Directors of Listed Companies under the Listing Rules are as follows:

(a) Interests in share capital of the Company

	Number of Ordinary	Shares of HK$0.10 each
	Personal	Corporate	Percentage
Name	Interests	Interests	of issued shares
Mr. Chang Yun Chung	–	285,660,178_(Note)_	62.64
Mr. Teo Siong Seng	10,234,000	–	2.24
Mr. Teo Tiou Seng	1,114,000	–	0.24

Note: These shares are held by Pacific International Lines (Private) Limited (“PIL”) (an associated corporation, within the meaning of the SDI Ordinance, of the Company) in which Mr. Chang Yun Chung is interested, in aggregate, in 16,525,000 shares representing 89.42% of the issued share capital of that company. Mr. Chang Yun Chung’s interest in shares of PIL comprises a personal interest in 2,642,500 shares and corporate interests in 5,850,000 shares through South Pacific International Holdings Limited, a company in which he holds 55.75% of the issued share capital and 8,032,500 shares through Y C Chang & Sons Private Limited, a company in which he holds 2.86% of the issued share capital.

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GENERAL INFORMATION

(b) Interests in share options

			Number of Share Options
			as at 31 December
Name	Date of Grant	Exercise Price	2001 & 2000
		(HK$)
Mr. Teo Siong Seng	8 October 1994	1.908	1,500,000
	15 May 1995	1.440	1,500,000
Mr. Hsueh Chao En	8 October 1994	1.908	400,000
			3,400,000

Pursuant to a share option scheme adopted on 17 June 1993 (the “Share Option Scheme”), the Company may offer to full-time employees of the Group (including executive directors of the Company) options to subscribe for ordinary shares in the Company for the primary purpose of providing incentives to eligible employees, subject to a maximum of 10% of the issued share capital of the Company from time to time. Any option may be exercised at any time from the date on which the option was granted and prior to the expiry of ten years from that date. Consideration of HK$1.00 was received from each of the option holders at the time when the options were granted. The exercise price is determined by the Board and shall be the price being not less than 80% of the average closing prices of the Company’s ordinary shares traded on the Stock Exchange on the five trading days immediately preceding the date of grant.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors has for the purposes of section 28 of SDI Ordinance, nor are they taken to or deemed to have under section 31 of, or Part I of the Schedule to, the SDI Ordinance, any interests in the equity or debt securities of the Company or any associated corporations within the meaning of the SDI Ordinance or any interests which are required to be entered in the register kept by the Company pursuant to section 29 of the SDI Ordinance or any interests which are required to be notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transaction by Directors of Listed Companies under the Listing Rules.

Save as disclosed herein, none of the Directors was materially interested in any contract or arrangement entered into by any member of the Group since 31 December 2001 (being the date of the Company’s latest published audited accounts) and which was significant in relation to the business of the Group.

As at the Latest Practicable Date, Dao Heng Securities has no shareholding in any member of the Group and does not have any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group.

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GENERAL INFORMATION

Save as disclosed herein, none of the Directors or Dao Heng Securities is interested, directly or indirectly, in any assets which had since 31 December 2001 (being the date to which the latest published audited financial statements of the Company were made up) been 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.

(4) SUBSTANTIAL SHAREHOLDERS

As at the Latest Practicable Date, so far as is known to, or can be ascertained after reasonable enquiry by, the Directors, no person other than certain Directors, whose interest has been disclosed above, 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 member of the Group.

(5) MATERIAL ADVERSE CHANGES

The Directors are not aware of any material adverse change in the financial or trading position of the Group since 31 December 2001 (being the date to which the latest published audited consolidated financial statements of the Company were made up).

(6) SERVICE CONTRACT

Mr. Teo Siong Seng has entered into a service agreement with the Company. Unless terminated by cause, the service agreement is for an initial term of three years which commenced on 1 April 2000. Thereafter, the service agreement is valid for a further three years, unless terminated by either party giving at least six months’ notice. No other Directors had any existing or proposed service contract with the Company or any of its subsidiaries which will not expire or is not determinable by the employer within one year without payment of compensation (other than statutory compensation) as at the Latest Practicable Date.

(7) CONSENT

Dao Heng Securities is an investment adviser and securities dealer registered under the Securities Ordinance (Chapter 333 of the Laws of Hong Kong). Dao Heng Securities has given and has not withdrawn its written consent to the issue of this circular with the inclusion of its letter dated 26 July 2002 and references to its name in the form and context in which they appear.

(8) LITIGATION

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 by or against the Company or any of its subsidiaries.

(9) MISCELLANEOUS

• (a) The registered office of the Company in Hong Kong is at Unit 604-606, 6th Floor, AXA Centre, 151 Gloucester Road, Wanchai, Hong Kong.

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GENERAL INFORMATION

The Share registrar of the Company is Central Registration Hong Kong Limited at 17th Floor, Hopewell Centre, 183 Queen’s Road East, Hong Kong.

• (b) The secretary of the Company is Ms. Tam Shuk Ping, Sylvia who is a member of the Canadian Institute of Chartered Accountants and a fellow member of the Hong Kong Society of Accountants.

(10) DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection during normal business hours at the registered office of the Company in Hong Kong at Unit 604-606, 6th Floor, AXA Centre, 151 Gloucester Road, Wanchai, Hong Kong from 29th July, 2002 to 15th August, 2002 (both days inclusive):

• (a) the memorandum and articles of association of the Company;

• (b) the Agreement and the Shareholders Agreement;

• (c) the service contract as referred to under the heading “Service Contract” of this Appendix;

• (d) the letter from Dao Heng Securities dated 26th July, 2002, the text of which is set out on pages 13 to 19 of this circular;

• (e) the written consent of Dao Heng Securities as referred to in paragraph 7 of this appendix; and

• (f) the letter from the Independent Board Committee, the text of which is set out on page 12 of this circular.

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NOTICE OF EXTRAORDINARY GENERAL MEETING

Notice of the EGM was published in The Standard in English and in Hong Kong Economic Times in Chinese on 26th July 2002 and is reproduced below for your information.

==> picture [120 x 37] intentionally omitted <==

SINGAMAS CONTAINER HOLDINGS LIMITED 勝 獅 貨 櫃 企 業 有 限 公 司

(Incorporated in Hong Kong with limited liability)

NOTICE IS HEREBY GIVEN that the Extraordinary General Meeting of the Company will be held at 9:00 a.m. on 15 August 2002 (Thursday) at Unit 604-606, 6th Floor, AXA Centre, 151 Gloucester Road, Wanchai, Hong Kong (the “Meeting”) for the purpose of considering and, if thought fit, passing the following resolutions which will be proposed as ordinary resolutions:

ORDINARY RESOLUTIONS

“ THAT :

• (a) the conditional purchase and sale agreement dated 5 July 2002 made between the Company, Singamas Refrigerated Container Limited and ChinaVest IV, L.P., ChinaVest IV-A, L.P., ChinaVest IV-B, L.P., Chine Investissement 2000 and Garden Capital Limited (the “Agreement”, a copy of which has been produced to the Meeting marked “A” and signed by the Chairman of this Meeting for the purpose of identification and the details of which are set out in the announcement of the Company dated 5 July 2002), under which the Company agreed to purchase from these entities 4,083,333 issued ordinary shares (with voting right) and 9,506,000 redeemable preference shares (with no voting right) of Singamas Refrigerated Container Limited which together represent 46.22% of the entire issued share capital thereof be and is hereby approved and ratified; and

• (b) any one director of the Company be and is hereby authorized for and on behalf of the Company to execute, deliver and perfect the Agreement and to take all such actions, do all such things and execute all such further documents (or, in case of execution of documents under seal, to do so jointly with either the company secretary or a second director of the Company) so as to implement and give effect to the Agreement, including the allotment of shares of the Company as part of the consideration to be paid by the Company in the above transaction.”

By order of the Board Singamas Container Holdings Limited Chang Yun Chung Chairman

26th July, 2002

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NOTICE OF EXTRAORDINARY GENERAL MEETING

Notes:–

• (1) A member who is holder of two or more shares, and who is entitled to attend and vote at the Meeting is entitled to appoint more than one proxy to attend and vote in his stead. A proxy need not be a member of the Company. Completion and return of the form of proxy will not preclude a member from attending the Meeting and voting in person. In such event, his form of proxy will be deemed to have been revoked.

• (2) In order to be valid, the form of proxy together with the power of attorney, if any, under which it is signed, or a notarially certified copy of such power of authority must be deposited at the registered office of the Company in Hong Kong at Unit 604-606, 6th Floor, AXA Centre, 151 Gloucester Road, Wanchai, Hong Kong not less than 48 hours before the time for holding the Meeting or any adjournment thereof.

• (3) A form of proxy for use at the Meeting will be sent to shareholders together with the circular to be issued by the Company in connection with the aforesaid Agreement as soon as possible.

• (4) Documents including, among others, copy of the Agreement will be available for inspection during normal business hours at the registered office of the Company in Hong Kong at Unit 604-606, 6th Floor, AXA Centre, 151 Gloucester Road, Wanchai, Hong Kong from 29 July 2002 to 15 August 2002 (both days inclusive).

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