Sinopharm Tech Holdings Limited — Proxy Solicitation & Information Statement 2004

Jul 12, 2004

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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.

If you are in any doubt as to any aspect of this circular, 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 B & B Natural Products Limited, you should at once hand this circular to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

This circular is for information only and does not constitute an offer or invitation to acquire, purchase or subscribe for securities of B & B Natural Products Limited.

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B & B NATURAL PRODUCTS LIMITED

*

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 8156)

DISCLOSEABLE TRANSACTION

(1) DISPOSAL OF 75% EQUITY INTEREST IN TOP ENTREPRENEUR PROFITS LIMITED TO APTUS HOLDINGS LIMITED;

(2) SUBSCRIPTION OF NEW SHARES IN APTUS HOLDINGS LIMITED; AND

(3) RELATED WHITEWASH APPLICATION

This circular will remain on the “Latest Company Announcements” page of the GEM website at http://www.hkgem.com for at least seven days from the date of its posting.

* For identification purpose only

9 July, 2004

CHARACTERISTICS OF GEM

GEM has been established as a market designed to accommodate companies to which a high investment risk may be attached. In particular, companies may list on GEM with neither a track record of profitability nor any obligation to forecast future profitability. Furthermore, there may be risks arising out of the emerging nature of companies listed on GEM and the business sectors or countries in which the companies operate. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only after due and careful consideration. The greater risk profile and other characteristics of the GEM mean that it is a market more suited to professional and other sophisticated investors.

Given the emerging nature of companies listed on GEM, there is a risk that securities traded on GEM may be more susceptible to high market volatility than securities traded on the Main Board and no assurance is given that there will be a liquid market in the securities traded on GEM. The principal means of information dissemination on GEM is publication on the Internet website operated by the Stock Exchange. Listed companies are not generally required to issue paid announcements in gazetted newspapers. Accordingly, prospective investors should note that they need to have access to the GEM website at http://www.hkgem.com in order to obtain up-to-date information on GEM-listed issuers.

i

CONTENTS

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
The Sale and Purchase Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
The Subscription Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
Reasons for the Disposal of Target and the Subscription . . . . . . . . . . . . . . . . .	11
Information on Hsing Long . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
The Whitewash Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12
Further Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12
Appendix – General information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	13

ii

DEFINITIONS

In this circular, the following expressions have the meanings respectively set opposite them unless the context otherwise requires:

“Acquisition”	the proposed acquisition of a 75% equity interest of the
	Target by Aptus pursuant to the Sale and Purchase
	Agreement;
“Acquisition Consideration	190,476,190 new Aptus Shares to be allotted and issued
Shares”	to the Vendor, credited as fully paid, as consideration for
	the Acquisition;
“Aptus”	Aptus Holdings Limited, a company incorporated in
	Cayman Islands with limited liability, whose issued
	Aptus Shares are listed on GEM;
“Aptus Group”	Aptus and its subsidiaries;
“Aptus Shareholder(s)”	holder(s) of the Aptus Shares;
“Aptus Shares”	ordinary shares of HK$0.01 each in the ordinary share
	capital of Aptus;
“associates”	has the meaning ascribed to it in the Previous GEM
	Listing Rules;
“B & B” or the “Company”	B & B Natural Products Limited, a company incorporated
	in the Cayman Islands with limited liability whose issued
	shares are listed on GEM;
“B & B Group”	B & B and its subsidiaries;
“B & B Shares”	ordinary shares of HK$0.01 each in the ordinary share
	capital of B & B;
“Best Frontier”	Best Frontier Investments Limited, a controlling
	shareholder of the Company and a limited company
	incorporated in the British Virgin Islands, which is owned
	as to 99.89% and 0.11% by Madam Cheung Kwai Lan
	and Mr. Chan Tung Mei, respectively;
“Board”	the board of directors of B & B from time to time;

1

DEFINITIONS

“Completion”	completion of the sale and purchase of a 75% equity
	interest of the Target and the Subscription in accordance
	with the terms and conditions of the Sale and Purchase
	Agreement and the Subscription Agreement respectively;
“Consideration Shares”	an aggregate of 928,571,428 new Aptus Shares to be
	allotted and issued by Aptus as consideration for the
	Acquisition and under the Subscription;
“Directors”	directors of B & B;
“EGM”	the extraordinary general meeting of Aptus to be
	convened for the purpose of approving, among other
	matters, the Whitewash Waiver and other transactions
	contemplated under the Subscription Agreement and the
	Sale and Purchase Agreement;
“Executive”	the executive director of the Corporate Finance Division
	of the SFC from time to time and any delegate of such
	executive director;
“GEM”	the Growth Enterprise Market of the Stock Exchange;
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong;
“Hsing Long”	Hsing Long Trading Co. Pte Ltd, a company incorporated
	in Singapore and a non-wholly owned subsidiary of B &
	B Natural Products (BVI) Limited (an indirect non-
	wholly owned subsidiary of B & B), held as to
	approximately 70.31% by B & B;
“Independent Aptus	Aptus Shareholders who are not interested or involved in
Shareholders”	the Acquisition, Subscription and Whitewash Waiver,
	being the shareholders of Aptus other than Precise Result
	Profits Limited, B & B, their associates and their
	respective concert parties if and to the extent they hold
	shares in Aptus;

2

DEFINITIONS

“Independent Third Parties”	Pentagon Agents Ltd and Wong Kim Ket, each of them
	holds 12.5% of Top Entrepreneur Profits Limited and
	Hsing Long, respectively. Pentagon Agents Ltd is a
	company incorporated in British Virgin Islands with
	limited liability and is 50% held by Hyasinta Atmaja and
	50% held by Lim King Hui. All of them are independent
	third parties not connected with the directors, chief
	executive or substantial shareholders or management
	shareholders of Aptus or any of its subsidiaries or their
	respective associates;
“Issue Price”	HK$0.021 per Acquisition Consideration Share;
“Joint Announcement”	the joint announcement of B & B and Aptus dated 23
	April, 2004 in relation to, inter alia, the Transactions;
“Latest Practicable Date”	8 July, 2004;
“Net Tangible Assets”	the net tangible assets of the B & B Group as at 30 June,
	2003;
“Parties”	the parties to the Sale and Purchase Agreement or, as
	appropriate, the Subscription Agreement and a “party”
	means any one of them;
“PRC”	the People’s Republic of China and for the purpose of the
	Agreement excludes Hong Kong, Taiwan and Macau
	Special Administrative Region of the PRC;
“Previous GEM Listing Rules”	the Rules Governing the Listing of Securities on GEM
	immediately in force prior to 31 March, 2004;
“Purchase Price”	HK$4,000,000;
“S$”	Singapore dollars, the lawful currency Singapore;
“Sale and Purchase Agreement”	the agreement dated 23 March, 2004 entered into between
	Aptus, the Vendor and the Warrantors in relation to, inter
	alia, the Acquisition;
“SFC”	the Securities and Futures Commission of Hong Kong;
“SFO”	the Securities and Futures Ordinance;
“Stock Exchange”	The Stock Exchange of Hong Kong Limited;

3

DEFINITIONS

“Subscription”	subscription by the Vendor of the Subscription Shares
	pursuant to the Subscription Agreement;
“Subscription Agreement”	the subscription agreement dated 23 March, 2004 entered
	into between the Vendor and Aptus in relation to the
	subscription of the Subscription Shares at the
	Subscription Price;
“Subscription Price”	HK$0.021 per Aptus Shares;
“Subscription Shares”	738,095,238 new Aptus Shares;
“Takeovers Code”	the Hong Kong Code on Takeovers and Mergers;
“Target”	Top Entrepreneur Profits Limited, a non-wholly owned
	indirect subsidiary of B & B, legally and beneficially
	owned by the Vendor as at the date of the Sale and
	Purchase Agreement and at Completion;
“Transactions”	collectively the transactions contemplated under the Sale
	and Purchase Agreement and the Subscription
	Agreement;
“Vendor”	Precise Result Profits Limited, a company incorporated
	in British Virgin Islands and a wholly owned indirect
	subsidiary of B & B;
“Warrantors”	collectively Mr. Ma Wai Hung, Vincent and Mr. Wong
	Kok Sun, a non-executive director and executive director
	of Aptus respectively; and
“Whitewash Waiver”	a waiver from the Executive pursuant to Note 1 on
	Dispensations from Rule 26 of the Takeovers Code in
	respect of the obligations of B & B and parties acting in
	concert with it to make a mandatory general offer for all
	the Aptus Shares (other than the Consideration Shares) as
	a result of the Subscription.

4

LETTER FROM THE BOARD

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B & B NATURAL PRODUCTS LIMITED

*

(Incorporated in the Cayman Islands with limited liability)

Executive Directors: Madam Cheung Kwai Lan Mr. Chan Tung Mei Mr. Chan Ting

Non-executive Director: Mr. Shaw Kyle Arnold Junior

Head office and principal place of business in Hong Kong: Unit 1603, 16th Floor, Dina House, 11 Duddell Street, Central, Hong Kong.

Independent Non-executive Directors:

Professor Peter Chin Wan Fung Mr. Du Ying Min

9 July, 2004

To the shareholders of the Company

Dear Sir or Madam,

DISCLOSEABLE TRANSACTION

• (1) DISPOSAL OF 75% EQUITY INTEREST IN TOP ENTREPRENEUR PROFITS LIMITED TO APTUS HOLDINGS LIMITED;

• (2) SUBSCRIPTION OF NEW SHARES IN APTUS HOLDINGS LIMITED; AND

• (3) RELATED WHITEWASH APPLICATION

INTRODUCTION

The Board announced on 23 April, 2004 that the Vendor had entered into the Sale and Purchase Agreement and the Subscription Agreement whereby it would sell a 75% equity interest in the Target to Aptus and to subscribe for 738,095,238 new Aptus Shares respectively.

The consideration of the Transactions when aggregated exceeds 15% but not more than 50% of the Net Tangible Assets and as such constitutes a discloseable transaction of the Company under the Previous GEM Listing Rules. The purpose of this circular is to provide you with further details of the Transactions and the Whitewash Waiver.

* For identification purpose only

5

LETTER FROM THE BOARD

THE SALE AND PURCHASE AGREEMENT

The principal terms of the Sale and Purchase Agreement are as follows:

Parties to the Agreement:

1. the Vendor as seller

2. Aptus as purchaser

3. the Warrantors as warrantors

Subject matter of purchase:

75% of the Target. The Target is a company incorporated in the British Virgin Islands, which in turn indirectly holds an effective 93.75% interests of the entire issued share capital of Hsing Long.

Consideration:

The Purchase Price is HK$4,000,000. The Purchase Price will be satisfied by the allotment and issue of the Acquisition Consideration Shares to the Vendor or its nominee nominated by the Vendor at approximately HK$0.021 per Aptus Share.

The Acquisition Consideration Shares of 190,476,190 new Aptus Shares represent approximately 30.8% of the entire existing issued share capital of Aptus and approximately 23.6% of the enlarged issued share capital of Aptus immediately after completion of the Acquisition or approximately 12.3% of the enlarged issued share capital of Aptus immediately after the Completion, assuming that there will be no change in the issued share capital of Aptus from the date of the Joint Announcement to Completion save for the issue of the Acquisition Consideration Shares and the Subscription Shares.

The Purchase Price and the issue price per Acquisition Consideration Share were arrived at after arm’s length negotiations among the parties to the Sale and Purchase Agreement with reference to the turnover and financial performance of Hsing Long and the net asset value of Aptus Shares.

The issue price per Acquisition Consideration Share represents (i) a discount of approximately 82.5% to the closing price per Aptus Share of HK$0.12 as quoted on GEM on 19 March, 2004, being the last full trading day for the Aptus Shares prior to the Joint Announcement; (ii) a discount of approximately of 84.98% to the 5-day average closing price per Aptus Share of HK$0.1398 as quoted on GEM up to and including 19 March, 2004; (iii) a discount of approximately 86.37% to the 10-day

6

LETTER FROM THE BOARD

average closing price per Aptus Share of HK$0.1541 as quoted on GEM up to and including 19 March, 2004; and (iv) a premium of approximately 20% over the net tangible asset value of HK$0.0174 per Aptus Share as at 30 September, 2003 based on the latest audited financial result of Aptus.

Conditions precedent:

Completion of the Sale and Purchase Agreement is conditional upon the fulfilment (or waiver, in certain cases) of various conditions precedent. The material conditions precedent are as follows:

• (i) the Aptus Shares remaining listed and traded on GEM at all times from the date of the Sale and Purchase Agreement to completion of the Sale and Purchase Agreement, save for any temporary suspension not exceeding fourteen consecutive trading days, or such longer period as the Vendor may accept in writing, and no indication being received on or before completion of the Sale and Purchase Agreement from the SFC or the Stock Exchange to the effect that the listing of the Shares on GEM will or may be withdrawn or objected to (or conditions will or may be attached thereto) as a result of completion of the Sale and Purchase Agreement or in connection with the terms of the Sale and Purchase Agreement;

• (ii) all consents which are required or appropriate for the entering into or the implementation or completion of the Sale and Purchase Agreement by the Vendor and Aptus or for the performance of their respective obligations under the Sale and Purchase Agreement having been obtained, including, without limitation, such consents (if appropriate or required) of the shareholders of Aptus and of the shareholders of the Vendor, the Stock Exchange and the SFC and all filings with any relevant governmental or regulatory authorities and other relevant third parties in Hong Kong, Cayman Islands or elsewhere which are required or appropriate for the entering into and the implementation of the Sale and Purchase Agreement having been made; all waiting periods required under the laws of Hong Kong, Cayman Islands or any other relevant jurisdictions having expired or terminated; all applicable statutory or other legal obligations having been complied with;

7

LETTER FROM THE BOARD

• (iii) the Stock Exchange approving the listing of and permission to deal in the Acquisition Consideration Shares;

• (iv) no indication from the Stock Exchange indicating that it will treat the transactions contemplated by the Sale and Purchase Agreement and/or the Subscription as a reverse takeover or as an application for a new listing of Aptus;

• (v) the warranties, representations and undertakings given by the Vendor and the warranties, representations and undertakings given by Aptus, in the Sale and Purchase Agreement remaining true and accurate in all material respects;

• (vi) the Vendor having been satisfied in its absolute discretion on its financial due diligence on the consolidated accounts of Aptus for the period ended 30 September, 2003;

• (vii) the shareholders of Aptus, if necessary, having approved the Sale and Purchase Agreement; and

• (viii) the SFC granting the Whitewash Waiver.

The Vendor may waive compliance with the conditions described above save for condition (iii) above.

If the above conditions precedent are not fulfilled or waived (as provided in the Sale and Purchase Agreement) in writing on or before 30 June, 2004 (or such later date as may be agreed by the parties), the Sale and Purchase Agreement will terminate and none of the parties to the Sale and Purchase Agreement shall have any claim against the others for costs, damages, compensation or otherwise, save in respect of any prior breach.

A deed of variation had been entered into by the relevant parties to the Transactions on 21 June, 2004 to extend the longstop date for the satisfaction of the conditions precedent to 30 August, 2004.

8

LETTER FROM THE BOARD

THE SUBSCRIPTION AGREEMENT

Parties to the Agreement:

1. the Vendor as subscriber

2. Aptus as issuer

Consideration:

The consideration for the Subscription Shares is approximately HK$15,500,000 payable in cash on completion of the Subscription Agreement.

The Subscription Shares represent approximately 119% existing issued share capital of Aptus and approximately 48% of the enlarged issued share capital of Aptus immediately after the completion of the Subscription Agreement (assuming that there will be no change in the issued share capital of Aptus from the date of the Joint Announcement to the Completion save for the issue of the Acquisition Consideration Shares and the Subscription Shares).

The issue price per Subscription Share represents (i) a discount of approximately 82.5% to the closing price per Aptus Share of HK$0.12 as quoted on GEM on 19 March, 2004; (ii) a discount of approximately of 84.98% to the 5-day average closing price per Aptus Share of HK$0.1398 as quoted on GEM for the 5-day period up to and including 19 March, 2004; (iii) a discount of approximately 86.37% to the 10-day average closing price per Aptus Share of HK$0.1541 as quoted on GEM for the 10-day period up to and including 19 March, 2004; and (iv) a premium of approximately 20% over the net tangible asset value of HK$0.0174 per Aptus Share as at 30 September, 2003 based on the latest audited financial result of Aptus.

The Subscription Price was negotiated on arm’s length basis with reference to the net asset value of Aptus, between B & B and Aptus and the directors of B & B and Aptus believe that the terms of the Subscription are fair and reasonable and in the interests of their respective shareholders as a whole.

9

LETTER FROM THE BOARD

Conditions precedent:

Completion of the Subscription Agreement is conditional upon the fulfilment (or waiver, in certain cases) of the following conditions precedent:

• (i) the Independent Aptus Shareholders in the EGM having approved (a) the Subscription Agreement; (b) by a separate resolution the relevant Independent Aptus Shareholders having approved the Whitewash Waiver with such Shareholders abstaining as may be required to abstain by law or by the rules of the Stock Exchange and the Executive and Shareholders which involved in or interested in the Transactions be abstained for voting;

• (ii) the Stock Exchange approving the listing of and permission to deal in the Subscription Shares;

• (iii) the Executive granting the Whitewash Waiver;

• (iv) the Vendor having been satisfied in its absolute discretion on its financial due diligence on the consolidated accounts of Aptus for the period ended 30 September, 2003; and

• (v) no indication from the Stock Exchange indicating that it will treat the transactions contemplated by the Sale and Purchase Agreement and/or the Subscription Agreement as a reverse takeover or as an application for a new listing of Aptus.

The Vendor may waive compliance with the conditions described above save for conditions (ii) above, and the Vendor will not waive condition (iii) above unless the Vendor has demonstrated to the satisfaction of the Executive that in the event that it will be required to make a mandatory offer under the Takeovers Code as a result of the Subscription, it has sufficient financial resources to fulfil its obligations under Rule 26 of the Takeovers Code.

If the above conditions precedent are not fulfilled or waived (as provided in the Subscription Agreement) in writing on or before the date falling 90 days from the date of the Subscription Agreement (or such later date as may be agreed), the Subscription Agreement will terminate and none of the parties shall have any claim against the others for costs, damages, compensation or otherwise, save in respect of any prior breach.

10

LETTER FROM THE BOARD

A deed of variation had been entered into by the relevant parties to the Transactions on 21 June, 2004 to extend the longstop date for the satisfaction of the conditions precedent to 30 August, 2004.

REASONS FOR THE DISPOSAL OF TARGET AND THE SUBSCRIPTION

The Directors believe that the disposal of the Target and the Subscription will enable B & B to acquire a business with synergy to the B & B Group at a reasonable price. The principal business of B & B is the distribution, production and trading of natural food products while the principal business of Aptus is the provision of product commercialisation services to international and domestic pharmaceutical and healthcare companies. Commercialisation services comprise direct marketing, product consulting and sales force management consulting services. The Directors are of the view that Aptus can provide its commercialisation services and its sales expertise to B & B which will help to extend B & B’s distribution network. In addition, the disposal of the Target will enable B & B to streamline its business and the Subscription will enable the B & B Group to diversify its business. In view of the synergistic effect of the Transactions, the Directors consider that the disposal of the Target and the Subscription Price offered by B & B are fair and reasonable and are in the interest of its shareholders and B & B as a whole.

INFORMATION ON HSING LONG

Hsing Long was incorporated in Singapore in 1996 and which is principally engaged in the business of the trading of edible oil by-products by sourcing crude palm oil from Indonesian plantations and selling it to refineries and processors in South East Asia, Indian sub-continent, Europe and in the PRC.

B & B acquired 75% of the equity interest of Hsing Long on 1 January, 2003 for a total consideration of HK$600,000 from independent third parties who are not connected persons of the Company as defined in the Previous GEM Listing Rules. Based on Hsing Long’s audited financial statements for the four years ended 31 December, 2003 and for the three-months ended 31 March, 2004, its audited net profit/(loss) before taxation and extraordinary items, audited net profit/(loss) after taxation and extraordinary items, turnover and net asset value are as follows:

	Twelve-months	Twelve-months	Twelve-months	Twelve-months	Twelve-months	Twelve-months	Twelve-months	Twelve-months	Three-months	Three-months
		ended		ended		ended		ended		ended
	31/12/2000		31/12/2001		31/12/2002		31/12/2003		31/03/2004
	(Audited)		(Audited)		(Audited)		(Audited)		(Audited)
	(S$)	(HK$)	(S$)	(HK$)	(S$)	(HK$)	(S$)	(HK$)	(S$)	(HK$)
Turnover	4,971,897	22,671,850	8,652,490	39,455,354	6,745,763	30,760,679	9,131,232	41,638,418	1,866,860	8,512,882
Net asset value	129,333	589,758	162,569	741,315	175,472	800,152	73,692	336,036	75,530	344,417
Profit/(loss) before tax
and extraordinary
items	712	3,247	36,936	168,428	19,135	87,256	(28,989)	(132,190)	1,838	8,381
Taxation	65	296	3,700	16,872	6,232	28,418	(2,681)	(12,225)	–	–
Profit/(loss) after tax
and extraordinary
items	647	2,951	33,236	151,556	12,903	58,838	(26,308)	(119,965)	1,838	8,381

11

LETTER FROM THE BOARD

As a result of the Sale and Purchase Agreement, the Company is expected to make a gain of HK$3,437,500 calculated by reference to the difference in the carrying cost of Hsing Long and the Purchase Price.

The Transactions are not expected to have any effect on the earnings and assets and liabilities of the Company.

THE WHITEWASH WAIVER

Prior to the Transactions, B & B did not have, directly or indirectly, an equity interest in the Aptus Group. On completion of the Sale and Purchase Agreement and the Subscription Agreement, B & B and parties acting in concert with it will have acquired approximately 60% of the issued share capital of Aptus. Under the Takeovers Code, upon completion of the Sale and Purchase Agreement and the Subscription Agreement, B & B would be obliged, by virtue of it having acquired 30% or more of the issued share capital of Aptus, to make a general offer under Rule 26 of the Takeovers Code to purchase all the Aptus Shares (other than the Acquisition Consideration Shares) and any Aptus Shares already owned, or agreed to be acquired by B & B and parties acting in concert with it. B & B has applied for and has been granted by the SFC the Whitewash Waiver.

GENERAL

The B & B Group is principally engaged in the distribution, production and trading of natural food products.

To the best of the Directors’ knowledge, information and belief, Aptus and the controlling shareholders of Aptus (including their beneficial owners) are independent third parties who are not connected persons (as that term is defined in the Previous GEM Listing Rules) of the Company.

FURTHER INFORMATION

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

By Order of the Board B & B Natural Products Limited Chan Ting

Director and Chief Executive Officer

12

GENERAL INFORMATION

APPENDIX

1. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, include particulars given in compliance with the Previous GEM Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that, to the best of their knowledge and belief:

• (a) the information contained in this circular is accurate and complete in all material respects and not misleading;

• (b) there are no other matters the omission of which would make any statement in this circular misleading; and

• (c) all opinions expressed in this circular have been arrived at after due and careful consideration and are founded on bases and assumptions that are fair and reasonable.

2. DIRECTORS’ INTERESTS AND SHORT POSITIONS IN SHARES, UNDERLYING SHARES AND DEBENTURES

As at the Latest Practicable Date, the interests or short positions of the Directors and chief executive of the Company in the shares, underlying shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which were notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which they are taken or deemed to have under such provisions of the SFO), or which were required, pursuant to Section 352 of the SFO, to be entered in the register referred to therein, or which were required, pursuant to Rule 5.40 to 5.58 of the Previous GEM Listing Rules, to be notified to the Company and the Stock Exchange, were as follows:

(1) Long positions in the Shares and shares of associated corporations

	Company/
	Name of
	associated		Number and
Name of Director	corporation	Capacity	class of securities
Cheung Kwai Lan	Company	Interest of a	262,080,000 Shares
		controlled	(Note 1)
		corporation
	Company	Beneficial owner	1,380,000 Shares

13

APPENDIX

GENERAL INFORMATION

Company/

Name of associated Number and Name of Director corporation Capacity class of securities Chan Tung Mei Company Interest of a 262,080,000 Shares controlled (Note 2) corporation Company Interest of spouse 1,380,000 Shares (Note 3) Peter Chin Wan Fung Company Beneficial owner 1,730,000 Shares Cheung Kwai Lan Best Frontier Beneficial owner 909 shares of US$1 each Interest of spouse 1 share of US$1 (Note 4) Chan Tung Mei Best Frontier Beneficial owner 1 share of US$1 Interest of spouse 909 shares of US$1 each (Note 5)

Notes:

1. The 262,080,000 Shares are owned by Best Frontier which is owned as to 99.89% and 0.11% by Madam Cheung Kwai Lan and Mr Chan Tung Mei respectively. Accordingly, Madam Cheung Kwai Lan is deemed to be interested in the Shares under the SFO.

2. The 262,080,000 Shares are owned by Best Frontier. Accordingly, Mr Chan Tung Mei is deemed to be interested in the Shares under the SFO.

3. The 1,380,000 Shares are owned by Madam Cheung Kwai Lan. Accordingly, Mr Chan Tung Mei is deemed to be interested in the Shares under the SFO.

4. The 1 share of US$1 in Best Frontier is owned by Mr Chan Tung Mei and Madam Cheung Kwai Lan is deemed to be interested in the shares under the SFO.

5. The 909 shares of US$1 each in Best Frontier are owned by Madam Cheung Kwai Lan and Mr Chan Tung Mei is deemed to be interested in the shares under the SFO.

14

GENERAL INFORMATION

APPENDIX

(2) Share options

Pre-IPO Share Option Scheme

Pursuant to the Pre-IPO share option scheme adopted by the Company on 18 October, 2002 (“Pre-IPO Share Option Scheme”), certain Directors had been granted share options to subscribe for Shares, details of which as at the Latest Practicable Date were as follows:

			Number of
			share options
			outstanding as
	Number of	Number of	at the Latest
	share options	share options	Practicable
Number of Director	granted	exercised	Date
	(note)
Peter Chin Wan Fung	2,600,000	1,730,000	870,000

Note : These share options were granted on 18 October, 2002, at an exercise price of HK$0.23 per Share, representing 50% of the offer price of HK$0.46 per Share in respect of the Company’s initial public offering. The options are exercisable in three equal portions. The respective portions are exercised at any time commencing on 12 May, 2003, 12 November, 2003 and 12 May, 2004 respectively. These share options, if not otherwise exercised, will lapse on 17 October, 2007.

Share Option Scheme

The Company has adopted a share option scheme on 18 October, 2002 (the “ Share Option Scheme ”), under which the Board may, at its discretion, invite any persons who satisfy the criteria of the Share Option Scheme, to take up options to subscribe for Shares.

The Share Option Scheme will remain valid for a period of 10 years commencing from 18 October, 2002.

As at the Latest Practicable Date, no share option had been granted or agreed to be granted under the Share Option Scheme.

Save as disclosed herein, as at the Latest Practicable Date, none of the Directors or chief executive of the Company had any interests or short positions in any shares, underlying shares or debentures of, the Company or any associated corporations (within the meaning of Part XV of the SFO) which would have to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which they are taken or deemed to have under such provisions of the SFO), or which were required, pursuant to section 352 of the SFO, to be entered in the register referred to therein, or which were required, pursuant to Rules 5.40 to 5.58 of the Previous GEM Listing Rules, to be notified to the Company and the Stock Exchange.

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GENERAL INFORMATION

APPENDIX

3. INTERESTS AND SHORT POSITIONS OF SHAREHOLDERS

So far as is known to any Director or chief executive of the Company, as at the Latest Practicable Date, the persons/companies (not being a Director or chief executive of the Company) who have interests or short positions in the Shares or underlying Shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO or will be 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 are as follows:

			Approximate
		Number	% of
Number of shareholder	Capacity	of Shares	shareholding
Best Frontier	Beneficial owner	262,080,000	54.45%
		Long position
Oppenheimer Fund, Inc	Investment manager	26,000,000	5.40%
		Long position
China Value Investment	Investment manager	24,620,000	5.11%
Limited		Long position
Asian Value Investment	Investment manager	24,620,000	5.11%
Fund, L. P.		Long position
		(Note)

Note : The 24,620,000 shares are owned by China Value Investment Limited which is wholly owned by Asian Value Investment Fund, L.P. Accordingly, Asian Value Investment Fund, L. P. is deemed to be interested in the Shares under the SFO.

Save as disclosed above, as at the Latest Practicable Date, the Directors are not aware of any other person who has an interest or short position in the shares or underlying shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or who is interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meeting of any other member of the Company.

4. LITIGATION

No member of the Group 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 any member of the Group.

5. SERVICE CONTRACTS

Each of the executive Directors, Madam Cheung Kwai Lan, Mr Chan Tung Mei and Mr Chan Ting, has entered into a service agreement with the Company for a term of three years

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APPENDIX

GENERAL INFORMATION

from 18 October, 2002, renewable automatically for successive terms of one year unless terminated by not less than six months’ notice in writing served by either party on the other. The initial annual remuneration of Madam Cheung Kwai Lan, Mr. Chan Tung Mei and Mr. Chan Ting are HK$1,950,000, HK$650,000 and HK$1,300,000 respectively. Under the service agreements, after each completed year of service, the remuneration of each executive Director shall be increased by not less than 5% of his/her annual remuneration immediately prior to such increase for each corresponding relevant year provided that: (a) the audited combined/ consolidated profit before taxation, minority interest and extraordinary items (if any) of the Group (“ Profit ”) for the first relevant financial year ending after 18 October, 2002 is not less than HK$12,000,000; and (b) the Profit for each of the following corresponding relevant financial years increases by not less than 10% of the annual Profit of the immediately preceding relevant financial year. Save as the abovementioned, remuneration of the executive Directors may be increased at the discretion of the Board. In addition, each executive Director will also be entitled to a discretionary bonus provided that the total amount of bonuses payable to all Directors for such year (if any) shall not be less than 10% of the Profit for the relevant financial year if the Profit for such financial year is not less than HK$12,000,000. Each of the executive Directors will also be entitled to all reasonable out-of-pocket expenses.

Save as disclosed above, none of the Directors has entered into any service agreements with any member of the Group (excluding contracts expiring or determinable by the employer within one year without payment of compensation other than statutory compensation).

6. GENERAL

• (a) The registered office of the Company is at Century Yard, Cricket Square, Hutchins Drive, P.O. Box 2681GT, George Town, Grand Cayman, British West Indies and the head office and principal place of business of the Company is at Unit 1603, 16th Floor, Dina House, 11 Duddell Street, Central, Hong Kong. The share registrar and transfer office of the Company is Standard Registrars Limited at Ground Floor, Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong.

• (b) The Compliance Officer of the Company is Mr. Chan Ting. Mr. Chan Ting is also an executive director of the Company.

• (c) The Company Secretary and the Qualified Accountant of the Company is Mr. Kwan Yiu Ming, Patrick. Mr. Kwan holds a bachelor degree of commerce in accounting from the Curtin University of Technology in Australia. Mr. Kwan is a fellow member of the Hong Kong Society of Accountants and the Association of Chartered Certified Accountants.

• (d) The Company established an audit committee on 18 October, 2002 with written terms of reference in compliance with Rule 5.23, 5.24 and 5.25 of the GEM Listing Rules. The primary duties of the audit committee are to review the Company’s annual report and accounts, half-year reports and quarterly reports and to provide advice and comments thereon to the Board. The audit committee is also responsible for reviewing and supervising the financial reporting process and internal control procedures of the Group.

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GENERAL INFORMATION

APPENDIX

The audit committee comprises Professor Peter Chin Wan Fung and Mr. Du Ying Min, both being independent non-executive Directors and further details of whom are as follows:

Professor Peter Chin Wan Fung, aged 66, is the Chair Professor and Chief of Medical Physics at the University of Hong Kong. He completed his Ph.D. program in 1966 at the University of Tasmania, Australia. He worked at the Institute for Plasma Research of Stanford University between 1968 and 1970. He then worked at the University of Hong Kong from September 1970 until the present day. He also acted as the Scientific Consultant to Stanford University and as a Visiting Professor to Kansas University. He acquired his Reader title in 1980, became the Personal Professor of Physics in 1984 and founded the Division of Medical Physics in the University of Hong Kong in 1998. He is one of the Members of the Board of Trustees of the Chinese University of Hong Kong – New Asia College. He is an editorial advisory member of the DRUG Indexed Medical Speciality publication. He has published well over 260 research articles in international peer reviewed journals and over 10 text books for Hong Kong high schools. He was appointed as an independent non-executive Director in September 2002.

Mr. Du Ying Min, aged 52, was the Government Deputy Mayor of Xin Xiang City ( ) from 1994 to 1997. He was a director of Zhong Cheng Group Judiciary Department from 1997 to 2001. He graduated from and received a master’s degree in investment management in November 1998. He is a committee member ( ) of the China Development Research Foundation ( ) and the chairman of . He was appointed as an independent non-executive Director in September 2002.

• (e) As at the Latest Practicable Date, so far as the Directors are aware, none of them or the management shareholders of the Company or their respective associates had any interests in a business which competes or may compete with the business of the Group.

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