Ulferts International Limited — Proxy Solicitation & Information Statement 2006

Jul 28, 2006

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your shares in Shougang Concord Grand (Group) Limited, you should at once hand this circular to the purchaser, the transferee or to the bank, licensed securities dealer or other agent through whom the sale or the transfer was effected for onward transmission to the purchaser or the 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.

首長四方（集團）有限公司[] SHOUGANG CONCORD GRAND (GROUP) LIMITED*

(Incorporated in Bermuda with limited liability)

(Stock Code: 730)

DISCLOSEABLE AND CONNECTED TRANSACTION

Transfer of shares in GDC Technology Limited

* For identification purpose only

28 July 2006

CONTENTS

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
Appendix – General information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8

DEFINITIONS

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

“associates”	has the meanings ascribed to it under the Listing Rules
“Board”	the board of Directors of the Company
“Business Day”	any day (excluding Saturday) that banks in Hong Kong generally
	open for business
“Company”	Shougang Concord Grand (Group) Limited, a company
	incorporated in Bermuda with limited liability whose securities
	are listed on the main board of the Stock Exchange
“Completion”	completion of the Transfer
“connected person”	has the meanings ascribed to it under the Listing Rules
“Director(s)”	the director(s) of the Company
“Dr. Chong”	Dr. Chong Man Nang, a director of GDC Technology and a
	connected person of the Company
“GDC”	Global Digital Creations Holdings Limited, a company
	incorporated in Bermuda with limited liability whose securities
	are listed on the GEM, an indirect non-wholly owned subsidiary
	of the Company
“GDC Technology”	GDC Technology Limited, a company incorporated in the British
	Virgin Islands, an indirect wholly-owned subsidiary of GDC and
	an indirect non-wholly owned subsidiary of the Company
“GEM”	the Growth Enterprise Market of the Stock Exchange
“Group”	the Company and its subsidiaries
“HK$”	Hong Kong Dollar, the lawful currency of Hong Kong
“Hong Kong”	the Hong Kong Special Administrative Region of the People’s
	Republic of China
“Latest Practicable Date”	26 July 2006, being the latest practicable date prior to the printing
	of this circular for the purpose of ascertaining certain information
	contained herein

1

DEFINITIONS

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

• “Mr. Cao” Mr. Cao Zhong, the Vice Chairman and Managing Director of the Company and the Chairman and Executive Director of GDC and a connected person of the Company

• “Mr. Chen” Mr. Chen Zheng, the Managing Director of Operations of the Company and the Chief Executive Officer and Executive Director of GDC and a connected person of the Company

• “SFO” Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)

• “Sale Shares” the 4,266,667 shares, 4,266,667 shares and 7,466,666 shares of HK$0.10 each in the issued share capital of GDC Technology to be transferred to Mr. Cao, Mr. Chen and Dr. Chong, respectively pursuant to the Transfer, representing 15% of the issued share capital of GDC Technology in aggregate

• “Share(s)” ordinary share(s) of HK$0.01 each in the share capital of the Company

• “Shareholder(s)” holders of the Share(s)

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

• “Transfer” the transfer of the Sale Shares to Mr. Cao, Mr. Chen and Dr. Chong

• “%” per cent.

2

LETTER FROM THE BOARD

首長四方（集團）有限公司[] SHOUGANG CONCORD GRAND (GROUP) LIMITED*

(Incorporated in Bermuda with limited liability)

(Stock Code: 730)

Directors: Wang Qinghai (Chairman) Cao Zhong (Vice Chairman and Managing Director) Chen Zheng (Managing Director of Operations) Wang Tian (Deputy Managing Director) Cheng Xiaoyu (Deputy Managing Director) Yuan Wenxin (Deputy Managing Director) Leung Shun Sang, Tony (Non-executive Director) Tam King Ching, Kenny (Independent Non-executive Director) Zhou Jianhong (Independent Non-executive Director) Liu Wei (Independent Non-executive Director)

Registered office: Canon’s Court 22 Victoria Street Hamilton HM12 Bermuda

Principal place of business in Hong Kong: 6th Floor Bank of East Asia Harbour View Centre 56 Gloucester Road Wanchai, Hong Kong

28 July 2006

To the Shareholders:

Dear Sir or Madam,

DISCLOSEABLE AND CONNECTED TRANSACTION

Transfer of shares in GDC Technology Limited

INTRODUCTION

On 6 July 2006, the Board announced that GDC, a non-wholly owned subsidiary of the Company, has agreed to transfer 4,266,667 shares, 4,266,667 shares and 7,466,666 shares in the issued share capital of GDC Technology, an indirect wholly-owned subsidiary of GDC, to Mr. Cao, Mr. Chen and Dr. Chong, respectively, for an aggregate cash consideration of HK$1,600,000, payable at Completion.

As at 5 July 2006, the Company was indirectly interested as to approximately 74.98% in GDC. Mr. Cao and Mr. Chen were both Directors, and Dr. Chong was a director of GDC Technology, an indirect non-wholly owned subsidiary of the Company, the transactions contemplated under the Transfer constituted a discloseable and connected transaction exempted from independent shareholders’ approval requirements for the Company under Rule 14A.32 of the Listing Rules.

* For identification purpose only

3

LETTER FROM THE BOARD

The purpose of this circular is to provide the Shareholders with further information in relation to the Transfer.

THE TRANSFER

Date

5 July 2006

Parties

• (1) GDC;

• (2) Mr. Cao;

• (3) Mr. Chen; and

• (4) Dr. Chong.

Transfer

Pursuant to the Transfer, GDC has agreed to transfer 4,266,667 shares, 4,266,667 shares and 7,466,666 shares in the issued share capital of GDC Technology, to Mr. Cao, Mr. Chen and Dr. Chong, respectively, for cash consideration of HK$426,666.70, HK$426,666.70 and HK$746,666.60, payable at Completion. The Sale Shares represent 15% of the issued share capital of GDC Technology.

GDC Technology was incorporated in the British Virgin Islands and is not required to prepare audited financial statements. Based on the unaudited consolidated financial statements of GDC Technology as at 31 May 2006, the net liability attributable to the Sale Shares was approximately HK$5,450,000, and the losses before and after taxation attributable to the Sale Shares for the year ended 31 December 2005 were approximately HK$1,640,000 and HK$1,586,000, respectively, and the profit before taxation and loss after taxation attributable to the Sale Shares for the year ended 31 December 2004 were approximately HK$34,000 and HK$31,000, respectively.

The consideration, which is equivalent to the par value of the Sale Shares (HK$0.10 per share), was determined after arm’s length negotiation between the parties on normal commercial terms. As per the unaudited consolidated financial statements as at 31 May 2006, GDC Technology was at net liability, the Directors (including the independent non-executive Directors) are of the view that the consideration was fair and reasonable so far as GDC and its shareholders are concerned.

4

LETTER FROM THE BOARD

Shareholding Structure

The shareholding structures of GDC Technology before and after Completion are as follows: –

Before Completion

==> picture [335 x 340] intentionally omitted <==

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

The Company Public
74.98% 25.02%
GDC
100%
GDC Technology
The Company Public
74.98% 25.02%
GDC Mr. Cao Mr. Chen Dr. Chong
85% 4% 4% 7%
GDC Technology
----- End of picture text -----

After Completion

At Completion, GDC Technology will remain a subsidiary of each of the Company and GDC.

Condition

Completion of the Transfer is conditional upon each of Mr. Cao, Mr. Chen and Dr. Chong has executed an undertaking in writing to GDC Technology that he will not sell, transfer, or otherwise dispose of any of his respective shares in GDC Technology acquired as a result of the Transfer for a period of 12 months from Completion. GDC Technology may refuse to register any transfers made by Mr. Cao, Mr. Chen or Dr. Chong, if in the opinion of GDC Technology, the transfer is made in breach of the above condition.

If the condition above is not satisfied on or before 31 July 2006 or such later date as may be agreed between the parties, the Transfer will not be effected and none of the parties will have any liability under or pursuant to the provisions of the Transfer except in respect of any antecedent breach.

5

LETTER FROM THE BOARD

Completion

Completion will take place on the third Business Day after the above condition has been satisfied.

REASONS FOR TRANSFER

As at the Latest Practicable Date, GDC Technology was an indirect wholly-owned subsidiary of GDC and was principally engaged in the provision of computing solutions for digital content distribution and exhibitions.

GDC Technology has been operating at a loss and based on its unaudited consolidated financial statements as at 31 May 2006, it was in a position of net liability. The Board considers that the Transfer would lead to Mr. Cao, Mr. Chen and Dr. Chong having personal interests in GDC Technology, which would enhance the commitment and participation by Mr. Cao, Mr. Chen and Dr. Chong in the business of GDC Technology. As the personal investment of each of Mr. Cao, Mr. Chen and Dr. Chong will be directly affected by the performance of GDC Technology, GDC anticipates that Mr. Cao, Mr. Chen and Dr. Chong would devote more time and be more focused on the business of GDC Technology. This additional commitment will facilitate the development of GDC Technology and in turn the continuous development of GDC. Accordingly, the Directors (including the independent non-executive Directors) consider that the Transfer is fair and reasonable and is beneficial to GDC and its shareholders as a whole.

FINANCIAL EFFECTS OF THE TRANSFER

Upon Completion, GDC Technology will remain a subsidiary of each of the Company and GDC and its financial results and assets and liabilities will remain to be consolidated into the consolidated financial statements of both the Company and GDC.

GDC will receive an aggregate cash consideration of HK$1,600,000, which is also the gross and net proceeds, from the Transfer. Based on the unaudited consolidated net liability as at 31 May 2006 attributable to the Sale Shares, the Company and GDC will realise a gain on deemed disposal, being the difference between the net proceeds of the Transfer and the unaudited consolidated net liability of approximately HK$5,450,000 as at 31 May 2006 attributable to the Sale Shares, in the amount of approximately HK$7,050,000 upon Completion. Net asset value of the Company and GDC based on the unaudited consolidated net liability attributable to the Sale Shares is expected to increase by approximately HK$7,050,000 (being the gain on the deemed disposal by GDC). The Transfer is not expected to have any material effect on the liabilities and earnings of the Company or GDC.

The net proceeds of the Transfer amounting to HK$1,600,000 will be reinvested into GDC Technology in proportion to GDC’s interest in GDC Technology in the form of a shareholder’s loan.

INFORMATION ON THE COMPANY

The Company is an investment holding company and its subsidiaries are principally engaged in property investment and management, cultural mass media and financial services.

6

LETTER FROM THE BOARD

GENERAL

As at the Latest Practicable Date, the Company was indirectly interested as to approximately 74.98% in GDC. Mr. Cao and Mr. Chen were both Directors, and Dr. Chong was a director of GDC Technology, an indirect non-wholly owned subsidiary of the Company. As each of the percentage ratios applicable to the Transfer is less than 25% and the total consideration is less than HK$10,000,000, the transactions contemplated under the Transfer constituted a discloseable and connected transaction exempted from independent shareholders’ approval requirements for the Company under Rule 14A.32 of the Listing Rules.

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

Yours faithfully, By Order of the Board of SHOUGANG CONCORD GRAND (GROUP) LIMITED Cao Zhong

Vice Chairman and Managing Director

7

GENERAL INFORMATION

APPENDIX

1. RESPONSIBILITY STATEMENT

This circular includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Group. The Directors collectively and individually accept full responsibility for the accuracy of the information contained in this circular with regard to the Group and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, opinions expressed in this circular have been arrived at after due and careful consideration and there are no other facts not contained in this circular, the omission of which would make any statement contained herein misleading.

2. DISCLOSURE OF INTERESTS

(a) Interests and short positions of the Directors in Shares and underlying Shares of the Company and its associated corporations

As at the Latest Practicable Date, the interests and short positions of the Directors and the chief executive of the Company in the Shares, underlying Shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which (a) were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they were taken or deemed to have under such provisions of the SFO); or (b) were required, pursuant to section 352 of the SFO, to be entered in the register of the Company referred to therein; or (c) were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers (the “ Model Code ”) contained in the Listing Rules, to be notified to the Company and the Stock Exchange were as follows:

Long positions in Shares and underlying Shares:

Capacity in Name of which interests Director are held Wang Qinghai Beneficial owner Cao Zhong Beneficial owner Cheng Xiaoyu Beneficial owner Yuan Wenxin Beneficial owner Leung Shun Sang, Tony Beneficial owner	Number of Shares/underlying Shares held in the Company Total interests Interests as to % under to the issued Interests equity Total share capital in Shares derivatives interests of the Company* 8,278,679 – 8,278,679 0.73% 8,278,679 – 8,278,679 0.73% 8,278,679 – 8,278,679 0.73% 4,920,000 – 4,920,000 0.43% 8,278,000 679 8,278,679 0.73%

• Unlisted cash settled options were granted pursuant to the Company’s share option scheme adopted on 7 June 2002 (the “ Scheme ”). Upon exercise of the share options in accordance with the Scheme, ordinary shares of HK$0.01 each in the share capital of the Company are issuable. The share options are personal to the respective Directors.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors and chief executive of the Company had any interest or short position in the Shares, underlying Shares and

8

GENERAL INFORMATION

APPENDIX

debentures of the Company or any of its associated corporation (within the meaning of Part XV of the SFO) which were required (a) 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 were taken or deemed to have under such provisions of the SFO); or (b) pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (c) pursuant to the Model Code, to be notified to the Company and the Stock Exchange.

Save as disclosed in this circular, none of the Directors or proposed Director is a director or employee of a company which has an interest in the Shares and underlying Shares of the Company which would fall to be disclosed under the provisions of Division 2 and 3 of Part XV of the SFO.

(b) Service contracts

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

(c) Directors’ interests in competing businesses

As at the Latest Practicable Date, the interests of the Directors in the businesses (other than those businesses where the Directors were appointed as directors to represent the interests of the Company and/or any member of the Group) which were considered to compete or were likely to compete, either directly or indirectly, with the businesses of the Group were as follows:

		Description of
	Name of entity	businesses of the
	whose businesses were	entity which were
	considered to compete	considered to compete	Nature
	or likely to compete	or likely to compete	of interest
	with the businesses	with the businesses	of the Director
Name of Director	of the Group	of the Group	in the entity
Wang Qinghai	Shougang Corporation#	Property investment	Director
Cao Zhong	China Shougang	Property investment	Director
	International Trade and
	Engineering Corporation#

Such businesses may be carried out through its subsidiaries or associates or by way of other forms of investments.

Save as disclosed above, as at the Latest Practicable Date, in so far as the Directors were aware, none of the Directors or their respective associates had any interest in a business that competed or was likely to compete with the business of the Group.

9

GENERAL INFORMATION

APPENDIX

(d) Directors’ interests in assets and contracts

None of the Directors had any direct or indirect interest in any assets which have been acquired or disposed 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 since 31 December 2005, being the date to which the latest published audited accounts of the Group were made up.

None of the Directors was materially interested, directly or indirectly, in any contract or arrangements entered into by any member of the Group subsisting at the Latest Practicable Date and which was significant in relation to the business of the Group.

3. SUBSTANTIAL SHAREHOLDERS

• (a) As at the Latest Practicable Date, according to the register kept by the Company pursuant to Section 336 of SFO, the following persons and companies (other than the Directors or chief executive of the Company) had an interest or short position in the Shares and the underlying Shares of the Company which would fall to be disclosed to the Company under the provisions of the Divisions 2 and 3 of Part XV of the SFO:

Long positions in the Shares

			Percentage of
		Number of	interest as to the
	Capacity in which	Shares held	issued share capital
Name of Shareholder	interests are held	in the Company	of the Company	Note(s)
Shougang Holding	Interests of controlled	465,753,673	40.97%	1
(Hong Kong) Limited	corporations
(“Shougang Holding”)
Wheeling Holdings	Beneficial owner	430,491,315	37.87%	1
Limited (“Wheeling”)
Cheung Kong (Holdings)	Interests of controlled	133,048,717	11.70%	2, 3
Limited (“Cheung Kong”)	corporations
Max Same Investment	Beneficial owner	91,491,193	8.05%	2
Limited (“Max Same”)
Li Ka-shing	Interests of controlled	133,048,717	11.70%	3
	corporations, founder
	of discretionary trusts
Li Ka-Shing Unity	Trustee	133,048,717	11.70%	3
Trustee Company
Limited (“TUT1”)

10

GENERAL INFORMATION

APPENDIX

			Percentage of
		Number of	interest as to the
	Capacity in which	Shares held	issued share capital
Name of Shareholder	interests are held	in the Company	of the Company	Note(s)
Li Ka-Shing Unity	Trustee,	133,048,717	11.70%	3
Trustee Corporation	beneficiary
Limited (“TDT1”)	of a trust
Li Ka-Shing Unity	Trustee,	133,048,717	11.70%	3
Trustcorp Limited	beneficiary
(“TDT2”)	of a trust

Notes:

1. Wheeling was a wholly-owned subsidiary of Shougang Holding and its interest was included in the interest held by Shougang Holding.

2. Max Same was a wholly-owned subsidiary of Cheung Kong and its interest was included in the interest held by Cheung Kong.

3. Li Ka-Shing Unity Holdings Limited (“ Unity Holdco ”), of which each of Mr. Li Ka-shing, Mr. Li Tzar Kuoi, Victor and Mr. Li Tzar Kai, Richard was interested in one-third of the entire issued share capital, owned the entire issued share capital of TUT1. TUT1 as trustee of The Li Ka-Shing Unity Trust (“ UT1 ”), together with certain companies which TUT1 as trustee of UT1 was entitled to exercise or control the exercise of more than one-third of the voting power at their general meetings, held more than one-third of the issued share capital of Cheung Kong.

In addition, Unity Holdco also owned the entire issued share capital of TDT1 as trustee of The Li KaShing Unity Discretionary Trust (“ DT1 ”) and TDT2 as trustee of another discretionary trust (“ DT2 ”). Each of TDT1 and TDT2 held units in UT1.

By virtue of the SFO, each of Mr. Li Ka-shing, being the settlor and may being regarded as a founder of each of DT1 and DT2 for the purpose of the SFO, TUT1, TDT1 and TDT2 was deemed to be interested in the same block of Shares in which Cheung Kong was interested under the SFO.

11

GENERAL INFORMATION

APPENDIX

• (b) As at the Latest Practicable Date, so far as is known to any Director, the following persons and companies were, 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 or had any option in respect of such capital:

Name of registered	Name of	Name of member	% of attributable
Shareholder	beneficial owner	of the Group	interest
Zhou Lin	Zhou Lin	四方源創國際影視	20%
		文化傳播（北京）有限公司
		(Concord Creation International
		(Beijing) Company Limited#)
		(“Concord Creation”)
Yang Yong	Yang Yong	廣東四方源創動畫製作有限公司	20%
		(Concord Creation Animation
		Production Guangdong Company Limited#)
		(“Guangdong Creation”)
Concord Creation	Zhou Lin	Guangdong Creation	16%
			(Note 1)
Concord Creation	Zhou Lin	東陽市四方源創影視製作有限公司	20%
		(Dongyang Concord Creation	(Note 2)
		Film@TV Company Limited#)
		(“Dongyang Creation”)
Guangdong Creation	Zhou Lin	杭州四方源創動畫製作有限公司	16%
and Chen Zheng		(Concord Creation Animation	(Note 3)
		Production Hangzhou
		Company Limited#)
		(“Hangzhou Creation”)
Guangdong Creation	Yang Yong	Hangzhou Creation	20%
and Chen Zheng			(Note 4)

# For identification purpose only

Notes:

1. Guangdong Creation was held as to 80% by Concord Creation. As Concord Creation was beneficially held as to 20% by Zhou Lin, Guangdong Creation was deemed to be held as to 16% by Zhou Lin.

2. Dongyang Creation was held as to 90% by Concord Creation. As Concord Creation was beneficially held as to 20% by Zhou Lin, Dongyang Creation was deemed to be held as to 18% by Zhou Lin. Together with Zhou Lin’s beneficial interest of 2% held in Dongyang Creation through another nominee, Zhou Lin has an aggregate interest of 20% in Dongyang Creation.

12

GENERAL INFORMATION

APPENDIX

1. Hangzhou Creation was beneficially held as to 100% by Guangdong Creation which included its beneficial interest of 10% held in Hangzhou Creation through its nominee, Chen Zheng. As Guangdong Creation was deemed to be beneficially held as to 16% by Zhou Lin, Hangzhou Creation was deemed to be held as to 16% by Zhou Lin.

2. Hangzhou Creation was beneficially held as to 100% by Guangdong Creation which included its beneficial interest of 10% held in Hangzhou Creation through its nominee, Chen Zheng. As Guangdong Creation was held as to 20% by Yang Yong, Hangzhou Creation was deemed to be held as to 20% by Yang Yong.

Save as disclosed above, the Directors and chief executive of the Company were not aware of any person who has an interest or short position in the Shares, or underlying Shares which would fall to be disclosed to the Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO, or who was directly or indirectly interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other member of the Group.

4. LITIGATION

On 14 May 2003, GDC Entertainment Limited (“ GDC Entertainment ”), a subsidiary of the Company, entered into a co-production agreement (the “ Co-production Agreement ”) with Westwood Audiovisual and Multimedia Consultants, Inc. (“ WAMC ”) and Production and Partners Multimedia, SAS (“ P&PM ”), in which the Group has a 25% equity interest, in relation to an animated television series.

In about November 2004, P&PM and WAMC commenced proceedings against GDC Entertainment in the Court of Commerce of Angouleme (France) alleging breaches on the part of GDC Entertainment of the Co-production Agreement.

In relation to the French proceedings, the Group’s French legal advisers have advised that (i) the proceedings would be very difficult and costly for P&PM and WAMC to pursue and (ii) the enforcement of P&PM’s and WAMC’s claims should they succeed would only be limited to the assets of GDC Entertainment.

Further, arbitration proceedings were commenced by GDC Entertainment against P&PM and WAMC in Hong Kong by way of a notice of arbitration dated 16 June 2005 issued pursuant to the Co-production Agreement. In the arbitration, issues will be raised by GDC Entertainment as to whether P&PM and/or WAMC was in repudiatory breach of the Co-production Agreement which entitled GDC Entertainment to terminate the same and claim damages from P&PM and WAMC. Pleadings have not yet exchanged in the arbitration. P&PM and WAMC have applied to the arbitrator for the determination of a preliminary issue as to whether the arbitrator has jurisdiction to hear the dispute which GDC Entertainment will refer to the arbitrator in the arbitration. The hearing of the application was held on 20 January 2006. The arbitrator published her Award on the Issue of Jurisdiction on 23 March 2006 dismissing the application, and made an order for costs in GDC Entertainment’s favour in respect of the application. As at the Latest Practicable Date, no further steps have been taken by the parties to advance the arbitration.

Save as disclosed above, neither the Company nor any other members of the Group was engaged in any litigation or arbitration of material importance and no litigation, arbitration or claim of material importance was known to the Directors to be pending or threatened against any member of the Group as at the Latest Practicable Date.

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GENERAL INFORMATION

APPENDIX

5. MATERIAL ADVERSE CHANGE

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

6. GENERAL

• (a) The registered office of the Company is at Canon’s Court, 22 Victoria Street, Hamilton HM12, Bermuda and the principal place of business of the Company in Hong Kong is at 6th Floor, Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong.

• (b) The Company’s Hong Kong branch share registrars and transfer office is Tengis Limited, 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong.

• (c) The company secretary of the Company is Ms. Cheng Man Ching, a fellow member of each of The Institute of Chartered Secretaries and Administrators and The Hong Kong Institute of Chartered Secretaries and an associate member of the Hong Kong Institute of Bankers. She holds a master degree in business administration and a master degree in arts.

• (d) The qualified accountant of the Company is Mr. Tsang Yu Tit, who is an associate member of The Hong Kong Institute of Certified Public Accountants and a fellow member of The Association of Chartered Certified Accountants.

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

7. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the instruments of transfer in respect of the Transfer are available for inspection at the Company’s principal place of business in Hong Kong at 6th Floor, Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong during normal business hours on any weekday other than public holidays, from the date of this circular up to at including 11 August 2006.

14