Ulferts International Limited — Proxy Solicitation & Information Statement 2008

Jul 3, 2008

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

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

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

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 TRANSACTION: FINANCE LEASE ARRANGEMENT RELATING TO PURCHASE AND LEASEBACK OF AIRCRAFT

* For identification purposes only

4 July 2008

CONTENTS

	Page
Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
Aircraft Purchase Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Aircraft Finance Lease Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Reasons for the Finance Lease Arrangement and Benefits to the Company . . . . . . . . . . . . . .	6
Implication under the Listing Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Further information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Appendix – General Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8

DEFINITIONS

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

“Aircraft” one Boeing 737-300 aircraft built in 1993

• “Aircraft Finance Lease Agreement” the aircraft finance lease agreement dated 13 June 2008 (as may be amended and supplemented from time to time) pursuant to which South China Leasing agreed to leaseback the Aircraft to Xinhua Airlines

• “Aircraft Purchase Agreement” the aircraft purchase agreement dated 13 June 2008 (as may be amended and supplemented from time to time) pursuant to which South China Leasing agreed to purchase the Aircraft from Xinhua Airlines

• “Board” the board of Directors

• “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

• “Consideration” the consideration paid by South China Leasing for the purchase of the Aircraft from Xinhua Airlines pursuant to the Aircraft Purchase Agreement

• “Director(s)” the directors of the Company

• “Finance Lease Arrangement” the purchase by South China Leasing from, and the leaseback to, Xinhua Airlines of the Aircraft pursuant to the Finance Lease Documents

• “Finance Lease Documents” the Aircraft Purchase Agreement, the Aircraft Finance Lease Agreement and the Guarantee

• “Group” the Company and its subsidiaries “Guarantee” the lease repayment guarantee, including but not limited to, guarantees in the form of bank guarantee letter and/or corporate guarantee, approved by South China Leasing for securing the obligations of Xinhua Airlines to South China Leasing under the Aircraft Finance Lease Agreement

• “HK$” Hong Kong dollar, the lawful currency of Hong Kong “Hong Kong” the Hong Kong Special Administrative Region of the PRC

1

DEFINITIONS

“Latest Practicable Date”	2 July 2008, being the latest practicable date prior to the printing
	of this circular for the purpose of ascertaining certain information
	contained herein
“Lease Payment”	the lease payment which South China Leasing is entitled to
	receive for the leaseback of the Aircraft to Xinhua Airlines
	pursuant to the Aircraft Finance Lease Agreement
“Leasing Handling Fee”	an one-off handling fee in the sum of approximately
	RMB3,888,000 (equivalent to approximately HK$4,369,000) paid
	by Xinhua Airlines to South China Leasing for the leaseback of
	the Aircraft
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock
	Exchange
“PRC”	the People’s Republic of China, which, for the purposes of this
	circular, does not include Hong Kong, Macau Special
	Administrative Region and Taiwan
“RMB”	Renminbi, the lawful currency of the PRC
“SFO”	the Securities and Futures Ordinance (Chapter 571 of the Laws of
	Hong Kong)
“Shareholders”	the shareholders of the Company
“South China Leasing”	South China International Leasing Company Limited, a sino-
	foreign equity joint venture established in the PRC and an indirect
	80% owned subsidiary of the Company
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Xinhua Airlines”	China Xinhua Airlines Company Limited, a company established
	in the PRC and an independent third party

Unless otherwise specified in this circular, translations of RMB into HK$ are made in this circular, for illustration only, at the rate of RMB1.00 to HK$0.89. No representation is made that any amounts in RMB or HK$ could have been or could be converted at that rate or at any other rate or at all.

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) 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) Yip Kin Man, Raymond (Independent Non-executive Director)

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

Principal Office in Hong Kong: Rooms 1101-4, 11th Floor Harcourt House 39 Gloucester Road Wanchai Hong Kong 4 July 2008

To the Shareholders

Dear Sir or Madam,

DISCLOSEABLE TRANSACTION: FINANCE LEASE ARRANGEMENT RELATING TO PURCHASE AND LEASEBACK OF AIRCRAFT

INTRODUCTION

On 16 June 2008, the Board announced that on 13 June 2008, South China Leasing, an indirect 80% owned subsidiary of the Company, as purchaser and Xinhua Airlines, an independent third party, as seller entered into the Aircraft Purchase Agreement, pursuant to which South China Leasing agreed to purchase the Aircraft from Xinhua Airlines at a consideration of RMB130,000,000 (equivalent to approximately HK$146,067,000). On the same day, South China Leasing, as lessor and Xinhua Airlines, as lessee entered into the Aircraft Finance Lease Agreement, pursuant to which South China Leasing agreed to leaseback the Aircraft to Xinhua Airlines.

* For identification purposes only

3

LETTER FROM THE BOARD

The purpose of this circular is to provide the Shareholders with, among other things, details of the Finance Lease Arrangement and other information as required under the Listing Rules. Principal terms of the Aircraft Purchase Agreement and Aircraft Finance Lease Agreement are set out below in this circular.

AIRCRAFT PURCHASE AGREEMENT

On 13 June 2008, South China Leasing, an indirect 80% owned subsidiary of the Company, as purchaser and Xinhua Airlines, an independent third party, as seller entered into the Aircraft Purchase Agreement, pursuant to which South China Leasing agreed to purchase the Aircraft from Xinhua Airlines.

The details of the transaction are summarised as follows:

Date of the agreement

13 June 2008

Parties to the agreement

Purchaser: South China Leasing, an indirect 80% owned subsidiary of the Company, is principally engaged in the provision of finance leasing, including the leasing of machinery, equipment, electrical equipment, meters, motor vehicles and the leasing of immovable properties in the PRC; and

Seller: Xinhua Airlines is principally engaged in dealing with domestic passenger and freight transportation. To the best of the Directors’ knowledge, information and belief, and having made all reasonable enquiry, Xinhua Airlines and its ultimate beneficial owner are third parties independent of the Company and its connected persons (as defined in the Listing Rules).

Subject matter of the agreement

South China Leasing agreed to purchase the Aircraft from Xinhua Airlines subject to the terms and conditions of the Aircraft Purchase Agreement, which is conditional upon, amongst others, South China Leasing agreeing to leaseback the Aircraft to Xinhua Airlines.

Consideration

The Consideration for the purchase of the Aircraft is RMB130,000,000 (equivalent to approximately HK$146,067,000), which has been agreed after arm’s length negotiations between South China Leasing and Xinhua Airlines with reference to a valuation report dated 24 December 2007 issued by 中和資產評估有限公司 (Zhong He Appraisal Company Limited), a professional and independent valuer, with the valuation amount of RMB149,200,000 (equivalent to approximately HK$167,640,000) and after taking into account of various factors such as the age of the Aircraft, the condition of the Aircraft, market price of comparable aircrafts, etc.

4

LETTER FROM THE BOARD

Payment and delivery terms

The Consideration was paid in cash. South China Leasing has, upon written request by Xinhua Airlines, made a prepayment in the sum of RMB50,000,000 (equivalent to approximately HK$56,180,000) (the “Prepayment” ) to Xinhua Airlines prior to the signing of the Finance Lease Documents, and interest accrued on such Prepayment at a rate of 8.514% per annum from the date of the Prepayment up to the date when the remaining balance of the Consideration was paid. Interest accrued on the Prepayment amounted to approximately RMB355,000 (equivalent to approximately HK$399,000). The Consideration after deducting the Leasing Handling Fee and the accrued interest on the Prepayment was paid to Xinhua Airlines on the date on which the Aircraft was delivered by Xinhua Airlines to South China Leasing. The delivery of the Aircraft took place on 13 June 2008 at the Beijing Airport. The Aircraft was delivered on an “as is” basis.

Source of funding

The transaction under the Aircraft Purchase Agreement was funded through bank borrowings (pursuant to which the Aircraft was mortgaged to the mortgagee bank) and internal resources of South China Leasing.

AIRCRAFT FINANCE LEASE AGREEMENT

On 13 June 2008, South China Leasing, as lessor and Xinhua Airlines, as lessee entered into the Aircraft Finance Lease Agreement, pursuant to which South China Leasing agreed to leaseback the Aircraft to Xinhua Airlines.

The details of the transaction are summarised as follows:

Date of the agreement

13 June 2008

Parties to the agreement

Lessor: South China Leasing; and

Lessee: Xinhua Airlines.

Subject matter of the agreement

South China Leasing agreed to leaseback the Aircraft to Xinhua Airlines for a term described below, at the end of which Xinhua Airlines has an option to purchase the Aircraft at the price specified below.

5

LETTER FROM THE BOARD

Term of the Aircraft Finance Lease Agreement

The Aircraft Finance Lease Agreement is for a lease term of sixty (60) months commencing from the date on which the Aircraft is to be delivered to Xinhua Airlines. The delivery of the Aircraft took place on 13 June 2008 at the Beijing Airport. The Aircraft was delivered on an “as is” basis.

Lease Payments

South China Leasing is entitled to receive the Lease Payments from Xinhua Airlines on a quarterly basis in advance with the first quarterly payment expected to be paid in or around September 2008. The aggregate amount of Lease Payment payable by Xinhua Airlines under the entire lease term is RMB130,000,000 (equivalent to approximately HK$146,067,000) together with finance lease charge which is determined at a rate of 10% above the benchmark rate for 5-year loan promulgated by the People’s Bank of China. Based on the benchmark rate for 5-year loan promulgated by the People’s Bank of China of 7.74% at the date of the Aircraft Finance Lease Agreement, the Lease Payment for each quarterly period is approximately RMB8,049,000 (equivalent to approximately HK$9,044,000). South China Leasing is also entitled to receive the Leasing Handling Fee under the Aircraft Finance Lease Agreement.

The Lease Payments have been agreed after arm’s length negotiations by reference to the Consideration and the prevailing market rate for aircraft finance leases of comparable aircrafts for comparable term.

Lessee’s option to purchase

At the end of the lease term of the Aircraft Finance Lease Agreement, Xinhua Airlines shall have the option to purchase the Aircraft at a nominal purchase price of RMB10,000 (equivalent to approximately HK$11,000).

REASONS FOR THE FINANCE LEASE ARRANGEMENT AND BENEFITS TO THE COMPANY

The Company is an investment holding company and its subsidiaries are principally engaged in provision and distribution of cultural recreations content, provision of financial services and property investment and management.

The entering into of the Finance Lease Arrangement is in the ordinary and usual course of business of South China Leasing. With reference to the benchmark rate for 5-year loan promulgated by the People’s Bank of China of 7.74% at the date of the Aircraft Finance Lease Agreement, it is expected that South China Leasing will earn a finance lease income of about RMB30,986,000 (equivalent to approximately HK$34,816,000) over the whole 60-month lease term under the Finance Lease Arrangement. The entering into of the Finance Lease Arrangement and the funding through bank borrowings would increase the consolidated assets and liabilities of the Group both by approximately RMB113,888,000 (equivalent to approximately HK$127,964,000).

6

LETTER FROM THE BOARD

The Directors are of the view that the terms of the Finance Lease Arrangement are fair and reasonable and in the interests of the Shareholders as a whole.

IMPLICATION UNDER THE LISTING RULES

As the applicable percentage ratios under Rule 14.07 of the Listing Rules in respect of the Finance Lease Arrangement exceed 5% but are below 25%, the Finance Lease Arrangement constitutes a discloseable transaction for the Company under the Listing Rules.

FURTHER INFORMATION

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

Yours faithfully, By order of the Board

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 Company. The Directors collectively and individually accept full responsibility for the accuracy of the information contained in this circular and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts the omission of which would make any statement 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:

• (i) Long positions in shares and underlying shares of the Company

Capacity in which Name of interests are Director held Wang Qinghai Beneficial owner Cao Zhong Beneficial owner Chen Zheng Beneficial owner Wang Tian Beneficial owner Yuan Wenxin Beneficial owner	Number of shares/underlying shares held Percentage in the Company of total interest as to the issued share Interests capital of Interests in under equity Total the shares derivatives interests Company* – 11,368,000 11,368,000 0.99% – 22,868,000 22,868,000 1.99% – 18,368,000 18,368,000 1.60% 4,000,000 11,094,000 15,094,000 1.31% 4,000,000 15,094,000 19,094,000 1.66%

8

GENERAL INFORMATION

APPENDIX

Capacity in which Name of interests are Director held Leung Shun Sang, Tony Beneficial owner Tam King Ching, Kenny Beneficial owner Zhou Jianhong Beneficial owner Yip Kin Man, Raymond Beneficial owner	Number of shares/underlying shares held Percentage in the Company of total interest as to the issued share Interests capital of Interests in under equity Total the shares derivatives interests Company* 8,278,000 19,368,679 27,646,679 2.40% – 2,286,000 2,286,000 0.20% – 2,286,000 2,286,000 0.20% – 2,286,000 2,286,000 0.20%

• The relevant interests are unlisted physically settled options 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.

• (ii) Long positions in shares and underlying shares of Global Digital Creations Holdings Limited ( “GDC” ), an associated corporation of the Company:

Capacity in which Name of interests are Director held Cao Zhong Beneficial owner Chen Zheng Beneficial owner Wang Tian Beneficial owner Leung Shun Sang, Tony Beneficial owner Zhou Jianhong Beneficial owner	Number of shares/underlying shares Percentage held in GDC of total interest as to the issued Interests share Interests in under equity Total capital of shares derivatives interests GDC* 8,008,200 4,900,000 12,908,200 1.00% 8,718,200 4,900,000 13,618,200 1.05% 820 – 820 0.00% 9,358,200 4,900,000 14,258,200 1.10% 500,615 – 500,615 0.04%

• The relevant interests are unlisted physically settled options granted pursuant to GDC’s share option scheme adopted on 18 July 2003 (the “ GDC Scheme ”). Upon exercise of the share options in accordance with the GDC Scheme, ordinary shares of HK$0.01 each in the share capital of GDC are issuable. The share options are personal to the respective Directors.

9

GENERAL INFORMATION

APPENDIX

• (iii) Long positions in shares and underlying shares of GDC Technology Limited (“ GDC Tech ”), an associated corporation of the Company:

Capacity in which Name of interests are Director held Cao Zhong Beneficial owner Chen Zheng Beneficial owner Leung Shun Sang, Tony Beneficial owner	Number of shares/underlying shares Percentage held in GDC Tech of total interest as to the issued Interests share Interests in under equity Total capital of shares derivatives interests GDC Tech* 8,533,334 1,650,000 10,183,334 4.38% 8,533,334 1,650,000 10,183,334 4.38% 2,130,000 1,653,333 3,783,333 1.63%

• The relevant interest are unlisted physically settled options granted pursuant to GDC Tech’s share option scheme adopted on 19 September 2006 (the “ GDC Tech Scheme ”). Upon exercise of the share options in accordance with the GDC Tech Scheme, ordinary shares of HK$0.1 each in the share capital of GDC Tech 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 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) Directors’ 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).

10

GENERAL INFORMATION

APPENDIX

(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:

	Name of entity whose		Description of businesses
	businesses were considered		of the entity which were	Nature of
	to compete or likely to		considered to compete or	interest of
Name of	compete with the		likely to compete with the	the Director
Director	businesses of the Group		businesses 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	#
	Shougang Holding		Property investment	Director
	(Hong Kong) Limited #
	(“Shougang Holding”)

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

The Board is independent from the boards of the above-mentioned entities and is accountable to the Shareholders. Coupled with the diligence of its independent non-executive Directors whose views carry significant weight in the Board’s decisions, the Group is capable of carrying on its businesses independently of, and at arm’s length from, the businesses of these entities.

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.

11

GENERAL INFORMATION

APPENDIX

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 of the Company:

			Percentage of
			interest as to the
	Capacity in	Number of	issued share
	which interests	shares held in	capital of the
Name of Shareholder	are held	the Company	Company	Note(s)
Shougang Holding	Interests of controlled	489,450,710	42.51%	1
	corporations
Wheeling Holdings	Beneficial owner	430,491,315	37.39%	1
Limited (“Wheeling”)
Prime Success	Beneficial owner	58,959,395	5.12%	1
Investments Limited
(“Prime Success”)
Cheung Kong (Holdings)	Interests of controlled	133,048,717	11.56%	2, 3
Limited (“Cheung Kong”)	corporations
Max Same Investment
Limited (“Max Same”)	Beneficial owner	91,491,193	7.95%	2
Li Ka-shing	Interests of controlled	133,048,717	11.56%	3
	corporations, founder
	of discretionary trusts
Li Ka-Shing Unity Trustee
Company Limited (“TUT1”)	Trustee	133,048,717	11.56%	3
Li Ka-Shing Unity Trustee	Trustee, beneficiary	133,048,717	11.56%	3
Corporation Limited (“TDT1”)	of a trust
Li Ka-Shing Unity Trustcorp	Trustee,
Limited (“TDT2”)	beneficiary of a trust	133,048,717	11.56%	3

12

GENERAL INFORMATION

APPENDIX

Notes:

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

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

4. In addition, Unity Holdco also owned the entire issued share capital of TDT1 as trustee of The Li Ka-Shing 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 of the Company in which Cheung Kong was interested under the SFO.

• (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	% of attributable
shareholder	beneficial owner	of the Group		interest
Zhou Lin	Zhou Lin	四方源創國際影視文化		20.00%
		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		20.00%
		有限公司
		(Concord Creation Animation
		Production Guangdong
		Company Limited #)
		(“Guangdong Creation”)
Concord Creation	Zhou Lin	Guangdong Creation		16.00%
				(Note 1)
Concord Creation	Zhou Lin	東陽市四方源創影視製作		20.00%
		有限公司		(Note 2)
		(Dongyang Concord Creation
		Film@TV Company Limited		#)
		(“Dongyang Creation”)

13

GENERAL INFORMATION

APPENDIX

Name of registered	Name of	Name of member	% of attributable	% of attributable
shareholder	beneficial owner	of the Group		interest
Guangdong Creation	Zhou Lin	杭州四方源創動畫製作		16.00%
and Chen Zheng		有限公司		(Note 3)
		(Concord Creation Animation
		Production Hangzhou
		Company Limited	#)
		(“Hangzhou Creation”)
Guangdong Creation	Yang Yong	Hangzhou Creation		20.00%
and Chen Zheng				(Note 4)
Greater Appeal	Greater Appeal	GDC Tech		22.52%
Investments Limited
(“Greater Appeal”)
Greater Appeal	Greater Appeal	GDC Technology Pte Limited		22.52%
				(Note 5)
GDC Tech	Greater Appeal	GDC Technology China Limited		22.52%
				(Note 5)
GDC Tech	Greater Appeal	GDC Technology		22.52%
		(Hong Kong) Limited		(Note 5)
GDC Tech	Greater Appeal	GDC Technology (USA), LLC		22.52%
				(Note 5)
GDC Tech	Greater Appeal	深圳市環球數碼		22.52%
		科技有限公司		(Note 5)
深圳市嘉殷達投資	Shenzhen Jiayinda	南方國際租賃有限公司		20.00%
有限公司		(South China International
(Shenzhen Jiayinda		Leasing Company	Limited)
Investment
Company Limited_#_)
(“Shenzhen
Jiayinda”)

# For identification purpose only

14

GENERAL INFORMATION

APPENDIX

Notes:

1. Guangdong Creation was held as to 80.00% by Concord Creation. As Concord Creation was beneficially held as to 20.00% by Zhou Lin, Guangdong Creation was deemed to be held as to 16.00% by Zhou Lin.

2. Dongyang Creation was held as to 90.00% by Concord Creation. As Concord Creation was beneficially held as to 20.00% by Zhou Lin, Dongyang Creation was deemed to be held as to 18.00% by Zhou Lin. Together with Zhou Lin’s beneficial interest of 2.00% held in Dongyang Creation through another nominee, Zhou Lin has an aggregate interest of 20.00% in Dongyang Creation.

3. Hangzhou Creation was beneficially held as to 100.00% by Guangdong Creation which included its beneficial interest of 10.00% held in Hangzhou Creation through its nominee, Chen Zheng. As Guangdong Creation was deemed to be beneficially held as to 16.00% by Zhou Lin, Hangzhou Creation was deemed to be held as to 16.00% by Zhou Lin.

4. Hangzhou Creation was beneficially held as to 100.00% by Guangdong Creation which included its beneficial interest of 10.00% held in Hangzhou Creation through its nominee, Chen Zheng. As Guangdong Creation was held as to 20.00% by Yang Yong, Hangzhou Creation was deemed to be held as to 20.00% by Yang Yong.

5. Each of GDC Technology Pte Limited, GDC Technology China Limited, GDC Technology (Hong Kong) Limited, GDC Technology (USA), LLC and 深圳市環球數碼科技有限公司 was held as to 100% by GDC Tech. As GDC Tech was held as to 22.52% by Greater Appeal, each of GDC Technology Pte Limited, GDC Technology China Limited, GDC Technology (Hong Kong) Limited, GDC Technology (USA), LLC and 深圳市環球數碼科技有限公 司 was deemed to be held as to 22.52% by Greater Appeal.

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 of the Company 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

As at the Latest Practicable Date, the Group was engaged in the following litigation or arbitration of material importance:

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 GDC 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 the enforcement of P&PM’s and WAMC’s claims should only be limited to the assets of GDC Entertainment.

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APPENDIX

GENERAL INFORMATION

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 Coproduction Agreement. In the arbitration, issues had been 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 claim of damages from P&PM and WAMC. Pleadings have not yet been 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. Award of the arbitrator was published 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. Since then, there has been no further step taken by the parties. GDC Entertainment has written to the arbitrator seeking directions for the further conduct of the arbitration, including the service of pleadings in the arbitration. GDC Entertainment is still waiting to hear from the arbitrator as to how she would like to proceed with the arbitration.

In April 2008, Mr. Leung Tim Hung filed a claim to the District Court of Hong Kong (the “ District Court ”) against the Company for an alleged disability discrimination to him and claimed for a compensation of approximately HK$6,659,000. In May 2008, the Company filed a defence to the District Court.

The legal adviser of the Company to the above District Court’s case advised that the Company has an arguable defence to his claim and the Directors are of the opinion that settlement of the claim is remote.

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.

5. 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 Rooms 1101-4, 11th Floor, Harcourt House, 39 Gloucester Road, Wanchai, Hong Kong.

• (b) The Company’s Hong Kong branch share registrars and transfer office is Tricor 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.

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GENERAL INFORMATION

APPENDIX

• (d) The qualified accountant of the Company is Mr. Chiu Ming Kin who is a fellow member of The Association of Chartered Certified Accountants and an associate member of The Hong Kong Institute of Certified Public Accountants, and holds a bachelor degree of business administration with honor.

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

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