2005-12-14 11:19:00

Circular (Discloseable transaction - acquisition and capital injection agreement in respect of Shijiazhuang steel mill)

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION 7 December 2005 If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser. If you have sold or transferred all your shares in CITIC Pacific Limited, you should at once hand this circular to the purchaser or the transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for 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. (Incorporated in Hong Kong with limited liability) (Stock Code: 267) DISCLOSEABLE TRANSACTION ACQUISITION AND CAPITAL INJECTION AGREEMENT IN RESPECT OF SHIJIAZHUANG STEEL MILLCONTENTS Page Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Appendix – General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9– 1 – DEFINITIONS In this circular, the following expressions have the following meanings unless the context otherwise requires: “Acquisition” the acquisition of Sale Interest by CITIC Pacific under the Acquisition and Capital Injection Agreement; “Acquisition and Capital the acquisition and capital injection agreement entered Injection Agreement” into between CITIC Pacific, Hebei SASAC and Hebei Zhongfu, the principal terms of which are set out below; “associate(s)” or have the meanings ascribed to them respectively under “connected person(s)” the Listing Rules; “Board” the board of Directors; “Capital Injection” the injection as the additional capital of Shijiazhuang Steel Mill by CITIC Pacific in the amount of RMB196,406,087.92 (approximately HK$188,549,844), Hebei SASAC in the amount of RMB134,387,667.70 (approximately HK$129,012,161) and Hebei Zhongfu in the amount of RMB341,144,582.87 (approximately HK$327,498,800) under the Acquisition and Capital Injection Agreement; “Company” or “CITIC Pacific” CITIC Pacific Limited, a company incorporated in Hong Kong whose shares are listed on the Stock Exchange; “Director(s)” director(s) of CITIC Pacific; “Group” the Company and its subsidiaries; “Hebei SASAC” (State- owned Assets Supervision and Administration Commission of the Government of Hebei Province, PRC); “Hebei Zhongfu” (Hebei Zhongfu Investment Limited), a company beneficially owned by various management members and employees of Shijiazhuang Steel Mill; “Latest Practicable Date” 30 November 2005, being the latest practicable date prior to the printing of this circular for the purpose of ascertaining certain information contained in this circular;– 2 – DEFINITIONS “Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange; “Percentage Ratios” has the meaning set out in Rule 14.04(9) of the Listing Rules; “PRC” People’s Republic of China; “RMB” Renminbi, the lawful currency of the PRC; “Sale Interest” 80% of the existing registered capital of Shijiazhuang Steel Mill; “SFO” the Securities and Futures Ordinance (Cap. 571 of the laws of Hong Kong); “Share(s)” share(s) of HK$0.4 each in the share capital of the Company; “Shareholders” holder of Shares in CITIC Pacific; “Shijiazhuang Steel Mill” (Shijiazhuang Iron & Steel Co., Ltd.), a company wholly owned by the PRC government which will become a Sino-foreign equity joint venture company upon the completion of the Acquisition and Capital Injection Agreement; “Stock Exchange” The Stock Exchange of Hong Kong Limited; and “%” percentage. (For reference only, the exchange rates used in this circular are RMB1 = HK$0.96.)– 3 – LETTER FROM THE BOARD (Incorporated in Hong Kong with limited liability) (Stock Code: 267) Directors: Registered Office: Larry Yung Chi Kin (Chairman) 32nd Floor Henry Fan Hung Ling (Managing Director) CITIC Tower Peter Lee Chung Hing (Deputy Managing Director) 1 Tim Mei Avenue Norman Yuen Kee Tong (Deputy Managing Director) Central Vernon Francis Moore (Executive Director) Hong Kong Yao Jinrong (Executive Director) Li Shilin (Executive Director) Carl Yung Ming Jie (Executive Director) Liu Jifu (Executive Director) Leslie Chang Li Hsien (Executive Director) Willie Chang* Hamilton Ho Hau Hay** Alexander Reid Hamilton** Hansen Loh Chung Hon** Norman Ho Hau Chong** André Desmarais* Peter Kruyt # * Non-executive Director ** Independent non-executive Director # Alternate Director to André Desmarais 7 December 2005 To the Shareholders, Dear Sir or Madam, DISCLOSEABLE TRANSACTION ACQUISITION AND CAPITAL INJECTION AGREEMENT IN RESPECT OF SHIJIAZHUANG STEEL MILL INTRODUCTION In an announcement dated 15 November 2005, the Directors announced that on 11 November 2005, CITIC Pacific entered into the Acquisition and Capital Injection Agreement with Hebei SASAC and Hebei Zhongfu whereby CITIC Pacific agreed to:–– 4 – LETTER FROM THE BOARD • acquire 80% of the existing registered capital of Shijiazhuang Steel Mill from Hebei SASAC for a consideration of RMB1,281,887,104.49 (approximately HK$1,230,611,620); and • subscribe for new registered capital of Shijiazhuang Steel Mill in the amount of RMB196,406,087.92 (approximately HK$188,549,844). Upon completion of the Acquisition and Capital Injection Agreement, CITIC Pacific will hold 65% of the enlarged registered capital of Shijiazhuang Steel Mill which will become a jointly controlled entity of CITIC Pacific. As the applicable Percentage Ratios are more than 5% and less than 25%, the Acquisition and Capital Injection Agreement constitutes a discloseable transaction of CITIC Pacific and is subject to the announcement and reporting requirements of the Listing Rules. The purpose of this circular is to provide you with further information relating to, among others, details of the Acquisition and Capital Injection Agreement. ACQUISITION AND CAPITAL INJECTION AGREEMENT Date: 11 November 2005 Parties: (1) CITIC Pacific, as purchaser of the Sale Interest and as subscriber of the registered capital of Shijiazhuang Steel Mill (2) Hebei SASAC, as vendor of the Sale Interest and as subscriber of the registered capital of Shijiazhuang Steel Mill (3) Hebei Zhongfu, as subscriber of the registered capital of Shijiazhuang Steel Mill CITIC Pacific has nominated its wholly-owned subsidiary, Winchamp Enterprises Corp, to enter into the relevant joint venture contract and to execute the articles of association of Shijiazhuang Steel Mill. Assets involved • 80% of the existing registered capital of Shijiazhuang Steel Mill (excluding the interest in a subsidiary operating a hospital) from Hebei SASAC for a consideration of RMB1,281,887,104.49 (approximately HK$1,230,611,620); and • registered capital of Shijiazhuang Steel Mill for subscription by: (1) CITIC Pacific in the amount of RMB196,406,087.92 (approximately HK$188,549,844);– 5 – LETTER FROM THE BOARD (2) Hebei SASAC in the amount of RMB134,387,667.70 (approximately HK$129,012,161); and (3) Hebei Zhongfu in the amount of RMB341,144,582.87 (approximately HK$327,498,800). At present, Shijiazhuang Steel Mill is owned by Hebei SASAC as to 100% of its registered capital. Upon completion of the Acquisition and Capital Injection Agreement, CITIC Pacific, Hebei SASAC and Hebei Zhongfu will respectively hold 65% (i.e. in the amount of RMB1,300 million (approximately HK$1,248 million)), 20% (i.e. in the amount of RMB400 million (approximately HK$384 million)) and 15% (i.e. in the amount of RMB300 million (approximately HK$288 million)) of the enlarged registered capital of Shijiazhuang Steel Mill. Consideration for the Acquisition and Amount of Capital Injection The purchase price payable by CITIC Pacific to Hebei SASAC for the acquisition of the Sale Interest is RMB1,281,887,104.49 (approximately HK$1,230,611,620) and the amount of Capital Injection payable by CITIC Pacific is RMB196,406,087.92 (approximately HK$188,549,844). In August 2005, the Company submitted its tender proposal to Hebei SASAC regarding the acquisition of Shijiazhuang Steel Mill. As a condition to the tender process, on 9 August 2005 the Company paid a deposit equivalent to RMB500 million (approximately HK$480 million) to Hebei SASAC. The amount was kept in custody by Hebei Merger Centre ( ). The said amount will be returned to the Company at the same time as the Company settles the purchase price in respect of the Acquisition as set out below. The payment for the purchase price and amount of the Capital Injection payable by CITIC Pacific in respect of the Acquisition and the Capital Injection respectively shall be made within one month after approval from the relevant governmental authorities for the Acquisition and Capital Injection Agreement having been obtained. It will be funded by the internal resources of CITIC Pacific. The said purchase price of approximately RMB1,282 million (approximately HK$1,231 million) was determined after arm’s length negotiation between CITIC Pacific and Hebei SASAC with reference to the appraised net asset value of Shijiazhuang Steel Mill (excluding the interest in a subsidiary operating a hospital incorporated in the year 2004) as at 31 December 2004 of approximately RMB1,452 million (approximately HK$1,394 million) as stipulated in the appraisal report prepared by China Consultants of Accounting and Financial Management Co., Ltd., a professional appraiser in the PRC which, to the best of the Directors’ knowledge, information and belief having made all reasonable enquiry, is a third party independent of and not connected with CITIC Pacific or any of the directors, chief executive or substantial shareholders of CITIC Pacific or any of its subsidiaries or any of their respective associates.– 6 – LETTER FROM THE BOARD Completion accounts will be prepared and audited (in accordance with generally accepted accounting principles in the PRC) with the view to ascertaining the net asset value of Shijiazhuang Steel Mill (excluding the interest in a subsidiary operating a hospital) as of the date of the completion. If the relevant net asset value at completion exceeds the corresponding net asset value as of 31 December 2004, such excess shall belong to Hebei SASAC and be payable by Shijiazhuang Steel Mill either (a) in cash within one week after the completion accounts are prepared and audited or (b) by Shijiazhuang Steel Mill issuing new registered capital to Hebei SASAC upon which CITIC Pacific and Hebei Zhongfu will subscribe for such amount of new equity in Shijiazhuang Steel Mill in order to maintain their respective 65% and 15% interest. If the relevant net asset value at completion is less than the corresponding net asset value as of 31 December 2004, Hebei SASAC shall indemnify Shijiazhuang Steel Mill on a dollar for dollar basis for such deficit. Completion Completion of the Acquisition and Capital Injection Agreement is conditional upon (a) all approvals from the relevant governmental authorities for the Acquisition and the Capital Injection having been obtained; (b) all the approvals, licences (including business licence) and registration from the relevant governmental authorities for the changes of the constitution of Shijiazhuang Steel Mill having been obtained. Completion of the Acquisition and Capital Injection is expected to take place simultaneously. Shijiazhuang Steel Mill will be changed from a company wholly owned by the PRC government (i.e. state-owned) into a Sino-foreign equity joint venture company. After completion, decisions of Shijiazhuang Steel Mill must be approved by two thirds of all its directors, with some other corporate matters requiring unanimous approval by all the directors. As such, Shijiazhuang Steel Mill would be accounted for as a jointly controlled entity of CITIC Pacific in the financial statement upon completion. The results, assets and liabilities of Shijiazhuang Steel Mill will not be consolidated into CITIC Pacific’s consolidated financial statements. Such accounting treatment is consistent with the accounting policy adopted by CITIC Pacific’s audited annual accounts of 2004, and has been concurred by CITIC Pacific’s auditors. The Directors expect that the Acquisition and Capital Injection would not have adverse effect on the earnings, net asset value and liabilities of the Company. Prior to completion of the Acquisition and Capital Injection, CITIC Pacific executed a guarantee in the amount of up to RMB400 million (approximately HK$384 million) on 22 November 2005 to secure the banking facilities granted to a subsidiary of Shijiazhuang Steel Mill and Hebei Merger Centre has returned the deposit equivalent to the guaranteed amount to the Company. The banking facilities are expected to be repaid once the proceeds for Capital Injection has been paid by shareholders to Shijiazhuang Steel Mill according to the Acquisition and Capital Injection Agreement. The guarantee will then be cancelled.– 7 – LETTER FROM THE BOARD INFORMATION ON SHIJIAZHUANG STEEL MILL Shijiazhuang Steel Mill was established on 22 May 1997 in Shijiazhuang, Hebei Province, PRC. At present, it is wholly owned by the PRC government. Shijiazhuang Steel Mill has current annual production capacity of 2 million tonnes of special steel and is one of the leading special steel manufacturers in the PRC. Shijiazhuang Steel Mill principally operates through its 75.09% subsidiary Shijiazhuang Iron & Steel Holdings Ltd ( ) and engages in the production and sale of special steel and related products. Shijiazhuang Iron & Steel Holdings Ltd ( ) is the main operating arm of Shijiazhuang Steel Mill. In order to streamline the corporate structure, this company will be dissolved as soon as practicable after completion of the Acquisition and Capital Injection Agreement with all its assets and liabilities transferred to Shijiazhuang Steel Mill. Forthwith upon signing the Acquisition and Capital Injection Agreement, Hebei SASAC with reference to the net asset value of Shijiazhuang Steel Mill, will capitalize certain reserves into registered capital and after capitalization, the registered capital of Shijiazhuang Steel Mill will be approximately RMB1,328 million (approximately HK$1,275 million) prior to completion of the Acquisition and Capital Injection Agreement. Upon completion of the Acquisition and Capital Injection Agreement, the total investment and registered capital of Shijiazhuang Steel Mill will be RMB4,000 million (approximately HK$3,840 million) and RMB2,000 million (approximately HK$1,920 million) respectively. The term of Shijiazhuang Steel Mill will be 50 years commencing from the date of obtaining the new business license, which may be extended if approved by the relevant PRC authorities. The board of directors of Shijiazhuang Steel Mill will, after completion of the Acquisition and Capital Injection Agreement, comprise seven directors, four of which shall be appointed by CITIC Pacific, two by Hebei SASAC and one by Hebei Zhongfu. The Chairman shall be nominated by CITIC Pacific. For the year ended 31 December 2004, the unaudited net profits before and after taxation of Shijiazhuang Steel Mill (in accordance with generally accepted accounting principles in the PRC and excluding the subsidiary operating a hospital incorporated in the year 2004) were approximately RMB457 million (approximately HK$439 million) and RMB282 million (approximately HK$271 million) respectively. For the year ended 31 December 2003, the unaudited net profits before and after taxation of Shijiazhuang Steel Mill (in accordance with generally accepted accounting principles in the PRC) were approximately RMB305 million (approximately HK$293 million) and RMB212 million (approximately HK$204 million) respectively. As at 31 December 2004, the unaudited net asset value of Shijiazhuang Steel Mill (in accordance with generally accepted accounting principles in the PRC and excluding the interest in the subsidiary operating a hospital incorporated in the year 2004) was approximately RMB1,346 million (approximately HK$1,292 million). The hospital subsidiary was owned by Shijiazhuang Steel Mill as to 88.9%. It does not form part of the core business of Shijiazhuang Steel Mill and will be disposed of by Shijiazhuang Steel Mill before completion. It has not been taken into account by the parties in arriving at the consideration for the Acquisition nor the Capital Injection.– 8 – LETTER FROM THE BOARD REASONS AND BENEFIT FOR THE ACQUISITION AND CAPITAL INJECTION The investment in Shijiazhuang Steel Mill through the Acquisition and Capital Injection provides an opportunity for the Group to further expand its special steel manufacturing business in the PRC by obtaining a majority stake in Shijiazhuang Steel Mill. Given this acquisition, the Group will have access to markets in East, Central and North China. Upon completion of the Acquisition and Capital Injection, CITIC Pacific will be entitled to appoint the majority of the board of directors of Shijiazhuang Steel Mill. The Directors (including the independent non-executive directors) consider that the terms of the Acquisition and Capital Injection Agreement are normal commercial terms and are fair and reasonable and in the interests of CITIC Pacific and its shareholders as a whole. INFORMATION RELATING TO THE PARTIES The principal businesses of CITIC Pacific comprise the provision of basic infrastructure in Hong Kong and the PRC including power generation, communications, aviation and civil infrastructure and the manufacturing of special steel, distribution of motor vehicles and consumer products and property investment and development. Hebei SASAC is a governmental authority responsible for administration of state assets. Hebei Zhongfu is a company beneficially owned by various management members and employees of Shijiazhuang Steel Mill. CITIC Pacific confirms that, to the best of the Directors’ knowledge, information and belief having made all reasonable enquiry, Hebei Zhongfu, its ultimate beneficial owners and Hebei SASAC are third parties independent of and not connected with CITIC Pacific or any of the directors, chief executive or substantial shareholders of CITIC Pacific or any of its subsidiaries or any of their respective associates. GENERAL As the applicable Percentage Ratios are more than 5% and less than 25%, the Acquisition and Capital Injection Agreement constitutes a discloseable transaction of CITIC Pacific and is subject to the announcement and reporting requirements of the Listing Rules. ADDITIONAL INFORMATION Your attention is drawn to the general information set out in the Appendix to this circular. Yours faithfully, By Order of the Board CITIC Pacific Limited Larry Yung Chi Kin Chairman– 9 – APPENDIX GENERAL INFORMATION 1. RESPONSIBILITY STATEMENT This circular includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors collectively and individually accept full responsibility for the accuracy of the information contained in this circular and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts not contained in this circular, the omission of which would make any statement herein misleading. 2. DISCLOSURE OF INTERESTS (a) Interests of Directors and chief executive in securities Save as disclosed below, as at the Latest Practicable Date, none of the Directors and the chief executive of the Company had any interest or short position in the Shares, underlying Shares or debentures of the Company or its associated corporations (within the meaning of the SFO) which were required, pursuant to section 352 of the SFO, to be entered into the register referred to therein, or 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 interest and short position which he was taken or deemed to have under such provisions of the SFO) or the Model Code for Securities Transactions by Directors of Listed Companies set out in the Listing Rules: (i) Shares in the Company: Number of Shares Trusts and Percentage of Personal Corporate Family similar issued share Name of Director interests interests interests interests capital (%) Larry Yung Chi Kin 400,381,000 18.259 Henry Fan Hung Ling 1,728,000 44,600,000 2.113 Peter Lee Chung Hing 500,000 0.023 Norman Yuen Kee Tong 33,000 0.002 Vernon Francis Moore 3,200,000 0.146 Liu Jifu 40,000 0.002 Leslie Chang Li Hsien 30,000 0.001 Hansen Loh Chung Hon 1,050,000 500,000 1 500,000 1 0.071 André Desmarais 1,488,000 102,242,000 2 75,000 4.734 Peter Kruyt 2,100 0.0001 (alternate director to Mr André Desmarais) Notes: 1. The corporate interests and the family interests of the relevant Director duplicate each other as the 500,000 Shares are held through a company in which the relevant Director and his family are interested.– 10 – APPENDIX GENERAL INFORMATION 2. Out of 102,242,000 Shares, 2,012,000 Shares are held by a corporation controlled by the relevant Director and 100,230,000 Shares are held indirectly by a corporation of which the relevant Director is the President and Co-Chief Executive Officer. (ii) Share options in the Company Number Options Number Percentage of Share lapsed/ of Share of issued options cancelled/ options share Directors Date of Grant granted exercised Outstanding capital % Larry Yung Chi Kin 28 May 2002 2,000,000 Nil 4,000,000 0.182 1 Nov 2004 2,000,000 Peter Lee Chung Hing 28 May 2002 1,000,000 Nil 2,000,000 0.091 1 Nov 2004 1,000,000 Norman Yuen Kee Tong 28 May 2002 500,000 Nil 1,000,000 0.046 1 Nov 2004 500,000 Vernon Francis Moore 28 May 2002 1,000,000 Nil 2,000,000 0.091 1 Nov 2004 1,000,000 Yao Jinrong 28 May 2002 300,000 Nil 800,000 0.036 1 Nov 2004 500,000 Li Shilin 28 May 2002 300,000 Nil 300,000 0.014 Carl Yung Ming Jie 28 May 2002 300,000 Nil 800,000 0.036 1 Nov 2004 500,000 Liu Jifu 28 May 2002 300,000 Nil 800,000 0.036 1 Nov 2004 500,000 Leslie Chang Li Hsien 28 May 2002 300,000 Nil 800,000 0.036 1 Nov 2004 500,000– 11 – APPENDIX GENERAL INFORMATION (iii) Shares in the associated corporation: Number of ordinary shares in Cathay Pacific Airways Limited Percentage Trusts and to the Personal Corporate Family similar issued share Name of Director interests interests interests interests capital (%) Hansen Loh Chung Hon 450,000 0.013 (b) Substantial shareholders of the Company As at the Latest Practicable Date, save as disclosed herein, so far as was known to any Director or chief executive of the Company, no person (other than a Director or chief executive of the Company or their respective associates) had any interest or short position in the Shares or underlying Shares which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO: Number of Shares Percentage to the issued Name of the Company share capital (%) CITIC Group 632,066,285 28.824 CITIC Hong Kong (Holdings) Limited (“CITIC HK”) 632,066,285 28.824 Heedon Corporation 498,424,285 22.730 Honpville Corporation 310,988,221 14.182 CITIC HK is a substantial shareholder of the Company (within the meaning of the Listing Rules) indirectly through the following wholly owned subsidiary companies: Name of subsidiary Number of Shares Percentage to the issued companies of CITIC HK of the Company share capital (%) Affluence Limited 43,266,000 1.973 Winton Corp. 30,718,000 1.401 Westminster Investment Inc. 101,960,000 4.650 Jetway Corp. 22,500,000 1.026 Cordia Corporation 32,258,064 1.471 Honpville Corporation 310,988,221 14.182 Hainsworth Limited 80,376,000 3.665 Southpoint Enterprises Inc. 10,000,000 0.456 Each of Affluence Limited, Winton Corp., Westminster Investment Inc., Jetway Corp., Cordia Corporation, Honpville Corporation, Hainsworth Limited and Southpoint Enterprises Inc. holds the shares of the Company beneficially. Accordingly, Honpville Corporation is a substantial shareholder of the Company.– 12 – APPENDIX GENERAL INFORMATION CITIC Group is the direct holding company of CITIC HK. CITIC HK is the direct holding company of Heedon Corporation, Hainsworth Limited, Affluence Limited and Barnsley Investments Limited. Heedon Corporation is the direct holding company of Winton Corp., Westminster Investment Inc., Jetway Corp., Kotron Company Ltd. and Honpville Corporation and Kotron Company Ltd. is the direct holding company of Cordia Corporation. Barnsley Investments Limited is the direct holding company of Southpoint Enterprises Inc. Accordingly, the interests of CITIC Group in the Company duplicate the interests of CITIC HK in the Company. The interests of CITIC HK in the Company duplicate the interests in the Company of all its direct and indirect subsidiary companies as described above. The interests of Heedon Corporation in the Company duplicate the interests in the Company of all its direct and indirect subsidiary companies as described above. The interests of Barnsley Investments Limited in the Company duplicate the interests in the Company of its direct subsidiary company as described above and the interests of Kotron Company Ltd. in the Company duplicate the interests in the Company of its direct subsidiary company as described above. As at the Latest Practicable Date, save as disclosed below, none of the Directors is a director or employee of a company which had an interest or short position in the Shares and underlying Shares of the Company which would fall to be disclosed to the Company under the provisions of Division 2 and 3 of Part XV of the SFO, or, is, directly or indirectly, interested in ten per cent. 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: Name of company which had such discloseable Position within Name of Director interest or short position such company Larry Yung Chi Kin CITIC Group Director CITIC HK Director Heedon Corporation Director Honpville Corporation Director Earnplex Corporation Director & Shareholder Bloomfield Enterprises Corp. Director & Shareholder Rockhampton Investments Limited Director & Shareholder Henry Fan Hung Ling CITIC HK Director Vernon Francis Moore CITIC HK Director Heedon Corporation Director Honpville Corporation Director Yao Jinrong CITIC Group Director Li Shilin CITIC Group Director Carl Yung Ming Jie Earnplex Corporation Director Liu Jifu CITIC HK Director Leslie Chang Li Hsien Honpville Corporation Director– 13 – APPENDIX GENERAL INFORMATION (c) Substantial shareholding in other members of the Group As at the Latest Practicable Date, save as disclosed herein, so far as was known to any Director or chief executive of the Company, no person (other than a Director or chief executive of the Company or their respective associates) is, directly or indirectly, interested in ten per cent. 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: Percentage of Name of issued Name of subsidiary shareholder share capital Adwood Company Limited Silverstone Assets Limited 30% New Hong Kong Tunnel Kumagai International Limited 13.875% Company Limited Sims Trading (Macau) Mr. Ma Iao Hang 10% Company Limited Mr. Ma Chi Seng 10% Mr. Ka Lon Ho 10% Dah Chong Hong – Dragonair Hong Kong Dragon Airlines 30% Airport GSE Service Limited Limited Triangle – Isuzu Motors Isuzu Motors Limited 40% Limited DAS Nordisk Limited Nordisk Aviation Products 30% Asia Limited DAS Aviation Support Hong Kong Dragon Airlines 30% Limited Limited Bright Billion Limited Jungle Investment Limited 10% Alixon Co. Ltd. RFC Management Limited 10% Prosperity Motors Limited Xin Kang Heng Holdings 40% Limited Dah Chong Hong Motor Xin Kang Heng Holdings 40% Service Centre (Macau) Limited Limited Dong Chong Motors (China) Tokyo Boeki Ltd. 32.25% Limited– 14 – APPENDIX GENERAL INFORMATION Percentage of Name of issued Name of subsidiary shareholder share capital Hang Shun Fat Company, Honorway Investments 11.8% Limited Limited Wideland Investors Limited 11.8% Mr. Leung Kau Kui, deceased 11.8% Wah Luen Fung Company, Marvel Sweet Management Ltd. 15% Limited Wideland Investors Limited 15% Asia Pacific Internet Exchange HKIX Hong Kong Ltd. 25% Limited Ko Lok Investment Company, Marvel Sweet Management Ltd. 40% Limited Goldenburg Properties Gorich Traders Limited 30% Limited Dah Chong Hong (Macao) Mr. Ma Iao Hang 20% Engineering Limited Mr. Liu Chak Wan 20% Dah Chong Hong Macau CBA Investments Company Limited 35% Total Supply Chain Cheong Wah Hong Corporation 10% Management Company – Enterprises and Investments Limited Limited DCH Supply Chain Excel Epoch International Limited 20% Management Company Limited Mainstream Holdings Limited IBP Caribbean Inc. 45% Regal Heights Limited Perdue Farms Incorporated 40% Winway Investments Rising Sun Investments 38% Holdings Corp. Holdings Ltd. Join Resources Limited Swire Properties Limited 16.67%– 15 – APPENDIX GENERAL INFORMATION Name of subsidiary being a joint venture company established in the PRC Percentage of without the concept of registered general meetings (#) Name of shareholder capital Guangdong Jing Yun Guangdong Huada Distribution 10% Distribution Co., Ltd. Company 30% (Wuxi Taihu Jing Development (Wuxi Guo Lian Development Group Co., Ltd.) Co., Ltd.) 30% (Wuxi Taihu Yuan Property (Wuxi Guo Lian Development Group Co., Ltd.) Co., Ltd.) 30% (Wuxi Taihu Mei Environmental (Wuxi Guo Lian Development Group Co., Ltd.) Co., Ltd.) Jiangsu CP Xingcheng Special Jiangyin Steel Mill 10.6% Steel Co., Ltd. Bright Trinity Enterprises Ltd. 11.62% Jiangyin Xingcheng Steel Jiangyin Steel Mill 11.7% Products Co., Ltd. Jiangyin Xingcheng Storage Jiangyin Steel Mill 11.7% and Transportation Co., Ltd. Wuxi Xingcheng Steel Products Jiangyin Steel Mill 11.7% Co., Ltd. Kunming Dah Chong Motor (Yunnan Coach Factory) 30% Service Co., Ltd. Guangdong Dah Chong Guangdong International Trade 30% Foodstuffs Co., Ltd. Travel Service Ltd. Qingdao Adachi Paints and New Asia Pacific Group Co. Ltd. 25% Chemical Materials Co., Ltd. Shanghai DCH Jiangnanfeng Shanghai Agriculture Investment 12.67% Co., Ltd. Holding Co., Ltd. Shanghai Pudong Huilun Enterprise 10.56% Holding Co., Ltd. Shenzhen Zhongliangdachang COFCO Shenzhen Trading & 30% Foodstuffs Co., Ltd. Development Co. Ltd. Dalian CP Digital Technology 19.5% Co., Ltd. (Dalian Instrument Group Co., Ltd.) Shanghai Jingan City Trading Group 10% (Shanghai CITIC Square Company Co., Ltd.)– 16 – APPENDIX GENERAL INFORMATION # Although the information relating to these joint venture companies have been set out under this section, such joint venture companies established in the PRC under the relevant laws thereof have a different capital structure from, and do not have the same concept of shareholders general meetings as, subsidiaries of the Company established in other jurisdictions. 3. LITIGATION As at the Latest Practicable Date, neither the Company nor any of its subsidiaries was engaged in any litigation or claim of material importance and, so far as the Directors were aware, no litigation or claim of material importance was pending or threatened against the Company or any of its subsidiaries. 4. SERVICE CONTRACTS There is no existing or proposed service contracts between any of the Directors and the Company or any of its subsidiaries, other than contracts expiring or determinable by the employer within one year without payment of compensation (other than statutory compensation). 5. COMPETING INTEREST In so far as the Directors are aware, none of the Directors or their respective associates have any interest in a business which competes or is likely to compete with the business of the Group. 6. GENERAL (a) The secretary of the Company is Ms. Alice Tso Mun Wai, ACIS, MA and the qualified accountant of the Company appointed pursuant to Rule 3.24 of the Listing Rules is Mr. Leslie Chang Li Hsien, HKICPA, AICPA, NYSSCPA. (b) The registered office of the Company is at 32nd Floor, CITIC Tower, 1 Tim Mei Avenue, Central, Hong Kong. (c) The share registrars of the Company is Tengis Limited, Ground Floor, Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong. (d) The English text of this circular shall prevail over the Chinese text.

LTN20051214066.pdf