ltn20090713431.pdf - HKEXnews

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Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

This announcement appears for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for the securities.

KINGBOARD CHEMICAL KINGBOARD LAMINATES HOLDINGS LIMITED HOLDINGS LIMITED 建滔化工集團 * 建滔積層板控股有限公司 (Incorporated in the Cayman Islands with limited liability) (Incorporated in the Cayman Islands with limited liability)

(Stock Code: 148) (Stock Code: 1888)

JOINT ANNOUNCEMENT

This announcement is made pursuant to Rule 13.09(2) of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and is being released for information purpose only.

Please refer to the attached document being:

The Scheme Document issued by Kingboard Copper Foil Holdings Limited which was published on the Singapore Exchange Securities Trading Limited website at www.sgx.com and despatched to the shareholders of Kingboard Copper Foil Holdings Limited on 13 July 2009 in relation to the proposed privatisation of Kingboard Copper Foil Holdings Limited by Kingboard Laminates Holdings Limited by way of a scheme of arrangement under section 99 of the Bermuda Companies Act 1981.

BY ORDER OF THE BOARD BY ORDER OF THE BOARD Kingboard Chemical Holdings Limited Kingboard Laminates Holdings Limited Chan Wing Kwan Cheung Kwok Keung Managing Director Managing Director

Hong Kong, 13 July 2009

* For identification purpose only

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As at the date of this announcement, the board of directors of Kingboard Chemical Holdings Limited comprises Messrs. Cheung Kwok Wing, Chan Wing Kwan, Chang Wing Yiu, Cheung Kwong Kwan, Ho Yin Sang, Cheung Wai Lin, Stephanie and Mok Cham Hung, Chadwick, being the executive directors, and Messrs. Cheng Wai Chee, Christopher, Henry Tan, Lai Chung Wing, Robert and Tse Kam Hung, being the independent non-executive directors.

As at the date of this announcement, the board of directors of Kingboard Laminates Holdings Limited comprises Messrs. Cheung Kwok Wa, Cheung Kwok Keung, Cheung Kwok Ping, Lam Ka Po, Cheung Ka Ho, Chan Sau Chi, Liu Min and Zhou Pei Feng, being the executive directors, Mr. Lo Ka Leong, being the non-executive director, and Messrs. Chan Charnwut Bernard, Chan Yue Kwong, Michael, Leung Tai Chiu and Mok Yiu Keung, Peter, being the independent non-executive directors.

The directors of Kingboard Chemical Holdings Limited (including any who may have delegated detailed supervision of the preparation of this announcement) have taken all reasonable care to ensure that the facts stated and all opinions expressed in this announcement are fair and accurate and that no material facts in relation thereto have been omitted from this announcement, and they jointly and severally accept responsibility accordingly.

Where any information has been extracted or reproduced from published or otherwise publicly available sources, the sole responsibility of the directors of Kingboard Chemical Holdings Limited has been to ensure that, through reasonable enquiries that such information is accurately extracted from such sources or, as the case may be, reflected or reproduced in this announcement.

The directors of Kingboard Laminates Holdings Limited (including any who may have delegated detailed supervision of the preparation of this announcement) have taken all reasonable care to ensure that the facts stated and all opinions expressed in this announcement are fair and accurate and that no material facts in relation thereto have been omitted from this announcement, and they jointly and severally accept responsibility accordingly.

Where any information has been extracted or reproduced from published or otherwise publicly available sources, the sole responsibility of the directors of Kingboard Laminates Holdings Limited has been to ensure that, through reasonable enquiries that such information is accurately extracted from such sources or, as the case may be, reflected or reproduced in this announcement.

SCHEME DOCUMENT DATED 10 JULY 2009

This Scheme Document is issued by Kingboard Copper Foil Holdings Limited (the “Company” or “Kingboard CopperFoil”). This Scheme Document is important and requires your immediate attention and you are advised to exercise cautionin relation to the Scheme (as defined herein). Please read it carefully.

If you are in any doubt about the matters contained in this Scheme Document or as to the action you should take, youshould consult your stockbroker, bank manager, solicitor or other professional adviser immediately.

The Singapore Exchange Securities Trading Limited assumes no responsibility for the correctness of any of the statements made,reports contained or opinions expressed in this Scheme Document.

If you have sold or transferred all your issued ordinary shares of US$0.10 each in the share capital of Kingboard Copper Foil, youshould immediately forward this Scheme Document together with the Notice of Scheme Meeting (as defined herein) and the proxyforms to the purchaser or transferee or to the bank, stockbroker, or agent through whom you effected the sale or transfer, foronward transmission to the purchaser or transferee.

KINGBOARD COPPER FOIL HOLDINGS LIMITED(Incorporated in Bermuda)

(Company Registration Number: 26998)

KINGBOARD LAMINATES HOLDINGS LIMITED(Incorporated in the Cayman Islands)

(Company Registration Number: MC-167703)

PROPOSED PRIVATISATION OF KINGBOARD COPPER FOIL HOLDINGS LIMITED BY KINGBOARD LAMINATES HOLDINGS LIMITED

BY WAY OF A SCHEME OF ARRANGEMENT UNDER SECTION 99 OFTHE BERMUDA COMPANIES ACT 1981

Financial Adviser to Kingboard Laminates Holdings Limited

DBS BANK LTD.(Incorporated in the Republic of Singapore)

(UEN/Company Registration Number: 196800306E)

Independent Financial Adviser to the Independent Directors

KPMG CORPORATE FINANCE PTE LTD(Incorporated in the Republic of Singapore)

(UEN/Company Registration Number: 198500417D)

IMPORTANT DATES, TIMES AND VENUE

Last date and time for lodgement of Proxy Forms : 9 August 2009 at 9.30 a.m. (Hong Kong time) for the Scheme Meeting

Date and time of the Scheme Meeting : 11 August 2009 at 9.30 a.m. (Hong Kong time)

Venue of the Scheme Meeting : 2/F., Harbour View 1, No. 12 Science Park East Avenue, Phase IIHong Kong Science Park, Shatin, N.T., Hong Kong

As the Scheme Meeting will be held in Hong Kong, there will be a Shareholders’ Briefing in Singapore prior to the SchemeMeeting on 31 July 2009 at 9.30 a.m.. Details relating to the Shareholders’ Briefing and the Scheme Meeting are on pages 231 to233 of this Scheme Document.

Details on the expected timetable are set out on page 9 of this Scheme Document. Your attention is also drawn to the notes underthe expected timetable.

The action to be taken by you is set out on page 36 of this Scheme Document.

IMPORTANT NOTICE TO OVERSEAS SHAREHOLDERS

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OVERSEAS SHAREHOLDERS

The availability of the Scheme (as defined herein) to Overseas Shareholders (as defined herein) may beaffected by the laws of the relevant overseas jurisdictions. Accordingly, any Overseas Shareholder shouldkeep himself informed of and observe any applicable legal requirements in his own jurisdiction. Wherethere are potential restrictions on sending this Scheme Document and other Scheme Materials (asdefined herein) to any overseas jurisdiction, each of Kingboard Laminates (as defined herein) andKingboard Copper Foil reserves the right not to send the Scheme Materials to the Shareholders (asdefined herein) in such overseas jurisdictions. For the avoidance of doubt, the Scheme is being proposedto all Shareholders (including the Overseas Shareholders), including those to whom the SchemeMaterials have not been, or may not be, sent, provided that the Scheme Materials do not constitute anoffer or a solicitation to any person in any jurisdiction in which such offer or solicitation is unlawful and theScheme is not being proposed in any jurisdiction in which the introduction or implementation of theScheme would not be in compliance with the laws of such jurisdictions.

OVERSEAS JURISDICTIONS

It is the responsibility of any Overseas Shareholder who wishes to participate in the Scheme to satisfyhimself as to the full observance of the laws of the relevant jurisdiction in that connection, including butnot limited to the obtaining of any governmental or other consent which may be required, and fullcompliance with all necessary formalities or legal requirements and the payment of any taxes, imposts,duties or other requisite payments due in such jurisdiction. If any Shareholder is in any doubt about hisposition, he should consult his professional adviser in the relevant jurisdiction. Overseas Shareholdersshould read paragraph 14 of the Explanatory Statement.

MALAYSIA

The Securities Commission of Malaysia has not approved or disapproved the offer or invitation in respectof the New KBL Shares (as defined herein) pursuant to the Scheme to any persons in Malaysia.Accordingly, no invitation or offer will be made directly or indirectly to any persons in Malaysia pursuant tothis Scheme Document and other Scheme Materials.

This Scheme Document and other Scheme Materials will not be made available to any persons inMalaysia. No prospectus or other offering material or document in connection with the Scheme has beenor will be registered as a prospectus or filed with the Securities Commission of Malaysia under theCapital Markets and Services Act 2007. Accordingly, this Scheme Document and other Scheme Materialswill not be circulated or distributed, directly or indirectly to any persons in Malaysia.

UNITED STATES AND AUSTRALIA

This Scheme Document and other Scheme Materials are not for release, publication or distribution in orinto the United States or Australia.

The offer of New KBL Shares pursuant to the Scheme is not being made, directly or indirectly, in or intothe United States or Australia, or by use of the mails, or by means or instrumentality (including, withoutlimitation, facsimile transmission, telephone and the internet) of interstate or foreign commerce, or of anyfacility of a national securities exchange, of the United States or Australia and the offer of New KBLShares pursuant to the Scheme cannot be accepted by any such use, means, instrumentality or facility orfrom within the United States or Australia.

The New KBL Shares have not been and will not be registered under the U.S. Securities Act of 1993.Accordingly, the New KBL Shares may not be offered, sold or delivered, directly or indirectly, in or into theUnited States.

HONG KONG

The contents of this Scheme Document and other Scheme Materials have not been reviewed by anyregulatory authority in Hong Kong. Shareholders in Hong Kong are advised to exercise caution inrelation to the offer under the Scheme. If a Shareholder in Hong Kong is in any doubt about any of thecontents of this Scheme Document, he should obtain independent professional advice.

CONTENTS

Page

DEFINITIONS .................................................................................................................................... 4

EXPECTED TIMETABLE .................................................................................................................. 9

CORPORATE INFORMATION .......................................................................................................... 10

LETTER TO SHAREHOLDERS ........................................................................................................ 12

1. INTRODUCTION ...................................................................................................................... 12

2. THE SCHEME.......................................................................................................................... 13

3. RATIONALE FOR THE SCHEME AND FUTURE PLANS FOR THE KBCF GROUP .......... 15

4. IRREVOCABLE UNDERTAKINGS.......................................................................................... 16

5. NO CASH OUTLAY ................................................................................................................ 17

6. WAIVER OF RIGHTS TO A GENERAL OFFER .................................................................... 17

7. TERMINATION ........................................................................................................................ 17

8. CONFIRMATION OF FINANCIAL RESOURCES .................................................................. 17

9. ADVICE OF INDEPENDENT FINANCIAL ADVISER TO THE INDEPENDENTDIRECTORS ............................................................................................................................ 17

10. RECOMMENDATION OF THE INDEPENDENT DIRECTORS................................................ 20

11. DIRECTORS’ RESPONSIBILITY STATEMENT ...................................................................... 21

12. GENERAL INFORMATION...................................................................................................... 21

EXPLANATORY STATEMENT .......................................................................................................... 22

1. INTRODUCTION ...................................................................................................................... 22

2. THE SCHEME.......................................................................................................................... 22

3. RATIONALE FOR THE SCHEME AND FUTURE PLANS FOR THE KBCF GROUP .......... 23

4. IRREVOCABLE UNDERTAKINGS.......................................................................................... 24

5. INFORMATION ON KINGBOARD LAMINATES .................................................................... 25

6. SCHEME MEETING AND SHAREHOLDERS’ BRIEFING .................................................... 25

7. CONDITIONS OF THE SCHEME ............................................................................................ 25

8. REGULATORY APPROVALS .................................................................................................. 27

9. EFFECT OF THE SCHEME AND DELISTING........................................................................ 28

10. IMPLEMENTATION OF THE SCHEME .................................................................................. 29

11. CLOSURE OF BOOKS .......................................................................................................... 32

12. SETTLEMENT AND REGISTRATION PROCEDURES .......................................................... 33

13. DIRECTORS’ INTERESTS IN KBCF SHARES ...................................................................... 34

14. OVERSEAS SHAREHOLDERS .............................................................................................. 34

15. ACTION TO BE TAKEN BY SHAREHOLDERS ...................................................................... 36

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16. ADVICE OF INDEPENDENT FINANCIAL ADVISER TO THE INDEPENDENT DIRECTORS ............................................................................................................................ 36

17. GENERAL INFORMATION...................................................................................................... 36

APPENDIX 1 – LETTER FROM KPMG CORPORATE FINANCE PTE LTD TO THE INDEPENDENT DIRECTORS ON THE SCHEME .............................................. 37

APPENDIX 2 – LETTER FROM KINGBOARD LAMINATES TO THE SHAREHOLDERS .......... 63

APPENDIX 3 – GENERAL INFORMATION RELATING TO KINGBOARD COPPER FOIL ........ 181

APPENDIX 4 – FINANCIAL INFORMATION ON THE KBCF GROUP ........................................ 204

APPENDIX 5 – CONDITIONS PRECEDENT ................................................................................ 216

APPENDIX 6 – PRESCRIBED OCCURRENCE............................................................................ 218

APPENDIX 7 – REPRESENTATIONS AND WARRANTIES OF KINGBOARD LAMINATES ...... 219

APPENDIX 8 – REPRESENTATIONS AND WARRANTIES OF KINGBOARD COPPER FOIL ...................................................................................................................... 220

APPENDIX 9 – ARRANGEMENTS FOR TRADING OR SALE OF NEW KBL SHARES ............ 221

THE SCHEME .................................................................................................................................... 224

NOTICE OF SCHEME MEETING ...................................................................................................... 231

NOTICE OF SHAREHOLDERS’ BRIEFING...................................................................................... 233

CONTENTS

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In this Scheme Document, the following definitions apply throughout except where the context otherwiserequires:

“Account Opening Form” : Has the meaning ascribed to it in paragraph 1.2(i) of Appendix 9to this Scheme Document

“Act” : The Bermuda Companies Act 1981

“Announcement” : The joint announcement by Kingboard Copper Foil and KingboardLaminates dated 4 May 2009 in relation to, inter alia, the Scheme

“Announcement Date” : 4 May 2009, being the date of the Announcement

“Authorisation Form” : Has the meaning ascribed to it in paragraph 1.4(i) of Appendix 9to this Scheme Document

“Books Closure Date” : A date and time to be announced (before the Effective Date) byKingboard Copper Foil on and at which the Transfer Books and theRegister of Members of Kingboard Copper Foil will be closed inorder to determine the entitlements of the Relevant Shareholdersin respect of the Scheme

“Business Day” : A day (other than Saturday, Sunday or public holiday) on whichcommercial banks are open for business in Bermuda, Hong Kongand Singapore

“Bye-laws” : The bye-laws of Kingboard Copper Foil, as amended,supplemented or modified from time to time

“Cash Consideration” : Has the meaning ascribed to it in paragraph 2.1(ii)(a) ofKingboard Copper Foil’s Letter to Shareholders

“Cash Consideration : Has the meaning ascribed to it in paragraph 4.1 of theIrrevocable Undertakings” Explanatory Statement

“Cash Consideration : Shareholders who have executed and delivered their respectiveUndertaking Shareholders” Cash Consideration Irrevocable Undertakings to Kingboard

Laminates, which details are set out in paragraph 4.1 of theExplanatory Statement, on and subject to the terms of theirrespective Cash Consideration Irrevocable Undertakings

“CDP” : The Central Depository (Pte) Limited

“Code” : The Singapore Code on Take-overs and Mergers

“Combination Offer” : Has the meaning ascribed to it in paragraph 2.1(ii)(c) ofKingboard Copper Foil’s Letter to Shareholders

“Company” or “Kingboard : Kingboard Copper Foil Holdings LimitedCopper Foil”

“Conditions Precedent” : The conditions precedent which must be satisfied (unless waived)for the Scheme to be implemented and which are reproduced inAppendix 5 to this Scheme Document

“Court” : The Supreme Court of Bermuda

DEFINITIONS

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“Court Order” : The order of the Court sanctioning the Scheme under Section 99of the Act

“Court Order Date” : The date upon which the Court sanctions the Scheme

“Depositor Proxy Form” : The proxy form to be completed by Depositors for the SchemeMeeting

“Directors” : The directors of Kingboard Copper Foil as at the date of thisScheme Document

“Effective Date” : The date on which the Scheme, if approved by the Shareholders,becomes effective and binding in accordance with its terms

“Election Form” : The election form (to be despatched to the Relevant Shareholdersafter the Books Closure Date) by which the Relevant Shareholdersshall elect to receive either the Cash Consideration or the ShareExchange Offer or the Combination Offer

“Election Period” : The election period during which the Relevant Shareholders shallelect to receive either the Cash Consideration or the ShareExchange Offer or the Combination Offer

“Encumbrances” : Any liens, equities, charges, encumbrances, rights of pre-emptionand any other third party rights or interests of any naturewhatsoever

“Excel First” : Excel First Investments Limited

“FY” : Financial year ended or ending 31 December, as the case may be

“Governmental Agency” : Any foreign or Singapore government or governmental, semi-governmental, administrative, regulatory, anti-trust, fiscal or judicialagency, authority, body, commission, department, exchange,tribunal or entity

“Group” or “KBCF Group” or : The Company, its subsidiaries and associated companies (if any),“KBCF Group Companies” and each company in the KBCF Group shall be referred to as a

“KBCF Group Company”

“HK$” or “Hong Kong dollar” : Hong Kong dollars, the lawful currency of Hong Kong

“HML” : Hallgain Management Limited

“Hong Kong” : The Hong Kong Special Administrative Region of the People’sRepublic of China

“Identification Document” : Has the meaning ascribed to it in paragraph 1.2(ii) of Appendix 9to this Scheme Document

“IFA” or “ KPMG” : KPMG Corporate Finance Pte Ltd, the independent financialadviser to the Independent Directors

“IFA Letter” : Has the meaning ascribed to it in paragraph 9.1 of KingboardCopper Foil’s Letter to Shareholders

DEFINITIONS

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“Implementation Agreement” : The implementation agreement dated 4 May 2009 entered intobetween Kingboard Copper Foil and Kingboard Laminates inrelation to the implementation of the Scheme

“Independent Directors” : The directors of Kingboard Copper Foil (other than those directorsof Kingboard Copper Foil who are considered not independent forthe purpose of the Scheme), being Mr Ong Tiong Wee and MrChim Hou Yan

“Issue Price” : Has the meaning ascribed to it in paragraph 2.1(ii)(b) ofKingboard Copper Foil’s Letter to Shareholders

“Jamplan” : Jamplan (BVI) Limited

“KBCF Shares” : Issued ordinary shares of nominal value of US$0.10 each in theshare capital of Kingboard Copper Foil

“KBL Group” : Kingboard Laminates, its subsidiaries and associated companies(if any)

“KBL Share Certificates” : Has the meaning ascribed to it in paragraph 10.3(iv)(b)(1) of theExplanatory Statement and “KBL Share Certificate” shall beconstrued accordingly

“KBL Shares” : Ordinary shares of nominal value of HK$0.10 each in the sharecapital of Kingboard Laminates

“Kingboard Chemical” : Kingboard Chemical Holdings Limited

“Kingboard Laminates” : Kingboard Laminates Holdings Limited

“Latest Practicable Date” : 2 July 2009, being the latest practicable date prior to the printing ofthis Scheme Document

“Long-Stop Date” : 26 October 2009 (or such other date as Kingboard Copper Foiland Kingboard Laminates may agree)

“Market Day” : A day on which the SGX-ST is open for the trading of securities

“Members” : Persons who are registered as holders of KBCF Shares in theRegister of Members of Kingboard Copper Foil

“Member Proxy Form” : The proxy form to be completed by Members for the SchemeMeeting

“New KBL Shares” : New KBL Shares, which are to be allotted and issued on a fullypaid up basis by Kingboard Laminates in connection with theScheme as part of the Scheme Price

“Notice of Scheme Meeting” : The Notice of the Scheme Meeting set out on pages 231 to 232 ofthis Scheme Document

“Overseas Shareholder” : Has the meaning ascribed to it in paragraph 14.1 of theExplanatory Statement

“Prescribed Occurrence” : Any of the matters set out in Schedule 1 to the ImplementationAgreement and which are reproduced in Appendix 6 to thisScheme Document

DEFINITIONS

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“Proxy Forms” : The Member Proxy Form and the Depositor Proxy Form

“Record Date” : The date falling on the Business Day immediately preceding theEffective Date

“Reference Period” : The period commencing three months prior to the AnnouncementDate and ending on the Latest Practicable Date

“Registrar” : The Registrar of Companies of Bermuda

“Relevant Documents” : Has the meaning ascribed to it in paragraph 1.5 of Appendix 9 tothis Scheme Document

“Relevant Shareholders” : Shareholders (excluding subsidiaries of Kingboard Laminateswhich hold KBCF Shares) as at 5.00 p.m. (Singapore time) on theBooks Closure Date

“Scheme” : Has the meaning ascribed to it in paragraph 1.1 of KingboardCopper Foil’s Letter to Shareholders

“Scheme Document” : This document to the Shareholders dated 10 July 2009 in relationto the Scheme

“Scheme Materials” : Has the meaning ascribed to it in paragraph 14.1 of theExplanatory Statement

“Scheme Meeting” : The meeting of the Members to be convened at the direction of theCourt, notice of which is set out on pages 231 to 232 of thisScheme Document, and any adjournment thereof

“Scheme Price” : Has the meaning ascribed to it in paragraph 2.1(ii) of KingboardCopper Foil’s Letter to Shareholders

“Securities Account” : The securities account maintained by the Depositor with CDP butdoes not include a securities sub-account

“SEHK” : The Stock Exchange of Hong Kong Limited

“SGX-ST” : Singapore Exchange Securities Trading Limited

“Share Exchange Offer” : Has the meaning ascribed to it in paragraph 2.1(ii)(b) ofKingboard Copper Foil’s Letter to Shareholders

“Shareholders” : Members, or if the Member is CDP and the context admits,Depositors who have KBCF Shares entered against their names inthe Depository Register

“Shareholders’ Briefing” : The briefing to be conducted by Kingboard Copper Foil forShareholders in Singapore, notice of which is set out on page 233of this Scheme Document, and any adjournment thereof

“SIC” : The Securities Industry Council of Singapore

“S$” or “Singapore dollars” : Singapore dollars, the lawful currency of Singapore

“Singapore Share Transfer : Intertrust Singapore Corporate Services Pte. Ltd. (formerly known Agent” as Compact Administrative Services Pte Ltd), the Singapore share

transfer agent to Kingboard Copper Foil

DEFINITIONS

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“Specified Obligations” : Has the meaning ascribed to it in paragraph 7.4 of theExplanatory Statement

“Substantial Shareholders” : Shareholders who have a five per cent. or more shareholdinginterests in Kingboard Copper Foil or Kingboard Laminates, as thecase may be

“Transfer Books” : The transfer books of Kingboard Copper Foil

“Transfer Form” : Has the meaning ascribed to it in paragraph 1.2(i) of Appendix 9to this Scheme Document

“UOB Kay Hian” : UOB Kay Hian Private Limited

“UOB Kay Hian Letter” : Has the meaning ascribed to it in paragraph 1.1 of Appendix 9 tothis Scheme Document

“US$” or “United States dollars” : United States of America dollars, the lawful currency of the UnitedStates of America

“VWAP” : Volume weighted average price

“%” or “per cent.” : Per centum or percentage

The terms “Depositor”, “Depository Agent” and “Depository Register” shall have the meaningsascribed to them respectively in Section 130A of the Companies Act, Chapter 50 of Singapore.

The term “acting in concert” shall have the meaning ascribed to it in the Code.

Words importing the singular shall, where applicable, include the plural and vice versa. Words importingthe masculine gender shall, where applicable, include the feminine and neuter genders. References topersons shall, where applicable, include corporations.

Any reference in this Scheme Document to any enactment is a reference to that enactment as for thetime being amended or re-enacted. Any word defined in the Act or the Code or any statutory modificationthereof and used in this Scheme Document shall, where applicable, have the meaning assigned to itunder the Act or the Code, or any statutory modification thereof, as the case may be, unless the contextotherwise requires.

Any reference to a time of the day and date in this Scheme Document shall be a reference to Singaporetime and date respectively, unless otherwise stated.

Any reference to “you” or “your” in this Scheme Document is a reference to the Shareholders unless thecontext otherwise requires.

Any discrepancies in the figures included in this Scheme Document between the listed amounts and thetotals thereof are due to rounding. Accordingly, figures shown as totals in this Scheme Document may notbe an arithmetic aggregation of the figures that precede them.

In this Scheme Document, the total number of issued KBCF Shares in Kingboard Copper Foil as at theLatest Practicable Date was 722,500,000.

DEFINITIONS

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Date and time of the Shareholders’ Briefing : 31 July 2009, 9.30 a.m.

Last date and time for lodgment of Proxy Forms(1)(2) : 9 August 2009, 9.30 a.m. (Hong Kongin respect of the Scheme Meeting time)

Date and time of the Scheme Meeting : 11 August 2009, 9.30 a.m. (Hong Kongtime)

Expected date of Court hearing application to sanction : 14 August 2009 (Bermuda time)the Scheme

Expected last day of trading of the KBCF Shares : 21 August 2009, at 5.00 p.m.

Expected Books Closure Date : 28 August 2009, at 5.00 p.m.

Expected Election Period : From 2 September 2009 to 16 September 2009

Expected Record Date : 22 September 2009

Expected Effective Date : 23 September 2009

Expected date for the allotment and issue of : Not later than 10 calendar days after the New KBL Shares and/or despatch of payment of the Cash the Effective DateConsideration

Expected date for delisting of the KBCF Shares : 2 October 2009

You should note that save for the last date and time for lodgement of Proxy Forms, the dates andtimes of the Shareholders’ Briefing and Scheme Meeting, the above timetable is indicative onlyand may be subject to change. For the events listed above which are described as “expected”,please refer to future announcement(s) by Kingboard Copper Foil and/or the SGX-ST for the exactdates and times of these events.

Notes:

(1) Members and Depositors are requested to lodge the Proxy Forms for the Scheme Meeting not less than 48 hours before thetime appointed for the Scheme Meeting.

(2) All Proxy Forms for the Scheme Meeting must be lodged at the office of Intertrust Singapore Corporate Services Pte. Ltd.(formerly known as Compact Administrative Services Pte Ltd), being the Singapore Share Transfer Agent of KingboardCopper Foil at 3 Anson Road #27-01, Springleaf Tower, Singapore 079909. Completion and return of a Member Proxy Formwill not preclude a Member from attending and voting in person at the Scheme Meeting.

EXPECTED TIMETABLE

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DIRECTORS OF KINGBOARD : Cheung Kwok Wing (Chairman) COPPER FOIL Chan Wing Kwan (Executive Managing Director)

Cheung Kwok Ping (Executive Director)Lam Ka Po (Executive Director)Ho Yin Sang (Non-Executive Director)Ong Tiong Wee (Independent Non-Executive Director)Chim Hou Yan (Independent Non-Executive Director)

COMPANY SECRETARY OF KINGBOARD : Juliana Loh Joo HuiCOPPER FOIL

ASSISTANT COMPANY SECRETARY OF : Ira Stuart Outerbridge IIIKINGBOARD COPPER FOIL

REGISTERED OFFICE OF KINGBOARD : Clarendon HouseCOPPER FOIL 2 Church Street

Hamilton HM 11Bermuda

BERMUDA REGISTRAR AND SHARE : Butterfield Fulcrum Group (Bermuda) LimitedTRANSFER OFFICE OF KINGBOARD (formerly known as Butterfield Corporate ServicesCOPPER FOIL Limited)

Rosebank Centre11 Bermudiana RoadPembroke HM 08Bermuda

SINGAPORE SHARE TRANSFER AGENT : Intertrust Singapore Corporate Services Pte. Ltd.OF KINGBOARD COPPER FOIL (formerly known as Compact Administrative Services

Pte Ltd)3 Anson Road #27-01Springleaf TowerSingapore 079909

SINGAPORE LEGAL ADVISER TO : Allen & Gledhill LLPKINGBOARD LAMINATES AND THE One Marina BoulevardSCHEME #28-00

Singapore 018989

HONG KONG LEGAL ADVISER TO : Mallesons Stephen JaquesKINGBOARD LAMINATES 37th Floor, Two International Finance Centre

8 Finance Street, CentralHong Kong

SINGAPORE LEGAL ADVISER TO : Chang See Hiang & Partners KINGBOARD COPPER FOIL 1 Kim Seng Promenade #16-07

Great World City West TowerSingapore 237994

BERMUDA LEGAL ADVISER TO : Conyers Dill & Pearman Pte. Ltd.KINGBOARD COPPER FOIL 50 Raffles Place

#18-04 Singapore Land TowerSingapore 048623

FINANCIAL ADVISER TO KINGBOARD : DBS Bank Ltd.LAMINATES 6 Shenton Way, #41-01

DBS Building, Tower OneSingapore 068809

CORPORATE INFORMATION

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INDEPENDENT FINANCIAL ADVISER TO : KPMG Corporate Finance Pte LtdTHE INDEPENDENT DIRECTORS 16 Raffles Quay #22-00

Hong Leong BuildingSingapore 048581

AUDITORS TO KINGBOARD COPPER FOIL : Deloitte & Touche LLP6 Shenton Way #32-00DBS Building Tower TwoSingapore 068809

AUDITORS TO KINGBOARD LAMINATES : Deloitte Touche Tohmatsu35/F One Pacific Place88 QueenswayHong Kong

CORPORATE INFORMATION

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KINGBOARD COPPER FOIL HOLDINGS LIMITED(Incorporated in Bermuda)

(Company Registration Number: 26998)

Directors: Registered Office:

Cheung Kwok Wing (Chairman) Clarendon HouseChan Wing Kwan (Executive Managing Director) 2 Church StreetCheung Kwok Ping (Executive Director) Hamilton HM 11Lam Ka Po (Executive Director) BermudaHo Yin Sang (Non-Executive Director)Ong Tiong Wee (Independent Non-Executive Director)Chim Hou Yan (Independent Non-Executive Director)

10 July 2009

To: The Shareholders of Kingboard Copper Foil Holdings Limited

Dear Sir/Madam

PROPOSED PRIVATISATION OF KINGBOARD COPPER FOIL HOLDINGS LIMITED BY KINGBOARDLAMINATES HOLDINGS LIMITED BY WAY OF A SCHEME OF ARRANGEMENT UNDER SECTION 99OF THE BERMUDA COMPANIES ACT 1981

1. INTRODUCTION

1.1 Announcement of the Scheme. On 4 May 2009, Kingboard Copper Foil and KingboardLaminates jointly announced that Kingboard Laminates and Kingboard Copper Foil had enteredinto the Implementation Agreement to effect the privatisation of Kingboard Copper Foil byKingboard Laminates by way of a scheme of arrangement under Section 99 of the Act and inaccordance with the Code (the “Scheme”).

A copy of the Announcement is available on the website of the SGX-ST at www.sgx.com.

1.2 Delisting. If the Scheme becomes effective and binding, Kingboard Laminates, together with itssubsidiaries and/or nominees, will own all the issued KBCF Shares as of the Effective Date, andKingboard Copper Foil will become a wholly-owned subsidiary of Kingboard Laminates. Anapplication was made to seek the approval from the SGX-ST to delist the KBCF Shares from theSGX-ST upon the Scheme becoming effective and binding. The SGX-ST has granted its approvalthat, inter alia, subject to the Scheme being approved by the independent Shareholders and theCourt, it has no objection to the proposed delisting of Kingboard Copper Foil from the Official Listof the SGX-ST. The SGX-ST’s approval, however, is not to be taken as an indication of the meritsof the proposed delisting, the Scheme, the Company and/or its subsidiaries.

MEMBERS SHOULD NOTE THAT BY VOTING IN FAVOUR OF THE SCHEME, THE KBCFSHARES WILL BE DELISTED AND WITHDRAWN FROM THE OFFICIAL LIST OF THE SGX-STIF THE SCHEME BECOMES EFFECTIVE AND BINDING IN ACCORDANCE WITH ITS TERMS.

1.3 Purpose. The purpose of this Scheme Document is to set out information pertaining to theScheme, to seek your approval of the Scheme and to give you notice of the Scheme Meeting.

1.4 Explanatory Statement. An Explanatory Statement setting out the key terms of, the rationale forand the effect of the Scheme and the procedures for its implementation is set out on pages 22 to36 of this Scheme Document. It should be read in conjunction with the full text of this SchemeDocument, including the Scheme as set out on pages 224 to 230 of this Scheme Document.

LETTER TO SHAREHOLDERS

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1.5 Information on Kingboard Copper Foil. Kingboard Copper Foil was incorporated as anexempted company in Bermuda on 10 September 1999. Kingboard Copper Foil was listed on theMain Board of the SGX-ST on 16 December 1999. Kingboard Copper Foil is an indirect subsidiaryof Kingboard Laminates, which has an approximately 63.97 per cent. interest in the issued sharecapital of Kingboard Copper Foil1. The principal activity of Kingboard Copper Foil is that ofinvestment holding while its subsidiaries are engaged in the manufacture and trading of copper foil,a raw material for the laminates and printed circuit board industries.

1.6 Information on Kingboard Laminates. As stated in the Letter from Kingboard Laminates to theShareholders as set out in Appendix 2 to this Scheme Document, Kingboard Laminates wasincorporated and registered as an exempted company with limited liability in the Cayman Islandson 10 May 2006. Kingboard Laminates is a subsidiary of Kingboard Chemical, which wasincorporated in the Cayman Islands as an exempted company with limited liability. Both the sharesof Kingboard Chemical and Kingboard Laminates are listed on the Main Board of SEHK. KingboardLaminates is a leading vertically-integrated electronics materials manufacturer, specialising in theproduction of laminates, including glass epoxy laminates, paper laminates and composite epoxymaterial laminates.

The current board of directors of Kingboard Laminates comprises:

Cheung Kwok Wa (Chairman)Cheung Kwok Keung (Executive Managing Director)Cheung Kwok Ping (Executive Director)Lam Ka Po (Executive Director)Cheung Ka Ho (Executive Director)Chan Sau Chi (Executive Director)Liu Min (Executive Director)Zhou Pei Feng (Executive Director)Lo Ka Leong (Non-Executive Director)Chan Charnwut Bernard (Independent Non-Executive Director)Chan Yue Kwong, Michael (Independent Non-Executive Director)Leung Tai Chiu (Independent Non-Executive Director)Mok Yiu Keung, Peter (Independent Non-Executive Director)

Mr Cheung Kwok Ping and Mr Lam Ka Po are also executive directors of Kingboard Copper Foil.

2. THE SCHEME

2.1 Terms of the Scheme. The Scheme will be effected by way of a scheme of arrangement pursuantto Section 99 of the Act and in accordance with the Code. As at the Latest Practicable Date,Kingboard Copper Foil has an issued share capital of US$72,250,000 comprising 722,500,000KBCF Shares.

The Scheme is proposed to all Shareholders in accordance with the terms set out herein.

Pursuant to the Scheme:

(i) all the issued KBCF Shares held by the Relevant Shareholders as at the Books ClosureDate will be transferred to Kingboard Laminates (or such entity or person as may bedesignated by Kingboard Laminates); and

(ii) in consideration for such a transfer, Kingboard Laminates will pay the Relevant Shareholdersthe following consideration (the “Scheme Price”) for each KBCF Share transferred:

(a) S$0.21 in cash for each KBCF Share (the “Cash Consideration”); or


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1 In this Scheme Document, for the purpose of computation, the number of KBCF Shares is 722,500,000, as at the LatestPracticable Date.

(b) 0.374 New KBL Shares at the issue price of HK$2.946 per New KBL Share (the“Issue Price”) (equivalent to S$0.561 at the exchange rate ratio of S$1 : HK$5.247 asat 30 April 2009, being the Business Day immediately preceding the AnnouncementDate), for each KBCF Share (the “Share Exchange Offer”). The Issue Price is equalto the average closing price of the issued KBL Shares on SEHK for the five tradingdays preceding the Announcement Date; or

(c) a combination of the Cash Consideration and the Share Exchange Offer (the“Combination Offer”),

provided that Kingboard Laminates obtains clearance by SEHK for the listing of, andpermission to deal in, the New KBL Shares which may be allotted and issued pursuant tothe Share Exchange Offer or the Combination Offer.

An application was made to SEHK for, and SEHK has approved on 30 June 2009, the listingof, and permission to deal in, the New KBL Shares to be allotted and issued in satisfactionof the Share Exchange Offer or the partial satisfaction of the Combination Offer. Theapproval from SEHK is subject to all other conditions set out in the ImplementationAgreement and the Announcement.

Subject to the Scheme becoming effective and binding:

(i) each Relevant Shareholder has the discretion to receive the Scheme Price in the formof the Cash Consideration, the Share Exchange Offer or the Combination Offer;

(ii) in the event a Relevant Shareholder does not make a valid election between the CashConsideration, the Share Exchange Offer or the Combination Offer, the RelevantShareholder will be paid the Cash Consideration in default for each KBCF Share heldby him; and

(iii) the aggregate Cash Consideration or that portion of the Combination Offer which ispayable in cash to each Relevant Shareholder for the KBCF Shares held by suchRelevant Shareholder will be rounded down to the nearest whole cent. Fractions of aNew KBL Share will not be allotted and issued to any Relevant Shareholder and willbe disregarded.

2.2 Illustrations. The following illustrates the Scheme Price to be paid to a Relevant Shareholder whoowns 1,000 KBCF Shares pursuant to the Scheme (the “Hypothetical Shareholder”):

Illustration A – Election to Receive Cash Consideration

If the Hypothetical Shareholder elects to receive the Scheme Price in respect of all 1,000 of theKBCF Shares owned by him entirely in the form of the Cash Consideration, he will receive anaggregate of S$210 in cash.

Illustration B – Election to Receive Share Exchange Offer

If the Hypothetical Shareholder elects to receive the Scheme Price in respect of all 1,000 of theKBCF Shares owned by him entirely in the form of the Share Exchange Offer, he will receive anaggregate of 374 New KBL Shares.

Illustration C – Election to Receive Combination Offer

If the Hypothetical Shareholder elects to receive the Scheme Price in respect of 500 of the KBCFShares owned by him in the form of the Cash Consideration and in respect of the remaining 500 ofthe KBCF Shares owned by him in the form of the Share Exchange Offer, he will receive anaggregate of S$105 in cash and 187 New KBL Shares.


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2.3 No Encumbrances. Upon the Scheme becoming effective and binding, the KBCF Shares held bythe Relevant Shareholders will be transferred to Kingboard Laminates (or such entity or person asmay be designated by Kingboard Laminates):

(i) fully paid;

(ii) free from all Encumbrances; and

(iii) together with all rights, benefits and entitlements attaching thereto as at the AnnouncementDate and thereafter attaching thereto, including but not limited to the right to receive andretain all dividends (other than the final dividend of HK$0.01 per KBCF Share which wasdeclared by Kingboard Copper Foil on 26 February 2009, approved at the annual generalmeeting of the Shareholders on 27 April 2009 and paid to the Shareholders on 26 May2009), rights and other distributions (if any) which may be declared, paid or made byKingboard Copper Foil on or after the Announcement Date.

2.4 New KBL Shares. Pursuant to the Scheme, Kingboard Laminates will allot and issue in aggregateup to 97,367,534 New KBL Shares (assuming completion of the Scheme and the Scheme Price issatisfied in full by way of the allotment and issuance of New KBL Shares to the RelevantShareholders), representing approximately 3.25 per cent. of the issued share capital of KingboardLaminates as at the Latest Practicable Date and approximately 3.14 per cent. of the enlargedissued share capital of Kingboard Laminates after allotment and issuance of the New KBL Shares.The New KBL Shares will be allotted and issued under the general mandate which was granted tothe directors of Kingboard Laminates at the annual general meeting of Kingboard Laminates heldon 5 May 2008. The general mandate allows Kingboard Laminates to allot, issue or otherwise dealwith up to a maximum of 600,000,000 new KBL Shares. As at the Announcement Date, theunutilised general mandate of Kingboard Laminates is 600,000,000 new KBL Shares.

2.5 Ranking of New KBL Shares. If and when allotted and issued, the New KBL Shares will be listedon SEHK and will rank pari passu with the then existing KBL Shares.

3. RATIONALE FOR THE SCHEME AND FUTURE PLANS FOR THE KBCF GROUP

3.1 Rationale for the Scheme. As stated in the Letter from Kingboard Laminates to the Shareholdersas set out in Appendix 2 to this Scheme Document:

(i) Opportunity for Relevant Shareholders to Realise their Investment. The Schemepresents the Relevant Shareholders with an opportunity to realise their investment in KBCFShares at an attractive premium of approximately 27.273 per cent., 35.484 per cent., 54.412per cent. and 51.079 per cent. over Kingboard Copper Foil’s closing share price of S$0.165,one-month VWAP of S$0.155, three-month VWAP of S$0.136 and six-month VWAP ofS$0.139, respectively, prior to the Announcement Date, without incurring brokerage andother trading costs.

(ii) Prolonged Undervaluation and Illiquidity of KBCF Shares. Kingboard Copper Foil’sclosing share price has been on a downward trend for the past two years from a high ofS$0.535 on 17 July 2007 to its current level of S$0.230 as at the Latest Practicable Datewith a low of S$0.105 on 19 March 2009 and 20 March 2009. The trading liquidity of theKBCF Shares has also been low, with an average daily trading volume of approximately721,246 KBCF Shares over the 12-month period up to the Latest Practicable Date,representing approximately 0.277 per cent. of the total free float of KBCF Shares.


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(iii) Better Integration and Greater Efficiency Within the Kingboard Laminates Group ofCompanies. The Scheme would facilitate better integration of similar businesses betweenthe KBCF Group and the Kingboard Laminates group of companies. It would also allowKingboard Copper Foil and Kingboard Laminates to rationalise and streamline the resourcesand cost structure of the business for greater efficiency and competitiveness.

(iv) No Necessity to Access the Capital Markets. Kingboard Copper Foil has been listed onthe SGX-ST since 16 December 1999. Given the current net cash position of approximatelyHK$193 million (approximately S$37 million) as at 31 December 2008, coupled with thedepressed market conditions, Kingboard Copper Foil is of the view that it is unlikely torequire access to the capital markets to finance its operations in the foreseeable future. Ifrequired, Kingboard Copper Foil could still access the capital markets via its parentcompany, Kingboard Laminates, which is listed on the Main Board of SEHK.

(v) Opportunity for Relevant Shareholders to Participate in the Enlarged KingboardLaminates Group of Companies. The Scheme, through the Share Exchange Offer or theCombination Offer, presents the Relevant Shareholders with an opportunity to participate inthe upside potential of the enlarged Kingboard Laminates group of companies upon thesuccessful completion of the Scheme. The return-on-equity ratio (“ROE”)2 for KingboardLaminates is approximately 17.187 per cent. for FY2008. This compares favourably to theROE2 of approximately 5.356 per cent. for Kingboard Copper Foil for FY2008.

(vi) Compliance Costs Related to Listing Status. In maintaining its listing status, KingboardCopper Foil incurs compliance costs. The Scheme would allow Kingboard Copper Foil todispense with listing related expenses and channel its resources to its business operations.

3.2 Future Plans for the KBCF Group. As stated in the Letter from Kingboard Laminates to theShareholders as set out in Appendix 2 to this Scheme Document, it is the intention of KingboardLaminates that Kingboard Copper Foil will continue with its existing business activities andKingboard Laminates presently has no intention to (i) introduce any major changes to the businessof Kingboard Copper Foil, (ii) redeploy the fixed assets of the KBCF Group, or (iii) discontinue theemployment of the employees of the KBCF Group.

However, the directors of Kingboard Laminates retain the flexibility at any time to consider anyoptions or opportunities in relation to the KBCF Group which may present themselves and whichthey may regard to be in the best interest of Kingboard Laminates.

4. IRREVOCABLE UNDERTAKINGS

4.1 Irrevocable Undertakings to Elect to Receive Cash Consideration

(i) The Cash Consideration Undertaking Shareholders have each given a Cash ConsiderationIrrevocable Undertaking to Kingboard Laminates in which they undertake to elect to receivethe Scheme Price in the form of the Cash Consideration in respect of all their respectiveKBCF Shares, on and subject to the terms set out in their respective Cash ConsiderationIrrevocable Undertakings.

(ii) The Cash Consideration Irrevocable Undertakings relate to an aggregate of 74,000 KBCFShares, representing approximately 0.01025 per cent. of the total issued KBCF Shares as atthe Latest Practicable Date.

(iii) Further details of the Cash Consideration Irrevocable Undertakings can be found inparagraph 4 of the Explanatory Statement.


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2 The calculation of the ROE is based on the profit attributable to equity holders for FY2008 over the average of the equityattributable to equity holders for FY2007 and FY2008.

4.2 No Other Irrevocable Undertakings. As at the Latest Practicable Date and save as disclosed inthe Letter from Kingboard Laminates to the Shareholders as set out in Appendix 2 to this SchemeDocument, neither Kingboard Laminates nor any other party acting or deemed to be acting inconcert with it has received any irrevocable undertaking to vote, or procure the voting of, all itsrespective KBCF Shares in favour of or against the Scheme and any other matters necessary orproposed to implement the Scheme at the Scheme Meeting.

5. NO CASH OUTLAY

Shareholders should note that no cash outlay (including any stamp duties or brokerage expenses)will be required from the Shareholders under the Scheme.

6. WAIVER OF RIGHTS TO A GENERAL OFFER

Members should note that by voting in favour of the Scheme, they are agreeing to KingboardLaminates and its concert parties acquiring or consolidating effective control in Kingboard CopperFoil without having to make a general offer for Kingboard Copper Foil and will be regarded ashaving waived their rights to a general offer by Kingboard Laminates and/or parties acting ordeemed to be acting in concert with Kingboard Laminates to acquire the KBCF Shares under theCode.

7. TERMINATION

Shareholders should note that pursuant to the terms of the Implementation Agreement, theImplementation Agreement may be terminated (and hence the Scheme will not proceed) in thecircumstances set out in paragraph 7.3 of the Explanatory Statement of this Scheme Document.

In the event of termination of the Implementation Agreement by either Kingboard Copper Foil orKingboard Laminates pursuant to the terms of the Implementation Agreement, the ImplementationAgreement shall terminate (except for surviving provisions relating to remedy, confidentiality, costsand expenses, third party contract rights, notices and governing law) and there shall be no otherliability on the part of either Kingboard Copper Foil or Kingboard Laminates save as otherwiseagreed between Kingboard Copper Foil and Kingboard Laminates.

8. CONFIRMATION OF FINANCIAL RESOURCES

We note in paragraph 14 of the Letter from Kingboard Laminates to the Shareholders as set out inAppendix 2 to this Scheme Document that DBS Bank Ltd., as financial adviser to KingboardLaminates in connection with the Scheme, confirms that sufficient financial resources are availableto Kingboard Laminates to satisfy in full the aggregate Scheme Price payable by it for all the KBCFShares to be acquired by it pursuant to the Scheme.

9. ADVICE OF INDEPENDENT FINANCIAL ADVISER TO THE INDEPENDENT DIRECTORS

9.1 IFA. KPMG has been appointed as the independent financial adviser to the Independent Directorsin relation to the Scheme. The letter from the IFA setting out its advice to the Independent Directorsis set out in Appendix 1 to this Scheme Document (the “IFA Letter”). The Shareholders areadvised to read and consider the recommendation of the IFA made therein in its entirety.


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9.2 Conclusion by the IFA. In arriving at its recommendation, the IFA has taken into consideration thefactors set out in the IFA Letter. The conclusions of the IFA in respect of the factors regarding theCash Consideration, the Share Exchange Offer and the other factors, are set out below. TheShareholders should read the following extract in conjunction with, and in the context of the full textof the IFA Letter:

“Our conclusions in respect of the factors regarding the Cash Consideration are set out below:

(a) Kingboard Copper Foil’s liquidity, as represented by the average daily value traded as apercentage of market capitalisation and the average daily volume traded as a percentageof shares outstanding, are 83.2 per cent. and 83.0 per cent. lower than the median liquiditystatistics of the 10 most highly traded stocks on the SGX-ST, respectively;

(b) Kingboard Copper Foil’s liquidity as represented by the average daily value traded as apercentage of market capitalisation and the average daily volume traded as a percentageof shares outstanding are 61.0 per cent. higher and 90.9 per cent. higher than the medianliquidity statistics of the SGX-ST listed entities with a market capitalisation of betweenS$153.1 million and S$181.6 million, respectively;

(c) For the different periods ranging from one year prior to the Announcement Date to onemarket day prior to the Announcement Date, the Cash Consideration is at a premium overVWAP of KBCF Shares. We further note that the Cash Consideration is at a premium of3.4 per cent. and at a discount of 5.0 per cent. compared to the VWAP of KBCF Sharesone market day post the Announcement Date and the period from post the AnnouncementDate till the Latest Practicable Date, respectively.

(d) Kingboard Copper Foil’s EV/EBITDA multiple is at a 8.9 per cent. premium and a 2.0 percent. discount to the mean and median EV/EBITDA multiple of comparable companies,respectively. However, Kingboard Copper Foil’s P/B multiple is at a 33.3 per cent. discountto the median P/B multiple of comparable companies but within the minimum/maximumrange of P/B multiples of comparable companies;

(e) The NTA per share of Kingboard Copper Foil is S$0.58 (HK$3.15) while the Offer Price isS$0.21, which translates into a discount of 63.8 per cent. Based on Kingboard CopperFoil’s financial statement for the period ended 31 March 2009, the Company had totalassets of S$501.3 million and total liabilities of S$79.2 million while total equity is S$422.1million. Approximately 52.5 per cent. of total assets comprise of property, plant andequipment estimated to be S$263.1 million. The figures calculated are inclusive of minorityinterests.

We have considered two scenarios under which Shareholders may be able to monetiseKingboard Copper Foil’s NTA. Firstly, management can liquidate certain assets and returnthe proceeds from the sale of such assets to Shareholders. Shareholders should note thatin a liquidation scenario it is unlikely that the assets can be sold at their book values.There are numerous factors which affect the consideration to be paid for the assetsincluding the time, costs and expenses relating to the sale of the asset as well as thedisruption it could possibly bring to the operations;

Secondly, management can declare dividends for distribution to Shareholders. As at 31March 2009, Kingboard Copper Foil has S$314.1 million in reserves, however theCompany does not have sufficient cash to pay the dividends. Kingboard Copper Foil wouldneed to obtain new borrowings in order to pay the dividends. Based on Kingboard CopperFoil’s earnings before interest and taxes for the trailing 12 months ended 31 March 2009which is negative S$0.47 million, the Company may not have the ability to service anysignificant borrowings;


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We also note that Kingboard Laminates has no intention to introduce any major changes tothe business of Kingboard Copper Foil and the terms of the Scheme are such thatShareholders can exchange their holdings in Kingboard Copper Foil with those ofKingboard Laminates;

(f) Kingboard Copper Foil’s EV/EBITDA multiple is at a premium of 172.2 per cent. to themedian EV/EBITDA multiple of the comparable transactions while its P/B multiple is at a42.9 per cent. discount to P/B multiple of the comparable transactions. Kingboard CopperFoil’s P/B multiple is within the minimum/maximum range of P/B multiples of thecomparable transactions;

(g) Kingboard Copper Foil’s premium implied by the Cash Consideration over PrecedentPrivatisation Transactions across the different observation periods, namely the lasttransacted price prior to announcement, 1-month VWAP prior to announcement and 3-month VWAP prior to announcement, is at a premium to the median statistics whencompared to the different observation periods;

(h) Kingboard Copper Foil’s premium implied by the Cash Consideration over PrecedentPrivatisation Transactions by Controlling Shareholder across the different observationperiods of last transacted price prior to announcement, 1-month VWAP prior toannouncement and 3-month VWAP prior to announcement is at a premium to the medianstatistics when compared to the said observation periods;

Our conclusions in respect of the factors regarding the Share Exchange Offer are set out below:

(i) The Share Conversion Ratio was calculated such that the implied offer price under theShare Exchange Offer would be equivalent to the Cash Consideration, after taking intoaccount, inter alia, the average five day closing share price of Kingboard Laminates andthe closing exchange rate as at 30 April 2009 (exchange rate ratio of S$1 : HK$5.247),being the Business Day immediately preceding the Announcement Date;

(j) Kingboard Laminates’ liquidity, as represented by the average daily value traded as apercentage of market capitalisation and the average daily volume traded as a percentageof shares outstanding, are 53.8 per cent. and 83.5 per cent. lower than the median liquiditystatistics of the 10 most highly traded stocks on the SEHK, respectively;

(k) Kingboard Laminates’ liquidity as represented by the average daily value traded as apercentage of market capitalisation and the average daily volume traded as a percentageof shares outstanding are 65.9 per cent. and 65.2 per cent. lower than the median liquiditystatistics of the SEHK-listed entities with a market capitalisation of between HK$10,078.2million and HK$13,453.4 million, respectively;

(l) Kingboard Laminates’ EV/EBITDA multiple is trading at a discount of 44.0 per cent. to themedian EV/EBITDA multiple of its comparable companies. However, Kingboard Laminates’P/B multiple is at a premium of 10.0 per cent. to its median P/B multiple of its comparablecompanies; and

Our conclusions in respect of the other factors are set out below:

(m) As at the Latest Practicable Date, there is no publicly available evidence of any alternativeoffer for the KBCF Shares. Further, the Directors have also confirmed that as at the LatestPracticable Date, apart from the Scheme, they have not received any other offer from anyother party.”


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9.3 Advice of the IFA. Having taken the considerations set out in the IFA Letter into account, andbased on the circumstances of Kingboard Copper Foil and the information as at the LatestPracticable Date, the IFA has made certain recommendations to the Independent Directors, anextract of which is set out below. The Shareholders should read the extract in conjunction with, andin the context of the full text of the IFA Letter:

“After carefully considering the information available to us as at the Latest Practicable Date,and based upon the monetary, industry, market, economic and other relevant conditionssubsisting as at the Latest Practicable Date and based on our considerations above, we areof the opinion that:

(i) the Cash Consideration on its own represents a fair offer to the RelevantShareholders;

(ii) the Share Exchange Offer on its own represents a fair offer to the RelevantShareholders; and

(iii) as the Cash Consideration and the Share Exchange Offer both represent a fair offer tothe Relevant Shareholders, accordingly, a combination of the Cash Consideration andShare Exchange Offer would represent a fair offer to the Relevant Shareholders.

Accordingly, we are of the opinion that the financial terms of the Scheme are fair and weadvise the Independent Directors to advise the Shareholders to accept and vote in favour ofthe Scheme.

In rendering the above opinion, we have not taken into consideration the specific investmentobjectives, financial situation, tax position or unique needs and constraints of any individualshareholder. Accordingly, any individual shareholder who may require specific advice in relation totheir investment portfolio including their investment in Kingboard Copper Foil should consult theirstockbroker, bank manager, solicitor, accountant, tax adviser, or other professional adviserimmediately.”

10. RECOMMENDATION OF THE INDEPENDENT DIRECTORS

10.1 Recommendation on the Scheme. The Directors who are also directors of Kingboard Laminatesnamely, Mr Cheung Kwok Ping and Mr Lam Ka Po, and the Directors who are also directors ofKingboard Chemical, namely, Mr Cheung Kwok Wing, Mr Chan Wing Kwan and Mr Ho Yin Sang,will abstain from making a recommendation on the Scheme to the Shareholders in accordancewith the terms of the exemption granted by the SIC as described in paragraph 8.1(i) of theExplanatory Statement.

The Independent Directors, having reviewed the terms of the Scheme and having carefullyconsidered the advice of the IFA in the IFA Letter, concur with the opinion of the IFA, andaccordingly, recommend that:

(i) the Cash Consideration on its own represents a fair offer to the Relevant Shareholders;

(ii) the Share Exchange Offer on its own represents a fair offer to the Relevant Shareholders;and

(iii) as the Cash Consideration and the Share Exchange Offer both represent a fair offer to theRelevant Shareholders, accordingly, a combination of the Cash Consideration and the ShareExchange Offer would represent a fair offer to the Relevant Shareholders.

Accordingly, the Independent Directors are of the opinion that the financial terms of the Schemeare fair and advise the Shareholders to accept and vote in favour of the Scheme.


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The Independent Directors wish to remind Shareholders that there is currently no certainty that theScheme will become effective and there is no assurance that the trading volumes and marketprices of the KBCF Shares will be maintained at the current levels prevailing as at the LatestPracticable Date in the short term if the Scheme does not become effective for whatever reason. Inthe event the Scheme becomes effective, it will be binding on all Shareholders and the KBCFShares will be delisted and withdrawn from the Official List of the SGX-ST.

THE SHAREHOLDERS ARE ADVISED TO READ THE IFA LETTER SET OUT IN APPENDIX 1ON PAGES 37 TO 62 OF THIS SCHEME DOCUMENT CAREFULLY.

10.2 No Regard to Specific Objectives. In making their recommendation, the Independent Directorshave not had regard to the specific investment objectives, financial situation, tax status, risk profilesor unique needs and constraints of any individual Shareholder. As each Shareholder would havedifferent investment objectives and profiles, the Independent Directors recommend that anyindividual Shareholder who may require advice in the context of his specific investment portfolioshould consult his stockbroker, bank manager, solicitor, accountant, tax adviser, or otherprofessional adviser immediately.

10.3 Intention of Directors. Two Directors have interests in the KBCF Shares, namely Mr CheungKwok Wing and Mr Ho Yin Sang. In accordance with the terms of the exemption granted by the SICas described in paragraph 8.1(i) of the Explanatory Statement, Mr Cheung Kwok Wing (who is acommon Substantial Shareholder of Kingboard Laminates and Kingboard Copper Foil and who isalso a common director of Kingboard Chemical and Kingboard Copper Foil) will abstain from votingany of his KBCF Shares on the Scheme. In addition, Mr Ho Yin Sang, who is a common director ofKingboard Chemical and Kingboard Copper Foil, will abstain from voting any of his interest in theKBCF Shares on the Scheme. None of the other Directors have any interests in the KBCF Shares.

11. DIRECTORS’ RESPONSIBILITY STATEMENT

The Directors (including any who may have delegated detailed supervision of the preparation ofthis Scheme Document) have taken all reasonable care to ensure that the facts stated and allopinions expressed in this Scheme Document (other than the information and opinions inAppendices 1, 2, 7 and 9 to this Scheme Document respectively, and facts relating to and anyopinions expressed by Kingboard Laminates and the IFA) are fair and accurate and that nomaterial facts in relation thereto have been omitted from this Scheme Document, and they jointlyand severally accept responsibility accordingly.

Where any information has been extracted or reproduced from published or otherwise publiclyavailable sources, the sole responsibility of the Directors has been to ensure through reasonableenquiries that such information is accurately extracted from such sources or, as the case may be,reflected or reproduced in this Scheme Document. The Directors do not accept any responsibilityfor any information and opinions in Appendices 1, 2, 7 and 9 to this Scheme Documentrespectively, and facts relating to and any opinions expressed by Kingboard Laminates and theIFA. In respect of the IFA Letter, the sole responsibility of the Directors has been to ensure that thefacts stated with respect to the Group are fair and accurate.

12. GENERAL INFORMATION

Your attention is drawn to the further relevant information in the Appendices to this SchemeDocument.

Yours faithfullyFor and on behalf ofthe Board of Directors ofKINGBOARD COPPER FOIL HOLDINGS LIMITED

Cheung Kwok WingChairman


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1. INTRODUCTION

1.1 Announcement of Scheme. On 4 May 2009, Kingboard Laminates and Kingboard Copper Foiljointly announced that Kingboard Laminates and Kingboard Copper Foil had entered into theImplementation Agreement to effect the Scheme by way of a scheme of arrangement underSection 99 of the Act and in accordance with the Code.

1.2 Explanatory Statement. This Explanatory Statement should be read in conjunction with the fulltext of this Scheme Document, including the Scheme as set out on pages 224 to 230 of thisScheme Document. Capitalised terms used in this Explanatory Statement have the same meaningas those defined on pages 4 to 8 of this Scheme Document unless otherwise indicated.

2. THE SCHEME

2.1 Scheme. The Scheme is proposed to be undertaken by Kingboard Copper Foil in accordance withthe provisions of Section 99 of the Act and the Code and will involve the following:

(i) a transfer of all the issued KBCF Shares held by the Relevant Shareholders to KingboardLaminates (or such entity or person as may be designated by Kingboard Laminates); and

(ii) in consideration for such a transfer, Kingboard Laminates will pay the Relevant Shareholdersthe Scheme Price for each KBCF Share transferred.

Upon the Scheme becoming effective and binding, the KBCF Shares held by the RelevantShareholders will be transferred to Kingboard Laminates (or such entity or person as may bedesignated by Kingboard Laminates):

(a) fully paid;

(b) free from all Encumbrances; and

(c) together with all rights, benefits and entitlements attaching thereto as at the AnnouncementDate and thereafter attaching thereto, including but not limited to the right to receive andretain all dividends (other than the final dividend of HK$0.01 per KBCF Share which wasdeclared by Kingboard Copper Foil on 26 February 2009, approved at the annual generalmeeting of the Shareholders on 27 April 2009 and paid to the Shareholders on 26 May2009), rights and other distributions (if any) which may be declared, paid or made byKingboard Copper Foil on or after the Announcement Date.

Upon the completion of the Scheme, Kingboard Copper Foil will become a wholly-ownedsubsidiary of Kingboard Laminates as of the Effective Date and the KBCF Shares will be delistedand withdrawn from the Official List of the SGX-ST.

2.2 No Cash Outlay. Shareholders should note that no cash outlay (including any stamp duties orbrokerage expenses) will be required from the Shareholders under the Scheme.

2.3 Waiver of Rights to a General Offer. Members should note that by voting in favour of theScheme, they are agreeing to Kingboard Laminates and its concert parties acquiring orconsolidating effective control in Kingboard Copper Foil without having to make a general offer forKingboard Copper Foil and will be regarded as having waived their rights to a general offer byKingboard Laminates and/or parties acting or deemed to be acting in concert with KingboardLaminates to acquire the KBCF Shares under the Code.

EXPLANATORY STATEMENT(in compliance with Section 100 of the Act)

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3. RATIONALE FOR THE SCHEME AND FUTURE PLANS FOR THE KBCF GROUP

3.1 Rationale for the Scheme. As stated in the Letter from Kingboard Laminates to the Shareholdersset out in Appendix 2 to this Scheme Document:





(v) Opportunity for Relevant Shareholders to Participate in the Enlarged KingboardLaminates Group of Companies. The Scheme, through the Share Exchange Offer or theCombination Offer, presents the Relevant Shareholders with an opportunity to participate inthe upside potential of the enlarged Kingboard Laminates group of companies upon thesuccessful completion of the Scheme. The return-on-equity ratio (“ROE”)3 for KingboardLaminates is approximately 17.187 per cent. for FY2008. This compares favourably to theROE3 of approximately 5.356 per cent. for Kingboard Copper Foil for FY2008.



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3.2 Future Plans for the KBCF Group. As stated in the Letter from Kingboard Laminates to theShareholders set out in Appendix 2 to this Scheme Document, it is the intention of KingboardLaminates that Kingboard Copper Foil will continue with its existing business activities andKingboard Laminates presently has no intention to (i) introduce any major changes to the businessof Kingboard Copper Foil, (ii) redeploy the fixed assets of the KBCF Group, or (iii) discontinue theemployment of the employees of the KBCF Group.



4.1 Irrevocable Undertakings to Elect to Receive Cash Consideration. Certain Shareholders (the“Cash Consideration Undertaking Shareholders”) have each given an irrevocable undertakingto Kingboard Laminates (the “Cash Consideration Irrevocable Undertakings”) in which theyundertake to elect to receive the Scheme Price in the form of the Cash Consideration in respect ofall their respective KBCF Shares, on and subject to the terms set out in their respective CashConsideration Irrevocable Undertakings.

Each of the Cash Consideration Undertaking Shareholders is a “connected person” of KingboardChemical under the Rules Governing the Listing of Securities on The Stock Exchange of HongKong Limited (the “HK Listing Rules”) and the acquisition by Kingboard Laminates, being asubsidiary of Kingboard Chemical, of KBCF Shares held by the Cash Consideration UndertakingShareholders may constitute connected transactions under the HK Listing Rules (the “ConnectedTransactions”) for Kingboard Chemical. Accordingly, each of the Cash Consideration UndertakingShareholders has executed the Cash Consideration Irrevocable Undertakings confirming that theywill not take any New KBL Shares under the Scheme, so that as at the Latest Practicable Date theConnected Transactions fall within Rule 14A.31(2) of the HK Listing Rules and are exempted fromreporting and shareholders’ approval requirements.

The Cash Consideration Irrevocable Undertakings are subject to the Scheme being approved byShareholders at the Scheme Meeting.

4.2 Termination. The Cash Consideration Irrevocable Undertakings terminate on the earlier of: (i) thetermination of the Implementation Agreement or the Scheme lapsing, whichever is later; (ii) thecompletion of the Scheme; or (iii) the date on which Kingboard Laminates withdraws from theScheme.

4.3 Details of Cash Consideration Irrevocable Undertakings. The Cash Consideration IrrevocableUndertakings relate to an aggregate of 74,000 KBCF Shares, representing approximately 0.01025per cent. of the total issued KBCF Shares as at the Latest Practicable Date.

A list of the Cash Consideration Undertaking Shareholders as at the Latest Practicable Date is setout below.

Name of Cash Consideration No. of KBCF Shares held by Percentage of total interest inUndertaking Shareholder such Shareholder (1) the issued share capital (%) (2)

Ms Cheung Wai Kam 2,000 0.00028Mr Lai Chung Wing, Robert 72,000 0.00997

Total 74,000 0.01025

Notes:

(1) Based on information provided by each of the Cash Consideration Undertaking Shareholders.

(2) Based on an issued share capital of 722,500,000 KBCF Shares as at the Latest Practicable Date.


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5. INFORMATION ON KINGBOARD LAMINATES

Information on Kingboard Laminates, as well as its views and intentions in relation to KingboardCopper Foil and to the Scheme, are set out in the Letter from Kingboard Laminates to theShareholders in Appendix 2 to this Scheme Document.

6. SCHEME MEETING AND SHAREHOLDERS’ BRIEFING

6.1 Scheme Meeting. The Scheme, which is proposed pursuant to Section 99 of the Act, has to beapproved by the Members at a meeting convened at the direction of the Court. By an order of theCourt dated 2 July 2009, the Scheme Meeting was directed to be convened for the purpose ofapproving the Scheme.

By proposing that the Scheme be implemented by way of a scheme of arrangement under Section99 of the Act, Kingboard Copper Foil is providing the Members with the opportunity to determine atthe Scheme Meeting whether they consider the Scheme to be in their best interests.

The Scheme must be approved at the Scheme Meeting by a majority in number of Membersrepresenting not less than three-fourths in value of the KBCF Shares held by Members presentand voting either in person or by proxy at the Scheme Meeting. Depositors holding KBCF Sharesthrough CDP are not treated, under the Bye-laws and the Act, as members of Kingboard CopperFoil in respect of the number of KBCF Shares credited to their respective Securities Accounts.Accordingly, Depositors generally do not have a right under the Act and the Bye-laws to attend andto vote at general meetings of Kingboard Copper Foil. However, by an order of the Court dated2 July 2009, each Member who holds KBCF Shares in their own name will have one vote and thevalue to be attributed to a Member’s vote at the Scheme Meeting will be the number of KBCFShares held in the name of that Member, and in respect of KBCF Shares held by CDP as Member,each Depositor who has KBCF Shares entered against their names in the Depository Register whovotes as a proxy at the Scheme Meeting will be counted and their vote taken into account indetermining if a majority in number representing three fourths in value have voted to approve theScheme at the Scheme Meeting. Depositors who wish to attend and vote at the Scheme Meeting,and whose names are shown in the records of CDP as at a time not earlier than forty-eight (48)hours prior to the time of the Scheme Meeting supplied by CDP to Kingboard Copper Foil, mayattend as CDP’s proxies, and further details relating thereto can be found at paragraph 15 of theExplanatory Statement.

When the Scheme, with or without modification, becomes effective, it will be binding on all theMembers, whether or not they were present in person or by proxy or voted at the Scheme Meeting.

6.2 Notice. The notice of Scheme Meeting is set out on pages 231 to 232 of this Scheme Document.The Scheme Meeting will be held on 11 August 2009, at 9.30 a.m. (Hong Kong time) at 2/F.,Harbour View 1, No. 12 Science Park East Avenue, Phase II Hong Kong Science Park, Shatin,N.T., Hong Kong for the purpose of approving the Scheme.

6.3 Shareholders’ Briefing. As the Scheme Meeting will be held in Hong Kong, Kingboard CopperFoil proposes to hold a briefing in Singapore for Shareholders on 31 July 2009, at 9.30 a.m.at Jurong Country Club, Ficus Ballroom, Level 2, 9 Science Centre Road, Singapore 609078whereby Shareholders will be given the opportunity prior to the Scheme Meeting to raise anyquestions on the Scheme and for Kingboard Copper Foil to address such queries. Notice of theShareholders’ Briefing is set out on page 233 of this Scheme Document.

7. CONDITIONS OF THE SCHEME

7.1 Conditions Precedent. The Scheme is conditional upon the satisfaction of a number of ConditionsPrecedent not later than the Long-Stop Date. A list of such Conditions Precedent is set out inAppendix 5 to this Scheme Document.


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7.2 Non-fulfilment of Conditions Precedent. The Scheme will only become effective and binding ifall the Conditions Precedent set out in Appendix 5 to this Scheme Document have been satisfied(or where applicable, waived) in accordance with the Implementation Agreement. Shareholdersshould note that if any of the Conditions Precedent is not satisfied (or where applicable, has notbeen waived) by the Long-Stop Date, the Scheme may not become effective and binding.

7.3 Right to Terminate. Shareholders should note that pursuant to the terms of the ImplementationAgreement, the Implementation Agreement may be terminated (and hence the Scheme will notproceed) in the following circumstances:

(i) the Implementation Agreement may be terminated with immediate effect by giving notice inwriting at any time prior to the Record Date subject to prior consultation with the SIC:

(a) Court Order: by either Kingboard Laminates or Kingboard Copper Foil, if any courtof competent jurisdiction or Governmental Agency (as defined in the ImplementationAgreement) has issued an order, decree or ruling or taken any other actionpermanently enjoining, restraining or otherwise prohibiting the Scheme or any partthereof, or has refused to do anything necessary to permit the Scheme or any partthereof, and such order, decree, ruling, other action or refusal shall have become finaland non-appealable;

(b) Breach: by (a) Kingboard Laminates, if Kingboard Copper Foil is in breach of anyprovision of the Implementation Agreement, or (b) Kingboard Copper Foil, if KingboardLaminates is in breach of any provision of the Implementation Agreement; or

(c) Shareholders’ Approvals: by Kingboard Laminates, if the resolutions submitted tothe Scheme Meeting are not approved (without amendment) by the requisite majorityof the Members; and

(ii) notwithstanding anything contained in the Implementation Agreement, the ImplementationAgreement will terminate if any of the Conditions Precedent has not been satisfied (or,where applicable, has not been waived) by the Long-Stop Date and the non-fulfilment of anysuch Condition Precedent is material in the context of the Scheme, provided always thateither Kingboard Laminates or Kingboard Copper Foil may only invoke the non-fulfilment of aCondition Precedent to terminate the Implementation Agreement after consultation with theSIC.

In the event of termination of the Implementation Agreement by either Kingboard Copper Foil orKingboard Laminates pursuant to the terms of the Implementation Agreement, the ImplementationAgreement shall terminate (except for surviving provisions relating to remedy, confidentiality, costsand expenses, third party contract rights, notices and governing law) and there shall be no liabilityon the part of either Kingboard Copper Foil or Kingboard Laminates save as otherwise agreedbetween Kingboard Laminates and Kingboard Copper Foil.

7.4 Specified Obligations.

The specified obligations of Kingboard Copper Foil are the following:

(i) the release of the Announcement, jointly with Kingboard Laminates, on or as soon aspracticable after the date of the Implementation Agreement;

(ii) within three Business Days after the release of the Announcement, release or issue of suchother letters or announcements as may be agreed between Kingboard Laminates andKingboard Copper Foil;

(iii) the preparation and despatch of this Scheme Document in compliance with all applicablelaws and regulations;


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(iv) the submission of the draft Scheme Document to the SGX-ST for clearance as soon asreasonably practicable after the date of the Implementation Agreement and diligentlyseeking such clearance promptly;

(v) subject to obtaining the approval of the SGX-ST, the application to the Court for order(s)convening the Scheme Meeting and the convening of the Scheme Meeting;

(vi) instructing Kingboard Copper Foil’s share registrar(s) to despatch, in accordance with theterms as set out in this Scheme Document, to the Shareholders this Scheme Document andthe appropriate forms of proxy for use at the Scheme Meeting promptly following approvalthereof by the SGX-ST and the grant of an order by the Court to convene the SchemeMeeting, respectively;

(vii) if the Scheme is approved by the requisite majority of the Members at the Scheme Meeting,promptly applying to the Court for, and diligently seeking its sanction and confirmation of, theScheme;

(viii) following the grant of the Court Order by the Court sanctioning the Scheme, delivering thesame to the Registrar for registration in accordance with the Act on such date as KingboardLaminates may require;

(ix) subject to the receipt by the Independent Directors of an unqualified opinion from the IFAadvising that the Independent Directors should recommend that Members vote in favour ofthe Scheme, Kingboard Copper Foil will use its best endeavours to procure that theIndependent Directors will:

(a) (subject always to compliance with their fiduciary duties) recommend, in accordancewith the advice of the IFA, in this Scheme Document that Members vote in favour ofall resolutions required to approve and implement the Scheme at the SchemeMeeting; and

(b) after making the recommendation set out in paragraph 7.4(ix)(a) above not at anytime withdraw, modify or adversely qualify or amend the recommendation, (in eachcase) except to the extent that the Independent Directors have determined in goodfaith and upon written legal advice that such recommendation should not be given orshould be withdrawn, modified, qualified or amended in order to comply with theirfiduciary duties; and

(x) Kingboard Copper Foil will not knowingly take any action which may be prejudicial to thesuccessful completion of the Scheme.

8. REGULATORY APPROVALS

8.1 SIC. An application was made by Kingboard Laminates to the SIC to seek certain rulings inrelation to the Scheme. The SIC has confirmed on 22 April 2009, inter alia, that:

(i) Exemptions from the Code

The Scheme is exempted from complying with Rules 14, 15, 16, 17, 20.1, 21, 22, 28, 29,33.2 and Note 1(b) on Rule 19 of the Code, subject to the following conditions:

(a) the common Substantial Shareholders of Kingboard Laminates and Kingboard CopperFoil namely, Mr Cheung Kwok Wing, HML, Kingboard Chemical and Jamplan abstainfrom voting on the Scheme4;


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4 The shareholding of the common Substantial Shareholders in Kingboard Copper Foil as at the Latest Practicable Date, isset out in Annex 2 of Appendix 2 to this Scheme Document.

(b) Kingboard Laminates and its concert parties abstain from voting on the Scheme5;

(c) the Directors who are also directors of Kingboard Laminates namely, Mr CheungKwok Ping and Mr Lam Ka Po, and the Directors who are acting in concert with thosepersons in paragraphs (a) and (b) above, namely, Mr Cheung Kwok Wing, Mr ChanWing Kwan and Mr Ho Yin Sang, abstain from making a recommendation on theScheme to the Shareholders; and

(d) Kingboard Copper Foil appoints an independent financial adviser to advise theShareholders on the Scheme.

In respect of (b) above, to the extent that certain parties deemed to be acting in concert withKingboard Laminates hold KBCF Shares as at the Latest Practicable Date, as disclosed inthe Letter from Kingboard Laminates to the Shareholders set out in Appendix 2 to thisScheme Document, such parties will abstain from voting on the Scheme.

If the Scheme becomes effective and binding, Kingboard Laminates, together with itssubsidiaries and/or nominees, will, in aggregate own all of the voting rights in KingboardCopper Foil as of the Effective Date, and Kingboard Copper Foil will become a wholly-ownedsubsidiary of Kingboard Laminates.

In compliance with the Code, the IFA has been appointed to advise the IndependentDirectors in relation to the Scheme.

(ii) Conditions Precedent

The SIC has confirmed that it has no objections to the Conditions Precedent, subject to theinclusion of a clause in the Implementation Agreement to the effect that KingboardLaminates may invoke any of the Conditions Precedent to terminate the ImplementationAgreement and/or the Scheme only after prior consultation with the SIC.

8.2 Court. The Scheme is subject to sanction by the Court as stated under paragraph 10.1 below andparagraph 2 of Appendix 5 to this Scheme Document.

8.3 SGX-ST. An application was made to seek the approval from the SGX-ST for the KBCF Shares tobe delisted and withdrawn from the Official List of the SGX-ST after the Scheme becomes effectiveand binding as set out in paragraph 11.3 below.

9. EFFECT OF THE SCHEME AND DELISTING

If the Scheme becomes effective and binding, Kingboard Laminates, together with its subsidiariesand/or nominees, will own all the issued KBCF Shares as of the Effective Date, and KingboardCopper Foil will become a wholly-owned subsidiary of Kingboard Laminates. An application wasmade to seek the approval from the SGX-ST for the KBCF Shares to be delisted and withdrawnfrom the Official List of the SGX-ST after the Scheme becomes effective and binding. The SGX-SThas granted its approval that, inter alia, subject to the Scheme being approved by the independentShareholders and the Court, it has no objection to the proposed delisting of Kingboard Copper Foilfrom the Official List of the SGX-ST. The SGX-ST’s approval, however, is not to be taken as anindication of the merits of the proposed delisting, the Scheme, the Company and/or itssubsidiaries.

The KBCF Shares will be delisted and withdrawn from the Official List of the SGX-ST after theScheme has become effective and binding.


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5 The KBCF Shares owned, controlled or agreed to be acquired by Kingboard Laminates and its concert parties as at theLatest Practicable Date, is set out in Annex 2 of Appendix 2 to this Scheme Document.

10. IMPLEMENTATION OF THE SCHEME

10.1 Application to Court for Sanction. Upon the Scheme being approved by a majority in number ofthe Members representing not less than three-fourths in value of the KBCF Shares held by theMembers present and voting either in person or by proxy at the Scheme Meeting convened andheld in accordance with the order of the Court dated 2 July 2009, an application will be made tothe Court by Kingboard Copper Foil for sanction of the Scheme.

10.2 Election. All Relevant Shareholders have the discretion, subject to the terms set out herein, toreceive the Scheme Price in the form of the Cash Consideration, the Share Exchange Offer or theCombination Offer. However, for the avoidance of doubt, Depositors have the discretion to receivethe Scheme Price in the form of the Cash Consideration, the Share Exchange Offer or theCombination Offer only through CDP, the latter being the registered holder of KBCF Shares in theRegister of Members of Kingboard Copper Foil. Administrative arrangements have been made withCDP to allow Depositors to make such election. For the purpose of the Scheme, the term“Shareholders” has been defined to also include references to Depositors where the context admitsand they will accordingly be treated administratively herein, where the context admits, asshareholders of Kingboard Copper Foil with entitlements in respect of the Scheme. Subject toparagraph 14 of the Explanatory Statement, the Election Forms are expected to be despatchedafter the Court sanctions the Scheme (which is likely to be on or around 14 August 2009 (Bermudatime)) to all Relevant Shareholders at their respective addresses shown in the Register ofMembers of Kingboard Copper Foil or the records of CDP, as the case may be, at their own risk.The Election Forms can also be collected at the Singapore Share Transfer Agent’s office situatedat 3 Anson Road #27-01, Springleaf Tower, Singapore 079909 during the Election Period. TheRelevant Shareholders should complete, sign and return the Election Forms in accordance with theprovisions and instructions printed on the forms during the Election Period.

If the Relevant Shareholder wishes to receive the Scheme Price wholly in the form of the CashConsideration in respect of all of his KBCF Shares, he does not need to complete and return theElection Form.

The Election Forms must be received by the end of the Election Period which is expected to be16 September 2009 at 5.00 p.m.. Each Relevant Shareholder is permitted to submit only oneElection Form and any subsequent submission of any Election Forms will be disregarded anddeemed as invalid. If the Singapore Share Transfer Agent or CDP fails to receive from anyRelevant Shareholder an Election Form by this date or receives an Election Form which does notcomply with the instructions contained in the Election Form, or which is not complete or is invalid inany other respect, that Relevant Shareholder shall be deemed to have elected to receive theScheme Price in the form of the Cash Consideration in exchange for all his KBCF Shares.

Kingboard Laminates shall not be required to notify any Relevant Shareholder if his Election Formis not received or is not in compliance with the instructions contained in the Election Form, or isotherwise incomplete or invalid in any other respect.

10.3 Implementation. If the Members approve the Scheme at the Scheme Meeting and the Courtsanctions the Scheme, Kingboard Laminates and Kingboard Copper Foil will take the necessarysteps to render the Scheme effective and the following will be implemented:

(i) the KBCF Shares held by the Relevant Shareholders (not being Depositors) will betransferred (and in the case of the Relevant Shareholders who are Depositors, the KBCFShares held by such Relevant Shareholders will be transferred by CDP) to KingboardLaminates (or such entity or person as may be designated by Kingboard Laminates) and theScheme Price will be paid by Kingboard Laminates to the Relevant Shareholders (not beingDepositors) (and in the case of Relevant Shareholders who are Depositors, the SchemePrice will be paid to CDP and/or the Depositor, as the case may be) for each KBCF Sharetransferred in the manner set out in sub-paragraph (iv) below;


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(ii) as of and from the Effective Date, all existing share certificates relating to the KBCF Sharesheld by CDP and the Relevant Shareholders (not being Depositors) will cease to have anyeffect as evidence of title of the KBCF Shares represented thereby;

(iii) Relevant Shareholders (not being Depositors) are required to forward their existing sharecertificates relating to their KBCF Shares to the Singapore Share Transfer Agent’s office at 3Anson Road #27-01, Springleaf Tower, Singapore 079909 before the Effective Date forcancellation; and

(iv) not later than ten (10) calendar days after the Effective Date and against the transfer of theKBCF Shares set out in sub-paragraph (i) above:

(a) Cash Consideration

Kingboard Laminates shall pay cash to the Relevant Shareholders who elect to andare entitled to receive the Scheme Price in the form of the Cash Consideration for allof their KBCF Shares and those whose Election Forms have not been received by theend of the Election Period which is expected to be 16 September 2009 at 5.00 p.m..

(1) Relevant Shareholders whose KBCF Shares are not deposited with CDP

Kingboard Laminates shall pay each Relevant Shareholder (not being aDepositor) by sending a cheque for the Cash Consideration payable to andmade out in favour of such Relevant Shareholder by ordinary post to hisaddress in the Register of Members of Kingboard Copper Foil at the close ofbusiness on the Books Closure Date, at the sole risk of such RelevantShareholder, or in the case of joint Relevant Shareholders, to the first namedRelevant Shareholder made out in favour of such Relevant Shareholder byordinary post to his address in the Register of Members of Kingboard CopperFoil at the close of business on the Books Closure Date, at the sole risk of suchjoint Relevant Shareholders; and

(2) Relevant Shareholders whose KBCF Shares are deposited with CDP

Kingboard Laminates shall pay each Relevant Shareholder (being a Depositor)by making payment of the Cash Consideration payable to such RelevantShareholder to CDP. CDP shall:

(i) in the case of a Relevant Shareholder (being a Depositor) who hasregistered for CDP’s direct crediting service, credit the CashConsideration payable to such Relevant Shareholder, to the designatedbank account of such Relevant Shareholder; and

(ii) in the case of a Relevant Shareholder (being a Depositor) who has notregistered for CDP’s direct crediting service, send to such RelevantShareholder, by ordinary post to his address in the Depository Registerat the close of business on the Books Closure Date and at the sole riskof such Relevant Shareholder, a cheque for the payment of such CashConsideration made out in favour of such Relevant Shareholder.

Assuming that the Scheme becomes effective and binding on 23 September 2009, thecrediting by CDP of the Cash Consideration into the designated bank accounts of theRelevant Shareholders (in the case of Relevant Shareholders being Depositors andwho have registered with CDP for its direct crediting service) or, as the case may be,the posting of cheques for the Cash Consideration in the manner set out in sub-paragraphs (iv)(a)(1) and (iv)(a)(2) above, is expected to take place on or before2 October 2009.


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On or after the day being six (6) calendar months after the posting of such chequesby Kingboard Laminates, Kingboard Laminates shall have the right to cancel orcountermand payment of any such cheque which has not been cashed (or has beenreturned uncashed) and shall place all such moneys in a bank account in KingboardCopper Foil’s name with a licensed bank in Singapore selected by Kingboard CopperFoil. Kingboard Copper Foil or its successor entity shall hold such moneys until theexpiration of six (6) years from the Effective Date and shall, prior to such date makepayments therefrom of the sums (without interest) payable pursuant to Clause 2 ofthe Scheme set out in pages 224 to 230 of this Scheme Document to persons whosatisfy Kingboard Copper Foil or its successor entity that they are respectively entitledthereto and that the cheques referred to in Clauses 3(a)(1) and 3(a)(2) of theScheme set out in pages 224 to 230 of this Scheme Document of which they arepayees have not been cashed. Kingboard Copper Foil or its successor entity shall, inits absolute discretion, determine whether any such person is so entitled and anysuch determination shall be conclusive and binding upon all persons claiming aninterest in the relevant moneys.

On the expiry of six (6) years from the Effective Date, Kingboard Laminates shall bereleased from any further obligation to make any payments under the Scheme andKingboard Copper Foil or its successor entity shall transfer to Kingboard Laminatesthe balance (if any) of the sums then standing to the credit of the bank accountreferred to in Clause 3(a) of the Scheme set out in pages 224 to 230 of this SchemeDocument including accrued interest subject, if applicable, to the deduction of interest,tax or any withholding tax or any other deduction required by law and subject to thededuction of any expenses.

(b) Share Exchange Offer

Kingboard Laminates shall allot and issue New KBL Shares, credited as fully-paid, onthe basis of 0.374 New KBL Shares at the Issue Price per New KBL Share for everyone KBCF Share held by such Relevant Shareholder (not being Depositors) or CDP(as regards Relevant Shareholders who are Depositors), who elects to and is entitledto receive the Scheme Price in the form of the Share Exchange Offer for all of theirKBCF Shares.


Kingboard Laminates shall send the share certificates representing the relevantnumber of New KBL Shares (“KBL Share Certificates”) to each RelevantShareholder (not being a Depositor) by post to his address in the Register ofMembers of Kingboard Copper Foil at the close of business on the BooksClosure Date, at the sole risk of such Relevant Shareholder, or in the case ofjoint Relevant Shareholders, to the first named Relevant Shareholder by post tohis address in the Register of Members of Kingboard Copper Foil at the closeof business on the Books Closure Date, at the sole risk of such joint RelevantShareholder.


Kingboard Laminates shall send the KBL Share Certificates representing therelevant number of New KBL Shares to each Relevant Shareholder (being aDepositor) by post to his address in the Depository Register at the close ofbusiness on the Books Closure Date and at the sole risk of such RelevantShareholder.


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Assuming that the Scheme becomes effective and binding on 23 September 2009, theposting of the share certificates representing the New KBL Shares to be allotted andissued pursuant to the Scheme in the manner set out in sub-paragraphs (iv)(b)(1)and (iv)(b)(2) above, is expected to take place on or before 2 October 2009.

The New KBL Shares to be allotted and issued pursuant to the Scheme shall beallotted and issued and credited as fully paid and, if and when allotted and issued, willrank pari passu in all respects with the then existing KBL Shares.

The full terms and conditions of the KBL Shares are set out in the Memorandum andArticles of Association of Kingboard Laminates. An extract of some of these terms andconditions can be found in paragraph 1.4 of Annex 1 of Appendix 2 to this SchemeDocument.

(c) Combination Offer

In respect of the Cash Consideration component of the Combination Offer, theprocedure for settlement shall be as described above in respect of the CashConsideration.

In respect of the securities component of the Combination Offer, the procedure forsettlement shall be as described above in respect of the Share Exchange Offer.

10.4 Arrangements for Trading. Kingboard Laminates has put in place certain arrangements tofacilitate trading in or sale of New KBL Shares by Relevant Shareholders who have elected toreceive the Scheme Price in the form of New KBL Shares pursuant to the Share Exchange Offer orthe Combination Offer. Details of such arrangements are set out in Appendix 9 to this SchemeDocument.

11. CLOSURE OF BOOKS

11.1 Notice of Books Closure. Subject to the approval by the Members of the Scheme at the SchemeMeeting and the sanction of the Scheme by the Court, notice will be given by Kingboard CopperFoil by way of an announcement on SGXNET before the Effective Date of the Books Closure Datefor the purpose of determining the entitlements of the Relevant Shareholders under the Scheme.The Books Closure Date is tentatively scheduled on 28 August 2009 at 5.00 p.m..

11.2 Books Closure. No transfer of the KBCF Shares where the certificates relating thereto are notdeposited with CDP may be effected after the Books Closure Date.

As at Books Closure Date, the trading counter for the KBCF Shares will be suspended and notransfers of the KBCF Shares may be made by Depositors after the Books Closure Date.

11.3 Trading in KBCF Shares on the SGX-ST. An application was made to seek the approval from theSGX-ST for the KBCF Shares to be delisted and withdrawn from the Official List of the SGX-STafter the Scheme becomes effective and binding. The SGX-ST has granted its approval that, interalia, subject to the Scheme being approved by the independent Shareholders and the Court, it hasno objection to the proposed delisting of Kingboard Copper Foil from the Official List of the SGX-ST. The SGX-ST’s approval, however, is not to be taken as an indication of the merits of theproposed delisting, the Scheme, the Company and/or its subsidiaries.

MEMBERS SHOULD NOTE THAT BY VOTING IN FAVOUR OF THE SCHEME, THE KBCFSHARES WILL BE DELISTED AND WITHDRAWN FROM THE OFFICIAL LIST OF THE SGX-STIF THE SCHEME BECOMES EFFECTIVE AND BINDING IN ACCORDANCE WITH ITS TERMS.


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The Scheme is tentatively scheduled to become effective and binding on or about 23 September2009 and accordingly, the KBCF Shares are expected to be delisted and withdrawn from theOfficial List of the SGX-ST with effect from 2 October 2009. It is therefore expected that, subject tothe approval of the SGX-ST, the KBCF Shares will cease to be traded on the SGX-ST from22 August 2009, being five (5) Market Days before the expected Books Closure Date.

Shareholders (not being Depositors) who wish to trade their KBCF Shares on the SGX-ST arerequired to deposit with CDP their certificates relating to their KBCF Shares, together with the dulyexecuted instruments of transfer in favour of CDP, tentatively by 11 August 2009, being eight (8)Market Days prior to the tentative last day for trading of the KBCF Shares.

The exact dates and times of these events will be announced by Kingboard Copper Foil and/or theSGX-ST.

12. SETTLEMENT AND REGISTRATION PROCEDURES

Subject to the Scheme becoming effective and binding, the following settlement and registrationprocedures will apply:

(i) Relevant Shareholders whose KBCF Shares are not deposited with CDP

Entitlements of Relevant Shareholders (not being Depositors), whose KBCF Shares are notdeposited with CDP, to the Scheme Price will be determined on the basis of theShareholders (not being Depositors) and their holdings of KBCF Shares appearing in theRegister of Members at 5.00 p.m. on the Books Closure Date, which is tentatively scheduledon 28 August 2009.

Relevant Shareholders (not being Depositors) who have not yet done so are requested totake the necessary action to ensure that the KBCF Shares owned by them are registered intheir names by the Books Closure Date, which is expected to be on 28 August 2009 at 5.00p.m..

As of and from the Effective Date, each existing share certificate representing a formerholding of KBCF Shares by the Relevant Shareholders (not being Depositors) will cease tobe evidence of title to the KBCF Shares represented thereby. Within ten (10) calendar daysafter the Effective Date, Kingboard Laminates or CDP, on behalf of Kingboard Laminates,shall make payment of the Scheme Price to each Relevant Shareholder based on hisholding of the KBCF Shares as at the Books Closure Date.

(ii) Relevant Shareholders whose KBCF Shares are deposited with CDP

Entitlements of Relevant Shareholders, whose KBCF Shares are deposited with CDP, to theScheme Price will be determined on the basis of the Shareholders (being Depositors) andthe number of KBCF Shares standing to the credit of their Securities Account at 5.00 p.m.on the Books Closure Date, which is expected to be 28 August 2009.

Relevant Shareholders (being Depositors) who have not yet done so are requested to takethe necessary action to ensure that the KBCF Shares owned by them are credited to theirSecurities Account by 5.00 p.m. on the Books Closure Date.

From the Effective Date, CDP will debit from each relevant Securities Account the number ofKBCF Shares standing to the credit of the Securities Account of the relevant RelevantShareholder (being a Depositor). Within ten (10) calendar days after the Effective Date,Kingboard Laminates or CDP, as the case may be, shall make payment of the Scheme Priceto each Relevant Shareholder (being a Depositor) based on the number of KBCF Sharesstanding to the credit of his Securities Account as at the Books Closure Date.


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13. DIRECTORS’ INTERESTS IN KBCF SHARES

The interests of the Directors in the KBCF Shares are set out in paragraph 3 of Appendix 3 tothis Scheme Document. The effect of the Scheme on such interests of the Directors does not differfrom that of the other Shareholders except that, after the Scheme becomes effective and binding,Kingboard Laminates, together with its subsidiaries and/or nominees, will own all of the issuedKBCF Shares as of the Effective Date, and Kingboard Copper Foil will become a wholly-ownedsubsidiary of Kingboard Laminates.

14. OVERSEAS SHAREHOLDERS

14.1 Overseas Shareholders. The availability of the Scheme to the Shareholders whose addresses areoutside Singapore, as shown on the Register of Members of Kingboard Copper Foil or, as the casemay be, in the records of CDP (each, an “Overseas Shareholder”) may be affected by the laws ofthe relevant overseas jurisdictions. Accordingly, any Overseas Shareholders should keep himselfinformed of and observe any applicable legal requirements in his own jurisdiction. Where there arepotential restrictions on sending the Scheme Document and any related documents, including theElection Form (collectively, the “Scheme Materials”), to any overseas jurisdiction, each ofKingboard Laminates and Kingboard Copper Foil reserves the right not to send the SchemeMaterials to the Shareholders in such overseas jurisdictions. For the avoidance of doubt, theScheme is being proposed to all Shareholders (including the Overseas Shareholders), includingthose to whom the Scheme Materials have not been, or may not be, sent, provided that theScheme Materials do not constitute an offer or a solicitation to any person in any jurisdiction inwhich such offer or solicitation is unlawful and the Scheme is not being proposed in any jurisdictionin which the introduction or implementation of the Scheme would not be in compliance with thelaws of such jurisdictions. However, Kingboard Laminates may, in its sole discretion, take suchaction as it may deem necessary to extend the Scheme to Shareholders in any such jurisdiction.

14.2 Copies of Scheme Document. The Shareholders (including the Overseas Shareholders) may,nonetheless, obtain copies of the Scheme Materials (save for the Election Form), during normalbusiness hours and up to the date of the Scheme Meeting, from Kingboard Copper Foil throughthe Singapore Share Transfer Agent of Kingboard Copper Foil, Intertrust Singapore CorporateServices Pte. Ltd., at its office located at 3 Anson Road #27-01, Springleaf Tower, Singapore079909. Alternatively, an Overseas Shareholder may write in to Kingboard Copper Foil atKingboard Copper Foil Holdings Limited c/o Intertrust Singapore Corporate Services Pte. Ltd., 3Anson Road #27-01, Springleaf Tower, Singapore 079909 to request for this Scheme Documentand any related documents to be sent to an address in Singapore by ordinary post at theOverseas Shareholder’s own risk, up to five (5) Market Days prior to the date of the SchemeMeeting.

It is the responsibility of any Overseas Shareholder who wishes to participate in the Scheme tosatisfy himself as to the full observance of the laws of the relevant jurisdiction in that connection,including but not limited to the obtaining of any governmental or other consent which may berequired, and full compliance with all necessary formalities or legal requirements and the paymentof any taxes, imposts, duties or other requisite payments due in such jurisdiction. By participatingin the Scheme, the Overseas Shareholder represents and warrants to Kingboard Laminates andKingboard Copper Foil that he is in full observance of the laws of the relevant jurisdiction in thatconnection, and that he is in full compliance with all necessary formalities or legal requirements.

Copies of the Scheme Materials are not being, and must not be, directly or indirectly, mailed orotherwise forwarded, distributed, circulated or sent in or into or from any jurisdiction where theintroduction or implementation of the Scheme would violate the law of that jurisdiction (“RestrictedJurisdiction”) and will not be capable of acceptance by any such use, instrumentality or facilitywithin any Restricted Jurisdiction and persons receiving such documents (including custodians,nominees and trustees) must not mail or otherwise forward, distribute, circulate or send them in orinto or from any Restricted Jurisdiction.


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The Scheme (unless otherwise determined by Kingboard Copper Foil and permitted by applicablelaw and regulations) will not be proposed, directly or indirectly, in or into, or by the use of mails of,or by any means or instrumentality (including, without limitation, telephonically or electronically) ofinterstate or foreign commerce of, or any facility of a national, state or other securities exchange of,any Restricted Jurisdiction and the Scheme will not be capable of acceptance by any such use,means, instrumentality or facilities.

14.3 Election Forms. Relevant Shareholders (including Overseas Shareholders) may collect theElection Forms at the Singapore Share Transfer Agent’s office situated at 3 Anson Road #27-01,Springleaf Tower, Singapore 079909 during the Election Period. Alternatively, OverseasShareholders may write in to Kingboard Copper Foil at the foregoing address (addressee:Kingboard Copper Foil Holdings Limited c/o Intertrust Singapore Corporate Services Pte. Ltd.) torequest for the Election Forms to be sent to an address in Singapore by ordinary post, at theOverseas Shareholders’ own risk, up to five (5) Market Days prior to the expiry of the ElectionPeriod.

14.4 Malaysia. The Securities Commission of Malaysia has not approved or disapproved the offer orinvitation in respect of the New KBL Shares pursuant to the Scheme to any persons in Malaysia.Accordingly, no invitation or offer will be made directly or indirectly to any persons in Malaysiapursuant to this Scheme Document and other Scheme Materials.

This Scheme Document and other Scheme Materials will not be made available to any persons inMalaysia. No prospectus or other offering material or document in connection with the Scheme hasbeen or will be registered as a prospectus or filed with the Securities Commission of Malaysiaunder the Capital Markets and Services Act 2007. Accordingly, this Scheme Document and otherScheme Materials will not be circulated or distributed, directly or indirectly to any persons inMalaysia.

14.5 United States and Australia. This Scheme Document and other Scheme Materials are not forrelease, publication or distribution in or into the United States or Australia.

The offer of New KBL Shares pursuant to the Scheme is not being made, directly or indirectly, in orinto the United States or Australia, or by use of the mails, or by means or instrumentality(including, without limitation, facsimile transmission, telephone and the internet) of interstate orforeign commerce, or of any facility of a national securities exchange, of the United States orAustralia and the offer of New KBL Shares pursuant to the Scheme cannot be accepted by anysuch use, means, instrumentality or facility or from within the United States or Australia.

The New KBL Shares have not been and will not be registered under the U.S. Securities Act of1993. Accordingly, the New KBL Shares may not be offered, sold or delivered, directly or indirectly,in or into the United States.

14.6 Hong Kong. The contents of this Scheme Document and other Scheme Materials have not beenreviewed by any regulatory authority in Hong Kong. Shareholders in Hong Kong are advised toexercise caution in relation to the offer under the Scheme. If a Shareholder in Hong Kong is in anydoubt about any of the contents of this Scheme Document, he should obtain independentprofessional advice.

14.7 Notification. Kingboard Laminates and Kingboard Copper Foil each reserves the right to notifyany matter, including the fact that the Scheme has been proposed, to any or all OverseasShareholders by announcement to the SGX-ST and if necessary, by paid advertisement in a dailynewspaper published and circulated in Singapore, in which case such notice shall be deemed tohave been sufficiently given notwithstanding any failure by any Shareholder to receive or see suchannouncement or advertisement, provided that such notification will not result in any breach of anylaws in the relevant jurisdiction.


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It is the responsibility of any Overseas Shareholder who wishes to participate in the Scheme tosatisfy himself as to the full observance of the laws of the relevant jurisdiction in that connection,including but not limited to the obtaining of any governmental or other consent which may berequired, and full compliance with all necessary formalities or legal requirements and the paymentof any taxes, imposts, duties or other requisite payments due in such jurisdiction.

Any Overseas Shareholder who is in any doubt about his position should consult his professionaladviser in the relevant jurisdiction.

15. ACTION TO BE TAKEN BY SHAREHOLDERS

15.1 Appointment of Proxies. Members (not being CDP) who are unable to attend the SchemeMeeting and who wish to appoint a proxy to attend and vote at the Scheme Meeting on their behalfwill find together with this Scheme Document a Member Proxy Form which they are requested tocomplete, sign and return in accordance with the instructions printed thereon as soon as possibleand, in any event, so as to arrive at the office of the Singapore Share Transfer Agent at IntertrustSingapore Corporate Services Pte. Ltd., 3 Anson Road #27-01, Springleaf Tower, Singapore079909, not later than forty-eight (48) hours before the time fixed for the Scheme Meeting. Theappointment of a proxy by a Member does not preclude him from attending and voting in person atthe Scheme Meeting if he so wishes in place of the proxy if he finds that he is able to do so. Insuch event, the Member Proxy Form appointing a proxy shall be deemed to be revoked.

The common Substantial Shareholders of Kingboard Laminates and Kingboard Copper Foilnamely, Mr Cheung Kwok Wing, HML, Kingboard Chemical and Jamplan, as well as KingboardLaminates and its concert parties, are to abstain from voting on the Scheme. As such, theseparties are not permitted to act as a general proxy on behalf of any Member whereby such proxymay vote or abstain as the proxy may think fit in the absence of any specific instructions from theMember. For the avoidance of doubt, these parties are however permitted to act as a specific proxyon behalf of a Member whereby the proxy is given specific directions to vote or abstain at theScheme Meeting.

15.2 Voting by Depositors. A Depositor is generally not regarded as a Member entitled to attend theScheme Meeting and to speak and vote thereat. However, by an order of the Court dated 2 July2009, in respect of KBCF Shares held by CDP as Member, each Depositor who votes as a proxyat the Scheme Meeting will be counted and their vote taken into account in determining if amajority in number representing three fourths in value have voted to approve the Scheme at theScheme Meeting. Depositors who wish to attend and vote at the Scheme Meeting, and whosenames are shown in the records of CDP as at a time not earlier than forty-eight (48) hours prior tothe time of the Scheme Meeting supplied by CDP to Kingboard Copper Foil, may attend as CDP’sproxies. Depositors who wish to attend and vote at the Scheme Meeting or to appoint a nominee toattend and vote on his behalf, will find together with this Scheme Document a Depositor ProxyForm which they are requested to complete, sign and return in accordance with the instructionsprinted thereon as soon as possible and, in any event, so as to arrive at the office of the SingaporeShare Transfer Agent at Intertrust Singapore Corporate Services Pte. Ltd., 3 Anson Road #27-01,Springleaf Tower, Singapore 079909, not later than forty-eight (48) hours before the time fixed forthe Scheme Meeting.

16. ADVICE OF INDEPENDENT FINANCIAL ADVISER TO THE INDEPENDENT DIRECTORS

The IFA Letter is set out in Appendix 1 to this Scheme Document.

17. GENERAL INFORMATION

Your attention is drawn to the further relevant information, including the Directors’ interests in theKBCF Shares, set out under the Appendices to this Scheme Document. The Appendices form partof this Scheme Document. This Explanatory Statement should be read in conjunction with, and isqualified by, the full text of this Scheme Document, including the Scheme as set out on pages 224to 230 of this Scheme Document.


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The Independent Directors

Kingboard Copper Foil Holdings LimitedClarendon House2 Church StreetHamilton HM 11Bermuda

3 July 2009

Dear Sirs

PROPOSED SCHEME OF ARRANGEMENT FOR THE PRIVATISATION OF KINGBOARD COPPERFOIL HOLDINGS LIMITED

For the purpose of this letter, capitalised terms not otherwise defined herein shall have the samemeaning as given to them in the scheme document dated 10 July 2009, circulated to the shareholders ofKingboard Copper Foil Holdings Limited (the “Scheme Document”)

1. INTRODUCTION

On 4 May 2009 (the “Announcement Date”), the respective boards of directors of KingboardCopper Foil Holdings Limited (“Kingboard Copper Foil” or the “Company”) and KingboardLaminates Holdings Limited (“Kingboard Laminates”) jointly announced that the Company andKingboard Laminates had entered into the Implementation Agreement to implement theprivatisation of Kingboard Copper Foil by way of a scheme of arrangement (the “Scheme”) underSection 99 of the Bermuda Companies Act 1981 (the “Act”) and in accordance with The SingaporeCode on Take-overs and Mergers (the “Code”), subject to the satisfaction of certain pre-conditions.

Under the Scheme, all the issued ordinary shares of Kingboard Copper Foil (“KBCF Shares”) heldby the shareholders of Kingboard Copper Foil (excluding subsidiaries of Kingboard Laminateswhich hold KBCF Shares) (individually the “Relevant Shareholder” and collectively the “RelevantShareholders”) will be transferred to Kingboard Laminates. In consideration of such transfer,Kingboard Laminates will pay the Relevant Shareholders a consideration for each KBCF Sharetransferred.

If the Scheme becomes effective and binding, Kingboard Copper Foil will become a wholly-ownedsubsidiary of Kingboard Laminates, and Kingboard Copper Foil will be delisted from the Official Listof Singapore Exchange Securities Trading Limited (the “SGX-ST”).

This letter to be included in the Scheme Document to Shareholders sets out, inter alia, ourevaluation of the financial terms of the Scheme and our advice to the Independent Directors inrelation to their recommendation to the minority Shareholders in respect of the Scheme.

2. TERMS OF REFERENCE

KPMG Corporate Finance Pte Ltd (“KPMG Corporate Finance”) was appointed by the Directorsof Kingboard Copper Foil who are independent for the purpose of making a recommendation to theShareholders in respect of the Scheme (the “Independent Directors”). We were not a party to thenegotiations entered into by the Company in relation to the Scheme, nor were we involved in thedeliberations leading up to the decision on the part of the Directors to enter into the Scheme.

It is not within our terms of reference to evaluate or comment on the legal, strategic, and/orcommercial merits and risks of the Scheme, or on the future growth prospects or earnings potentialof the Company should the Scheme be completed or not completed. We have not been requestedand we do not express any opinion on the relative merits of the Scheme as compared to any

APPENDIX 1 – LETTER FROM KPMG CORPORATE FINANCE PTE LTD TO THEINDEPENDENT DIRECTORS ON THE SCHEME

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alternative transaction previously considered by the Company or that otherwise may becomeavailable to the Company in the future. Such evaluations or comments are and remain the soleresponsibility of the Directors and the management of the Company, although we may draw upontheir views or make such comments in respect thereof (to the extent deemed necessary orappropriate by us) in arriving at our opinion.

We have held discussions with the Directors and the management of the Company and haveexamined publicly available information collated by us as well as information, both written andverbal, provided to us by the Directors, the management of the Company and the Company’sother professional advisers. We have not independently verified such information, whether writtenor verbal, and accordingly we cannot and do not warrant or make any representation (whetherexpress or implied) regarding, or accept any responsibility for, the accuracy, completeness oradequacy of such information. However, we have made such enquiries and exercised our judgmentas we deem necessary on such information and have found no reason to doubt the reliability of theinformation.

The Directors of the Company have confirmed, having made all reasonable enquiries and to thebest of their knowledge, information and belief, the accuracy of such information andrepresentations as provided by the Directors and the management of the Company and havefurther confirmed to us that, upon making all reasonable enquiries and to the best of theirknowledge, information and belief, all material information available to them in connection with theScheme has been disclosed to us, and that there is no other information or fact that has not beenprovided, the omission of which would cause any information disclosed to us to be inaccurate,incomplete or misleading in any material respect.

In performing our evaluation, we have not relied upon any financial projections or forecasts inrespect of the Company. The opinion set forth herein is based solely on publicly availableinformation as well as information provided by the Directors and the management of the Company,and is predicated upon the economic and market conditions prevailing as at the date of thisopinion. This letter therefore does not reflect any projections on the future financial performance ofthe Company, should the Scheme be completed or not completed.

For the avoidance of doubt, we have not made any independent evaluation or appraisal of theassets and liabilities (including without limitation, real properties) of the Company, or in relation tothe Scheme.

Our view is based upon market, economic, industry, monetary, and other conditions in effect on,and the information made available to us as at the latest practicable date prior to the printing of theScheme Document, being 2 July 2009 (the “Latest Practicable Date”). Such conditions canchange significantly over a relatively short period of time. We assume no responsibility to update,revise or reaffirm our opinion in the light of any subsequent development after the date of this lettereven if it might affect our opinion contained herein.

Our opinion should not be relied on as a recommendation to any Shareholder as to how theyshould vote on the resolution in relation to the Scheme or any matters related thereto. In renderingour advice and giving our recommendation, we did not have regard to the specific investmentobjectives, financial situation or unique needs and constraints of any Shareholder or any specificgroup of Shareholders. We recommend that any individual Shareholder or group of Shareholderswho may require specific advice in relation to their investment portfolio consult their stockbroker,bank manager, solicitor, accountant, tax adviser or other professional adviser.

The Company has been separately advised in the preparation of the Scheme Document (otherthan this letter). We were not involved in and have not provided any advice in the preparation,review and verification of the Scheme Document (other than this letter). Accordingly, we take noresponsibility for, and express no views (express or implied) on, the contents of the SchemeDocument (other than this letter).


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This letter is addressed to the Independent Directors for their benefit in connection with and for thepurposes of their consideration of the Scheme, and the recommendations made by them shallremain the responsibility of the Independent Directors.

This letter is governed by, and construed in accordance with, the laws of Singapore, and is strictlylimited to the matters stated herein and does not apply by implication to any other matter. No otherperson may reproduce, disseminate or quote this letter (or any part thereof) for any other purposeat any time and in any manner except with the prior written consent of KPMG Corporate Finance ineach specific case.

Our opinion in relation to the Scheme should be considered in the context of the entirety of thisletter and the Scheme Document.

3. THE SCHEME

The details of the Scheme are set out in Section 2 of the Scheme Document. Shareholders areadvised to refer to these respective sections for more details on the Scheme.

A summary of the key terms of the Scheme is set out below:

3.1 Terms of the Scheme

The Scheme will be effected by way of a scheme of arrangement pursuant to Section 99 of the Actand in accordance with the Code. As at the Latest Practicable Date, Kingboard Copper Foil has anissued share capital of US$72,250,000 comprising 722,500,000 KBCF Shares.

The Scheme is proposed to all Shareholders in accordance with the terms set out in the SchemeDocument.

Pursuant to the Scheme:


(ii) in consideration for such a transfer, Kingboard Laminates will pay the RelevantShareholders the following consideration (the “Scheme Price”) for each KBCF Sharetransferred:


(b) 0.374 New KBL Shares at the issue price of HK$2.946 per New KBL Share (the“Issue Price”) (equivalent to S$0.561 at the exchange rate ratio of S$1 : HK$5.247as at 30 April 2009, being the Business Day immediately preceding theAnnouncement Date), for each KBCF Share (the “Share Exchange Offer”). TheIssue Price is equal to the average closing price of the issued KBL Shares on theStock Exchange of Hong Kong Limited (the “SEHK”) for the five trading dayspreceding the Announcement Date; or


provided that Kingboard Laminates obtains clearance by SEHK for the listing of, and permission todeal in, the New KBL Shares which may be allotted and issued pursuant to the Share ExchangeOffer or the Combination Offer.

An application was made to SEHK for, and SEHK has approved on 30 June 2009, the listing of,and permission to deal in, the New KBL Shares to be allotted and issued in satisfaction of theShare Exchange Offer or the partial satisfaction of the Combination Offer. The approval from SEHKis subject to all other conditions set out in the Implementation Agreement and the Announcement.


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(i) each Relevant Shareholder has the discretion to receive the Scheme Price in the form ofthe Cash Consideration, the Share Exchange Offer or the Combination Offer;

(ii) in the event a Relevant Shareholder does not make a valid election between the CashConsideration, the Share Exchange Offer or the Combination Offer, the RelevantShareholder will be paid the Cash Consideration in default for each KBCF Share held byhim; and

(iii) the aggregate Cash Consideration or that portion of the Combination Offer which ispayable in cash to each Relevant Shareholder for the KBCF Shares held by such RelevantShareholder will be rounded down to the nearest whole cent. Fractions of a New KBLShare will not be allotted and issued to any Relevant Shareholder and will be disregarded.

3.2 Delisting

If the Scheme becomes effective and binding, Kingboard Laminates, together with its subsidiariesand/or nominees, will own all the issued KBCF Shares as of the Effective Date, and KingboardCopper Foil will become a wholly-owned subsidiary of Kingboard Laminates. An application wasmade to seek the approval from the SGX-ST for the KBCF Shares to be delisted and withdrawnfrom the Official List of the SGX-ST after the Scheme becomes effective and binding. The SGX-SThas granted its approval that, inter alia, subject to the Scheme being approved by the independentShareholders and the Court, it has no objection to the proposed delisting of Kingboard Copper Foilfrom the Official List of the SGX-ST. The SGX-ST’s approval, however, is not to be taken as anindication of the merits of the proposed delisting, the Scheme, the Company and/or itssubsidiaries.

The KBCF Shares will be delisted and withdrawn from the Official List of the SGX-ST after theScheme has become effective and binding.

3.3 Waiver of rights to a general offer

Members should note that by voting in favour of the Scheme, they are agreeing to KingboardLaminates and its concert parties acquiring or consolidating effective control in Kingboard CopperFoil without having to make a general offer for Kingboard Copper Foil and will be regarded ashaving waived their rights to a general offer by Kingboard Laminates and/or parties acting ordeemed to be acting in concert with Kingboard Laminates to acquire the KBCF Shares under theCode.

4. INFORMATION ON THE COMPANY

The information on Kingboard Copper Foil is set out in the Company’s Letter to Shareholdersunder paragraph 1.5, which is reproduced below:

Kingboard Copper Foil was incorporated as an exempted company in Bermuda on 10 September1999. Kingboard Copper Foil was listed on the Main Board of the SGX-ST on 16 December 1999.Kingboard Copper Foil is an indirect subsidiary of Kingboard Laminates, which has anapproximately 63.97 per cent. interest in the issued share capital of Kingboard Copper Foil (1). Theprincipal activity of Kingboard Copper Foil is that of investment holding while its subsidiaries areengaged in the manufacture and trading of copper foil, a raw material for the laminates and printedcircuit board industries.

Note:

(1) In this Scheme Document, for the purpose of computation, the number of KBCF Shares is 722,500,000 as at theLatest Practicable Date.


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5. INFORMATION ON KINGBOARD LAMINATES

The information on Kingboard Laminates is set out in Appendix 2 of the Scheme Document underparagraph 3 entitled “Principal Activities of Kingboard Laminates”, which is reproduced below:

Kingboard Laminates was incorporated and registered as an exempted company with limitedliability in the Cayman Islands on 10 May 2006. Kingboard Laminates is a subsidiary of KingboardChemical, which was incorporated in the Cayman Islands as an exempted company with limitedliability. Both the shares of Kingboard Chemical and Kingboard Laminates are listed on the MainBoard of SEHK. Kingboard Laminates is a leading vertically-integrated electronics materialsmanufacturer, specialising in the production of laminates, including glass epoxy laminates, paperlaminates and composite epoxy material laminates.

6. RATIONALE FOR THE SCHEME

The following rationale for implementing the Scheme have been extracted from the SchemeDocument and reproduced below:

(a) Opportunity for Relevant Shareholders to Realise their Investment. The Schemepresents the Relevant Shareholders with an opportunity to realise their investment in KBCFShares at an attractive premium of approximately 27.273 per cent., 35.484 per cent.,54.412 per cent. and 51.079 per cent. over Kingboard Copper Foil’s closing share price ofS$0.165, one-month VWAP of S$0.155, three-month VWAP of S$0.136 and six-monthVWAP of S$0.139, respectively, prior to the Announcement Date without incurringbrokerage and other trading costs.

(b) Prolonged Undervaluation and Illiquidity of KBCF Shares. Kingboard Copper Foil’sclosing share price has been on a downward trend for the past two years from a high ofS$0.535 on 17 July 2007 to its current level of S$0.230 as at the Latest Practicable Datewith a low of S$0.105 on 19 March 2009 and 20 March 2009. The trading liquidity of theKBCF Shares has also been low, with an average daily trading volume of approximately721,246 KBCF Shares over the 12-month period up to the Latest Practicable Date,representing approximately 0.277 per cent. of the total free float of KBCF Shares.

(c) Better Integration and Greater Efficiency Within the Kingboard Laminates Group ofCompanies. The Scheme would facilitate better integration of similar businesses betweenthe KBCF Group and the Kingboard Laminates group of companies. It would also allowKingboard Copper Foil and Kingboard Laminates to rationalise and streamline theresources and cost structure of the business for greater efficiency and competitiveness.

(d) No Necessity to Access the Capital Markets. Kingboard Copper Foil has been listed onthe SGX-ST since 16 December 1999. Given the current net cash position of approximatelyHK$193 million (approximately S$37 million) as at 31 December 2008, coupled with thedepressed market conditions, Kingboard Copper Foil is of the view that it is unlikely torequire access to the capital markets to finance its operations in the foreseeable future. Ifrequired, Kingboard Copper Foil could still access the capital markets via its parentcompany, Kingboard Laminates, which is listed on the Main Board of SEHK.


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(e) Opportunity for Relevant Shareholders to Participate in the Enlarged KingboardLaminates Group of Companies. The Scheme, through the Share Exchange Offer or theCombination Offer, presents the Relevant Shareholders with an opportunity to participate inthe upside potential of the enlarged Kingboard Laminates group of companies upon thesuccessful completion of the Scheme. The return-on-equity ratio (“ROE”)(2) for KingboardLaminates is approximately 17.187 per cent. for FY2008. This compares favourably to theROE(2) of approximately 5.356 per cent. for Kingboard Copper Foil for FY2008.

(f) Compliance Costs Related to Listing Status. In maintaining its listing status, KingboardCopper Foil incurs compliance costs. The Scheme would allow Kingboard Copper Foil todispense with listing related expenses and channel its resources to its business operations.

7. KINGBOARD LAMINATES’ INTENTIONS FOR KINGBOARD COPPER FOIL

It is the intention of Kingboard Laminates that Kingboard Copper Foil will continue with its existingbusiness activities and Kingboard Laminates presently has no intention to (i) introduce any majorchanges to the business of Kingboard Copper Foil, (ii) redeploy the fixed assets of the KBCFGroup, or (iii) discontinue the employment of the employees of the KBCF Group.


8. FINANCIAL ASSESSMENT OF THE SCHEME

In consideration for the transfer of the KBCF Shares to Kingboard Laminates, the RelevantShareholders will be entitled to receive the Scheme Price which, at the option of the RelevantShareholders can be by way of, (a) the Cash Consideration, (b) the Share Exchange Offer or (c)the Combination Offer. We set out the following pertinent factors which we consider to have asignificant bearing on our assessment of each of the options and of the Scheme Price in totality.

These factors are discussed in greater detail in the ensuing sections.

8.1 Cash Consideration

In evaluating the fairness of the Cash Consideration of S$0.21, we examine the underlying value ofKBCF Shares below:

8.1.1 Historical share price and trading analysis of the KBCF Shares

In evaluating the reasonableness of the Cash Consideration, the market valuation of stockstraded on a recognized stock exchange provide a perspective on market price expectationsof a particular stock. As such, we have considered the current and historical priceperformance of KBCF Shares as reasonable indicators for assessing the financial value ofthe KBCF Shares at a given point in time.

We wish to highlight that under ordinary circumstances, the market valuation ofshares traded on a recognised stock exchange may be affected by, inter alia, itsrelative liquidity, the size of its free float, the extent of research coverage andinvestor interest it attracts, and the general market sentiment at a given point intime. Accordingly, this analysis serves as an illustrative guide only.

Note:

(2) The calculation of the ROE is based on the profit attributable to equity holders for FY2008 over the average of theequity attributable to equity holders for FY2007 and FY2008.


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We set out below the daily closing prices and daily trading volume of KBCF Shares fromtwo years prior to the Latest Practicable Date.

Source: Bloomberg

To assess the market price performance of KBCF Shares relative to the generalperformance of the Singapore equity market, we have compared the market pricemovement of KBCF Shares against the Straits Times Index (“FSSTI Index”) over the twoyear period prior to the Latest Practicable Date.

We note that from August 2007 up until September 2007, KBCF Shares traded in line withFSSTI Index with exception of a peak in July 2007 where KBCF Shares outperformed theFSSTI Index over a short period of time. Since then, KBCF Shares in generalunderperformed the FSSTI Index over the rest of the observation period.

We set out below the daily closing price and the daily trading volume of KBCF Shares from30 April 2009 (one market day prior to the Announcement Date) to the Latest PracticableDate.

Source: Bloomberg

KBCF Shares closed at S$0.165 on 30 April 2009 (one market day prior to theAnnouncement Date) and closed at S$0.180 on the Announcement Date. However, on 12May 2009, KBCF Shares started to trade above the Cash Consideration at S$0.215,reaching a high on 5 June 2009 at S$0.250.

Chart 2: K ingboard Copper Foil share price performance (one day prior to Announcement Date to LPD)

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Chart 1: Kingboard Copper Foil share price performance

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43

We set out in the following table the liquidity statistics of the 10 most highly traded stockson the SGX-ST by average daily value traded.

Source: Bloomberg

We note that Kingboard Copper Foil’s liquidity, as represented by the average daily valuetraded as a percentage of market capitalisation and the average daily volume traded as apercentage of shares outstanding, are 83.2 per cent. and 83.0 per cent. lower than themedian liquidity statistics of the 10 most highly traded stocks on the SGX-ST, respectively.

We have set out in the following table, the liquidity statistics of the 20 SGX-ST listedentities closest to Kingboard Copper Foil in terms of market capitalisation ranging fromS$153.1 million to S$181.6 million.

Source: Bloomberg

Company name

Market

capitalisation

(S$ mil)

Average daily

value traded for

the past 6

months (S$ mil)

Average daily

volume for the

past 6 months

(mil)

Shares

outstanding

(mil)

Average daily

value as % of

market

capitalisation

Avg daily

volume as % of

shares

outstanding

GP Industries Ltd 181.6 0.039 0.144 576.6 0.022% 0.025%GK Goh Holdings Ltd 181.4 0.039 0.082 318.2 0.022% 0.026%JES International Hlds Ltd 180.7 0.677 4.422 1,166.0 0.375% 0.379%First Real Estate Invt Trust 174.4 0.115 0.228 274.7 0.066% 0.083%Amara Holdings Ltd 173.1 0.066 0.235 576.9 0.038% 0.041%Furama Ltd 172.8 0.013 0.014 154.3 0.008% 0.009%Pan Hong Property Group Ltd 171.5 0.244 1.073 490.0 0.142% 0.219%Tuan Sing Holdings Ltd 170.6 0.066 0.482 1,137.7 0.039% 0.042%Thakral Corp Ltd 169.8 0.067 1.091 2,612.1 0.039% 0.042%Food Empire Holdings Ltd 169.3 0.072 0.245 529.0 0.042% 0.046%United Fiber System Ltd 165.5 1.607 27.234 2,757.7 0.971% 0.988%United Overseas Insurance 163.3 0.006 0.003 61.2 0.004% 0.004%Soilbuild Group Holdings Ltd 163.2 0.134 0.201 217.6 0.082% 0.093%Thomson Medical Centre Ltd 160.6 0.068 0.148 292.0 0.042% 0.051%QAF Ltd 159.5 0.031 0.129 476.0 0.019% 0.027%Hyflux Water Trust 159.0 0.261 0.689 300.0 0.164% 0.230%Frasers Commercial Trust 157.6 1.058 5.215 750.7 0.671% 0.695%LC Development Ltd 156.2 0.540 3.199 867.5 0.346% 0.369%Vicom Ltd 154.0 0.013 0.008 85.6 0.009% 0.009%Trump Dragon Distillers Hldg 153.1 0.033 0.142 625.0 0.022% 0.023%

Mean 166.9 0.258 2.249 713.4 0.156% 0.170%

Median 167.4 0.068 0.232 509.5 0.041% 0.044%

Kingboard Copper Foil 166.2 0.110 0.608 722.5 0.066% 0.084%

Table 2: Liqudity analysis of Kingboard Copper Foil relative to SGX-ST listed entities of comparable market capitalisation

Company name

Marketcapitalisation

(S$ mil)

Avg daily valuetraded for the

past 6 months(S$ mil)

Avg daily volumefor the past 6months (mil)

Sharesoutstanding (mil)

Avg daily valueas % of market

capitalisation

Avg dailyvolume as % of

sharesoutstanding

DBS Group Holdings Ltd 26,557.6 108.9 11.6 2,281.6 0.410% 0.508%Capitaland Ltd 15,413.2 89.4 31.7 4,246.1 0.580% 0.747%United Overseas Bank Ltd 22,097.0 75.0 6.5 1,523.9 0.340% 0.425%Singapore Telecommunications Ltd 47,623.3 71.1 26.9 15,927.5 0.149% 0.169%Oversea-Chinese Banking Corp Ltd 21,559.1 51.7 9.1 3,193.9 0.240% 0.286%Singapore Exchange Ltd 7,623.4 43.2 7.2 1,069.2 0.566% 0.673%Keppel Corp Ltd 11,008.7 41.6 7.6 1,593.2 0.378% 0.478%Wilmar International Ltd 31,992.3 41.3 11.2 6,385.7 0.129% 0.175%Golden Agri-Resources Ltd 4,491.3 35.8 99.8 12,138.7 0.798% 0.822%Cosco Corp Singapore Ltd 2,821.4 33.4 30.9 2,239.2 1.182% 1.382%

Mean 19,118.7 59.1 24.3 5,059.9 0.477% 0.566%Median 18,486.1 47.4 11.4 2,737.8 0.394% 0.493%

Kingboard Copper Foil 166.2 0.1 0.6 722.5 0.066% 0.084%

Table 1: Liquidity analysis of Kingboard Copper Foil relative to SGX-ST's top 10 most active stocks by 6 month averagedaily value traded


44

We note that Kingboard Copper Foil’s liquidity as represented by the average daily valuetraded as a percentage of market capitalisation and the average daily volume traded as apercentage of shares outstanding are 61.0 per cent. higher and 90.9 per cent. higher thanthe median liquidity statistics of the SGX-ST listed entities with a market capitalisation ofbetween S$153.1 million and S$181.6 million, respectively.

Based on the data presented, it would appear that while Kingboard Copper Foil may nothave the trading liquidity when compared to the most actively traded stocks on the SGX-ST, it is reasonably liquid when compared to stocks that have a comparable marketcapitalisation on the SGX-ST.

We have also analysed the premium implied by the Cash Consideration over the volume-weighted average price (“VWAP”) of KBCF Shares for varying periods preceding andpursuant to the Announcement Date, and have tabulated them as follows:

Source: Bloomberg

Note:

(1) The date ranges corresponding to the reference periods have been presented before adjustments to reflectthe exclusion of weekends and public holidays.

The analysis shows that, for the different periods ranging from one year prior to theAnnouncement Date to one market day prior to the Announcement Date, the CashConsideration is at a premium over VWAP of KBCF Shares. We further note that the CashConsideration is at a premium of 3.4 per cent. and at a discount of 5.0 per cent. comparedto the VWAP of KBCF Shares one market day post the Announcement Date and the periodfrom post the Announcement Date till the Latest Practicable Date, respectively.

8.1.2 Implied valuation multiples of Kingboard Copper Foil against publicly-traded broadlycomparable companies

In our analysis of comparing the valuation multiples of Kingboard Copper Foil as implied bythe Cash Consideration with valuation multiples of comparable publicly-traded companies,we have looked at companies which are engaged in the manufacture and trading of copperfoil for use in laminates and printed circuit board industries in Singapore and Asia Pacificregion.

Table 3: Cash Consideration offer premium / (discount) statistics

Reference period Date(1) VWAP (S$)

Premium /(Discount) to

VWAP

S$ 0.21

Prior to Announcement DateOne year prior 01 May 08 to 30 Apr 09 0.186 12.90%6 month prior 01 Nov 08 to 30 Apr 09 0.139 51.08%3 month prior 01 Feb 09 to 30 Apr 09 0.136 54.41%1 month prior 01 Apr 09 to 30 Apr 09 0.155 35.48%1 market day prior 30 Apr 09 0.164 28.05%

Announcement Date 4-May-09 0.174 20.69%

Post Announcement Date1 market day post 5-May-09 0.203 3.45%Post the Announcement Date till LatestPracticable Date

05 May to 2 Jul 09 0.221 (4.98)%

Cash Consideration


45

We have endeavoured to identify companies that comprise a representative sample.However, in certain areas of our analysis, we were not able to form a representativesample due to lack of comparable companies. As such, we have extended our analysis tosector comparables where we were able to identify a representative sample. However, theRelevant Shareholders should note that there is a variance in the sample and thesecomparable companies will not be directly comparable with Kingboard Copper Foil as, interalia, they operate in different markets geographically and, while they all operate in theelectronics component manufacturing sector, have varying product and service mixes.Accordingly, these differences will have an impact on relative growth rates, profit margins,and return on capital. In addition, the valuation multiples of these comparable companieswill be impacted, amongst other factors, by the state of their respective capital markets, thesize of their market capitalisation as well as their size in terms of revenue, liquidity of theirrespective shares, and their tax regimes, accounting standards and disclosure, amongothers.

For the purposes of comparison with the comparable companies, we have considered thefollowing valuation metrics:

� Enterprise value (“EV”) to earnings before interest, taxation, depreciation andamortisation (“EBITDA”) (“EV/EBITDA”) multiples of comparable companies arebased on their enterprise values as at the Latest Practicable Date. Enterprise valueis the market capitalisation as at the Latest Practicable Date, plus the net debtposition derived from the latest available financial data. Net debt is defined as totalinterest-bearing liabilities less excess cash and cash equivalent items (excludingmarketable securities). Interest revenue has been subtracted from EBITDA, whichhas been calculated on a trailing 12-month basis.

We are of the view that when comparing companies operating in differentjurisdictions, the EV/EBITDA multiple is the most appropriate valuation statistic, as itavoids the distortionary effects of different depreciation and taxation regimes anddifferent interest rates, which are inherent when using earnings before interest andtaxation and profit after tax multiples.

� Price to book value (“P/B”) multiple illustrates the ratio of the market capitalisation ofa company relative to its book value as at the Latest Practicable Date. The P/Bmultiple is affected by differences in their respective accounting policies includingtheir depreciation and asset valuation policies.


46

We have set out below the valuation multiples of companies engaged in the manufacture ofprinted circuit boards in Singapore.

Source: Bloomberg, Respective company annual reports

Based on our analysis, we note that Kingboard Copper Foil’s EV/EBITDA multiple is at a8.9 per cent. premium and a 2.0 discount to the mean and median EV/EBITDA multiples ofcomparable companies, respectively. However, Kingboard Copper Foil’s P/B multiple is at a33.3 per cent. discount to the median P/B multiple of comparable companies but within theminimum/maximum range of P/B multiples of comparable companies.

We note that the net tangible asset (“NTA”) per share of Kingboard Copper Foil is S$0.58(HK$3.15) while the Offer Price is S$0.21, which translates into a discount of 63.8 per cent.Based on Kingboard Copper Foil’s financial statement for the period ended 31 March 2009,the Company had total assets of S$501.3 million and total liabilities of S$79.2 million whiletotal equity is S$422.1 million. Approximately 52.5 per cent. of total assets comprise ofproperty, plant and equipment estimated to be S$263.1 million. The figures calculated areinclusive of minority interests.

We have considered two scenarios under which Shareholders may be able to monetiseKingboard Copper Foil’s NTA. Firstly, management can liquidate certain assets and returnthe proceeds from the sale of such assets to Shareholders. Shareholders should note thatin a liquidation scenario it is unlikely that the assets can be sold at their book values.There are numerous factors which affect the consideration to be paid for the assetsincluding the time, costs and expenses relating to the sale of the asset as well as thedisruption it could possibly bring to the operations.

Table 4: Sector comparables in Singapore

Valuation metrics

Company Country Description

Market

capitalisation

(S$ mil)

EV

(S$ mil)

EV /

EBITDA(x) P/B(x)

Elec & EltekInternational Co Ltd

Singapore Designs, develops, manufactures, and distributesdouble-sided, multi-layered, and high-density printedcircuit boards.

318 439 3.6 x 0.6 x

Gul TechnologiesSingapore Ltd

Singapore Manufactures and sells printed circuit boards and otherelectronic devices.

51 139 5.7 x 0.9 x

JadasonEnterprises Ltd

Singapore Distributes and trades machines and materials for theprinted circuit board and semiconductor industries.

51 75 7.7 x 0.5 x

Multi-Chem Ltd Singapore Provides printed circuit boards manufacturing services,primarily precision drilling services.

49 66 6.1 x 0.6 x

PCI Ltd Singapore Manufactures and sells printed circuit boards, modules,and cordless telephones.

46 14 2.0 x 0.6 x

CEI ContractManufacturing Ltd

Singapore Offers printed circuit board, box-build and prototypeassembly, and engineering w orks such as circuit layoutand functional design.

37 39 4.9 x 1.2 x

ChunghongHoldings Ltd

Singapore Provides printed circuit board assembly and originalequipment manufacturer services.

25 21 1.2 x 0.3 x

Eucon Holding Ltd Singapore Manufactures printed circuit boards and providesdrilling and routing services to manufacturers.

20 56 5.2 x 0.2 x

PCA TechnologyLtd

Singapore Provides contract manufacturing services, from printedcircuit board, box-build and contract assembly ofelectronic products.

18 10 neg 0.6 x

Ionics EMS Inc Singapore Manufactures printed circuit board assemblies, andprovides electronic manufacturing services.

16 21 neg 0.7 x

CPH Ltd Singapore Manufactures printed circuit boards and advanceinterconnect substrates.

8 2 neg 0.5 x

Min 1.2 x 0.2 xMean 4.5 x 0.6 x

Median 5.0 x 0.6 x

Max 7.7 x 1.2 x

Kingboard Copper Foil (Implied by the Cash Consideration) 151.7 154.8 4.9 x 0.4 x


47

Secondly, management can declare dividends for distribution to Shareholders. As at 31March 2009, Kingboard Copper Foil has S$314.1 million in reserves, however theCompany does not have sufficient cash to pay the dividends. Kingboard Copper Foil wouldneed to obtain new borrowings in order to pay the dividends. Based on Kingboard CopperFoil’s earnings before interest and taxes for the trailing 12 months ended 31 March 2009which is negative S$0.47 million, the Company may not have the ability to service anysignificant borrowings.

We also note that Kingboard Laminates has no intention to introduce any major changesto the business of Kingboard Copper Foil and the terms of the Scheme are such thatShareholders can exchange their holdings in Kingboard Copper Foil with those ofKingboard Laminates.

8.1.3 Implied transaction multiples of Kingboard Copper Foil against precedent tenderoffer transactions

We set out a search for transactions involving the sale of companies which operate in theprinted circuit board manufacturing sector, within the Asia Pacific region. Based on ourresearch, we identified 5 transactions which have published EV/EBITDA multiples as setout below.

Source: ThomsonDeals, MergerMarket

Our assessment shows that Kingboard Copper Foil’s EV/EBITDA multiple is at a premiumof 172.2 per cent. to the median EV/EBITDA multiple of the comparable transactions whileits P/B multiple is at a 42.9 per cent. discount to P/B multiple of the comparabletransactions. Kingboard Copper Foil’s P/B multiple is within the minimum/maximum rangeof P/B multiples of the comparable transactions.

Table 5: Comparable transactions within the printed circuit board manufacturing sector in Asia Pacific

EffectiveDate Target Country Business description Acquiror

% of shares

acquired

Deal value

(S$ mil)

EV / EBITDA

(x)P/B (x)

22 May 09 SVI PCL Thailand Provides turnkey manufacturingservices i.e. printed circuit boardassembly, box build production ofelectronic products for OEMs.

MFG SolutionCo Ltd

58.48 50.59 1.3 x 0.7 x

11 May 09 SVI PCL Thailand Provides turnkey manufacturingservices i.e. printed circuit boardassembly, box build production ofelectronic products for OEMs.

MFG SolutionCo Ltd

5.00 4.33 1.2 x 0.6 x

31 Mar 09 Same TimeHoldings Ltd

Hong Kong Manufactures and w holesalesprinted circuit boards and othercomputer peripherals.

Sum TaiHoldings Ltd

28.77 3.95 2.3 x 0.2 x

24 Dec 08 SatNusapersadaTbk PT

Indonesia Manufacture of electroniccomponents, assembly ofmechanical parts and printed

MilleniumRestructuredFund II

22.10 33.11 12.3 x 2.2 x

22 Oct 08 Yang AnElectronics CoLtd

Taiw an Manufactures printed circuitboards.

Taiw an PCBTechvest CoLtd

28.67 12.71 nm 0.7 x

Min 1.2 x 0.2 xMean 4.3 x 0.9 x

Median 1.8 x 0.7 xMax 12.3 x 2.2 x

Kingboard Copper Foil (Implied by the Cash Consideration) 4.9 x 0.4 x


48

8.1.4 Precedent successful privatisation/delisting transactions of companies listed on theSGX-ST

We have considered precedent successful privatisation/delisting transactions for companieslisted on the Main Board of the SGX-ST, which were announced and completed two yearsprior to the Announcement Date (“Precedent Privatisation Transactions”).

For the purposes of comparison with the Precedent Privatisation Transactions, we have setout below the premiums/(discounts) implied by the offer prices compared to the lasttransacted price prior to announcement, 1-month VWAP prior to announcement and 3-month VWAP prior to announcement.

It should be noted, however, that the level of premiums/(discounts) represented by thePrecedent Privatisation Transactions varies in different circumstances depending, inter alia,on the attractiveness of the underlying business to be acquired, the potential synergies tobe gained from integration with an existing business to be acquired, the possibility ofsignificant revaluation of the assets to be acquired, the availability of cash reserves, theliquidity of the target company’s traded shares, the presence of competing bids for thetarget company, the form of consideration offered by an acquirer, the extent of control theacquirer already had in the target company and prevailing market expectations.Accordingly, any comparison made with respect to the Precedent Privatisation Transactionsmerely serves as an illustrative guide and conclusions drawn from the comparison may notnecessarily reflect the perceived market valuation of the Company.

The Precedent Privatisation Transactions and relevant information relating to them are setout in the following table.

Source: Circulars, Bloomberg

Notes:

(1) Offer price based on the final bid price per share.

Table 6: Precedent privatisation transactions

CompanyAnnouncement

dateOffer price

(S$) (1)

Premium/(discount)of offer price over

last transacted priceprior to

announcement

Premium/(discount)of offer price over 1-month VWAP (2) prior

to announcement


to announcement

Pan-United Marine Ltd 28 May 07 2.380 3.03% 14.43% 21.41%Sembaw ang Kimtrans Ltd (3) 13 Jun 07 0.800 12.68% 13.92% 15.06%United Test and Assembly Center Ltd (4) 26 Jun 07 1.200 31.90% 30.65% 30.77%Labroy Marine Ltd 29 Oct 07 2.843 3.36% 9.21% 19.81%Permasteelisa Pacif ic Holdings Ltd 16 Nov 07 0.440 18.92% 39.22% 23.29%Sincere Watch Ltd (5) 07 Dec 07 2.560 11.00% 19.05% 32.82%Ascott Group Ltd 08 Jan 08 1.730 42.98% 39.44% 19.78%Robinson and Co, Ltd (6) 20 Jan 08 7.200 61.43% 65.38% 60.22%Hartford Education Corporation Ltd (7) 01 Feb 08 0.020 6.53% 13.29% 11.91%China Education Ltd (8) 01 Feb 08 0.500 25.00% 11.22% 2.39%Sing Lun Holdings Ltd (9) 30 Mar 08 0.460 50.82% 62.96% 73.68%Transmarco Ltd 08 Apr 08 1.020 39.73% 40.36% 38.93%Unisteel Technology Limited (10) 14 Apr 08 1.950 39.30% 42.00% 46.30%SNP Corporation Ltd (11) 18 Apr 08 1.760 33.33% 39.69% 47.19%Midsouth Holdings Ltd (12) 13 May 08 0.800 15.94% 38.23% 45.00%Pokka Corporation (Singapore) Ltd (13) 13 Jun 08 0.750 54.64% 48.55% 56.02%Datacraft Asia Ltd (14) 22 Jul 08 US$ 1.33 34.34% 30.46% 33.37%King's Safetyw ear Ltd 19 Sep 08 0.438 12.31% 13.21% 15.58%SP Chemicals Ltd 15 Sep 08 0.730 18.70% 23.44% 21.70%Hiap Moh Corporation Ltd 29 Oct 08 0.400 166.67% 122.22% 101.46%Agva Corporation Ltd 21 Feb 09 0.070 7.69% 20.05% 20.05%

Min 3.03% 9.21% 2.39%Mean 32.87% 35.09% 35.08%

Median 25.00% 30.65% 30.77%Max 166.67% 122.22% 101.46%

Kingboard Copper Foil 04 May 09 0.210 27.27% 35.48% 54.41%


49

(2) VWAP of shares traded during the specified market trading date range prior to announcement date of thetransaction.

(3) In respect of Sembawang Kimtrans Ltd, the offer price was S$0.70 for each share and in the event that theofferor was entitled to exercise its right of compulsory acquisition, the offer price would be S$0.80. Thecomputations in the table above were based on the offer price of S$0.80 as the offeror had successfullyexercised its right of compulsory acquisition.

(4) The reference date used to compute market premia was based on 1 June 2007 as DBS Group Researchwas quoted on Bloomberg as saying that there was “significant” investor interest in United Test AssemblyCentre Ltd (“UTAC”) and the announcement of first quarter’s results released on 24 April 2007 may havebeen incorporated into UTAC’s share price prior to the announcement date on 26 June 2007.

(5) On 7 December 2007, a pre-conditional voluntary conditional offer for Sincere Watch Limited wasannounced. The offer price for each share in Sincere Watch Limited was S$2.051 in cash and 0.228 newshare in the capital of Peace Mark Holdings Limited (a company listed on the SEHK) at the issue price ofHK$12.096 each, equivalent to a total notional value of S$2.564. The computations in the table above werebased on such notional value and over the relevant periods prior to the pre-conditional offer announcementon 7 December 2007.

At the close of the offer on 18 March 2008, as a result of acceptance of the offer, the public float in SincereWatch Limited had fallen below 10% and consequently, its shares were suspended since 19 March 2008.The offeror had then stated that it intended to preserve the listing status of Sincere Watch Limited andwould take steps to restore public float. However, on 27 March 2008, the offeror announced that it hadchanged its intention and would seek the SIC’s consent for the compulsory acquisition of Sincere WatchLimited. On 28 April 2008, the offeror announced that SIC had rejected the application. On 8 August 2008,Sincere Watch Limited was de-listed from the Main Board of the SGX-ST.

(6) On 20 January 2008, the offeror announced that it intended to make a voluntary conditional cash offer forthe shares in the capital of Robinson and Company, Limited at a price of S$6.25 for each share.Subsequently, the offeror increased the offer price to S$7.00 for each share on 17 March 2008, and toS$7.20 for each share on 3 April 2008. The computations in the table above, as extracted from the relevantcircular, were computed based on the final offer price of S$7.20 for each share and, inter alia, market pricesprior to the first offer announcement on 20 January 2008, and is unadjusted for interim dividend.

(7) In respect of Hartford Education Corporation Limited (“HEC”), the delisting exit offer was made by theofferor as part of a larger restructuring effort to consolidate and rationalise its assets. The delisting exit offerwas made on the basis of 0.176 share in the issued share capital of Raffles Education Corporation Limited(“REC Share”) (as adjusted for the sub-division of REC Share announced on 2 January 2008) for everyshare held in the capital of HEC. The market premia in the table above, as extracted from the relevantcircular, were computed based on the last transacted price of REC Shares of S$1.15 on 21 April 2008(being the latest practicable date for the issuance of the delisting circular).

(8) The VWAP has been calculated using the volume-weighted average price of shares in China Education Ltdmultiplied by total daily trading volume of shares listed in the Singapore Stock Exchange and AustraliaStock Exchange. When there was no trading in Singapore Stock Exchange, we have used the volume-weighted average price of shares in Australia Stock Exchange and converted to its equivalent value inSingapore dollars using exchange rate extracted from Bloomberg.

(9) On 24 March 2008, Sing Lun Holdings Ltd made an announcement that certain parties were engaged indiscussions with respect to a general offer for the shares of the company. Accordingly, the market premiawas calculated based on prices prior to 24 March 2008.

(10) On 15 April 2008, Unisteel Technology Ltd (“Unisteel”) received a query from the SGX-ST regarding asubstantial increase in the price of its shares. On 16 April 2008, 18 April 2008, 2 May 2008 and 5 June2008, Unisteel released several holding announcements. The market premia in the table above, werecomputed based on prices prior to 15 April 2008.

(11) On 18 April 2008, SNP Corporation Ltd (“SNP”) announced that it had been informed by Green Dot CapitalPte Ltd which owned approximately 54% of its issued share capital that it was evaluating its options withrespect to such stake. The market premia in the table above were computed based on prices prior to theholding announcement on 18 April 2008.

(12) On 17 April 2008, Midsouth Holdings Ltd (“Midsouth”) released a holding announcement in relation to thestrategic review of interest in Midsouth by certain majority shareholders of Midsouth, including the possibilityof a voluntary delisting of Midsouth from the SGX-ST. Subsequently, on 13 May 2008, Midsouth announcedthat it had received a delisting exit offer proposal. The market premia in the table above, were computedbased on prices prior to the holding announcement on 17 April 2008.


50

(13) On 13 June 2008, the offeror announced that it intends to make a voluntary unconditional cash offer for theshares in the capital of Pokka Corporation (Singapore) Ltd at a price of S$0.66 per share. Subsequently, theofferor increased the offer price to S$0.75 for each share on 15 August 2008. The computations in the tableabove, were computed based on the final offer price of S$0.75 for each share and market prices prior to thefirst offer announcement on 13 June 2008.

(14) The computations in the table above, were computed based on the cash consideration of US$1.33 for eachscheme share comprising (a) US$1.09 in cash for each scheme share transferred and (b) US$0.24 in cashfor each scheme share pursuant to the capital distribution.

Based on our analysis, we note that Kingboard Copper Foil’s premium implied by the CashConsideration over Precedent Privatisation Transactions across the different observationperiods, namely the last transacted price prior to announcement, 1-month VWAP prior toannouncement and 3-month VWAP prior to announcement, is at a premium to the medianstatistics when compared to the different observation periods.

In addition to the above, we have further selected Precedent Privatisation Transactionswhere the offeror already has a controlling stake in the company as at their respective offerannouncement date (the “Precedent Privatisation Transactions by ControllingShareholder”).

The Precedent Privatisation Transactions by Controlling Shareholder and relevantinformation relating to them are set out in the following table.

Source: Circulars, Bloomberg

Notes:

(1) Offer price based on the final bid price per share.

(2) VWAP of shares traded during the specified market trading date range prior to announcement date of thetransaction.

(3) In respect of Hartford Education Corporation Limited (“HEC”), the delisting exit offer was made by theofferor as part of a larger restructuring effort to consolidate and rationalise its assets. The delisting exit offerwas made on the basis of 0.176 share in the issued share capital of Raffles Education Corporation Limited(“REC Share”) (as adjusted for the sub-division of REC Share announced on 2 January 2008) for everyshare held in the capital of HEC. The market premia in the table above, as extracted from the relevantcircular, were computed based on the last transacted price of REC Shares of S$1.15 on 21 April 2008(being the latest practicable date for the issuance of the delisting circular).

(4) On 17 April 2008, Midsouth Holdings Ltd (“Midsouth”) released a holding announcement in relation to thestrategic review of interest in Midsouth by certain majority shareholders of Midsouth, including the possibilityof a voluntary delisting of Midsouth from the SGX-ST. Subsequently, on 13 May 2008, Midsouth announcedthat it had received a delisting exit offer proposal. The market premia in the table above, were computedbased on prices prior to the holding announcement on 17 April 2008.

Table 7: Precedent privatisation transactions by controlling shareholder

CompanyAnnouncement

dateOffer price

(S$) (1)

Premium/(discount)of offer price over

last transacted priceprior to

announcement


to announcement


to announcement

Permasteelisa Pacif ic Holdings Ltd 16 Nov 07 0.440 18.92% 39.22% 23.29%Hartford Education Corporation Ltd (3) 01 Feb 08 0.020 6.53% 13.29% 11.91%Transmarco Ltd 08 Apr 08 1.020 39.73% 40.36% 38.93%Midsouth Holdings Ltd (4) 13 May 08 0.800 15.94% 38.23% 45.00%Pokka Corporation (Singapore) Ltd (5) 13 Jun 08 0.750 54.64% 48.55% 56.02%Datacraft Asia Ltd (6) 22 Jul 08 US$ 1.33 34.34% 30.46% 33.37%SP Chemicals Ltd 15 Sep 08 0.730 18.70% 23.44% 21.70%Agva Corporation Ltd 21 Feb 09 0.070 7.69% 20.05% 20.05%

Min 6.53% 13.29% 11.91%Mean 24.56% 31.70% 31.28%

Median 18.81% 34.34% 28.33%Max 54.64% 48.55% 56.02%

Kingboard Copper Foil 04 May 09 0.210 27.27% 35.48% 54.41%


51

(5) On 13 June 2008, the offeror announced that it intends to make a voluntary unconditional cash offer for theshares in the capital of Pokka Corporation (Singapore) Ltd at a price of S$0.66 per share. Subsequently, theofferor increased the offer price to S$0.75 for each share on 15 August 2008. The computations in the tableabove, were computed based on the final offer price of S$0.75 for each share and market prices prior to thefirst offer announcement on 13 June 2008.

(6) The computations in the table above, were computed based on the cash consideration of US$1.33 for eachscheme share comprising (a) US$1.09 in cash for each scheme share transferred and (b) US$0.24 in cashfor each scheme share pursuant to the capital distribution.

Based on our analysis, we note that Kingboard Copper Foil’s premium implied by the CashConsideration over Precedent Privatisation Transactions by Controlling Shareholder acrossthe different observation periods of last transacted price prior to announcement, 1-monthVWAP prior to announcement and 3-month VWAP prior to announcement is at a premiumto the median statistics when compared to the said observation periods.

8.1.5 Analyst coverage of Kingboard Copper Foil

We note that there is only one analyst covering Kingboard Copper Foil. On 30 April 2009,CIMB issued a report downgrading KBCF Shares from Outperform to Neutral due to higherthan expected losses as reported in Kingboard Copper Foil’s first quarter financial results.Accordingly, the price target for KBCF Shares was estimated at S$0.195 which is a 7.1 percent. discount to the Cash Consideration.

On 19 June 2009, CIMB issued another report downgrading its earlier assessment fromNeutral to Underperform since KBCF shares are now trading above the price target ofS$0.195 and the privatisation offer price of S$0.21.

We highlight that the price target for KBCF Shares is an independent estimate of theanalyst based on his views on the outlook (including market conditions and economicoutlook) as at the date of publication. The analyst’s views and/or price targets may changematerially as a result of, amongst others, changes in general market conditions, KingboardCopper Foil’s corporate developments, macro-economic conditions and emergence of newdevelopments or information relevant to Kingboard Copper Foil and/or its industry. TheRelevant Shareholders should note that the information above should not be relied upon asa promise or indication of the future market prices of KBCF Shares.

Based on this analysis undertaken above, we are of the view that the CashConsideration on its own represents a fair offer to the Relevant Shareholders.

8.2 Share Exchange Offer

In evaluating the fairness of the Share Exchange Offer, we examine the underlying value of KBLShares below:

8.2.1 Implied share exchange offer

Under the Scheme, Kingboard Laminates will issue 0.374 New KBL Shares (the “ShareConversion Ratio”) at the issue price of HK$2.946, as consideration for each KBCF Sharetendered. As such, the Share Exchange Offer is equivalent to S$0.21 per KBCF Share(“Implied Share Exchange Offer”).

We understand that the Share Conversion Ratio was calculated such that the implied offerprice under the Share Exchange Offer would be equivalent to the Cash Consideration, aftertaking into account, inter alia, the average five day closing share price of KingboardLaminates and the closing exchange rate as at 30 April 2009 (exchange rate ratio of S$1 :HK$5.247), being the Business Day immediately preceding the Announcement Date.


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We note that as at the Latest Practicable Date, the Share Exchange Offer translates intoS$0.270 based on Kingboard Laminates’ VWAP of HK$3.860 (“LPD VWAP”) at anexchange rate ratio of S$1 : HK$5.344 (the “LPD Implied Share Exchange Offer”). Thevalue of the LPD Implied Share Exchange Offer will fluctuate subject to share pricemovements of KBL Shares as well as movements in the exchange rate ratio. There is nocertainty that LPD Share Exchange Ratio will remain at S$0.270 upon the completion ofthe Scheme.

8.2.2 Historical share price and trading analysis of the KBL Shares

In evaluating the reasonableness of the Share Exchange Offer, we have undertaken ahistorical share price and trading analysis of KBL Shares. The market valuation of stockstraded on a recognised stock exchange provides a perspective on market priceexpectations. As such, we have considered the current and historical price performance ofKBL Shares as reasonable indicators for assessing the financial value of KBL Shares at agiven point in time.

We wish to highlight that under ordinary circumstances, the market valuation ofshares traded on a recognised stock exchange may be affected by, inter alia, itsrelative liquidity, the size of its free float, the extent of research coverage andinvestor interest it attracts, and the general market sentiment at a given point intime. Accordingly, this analysis serves as an illustrative guide only.

We set out below the traded value and volume of Kingboard Laminates against the HangSeng Index (“HSI”) and Hang Seng Materials Index (“HSMI”) over the two year period priorto the Latest Practicable Date.

Source: Bloomberg

We note that KBL Shares underperformed HSI over the two year period. With respect tothe performance of KBL Shares in relation to the HSMI, KBL Shares underperformed theindex up until August 2008. KBL Shares have since closely tracked the HSMI.

0.00

2.00

4.00

6.00

8.00

10.00

12.00

Jul-07 Sep-07 Nov-07 Jan-08 M ar-08 M ay-08 Jul-08 Sep-08 Nov-08 Jan-09 M ar-09 M ay-09

0

5,000

10,000

15,000

20,000

25,000

30,000

Trading vo lume (000) KBL share price (HK$) Rebased HSM I Index Rebased HSI Index

Trad

ing

volu

me (000)

HK

$

Chart 3: Kingboard Laminates share price performance


53

We set out in the following table the liquidity statistics of the 10 most highly traded stockson the SEHK by average daily value traded.

Source: Bloomberg

We note that Kingboard Laminates’ liquidity, as represented by the average daily valuetraded as a percentage of market capitalisation and the average daily volume traded as apercentage of shares outstanding, are 53.8 per cent. and 83.5 per cent. lower than themedian liquidity statistics of the 10 most highly traded stocks on the SEHK, respectively.

We have set out in the following table the liquidity statistics of 20 SEHK-listed entitiesclosest to Kingboard Laminates in terms of market capitalisation ranging from HK$10,078.2million to HK$13,453.4 million.

Source: Bloomberg

Company name

Market

capitalisation

(HK$ mil)

Avg daily value

traded for the

past 6 months

(HK$ mil)

Avg daily

volume for

the past 6

months (mil)

Shares

outstanding

(mil)

Avg daily value

as % of

market

capitalisation

Avg daily

volume as %

of Shares

outstanding

Sinotrans Shipping Ltd 13,453.4 33.21 11.68 3,992.1 0.247% 0.293%Xinao Gas Holdings Ltd 13,357.9 19.94 1.95 1,050.1 0.149% 0.186%Vtech Holdings Ltd 13,312.9 14.93 0.41 245.9 0.112% 0.165%China Foods Ltd 12,979.9 11.98 3.31 2,791.4 0.092% 0.119%Hidili Industry Intl Develop 12,751.4 103.47 27.78 2,060.0 0.811% 1.349%Citic Resources Holdings Ltd 12,699.9 48.71 34.37 6,047.6 0.384% 0.568%Hopew ell Highw ay Infrastructure 12,676.0 9.40 2.17 2,961.7 0.074% 0.073%Guangzhou Investment 12,188.1 94.20 89.26 7,127.5 0.773% 1.252%Champion REIT 12,085.7 27.06 13.21 4,630.5 0.224% 0.285%Zhuzhou CSR Times Electric 11,991.9 27.73 3.06 456.1 0.231% 0.671%Hongkong & Shanghai Hotels 11,398.2 7.88 1.34 1,467.0 0.069% 0.091%Xinyi Glass Holdings Co Ltd 11,347.5 45.63 9.87 1,773.1 0.402% 0.557%C C Land Holdings Ltd 10,701.7 90.76 33.57 2,144.6 0.848% 1.565%Shenzhen Investment Ltd 10,552.9 51.45 22.39 3,217.3 0.488% 0.696%Byd Electronic Intl Co Ltd 10,436.1 21.93 5.81 2,254.0 0.210% 0.258%Poly Hong Kong Investment Ltd 10,426.9 37.57 10.14 2,141.0 0.360% 0.474%Ports Design Limited 10,231.9 23.26 1.94 561.0 0.227% 0.345%New World Dept Store China 10,218.0 14.11 3.43 1,686.1 0.138% 0.203%Stella International 10,120.4 4.64 0.53 794.4 0.046% 0.067%Harbin Pow er Equipment Co 10,078.2 73.65 11.65 675.6 0.731% 1.724%

Mean 11,650.4 38.07 14.39 2,403.8 0.331% 0.547%

Median 11,695.0 27.39 7.84 2,100.5 0.229% 0.319%

Kingboard Laminates 11,670.0 9.09 3.34 3,000.0 0.078% 0.111%

Table 9: Liquidity analysis of Kingboard Laminates relative to SEHK Main Board listed entities of comparable market

capitalisation

Company name

Market

capitalisation

(HK$ mil)

Avg daily value

traded for the

past 6 months

(HK$ mil)

Avg daily

volume for

the past 6

months (mil)

Shares

outstanding

(mil)

Avg daily

value as % of

market

capitalisation

Avg daily

volume as %

of Shares

outstanding

China Construction Bank 1,417,566.0 3,035.0 668.2 224,689.1 0.214% 0.297%China Mobile Ltd 1,527,375.0 2,160.3 29.9 20,057.5 0.141% 0.149%Bank Of China Ltd 1,222,862.0 1,885.9 761.9 76,020.3 0.154% 1.002%China Life Insurance Co 901,450.4 1,633.6 63.7 7,441.2 0.181% 0.857%Petrochina Co Ltd 2,947,287.0 1,112.6 157.8 21,098.9 0.038% 0.748%China Petroleum & Chemical 986,937.9 984.3 186.6 16,780.5 0.100% 1.112%Hong Kong Exchanges & Clear 129,751.5 965.5 10.6 1,075.9 0.744% 0.987%CNOOC Ltd 421,677.2 950.9 112.2 44,669.2 0.226% 0.251%Sun Hung Kai Properties 245,663.1 669.4 8.6 2,564.3 0.272% 0.336%Ping An Insurance Group Co 437,223.2 683.7 15.2 2,558.6 0.156% 0.593%

Mean 1,023,779.3 1,408.1 201.5 41,695.5 0.223% 0.633%

Median 944,194.2 1,048.5 87.9 18,419.0 0.169% 0.671%

Kingboard Laminates 11,670.0 9.1 3.3 3,000.0 0.078% 0.111%

Table 8: Liqudity analysis of Kingboard Laminates relative to SEHK's top 10 most active stocks by 6 months average

daily value traded


54

We note that Kingboard Laminates’ liquidity as represented by the average daily valuetraded as a percentage of market capitalisation and the average daily volume traded as apercentage of shares outstanding are 65.9 per cent. and 65.2 per cent. lower than themedian liquidity statistics of the SEHK-listed entities with a market capitalisation of betweenHK$10,078.2 million and HK$13,453.4 million, respectively.

Based on the data presented, it would appear that Kingboard Laminates has significantlyless trading activity when compared to the most actively traded stocks on SEHK as well aswhen compared to stocks which have a comparable market capitalisation.

For illustrative purposes, assuming a hypothetical situation where all the RelevantShareholders elect to receive the Share Exchange Offer, the theoretical number of daysrequired to dispose 97,367,534 New KBL Shares would be approximately 30 days, takinginto account the six month average daily volume of 3.34 million shares. Accordingly, theRelevant Shareholders may take note that relatively large shareholdings may take longer toliquidate under the circumstances.

8.2.3 Valuation multiples of Kingboard Laminates against publicly-traded broadlycomparable companies

In our analysis of comparing the valuation multiples of Kingboard Laminates on the basis ofthe Issue Price and LDP VWAP with valuation multiples of publicly-traded broadlycomparable companies, we have looked at companies which are engaged in themanufacture of laminates within the Asia Pacific region.

We believe the selected companies comprise a representative sample. However, there is avariance in the sample and these comparable companies will not be directly comparablewith Kingboard Laminates as, inter alia, they operate in different markets geographicallyand, while they all operate in the electronics component manufacturing sector, have varyingproduct and service mixes. Accordingly, these differences will have an impact on relativegrowth rates, profit margins, and return on capital. In addition, the valuation multiples ofthese comparable companies will be impacted, amongst other factors, by the state of theirrespective capital markets, the size of their market capitalisation as well as their size interms of revenue, liquidity of their respective shares, and their tax regimes, accountingstandards and disclosure.


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The selected comparable companies and relevant information relating to them are set outin the following table.

Source: Bloomberg, Respective company annual reports

Table 10: Comparable companies engaged in the manufacturing of laminates

Valuation metrics

Company Country Description

Market capitalisation

(S$ mil)EV

(S$ mil)EV/

EBITDA(x) P/B(x)Nan Ya PCB Corporation Taiw an Manufactures printed circuit boards and substrates. 2,547 2,390 5.6 x 1.6 x

Guangdong ShengyiScience Technology CoLtd

China Manufactures and markets electronic components, itsproducts include copper coated panels, printedcircuit boards, and other related products.

1,391 1,563 25.8 x 2.9 x

Eternal Chemical Co., Ltd Taiw an Manufactures and markets synthetic resins,unsaturated polyester resins, plastics, copper-cladlaminates, photoresistant materials as w ell as otherspecialty chemicals.

938 1,399 6.9 x 1.2 x

Meadville Holdings Ltd Taiw an Manufactures and distributes printed circuit boards,provides drilling and routing services, andmanufactures and distributes laminates.

555 1,054 5.0 x 1.0 x

ITEQ Corp Taiw an Manufactures and markets prepregs and copper cladlaminates for the printed circuit board industry.

232 255 10.1 x 1.1 x

Taif lex Scientif ic Co Ltd Taiw an Manufactures and markets flexible copper cladlaminates and cover layers.

197 163 7.4 x 1.3 x

Elite Material Co Ltd Taiw an Manufactures and markets prepared laminated covercladdings for double-sided and multi-layer printedcircuit boards.

171 275 8.4 x 1.0 x

Hong Tai ElectricIndustrial Co., Ltd

Taiw an Manufactures copper w ires and copper laminates 156 112 12.7 x 0.7 x

Taiw an UnionTechnology Corp

Taiw an Engaged in the production and distribution of printedcircuit boards, copper clad laminates, prepregs andmass laminates.

92 118 6.3 x 0.5 x

Nam Hing Holdings Ltd Hong Kong Designs, manufactures and trades laminates, printedcircuit boards, and copper foils.

52 71 neg 2.5 x

Uniplus Electronics CoLtd

Taiw an Manufactures and markets multi-layer printed circuitboards, copper clad laminates, glass fiber film, andrelated components.

50 111 neg 0.3 x

Hw a Woei Laminate Corp Taiw an Manufactures and markets copper clad laminate,w hich is the raw material for single-sided, double-sided, and multi-layer printed circuit boards.

40 63 neg 0.4 x

Innox Corp SouthKorea

Manufactures semiconductor materials, f lexibleprinted circuit board materials such as flexible copperclad laminates as w ell as display materials.

27 44 39.7 x 1.0 x

Aurona Industries Inc Taiw an Manufactures and markets insulating laminateproducts for printed circuit boards and otherelectronics.

26 35 6.5 x 0.9 x

Advance Materials Corp Taiw an Processes and manufactures printed circuit boardcomponents & other related materials, includingcopper clad laminate, solder resist, mass lam, glassfiber pre-preg and other related chemicals and rawmaterials.

26 72 15.4 x 0.4 x

ThinFlex Corp Taiw an Manufactures and markets flexible copper cladlaminates and coverlays.

12 42 neg 0.7 x

ShineMore TechnologyMaterials Co Ltd

Taiw an Manufactures, processes and sells copper cladlaminate boards, bonded films and mass laminatedboards.

10 27 9.7 x 0.3 x

Min 5.0 x 0.3 xMean 12.3 x 1.0 x

Median 8.4 x 1.0 xMax 39.7 x 2.9 x

Implied values

Scenario

Marketcapitalisation

(S$ mil)EV

(S$ mil)EV/

EBITDA (x) P/B (x)Kingboard Laminates At KBL Issue Price of HK$ 2.946 1,684 1,865 4.7 x 1.1 x

At Latest Practicable Date, KBL VWAP of HK$ 3.860 2,177 2,357 5.9 x 1.4 x


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Based on our analysis, we note that Kingboard Laminates’ EV/EBITDA multiple as impliedby the Issue Price is trading at a discount of 44.0 per cent. to the median EV/EBITDAmultiple of its comparable companies. However, Kingboard Laminates’ P/B multiple asimplied by the Issue Price is at a premium of 10.0 per cent. to its median P/B multiple of itscomparable companies.

8.2.4 Dilution effects on KBL Shares

Pursuant to the Scheme, Kingboard Laminates will allot and issue up to an aggregate of97,367,534 New KBL Shares (assuming completion of the Scheme and the Scheme Priceis satisfied in full by way of the allotment and issuance of New KBL Shares) to the RelevantShareholders, representing approximately 3.1 per cent. of the enlarged issued share capitalof Kingboard Laminates. We note that if the Relevant Shareholders elect to receive asconsideration by way of a Share Exchange Offer, there will be dilutive effects with respectto value of the KBL Shares and earnings per share.

For illustration purposes, we set out the following table which demonstrates the effects ofdilution on the earnings per share of Kingboard Laminates.

Source: Annual report

Assuming all the Relevant Shareholders elect to receive KBL Shares under the ShareExchange Offer, an additional 97,367,534 New KBL Shares will be issued therebyincreasing Kingboard Laminates’ issued share capital to 3,097,367,534 shares.Hypothetically, with the issuance of New KBL Shares, the earnings per share of KBLShares will be reduced by 3.1 per cent. from HK$40.13 cents to HK$38.87 cents.

Table 11: Kingboard Laminates earnings per share dilution2008 Net income (less minority interests) (in HK$ mil) 1,204

KBCF shares outstanding 722,500,000Held by KBL Group 462,159,000Held by the Relevant Shareholders 260,341,000

Conversion ratio 0.374

New KBL Shares to be issued, assuming full acceptance in ShareExchange Offer

97,367,534

KBL shares outstanding 3,000,000,000 3,097,367,534

Current EnlargedEarnings Per Share (HK cents) 40.13 38.87

Earnings dilution -3.14%


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8.2.5 Analysts coverage of Kingboard Laminates

There were a total of 5 financial institutions which have issued investment research reportson Kingboard Laminates from 30 March 2009 to 21 April 2009. Kingboard Laminatesreleased its full year financial results on 27 March 2009.

We set out below a summary of the price targets for KBL Shares set out in these reports.

Source: Bloomberg, Thomson Research, Analyst reports

Based on the above, the Issue Price is above the median target price of HK$2.6 by 13.5per cent..

We highlight that the price targets for KBL Shares are independent estimates of theanalysts based on their views on the outlook (including market conditions and economicoutlook) as at the date of publication. The analysts’ views and/or price targets may changematerially as a result of, amongst others, changes in general market conditions, KingboardLaminates’ corporate developments, macro-economic conditions and emergence of newdevelopments or information relevant to Kingboard Laminates and/or its industry. TheRelevant Shareholders should note that the information above should not be relied upon asa promise or indication of the future market prices of KBCF Shares.

Based on the analysis undertaken above, we are of the view that the ShareExchange Offer on its own represents a fair offer to the Relevant Shareholder.

8.3 Combination Offer

Under the Combination Offer, the Relevant Shareholder can elect to receive a combination of theCash Consideration and the Share Exchange Offer. As the Cash Consideration on its ownrepresents a fair offer to the Relevant Shareholders, and the Share Exchange Offer on its ownrepresents a fair offer to the Relevant Shareholders, accordingly, a combination of the CashConsideration and Share Exchange Offer would represent a fair offer to the Relevant Shareholder.

We wish to note that the portion of the Combination Offer that is payable in cash to each RelevantShareholder for the KBCF Shares held by such Relevant Shareholder will be rounded down to thenearest whole cent. Fractions of a New KBL Share will not be allotted and issued to any RelevantShareholder and will be disregarded.

Table 12: Analysts' estimates of price targets for KBL shares

Name of financial institution DateTarget price

(HK$)HSBC 21-Apr-09 3.25

Sun Hung Kai Securities 01-Apr-09 2.80

Citigroup 30-Mar-09 2.60

Daiwa Institute 30-Mar-09 2.02

MainFirst Securities 30-Mar-09 2.50

Min 2.02Mean 2.63

Median 2.60Max 3.25

Kingboard Laminates (Issue Price) 2.95


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8.4 Other considerations

8.4.1 The Scheme is binding on Relevant Shareholders

If the Scheme is approved by a majority of persons who are registered as holders of KBCFShares in the Register of Members of the Company present and voting, either in person orby proxy, at a Scheme Meeting, such majority holding not less than 75 per cent. in value ofKBCF Shares held by Members present and voting at the Scheme Meeting, the Schemewill be binding on all Members, regardless of whether they were present in person or byproxy or voted at the Scheme Meeting.

8.4.2 Other conditions of the Scheme

The Relevant Shareholders should note that besides the requisite approval of Members atthe Scheme Meeting, the Scheme is also subject to, inter alia, the fulfilment of certainconditions precedent and termination provisions. In the event that such conditionsprecedent are not fulfilled or waived or the termination provisions become applicable, theScheme may not proceed. There is no assurance as at the Latest Practicable Date that theScheme will become effective.

8.4.3 Alternative offers

As at the Latest Practicable Date, there is no publicly available evidence of any alternativeoffer for KBCF Shares. Further, the Directors have also confirmed that as the LatestPracticable Date, apart from the Scheme, they have not received any other offer from anyother party.

8.4.4 Shareholder exit costs

We note that the Relevant Shareholders who receive Share Exchange Offer under theScheme and subsequently sell KBL Shares are likely to incur brokerage costs and othercharges in relation to the sale. The amount of those brokerage and related charges will bedependent upon the brokerage charges levied by the broker they elect to use.

8.4.5 Change in investment profile and risk

If the Relevant Shareholders elect to receive the Share Exchange Offer and the Scheme isapproved and implemented, the Relevant Shareholders will become shareholders ofKingboard Laminates. This will change the nature of the investments held by the RelevantShareholders and should note the key differences between the two companies.

Kingboard Laminates is a major producer of electronic materials and upstream componentmaterials and offers drilling and reinforcement services. Kingboard Laminates generatesmajority of its revenues from unrelated parties. Kingboard Copper Foil, a subsidiary ofKingboard Laminates, generates approximately 87.7 per cent. of it revenues from relatedparties.

8.4.6 Irrevocable Undertakings to Elect to Receive Cash Consideration

(i) The Cash Consideration Undertaking Shareholders have each given a CashConsideration Irrevocable Undertaking to Kingboard Laminates in which theyundertake to elect to receive the Scheme Price in the form of the CashConsideration in respect of all their respective KBCF Shares, on and subject to theterms set out in their respective Cash Consideration Irrevocable Undertakings.

(ii) The Cash Consideration Irrevocable Undertakings relate to an aggregate of 74,000KBCF Shares, representing approximately 0.01025 per cent. of the total issuedKBCF Shares as at the Latest Practicable Date.


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(iii) Further details of the Cash Consideration Irrevocable Undertakings can be found inparagraph 4 of the Explanatory Statement.

9. CONCLUSION AND RECOMMENDATION

In arriving at our recommendation, we have considered the factors set out in the previous sectionsof this letter. Accordingly, it is important that our letter and, in particular all the considerations andinformation we have taken into account, be read in its entirety.

Our conclusions in respect of the factors regarding the Cash Consideration are set out below:

(a) Kingboard Copper Foil’s liquidity, as represented by the average daily value traded as apercentage of market capitalisation and the average daily volume traded as a percentageof shares outstanding, are 83.2 per cent. and 83.0 per cent. lower than the median liquiditystatistics of the 10 most highly traded stocks on the SGX-ST, respectively;

(b) Kingboard Copper Foil’s liquidity as represented by the average daily value traded as apercentage of market capitalisation and the average daily volume traded as a percentageof shares outstanding are 61.0 per cent. higher and 90.9 per cent. higher than the medianliquidity statistics of the SGX-ST listed entities with a market capitalisation of betweenS$153.1 million and S$181.6 million, respectively;

(c) For the different periods ranging from one year prior to the Announcement Date to onemarket day prior to the Announcement Date, the Cash Consideration is at a premium overVWAP of KBCF Shares. We further note that the Cash Consideration is at a premium of3.4 per cent. and at a discount of 5.0 per cent. compared to the VWAP of KBCF Sharesone market day post the Announcement Date and the period from post the AnnouncementDate till the Latest Practicable Date, respectively;

(d) Kingboard Copper Foil’s EV/EBITDA multiple is at a 8.9 per cent. premium and a 2.0 percent. discount to the mean and median EV/EBITDA multiple of comparable companies,respectively. However, Kingboard Copper Foil’s P/B multiple is at a 33.3 per cent. discountto the median P/B multiple of comparable companies but within the minimum/maximumrange of P/B multiples of comparable companies;

(e) The NTA per share of Kingboard Copper Foil is S$0.58 (HK$3.15) while the Offer Price isS$0.21, which translates into a discount of 63.8 per cent. Based on Kingboard CopperFoil’s financial statement for the period ended 31 March 2009, the Company had totalassets of S$501.3 million and total liabilities of S$79.2 million while total equity is S$422.1million. Approximately 52.5 per cent. of total assets comprise of property, plant andequipment estimated to be S$263.1 million. The figures calculated are inclusive of minorityinterests.

We have considered two scenarios under which Shareholders may be able to monetiseKingboard Copper Foil’s NTA. Firstly, management can liquidate certain assets and returnthe proceeds from the sale of such assets to Shareholders. Shareholders should note thatin a liquidation scenario it is unlikely that the assets can be sold at their book values.There are numerous factors which affect the consideration to be paid for the assetsincluding the time, costs and expenses relating to the sale of the asset as well as thedisruption it could possibly bring to the operations;


60

Secondly, management can declare dividends for distribution to Shareholders. As at 31March 2009, Kingboard Copper Foil has S$314.1 million in reserves, however theCompany does not have sufficient cash to pay the dividends. Kingboard Copper Foil wouldneed to obtain new borrowings in order to pay the dividends. Based on Kingboard CopperFoil’s earnings before interest and taxes for the trailing 12 months ended 31 March 2009which is negative S$0.47 million, the Company may not have the ability to service anysignificant borrowings;

We also note that Kingboard Laminates has no intention to introduce any major changes tothe business of Kingboard Copper Foil and the terms of the Scheme are such thatShareholders can exchange their holdings in Kingboard Copper Foil with those ofKingboard Laminates;

(f) Kingboard Copper Foil’s EV/EBITDA multiple is at a premium of 172.2 per cent. to themedian EV/EBITDA multiple of the comparable transactions while its P/B multiple is at a42.9 per cent. discount to P/B multiple of the comparable transactions. Kingboard CopperFoil’s P/B multiple is within the minimum/maximum range of P/B multiples of thecomparable transactions;

(g) Kingboard Copper Foil’s premium implied by the Cash Consideration over PrecedentPrivatisation Transactions across the different observation periods, namely the lasttransacted price prior to announcement, 1-month VWAP prior to announcement and 3-month VWAP prior to announcement, is at a premium to the median statistics whencompared to the different observation periods;

(h) Kingboard Copper Foil’s premium implied by the Cash Consideration over PrecedentPrivatisation Transactions by Controlling Shareholder across the different observationperiods of last transacted price prior to announcement, 1-month VWAP prior toannouncement and 3-month VWAP prior to announcement is at a premium to the medianstatistics when compared to the said observation periods;

Our conclusions in respect of the factors regarding the Share Exchange Offer are set out below:

(i) The Share Conversion Ratio was calculated such that the implied offer price under theShare Exchange Offer would be equivalent to the Cash Consideration, after taking intoaccount, inter alia, the average five day closing share price of Kingboard Laminates andthe closing exchange rate as at 30 April 2009 (exchange rate ratio of S$1 : HK$5.247),being the Business Day immediately preceding the Announcement Date;

(j) Kingboard Laminates’ liquidity, as represented by the average daily value traded as apercentage of market capitalisation and the average daily volume traded as a percentageof shares outstanding, are 53.8 per cent. and 83.5 per cent. lower than the median liquiditystatistics of the 10 most highly traded stocks on the SEHK, respectively;

(k) Kingboard Laminates’ liquidity as represented by the average daily value traded as apercentage of market capitalisation and the average daily volume traded as a percentageof shares outstanding are 65.9 per cent. and 65.2 per cent. lower than the median liquiditystatistics of the SEHK-listed entities with a market capitalisation of between HK$10,078.2million and HK$13,453.4 million, respectively;

(l) Kingboard Laminates’ EV/EBITDA multiple is trading at a discount of 44.0 per cent. to themedian EV/EBITDA multiple of its comparable companies. However, Kingboard Laminates’P/B multiple is at a premium of 10.0 per cent. to its median P/B multiple of its comparablecompanies; and


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Our conclusions in respect of the other factors are set out below:

(m) As at the Latest Practicable Date, there is no publicly available evidence of any alternativeoffer for the KBCF Shares. Further, the Directors have also confirmed that as at the LatestPracticable Date, apart from the Scheme, they have not received any other offer from anyother party.

After carefully considering the information available to us as at the Latest Practicable Date,and based upon the monetary, industry, market, economic and other relevant conditionssubsisting as at the Latest Practicable Date and based on our considerations above, we areof the opinion that:

(i) the Cash Consideration on its own represents a fair offer to the RelevantShareholders;

(ii) the Share Exchange Offer on its own represents a fair offer to the RelevantShareholders; and

(iii) as the Cash Consideration and the Share Exchange Offer both represent a fair offerto the Relevant Shareholders, accordingly, a combination of the Cash Considerationand Share Exchange Offer would represent a fair offer to the Relevant Shareholders.

Accordingly, we are of the opinion that the financial terms of the Scheme are fair and weadvise the Independent Directors to advise the Shareholders to accept and vote in favour ofthe Scheme.

In rendering the above opinion, we have not taken into consideration the specific investmentobjectives, financial situation, tax position or unique needs and constraints of any individualshareholder. Accordingly, any individual shareholder who may require specific advice in relation totheir investment portfolio including their investment in Kingboard Copper Foil should consult theirstockbroker, bank manager, solicitor, accountant, tax adviser, or other professional adviserimmediately.

This opinion is governed by, and construed in accordance with the laws of Singapore, and isstrictly limited to the matters stated herein and does not apply by implication to any other matter.Nothing herein shall confer or be deemed or is intended to confer any right or benefit to any thirdparty and the Contracts (Rights of Third Parties) Act 2001, Chapter 53B of Singapore and any re-enactment thereof shall not apply.

Yours faithfullyFor and on behalf ofKPMG Corporate Finance Pte Ltd

Satyanarayan Ramamurthy Ma Rowena ReyesExecutive Director Associate Director


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KINGBOARD LAMINATES HOLDINGS LIMITED(Incorporated in the Cayman Islands)

(Company Registration Number: MC-167703)

Directors:

Cheung Kwok Wa (Chairman)Cheung Kwok Keung (Executive Managing Director)Cheung Kwok Ping (Executive Director)Lam Ka Po (Executive Director)Cheung Ka Ho (Executive Director)Chan Sau Chi (Executive Director)Liu Min (Executive Director)Zhou Pei Feng (Executive Director)Lo Ka Leong (Non-Executive Director)Chan Charnwut Bernard (Independent Non-Executive Director)Chan Yue Kwong, Michael (Independent Non-Executive Director)Leung Tai Chiu (Independent Non-Executive Director)Mok Yiu Keung, Peter (Independent Non-Executive Director)

10 July 2009

To: The Shareholders of Kingboard Copper Foil Holdings Limited

Dear Sir/Madam


1. INTRODUCTION

1.1 Joint Announcement. On 4 May 2009, Kingboard Laminates and Kingboard Copper Foil jointlyannounced the proposed privatisation of Kingboard Copper Foil by way of a scheme ofarrangement under Section 99 of the Act and in accordance with the Code, pursuant to which:


(ii) in consideration for such a transfer, Kingboard Laminates will pay the Relevant Shareholdersthe following consideration (the “Scheme Price”) for each KBCF Share transferred:


(b) 0.374 New KBL Shares at the issue price of HK$2.946 per New KBL Share (the“Issue Price”) (equivalent to S$0.561 at the exchange rate ratio of S$1 : HK$5.247 asat 30 April 2009, being the Business Day immediately preceding the AnnouncementDate), for each KBCF Share (the “Share Exchange Offer”). The Issue Price is equalto the average closing price of the issued KBL Shares on SEHK for the five tradingdays preceding the Announcement Date; or


APPENDIX 2 – LETTER FROM KINGBOARD LAMINATES TO THE SHAREHOLDERS

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provided that Kingboard Laminates obtains clearance by SEHK for the listing of, andpermission to deal in, the New KBL Shares which may be allotted and issued pursuant tothe Share Exchange Offer or the Combination Offer.

An application was made to SEHK for, and SEHK has approved on 30 June 2009, the listingof, and permission to deal in, the New KBL Shares to be allotted and issued in satisfactionof the Share Exchange Offer or the partial satisfaction of the Combination Offer. Theapproval from SEHK is subject to all other conditions set out in the ImplementationAgreement and the Announcement.


(i) each Relevant Shareholder has the discretion to receive the Scheme Price in the formof the Cash Consideration, the Share Exchange Offer or the Combination Offer;

(ii) in the event a Relevant Shareholder does not make a valid election between the CashConsideration, the Share Exchange Offer or the Combination Offer, the RelevantShareholder will be paid the Cash Consideration in default for each KBCF Share heldby him; and

(iii) the aggregate Cash Consideration or that portion of the Combination Offer which ispayable in cash to each Relevant Shareholder for the KBCF Shares held by suchRelevant Shareholder will be rounded down to the nearest whole cent. Fractions of aNew KBL Share will not be allotted and issued to any Relevant Shareholder and willbe disregarded.

Pursuant to the Scheme, Kingboard Laminates will allot and issue in aggregate up to 97,367,534New KBL Shares (assuming completion of the Scheme and the Scheme Price is satisfied in full byway of the allotment and issuance of New KBL Shares to the Relevant Shareholders), representingapproximately 3.25 per cent. of the issued share capital of Kingboard Laminates as at the LatestPracticable Date and approximately 3.14 per cent. of the enlarged issued share capital ofKingboard Laminates after allotment and issuance of the New KBL Shares. The New KBL Shareswill be allotted and issued under the general mandate which was granted to the directors ofKingboard Laminates at the annual general meeting of Kingboard Laminates held on 5 May 2009.The general mandate allows Kingboard Laminates to allot, issue or otherwise deal with up to amaximum of 600,000,000 new KBL Shares. As at the Announcement Date, the unutilised generalmandate of Kingboard Laminates is 600,000,000 new KBL Shares.

The New KBL Shares, which may be allotted and issued pursuant to the Share Exchange Offer orthe Combination Offer, will be listed on SEHK and will rank pari passu with the then existing KBLShares.

A copy of the Announcement is available on the website of the SGX-ST at www.sgx.com.

The Scheme is subject to conditions precedent which must be satisfied or waived (as applicable)for the Scheme to be implemented. Details of these conditions precedent are set out in paragraph7.1 of the Explanatory Statement in the Scheme Document. These conditions precedents arereproduced in Appendix 5 to the Scheme Document.

The terms of the Scheme are more particularly described in paragraph 2.1 of Kingboard CopperFoil’s Letter to the Shareholders in the Scheme Document.


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1.2 Financial Evaluation of the Scheme. Based on the Cash Consideration, the Scheme Pricerepresents the following premium over the historical traded prices of the KBCF Shares:

Benchmark Price(1) Premium over Benchmark Price(S$)(2) (%)(2)

Last traded price per KBCF Share on 30 April 2009, being the last trading day 0.165 27.273preceding the Announcement Date

VWAP of the traded prices of the KBCF Shares for the one-month period 0.155 35.484preceding the Announcement Date

VWAP of the traded prices of the KBCF Shares for the three-month period 0.136 54.412preceding the Announcement Date

VWAP of the traded prices of the KBCF Shares for the six-month period 0.139 51.079preceding the Announcement Date

Notes:

(1) Source: Bloomberg as at 30 April 2009.

(2) Rounded to the nearest three decimal places.

1.3 Effect of the Scheme and Delisting. If the Scheme becomes effective and binding, KingboardLaminates, together with its subsidiaries and/or nominees, will own the entire issued share capitalof Kingboard Copper Foil, and Kingboard Copper Foil will become a wholly-owned subsidiary ofKingboard Laminates. An application has been made to the SGX-ST to seek the approval from theSGX-ST to delist the KBCF Shares from the SGX-ST upon the Scheme becoming effective andbinding and in connection therewith, the SGX-ST has granted its approval that, inter alia, subject tothe Scheme being approved by the independent Shareholders and the Court, it has no objection tothe proposed delisting of the KBCF Shares from the Official List of the SGX-ST. The SGX-ST’sapproval, however, is not to be taken as an indication of the merits of the proposed delisting, theScheme, the Company and/or its subsidiaries.

1.4 Capitalised Terms. Capitalised terms used in this Letter have the same meaning and constructionas those defined in the Scheme Document, unless the context otherwise requires.

2. RATIONALE FOR THE SCHEME



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(v) Opportunity for Relevant Shareholders to Participate in the Enlarged KingboardLaminates Group of Companies. The Scheme, through the Share Exchange Offer or theCombination Offer, presents the Relevant Shareholders with an opportunity to participate inthe upside potential of the enlarged Kingboard Laminates group of companies upon thesuccessful completion of the Scheme. The return-on-equity ratio (“ROE”)1 for KingboardLaminates is approximately 17.187 per cent. for the FY2008. This compares favourably tothe ROE1 of approximately 5.356 per cent. for Kingboard Copper Foil for the FY2008.


3. PRINCIPAL ACTIVITIES OF KINGBOARD LAMINATES

Kingboard Laminates was incorporated and registered as an exempted company with limitedliability in the Cayman Islands on 10 May 2006. Kingboard Laminates is a subsidiary of KingboardChemical, which was incorporated in the Cayman Islands as an exempted company with limitedliability. Both the shares of Kingboard Chemical and Kingboard Laminates are listed on the MainBoard of SEHK. Kingboard Laminates is a leading vertically-integrated electronics materialsmanufacturer, specialising in the production of laminates, including glass epoxy laminates, paperlaminates and composite epoxy material laminates.

4. FUTURE PLANS FOR THE KBCF GROUP

It is the intention of Kingboard Laminates that Kingboard Copper Foil will continue with its existingbusiness activities and Kingboard Laminates presently has no intention to (i) introduce any majorchanges to the business of Kingboard Copper Foil, (ii) redeploy the fixed assets of the KBCFGroup, or (iii) discontinue the employment of the employees of the KBCF Group. However, thedirectors of Kingboard Laminates retain the flexibility at any time to consider any options oropportunities in relation to the KBCF Group which may present themselves and which they mayregard to be in the best interest of Kingboard Laminates.


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5.1 Irrevocable Undertakings to Elect to Receive Cash Consideration

(i) Cash Consideration Irrevocable Undertakings. The Cash Consideration UndertakingShareholders have each given a Cash Consideration Irrevocable Undertaking to KingboardLaminates in which they undertake to elect to receive the Scheme Price in the form of theCash Consideration in respect of all their respective KBCF Shares, on and subject to theterms set out in their respective Cash Consideration Irrevocable Undertakings.

(ii) List of Cash Consideration Undertaking Shareholders. A list of the Cash ConsiderationUndertaking Shareholders as at the Latest Practicable Date is set out below.

Percentage of total Name of Cash Consideration No. of KBCF Shares held interest in the issued Undertaking Shareholder by such Shareholder (1) share capital (%) (2)

Ms Cheung Wai Kam 2,000 0.00028Mr Lai Chung Wing, Robert 72,000 0.00997

Total 74,000 0.01025

Notes:

(1) Based on information provided by each of the Cash Consideration Undertaking Shareholders.

(2) Based on an issued share capital of 722,500,000 KBCF Shares as at the Latest Practicable Date.

5.2 Condition. The Cash Consideration Irrevocable Undertakings are subject to the Scheme beingapproved by Shareholders at the Scheme Meeting.

5.3 Termination. The Cash Consideration Irrevocable Undertakings terminate on the earlier of: (a) thetermination of the Implementation Agreement or the Scheme lapsing, whichever is later; (b) thecompletion of the Scheme; or (c) the date on which Kingboard Laminates withdraws from theScheme.

6. DISCLOSURE OF SHAREHOLDINGS AND DEALINGS

6.1 Shareholdings and Dealings in KBCF Shares

(i) Shareholdings. Annex 2 to this Letter sets out the KBCF Shares owned, controlled oragreed to be acquired by Kingboard Laminates, its directors and any party deemed to beacting in concert with Kingboard Laminates as at the Latest Practicable Date.

(ii) No Other Holdings. Save as disclosed in Annex 2 to this Letter, as at the LatestPracticable Date, none of Kingboard Laminates, its directors, any party deemed to be actingin concert with Kingboard Laminates owns, controls, or has agreed to acquire any KBCFShares during the Reference Period. There are no other securities which carry voting rightsin Kingboard Copper Foil, securities which are convertible into KBCF Shares, or rights tosubscribe for, or options in respect of, such KBCF Shares or securities.

(iii) No Dealings. None of Kingboard Laminates, its directors, any party deemed to be acting inconcert with Kingboard Laminates has dealt for value in any KBCF Shares during theReference Period.


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6.2 Shareholdings and Dealings in KBL Shares

(i) Shareholdings. Annex 2 to this Letter sets out the KBL Shares owned, controlled or agreedto be acquired by the directors of Kingboard Laminates, any party deemed to be acting inconcert with Kingboard Laminates as at the Latest Practicable Date.

(ii) No Other Holdings. Save as disclosed in Annex 2 to this Letter, as at the LatestPracticable Date, none of the directors of Kingboard Laminates, any party deemed to beacting in concert with Kingboard Laminates owns, controls, or has agreed to acquire anyKBL Shares during the Reference Period. There are no other securities which carry votingrights in Kingboard Laminates, securities which are convertible into KBL Shares, or rights tosubscribe for, or options in respect of, such KBL Shares or securities.

(iii) No Dealings. None of the directors of Kingboard Laminates or any party deemed to beacting in concert with Kingboard Laminates has dealt for value in any KBL Shares during theReference Period.

6.3 No Other Irrevocable Undertakings. As at the Latest Practicable Date and save as disclosed inthis Letter, neither Kingboard Laminates nor any other party acting or deemed to be acting inconcert with it has received any irrevocable undertaking to vote, or procure the voting of, all itsrespective KBCF Shares in favour of or against the Scheme and any other matters necessary orproposed to implement the Scheme at the Scheme Meeting.

7. DISCLOSURES OF ARRANGEMENTS

7.1 No Agreement having any Connection with or Dependence upon the Scheme or ConditionalUpon Outcome of the Scheme. Save as disclosed in this Scheme Document, there is, as at theLatest Practicable Date, no agreement, arrangement or understanding between KingboardLaminates or any of the parties acting in concert with it and (i) any of the current or recentdirectors of Kingboard Copper Foil or (ii) any of the current or recent shareholders of KingboardCopper Foil or any other person, having any connection with or dependence upon the Scheme orwhich is conditional upon the outcome of the Scheme or otherwise connected with the Scheme.

7.2 Transfer of KBCF Shares. The KBCF Shares acquired by Kingboard Laminates pursuant to theScheme will be transferred by the Relevant Shareholders (not being Depositors), and in the caseof the Relevant Shareholders who are Depositors, by CDP on their behalf, to Kingboard Laminatesand/or its subsidiaries and/or nominees.

7.3 No Payment or Other Benefit. No payment or other benefit will be made or given to any Directoror any directors of any corporation which is deemed to be related to Kingboard Copper Foil, asdefined in Section 6 of the Companies Act, Chapter 50 of Singapore, as compensation for loss ofoffice or otherwise in connection with the Scheme.

7.4 Directors’ Service Contracts. As at the Latest Practicable Date, there is no agreement,arrangement or understanding between Kingboard Laminates or any of the parties acting inconcert with it and any director of Kingboard Laminates, whereby the total emoluments received bythe directors of Kingboard Laminates will be affected as a consequence of the Scheme.

7.5 Arrangements relating to the KBCF Shares. As at the Latest Practicable Date, save asdisclosed in this Scheme Document, neither Kingboard Laminates nor any party acting in concertwith it has entered into any arrangement with any person of the kind referred to in Note 7 on Rule12 of the Code, including indemnity or option arrangements, and any agreement or understanding,formal or informal, of whatever nature, relating to the KBCF Shares which may be an inducementto deal or refrain from dealing in the KBCF Shares.


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8. IMPLEMENTATION OF THE SCHEME

8.1 Application to Court for Sanction. Upon the Scheme being approved by a majority in number ofthe Members representing not less than three-fourths in value of the KBCF Shares held by theMembers present and voting either in person or by proxy at the Scheme Meeting, an applicationwill be made to the Court by Kingboard Copper Foil for sanction of the Scheme.

8.2 Election. All Relevant Shareholders have the discretion, subject to the terms set out herein, toreceive the Scheme Price in the form of the Cash Consideration, the Share Exchange Offer or theCombination Offer. However, for the avoidance of doubt, Depositors have the discretion to receivethe Scheme Price in the form of the Cash Consideration, the Share Exchange Offer or theCombination Offer only through CDP, the latter being the registered holder of KBCF Shares in theRegister of Members of Kingboard Copper Foil. Administrative arrangements have been made withCDP to allow Depositors to make such election. For the purpose of the Scheme, the term“Shareholders” has been defined to also include references to Depositors where the context admitsand they will accordingly be treated administratively herein, where the context admits, asshareholders of Kingboard Copper Foil with entitlements in respect of the Scheme. Subject toparagraph 14 of the Explanatory Statement, the Election Forms are expected to be despatchedafter the Court sanctions the Scheme (which is likely to be on or around 14 August 2009 (Bermudatime)) to all Relevant Shareholders at their respective addresses shown in the Register ofMembers of Kingboard Copper Foil or the records of CDP, as the case may be, at their own risk.The Election Forms can also be collected at the Singapore Share Transfer Agent’s office situatedat 3 Anson Road #27-01, Springleaf Tower, Singapore 079909 during the Election Period. TheRelevant Shareholders should complete, sign and return the Election Forms in accordance with theprovisions and instructions printed on the forms during the Election Period.

If the Relevant Shareholder wishes to receive the Scheme Price wholly in the form of the CashConsideration in respect of all of his KBCF Shares, he does not need to complete and return theElection Form.

The Election Forms must be received by the end of the Election Period which is expected to be 16September 2009 at 5.00 p.m.. Each Relevant Shareholder is permitted to submit only one ElectionForm and any subsequent submission of any Election Form will be disregarded and deemed asinvalid. If the Singapore Share Transfer Agent or CDP fails to receive from any RelevantShareholder an Election Form by this date or receives an Election Form which does not complywith the instructions contained in the Election Form, or which is not complete or is invalid in anyother respect, that Relevant Shareholder shall be deemed to have elected to receive the SchemePrice in the form of the Cash Consideration in exchange for all his KBCF Shares.

Kingboard Laminates shall not be required to notify any Relevant Shareholder if his Election Formis not received or is not in compliance with the instructions contained in the Election Form, or isotherwise incomplete or invalid in any other respect.

8.3 Implementation of the Scheme. Paragraphs 8.4 and 8.5 below set out the procedure for theimplementation of the Scheme as well as the procedures for settlement and registration.

8.4 Procedure. If the Members approve the Scheme at the Scheme Meeting and the Court sanctionsthe Scheme, Kingboard Laminates and Kingboard Copper Foil will take the necessary steps torender the Scheme effective and the following will be implemented:

(i) the KBCF Shares held by the Relevant Shareholders (not being Depositors) will betransferred (and in the case of the Relevant Shareholders who are Depositors, the KBCFShares held by such Relevant Shareholders will be transferred by CDP) to KingboardLaminates (or such entity or person as may be designated by Kingboard Laminates) and theScheme Price will be paid by Kingboard Laminates to the Relevant Shareholders (not beingDepositors) (and in the case of Relevant Shareholders who are Depositors, the SchemePrice will be paid to CDP and/or the Depositor, as the case may be) for each KBCF Sharetransferred in the manner set out in sub-paragraph (iv) below;


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(ii) as of and from the Effective Date, all existing share certificates relating to the KBCF Sharesheld by CDP and the Relevant Shareholders (not being Depositors) will cease to have anyeffect as evidence of title of the KBCF Shares represented thereby;

(iii) Relevant Shareholders (not being Depositors) are required to forward their existing sharecertificates relating to their KBCF Shares to the Singapore Share Transfer Agent’s office at 3Anson Road #27-01, Springleaf Tower, Singapore 079909 before the Effective Date forcancellation; and

(iv) not later than ten (10) calendar days after the Effective Date and against the transfer of theKBCF Shares set out in sub-paragraph (i) above:


Kingboard Laminates shall pay cash to the Relevant Shareholders who elect to andare entitled to receive the Scheme Price in the form of the Cash Consideration for allof their KBCF Shares and those whose Election Forms have not been received by theend of the Election Period which is expected to be 16 September 2009 at 5.00 p.m...


Kingboard Laminates shall pay each Relevant Shareholder (not being aDepositor) by sending a cheque for the Cash Consideration payable to andmade out in favour of such Relevant Shareholder by ordinary post to hisaddress in the Register of Members of Kingboard Copper Foil at the close ofbusiness on the Books Closure Date, at the sole risk of such RelevantShareholder, or in the case of joint Relevant Shareholders, to the first namedRelevant Shareholder made out in favour of such Relevant Shareholder byordinary post to his address in the Register of Members of Kingboard CopperFoil at the close of business on the Books Closure Date, at the sole risk of suchjoint Relevant Shareholders; and


Kingboard Laminates shall pay each Relevant Shareholder (being a Depositor)by making payment of the Cash Consideration payable to such RelevantShareholder to CDP. CDP shall:

(i) in the case of a Relevant Shareholder (being a Depositor) who hasregistered for CDP’s direct crediting service, credit the CashConsideration payable to such Relevant Shareholder, to the designatedbank account of such Relevant Shareholder; and

(ii) in the case of a Relevant Shareholder (being a Depositor) who has notregistered for CDP’s direct crediting service, send to such RelevantShareholder, by ordinary post to his address in the Depository Registerat the close of business on the Books Closure Date and at the sole riskof such Relevant Shareholder, a cheque for the payment of such CashConsideration made out in favour of such Relevant Shareholder.

Assuming that the Scheme becomes effective and binding on 23 September2009, the crediting by CDP of the Cash Consideration into the designated bankaccounts of the Relevant Shareholders (in the case of Relevant Shareholdersbeing Depositors and who have registered with CDP for its direct creditingservice) or, as the case may be, the posting of cheques for the CashConsideration in the manner set out in sub-paragraphs (iv)(a)(1) and (iv)(a)(2)above, is expected to take place on or before 2 October 2009.


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On or after the day being six (6) calendar months after the posting of suchcheques by Kingboard Laminates, Kingboard Laminates shall have the right tocancel or countermand payment of any such cheque which has not beencashed (or has been returned uncashed) and shall place all such moneys in abank account in Kingboard Copper Foil’s name with a licensed bank inSingapore selected by Kingboard Copper Foil. Kingboard Copper Foil or itssuccessor entity shall hold such moneys until the expiration of six (6) yearsfrom the Effective Date and shall prior to such date make payments therefromof the sums (without interest) payable pursuant to Clause 2 of the Scheme setout in pages 224 to 230 of this Scheme Document to persons who satisfyKingboard Copper Foil or its successor entity that they are respectively entitledthereto and that the cheques referred to in Clauses 3(a)(1) and 3(a)(2) of theScheme set out in pages 224 to 230 of this Scheme Document of which theyare payees have not been cashed. Kingboard Copper Foil or its successorentity shall, in its absolute discretion, determine whether any such person is soentitled and any such determination shall be conclusive and binding upon allpersons claiming an interest in the relevant moneys.

On the expiry of six (6) years from the Effective Date, Kingboard Laminatesshall be released from any further obligation to make any payments under theScheme and Kingboard Copper Foil or its successor entity shall transfer toKingboard Laminates the balance (if any) of the sums then standing to thecredit of the bank account referred to in Clause 3(a) of the Scheme set out inpages 224 to 230 of this Scheme Document including accrued interest subject,if applicable, to the deduction of interest, tax or any withholding tax or any otherdeduction required by law and subject to the deduction of any expenses.


Kingboard Laminates shall allot and issue New KBL Shares, credited as fully-paid, onthe basis of 0.374 New KBL Shares at the Issue Price per New KBL Share for everyone KBCF Share held by such Relevant Shareholder (not being Depositors) or CDP(as regards Relevant Shareholders who are Depositors), who elects to and is entitledto receive the Scheme Price in the form of the Share Exchange Offer for all of theirKBCF Shares.


Kingboard Laminates shall send the share certificates representing the relevantnumber of New KBL Shares to each Relevant Shareholder (not being aDepositor) by post to his address in the Register of Members of KingboardCopper Foil at the close of business on the Books Closure Date, at the sole riskof such Relevant Shareholder, or in the case of joint Relevant Shareholders, tothe first named Relevant Shareholder by post to his address in the Register ofMembers of Kingboard Copper Foil at the close of business on the BooksClosure Date, at the sole risk of such joint Relevant Shareholder.


Kingboard Laminates shall send the share certificates representing the relevantnumber of New KBL Shares to each Relevant Shareholder (being a Depositor)by post to his address in the Depository Register at the close of business onthe Books Closure Date and at the sole risk of such Relevant Shareholder.


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Assuming that the Scheme becomes effective and binding on 23 September 2009, theposting of the share certificates representing the New KBL Shares to be allotted andissued pursuant to the Scheme in the manner set out in sub-paragraphs (iv)(b)(1)and (iv)(b)(2) above, is expected to take place on or before 2 October 2009.

The New KBL Shares to be allotted and issued pursuant to the Scheme shall beallotted and issued and credited as fully paid and, if and when allotted and issued, willrank pari passu in all respects with the then existing KBL Shares.

The full terms and conditions of the KBL Shares are set out in the Memorandum andArticles of Association of Kingboard Laminates. An extract of some of these terms andconditions can be found in paragraph 1.4 of Annex 1 of this Letter.


In respect of the Cash Consideration component of the Combination Offer, theprocedure for settlement shall be as described above in respect of the CashConsideration.


8.5 Settlement and Registration. Subject to the Scheme becoming effective and binding, thefollowing settlement and registration procedures will apply:

(i) Relevant Shareholders whose KBCF Shares are not deposited with CDP

Entitlements of Relevant Shareholders (not being Depositors), whose KBCF Shares are notdeposited with CDP, to the Scheme Price will be determined on the basis of theShareholders (not being Depositors) and their holdings of KBCF Shares appearing in theRegister of Members at 5.00 p.m. on the Books Closure Date, which is tentatively scheduledon 28 August 2009.

Relevant Shareholders (not being Depositors) who have not yet done so are requested totake the necessary action to ensure that the KBCF Shares owned by them are registered intheir names by the Books Closure Date, which is expected to be on 28 August 2009 at 5.00 p.m..

As of and from the Effective Date, each existing share certificate representing a formerholding of KBCF Shares by the Relevant Shareholders (not being Depositors) will cease tobe evidence of title to the KBCF Shares represented thereby. Within ten (10) calendar daysafter the Effective Date, Kingboard Laminates or CDP, on behalf of Kingboard Laminatesshall make payment of the Scheme Price to each Relevant Shareholder based on hisholding of the KBCF Shares as at the Books Closure Date.

(ii) Relevant Shareholders whose KBCF Shares are deposited with CDP

Entitlements of Relevant Shareholders, whose KBCF Shares are deposited with CDP, to theScheme Price will be determined on the basis of the Shareholders (being Depositors) andthe number of KBCF Shares standing to the credit of their Securities Account at 5.00 p.m.on the Books Closure Date, which is expected to be 28 August 2009.

Relevant Shareholders (being Depositors) who have not yet done so are requested to takethe necessary action to ensure that the KBCF Shares owned by them are credited to theirSecurities Account by 5.00 p.m. on the Books Closure Date.


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From the Effective Date, CDP will debit from each relevant Securities Account the number ofKBCF Shares standing to the credit of the Securities Account of the relevant RelevantShareholder (being a Depositor). Within ten (10) calendar days after the Effective Date,Kingboard Laminates or CDP, as the case may be, shall make payment of the Scheme Priceto each Relevant Shareholder (being a Depositor) based on the number of KBCF Sharesstanding to the credit of his Securities Account as at the Books Closure Date.

9. DIRECTORS OF KINGBOARD LAMINATES

The names, addresses and designations of the directors of Kingboard Laminates as at the LatestPracticable Date are set out below:

Name Address Designation

Cheung Kwok Wa 2/F., Harbour View 1, ChairmanNo.12 Science Park East Avenue, Phase II Hong Kong Science Park, Shatin, N.T., Hong Kong

Cheung Kwok Keung 2/F., Harbour View 1, Executive ManagingNo.12 Science Park East Avenue, Director Phase II Hong Kong Science Park, Shatin, N.T., Hong Kong

Cheung Kwok Ping 2/F., Harbour View 1, Executive Director No.12 Science Park East Avenue, Phase II Hong Kong Science Park, Shatin, N.T., Hong Kong

Lam Ka Po 2/F., Harbour View 1, Executive DirectorNo.12 Science Park East Avenue, Phase II Hong Kong Science Park, Shatin, N.T., Hong Kong

Cheung Ka Ho 2/F., Harbour View 1, Executive DirectorNo.12 Science Park East Avenue, Phase II Hong Kong Science Park, Shatin, N.T., Hong Kong

Chan Sau Chi 2/F., Harbour View 1, Executive DirectorNo.12 Science Park East Avenue, Phase II Hong Kong Science Park, Shatin, N.T., Hong Kong

Liu Min 2/F., Harbour View 1, Executive DirectorNo.12 Science Park East Avenue, Phase II Hong Kong Science Park, Shatin, N.T., Hong Kong

Zhou Pei Feng 2/F., Harbour View 1, Executive DirectorNo.12 Science Park East Avenue, Phase II Hong Kong Science Park, Shatin, N.T., Hong Kong


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Lo Ka Leong 2/F., Harbour View 1, Non-Executive DirectorNo.12 Science Park East Avenue,Phase II Hong Kong Science Park, Shatin, N.T., Hong Kong

Chan Charnwut 2/F., Harbour View 1, Independent Non-ExecutiveBernard No.12 Science Park East Avenue, Director

Phase II Hong Kong Science Park, Shatin, N.T., Hong Kong

Chan Yue Kwong, 2/F., Harbour View 1, Independent Non-ExecutiveMichael No.12 Science Park East Avenue, Director

Phase II Hong Kong Science Park, Shatin, N.T., Hong Kong

Leung Tai Chiu 2/F., Harbour View 1, Independent Non-ExecutiveNo.12 Science Park East Avenue, DirectorPhase II Hong Kong Science Park, Shatin, N.T., Hong Kong

Mok Yiu Keung, Peter 2/F., Harbour View 1, Independent Non-ExecutiveNo.12 Science Park East Avenue, DirectorPhase II Hong Kong Science Park,Shatin, N.T., Hong Kong

Mr Cheung Kwok Ping and Mr Lam Ka Po are also executive directors of Kingboard Copper Foil.

10. FINANCIAL INFORMATION RELATING TO KINGBOARD LAMINATES

10.1 Financial Summary. Set out below are certain financial information extracted from KingboardLaminates’ annual reports for FY2006, FY2007 and FY2008 respectively. The financial informationfor FY2006, FY2007 and FY2008 should be read in conjunction with the audited consolidatedfinancial statements and related notes thereto of the KBL Group for FY2006, FY2007 and FY2008respectively.

FY2006 FY2007 FY2008HK$’000 HK$’000 HK$’000

Turnover 8,472,422 10,426,783 10,127,764

Exceptional items 1,498 – 26,800

Profit before tax 1,887,260 2,054,835 1,321,136

Profit after tax 1,741,411 1,925,609 1,250,670

Minority interests 103,277 112,340 46,866

Net earnings per KBL Share (Hong Kong cents) 57.3 60.4 40.1


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Set out below is also a summary of the dividend per KBL Share declared in respect of each ofFY2006, FY2007 and FY2008 by Kingboard Laminates. This information was also extracted fromKingboard Laminates’ annual reports for FY2006, FY2007 and FY2008 respectively.

HK$

In respect of FY2006

Interim dividend 9.09

Special Dividend 0.702



Final dividend 0.20



Final dividend 0.10

Copies of the annual reports of Kingboard Laminates for FY2006, FY2007 and FY2008 areavailable for inspection at the office of the Singapore Share Transfer Agent. The auditedconsolidated financial statements of the KBL Group for FY2008 are set out in Annex 3 to thisLetter.

10.2 Material Changes in Financial Position of Kingboard Laminates. Save as disclosed in theaudited consolidated financial statements of the KBL Group for FY2008 and any other informationon the KBL Group which is publicly available (including without limitation, the announcementsreleased by Kingboard Laminates on the website of SEHK), there have been no known materialchanges to the financial position of the KBL Group since 31 December 2008, being the date of thelast audited accounts of the KBL Group laid before the shareholders of Kingboard Laminates ingeneral meeting.

10.3 Significant Accounting Policies. The significant accounting policies of the KBL Group are set outin the notes to the audited financial statements of the KBL Group for FY2008 and are set out inAnnex 3 to this Letter.

10.4 Changes in Accounting Policies. The changes in the significant accounting policies of the KBLGroup are set out in the notes to the audited financial statements of the KBL Group for FY2008and are set out in Annex 3 to this Letter.

10.5 Further Information. Annex 1 of this Letter sets out additional information relating to KingboardLaminates. The audited consolidated financial statements of the KBL Group for FY2008 are set outin Annex 3 to this Letter.

10.6 Changes since the Announcement Date. As at the Latest Practicable Date, there have been nomaterial changes to the information previously published by, or on behalf of, Kingboard Laminatessince the Announcement Date.


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11. GENERAL AND FINANCIAL INFORMATION RELATING TO KINGBOARD COPPER FOIL

11.1 Transfer Restrictions. As far as Kingboard Laminates is aware, there is no restriction in theMemorandum of Association and Bye-laws of Kingboard Copper Foil on the right to transfer anyKBCF Shares which has the effect of requiring the Shareholders, before transferring them, to offerthem for purchase to other Shareholders or to any other person.

11.2 Material Changes in Financial Position of Kingboard Copper Foil. Save as disclosed in theScheme Document and in the audited consolidated financial statements of the KBCF Group forFY2008, within the knowledge of the directors of Kingboard Laminates, there are no other knownmaterial changes in the financial position or prospects of Kingboard Copper Foil subsequent to thelast published audited consolidated financial statements of the KBCF Group for FY2008.

12. ULTIMATE HOLDER OF KBCF SHARES

It is the current intention of Kingboard Laminates that all KBCF Shares held by the RelevantShareholders as at the Books Closure Date, which will be transferred pursuant to the Scheme, betransferred to Excel First which is a wholly-owned subsidiary of Kingboard Laminates. As at theLatest Practicable Date, Excel First has a direct interest of approximately 62.15 per cent. in theissued share capital of Kingboard Copper Foil, and an indirect interest of approximately 1.82 percent. in the issued share capital of Kingboard Copper Foil, through its wholly owned subsidiary,Kingboard Laminates Limited.

13. KINGBOARD COPPER FOIL MARKET QUOTATIONS

13.1 Closing Prices. The following table sets out the closing prices of the KBCF Shares on the SGX-ST as at the following dates:

Closing Date Price (S$)

2 July 2009 (the Latest Practicable Date) 0.230

30 April 2009 (the last Business Day immediately preceding the Announcement Date) 0.165

31 March 2009 0.120

27 February 2009 0.130

30 January 2009 0.160

31 December 2008 0.185

28 November 2008 0.120

Source: Bloomberg as at 2 July 2009

13.2 Highest and Lowest Prices. The highest and lowest closing prices of the KBCF Shares on theSGX-ST during the period commencing six months prior to 4 May 2009 (being the AnnouncementDate) and ending on the Latest Practicable Date are as follows:

(i) highest closing price: S$0.250 per KBCF Share, transacted on 5 June 2009; and

(ii) lowest closing price: S$0.105 per KBCF Share, transacted on 19 March 2009 and 20 March2009.


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14. CONFIRMATION OF FINANCIAL RESOURCES

DBS Bank Ltd., as financial adviser to Kingboard Laminates in connection with the Scheme,confirms that sufficient financial resources are available to Kingboard Laminates to satisfy in fullthe aggregate Scheme Price payable by it for all the KBCF Shares to be acquired by it pursuant tothe Scheme.

15. RESPONSIBILITY STATEMENT

The directors of Kingboard Laminates (including any who may have delegated detailed supervisionof the preparation of this Letter) have taken all reasonable care to ensure that the facts stated andall opinions expressed in this Letter (excluding information relating to Kingboard Copper Foil) arefair and accurate and that no material facts in relation thereto have been omitted from this Letter,and they jointly and severally accept responsibility accordingly. Where any information has beenextracted or reproduced from published or otherwise publicly available sources, the soleresponsibility of the directors of Kingboard Laminates has been to ensure through reasonableenquiries that such information is accurately extracted from such sources or, as the case may be,reflected or reproduced in this Letter. The directors of Kingboard Laminates do not accept anyresponsibility for any information relating to or opinions expressed by Kingboard Copper Foil in thisLetter.

Yours faithfullyFor and on behalf ofKINGBOARD LAMINATES HOLDINGS LIMITED

Cheung Kwok WaChairman


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Annex 1

Additional Information Relating to Kingboard Laminates

1. SHARE CAPITAL

1.1 Authorised Share Capital. As at the Latest Practicable Date, Kingboard Laminates has anauthorised share capital of HK$2,000,000,000 comprising 20,000,000,000 ordinary shares ofHK$0.10 each.

1.2 Issued Share Capital. As at the Latest Practicable Date, Kingboard Laminates has an issuedshare capital of HK$300,000,000 comprising 3,000,000,000 ordinary shares of HK$0.10 each.

1.3 Issued KBL Shares Since 31 December 2008. As at 31 December 2008, being the end ofKingboard Laminates’ last financial year, Kingboard Laminates had issued 3,000,000,000 KBLShares. Since 31 December 2008 and up to the Latest Practicable Date, Kingboard Laminateshas not issued any further KBL Shares.

1.4 KBL Shares. As at the Latest Practicable Date, Kingboard Laminates has one class of ordinaryshares. The rights and privileges attached to the KBL Shares are stated in the Memorandum andArticles of Association of Kingboard Laminates. For ease of reference, selected texts of the Articlesof Association of Kingboard Laminates have been reproduced in this paragraph 1.4 of this Annex1. Capitalised terms used in this paragraph 1.4 of this Annex 1 shall have the meaning given tothem in the Articles of Association of Kingboard Laminates.

Share and Share Capital

(i) “Article 3

The capital of the Company at the date of the adoption of these Articles isHK$2,000,000,000 divided into 20,000,000,000 shares of HK$0.10 each.

(ii) Article 4

Subjection to the provisions of these Articles and to any direction that may be given bythe Company in general meeting and without prejudice to any special rights conferred onthe holders of any existing shares or attaching to any class of shares, any share may beissued with or have attached thereto such preferred, deferred, qualified or other specialrights or restrictions, whether in regard to dividend, voting, return of capital or otherwise,and to such persons at such times and for such consideration as the Board maydetermine provide always that where the Company issues shares which do not carryingvoting rights, the words “non-voting” shall appear in the designation of such shares andwhere the equity capital includes shares with different voting rights, the designation ofeach class of shares, other than those with the most favourable voting rights, must includethe words “restricted voting” or “limited voting”. Subject to the Law and to any specialrights conferred on any shareholders or attaching to any class of shares, any share may,with the sanction of a special resolution, be issued on terms that it is, or at the Option ofthe Company or the holder thereof is, liable to be redeemed. No shares shall be issued tobearer.


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(iii) Article 5

Subject to the Listing Rules, the Board may issue warrants to subscribe for any class ofshares or other securities of the Company on such terms as it may from time to timedetermine. No warrants shall be issued to bearer for so long as a recognised clearinghouse (in its capacity as such) is a member of the Company. Where warrants are issuedto bearer, no new warrant shall be issued to replace one that has been lost unless theBoard is satisfied beyond reasonable doubt that the original has been destroyed and theCompany has received an indemnity in such form as the Board shall think fit with regardto the issue of any such new warrant.

(iv) Article 6

If at any time the share capital of the Company is divided into different classes of shares,all or any of the rights attached to any class of shares for the time being issued (unlessotherwise provided for in the terms of issue of the shares of that class) may, subject to theprovisions of the Law, be varied or abrogated with the consent in writing of the holders ofnot less than three-fourths in nominal value of the issued shares of that class or with thesanction of a special resolution passed at a separate meeting of the holders of shares ofthat class. To every such separate meeting all the provisions of these Articles relating togeneral meetings shall mutatis mutandis apply, but so that the quorum for the purposes ofany such separate meeting and of any adjournment thereof shall be a person or personstogether holding (or representing by proxy or duly authorised representative) at the date ofthe relevant meeting not less than one-third in nominal value of the issued shares of thatclass.

(v) Article 7

The special rights conferred upon the holders of shares of any class shall not, unlessotherwise expressly provided in the rights attaching to or the terms of issue of suchshares, be deemed to be varied by the creation or issue of further shares ranking paripassu therewith.

(vi) Article 8

Subject to the Law, or any other law or so far as not prohibited by any law and subject toany rights conferred on the holders of any class of shares, the Company shall have thepower to purchase or otherwise acquire all or any of its own shares (which expression asused in this Article includes redeemable shares) provided that the manner of purchasehas first been authorised by a resolution of the shareholders, and to purchase orotherwise acquire warrants for the subscription or purchase of its own shares, and sharesand warrants for the subscription or purchase of any shares in any company which is itsholding company and may make payment therefor in any manner authorised or notprohibited by law, including out of capital, or to give, directly or indirectly, by means of aloan, a guarantee, a gift, an indemnity, the provision of security or otherwise howsoever,financial assistance for the purpose of or in connection with a purchase or otheracquisition made or to be made by any person of any shares or warrants in the Companyor any company which is a holding company of the Company and should the Companypurchase or otherwise acquire its own shares or warrants neither the Company nor theBoard shall be required to select the shares or warrants to be purchased or otherwiseacquired rateably or in any other manner as between the holders of shares or warrants ofthe same class or as between them and the holders of shares or warrants of any otherclass or in accordance with the rights as to dividends or capital conferred by any class ofshares provided always that any such purchase or other acquisition or financialassistance shall only be made in accordance with any relevant code, rules or regulationsissued by the Exchange or the Securities and Futures Commission of Hong Kong fromtime to time in force.


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(vii) Article 9

The Company in general meeting may, from time to time, whether or not all the shares forthe time being authorised shall have been issued and whether or not all the shares for thetime being issued shall have been fully paid up, by ordinary resolution, increase its sharecapital by the creation of new shares, such new capital to be of such amount and to bedivided into shares of such respective amounts as the resolution shall prescribe.

(viii) Article 10

Subject to the provisions of the Law and the Memorandum of Association of theCompany, and to any special rights conferred on the holders of any shares or attaching toany class of shares, shares may be issued on the terms that they may be, or at the optionof the Company or the holders are, liable to be redeemed on such terms and in suchmanner, including out of capital, as the Board may deem fit.

(ix) Article 11

Where the Company purchases for redemption a redeemable share, purchases not madethrough the market or by tender shall be limited to a maximum price, and if purchases areby tender, tenders shall be available to all shareholders alike.

(x) Article 12

The purchase or redemption of any share shall not be deemed to give rise to thepurchase or redemption of any other share.

(xi) Article 13

The holder of the shares being purchased, surrendered or redeemed shall be bound todeliver up to the Company at its principal place of business in Hong Kong or such otherplace as the Board shall specify the certificate(s) thereof for cancellation and thereuponthe Company shall pay to him the purchase or redemption monies in respect thereof.

(xii) Article 14

Subject to the provisions of the Law, of the Memorandum of Association of the Company,and of these Articles relating to new shares, the unissued shares in the Company(whether forming part of its original or any increased capital) shall be at the disposal ofthe Board, which may offer, allot, grant options over or otherwise dispose of them to suchpersons, at such times and for such consideration, and upon such terms, as the Boardshall determine.

(xiii) Article 15

The Company may, unless prohibited by law, at any time pay a commission to any personfor subscribing or agreeing to subscribe (whether absolutely or conditionally) for anyshares in the Company or procuring or agreeing to procure subscriptions (whetherabsolute or conditional) for any shares in the Company, but so that the conditions andrequirements of the Law shall be observed and complied with, and in each case thecommission shall not exceed 10 per cent. of the price at which the shares are issued.

(xiv) Article 16

Except as otherwise expressly provided by these Articles or as required by law or asordered by a court of competent jurisdiction, no person shall be recognised by theCompany as holding any share upon any trust and the Company shall not be bound by orbe compelled in any way to recognise (even when having notices thereof) any equitable,contingent, future or partial interest in any shares or any interest in any fractional part of ashare or any other rights in respect of any share except an absolute right to the entiretythereof in the registered holder.


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(xv) Article 33

The Board may from time to time make such calls as it may think fit upon the members inrespect of any monies unpaid on the shares held by them respectively (whether onaccount of the nominal amount of the shares or by way of premium or otherwise) and notby the conditions of allotment thereof made payable at fixed times. A call may be madepayable either in one sum or by instalments. A call may be revoked or postponed as theBoard may determine.

(xvi) Article 34

At least 14 days’ notice of any call shall be given to each member specifying the time andplace of payment and to whom such payment shall be made.

(xvii) Article 35

A copy of the notice referred to in Article 34 shall be sent in the manner in which noticesmay be sent to members by the Company as herein provided.

(xviii) Article 36

Every member upon whom a call is made shall pay the amount of every call so made onhim to the person and at the time or times and place or places as the Board shall specify.A person upon whom a call is made shall remain liable on such call notwithstanding thesubsequent transfer of the shares in respect of which the call was made.

(xix) Article 37

In addition to the giving of notice in accordance with Article 35, notice of the personappointed to receive payment of every call and of the times and places appointed forpayment may be given to the members affected by notice published on the Exchange’swebsite or, subject to the Listing Rules, by electronic communication in the manner inwhich notices may be served by the Company by electronic means as herein provided orby advertisement published in the newspapers.

(xx) Article 38

A call shall be deemed to have been made at the time when the resolution of the Boardauthorising such call was passed.

(xxi) Article 39

The joint holders of a share shall be severally as well as jointly liable for the payment of allcalls and instalments due in respect of such share or other moneys due in respectthereof.

(xxii) Article 40

The Board may from time to time at its discretion extend the time fixed for any call, andmay extend such time as to all or any of the members, whom by reason of residenceoutside Hong Kong or other cause the Board considers it reasonable to grant anextension to, but no member shall be entitled to any such extension as a matter of graceand favour.

(xxiii) Article 41

If the sum or any instalment payable in respect of any call is unpaid on or before the dayappointed for payment thereof, the person or persons from whom the sum is due shall payinterest on the same at such rate not exceeding 15 per cent. per annum as the Boardshall determine from the day appointed for the payment thereof to the time of actualpayment, but the Board may waive payment of such interest wholly or in part.


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(xxiv) Article 42

No member shall be entitled to receive any dividend or bonus or to be present and vote(save as proxy for another member) at any general meeting, either personally or by proxy,or be reckoned in a quorum, or to exercise any other privilege as a member until all sumsor instalments due from him to the Company in respect of any call, whether alone orjointly with any other person, together with interest and expenses (if any) shall have beenpaid.

(xxv) Article 43

At the trial or hearing of any action or other proceedings for the recovery of any moneydue for any call, it shall be sufficient to prove that the name of the member sued isentered in the register as the holder, or one of the holders, of the shares in respect ofwhich such debt accrued; that the resolution making the call is duly recorded in theminute book; and that notice of such call was duly given to the member sued, inpursuance of these Articles; and it shall not be necessary to prove the appointment of theDirectors who made such call, nor any other matters whatsoever, and the proof of thematters aforesaid shall be conclusive evidence of the debt.

(xxvi) Article 44

Any sum which by the terms of allotment of a share is made payable upon allotment or atany fixed date, whether on account of the nominal value of the share and/or by way ofpremium or otherwise, shall for all purposes of these Articles be deemed to be a call dulymade and payable on the date fixed for payment, and in case of non-payment, all therelevant provisions of these Articles as to payment of interest and expenses, liabilities ofjoint holders, forfeiture and the like, shall apply as if such sum had become payable byvirtue of a call duly made and notified.

(xxvii) Article 45

The Board may, if it thinks fit, receive from any member willing to advance the same, andeither in money or money’s worth, all or any part of the money uncalled and unpaid orinstalments payable upon any shares held by him, and upon all or any of the moneys soadvanced the Company may pay interest at such rate (if any) as the Board may decide.The Board may at any time repay the amount so advanced upon giving to such membernot less than one month’s notice in writing of its intention in that behalf, unless before theexpiration of such notice the amount so advanced shall have been called up on theshares in respect of which it was advanced. No such sum paid in advance of calls shallentitle the member paying such sum to any portion of a dividend declared in respect ofany period prior to the date upon which such sum would, but for such payment, becomepresently payable.

Voting and Meetings

(xxviii) Article 77

The Company shall in each year hold a general meeting as its annual general meeting inaddition to any other meeting in that year and shall specify the meeting as such in thenotices calling it; and not more than 15 months shall elapse (or such longer period as theExchange may authorise) between the date of one annual general meeting of theCompany and that of the next. So long as the first annual general meeting of theCompany is held within 18 months of its incorporation, it need not be held in the year ofits incorporation or in the following years. The annual general meeting shall be held atsuch time and place as the Board shall appoint.


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(xxix) Article 78

All general meetings other than annual general meetings shall be called extraordinarygeneral meetings.

(xxx) Article 79

The Board may, whenever it thinks fit, convene an extraordinary general meeting.General meetings shall also be convened on the written requisition of any two or moremembers of the Company deposited at the principal office of the Company in Hong Kongor, in the event the Company ceases to have such a principal office, the registered officespecifying the objects of the meeting and signed by the requisitionists, provided that suchrequisitionists held as at the date of deposit of the requisition not less than one-tenth ofthe paid up capital of the Company which carries the right of voting at general meetings ofthe Company. General meetings may also be convened on the written requisition of anyone member of the Company which is a recognised clearing house (or its nominee(s))deposited at the principal office of the Company in Hong Kong or, in the event theCompany ceases to have such a principal office, the registered office specifying theobjects of the meeting and signed by the requisitionist, provided that such requisitionistheld as at the date of deposit of the requisition not less than one-tenth of the paid upcapital of the Company which carries the right of voting at general meetings of theCompany. If the Board does not within 21 days from the date of deposit of the requisitionproceed duly to convene the meeting to be held within a further 21 days, therequisitionist(s) themselves or any of them representing more than one-half of the totalvoting rights of all of them, may convene the general meeting in the same manner, asnearly as possible, as that in which meetings may be convened by the Board providedthat any meeting so convened shall not be held after the expiration of three months fromthe date of deposit of the requisition, and all reasonable expenses incurred by therequisitionist(s) as a result of the failure of the Board shall be reimbursed to them by theCompany.

(xxxi) Article 80

An annual general meeting and any extraordinary general meeting called for the passingof a special resolution shall be called by not less than 20 business days’ notice or 21days’ notice (whichever is longer) in writing and any other extraordinary general meetingshall be called by not less than 10 business days’ notice or 14 days’ notice (whichever islonger) in writing. The notice shall be inclusive of the day on which it is served or deemedto be served and of the day for which it is given, and shall specify the time, place andagenda of the meeting, particulars of the resolutions to be considered at the meeting andin the case of special business (as defined in Article 85) the general nature of thatbusiness. The notice convening an annual general meeting shall specify the meeting assuch, and the notice convening a meeting to pass a special resolution shall specify theintention to propose the resolution as a special resolution. Notice of every generalmeeting shall be given to the Auditors and to all members other than such as, under theprovisions hereof or the terms of issue of the shares they hold, are not entitled to receivesuch notice from the Company.

(xxxii) Article 81

Notwithstanding that a meeting of the Company is called by shorter notice than thatreferred to in Article 80, it shall be deemed to have been duly called if it is so agreed:

81.1 in the case of a meeting called as an annual general meeting, by all themembers of the Company entitled to attend and vote thereat or their proxies; and

81.2 in the case of any other meeting, by a majority in number of the members havinga right to attend and vote at the meeting, being a majority together holding notless than 95 per cent. in nominal value of the shares giving that right.


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(xxxiii) Article 82

There shall appear with reasonable prominence in every notice of general meetings of theCompany a statement that a member entitled to attend and vote is entitled to appoint aproxy to attend and vote instead of him and that a proxy need not be a member of theCompany.

(xxxiv) Article 83

The accidental omission to give any such notice to, or the non-receipt of any such noticeby, any person entitled to receive notice shall not invalidate any resolution passed or anyproceeding at any such meeting.

(xxxv) Article 84

In cases where instruments of proxy are sent out with notices, the accidental omission tosend such instrument of proxy to, or the non-receipt of such instrument of proxy by, anyperson entitled to receive notice shall not invalidate any resolution passed or anyproceeding at any such meeting.

(xxxvi) Article 85

All business shall be deemed special that is transacted at an extraordinary generalmeeting and also all business shall be deemed special that is transacted at an annualgeneral meeting with the exception of the following, which shall be deemed ordinarybusiness:

85.1 the declaration and sanctioning of dividends;

85.2 the consideration and adoption of the accounts and balance sheets and thereports of the Directors and Auditors and other documents required to beannexed to the balance sheet;

85.3 the election of Directors in place of those retiring;

85.4 the appointment of Auditors;

85.5 the fixing of, or the determining of the method of fixing of, the remuneration ofthe Directors and of the Auditors;

85.6 the granting of any mandate or authority to the Directors to offer, allot, grantoptions over, or otherwise dispose of the unissued shares of the Companyrepresenting not more than 20 per cent. (or such other percentage as may fromtime to time be specified in the Listing Rules) in nominal value of its then existingissued share capital and the number of any securities repurchased pursuant toArticle 85.7; and

85.7 the granting of any mandate or authority to the Directors to repurchase securitiesof the Company.

(xxxvii) Article 86

For all purposes the quorum for a general meeting shall be two members present inperson (or in the case of a corporation, by its duly authorised representative) or by proxyprovided always that if the Company has only one member of record the quorum shall bethat one member present in person or by proxy. No business (except the appointment ofa Chairman) shall be transacted at any general meeting unless the requisite quorum shallbe present at the commencement of the business.


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(xxxviii) Article 87

If within 15 minutes from the time appointed for the meeting a quorum is not present, themeeting, if convened upon the requisition of members, shall be dissolved, but in any othercase it shall stand adjourned to the same day in the next week and at such time andplace as shall be decided by the Board, and if at such adjourned meeting a quorum is notpresent within 15 minutes from the time appointed for holding the meeting, the member ormembers present in person (or in the case of a corporation, by its duly authorisedrepresentative) or by proxy shall be a quorum and may transact the business for whichthe meeting was called.

(xxxix) Article 88

The Chairman shall take the chair at every general meeting, or, if there be no suchChairman or, if at any general meeting such Chairman shall not be present within 15minutes after the time appointed for holding such meeting or is unwilling to act, theDirectors present shall choose another Director as Chairman, and if no Director bepresent, or if all the Directors present decline to take the chair, or if the Chairman chosenshall retire from the chair, then the members present (whether in person or representedby proxy or duly authorised representative) shall choose one of their own number to beChairman.

(xl) Article 89

The Chairman may, with the consent of any general meeting at which a quorum ispresent, and shall, if so directed by the meeting, adjourn any meeting from time to timeand from place to place as the meeting shall determine. Whenever a meeting is adjournedfor 14 days or more, at least seven clear days’ notice, specifying the place, the day andthe hour of the adjourned meeting shall be given in the same manner as in the case of anoriginal meeting but it shall not be necessary to specify in such notice the nature of thebusiness to be transacted at the adjourned meeting. Save as aforesaid, no member shallbe entitled to any notice of an adjournment or of the business to be transacted at anyadjourned meeting. No business shall be transacted at any adjourned meeting other thanthe business which might have been transacted at the meeting from which theadjournment took place.

(xli) Article 91

At any general meeting a resolution put to the vote at the meeting shall be decided on apoll.

(xlii) Article 92

A poll shall be taken in such manner (including the use of ballot or voting papers ortickets) as the Chairman directs.

(xliii) Article 94

Any question of adjournment shall be decided at the meeting and without adjournment.

(xliv) Article 95

In the case of an equality of votes, the Chairman of the meeting shall be entitled to asecond or casting vote.


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(xlv) Article 96

A resolution in writing (in one or more counterparts), including a special resolution, signedby all members for the time being entitled to receive notice of and to attend and vote atgeneral meetings (or being corporations by their duly appointed representatives) shall beas valid and effective as if the same had been passed at a general meeting of theCompany duly convened and held. Any such resolution shall be deemed to have beenpassed at a meeting held on the date on which it was signed by the last member to sign.

Dividends and Distributions

(xlvi) Article 168

The Company in general meeting may upon the recommendation of the Board by ordinaryresolution resolve that it is desirable to capitalise all or any part of the amount for the timebeing standing to the credit of any of the Company’s reserve accounts or funds or to thecredit of the profit and loss account or otherwise available for distribution (and notrequired for the payment or provision of dividend on any shares with a preferential right todividend) and accordingly that such sums be set free for distribution amongst themembers who would have been entitled thereto if distributed by way of dividend and in thesame proportion on condition that the same be not paid in cash but be applied either in ortowards paying up any amounts for the time being unpaid on any shares held by suchmembers respectively or paying up in full unissued shares, debentures or other securitiesof the Company to be allotted and distributed credited as fully paid up to and amongstsuch members in proportion aforesaid or partly in one way and partly in the other, and theBoard shall give effect to such resolution, provided that a share premium account and acapital redemption reserve and any reserve or fund representing unrealised profits may,for the purposes of this Article, only be applied in paying up unissued shares to be issuedto members of the Company as fully paid up shares or paying up calls or instalments dueor payable on partly paid securities of the Company subject always to the provisions ofthe Law.

(xlvii) Article 169

Wherever such a resolution as referred to in Article 168 shall have been passed theBoard shall make all appropriations and applications of the undivided profits resolved tobe capitalised thereby, and all allotments and issues of fully paid up shares, debentures orother securities, if any, and generally shall do all acts and things required to give effectthereto, with full power to the Board:

169.1 to make such provision by the issue of fractional certificates or by payment incash or otherwise (including provisions whereby, in whole or in part, fractionalentitlements are aggregated and sold and the net proceeds distributed to thoseentitled, or are disregarded or rounded up or down or whereby the benefit offractional entitlements accrues to the Company rather than to the membersconcerned) as they think fit in cases where shares, debentures or othersecurities become distributable in fractions;

169.2 to exclude the right of participation or entitlement of any member with aregistered address outside any territory where in the absence of a registrationstatement or other special or onerous formalities the circulation of an offer ofsuch right or entitlement would or might be unlawful or where the Board considerthe costs, expense or possible delays in ascertaining the existence or extent ofthe legal and other requirements applicable to such offer or the acceptance ofsuch offer out of proportion to the benefits of the Company; and


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169.3 to authorise any person to enter on behalf of all members entitled thereto into anagreement with the Company providing for the allotment to them respectively,credited as fully paid up, of any further shares, debentures or other securities towhich they may be entitled upon such capitalisation, or, as the case may require,for the payment up by the Company on their behalf, by the application thereto oftheir respective proportions of the profits resolved to the capitalised, of theamounts or any part of the amounts remaining unpaid on their existing shares,and any agreement made under such authority shall be effective and binding onall such members.

(xlviii) Article 170

The Board may, in relation to any capitalisation sanctioned under Article 169 in itsabsolute discretion specify that, and in such circumstances and if directed so to do by amember or members entitled to an allotment and distribution credited as fully paid up ofunissued shares or debentures in the Company pursuant to such capitalisation, shall allotand distribute credited as fully paid up the unissued shares, debentures or other securitiesto which that member is entitled to such person or persons as that member may nominateby notice in writing to the Company, such notice to be received not later than the day forwhich the general meeting of the Company to sanction the capitalisation is convened.

(xlix) Article 171

Subject to the Law and these Articles, the Company in general meeting may declaredividends in any currency but no dividends shall exceed the amount recommended by theBoard.

(l) Article 172

The dividends, interest and bonuses and any other benefits and advantages in the natureof income receivable in respect of the Company’s investments, and any commissions,trusteeship, agency, transfer and other fees and current receipts of the Company shall,subject to the payment thereout of the expenses of management, interest upon borrowedmoney and other expenses which in the opinion of the Board are of a revenue nature,constitute the profits of the Company available for distribution.

(li) Article 173

The Board may from time to time pay to the members such interim dividends as appear tothe Board to be justified by the profits of the Company and, in particular (but withoutprejudice to the generality of the foregoing), if at any time the share capital of theCompany is divided into different classes, the Board may pay such interim dividends inrespect of those shares in the capital of the Company which confer on the holders thereofdeferred or non-preferential rights as well as in respect of those shares which confer onthe holders thereof preferential rights with regard to dividend and provided that the Boardacts bona fide, the Board shall not incur any responsibility to the holders of sharesconferring any preferential rights.

(lii) Article 174

The Board may also pay half-yearly or at other intervals to be selected by it any dividendwhich may be payable at a fixed rate if the Board is of the opinion that the profits availablefor distribution justify the payment.


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(liii) Article 175

The Board may in addition from time to time declare and pay special dividends on sharesof any class of such amounts and on such dates as they think fit, and the provisions ofArticle 173 as regards the powers and the exemption from liability of the Board as relateto declaration and payment of interim dividends shall apply, mutatis mutandis, to thedeclaration and payment of any such special dividends.

(liv) Article 176

No dividend shall be declared or payable except out of the profits and reserves of theCompany lawfully available for distribution including share premium. No dividend shallcarry interest against the Company.

(lv) Article 177

Whenever the Board or the Company in general meeting has resolved that a dividend bepaid or declared on the share capital of the Company, the Board may further resolve:

EITHER

177.1 that such dividend be satisfied wholly or in part in the form of an allotment ofshares credited as fully paid up, provided that the shareholders entitled theretowill be entitled to elect to receive such dividend (or part thereof) in cash in lieu ofsuch allotment. In such case, the following provisions shall apply:

177.1.1 the basis of any such allotment shall be determined by the Board;

177.1.2 the Board, after determining the basis of allotment, shall give not lessthan two weeks’ notice in writing to the shareholders of the right ofelection accorded to them and shall send with such notice forms ofelection and specify the procedure to be followed and the place at whichand the latest date and time by which duly completed forms of electionmust be lodged in order to be effective;

177.1.3 the right of election may be exercised in respect of the whole or part ofthat portion of the dividend in respect of which the right of election hasbeen accorded;

177.1.4 the dividend (or that part of the dividend to be satisfied by the allotmentof shares as aforesaid) shall not be payable in cash on shares inrespect whereof the cash election has not been duly exercised (“thenon-elected shares”) and in satisfaction thereof shares shall be allottedcredited as fully paid to the holders of the non-elected shares on thebasis of allotment determined as aforesaid and for such purpose theBoard shall capitalise and apply out of any part of the undivided profitsof the Company or any part of any of the Company’s reserve accounts(including any special account, share premium account and capitalredemption reserve (if there be any such reserve)) or profit or lossaccount or amounts otherwise available for distribution as the Boardmay determine, a sum equal to the aggregate nominal amount of theshares to be allotted on such basis and apply the same in paying up infull the appropriate number of shares for allotment and distribution toand amongst the holders of the non-elected shares on such basis;


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OR

177.2 that shareholders entitled to such dividend shall be entitled to elect to receive anallotment of shares credited as fully paid up in lieu of the whole or such part ofthe dividend as the Board may think fit. In such case, the following provisionsshall apply:

177.2.1 the basis of any such allotment shall be determined by the Board;

177.2.2 the Board, after determining the basis of allotment, shall give not lessthan two weeks’ notice in writing to shareholders of the right of electionaccorded to them and shall send with such notice forms of election andspecify the procedure to be followed and the place at which and thelatest date and time by which duly completed forms of election mustlodged in order to be effective;

177.2.3 the right of election may be exercised in respect of the whole or part ofthat portion of the dividend in respect of which the right of election hasbeen accorded;

177.2.4 the dividend (or that part of the dividend in respect of which a right ofelection has been accorded) shall not be payable on shares in respectwhereof the share election has been duly exercised (“the electedshares”) and in lieu thereof shares shall be allotted credited as fully paidto the holders of the elected shares on the basis of allotmentdetermined as aforesaid and for such purpose the Board shall capitaliseand apply out of any part of the undivided profits of the Company’sreserve accounts (including any special account, share premiumaccount and capital redemption reserve (if there be any such reserve))or profit and loss account or amounts otherwise available for distributionas the Board may determine, a sum equal to the aggregate nominalamount of the shares to be allotted on such basis and apply the samein paying up in full the appropriate number of shares for allotment anddistribution to and amongst the holders of the elected shares on suchbasis.

(lvi) Article 178

The shares allotted pursuant to the provisions of Article 177 shall be of the same class asthe class of, and shall rank pari passu in all respects with the shares then held by therespective allottees save only as regards participation:

178.1 in the relevant dividend (or share or cash election in lieu thereof as aforesaid); or

178.2 in any other distributions, bonuses or rights paid, made, declared or announcedprior to or contemporaneously with the payment or declaration of the relevantdividend, unless contemporaneously with the announcement by the Board of itsproposal to apply the provisions of Article 177.1 or 177.2 in relation to therelevant dividend or contemporaneously with its announcement of thedistribution, bonus or rights in question, the Board shall specify that the shares tobe allotted pursuant to the provisions of Article 177 shall rank for participation insuch distributions, bonuses or rights.


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(lvii) Article 179

The Board may do all acts and things considered necessary or expedient to give effect toany capitalisation pursuant to the provisions of Article 178 with full power to the Board tomake such provisions as it thinks fit in the case of shares becoming distributable infractions (including provisions whereby, in whole or in part, fractional entitlements areaggregated and sold and the net proceeds distributed to those entitled, or aredowngraded or rounded up or down or whereby the benefit of fractional entitlementsaccrues to the Company rather than to the members concerned). The Board mayauthorise any person to enter into on behalf of all members interested, an agreement withthe Company providing for such capitalisation and matters incidental thereto and anyagreement made pursuant to such authority shall be effective and binding on allconcerned.

(lviii) Article 180

The Company may upon the recommendation of the Board by ordinary resolution resolvein respect of any one particular dividend of the Company that notwithstanding theprovisions of Article 177 a dividend may be satisfied wholly in the form of an allotment ofshares credited as fully paid without offering any right to shareholders to elect to receivesuch dividend in cash in lieu of such allotment.

(lix) Article 181

The Board may on any occasion determine that rights of election and the allotment ofshares under Article 177 shall not be made available or made to any shareholders withregistered address in any territory where in the absence of a registration statement orother special formalities the circulation of an offer of such rights of election or theallotment of shares would or might be unlawful, or where the Board considers the costs,expenses or possible delays in ascertaining the existence or extent of the legal and otherrequirements applicable to such offer or the acceptance of such offer out of proportion tothe benefit of the Company, and in any such case the provisions aforesaid shall be readand construed subject to such determination.

(lx) Article 182

The Board shall establish an account to be called the share premium account and shallcarry to the credit of such account from time to time a sum equal to the amount of valueof the premium paid on the issue of any share in the Company. The Company may applythe share premium account in any manner permitted by the Companies Law. TheCompany shall at all times comply with the provisions of the Companies Law in relation tothe share premium account.

(lxi) Article 183

The Board may, before recommending any dividend, set aside out of the profits of theCompany such sums as it thinks fit as a reserve or reserves which shall, at the discretionof the Board, be applicable for meeting claims on or liabilities of the Company orcontingencies or for paying off any loan capital or for equalising dividends or for any otherpurpose to which the profits of the Company may be properly applied, and pending suchapplications may, at the like discretion, either be employed in the business of theCompany or be invested in such investments (including shares, warrants and othersecurities of the Company) as the Board may from time to time think fit, and so that itshall not be necessary to keep any reserves separate or distinct from any otherinvestments of the Company. The Board may also without placing the same to reservecarry forward any profits which it may think prudent not to distribute by way of dividend.


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(lxii) Article 184

Unless and to the extend that the rights attached to any shares or the terms of issuethereof otherwise provide, all dividends shall (as regards any shares not fully paidthroughout the period in respect of which the dividend is paid) be apportioned and paidpro rata according to the amounts paid up on the shares during any portion or portions ofthe period in respect of which the dividend is paid. For the purpose of this Article noamount paid up on a share in advance of calls shall be treated as paid up on the share.

(lxiii) Article 185

The Board may retain any dividends or other moneys payable on or in respect of a shareupon which the Company has a lien, and may apply the same in or towards satisfaction ofthe debts, liabilities or engagements in respect of which the lien exists.

(lxiv) Article 186

The Board may retain any dividends or other monies payable upon shares in respect ofwhich any person is, under the provisions as to the transmission of shares hereinbeforecontained, entitled to become a member, or in respect of which any person is under thoseprovisions entitled to transfer, until such person shall become a member in respect ofsuch shares or shall transfer the same.

(lxv) Article 187

The Board may deduct from any dividend or other monies payable to any member allsums of money (if any) presently payable by him to the Company on account of calls,instalments or otherwise.

(lxvi) Article 188

Any general meeting sanctioning a dividend may make a call on the members of suchamount as the meeting resolves, but so that the call on each member shall not exceed thedividend payable to him, and so that the call be made payable at the same time as thedividend, and the dividend may, if so arranged between the Company and the member, besent off against the call.

(lxvii) Article 189

The Board, with the sanction of the members in general meeting, may direct that anydividend be satisfied wholly or in part by the distribution of specific assets of any kind andin particular of paid up shares, debentures or warrants to subscribe securities of any othercompany, or in any one or more of such ways, and where any difficulty arises in regard tothe distribution the Board may settle the same as it thinks expedient, and in particular maydisregard fractional entitlements, round the same up and down or provide that the sameshall accrue to the benefit of the Company, and may fix the value for distribution of suchspecific assets, or any part thereof, and may determine that cash payments shall be madeto any members upon the footing of the value so fixed in order to adjust the rights of allparties, and may vest any such specific assets in trustees as may seem expedient to theBoard and may appoint any person to sign any requisite instruments of transfer and otherdocuments on behalf of the persons entitled to the dividend and such appointment shallbe effective. Where required, a contract shall be filed in accordance with the provisions ofthe Law and the Board may appoint any person to sign such contract on behalf of thepersons entitled to the dividend and such appointment shall be effective.

(lxviii) Article 190

A transfer of shares shall not pass therewith the right to any dividend or bonus declaredthereon before the registration of the transfer.


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(lxix) Article 191

Any resolution declaring or resolving upon the payment of a dividend or other distributionon shares of any class, whether a resolution of the Company in general meeting or aresolution of the Board, may specify that the same shall be payable or made to thepersons registered as the holders of such shares at the close of business on a particulardate, notwithstanding that it may be a date prior to that on which the resolution is passed,and thereupon the dividend or other distribution shall be payable or made to them inaccordance with their respective holdings so registered, but without prejudice to the rightsinter se in respect of such dividend of transferors and transferees of any such shares.

(lxx) Article 192

If two or more persons are registered as joint holders of any shares, any one of suchpersons may give effectual receipts for any dividends, interim and special dividends orbonuses and other moneys payable or rights or property distributable in respect of suchshares.

(lxxi) Article 193

Unless otherwise directed by the Board, any dividend, interest or other sum payable incash to a holder of shares may be paid by cheque or warrant sent through the post to theregistered address of the member entitled, or, in case of joint holders, to the registeredaddress of the person whose name stands first in the register in respect of the jointholding or to such person and to such address as the holder or joint holders may inwriting direct. Every cheque or warrant so sent shall be made payable to the order of theholder or, in the case of joint holders, to the order of the holder whose name stands firston the register in respect of such shares and shall be sent at his or their risk, and thepayment of any such cheque or warrant by the bank on which it is drawn shall operate asa good discharge to the Company in respect of the dividend and/or bonus representedthereby, notwithstanding that it may subsequently appear that the same has been stolenor that any endorsement thereon has been forged.

(lxxii) Article 194

The Company may cease sending such cheques for dividend entitlements or dividendwarrants by post if such cheques or warrants have been left uncashed on two consecutiveoccasions. However, the Company may exercise its power to cease sending cheques fordividend entitlements or dividend warrants after the first occasion on which such a chequeor warrant is returned undelivered.

(lxxiii) Article 195

All dividends or bonuses unclaimed for one year after having been declared may beinvested or otherwise made use of by the Board for the exclusive benefit of the Companyuntil claimed and the Company shall not be constituted a trustee in respect thereof or berequired to account for any money earned thereon. All dividends or bonuses unclaimed forsix years after having been declared may be forfeited by the Board and shall revert to theCompany and after such forfeiture no member or other person shall have any right to orclaim in respect of such dividends or bonuses.”

1.5 Options. Kingboard Laminates has a share option scheme (“KBL Share Option Scheme”) whichwas approved by shareholders of Kingboard Laminates and the shareholders of KingboardChemical on 18 May 2007 and 25 June 2007 respectively. The KBL Share Option Scheme hastaken effect on 6 July 2007. As at the Latest Practicable Date, no share options have been grantedpursuant to the KBL Share Option Scheme.


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Save as disclosed in this Scheme Document, there are no outstanding instruments convertible into,rights to subscribe for, and options in respect of, KBL Shares which carry voting rights affecting theKBL Shares.

1.6 Changes to the Share Capital. In the three financial years immediately preceding the LatestPracticable Date, the material changes to the issued share capital of Kingboard Laminates hadbeen as follows:

(i) On 10 May 2006, being the date of incorporation of Kingboard Laminates, the authorisedshare capital of Kingboard Laminates was HK$390,000 divided into 3,900,000 KBLShares of HK$0.10 each.

(ii) On 5 November 2006, the authorised share capital of Kingboard Laminates wasincreased to HK$2,000,000,000 divided into 20,000,000,000 KBL Shares of HK$0.10each by the creation of 19,996,100,000 new KBL Shares.

(iii) On 7 December 2006, Kingboard Laminates was listed on the SEHK with an authorisedshare capital of HK$2,000,000,000 divided into 20,000,000,000 KBL Shares of HK$0.10each of which 3,000,000,000 has been issued fully paid or credited as fully paid and17,000,000,000 KBL Shares remain unissued.

(iv) Since 7 December 2006, Kingboard Laminates has not undergone any re-organisation ofcapital.

2. INDEBTEDNESS

Save as disclosed in this Scheme Document, the audited consolidated financial statements ofKingboard Laminates for FY2008 and any other information on Kingboard Laminates which ispublicly available (including without limitation, the announcements released by KingboardLaminates on the website of SEHK), there is no other material indebtedness (including contingentindebtedness) of Kingboard Laminates and of any of its subsidiaries.

3. MATERIAL LITIGATION

As at the Latest Practicable Date, the directors of Kingboard Laminates are not aware of anylitigation, claims or proceedings pending or threatened against Kingboard Laminates or any of itssubsidiaries or any facts likely to give rise to any litigation, claims or proceedings which, in theopinion of the directors of Kingboard Laminates, might materially and adversely affect the financialposition of the KBL Group taken as a whole.

4. MATERIAL CONTRACTS WITH INTERESTED PERSONS

Save as disclosed in the audited consolidated financial statements of Kingboard Laminates forFY2006, FY2007 and FY2008 and any other information on Kingboard Laminates which is publiclyavailable (including without limitation, the announcements released by Kingboard Laminates on thewebsite of SEHK) which are not in the ordinary course of business, there are no other materialcontracts which are not in the ordinary course of business that have been entered into byKingboard Laminates and an interested person (within the meaning of the Note to Rule 23.12 tothe Code).


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5. KINGBOARD LAMINATES MARKET QUOTATIONS

5.1 Closing Prices. The following table sets out the closing prices of the KBL Shares on SEHK as atthe following dates:

Closing Date Price (HK$)

2 July 2009 (the Latest Practicable Date) 3.89

30 April 2009 (the last Business Day immediately preceding the Announcement Date) 3.08

31 March 2009 2.15

27 February 2009 1.85

30 January 2009 1.97

31 December 2008 1.81

28 November 2008 1.69

Source: Bloomberg as at 2 July 2009

5.2 Highest and Lowest Prices.

The highest and lowest closing prices of the KBL Shares on SEHK during the period commencingsix months prior to 4 May 2009 (being the Announcement Date) and ending on the LatestPracticable Date are as follows:

(i) highest closing price: HK$4.02 per KBL Share, transacted on 29 June 2009; and

(ii) lowest closing price: HK$1.56 per KBL Share, transacted on 20 November 2008 and 24November 2008.

6. REGISTERED OFFICE

The registered office of Kingboard Laminates is at P.O. Box 309GT, Ugland House, South ChurchStreet, George Town, Grand Cayman, Cayman Islands. The principal office of Kingboard Laminatesin Hong Kong is 2/F., Harbour View 1, No. 12 Science Park East Avenue, Phase II Hong KongScience Park, Shatin, New Territories, Hong Kong. Kingboard Laminates does not have a principaloffice in Singapore.


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Annex 2

Disclosure of Shareholdings and Dealings

1. Details of Holdings in KBCF Shares

1.1 Kingboard Chemical, Jamplan, Kingboard Laminates, Excel First, Kingboard LaminatesLimited and HML

As at the Latest Practicable Date, the interests in KBCF Shares held by HML, Kingboard Chemical,Jamplan, Kingboard Laminates, Excel First and Kingboard Laminates Limited are set out below:

Direct Interest Deemed Interest

Shareholders No. of KBCF Shares % No. of KBCF Shares %

Excel First 449,002,000 62.15 13,157,000 (1) 1.82Kingboard Laminates Limited 13,157,000 1.82 – –Kingboard Laminates – – 462,159,000 (2) 63.97Jamplan – – 462,159,000 (3) 63.97Kingboard Chemical – – 462,159,000 (3) 63.97HML – – 462,159,000 (3) 63.97

Notes:

(1) These KBCF Shares are held by Kingboard Laminates Limited, which is a wholly-owned subsidiary of Excel First.

(2) These KBCF Shares are held by Excel First, which is a wholly-owned subsidiary of Kingboard Laminates, and byKingboard Laminates Limited.

(3) These KBCF Shares are held by Excel First and by Kingboard Laminates Limited. Kingboard Laminates is a 74.77%-owned subsidiary of Kingboard Chemical of which 0.45% is held by Kingboard Chemical directly and 74.32% is heldby Jamplan and its subsidiaries. Jamplan is wholly-owned by Kingboard Chemical. HML holds 30.97% in KingboardChemical. Accordingly, HML, Kingboard Chemical and Jamplan are deemed to have an interest in these KBCFShares held by Excel First and by Kingboard Laminates Limited.

1.2 Directors of Kingboard Chemical

As at the Latest Practicable Date, the interests in KBCF Shares held by the directors of KingboardChemical are set out below:


Directors No. of KBCF Shares % No. of KBCF Shares %

Cheung Kwok Wing – – 462,159,000 (1) 63.97Chan Wing Kwan – – – –Chang Wing Yiu – – – –Cheung Kwong Kwan – – – –Ho Yin Sang – – 2,000 (2) 0.00Cheung Wai Lin, Stephanie – – – –Mok Cham Hung, Chadwick – – – –Lai Chung Wing, Robert 72,000 0.01 – –Cheng Wai Chee, Christopher – – – –Tse Kam Hung – – – –Henry Tan – – – –


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Notes:

(1) These KBCF Shares are held by Excel First and by Kingboard Laminates Limited. Kingboard Laminates is a 74.77%-owned subsidiary of Kingboard Chemical of which 0.45% is held by Kingboard Chemical directly and 74.32% is heldby Jamplan and its subsidiaries. Jamplan is wholly-owned by Kingboard Chemical. Mr Cheung Kwok Wing is deemedto have an interest in these KBCF Shares held by Excel First and by Kingboard Laminates Limited through hisshareholding interest in HML, which has an approximately 30.97% shareholding interest in Kingboard Chemical.

(2) These KBCF Shares are held by the spouse of Mr Ho Yin Sang. Accordingly, Mr Ho Yin Sang is deemed to have aninterest in these KBCF Shares.

1.3 Directors of Kingboard Laminates

As at the Latest Practicable Date, none of the directors of Kingboard Laminates have any interestsin the KBCF Shares.

1.4 Directors of HML

The directors of HML are Mr Cheung Kwok Wing, Mr Chan Wing Kwan, Mr Cheung Kwok Wa, MrCheung Kwok Ping and Mr Lam Ka Po. Save for Mr Cheung Kwok Wing, none of the directors ofHML have any interests in the KBCF Shares as at the Latest Practicable Date. Details of MrCheung Kwok Wing’s interest in the KBCF Shares as at the Latest Practicable Date are set out inparagraph 1.2 above.

1.5 Directors of Jamplan

The directors of Jamplan are Mr Cheung Kwok Wing, Mr Chan Wing Kwan and Mr Lam Ka Po.Details of Mr Cheung Kwok Wing’s and Mr Chan Wing Kwan’s interests in the KBCF Shares as atthe Latest Practicable Date are set out in paragraph 1.2 above. As at the Latest Practicable Date,Mr Lam Ka Po does not have any interest in the KBCF Shares.

1.6 Directors of Excel First

The directors of Excel First are Mr Cheung Kwok Wa, Mr Cheung Kwok Ping, Mr Cheung Ka Hoand Ms Chan Sau Chi. None of the directors of Excel First have any interests in the KBCF Sharesas at the Latest Practicable Date.

1.7 Directors of Kingboard Laminates Limited

The directors of Kingboard Laminates Limited are Mr Cheung Kwok Wing, Mr Chan Wing Kwan,Mr Chang Wing Yiu, Mr Cheung Kwok Wa and Mr Cheung Kwok Ping. Save for Mr Cheung KwokWing, none of the directors of Kingboard Laminates Limited have any interests in the KBCFShares as at the Latest Practicable Date. Details of Mr Cheung Kwok Wing’s interest in the KBCFShares as at the Latest Practicable Date are set out in paragraph 1.2 above.

1.8 Directors of Kingboard Copper Foil

The Directors are Mr Cheung Kwok Wing, Mr Chan Wing Kwan, Mr Cheung Kwok Ping, Mr Ho YinSang, Mr Lam Ka Po, Mr Ong Tiong Wee and Mr Chim Hou Yan. Save for Mr Cheung Kwok Wingand Mr Ho Yin Sang, as at the Latest Practicable Date, none of the Directors have any interests inthe KBCF Shares. Details of Mr Cheung Kwok Wing’s and Mr Ho Yin Sang’s interests in the KBCFShares as at the Latest Practicable Date are set out in paragraph 1.2 above.


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2. Details of Holdings in KBL Shares

2.1 Kingboard Chemical, Jamplan, Excel First, Kingboard Laminates Limited and HML

As at the Latest Practicable Date, the interests in KBL Shares held by HML, Kingboard Chemical,Jamplan, Excel First and Kingboard Laminates Limited are set out below:


Directors No. of KBL Shares % No. of KBL Shares %

Excel First – – – –Kingboard Laminates Limited – – – –Jamplan 2,175,000,000 72.50 54,667,500 (1) 1.82Kingboard Chemical 13,383,000 0.45 2,229,667,500 (2) 74.32HML 1,500,000 0.05 2,243,050,500 (3) 74.77

Notes:

(1) Jamplan’s deemed interest in KBL Shares arises through its wholly-owned subsidiary, Kingboard InvestmentsLimited.

(2) Kingboard Chemical’s deemed interest arises through its wholly-owned subsidiary, Jamplan.

(3) HML’s deemed interest arises through its approximately 30.97 per cent. shareholding interest in Kingboard Chemical.

2.2 Kingboard Copper Foil

As at the Latest Practicable Date, Kingboard Copper Foil does not have any interests in the KBLShares.

2.3 Directors of Kingboard Chemical

As at the Latest Practicable Date, the interests in KBL Shares held by the directors of KingboardChemical are set out below:



Cheung Kwok Wing 1,141,500 0.03 – –Chan Wing Kwan – – 100,000 (1) 0.003Chang Wing Yiu – – 100,000 (2) 0.003Cheung Kwong Kwan – – – –Ho Yin Sang – – 540,000 (3) 0.01Cheung Wai Lin, Stephanie 804,000 0.02 – –Mok Cham Hung, Chadwick – – – –Lai Chung Wing, Robert – – – –Cheng Wai Chee, Christopher – – – –Tse Kam Hung – – – –Henry Tan – – – –

Notes:

(1) These KBL Shares are held by the spouse of Mr Chan Wing Kwan. Accordingly, Mr Chan Wing Kwan is deemed tohave an interest in these KBL Shares.

(2) These KBL Shares are held by the spouse of Mr Chang Wing Yiu. Accordingly, Mr Chang Wing Yiu is deemed to havean interest in these KBL Shares.

(3) These KBL Shares are held by the spouse of Mr Ho Yin Sang. Accordingly, Mr Ho Yin Sang is deemed to have aninterest in these KBL Shares.


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2.4 Directors of Kingboard Laminates

As at the Latest Practicable Date, the interests in KBL Shares held by the directors of KingboardLaminates are set out below:



Cheung Kwok Wa 1,539,500 0.051 – –Cheung Kwok Keung 801,500 0.027 – –Cheung Kwok Ping – – – –Lam Ka Po – – – –Cheung Ka Ho 89,000 0.003 – –Chan Sau Chi 60,000 0.002 – –Liu Min – – – –Zhou Pei Feng – – – –Chan Charnwut Bernard – – – –Chan Yue Kwong, Michael – – – –Leung Tai Chiu – – – –Mok Yiu Keung, Peter – – 150,000(1) 0.005Lo Ka Leong 100,000 0.003 – –

Note:

(1) These KBL Shares are held by the spouse of Mr Mok Yiu Keung, Peter. Accordingly, Mr Mok Yiu Keung, Peter isdeemed to have an interest in these KBL Shares.

2.5 Directors of HML

The directors of HML are Mr Cheung Kwok Wing, Mr Chan Wing Kwan, Mr Cheung Kwok Wa, Mr Cheung Kwok Ping and Mr Lam Ka Po. Mr Cheung Kwok Ping and Mr Lam Ka Po do not haveany interests in the KBL Shares as at the Latest Practicable Date. Mr Cheung Kwok Wing’s, Mr Chan Wing Kwan’s and Mr Cheung Kwok Wa’s interests in the KBL Shares as at the LatestPracticable Date are set out in paragraphs 2.3 and 2.4 above.

2.6 Directors of Jamplan

The directors of Jamplan are Mr Cheung Kwok Wing, Mr Chan Wing Kwan and Mr Lam Ka Po.Details of Mr Cheung Kwok Wing’s and Mr Chan Wing Kwan’s interests in the KBL Shares as atthe Latest Practicable Date are set out in paragraph 2.3 above. Mr Lam Ka Po does not have anyinterest in the KBL Shares as at the Latest Practicable Date.

2.7 Directors of Excel First

The directors of Excel First are Mr Cheung Kwok Wa, Mr Cheung Kwok Ping, Mr Cheung Ka Hoand Ms Chan Sau Chi. Details of Mr Cheung Kwok Wa’s, Mr Cheung Ka Ho’s, and Ms Chan SauChi’s interests in the KBL Shares as at the Latest Practicable Date are set out in paragraph 2.4above. Mr Cheung Kwok Ping does not have any interest in the KBL Shares as at the LatestPracticable Date.

2.8 Directors of Kingboard Laminates Limited

The directors of Kingboard Laminates Limited are Mr Cheung Kwok Wing, Mr Chan Wing Kwan,Mr Chang Wing Yiu, Mr Cheung Kwok Wa and Mr Cheung Kwok Ping. Mr Cheung Kwok Ping doesnot have any interest in the KBL Shares as at the Latest Practicable Date. Details of the interestsof the other directors of Kingboard Laminiates Limited in the KBL Shares as at the LatestPracticable Date are set out in paragraphs 2.3 and 2.4 above.


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2.9 Directors of Kingboard Copper Foil

The Directors are Mr Cheung Kwok Wing, Mr Chan Wing Kwan, Mr Cheung Kwok Ping, Mr Ho YinSang, Mr Lam Ka Po, Mr Ong Tiong Wee and Mr Chim Hou Yan. Details of Mr Cheung KwokWing’s, Mr Chan Wing Kwan’s and Mr Ho Yin Sang’s interests in the KBL Shares as at the LatestPracticable Date are set out in paragraph 2.3 above. As at the Latest Practicable Date, none ofthe other Directors have any interests in the KBL Shares.


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Consolidated Income Statement綜合收益表For the year ended 31 December 2008截至二零零八年十二月三十一日止年度

2008 2007

二零零八年二零零七年NOTES HK$’000 HK$’000

附註千港元千港元

Revenue 營業額 6 10,127,764 10,426,783

Cost of sales 銷售成本 (8,149,908 ) (7,671,540 )

Gross profit 毛利 1,977,856 2,755,243

Other income 其他收入 8 48,385 69,631

Distribution costs 分銷成本 (187,934 ) (178,744 )

Administrative costs 行政成本 (427,918 ) (423,159 )

Discount on acquisition of additional 收購一間附屬公司interest in a subsidiary 額外權益之折讓 26,800 –

Finance costs 融資成本 9 (116,053 ) (168,136 )

Profit before taxation 除稅前溢利 1,321,136 2,054,835

Income tax expense 所得稅開支 10 (70,466 ) (129,226 )

Profit for the year 本年度溢利 11 1,250,670 1,925,609

Attributable to: 應佔份額：Equity holders of the Company 本公司權益持有人 1,203,804 1,813,269

Minority interests 少數股東權益 46,866 112,340

1,250,670 1,925,609

Dividends 股息 13 960,000 300,000

Earnings per share 每股盈利 14

Basic 基本 HK$0.401港元 HK$0.604港元

Annex 3

Audited Consolidated Financial Statements of the KBL Group for FY2008


101

Consolidated Balance Sheet綜合資產負債表At 31 December 2008於二零零八年十二月三十一日

2008 2007



Non-current assets 非流動資產 Investment properties 投資物業 15 42,005 40,537

Properties, plant and equipment 物業、廠房及設備 16 5,907,816 5,152,176

Prepaid lease payments 預付租賃款項 17 266,993 193,187

Available-for-sale investments 可供出售投資 18 19,800 19,800

Non-current deposits 非流動訂金 19 78,249 221,589

Deferred tax assets 遞延稅項資產 20 4,675 1,632

Goodwill 商譽 21 238 238

6,319,776 5,629,159

Current assets 流動資產 Inventories 存貨 22 1,668,934 1,510,586

Trade and other receivables and 貿易及其他應收賬款及 prepayments 預付款項 23 2,380,941 3,510,045

Prepaid lease payments 預付租賃款項 17 4,712 4,199

Amounts due from fellow subsidiaries 應收同系附屬公司款項 25 182,406 391,767

Derivative financial instruments 衍生金融工具 26 3,027 1,637

Taxation recoverable 可收回稅項 7,063 12,074

Bank balances and cash 銀行結餘及現金 24 2,237,499 1,471,742

6,484,582 6,902,050

Current liabilities 流動負債Trade and other payables 貿易及其他應付賬款 27 837,719 892,259

Bills payable 應付票據 27 319,765 600,967

Amounts due to fellow subsidiaries 應付同系附屬公司款項 25 10,818 4,042

Derivative financial instruments 衍生金融工具 26 255 1,184

Taxation payable 應繳稅項 233,673 228,255

Bank borrowings – amount due 銀行借貸－一年內到期 within one year 之款項 28 1,078,370 636,634

2,480,600 2,363,341

Net current assets 流動資產淨值 4,003,982 4,538,709

Total assets less current liabilities 資產總值減流動負債 10,323,758 10,167,868


102

Consolidated Balance Sheet 綜合資產負債表At 31 December 2008於二零零八年十二月三十一日

2008 2007



Non-current liabilities 非流動負債Deferred tax liabilities 遞延稅項負債 20 316 –

Derivative financial instruments 衍生金融工具 26 35,273 –

Bank borrowings – amount due 銀行借貸－一年後到期 after one year 之款項 28 2,130,024 2,573,462

2,165,613 2,573,462

8,158,145 7,594,406

Capital and reserves 股本及儲備 Share capital 股本 29 300,000 300,000

Reserves 儲備 6,968,942 6,439,745

Equity attributable to equity holders 本公司權益持有人of the Company 應佔權益 7,268,942 6,739,745

Minority interests 少數股東權益 889,203 854,661

Total equity 資本總額 8,158,145 7,594,406

The consolidated financial statements on pages 47 to 127 were

approved and authorised for issue by the Board of Directors on

27 March 2009 and are signed on its behalf by:

Cheung Kwok Wa Cheung Kwok Keung

張國華張國強 DIRECTOR DIRECTOR

董事董事

董事會於二零零九年三月二十七日已批准及授權刊發第47頁至第127頁之綜合財務報表，並由下列董事代表簽署：


103

Consolidated Statement of Changes in Equity綜合權益變動表For the year ended 31 December 2008截至二零零八年十二月三十一日止年度

Attributable to equity holders of the Company本公司權益持有人應佔

MinorityShare Share Translation Hedging Special Statutory Retained interests Total

capital premium reserve reserve reserve reserve profits Total 少數 equity股本股份溢價匯兌儲備對沖儲備特別儲備法定儲備保留溢利合計股東權益資本總額

HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000千港元千港元千港元千港元千港元千港元千港元千港元千港元千港元

(note 30) (note a)（附註30）（附註a）

Balance at 1 January 2007 於二零零七年一月一日之結餘 300,000 1,097,104 221,722 – 757,689 6,185 2,555,468 4,938,168 700,936 5,639,104

Exchange differences arising 因折算至呈報on translation to 貨幣而產生之

presentation currency 匯兌差額 – – 288,308 – – – – 288,308 41,244 329,552Profit for the year 本年度溢利 – – – – – – 1,813,269 1,813,269 112,340 1,925,609

Total recognised income 本年度確認收入總額for the year – – 288,308 – – – 1,813,269 2,101,577 153,584 2,255,161

Acquisition of subsidiaries 收購附屬公司 – – – – – – – – 19,605 19,605Dividend paid to minority 支付予少數股東 shareholders 之股息 – – – – – – – – (19,464 ) (19,464 )Interim dividend paid for 已付截至二零零七年

the year ended 十二月三十一日止31 December 2007 年度中期股息 – – – – – – (300,000 ) (300,000 ) – (300,000 )

– – – – – – (300,000 ) (300,000 ) 141 (299,859 )

Balance at 31 December 2007 於二零零七年十二月三十一日之結餘 300,000 1,097,104 510,030 – 757,689 6,185 4,068,737 6,739,745 854,661 7,594,406

Loss on cash flow hedges 現金流量對沖虧損 – – – (41,411 ) – – – (41,411 ) – (41,411 )Exchange differences arising 因折算至呈報

on translation to 貨幣而產生的 presentation currency 匯兌差額 – – 320,666 – – – – 320,666 47,805 368,471

Net income (expense) 直接於權益內確認recognised directly in equity 之收入（開支）淨額 – – 320,666 (41,411 ) – – – 279,255 47,805 327,060

Profit for the year 本年度溢利 – – – – – – 1,203,804 1,203,804 46,866 1,250,670Transfer to profit or loss on 因現金流量對沖而

cash flow hedges 轉撥至損益 – – – 6,138 – – – 6,138 – 6,138

Total recognised income and 本年度確認收入expense for the year 及開支總額 – – 320,666 (35,273 ) – – 1,203,804 1,489,197 94,671 1,583,868

Acquisition of additional 收購一間附屬公司interest in a subsidiary 額外權益 – – – – – – – – (35,275 ) (35,275 )

Dividend paid to minority 支付予少數股東之 shareholders 股息 – – – – – – – – (24,854 ) (24,854 )Final dividend paid for 已付截至二零零七年

the year ended 十二月三十一日止31 December 2007 年度末期股息 – – – – – – (600,000 ) (600,000 ) – (600,000 )

Interim dividend paid for 已付截至二零零八年the year ended 十二月三十一日止31 December 2008 年度中期股息 – – – – – – (360,000 ) (360,000 ) – (360,000 )

– – – – – – (960,000 ) (960,000 ) (60,129 ) (1,020,129 )

Balance at 31 December 2008 於二零零八年十二月三十一日之結餘 300,000 1,097,104 830,696 (35,273 ) 757,689 6,185 4,312,541 7,268,942 889,203 8,158,145

Note:

(a) Statutory fund, which is non-distributable, is appropriated from the profit

after taxation of the Company’s subsidiaries established in the People’s

Republic of China (other than Hong Kong) (“PRC”) under the applicable

laws and regulations in the PRC.

附註：

(a) 不可分派之法定基金乃根據中華人民共和國（不包括香港）（「中國」）之適用法律及法規按本公司於中國成立之附屬公司之除稅後溢利計提。


104

Consolidated Cash Flow Statement綜合現金流量表For the year ended 31 December 2008截至二零零八年十二月三十一日止年度

2008 2007

二零零八年二零零七年HK$’000 HK$’000

千港元千港元

OPERATING ACTIVITIES 經營業務Profit before taxation 除稅前溢利 1,321,136 2,054,835

Adjustments for: 就以下項目作出調整：Depreciation of properties, 物業、廠房及設備之

plant and equipment 折舊 719,143 564,618

Release of prepaid lease payments 預付租賃款項撥回 4,712 4,198

Interest expenses and other 利息開支及其他 finance charges 融資費用 116,053 168,136

Impairment losses recognised on 就貿易及其他應收賬款trade and other receivables 確認之減值虧損 8,101 19,854

Loss on disposal and write off of 出售及撇銷物業、廠房properties, plant and equipment 及設備之虧損 608 896

Gain on fair value changes of 投資物業公平值變動 investment properties 之收益 (1,468 ) (317 )

Gain on fair value changes of 商品遠期合約公平值 commodity forward contracts 變動之收益 (2,454 ) (368 )

Gain on fair value changes of 外匯遠期合約公平值foreign currency forward contracts 變動之收益 (318 ) (85 )

Discount on acquisition of additional 收購一間附屬公司額外interest in a subsidiary 權益之折讓 (26,800 ) –

Interest income 利息收入 (21,871 ) (30,559 )

Operating cash flows before 未計營運資金變動前之movement in working capital 經營現金流量 2,116,842 2,781,208

Increase in inventories 存貨增加 (138,503 ) (167,102 )

Decrease (increase) in trade and 貿易及其他應收賬款及other receivables and prepayments 預付款項減少（增加） 1,196,538 (687,047 )

Decrease (increase) in amounts 應收同系附屬公司款項due from fellow subsidiaries 減少（增加） 209,361 (218,586 )

(Decrease) increase in trade and 貿易及其他應付賬款 other payables （減少）增加 (358,332 ) 69,304

(Decrease) increase in bills payable 應付票據（減少）增加 (281,202 ) 45,039

Net increase in derivative 衍生金融工具增加 financial instruments 淨額 453 3,509

Increase (decrease) in amounts 應付同系附屬公司款項due to fellow subsidiaries 增加（減少） 6,776 (839 )

Cash generated from operations 經營業務所得現金 2,751,933 1,825,486

Hong Kong Profits Tax paid 已繳香港利得稅 (1,492 ) (48,644 )

Other taxes paid 其他已繳稅項 (61,272 ) (126,875 )

NET CASH FROM OPERATING 經營業務所得現金淨額 ACTIVITIES 2,689,169 1,649,967


105

Consolidated Cash Flow Statement 綜合現金流量表For the year ended 31 December 2008截至二零零八年十二月三十一日止年度

2008 2007

二零零八年二零零七年NOTE HK$’000 HK$’000


INVESTING ACTIVITIES 投資業務Purchase of properties, 購買物業、廠房及設備

plant and equipment (854,078 ) (1,325,365 )

Deposits paid for 購買物業、廠房及設備acquisition of properties, 所付訂金plant and equipment (78,197 ) (197,677 )

Prepaid lease payments made 已付預付租賃款項 – (11,213 )

Interest received 已收利息 21,871 30,559

Proceeds from disposal of properties, 出售物業、廠房及設備plant and equipment 所得款項 38,228 65,741

Consideration paid for acquisition 增購可供出售投資權益of additional interest in 所付代價

available-for-sale investments – (10,800 )

Consideration paid for acquisition 收購一間附屬公司額外of additional interest in a subsidiary 權益所付之代價 (8,475 ) –

Net cash inflow (outflow) arising on 收購附屬公司產生之現金acquisition of subsidiaries 流入（流出）淨額 32 20,280 (110,928 )

NET CASH USED IN INVESTING 投資業務所用 ACTIVITIES 現金淨額 (860,371 ) (1,559,683 )

FINANCING ACTIVITIES 融資活動New bank borrowings raised 新增銀行借貸 1,164,018 683,059

Repayment of bank borrowings 償還銀行借貸 (1,165,720 ) (548,650 )

Dividends paid on ordinary shares 已付普通股股息 (960,000 ) (300,000 )

Dividends paid to minority shareholders 已付少數股東股息 (24,854 ) (19,464 )

Interest and other finance charges paid 已付利息及其他融資費用 (116,053 ) (168,136 )

NET CASH USED IN FINANCING 融資活動所用 ACTIVITIES 現金淨額 (1,102,609 ) (353,191 )

NET INCREASE (DECREASE) IN CASH 現金及現金等價物增加AND CASH EQUIVALENTS （減少）淨額 726,189 (262,907 )

CASH AND CASH EQUIVALENTS 年初之現金及現金AT THE BEGINNING OF THE YEAR 等價物 1,471,742 1,713,324

EFFECT OF FOREIGN EXCHANGE 匯率變動影響 RATE CHANGES 39,568 21,325

CASH AND CASH EQUIVALENTS 年末之現金及現金等價物，AT THE END OF THE YEAR, 即銀行結餘及現金REPRESENTING BANK BALANCES

AND CASH 2,237,499 1,471,742


106

Notes to the Consolidated Financial Statements綜合財務報表附註For the year ended 31 December 2008截至二零零八年十二月三十一日止年度

1. GENERALThe Company was incorporated and registered as an

exempted company with limited liability in the Cayman

Islands on 10 May 2006 and its shares were listed on

the main board of The Stock Exchange of Hong Kong

Limited (the “Stock Exchange”) on 7 December 2006.

Its immediate parent company is Jamplan (BVI) Ltd., a

limited liability company incorporated in the British Virgin

Islands and its ultimate holding company is Kingboard

Chemical Holdings Limited (“KCHL”), a company which is

an exempted company with limited liability incorporated

in the Cayman Islands with its shares listed on the main

board of the Stock Exchange. The addresses of the

registered office and principal place of business of the

Company are disclosed in the section headed “Corporate

Information” on pages 2 to 3.

The functional currency of the Group is Renminbi (“RMB”)

while the consolidated financial statements are presented

in Hong Kong Dollars (“HK$”), which the management of

the Company considered is more beneficial for the users

of the consolidated financial statements.

The Company is an investment holding company and

the principal activities of its subsidiaries are set out in

Note 37.

2. APPLICATION OF NEW AND REVISEDHONG KONG FINANCIAL REPORTINGSTANDARDS (“HKFRSs”)In the current year, the Group has applied the following

amendments and interpretations (“new HKFRSs”) issued

by the Hong Kong Institute of Certified Public Accountants

(“HKICPA”) which are or have become effective.

HKAS 39 & HKFRS 7 Reclassification of financial assets

(Amendments)

HK(IFRIC)* – INT 11 HKFRS 2: Group and treasury

share transactions

HK(IFRIC) – INT 12 Service concession arrangements

HK(IFRIC) – INT 14 HKAS 19 – The limit on a defined

benefit asset, minimum funding

requirements and their interaction

1. 一般資料本公司於二零零六年五月十日在開曼群島註冊成立並登記為一家獲豁免之有限公司，其股份於二零零六年十二月七日起於香港聯合交易所有限公司（「聯交所」）主板上市。本公司之直屬母公司為Jamplan

(BVI) Ltd.，該公司為一家於英屬處女群島註冊成立之有限公司），而本公司之最終控股公司為建滔化工集團（「建滔化工」），該公司為一家於開曼群島註冊成立並獲豁免之有限公司，其股份於聯交所主板上市。本公司註冊辦事處及主要營業地點之地址於第2至3頁「公司資料」一節中披露。

本集團的功能貨幣為人民幣（「人民幣」）。綜合財務報表則以港元（「港元」）呈列，本公司管理層認為此舉對綜合財務報表的使用者更有幫助。

本公司為投資控股公司，其附屬公司之主要業務載於附註37。

2. 應用新增及經修訂之香港財務申報準則（「香港財務申報準則」）

於本年度，本集團應用以下多項由香港會計師公會（「香港會計師公會」）頒佈並已生效的修訂本及詮釋（「新香港財務申報準則」）。

香港會計準則第39號及金融資產之重新分類香港財務申報準則第7號（修訂本）香港（國際財務申報香港財務申報準則準則詮釋委員會）* 第2號：集團及－詮釋第11號庫存股份交易香港（國際財務申報服務經營權安排準則詮釋委員會）－詮釋第12號香港（國際財務申報香港會計準則第19號準則詮釋委員會）－設定受益資產－詮釋第14號的上限，最低資金

要求規定及其相互關係


107

Notes to the Consolidated Financial Statements 綜合財務報表附註For the year ended 31 December 2008截至二零零八年十二月三十一日止年度

2. APPLICATION OF NEW AND REVISEDHONG KONG FINANCIAL REPORTINGSTANDARDS (“HKFRSs”) (continued)The adoption of the new HKFRSs had no material effect

on how the results and the financial position for the

current or prior accounting periods have been prepared

and presented. Accordingly, no prior period adjustment

has been required.

The Group has not early applied the following new and

revised standards, amendments or interpretations that

have been issued but are not yet effective.

HKFRSs (Amendments) Improvements to HKFRSs 1

HKAS 1 (Revised) Presentation of financial statements 2

HKAS 23 (Revised) Borrowing costs 2

HKAS 27 (Revised) Consolidated and separate financial

statements 3

HKAS 32 & 1 Puttable financial instruments and

(Amendments) obligations arising on liquidation 2

HKAS 39 (Amendment) Eligible hedged items 3

HKFRS 1 & HKAS 27 Cost of an investment in a subsidiary,

(Amendments) jointly controlled entity or associate 2

HKFRS 2 (Amendment) Vesting conditions and cancellations 2

HKFRS 3 (Revised) Business combinations 3

HKFRS 7 (Amendment) Improving disclosures about

financial instruments 2

HKFRS 8 Operating segments 2

HK(IFRIC) – INT 9 & Embedded derivatives 4

HKAS 39 (Amendment)

HK(IFRIC) – INT 13 Customer loyalty programmes 5

HK(IFRIC) – INT 15 Agreements for the construction

of real estate 2

HK(IFRIC) – INT 16 Hedges of a net investment in

a foreign operation 6

HK(IFRIC) – INT 17 Distribution of non-cash assets

to owners 3

HK(IFRIC) – INT 18 Transfer of assets from customers 7

2. 應用新增及經修訂之香港財務申報準則（「香港財務申報準則」）（續）採納該等新增香港財務申報準則對如何編製及呈列本期間或過往會計期間之業績及財務狀況之方式並無重大影響。因此，本集團無需對過往期間進行調整。

本集團並無提前應用下列已頒佈但尚未生效之新增及經修訂的準則、修訂本或詮釋。

香港財務申報準則香港財務申報準則（修訂本）之改進1

香港會計準則第1號財務報表的呈列2

（經修訂）香港會計準則第23號借貸成本2

（經修訂）香港會計準則第27號綜合及獨立財務報表3

（經修訂）香港會計準則第32及可沽售金融工具及 1號（修訂本）清盤時產生之責任2

香港會計準則第39號合資格對沖項目3

（修訂本）香港財務申報準則第1號於附屬公司、共同及香港會計準則控制實體或聯營第27號（修訂本）公司之投資成本2

香港財務申報準則第2號歸屬條件及註銷2

（修訂本）香港財務申報準則第3號業務合併3

（經修訂）香港財務申報準則第7號金融工具披露改善2

（修訂本）香港財務申報準則第8號經營分部2

香港（國際財務申報準則內置衍生工具4

詮釋委員會）－詮釋第9號及香港會計準則第39號（修訂本）香港（國際財務申報顧客忠誠度計劃5

準則詮釋委員會）－詮釋第13號香港（國際財務申報房地產建造協議2

準則詮釋委員會）－詮釋第15號香港（國際財務申報海外業務投資淨額準則詮釋委員會）之對沖6

－詮釋第16號香港（國際財務申報分配給擁有人的非現準則詮釋委員會）金資產3

－詮釋第17號香港（國際財務申報來自客戶之資產轉移7

準則詮釋委員會）－詮釋第18號


108


2. APPLICATION OF NEW AND REVISEDHONG KONG FINANCIAL REPORTINGSTANDARDS (“HKFRSs”) (continued)1 Effective for annual periods beginning on or after 1 January 2009

except the amendments to HKFRS 5, effective for annual periods

beginning on or after 1 July 2009.

2 Effective for annual periods beginning on or after 1 January 2009.

3 Effective for annual periods beginning on or after 1 July 2009.

4 Effective for annual periods ending on or after 30 June 2009.

5 Effective for annual periods beginning on or after 1 July 2008.

6 Effective for annual periods beginning on or after 1 October

2008.

7 Effective for transfers on or after 1 July 2009.

* IFRIC represents the Internat ional F inancia l Report ingInterpretations Committee.

The adoption of HKFRS 3 (Revised) may affect the

accounting treatment for business combination for which

the acquisition date is on or after the beginning of the first

annual reporting period beginning on or after 1 July 2009.

HKAS 27 (Revised) will affect the accounting treatment for

changes in parent’s ownership interest in a subsidiary that

do not result in a loss of control, which will be accounted

for as equity transactions.

The directors of the Company (the “Director”) anticipate

that the application of other new or revised standards,

amendments or interpretations will have no material

impact on the results or financial position of the Group.

3. SIGNIFICANT ACCOUNTING POLICIESThe consolidated financial statements have been prepared

on the historical cost basis except for investment

properties and certain financial instruments, which are

measured at fair values, as explained in the accounting

policies set out below.

The consol idated f inancial statements have been

prepared in accordance with Hong Kong Financial

Reporting Standards issued by the HKICPA. In addition,

the consolidated financial statements include applicable

disclosures required by the Rules Governing the Listing of

Securities on the Stock Exchange and by the Hong Kong

Companies Ordinance.

2. 應用新增及經修訂之香港財務申報準則（「香港財務申報準則」）（續）

1 於二零零九年一月一日或其後開始之年度期間生效，惟香港財務申報準則第5號之修訂本於二零零九年七月一日或其後開始之年度期間生效。

2 於二零零九年一月一日或其後開始之年度期間生效。

3 於二零零九年七月一日或其後開始之年度期間生效。

4 於二零零九年六月三十日或其後終止之年度期間生效。

5 於二零零八年七月一日或其後開始之年度期間生效。

6 於二零零八年十月一日或其後開始之年度期間生效。

7 自二零零九年七月一日或其後之轉讓開始生效。

* IFRIC代表國際財務申報準則詮釋委員會。

採納香港財務申報準則第3號（經修訂）或會影響收購日期為二零零九年七月一日或之後開始之首個年度報告期間開始當日或之後業務合併之會計處理。香港會計準則第27號（經修訂）將影響對母公司於附屬公司之擁有權出現不致失去控制權之變動之會計處理方法，有關變動將入賬列作股本交易。

本公司董事（「董事」）預期應用其他新增或經修訂的準則、修訂本或詮釋對本集團之業績或財務狀況並無重大影響。

3. 主要會計政策綜合財務報表乃按歷史成本基準編製，惟如下文所載之會計政策所闡述，投資物業及若干金融工具則按公平值計量。

綜合財務報表乃按香港會計師公會頒佈的香港財務申報準則編製。此外，綜合財務報表載有聯交所證券上市規則及香港公司條例之適用披露規定。


109


3. SIGNIFICANT ACCOUNTING POLICIES(continued)Basis of consolidationThe consolidated financial statements incorporate

the financial statements of the Company and entities

controlled by the Company (its subsidiaries) made up

to 31 December each year. Control is achieved where

the Company has the power to govern the financial and

operating policies of an entity so as to obtain benefits

from its activities.

The results of subsidiaries acquired or disposed of

during the year are included in the consolidated income

statement from the effective date of acquisition or up to

the effective date of disposal, as appropriate.

Where necessary, adjustments are made to the financial

statements of subsidiaries to bring their accounting

policies into line with those used by other members of the

Group.

All intra-group transactions, balances, incomes and

expenses are eliminated on consolidation.

Minority interests in the net assets of consolidated

subsidiaries are presented separately from the Group’s

equity therein. Minority interests in the net assets consist

of the amount of those interests at the date of the original

business combination and the minority’s share of changes

in equity since the date of the combination. Losses

applicable to the minority in excess of the minority’s

interest in the subsidiary’s equity are allocated against

the interests of the Group except to the extent that the

minority has a binding obligation and is able to make an

additional investment to cover the losses.

On acquisition of additional interest in subsidiaries,

goodwill arising is calculated as the difference between

the consideration paid for the additional interest and the

carrying amount of the net assets of the subsidiaries

attributable to the additional interest acquired. If the

Group’s additional interest in the net assets of the

subsidiaries exceeds the consideration paid for the

additional interest, the excess is recognised immediately as

income in the consolidated income statement.

3. 主要會計政策（續）

綜合賬目基準綜合財務報表包括本公司及由本公司控制之實體（其附屬公司）截至每年十二月三十一日止之財務報表。當本公司有權力操縱某實體之財政及經營政策以藉其活動之中獲益，將視為擁有控制權。

於年內收購或出售之附屬公司之業績，自實際收購日期起或結算至出售生效日期止（視適用情況而定）列入綜合收益表內。

如有需要，將會就附屬公司之財務報表作出調整，以確保其會計政策與本集團其他成員公司所採用者貫徹一致。

所有集團內公司間之交易、結餘、收入及開支已於綜合賬目時對銷。

綜合入賬之附屬公司之資產淨值之少數股東權益乃與本集團擁有之權益分開呈列。於該等資產淨值之少數股東權益包括於原本之企業合併日期該等權益之金額及自合併日期以來少數股東應佔權益之變動。適用於少數股東及超過少數股東於附屬公司之權益之虧損乃與本集團之權益對銷，惟少數股東有具約束力責任及有能力作出額外投資以彌補虧損則除外。

收購附屬公司之額外權益時，所產生之商譽按就額外權益所付代價與所收購之額外權益應佔附屬公司資產淨值之賬面值間差額計算。倘本集團應佔附屬公司資產淨值之額外權益超逾就額外權益所支付之代價，超額部分即時於綜合收益表內確認。


110


3. SIGNIFICANT ACCOUNTING POLICIES(continued)

Business combinations

The acquisition of businesses is accounted for using

the purchase method. The cost of the acquisition is

measured at the aggregate of the fair values, at the

date of exchange, of assets given, liabilities incurred or

assumed, and equity instruments issued by the Group

in exchange for control of the acquiree, plus any costs

directly attributable to the business combination. The

acquiree’s identifiable assets, liabilities and contingent

liabilities that meet the conditions for recognition under

HKFRS 3 “Business combinations” are recognised at their

fair values at the acquisition date.

Goodwill arising on acquisition is recognised as an asset

and initially measured at cost, being the excess of the

cost of the business combination over the Group’s

interest in the net fair value of the identifiable assets,

liabilities and contingent liabilities recognised. If, after

reassessment, the Group’s interest in the net fair value of

the acquiree’s identifiable assets, liabilities and contingent

liabilities exceeds the cost of the business combination,

the excess is recognised immediately in the consolidated

income statement.

The interest of minority shareholders in the acquiree is

initially measured at the minority’s proportion of the net

fair value of the assets, liabilities and contingent liabilities

recognised.

Goodwill

Goodwi l l ar is ing on an acquis i t ion of a business

represents the excess of the cost of acquisition over the

Group’s interest in the fair value of the identifiable assets,

liabilities and contingent liabilities of the relevant business

at the date of acquisition. Such goodwill is carried at cost

less any accumulated impairment losses.

Capital ised goodwil l arising on an acquisit ion of a

business is presented separately in the consolidated

balance sheet.


業務合併

收購業務採用購買會計處理法入賬。收購成本按交易當日所給予之資產、所產生或承擔之負債，以及本集團為控制被收購方而已發行股本工具之公平值總額，另加業務合併中直接應佔之任何成本計量。符合香港財務申報準則第3號「業務合併」確認條件之被收購方之可識別資產、負債及或然負債，均以收購日期之公平值確認。

因收購而產生之商譽確認為資產，乃初步按成本（即業務合併成本超逾本集團所佔之已確認之可識別資產、負債及或然負債之公平值淨額之權益之部分）計量。倘於重新評估後，本集團應佔被收購方之可識別資產、負債及或然負債之公平值淨額之權益高於業務合併成本，其超出部分即時於綜合收益表內確認。

少數股東於被收購方之權益初步按少數股東於已確認資產、負債及或然負債之公平值淨額所佔比例計量。

商譽

收購業務所產生之商譽，乃指收購成本超出本集團於收購日期應佔有關業務之可識別資產、負債及或然負債公平值之權益之數額。該商譽按成本減任何累計減值虧損列賬。

收購一項業務所產生並已資本化之商譽於綜合資產負債表內獨立呈列。


111



Goodwill (continued)

For the purposes of impairment testing, goodwill arising

from an acquisition is allocated to each of the relevant

cash-generating units, or groups of cash-generating

units, that are expected to benefit from the synergies of

the acquisition. A cash-generating unit to which goodwill

has been allocated is tested for impairment annually,

and whenever there is an indication that the unit may

be impaired. For goodwill arising on an acquisition in a

financial year, the cash-generating unit to which goodwill

has been allocated is tested for impairment before the end

of that financial year. When the recoverable amount of

the cash-generating unit is less than the carrying amount

of the unit, the impairment loss is allocated to reduce the

carrying amount of any goodwill allocated to the unit first,

and then to the other assets of the unit pro rata on the

basis of the carrying amount of each asset in the unit. Any

impairment loss for goodwill is recognised directly in the

consolidated income statement. An impairment loss for

goodwill is not reversed in subsequent periods.

Investment properties

Investment properties are properties held to earn rentals

and/or for capital appreciation.

On initial recognition, investment properties are measured

at cost, including any directly attributable expenditure.

Subsequent to initial recognition, investment properties

are measured at their fair values using the fair value

model. Gains or losses arising from changes in the fair

value of investment properties are included in profit or

loss for the period in which they arise.

An investment property is derecognised upon disposal or

when the investment property is permanently withdrawn

from use and no future economic benefits are expected

from its disposal. Any gain or loss arising on derecognition

of the asset (calculated as the difference between the net

disposal proceeds and the carrying amount of the asset) is

included in the consolidated income statement in the year

in which the item is derecognised.


商譽（續）就減值測試而言，收購所產生之商譽分配到預期從收購之協同效應中受益之各有關現金產生單位，或現金產生單位之組別。已獲分配商譽之現金產生單位每年及凡該單位有跡象顯示出現減值時進行減值測試。就於財政年度之收購所產生之商譽而言，已獲分配商譽之現金產生單位於該財政年度完結前進行減值測試。當現金產生單位之可收回金額少於該單位之賬面值，則減值虧損被分配，以首先削減分配到該單位之任何商譽之賬面值，及其後以單位各資產之賬面值為基準，按比例分配到該單位之其他資產。商譽之任何減值虧損乃於綜合收益表內直接確認。商譽之減值虧損於其後期間不予撥回。

投資物業

投資物業乃持作賺取租金及╱或資本增值之物業。

於初步確認時，投資物業乃按成本計量，包括任何直接應佔開支。於初步確認後，投資物業按公平值以公平值模式計量。投資物業公平值變動產生之盈虧乃計入盈虧產生期間之損益內。

投資物業於出售後，或當永久停止使用該投資物業，及預期出售不會產生未來經濟利益時剔除確認。剔除確認該資產所產生之任何盈虧（按出售所得款項淨額與該資產賬面值間之差額計算），乃計入剔除確認項目年度之綜合收益表內。


112



Properties, plant and equipment

Properties, plant and equipment (other than properties,

plant and equipment under construct ion) used in

the production of goods or supply of services, or for

administrative purposes, are stated in the consolidated

balance sheet at cost less subsequent accumulated

depreciation and any accumulated impairment losses.

Depreciation is provided to write off the cost of items of

properties, plant and equipment other than properties,

plant and equipment under construction over their

estimated useful lives and after taking into account of their

estimated residual value, using the straight-line method

(see Note 16 for the depreciation rates per annum of the

items of properties, plant and equipment).

Properties, plant and equipment under construction,

representing properties, plant and equipment in the

course of construction for production or for its own

use purposes, are carried at cost less any recognised

impairment loss. Properties, plant and equipment under

construction is classified to the appropriate category

of property, plant and equipment when completed and

ready for intended use. Depreciation of these assets, on

the same basis as other property assets, commences

when the assets are ready for their intended use.

An i t em o f p rope r t i es , p l an t and equ ipment i s

derecognised upon disposal or when no future economic

benefits are expected to arise from the continued use of

the asset. Any gain or loss arising on derecognition of

the asset (calculated as the difference between the net

disposal proceeds and the carrying amount of the item) is

included in the consolidated income statement in the year

in which the item is derecognised.


物業、廠房及設備

用於生產貨物或供應服務或作行政用途之物業、廠房及設備（不包括在建之物業、廠房及設備），乃按成本減其後累計折舊及任何累計減值虧損於綜合資產負債表列賬。

物業、廠房及設備項目（在建物業、廠房及設備除外）之折舊乃根據其估計可使用年期，於計及其估計剩餘價值後，以直線法撇銷其成本。（有關物業、廠房及設備項目每年折舊率，見附註16）

在建物業、廠房及設備（即為生產或自用而在建之物業、廠房及設備）按成本減任何已識別減值虧損列賬。在建物業、廠房及設備在竣工及可作擬定用途時分類為物業、廠房及設備之適當類別。該等資產在可作擬定用途時按其他物業資產之相同基準開始計提折舊。

物業、廠房及設備項目於出售或預期持續使用資產不會產生未來經濟利益時剔除確認。剔除確認資產時所產生之任何盈虧（按出售所得款項淨額與項目賬面值間之差額計算）乃計入剔除確認項目年度之綜合收益表內。


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Properties, plant and equipment (continued)

Leasehold land and buildings under development for

future owner-occupied purpose

When the leasehold land and buildings are in the course

of development for production, rental or for administrative

purposes, the leasehold land component is classified as a

prepaid lease payment and amortised over a straight-line

basis over the lease term. During the construction period,

the amortisation charge provided for the leasehold land is

included as part of costs of buildings under construction.

Buildings under construction are carried at cost, less any

identified impairment losses. Depreciation of buildings

commences when they are available for use (i.e. when

they are in the location and condition necessary for them

to be capable of operating in the manner intended by

management).

Inventories

Inventories are stated at the lower of cost and net

real isable value. Cost comprises direct mater ials

and, where applicable, direct labour costs and those

overheads that have been incurred in bringing the

inventories to their present location and condition. Cost

is calculated using the weighted average method. Net

realisable value represents the estimated selling price less

all estimated costs of completion and costs to be incurred

in marketing, selling and distribution.

Impairment losses on assets (other than goodwill

(see the account ing pol ic ies in respect of

goodwill))

At each balance sheet date, the Group reviews the

carrying amounts of its tangible assets to determine

whether there is any indication that those assets have

suffered an impairment loss. If the recoverable amount

of an asset is estimated to be less than its carrying

amount, the carrying amount of the asset is reduced to its

recoverable amount. An impairment loss is recognised as

an expense immediately.


物業、廠房及設備（續）發展中供日後業主使用之租約土地及樓宇

倘租約土地及樓宇正在發展作生產、租約或行政用途，則租約土地部分乃分類為預付租賃款項，並於租約年期以直線法攤銷。在建期間，就租約土地計提攤銷費用，乃列作在建樓宇成本部分。在建樓宇以成本減任何已識別減值虧損列賬。樓宇於可供使用（即其達致管理層預期方式之所需運作地點及狀況）時開始計提折舊。

存貨

存貨按成本或可變現淨值兩者中之較低者入賬。成本包括直接物料及（如適用）直接勞工成本及使存貨達致現有位置及狀況所產生之間接成本。成本按加權平均法計算。可變現淨值指估計售價減估計完成所需之全部成本以及市場推廣、銷售及分銷將予產生之成本。

資產減值虧損（商譽除外（見有關商譽之會

計政策））

於各結算日，本集團審閱其有形資產之賬面值，以確定是否有任何跡象顯示該等資產出現減值虧損。倘某項資產之可收回金額估計低於其賬面值，則該項資產之賬面值須削減至其可收回金額。減值虧損即時確認為開支。


114



Impairment losses on assets (other than goodwill (see the account ing pol ic ies in respect ofgoodwill)) (continued)

Where an impairment loss subsequently reverses, the

carrying amount of the asset is increased to the revised

estimate of its recoverable amount, but so that the

increased carrying amount does not exceed the carrying

amount that would have been determined had no

impairment loss been recognised for the asset in prior

years. A reversal of an impairment loss is recognised as

income immediately.

LeasingLeases are classified as finance leases whenever the

terms of the lease transfer substantially all the risks and

rewards of ownership to the lessee. All other leases are

classified as operating leases.

The Group as lessor

Rental income from operating leases is recognised in the

consolidated income statement on a straight-line basis

over the term of the relevant lease.

The Group as lessee

Rentals payable under operating leases are charged to

the consolidated income statement on a straight-line

basis over the term of the relevant lease. Benefits received

and receivable as an incentive to enter into an operating

lease are recognised as a reduction of rental expense

over the lease term on a straight-line basis.

Leasehold land and building

The land and building elements of a lease of land and

building are considered separately for the purpose of

lease classification, unless the lease payments cannot

be allocated reliably between the land and building

elements, in which case, the entire contract is treated as

a finance lease and accounted for as properties, plant

and equipment. To the extent the allocation of the lease

payments can be made reliably, leasehold interests in land

are accounted as operating leases except for those that

are classified and accounted for as investment properties

under fair value model.


資產減值虧損（商譽除外（見有關商譽之會計政策））（續）

倘日後轉出減值虧損，有關資產之賬面值須增至其經重新估計之可收回金額，惟增加之賬面值不得超出倘有關資產並無於以往年度確認任何減值虧損所應釐定之賬面值。轉出之減值虧損即時確認為收入。

租約當租約條款將涉及擁有權之絕大部分風險及回報轉讓予承租人時，該租約乃分類為融資租約。所有其他租約均分類為經營租約。

由本集團出租經營租約之租金收入乃按相關租約年期以直線法在綜合收益表確認。

由本集團承租根據經營租約之應付租金於有關租約年期以直線法在綜合收益表中扣除。訂立經營租約時已收及應收作為獎勵之利益按直線法於有關租約之年期確認為租金開支減少。

租約土地及樓宇就租賃分類而言，租約土地及樓宇中土地及樓宇部分乃分開計算，除非租金支出無法可靠地在土地及樓宇部分之間作出分配，則在此情況下，整項合約則當作融資租約處理，並列作物業、廠房及設備。倘能可靠分配租金支出，土地的租約權益則列作經營租約，惟該等根據公平值模式分類及入賬為投資物業之租約權益則除外。


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3. SIGNIFICANT ACCOUNTING POLICIES(continued)Foreign currenciesIn preparing the financial statements of each individualgroup entity, transactions in currencies other than thefunctional currency of that entity (foreign currencies) are recorded in the respective functional currency (i.e. thecurrency of the primary economic environment in which the entity operates) at the rates of exchange prevailingon the dates of the transactions. At each balance sheet date, monetary items denominated in foreign currencies are retranslated at the rates prevailing on the balancesheet date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslatedat the rates prevailing on the date when the fair valuewas determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are notretranslated.

Exchange differences arising on the settlement ofmonetary items, and on the translation of monetary items, are recognised in the consolidated income statementin the period in which they arise. Exchange differencesarising on the retranslation of non-monetary items carried at fair value are included in the consolidated incomestatement for the period.

For the purposes of presenting the consolidated financial statements, the assets and liabilities of the group entities are translated into the presentation currency of the Group (i.e. Hong Kong dollars) at the rate of exchange prevailing at the balance sheet date, and their income and expenses are translated at the average exchange rates for the year, unless exchange rates fluctuate significantly during theperiod, in which case, the exchange rates prevailing atthe dates of transactions are used. Exchange differences arising, if any, are recognised as a separate component of equity (the translation reserve).

Goodwill and fair value adjustments on identif iableassets and liabilities acquired arising on an acquisitionof a foreign operation are treated as assets and liabilities of that foreign operation and translated at the rate ofexchange prevailing at the balance sheet date. Exchange differences arising are recognised in the translationreserve.


外幣編製各集團實體之財務報表時，以該實體之功能貨幣以外貨幣（外幣）進行之交易乃按其功能貨幣（即實體主要經營之經濟環境之貨幣）於交易日期當時之匯率記錄。於各結算日，以外幣列值之貨幣項目以結算日當日之匯率重新匯兌。按公平值列賬且按外幣列值之非貨幣項目乃會按釐定公平值當日之匯率重新匯兌。以外幣過往成本計算之非貨幣項目不予重新匯兌。

結算貨幣項目及匯兌貨幣項目所產生之匯兌差額會於產生期間在綜合收益表中確認。重新匯兌按公平值列賬之非貨幣項目產生之匯兌差額計入期內綜合收益表。

就呈列綜合財務報表而言，本集團之集團實體之資產及負債均按結算日當日匯率匯兌為本集團之呈列貨幣（即港元），而彼等之收入及開支項目乃按年內平均匯率匯兌，除非期內匯率出現重大波幅，則於此情況下，將採用交易日之匯率。所產生匯兌差額（如有）確認為權益之獨立部分（匯兌儲備）。

於收購海外業務時產生之對被收購的可識別資產及負債所作出的商譽及公平值調整被視作該海外業務之資產及負債，並按結算日之匯率匯兌。所產生匯兌差額於匯兌儲備確認。


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Borrowing costs

Borrowing costs directly attributable to the acquisition,

const ruct ion or product ion o f qua l i f y ing assets

are capitalised as part of the cost of those assets.

Capitalisation of such borrowing costs ceases when

the assets are substantially ready for their intended use

or sale. Investment income earned on the temporary

investment of speci f ic borrowings pending the i r

expenditure on qualifying assets is deducted from the

borrowing costs eligible for capitalisation.

A l l other borrowing costs are recognised in the

consolidated income statement in the period in which

they are incurred.

Retirement benefit costs

Payments to defined contribution retirement benefit plans,

including state-managed pension schemes and the

Mandatory Provident Fund Schemes are charged as an

expense when employees have rendered service entitling

them to the contributions.

Taxation

Income tax expense represents the sum of the tax

currently payable and deferred tax.

The tax currently payable is based on taxable profit for

the year. Taxable profit differs from profit as reported in

the consolidated income statement because it excludes

items of income or expense that are taxable or deductible

in other years and it further excludes items that are never

taxable or deductible. The Group’s liability for current tax

is calculated using tax rates that have been enacted or

substantively enacted by the balance sheet date.


借貸成本

與收購、建造或生產合資格資產直接有關之借貸成本均撥充資本，作為該等資產之部分成本。當資產大致可作其擬定用途或可供銷售時，該等借貸成本將不再撥充為資本。特定借貸中，在其應用於合資格的資產之前所作的臨時投資所賺取的投資收入，須於資本化的借貸成本中扣除。

所有其他借貸成本均在發生期間於綜合收益表確認。

退休福利成本

向定額供款退休福利計劃（包括國家管理退休福利計劃及強積金計劃）支付之供款均於僱員提供服務使其可獲供款時以開支形式扣除。

稅項

所得稅開支指現時應付稅項與遞延稅項之總和。

現時應付稅項乃按本年度應課稅溢利計算。應課稅溢利與綜合收益表中所申報之溢利不同，乃由於前者不包括在其他年度應課稅或可扣稅收入或開支，並且不包括從未應課稅或可扣稅之項目。本集團即期稅項之債務乃按結算日已頒佈或實際已頒佈之稅率計算。


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Taxation (continued)

Deferred tax is recognised on differences between

the carrying amounts of assets and liabilities in the

consolidated financial statements and the corresponding

tax bases used in the computation of taxable profit, and

is accounted for using the balance sheet liability method.

Deferred tax liabilities are generally recognised for all

taxable temporary differences and deferred tax assets

are recognised to the extent that it is probable that

taxable profits will be available against which deductible

temporary differences can be utilised. Such assets and

liabilities are not recognised if the temporary difference

arises from goodwill or from the initial recognition (other

than in a business combination) of assets and liabilities in

a transaction that affects neither the taxable profit nor the

accounting profit.

Deferred tax liabilities are recognised for taxable temporary

differences arising on investments in subsidiaries, except

where the Group is able to control the reversal of the

temporary difference and it is probable that the temporary

difference will not be reversed in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at

each balance sheet date and reduced to the extent that it

is no longer probable that sufficient taxable profits will be

available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are

expected to apply in the period when the liability is settled

or the asset realised. Deferred tax is charged or credited

to the consolidated income statement, except when it

relates to items charged or credited directly to equity, in

which case the deferred tax is also dealt with in equity.


稅項（續）遞延稅項乃根據綜合財務報表資產及負債賬面值與計算應課稅溢利所採用相應稅基間之差額確認，並以資產負債表負債法處理。遞延稅項負債一般會就所有應課稅臨時差額確認，而遞延稅項資產乃按可能出現可利用臨時差額扣稅之應課稅溢利時確認。因商譽或因業務合併以外交易初步確認資產及負債且不影響應課稅溢利亦不影響會計溢利而引致之臨時差額，則不會確認該等資產及負債。

遞延稅項負債乃按於附屬公司之投資而引致之應課稅臨時差額而確認，惟若本集團可控制臨時差額之撥回及臨時差額有可能不會於可見將來之撥回之情況則除外。

遞延稅項資產之賬面值於各結算日作檢討，並在沒可能會有足夠應課稅溢利收回全部或部分資產時加以遞減。

遞延稅項乃按預期於負債清償或資產變現期間適用之稅率計算。遞延稅項於綜合收益表扣除或計入綜合收益表，惟倘遞延稅項直接在權益中扣除或計入權益之情況則除外，在此情況下，遞延稅項亦會於權益中處理。


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Financial instruments

Financial assets and financial liabilities are recognised on

the consolidated balance sheet when the Group entity

becomes a party to the contractual provisions of the

instrument. Financial assets and financial liabilities are

initially measured at fair value. Transaction costs that are

directly attributable to the acquisition or issue of financial

assets and financial liabilities (other than financial assets

and financial liabilities at fair value through profit or loss)

are added to or deducted from the fair value of the

financial assets or financial liabilities, as appropriate, on

initial recognition. Transaction costs directly attributable to

the acquisition of financial assets or financial liabilities at

fair value through profit or loss are recognised immediately

in the consolidated income statement.

Financial assets

The Group’s financial assets are classified into (i) financial

assets at fair value through profit or loss (“FVTPL”), (ii)

loans and receivables and (iii) available-for-sale financial

assets. All regular way purchases or sales of financial

assets are recognised and derecognised on a trade date

basis. Regular way purchases or sales are purchases or

sales of financial assets that require delivery of assets

within the t ime frame established by regulation or

convention in the marketplace. The accounting policies

adopted in respect of each category of financial assets

are set out below.

Effective interest method

The effective interest method is a method of calculating

the amortised cost of a financial asset and of allocating

interest income over the relevant period. The effective

interest rate is the rate that exactly discounts estimated

future cash receipts (including all fees paid or received

that form an integral part of the effective interest rate,

transaction costs and other premiums or discounts)

through the expected life of the financial asset, or, where

appropriate, a shorter period.

Interest income is recognised on an effective interest

basis for debt instruments.


金融工具當集團實體成為工具合約條文之訂約方時，財務資產及財務負債會於綜合資產負債表確認。財務資產及財務負債初步按公平值計量。因收購或發行財務資產及財務負債（按公平值計入損益之財務資產及財務負債除外）而直接應佔之交易成本於初步確認時，按適用情況加入或扣自該項財務資產或財務負債之公平值。因收購按公平值計入損益之財務資產或財務負債而直接引致之交易成本即時於綜合收益表確認。

財務資產本集團之財務資產分類為( i )按公平值計入損益（「按公平值計入損益」）之財務資產；( i i )貸款及應收賬款；及( i i i )可供出售財務資產。所有日常買賣之財務資產於交易日確認及剔除確認。日常買賣指須根據市場規則或慣例訂立之時間內交收資產之財務資產買賣。就各類別財務資產所採納之會計政策載於下文。

實際利率法實際利率法是一種計算財務資產攤銷成本與分派利息收入到相關期間之方法。實際利率是以精確估計財務資產可使用年期或（如適用）更短期間估計未來現金收入（包括所有在時點支付之費用，或者實際利率整體之收入、交易成本或者其他溢價或折價）之折現比率。

債務工具的利息收入乃按實際利率基準確認。


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Financial instruments (continued)

Financial assets (continued)

Financial assets at fair value through profit or loss

Financial assets at FVTPL are financial assets held for

trading. A financial asset is classified as held for trading if:

• it has been acquired principally for the purpose of

selling in the near future; or

• it is a part of an identified portfolio of financial

instruments that the Group manages together and

has a recent actual pattern of short-term profit-

taking; or

• it is a derivative that is not designated and effective

as a hedging instrument.

At each balance sheet date subsequent to in i t ia l

recognition, financial assets at FVTPL are measured at

fair value, with changes in fair value recognised directly

in the consolidated income statement in the period in

which they arise. The net gain or loss recognised in the

consolidated income statement excludes any dividend or

interest earned on the financial assets.

Loans and receivables

Loans and receivables ( including trade and other

receivables, amounts due from fellow subsidiaries, non-

current deposits and bank balances and cash) are non-

derivative financial assets with fixed or determinable

payments that are not quoted in an active market. At each

balance sheet date subsequent to initial recognition, loans

and receivables are carried at amortised cost using the

effective interest method, less any identified impairment

losses. (See accounting policy on impairment of financial

assets below).


金融工具（續）財務資產（續）按公平值計入損益之財務資產按公平值計入損益之財務資產為持作買賣財務資產。倘屬下列情況，財務資產則分類為持作買賣：

• 所收購之財務資產主要用於在不久將來銷售；或

• 屬於本集團整體管理之可辨別金融工具組合之一部分，且近期事實上有賺取短期溢利的模式；或

• 屬於衍生工具（除指定及具有有效對沖作用之工具之外）。

於初次確認後各結算日，按公平值計入損益之財務資產按公平值計量，公平值之變動於產生變動期間直接在綜合收益表中確認。於綜合收益表確認之收益或虧損淨額不包括任何財務資產所賺取之股息或利息。

貸款及應收賬款貸款及應收賬款（包括貿易及其他應收賬款、應收同系附屬公司款項、非流動訂金及銀行結餘及現金）為在活躍市場上並無報價而具有固定或待定付款之非衍生金融資產。於初次確認後之各個結算日，貸款及應收賬款以實際利率法按攤銷成本減任何已識別減值虧損列賬（請參閱下文有關財務資產減值之會計政策）。


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Financial assets (continued)

Available-for-sale financial assets

Available-for-sale financial assets are non-derivatives that

are either designated or not classified as financial assets

at FVTPL, loans and receivables or held-to-maturity

investments.


recognition, available-for-sale f inancial assets are

measured at fa ir value. Changes in fa ir value are

recognised in equity, until the financial asset is disposed

of or is determined to be impaired, at which time, the

cumulative gain or loss previously recognised in equity is

removed from equity and recognised in the consolidated

income statement. (See accounting policy on impairment

of financial assets below).

For available-for-sale equity investments that do not have

a quoted market price in an active market and whose

fair value cannot be reliably measured are measured

at cost less any identified impairment losses at each

balance sheet date subsequent to initial recognition.

(See accounting policy on impairment of financial assets

below).

Impairment of financial assets

Financial assets, other than those at FVTPL, are assessed

for indicators of impairment at each balance sheet date.

Financial assets are impaired where there is objective

evidence that, as a result of one or more events that

occurred after the initial recognition of the financial asset,

the estimated future cash flows of the financial assets

have been impacted.

For an available-for sale equity investment, a significant

or prolonged decline in the fair value of that investment

below its cost is considered to be objective evidence of

impairment.


金融工具（續）財務資產（續）可供出售財務資產可供出售財務資產為非衍生工具，其須指定或非分類為按公平值計入損益之財務資產、貸款及應收賬款或持至到期投資。

於首次確認後之各個結算日，可供出售財務資產按公平值計算。公平值之變動於權益確認，直至該財務資產售出或釐定有所減值，屆時過往於權益確認之累計盈虧將自權益剔除，並於綜合收益表中確認（請參閱下文有關財務資產減值之會計政策）。

在活躍市場上並無報價而其公平值未能可靠計量之可供出售股本投資，則於首次確認後之各個結算日，按成本減任何已識別減值虧損計算。（請參閱下文有關財務資產減值虧損之會計政策）。

財務資產減值財務資產（除該等按公平值計入損益外），於各結算日獲評估是否存有減值跡象。倘出現客觀證據，即因財務資產初步確認後產生之一項或多項事件，財務資產估計未來現金流量受到影響，則財務資產列作減值。

就可供出售的股本投資而言，該項投資的公平值大幅或長期跌至低於其成本值被視為減值的客觀證據。


121




Impairment of financial assets (continued)

For all other financial assets, objective evidence of

impairment could include significant financial difficulty

of the issuer or counterparty; or it becomes probable

that the borrower will enter bankruptcy or financial re-

organisation.

For certain categories of financial asset, such as trade

receivables, assets that are assessed not to be impaired

individually are subsequently assessed for impairment

on a collective basis. Objective evidence of impairment

for a portfolio of receivables could include the Group’s

past experience of collecting payments, an increase in

the number of delayed payments in the portfolio past

the credit period and observable changes in national or

local economic conditions that correlate with default on

receivables.

For financial assets carried at amortised cost, the amount

of impairment loss is recognised in the consolidated

income statement when there is objective evidence that

the asset is impaired, and is measured as the difference

between the asset’s carrying amount and the present

value of the estimated future cash flows discounted at the

original effective interest rate.

For financial assets carried at cost, the amount of the

impairment loss is measured as the difference between

the asset’s carrying amount and the present value of the

estimated future cash flows discounted at the current

market rate of return for a similar financial asset. Such

impairment loss will not be reversed in subsequent

periods.


金融工具（續）財務資產減值（續）就所有其他財務資產而言，減值的客觀證據可能包括發行人或交易對方出現重大財政困難；或借款人有可能面臨破產或財務重組。

就若干類別的財務資產（如貿易及其他應收賬款）而言，估定不會單獨作出減值的資產會於其後彙集一併評估減值。應收賬款組合出現減值的客觀證據包括本集團過往收款經驗、組合內逾期超過過往信貸期之欠款數目上升、國家或地區經濟狀況出現明顯變動導致應收賬款未能償還。

就按攤銷成本計值的財務資產而言，當有客觀證據顯示資產已減值時，減值虧損金額會於綜合收益表中確認，並以資產的賬面值與估計未來現金流量的現值（以財務資產的原始實際利率折現）間的差額計算。

就按成本計值的財務資產而言，減值虧損的金額以資產的賬面值與估計未來現金流量的現值（以同類財務資產的當前市場回報率折現）間的差額計算。該等減值虧損不會於其後期間回撥。


122


3. SIGNIFICANT ACCOUNTING POLICIES(continued)Financial instruments (continued)Impairment of financial assets (continued)The carrying amount of the financial asset is reduced by

the impairment loss directly for all financial assets with the

exception of trade receivables, where the carrying amount

is reduced through the use of an allowance account.

Changes in the carrying amount of the allowance account

are recognised in the consolidated income statement.

When a trade receivable and other receivables are

considered uncollectible, it is written off against the

allowance account. Subsequent recoveries of amounts

previously written off are credited to the consolidated

income statement.

For financial assets measured at amortised cost, if, in

a subsequent period, the amount of impairment loss

decreases and the decrease can be related objectively

to an event occurring after the impairment losses were

recognised, the previously recognised impairment loss

is reversed through the consolidated income statement

to the extent that the carrying amount of the asset at the

date the impairment is reversed does not exceed what

the amortised cost would have been had the impairment

not been recognised.

Impairment losses on available-for-sale equity investments

will not be reversed in the consolidated income statement

in subsequent per iods. Any increase in fair value

subsequent to impairment loss is recognised directly in

equity.

Financial liabilities and equityFinancial liabilities and equity instruments issued by a

group entity are classified according to the substance

of the contractual arrangements entered into and the

definitions of a financial liability and an equity instrument.

An equity instrument is any contract that evidences a

residual interest in the assets of the Group after deducting

all of its liabilities. The Group’s financial liabilities are

generally classified into financial liabilities at FVTPL and

other financial liabilities. The accounting policies adopted

in respect of financial liabilities and equity instruments are

set out below.


金融工具（續）財務資產減值（續）與所有財務資產有關的減值虧損會直接於財務資產的賬面值中作出扣減，惟貿易應收賬款除外，其賬面值會透過撥備賬作出扣減。撥備賬內的賬面值變動會於綜合收益表中確認。當貿易應收賬款及其他應收賬款被視為不可收回時，其將於撥備賬內撇銷。於其後重新收取的先前撇銷的款項將計入綜合收益表。

就以攤銷成本計算的財務資產而言，倘於隨後期間減值虧損的金額減少，而此項減少可客觀地與確認減值虧損後的某一事件聯繫，則先前確認的減值虧損於綜合收益表中予以撥回，惟於撥回減值當日的資產賬面值不得超逾假設未確認減值時的攤銷成本。

可供出售的股本投資的減值虧損不會於其後期間在綜合收益表內回撥。減值虧損後公平值的任何增加將直接在權益內確認。

財務負債及權益由集團實體發行之財務負債及權益工具按所訂立之合約安排內容，以及財務負債及權益工具之定義而分類。

權益工具為證明本集團資產剩餘權益（經扣除其所有負債）之任何合約。本集團之財務負債一般分類為按公平值計入損益中之財務負債及其他財務負債。就財務負債及權益工具採納之會計政策載於下文。


123




Financial liabilities and equity (continued)

Effective interest method

The effective interest method is a method of calculating

the amortised cost of a financial liability and of allocating

interest expense over the relevant period. The effective

interest rate is the rate that exactly discounts estimated

future cash payments through the expected life of the

financial liability, or, where appropriate, a shorter period.

Interest expenses is recognised on an effective interest

basis.

Financial liabilities at fair value through profit or loss

The Group’s financial liabilities at FVTPL are financial

liabilities held for trading. A financial liability is classified as

held for trading if:

• it has been incurred principally for the purpose of

repurchasing in the near future; or

• it is a part of an identified portfolio of financial

instruments that the Group manages together and

has a recent actual pattern of short-term profit-

taking; or

• it is a derivative that is not designated and effective

as a hedging instrument.


recognition, financial liabilities at fair value through profit

or loss are measured at fair value, with changes in fair

value recognised directly in the consolidated income

statement in the period in which they arise. The net gain

or loss recognised in the consolidated income statement

excludes any interest paid on the financial liabilities.

Other financial liabilities

Other f inancial l iabil it ies including trade and other

payables, bills payable, amounts due to fellow subsidiaries

and bank borrowings are subsequently measured at

amortised cost, using the effective interest method.


金融工具（續）財務負債及權益（續）實際利率法實際利率法是一種計算財務負債攤銷成本與分派利息開支到相關期間之方法。實際利率是以精確估計財務負債期間或（如適用）更短期間估計未來現金支出之折現比率。

利息開支乃按實際利率基準確認。

按公平值計入損益之財務負債本集團按公平值計入損益之財務負債為持作買賣財務負債。倘屬下列情況，財務負債則分類為持作買賣︰

• 所產生之財務負債主要用於在不久將來購回；或

• 屬於本集團整體管理之可辨別金融工具組合之一部份，且近期事實上有賺取短期溢利的模式；或

• 屬於衍生工具（除指定及具有有效對沖作用之工具之外）。

於初次確認後各結算日，按公平值計入損益之財務負債按公平值計量，公平值之變動於產生變動期間直接在綜合收益表中確認。於綜合收益表確認之收益或虧損淨額不包括就任何財務負債所支付之利息。

其他財務負債其他財務負債包括其後以實際利率法按攤銷成本計量之貿易及其他應付賬款、應付票據、應付同系附屬公司款項及銀行借貸。


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Equity instruments

Equity instruments issued by the Company are recorded

at the proceeds received, net of direct issue costs.

Derivative financial instruments and hedging

Derivatives are initially recognised at fair value at the date

a derivative contract is entered into and are subsequently

remeasured to their fair values at each balance sheet

date. The resulting gain or loss is recognised in profit or

loss immediately unless the derivative is designated and

effective as a hedging instrument, in which event the

timing of the recognition in profit or loss depends on the

nature of the hedge relationship.

Derivatives that do not qualify for hedge accounting are

deemed as financial assets held for trading or financial

liabilities held for trading and are classified as current

assets or current liabilities.

Hedge accounting

The Group uses der ivat ive f inancia l instruments

(primarily interest rate swap contracts) to hedge its

exposure against changes in interest rate on bank

borrowings. At the inception of the hedging relationship

the Group documents the relationship between the

hedging instrument and hedged item, along with its risk

management objectives and its strategy for undertaking

various hedge transactions. Furthermore, at the inception

of the hedge and on an ongoing basis, the Group

documents whether the hedging instrument that is used

in a hedging relationship is highly effective in offsetting

changes in cash flows of the hedged item.

Cash flow hedge

The effective portion of changes in the fair value of

derivatives that are designated and qualify as cash flow

hedges are deferred in equity (hedging reserve). The gain

or loss relating to the ineffective portion is recognised

immediately in profit or loss as other gain or losses.


金融工具（續）權益工具本公司所發行之權益工具乃按已收取之所得款項減直接發行成本入賬。

衍生金融工具及對沖衍生工具以衍生工具合約簽訂日之公平值作初次確認及其後以各結算日之公平值重新計量。所產生的收益或虧損將即時於損益內確認。除非該衍生工具是指定而有效之對沖工具，在此情況下，於損益內確認的時間取決於對沖關係的類別。

不符合對沖會計法之衍生工具被視為持作買賣之財務資產或財務負債，並分類為流動資產或流動負債。

對沖會計法本集團使用衍生金融工具（主要為利率掉期合約），以對沖其承受之銀行借貸利率變動風險。於對沖關係之開始，本集團記錄對沖工具和被對沖項目的關係，及進行各類對沖交易之風險管理目標及其策略。此外，於對沖開始和進行期間，本集團記錄用於對沖關係之對沖工具是否能高度有效地抵銷被對沖項目的現金流量變動。

現金流量對沖指定和符合現金流量對沖之衍生工具公平值變動，其有效部分遞延於權益（對沖儲備）。其無效部分之收益或虧損，即時於損益內確認為其他收益或虧損。


125




Hedge accounting (continued)

Cash flow hedge (continued)

Amounts deferred in equity are recycled in profit or loss in

the periods when the hedged item is recognised in profit

or loss.

Hedge accounting is discontinued when the Group

revokes the hedging relationship, the hedging instrument

expires or is sold, terminated, or exercised, or no longer

qualifies for hedge accounting. Any cumulative gain or

loss deferred in equity at that time remains in equity and

is recognised when the forecast transaction is ultimately

recognised in profit or loss. When a forecast transaction is

no longer expected to occur, the cumulative gain or loss

that was deferred in equity is recognised immediately in

profit or loss.

Derecognition

Financial assets are derecognised when the rights to

receive cash flows from the assets expire or, the financial

assets are transferred and the Group has transferred

substantially all the risks and rewards of ownership of the

financial assets. On derecognition of a financial asset, the

difference between the asset’s carrying amount and the

sum of the consideration received and receivable and

the cumulative gain or loss that had been recognised

directly in equity is recognised in the consolidated income

statement.

Financial liabilities are derecognised when the obligation

specified in the relevant contract is discharged, cancelled

or expires. The difference between the carrying amount of

the financial liability derecognised and the consideration

paid and payable is recognised in the consolidated

income statement.


金融工具（續）對沖會計法（續）現金流量對沖（續）當被對沖項目於損益內確認時，遞延於權益之金額則在該期間之損益內重新確認。

當本集團解除對沖關係、對沖工具已屆滿、售出、終止、行使或不再符合對沖會計法，對沖會計法將被終止。當時遞延於權益之任何累計盈虧將保留於權益內，並在預測交易最終於損益內確認時確認。倘預測交易預期不再進行，遞延於權益之累計盈虧即時於損益內確認。

剔除確認若從資產收取現金流量之權利已到期，或財務資產已轉讓及本集團已將其於財務資產擁有權之絕大部份風險及回報轉移，則財務資產將剔除確認。於剔除確認財務資產時，資產賬面值與已收及應收代價及已直接於權益確認之累計收益或虧損之差額，將於綜合收益表中確認。

倘於有關合約之指定責任獲解除、註銷或到期時，則會剔除確認財務負債。剔除確認之財務負債賬面值與已付及應付代價之差額於綜合收益表中確認。


126



Equity-settled share-based payment transactions

Share options granted to directors and employees of the

Group

The fair value of services received determined by

reference to the fair value of share options granted at the

grant date is recognised as an expense in full at the grant

date when the share options granted vest immediately,

with a corresponding increase in the share option reserve.

At each balance sheet date, the Group revises its

estimates of the number of options that are expected to

ultimately vest. The impact of the revision of the estimates

during the vesting period, if any, is recognised in the

consolidated income statement, with a corresponding

adjustment to share option reserve.

At the time when the share options are exercised,

the amount previously recognised in the share option

reserve will be transferred to share premium. When the

share options are forfeited after vesting date or are still

not exercised at the expiry date, the amount previously

recognised in share option reserve will be transferred to

retained profits.

Revenue recognition

Revenue is measured at the fair value of the consideration

rece ived or rece ivab le and represents amounts

receivables for goods sold and services provided in the

normal course of business, net of discounts, returns and

sales related taxes.

Revenue from sales of goods is recognised when the

goods are delivered and title has passed.

Service income for drilling services is recognised when

services are provided.


以股份形式付款交易

授予本集團董事及僱員之優先購股權

所獲服務之公平值乃參考優先購股權於授出日期之公平值釐定，倘優先購股權即時歸屬，將於授出日期全數確認為開支，並於優先購股權儲備中作相應增加。

於各結算日，本集團修訂對預期最終可歸屬之優先購股權數目的估計，並將修訂於歸屬期間之估計的影響（如有）於綜合收益表內確認，優先購股權儲備亦作相應之調整。

優先購股權獲行使時，過往於優先購股權儲備中確認之金額將轉移至股份溢價。當優先購股權於歸屬日後被沒收或於屆滿日仍未獲行使，則過往於優先購股權儲備中確認之金額將轉撥至保留溢利。

營業額確認

營業額乃按已收或應收代價之公平值計算，並指於一般業務過程中銷售貨品及提供服務之應收金額，減折扣、退貨及相關銷售稅項後計算。

銷售貨品營業額於貨品付運及擁有權移交時確認。

服務收入於提供鑽孔服務時確認。


127



Revenue recognition (continued)

Interest income from a financial asset excluding financial

assets at fair value through profit or loss is accrued on a

time basis, by reference to the principal outstanding and

at the effective interest rate applicable, which is the rate

that exactly discounts the estimated future cash receipts

through the expected life of the financial asset to that

asset’s net carrying amount.

Rental income is recognised on a straight-line basis over

the term of the relevant lease.

Dividend income from investments is recognised when

the shareholders’ rights to receive payment have been

established.

4. CAPITAL RISK MANAGEMENTThe Group manages its capital to ensure that entities in

the Group will be able to continue as a going concern

while maximising the return to shareholders through the

optimisation of the debt and equity balance. The Group’s

overall strategy remains unchanged from prior years.

The capital structure of the Group consists of the bank

borrowings, net of cash and cash equivalents, and equity

attributable to equity holders of the Company, comprising

issued share capital, reserves and retained earnings as

disclosed in the consolidated statement of changes in

equity.

The Directors review the capital structure on a semi-

annual basis. As part of this review, the Directors consider

the cost of capital and the risks associated with each

class of capital. In the opinion of the Directors, the Group

will balance its overall capital structure through the

payment of dividends, new share issues and share buy-

backs as well as the issue of new debt or the redemption

of existing debt.


營業額確認（續）財務資產利息收入（不包括按公平值計入損益之財務資產）乃根據未償還本金及適用實際利率按時間基準累計，有關利率乃將估計未來所收現金按財務資產估計可使用年期折現至該資產賬面淨值之利率。

租金收入乃於有關租約期內按直線基準確認。

投資之股息收入於股東收取該等股息之權利獲確立時確認。

4. 資本風險管理本集團管理其資本以確保通過優化債務與股本結存為股東爭取最高回報，使本集團旗下實體能夠持續經營。本集團之整體策略與過往年度相同。

誠如綜合權益變動表所披露，本集團之資本結構包括銀行借貸（扣除現金及現金等價物）及本公司權益持有人應佔權益（包括已發行股本、儲備及保留溢利）。

董事每半年審核資本結構。作為審核一部分，董事將考慮資本成本與各類資本的風險。董事認為，本集團將通過支付股息、發行新股、購回股份、發行新債或者贖回現有債項，以平衡整體資本結構。


128


5. FINANCIAL INSTRUMENTS5a. Categories of financial instruments

2008 2007


千港元千港元

Financial assets 財務資產FVTPL – Held for trading 持作買賣且按公平值計入

損益 3,027 1,637

Loans and receivables 貸款及應收賬款– trade and other receivables －貿易及其他應收賬款 2,228,092 3,197,056

– amounts due from fellow －應收同系附屬公司 subsidiaries 款項 182,406 391,767

– bank balances and cash －銀行結餘及現金 2,237,499 1,471,742

– non-current deposits －非流動訂金 78,249 221,589

4,726,246 5,282,154

Available-for-sale investments 可供出售投資 19,800 19,800

Financial liabilities 財務負債FVTPL – Held for trading 持作買賣且按公平值計入

損益 255 1,184

Derivative instruments in 符合指定對沖會計關係designated hedge 之衍生工具

accounting relationships 35,273 –

Amortised cost 攤銷成本– trade and other payables －貿易及其他應付賬款

(excluding accrued （不包括預提 expenses) 費用） 536,678 595,199

– bills payable －應付票據 319,765 600,967

– amounts due to fellow －應付同系附屬公司 subsidiaries 款項 10,818 4,042

– bank borrowings －銀行借貸 3,208,394 3,210,096

4,075,655 4,410,304

5. 金融工具5a. 金融工具類別


129


5. FINANCIAL INSTRUMENTS (continued)

5b. Financial risk management objectives and

policies

The Group’s major financial instruments include

t rade and other rece ivab les , non-cur rent

deposits, bank balances and cash, available-

for-sale investments, amounts due from (to)

fellow subsidiaries, trade and other payables,

bank borrowings and bills payable. Details of the

financial instruments are disclosed in respective

notes. The risks associated with these financial

instruments include market risk (currency risk,

interest rate risk and commodity price risk),

credit risk and liquidity risk. The policies on how

to mitigate these risks are set out below. The

management manages and monitors these

exposures to ensure appropriate measures are

implemented on a timely and effective manner.

Market risk

Currency risk

Several subsidiaries of the Company have foreign

currency sales and purchases, which expose the

Group to foreign currency risk. Approximately 19%

(2007: 14%) of the Group’s sales are denominated

in currencies other than the functional currency

of the relevant group entity making the sale,

whilst almost 49% (2007: 51%) of purchases are

denominated in currencies other than the group

entity’s functional currency.

The carrying amounts of the Group’s foreign

currency denominated monetary assets and

liabilities at the balance sheet dates are disclosed

in respective notes. During the year, the Group

has entered into certain foreign currency forward

contracts to hedge against part of its exposure to

potential variability of foreign currency risk arising

from changes in foreign exchange exposure. The

management continuously monitors the foreign

exchange exposure and will consider further

hedging foreign currency risk should the need

arise.

５. 金融工具（續）5b. 財務風險管理目標及政策

本集團之主要金融工具包括貿易及其他應收賬款、非流動訂金、銀行結餘及現金、可供出售投資、應收（付）同系附屬公司款項、貿易及其他應付賬款、銀行借貸及應付票據。金融工具詳情於相關附註披露。金融工具相關的風險包括市場風險（貨幣風險、利率風險及商品價格風險）、信貸風險及流動資金風險。降低該等風險之政策載列如下。管理層管理及監控該等風險，以確保及時和有效地採取適當之措施。

市場風險貨幣風險本公司若干附屬公司以外幣進行銷售及採購，令本集團承受外幣風險。本集團約19%（二零零七年：14%）的銷售以非集團實體功能貨幣列值，而約49%（二零零七年：51%）的採購以非集團實體的功能貨幣列值。

本集團以外幣列值的貨幣資產及負債於結算日之賬面值於相關附註披露。年內，本集團已訂立若干外匯遠期合約，以對沖因外匯變動而產生之部分外幣風險潛在波動。管理層持續監控外幣風險，並將於有需要時考慮進一步對沖外幣風險。


130


5. FINANCIAL INSTRUMENTS (continued)5b. Financial risk management objectives and

policies (continued)Market risk (continued)Currency risk (continued)Sensitivity analysisThe Group mainly exposes to fluctuation against

foreign currencies of United States dollars and

Japanese Yen. The following table details the

Group’s sensitivity to a 10% (2007: 5%) increase

and decrease in RMB, the group ent i t ies’

functional currency, against the relevant foreign

currencies. 10% (2007: 5%) is the sensitivity rate

used when reporting foreign currency risk internally

to key management personnel and represents

management’s assessment of the reasonably

possible change in foreign exchange rates. As a

result of the volatile financial market in 2008, the

management adjusted the sensitivity rate from 5%

to 10% for the purpose of assessing the foreign

currency risk. The sensitivity analysis includes

only outstanding foreign currency denominated

monetary items and adjusts their translation at the

year end for a 10% (2007: 5%) change in foreign

currency rates. The sensitivity analysis includes

trade and other receivables, bank balances, trade

and other payables, bills payable as well as bank

borrowings. A positive number below indicates an

increase in post-tax profit for the year where RMB

strengthen 10% (2007: 5%) against the relevant

currency. For a 10% (2007: 5%) weakening of

RMB against the relevant currency, there would

be an equal and opposite impact on the post-tax

profit for the year.

2008 2007


千港元千港元

United States Dollars 美元 (104,768 ) (45,448 )

Japanese Yen 日圓 9,015 929

The management consider that the exposure of

the outstanding foreign currency forward contracts

at the balance sheet date as a result of the change

in foreign currency exchange rate is not significant

as the exchange rate of HK$ is pegged against

United States Dollars.

５. 金融工具（續）５b. 財務風險管理目標及政策（續）

市場風險（續）貨幣風險（續）敏感度分析本集團主要面對美元及日圓的外幣風險。下表詳述本集團對人民幣（集團實體的功能貨幣）兌相關外幣升跌10%（二零零七年：5%）的敏感度。10%（二零零七年：5%）為本集團內部向主要管理人員匯報外幣風險所用的敏感度，亦是管理層對外匯匯率合理變動的評估。由於金融市場於二零零八年波動，管理層將評估外幣風險之敏感度由5%

調整為10%。敏感度分析包括尚未到期的以外幣列值的貨幣項目，對年末匯率10%（二零零七年：5%）變動作兌換調整。敏感度分析包括貿易及其他應收賬款、銀行結餘、貿易及其他應付賬款、應付票據及銀行借貸。正數是指人民幣兌相關貨幣升值10%（二零零七年：5%）時，本年度除稅後溢利有所增加。當人民幣兌相關貨幣跌10%（二零零七年：5%）時，可能對本年度除稅後溢利有同等相反的影響。

管理層認為，由於港元匯率與美元掛鈎，因此外幣匯率變動引致之於結算日尚未到期外匯遠期合約風險並不重大。


131




policies (continued)

Market risk (continued)

Interest rate risk

The Group is exposed to cash flow interest rate

risk in relation to floating-rate bank borrowings (see

Note 28 for details of these borrowings). In relation

to these floating-rate borrowings, the Group aims

at keeping certain borrowings at fixed rates. In

order to achieve this result, the Group may enter

into interest rate swap contracts to hedge against

part of its exposure to potential variability of cash

flows arising from changes in floating rate (see

Note 26 for details). The management continuously

monitors interest rate fluctuation and will consider

further hedging interest rate risk should the need

arise.

The Group’s exposures to interest rates on

financial liabilities are detailed in the liquidity risk

management section of this note. The Group’s

cash flow interest rate risk is mainly related to the

fluctuation of HIBOR arising from the Group’s

Hong Kong dollar denominated borrowings.

The Group’s bank balances have exposure to

cash flow interest rate risk due to the fluctuation

of the prevailing market interest rate on bank

balances. The Group is also exposed to fair value

interest rate risk relates primarily to its fixed-rate

short term bank deposits. The Directors consider

the Group’s exposure of the short-term bank

deposits to interest rate risk is not significant as

interest bearing bank balances are within short

maturity period.

5. 金融工具（續）5b. 財務風險管理目標及政策（續）

市場風險（續）利率風險本集團就浮息銀行借貸承受現金流量利率風險（該等借貸詳情見附註28）。就該等浮息借貸而言，本集團致力將若干借貸利率保持穩定。為達致此目的，本集團或會訂立利率掉期合約，以對沖因浮息變動而產生之現金流量潛在變動（詳情見附註26）。管理層持續監控利率波動，並將於有需要時考慮進一步對沖利率風險。

本集團承受財務負債的利率風險的詳情，見本附註流動資金風險管理一節。本集團的現金流量利率風險主要與本集團以港元列值借貸受到香港銀行同業拆息波動的影響有關。

由於適用於銀行結餘之現行市場利率波動，本集團之銀行結餘承受現金流量利率風險。此外，本集團承受主要與定息短期銀行存款有關之公平值利率風險。董事認為，由於計息銀行結餘之到期期間較短，故本集團短期銀行存款所承受之利率風險並不重大。


132





Market risk (continued)

Interest rate risk (continued)

Sensitivity analysis

The sens i t iv i ty ana lyses be low have been

determined based on the exposure to interest

rates risk for interest bearing bank balances

and bank borrowings as well as interest rate

swap contracts at the balance sheet date. The

analysis is assuming the financial instruments

outstanding at the balance sheet date were

outstanding for the whole year. A 100 basis points

(2007: 50 basis points) increase or decrease is

used when reporting interest rate risk internally

to key management personnel and represents

management’s assessment of the reasonable

possible change in interest rates.

The management adjusted the sensitivity rate from

50 basis points to 100 basis points for assessing

interest rate after considering the impact of the

volatile financial market conditions after the third

quarter of 2008.

If interest rate had been 100 basis points (2007:

50 basis points) higher/ lower and al l other

variables were held constant, the Group’s:

• post-tax prof it for the year ended 31

December 2008 would decrease/increase

by HK$13,392,000 (2007: decrease/

increase by HK$8,692,000). This is mainly

attr ibutable to the Group’s exposure

to in terest ra tes r isk on i ts in terest

bearing bank balances and variable-rate

borrowings; and

• the debit side hedging reserve would

decrease/increase by HK$35,034,000

(2007: nil) mainly as a result of the changes

in the fair value of interest rate swap

contracts.


市場風險（續）利率風險（續）敏感度分析以下敏感度分析根據結算日計息銀行結餘、銀行借貸及利率掉期合約的利率風險釐定。編製該分析時，假設於結算日未到期之金融工具於整年度仍未到期。100個點子（二零零七年：50個點子）增減為本集團內部向主要管理人員匯報利率風險所用的敏感度，亦是管理層對利率合理潛在變動的評估。

管理層考慮二零零八年第三季後金融市場狀況波動之影響，就評估利率而言，將敏感度比率由50個點子調整為100個點子。

倘利率升╱跌100個點子（二零零七年：50個點子），而所有其他因素不變，本集團：

• 截至二零零八年十二月三十一日止年度之除稅後溢利將減少╱增加13,392,000

港元（二零零七年：減少╱增加8,692,000港元），主要理由是本集團承受計息銀行結餘及浮息借貸之利率風險；及

• 借方對沖儲備將減少╱增加35,034,000港元（二零零七年：沒有），主要理由是利率掉期合約公平值變動。


133


5. FINANCIAL INSTRUMENTS (continued)5b. Financial risk management objectives and


Market risk (continued)Commodity price risk

The Group was exposed to commodity price risk

from the outstanding commodity forward contracts

at the balance sheet date. The management

consider that the price risks of these derivative

instruments are not significant to the Group.

Credit riskThe Group’s maximum exposure to credit risk in

the event of the counterparties’ failure to perform

their obligations at 31 December 2008 in relation

to each class of recognised financial assets is

the carrying amount of those assets as stated

in the consolidated balance sheet. In order to

minimise the credit risk, the board of directors has

delegated the management to be responsible for

determination of credit limits, credit approvals and

other monitoring procedures to ensure that follow-

up action is taken to recover overdue debts.

In addition, the Group reviews the recoverable

amount of each individual trade debt at each

balance sheet date to ensure that adequate

impairment losses are made for irrecoverable

amounts. In this regard, the Directors consider

that the Group’s credit risk is significantly reduced.

The credit risk in relation to bank deposits and

bank balances is considered minimal as such

amounts are placed with banks with good credit

ratings.

The Group has no significant concentration of

credit risk on trade and other receivables, with

exposure spread over a number of counterparties

and customers other than group entities. However,

the Group is exposed to the concentration on

geographic and industry segment of the People’s

Republic of China (the “PRC”) and laminates

industry. At 31 December 2008, approximately

94% (2007: 92%) of the Group’s trade and other

receivables are arising from the PRC and all are

from the laminates industry segment.


市場風險（續）商品價格風險本集團承受於結算日尚未到期之商品遠期合約產生之商品價格風險。管理層認為該等衍生工具之價格風險對本集團並不重大。

信貸風險倘交易對手於二零零八年十二月三十一日未能履行彼等就各類已確認財務資產之承擔，則本集團須承受之最高信貸風險為於綜合資產負債表所載該等資產賬面值。為將信貸風險降至最低，董事會已任命管理層負責制訂信貸限額、信貸審批及其他監控程序，以確保採取跟進措施收回逾期未付之債項。此外，於各結算日，本集團審閱每項個別貿易債項之可收回金額，以確保就不可收回金額作出足夠減值虧損。就此而言，董事認為，本集團之信貸風險已大幅降低。

由於銀行存款及銀行結餘乃存放於信譽評級良好之銀行，故該等款項之信貸風險屬微不足道。

本集團並無高度集中之貿易及其他應收賬款信貸風險，除集團實體外，風險由多個交易方及客戶分攤。然而，本集團的風險集中於中華人民共和國（「中國」）地區及覆銅面板行業之地區及行業分部。於二零零八年十二月三十一日，本集團約94%（二零零七年：92%）之貿易及其他應收賬款源自中國，並全部均來自覆銅面板行業分部。


134





Credit risk (continued)

Amounts due f rom fe l low subsid iar ies are

concentrated on a few counterparties. However,

the credi t r isk on amount due f rom fe l low

subsidiaries is l imited because of the strong

financial background of the fellow subsidiaries.

Liquidity risk

In the management of the l iquidity r isk, the

Group monitors and maintains a level of cash

and cash equivalents deemed adequate by the

management to finance the Group’s operations

and mitigate the effects of fluctuations in cash

flows. The management monitors the utilisation

of bank borrowings and ensures compliance with

loan covenants.

The Group re l ies on bank borrowings as a

significant source of liquidity. As at 31 December

2008, the Group has ava i lab le unut i l i sed

bank borrowing faci l i t ies of approximately

HK$5,214,490,000 (2007: HK$4,768,142,000).

The following table details the Group’s remaining

contractual maturity for its financial liabilities and

derivative financial instruments. For non-derivative

financial liabilities, the table has been drawn up

based on the undiscounted cash flows of financial

liabilities based on the earliest date on which the

Group can be required to pay. The table includes

both interest and principal cash flows.

For derivative instruments settled on a net basis,

undiscounted net cash (inflows) outflows are

presented.


信貸風險（續）應收同系附屬公司款項集中於少數交易方。然而，由於同系附屬公司財政穩健，應收同系附屬公司款項的信貸風險只屬有限。

流動資金風險本集團為管理流動資金風險，監控現金及現金等價物的水平，將其維持於管理層認為合適的水平，來維持本集團的營運，並減低現金流量波動的影響。管理層監控銀行借貸的使用情況，確保符合貸款契諾。

本集團依賴銀行借貸作為流動資金的主要來源。於二零零八年十二月三十一日，本集團未動用的銀行信貸額度約為5,214,490,000港元（二零零七年：4,768,142,000港元）。

下表詳述本集團餘下財務負債及衍生金融工具的合約到期情況。就非衍生財務負債而言，乃根據本集團須付財務負債最早之日的非折現現金流量以制定表格。表格包括利息及本金現金流量。

按淨額基準結算的衍生工具，呈報其非折現現金（流入）流出淨額情況。


135





Liquidity risk (continued)

Liquidity and interest risk tables

Weighted

average Over Over Over Carrying

effective 3 months 1 year 2 years Total amount at

interest Less but not more but not more but not more undiscounted 31.12.2008

rate than 3 than 1 year than 2 years than 5 years cash flows 二零零八年加權平均 months 三個月以上一年以上兩年以上非折現十二月三十一日實際利率三個月內但不超過一年但不超過兩年但不超過五年現金流量總額之賬面值

% HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000

千港元千港元千港元千港元千港元千港元

At 31 December 2008 於二零零八年十二月三十一日

Non-derivative financial liabilities 非衍生財務負債Trade and other payables 貿易及其他應付賬款 – 447,134 89,544 – – 536,678 536,678

Bills payable 應付票據 – 319,765 – – – 319,765 319,765

Amounts due to fellow subsidiaries 應付同系附屬公司款項 – 10,818 – – – 10,818 10,818

Bank borrowings – variable rate 銀行借貸－浮息 3.43 297,709 274,338 119,728 797,944 1,489,719 1,339,163

Bank borrowings – variable 銀行借貸－浮息， rate hedged 以利率掉期合約對沖

by interest rate swap contracts 3.43 137,308 411,923 621,136 908,370 2,078,737 1,869,231

1,212,734 775,805 740,864 1,706,314 4,435,717 4,075,655

Derivatives – net settlement 衍生工具－結算淨額Commodity forward contracts 商品遠期合約 – (2,634 ) – – – (2,634 ) (2,454 )

Foreign currency forward contracts 外匯遠期合約 – (72 ) (282 ) – – (354 ) (318 )

Interest rate swap contracts 利率掉期合約 – 2,446 7,339 10,275 16,977 37,037 35,273

(260 ) 7,057 10,275 16,977 34,049 32,501

５. 金融工具（續）5b. 財務風險管理目標及政策（續）

流動資金風險（續）流動資金及利率風險表


136





Liquidity risk (continued)

Liquidity and interest risk tables (continued)

Weighted

average Over Over Over Carrying

effective 3 months 1 year 2 years Total amount at

interest Less but not more but not more but not more undiscounted 31.12.2007

rate than 3 than 1 year than 2 years than 5 years cash flows 二零零七年加權平均 months 三個月以上一年以上兩年以上非折現十二月三十一日實際利率三個月內但不超過一年但不超過兩年但不超過五年現金流量總額之賬面值

% HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000

千港元千港元千港元千港元千港元千港元

At 31 December 2007 於二零零七年十二月三十一日

Non-derivative financial liabilities 非衍生財務負債Trade and other payables 貿易及其他應付賬款 – 564,719 30,480 – – 595,199 595,199

Bills payable 應付票據 – 561,807 39,160 – – 600,967 600,967

Amounts due to fellow subsidiaries 應付同系附屬公司款項 – 4,042 – – – 4,042 4,042

Bank borrowings – variable rate 銀行借貸－浮息 5.38 418,242 234,755 644,537 2,383,619 3,681,153 3,210,096

1,548,810 304,395 644,537 2,383,619 4,881,361 4,410,304

Derivatives – net settlement 衍生工具－結算淨額Commodity forward contracts 商品遠期合約 (372 ) – – – (372 ) (368 )

Foreign currency forward contracts 外匯遠期合約 – (16 ) (37 ) (53 ) – (106 ) (85 )

(388 ) (37 ) (53 ) – (478 ) (453 )


流動資金風險（續）流動資金及利率風險表（續）


137



5c. Fair value

The fair value of financial assets and financial

liabilities are determined as follows:

• the fair value of other financial assets and

financial liabilities (excluding derivative

instruments) is determined in accordance

with generally accepted pricing models

based on discounted cash flow analysis

using prices from observable current

market transactions as input; and

• the fair value of other derivative instruments

are measured at fair value by reference

to the valuation provided by counterparty

financial institutions for these instruments.

The Directors consider that the carrying amounts

of financial assets and financial liabilities recorded

at amortised cost in the consolidated financial

statements approximate their fair values.

6. REVENUERevenue represents the amounts received and receivable

by the Group from the sales of goods and drilling services

provided to outside customers, net of discounts, returns

and sales related taxes, for each year is analysed as

follows:

2008 2007


千港元千港元

Sales of goods 銷售貨品 9,888,396 10,206,162

Drilling services 鑽孔服務 239,368 220,621

10,127,764 10,426,783

5. 金融工具（續）5c. 公平值

財務資產及財務負債之公平值按以下各項釐定：

• 根據普遍接受之定價模式，按折現現金流量分析，釐定其他財務資產及財務負債（不包括衍生工具）之公平值，折現現金流量分析使用現時市場交易已有之價格作為資料；及

• 其他衍生工具公平值乃經參考該等工具之對手方金融機構提供之估值後，按公平值計量。

董事認為，以攤銷成本記錄於綜合財務報表之財務資產及財務負債之賬面值與其公平值相若。

6. 營業額營業額指本集團於各個年度自對外客戶銷售貨品及提供鑽孔服務所收及應收金額減折扣、退貨及相關銷售稅項載列如下：


138


7. G E O G R A P H I C A L A N D B U S I N E S SSEGMENTSGeographical segments

The Group principally operates in the PRC with revenue

and profits derived mainly from its operations in the PRC.

An analysis of segment assets and capital additions by

geographical area in which the assets are located has not

been presented as the Group’s assets are substantially

located in the PRC.

The addit ional analysis of the Group’s revenue by

geographical market, based on geographical location of

customers, for each year is as follows:

2008 2007


千港元千港元

PRC 中國 9,555,219 9,566,919

Other Asian countries 其他亞洲國家 423,839 675,821

Europe 歐洲 98,562 128,319

America 美洲 50,144 55,724

10,127,764 10,426,783

Business segments

No business segment analysis is shown as more than

90% of the Group’s principal business activities is the

sales of laminates and related products.

7. 地區及業務分部

地區分部

本集團主要在中國經營業務，營業額及溢利主要來自中國業務。由於本集團大部分的資產位於中國，故並無按資產所在地區呈報分部資產及資本增添分析。

於各年度內，本集團根據客戶所在地區按市場地域來劃分之營業額的額外分析如下：

業務分部

由於本集團逾90%之主要業務活動為銷售覆銅面板及相關產品，故並無業務分部分析。


139


8. OTHER INCOME

2008 2007二零零八年二零零七年

HK$’000 HK$’000千港元千港元

Other income comprises: 其他收入包括：

Rental income 租金收入 12,147 7,738Gain on fair value changes of 投資物業公平值變動 investment properties 之收益 1,468 317Gain on fair value changes of 外匯遠期合約公平值

foreign currency forward contracts 變動之收益 318 86Interest income on bank deposits 銀行存款利息收入 21,871 30,559Net exchange gain 匯兌收益淨額 9,157 29,547Others 其他 3,424 1,384

48,385 69,631

9. FINANCE COSTS

2008 2007二零零八年二零零七年

HK$’000 HK$’000千港元千港元

Interest on bank borrowings wholly 須於五年內全數償還repayable within five years 之銀行借貸利息 109,915 169,025

Other finance charges 其他融資費用 – 3,177

109,915 172,202Release of hedging reserve 對沖儲備之撥回 6,138 –Fair value changes of interest rate 非對沖用途之利率掉期

swap contracts not designated 合約公平值變動for hedging purpose – (1,054 )

116,053 171,148Less: Interest capitalised 減：資本化利息 – (3,012 )

116,053 168,136

Borrowing costs capitalised during the year ended 31December 2007 arose on the general borrowing pool and are calculated by applying a capitalisation rate of 5% to expenditures on qualifying assets.

8. 其他收入

9. 融資成本

於截至二零零七年十二月三十一日止年度內，資本化借貸成本乃於一般借貸中產生，並以合資格資產開支之資本化率5%計算。


140


10. INCOME TAX EXPENSE

2008 2007


千港元千港元

The amount comprises: 稅項包括：

Hong Kong Profits Tax 香港利得稅Charge for the year 本年度稅項支出 8,254 1,644

Underprovision in previous years 過往年度撥備不足 368 –

8,622 1,644

Taxation arising in other jurisdictions 其他司法權區之稅項Charge for the year 本年度稅項支出 66,025 134,315

Overprovision in previous years 過往年度超額撥備 (1,454 ) (4,558 )

64,571 129,757

Deferred taxation 遞延稅項Credit for the year (Note 20) 本年度撥回（附註20） (2,820 ) (2,175 )

Attributable to change in tax rate 稅率變動之影響 93 –

(2,727 ) (2,175 )

70,466 129,226

On 26 June 2008, the Legislative Council of the Hong

Kong Special Administrative Region passed the Revenue

Bill 2008 which reduced corporate profits tax rate from

17.5% to 16.5% effective from the year of assessment

2008/2009. The effect of such decrease has been

reflected in measuring the current tax for the year ended

31 December 2008 and the deferred tax balance has

also been adjusted to reflect the change in tax rate. Hong

Kong Profits Tax was calculated at 17.5% of the estimated

assessable profit for the year ended 31 December 2007.

Taxation arising in other jurisdictions is calculated at the

rates prevailing in the relevant jurisdictions.

10. 所得稅開支

於二零零八年六月二十六日，香港特別行政區立法會通過《二零零八年收入條例草案》，公司利得稅率將由17.5%調低至16.5%，由二零零八╱二零零九課稅年度起生效。這下調影響已反映在截至二零零八年十二月三十一日止年度稅項之計算。遞延稅項結餘亦已調整，以反映稅率下調的影響。截至二零零七年十二月三十一日止年度內之香港利得稅乃按估計應課稅溢利並按17.5%之稅率計算。

其他司法權區之稅項乃按相關司法權區之適用稅率計算。


141


10. INCOME TAX EXPENSE (continued)

On 16 March 2007, the PRC promulgated the Law of the

People’s Republic of China on Enterprise Income Tax (the

“New Law”) by Order No. 63 of the President of the PRC.

On 6 December 2007, the State Council of the PRC issued

Implementation Regulations of the New Law. Under the

New Law and Implementation Regulations, the Enterprise

Income Tax rate for certain subsidiaries in the PRC was

reduced from 33% to 25% from 1 January 2008 onwards.

Taxation for the year can be reconciled to the profit before

taxation as follows:

2008 2007


千港元千港元

Profit before taxation 除稅前溢利 1,321,136 2,054,835

Tax charge at the domestic income 以當地所得稅率25%

tax rate of 25% (2007: 33%) （二零零七年：33%） (Note a) 計算之稅項支出（附註a） 330,284 678,096

Tax effect of expenses not 就稅項而言不可扣減費用deductible for tax purpose 之稅務影響 27,176 42,706

Tax effect of income not taxable 就稅項而言毋須課稅收入for tax purpose 之稅務影響 (24,009 ) (46,468 )

Overprovision in previous years 過往年度超額撥備 (1,086 ) (4,558 )

Tax effect of tax holiday (Note b) 免稅期之稅務影響（附註b） (31,254 ) (104,200 )

Tax effect of tax losses 未確認稅項虧損 not recognised 之稅務影響 9,855 10,241

Utilisation of tax losses previously 動用先前未確認 not recognised 稅項虧損 (5,527 ) (3,655 )

Effect of different tax rates of 於其他司法權區╱地區subsidiaries operating in other 經營附屬公司之不同

jurisdictions/areas 稅率之影響 (65,448 ) (108,944 )

Tax exempted profit (Note c) 豁免繳稅溢利（附註c） (169,618 ) (333,992 )

Decrease in opening deferred 適用稅率減少引致之tax assets resulting from 年初遞延稅項資產decrease in applicable tax rate 減少 93 –

Tax expense for the year 本年度之稅務開支 70,466 129,226

10. 所得稅開支（續）於二零零七年三月十六日，中國頒佈中華人民共和國主席令第63號《中華人民共和國企業所得稅法》（「新稅法」）。於二零零七年十二月六日，中國國務院頒佈新稅法實施條例。按照新稅法及實施條例，自二零零八年一月一日起，適用於若干位於中國的附屬公司之稅率將由33%減至25%。

本年度之稅項與除稅前溢利之對賬如下：


142


10. INCOME TAX EXPENSE (continued)Notes:

(a) The domestic income tax rate of 25% (2007: 33%) represents

the PRC Enterprise Income Tax rate of which the Group’s

operations are substantially based.

(b) Pursuant to relevant laws and regulations in the PRC, certain

subsidiaries of the Company in the PRC are exempted from PRC

Enterprise Income Tax for two years starting from the first profit-

making year in which profits exceed any carried forward tax

losses followed by a 50% reduction in the income tax rate in the

following three years (“Tax Holiday”). The Tax Holiday enjoyed by

these subsidiaries will expire on or before 2012.

(c) Profits arising from certain subsidiaries of the Company in areas

other than PRC and Hong Kong are exempted from profits tax.

11. PROFIT FOR THE YEAR

2008 2007


千港元千港元

Profit for the year has been arrived 本年度溢利已經扣除at after charging (crediting): （計入）以下項目：

Depreciation of properties, 物業、廠房及plant and equipment 設備折舊 719,143 564,618

Release of prepaid lease payments 預付租賃款項撥回 4,712 4,198

723,855 568,816

Net exchange gain 匯兌收益淨額– included in cost of sales －計入銷售成本 (47,517 ) (37,642 )

– included in other income －計入其他收入 (9,157 ) (29,547 )

(56,674 ) (67,189 )

Auditor’s remuneration 核數師酬金 3,000 3,000

Cost of inventories sold 已售存貨之成本 7,008,921 6,367,378

Impairment loss recognised 就貿易及其他應收賬款on trade and other receivables 確認之減值虧損(see Note 23) （見附註23） 8,101 19,854

Gain on fair value changes of commodity 商品遠期合約公平值變動forward contracts (included in cost 之收益（計入銷售成本）

of sales) (2,454 ) (368 )

Loss on disposal and write off of 出售及撇銷物業、廠房及properties, plant and equipment 設備之虧損 608 896

Total staff costs, including directors’ 員工成本總額，包括emoluments (see Note 12) 董事酬金（見附註12） 381,940 332,200

10. 所得稅開支（續）附註：

(a) 當地所得稅稅率25%（二零零七年：33%）指本集團大部分業務所在地區之中國企業所得稅。

(b) 根據中國相關法律與法規，本公司若干中國附屬公司自首個獲利年度（即溢利超逾任何結轉之稅務虧損）起計兩年內獲豁免繳納中國企業所得稅，其後三年所得稅率獲減免50%（「免稅期」）。該等附屬公司享有之免稅期將於二零一二年或之前屆滿。

(c) 本公司位於中國及香港以外地區之若干附屬公司所產生之溢利獲豁免繳納利得稅。

11. 本年度溢利


143


12. D I R E C T O R S ’ A N D E M P L O Y E E S ’

EMOLUMENTS

(a) Directors’ emoluments

The emoluments paid or payable were as follows:

2008 2007


千港元千港元

Salaries and other benefits 薪金及其他福利 12,758 12,274

Contributions to retirement 退休福利計劃供款 benefits scheme 492 478

Performance related incentive 工作表現獎勵款項 payment 42,050 59,220

Total emoluments 酬金總額 55,300 71,972

The emoluments paid or payable to each of the

directors were as follows:

Year ended 31 December 2008

截至二零零八年十二月三十一日止年度

Cheung Cheung Cheung Lam Cheung Chan Zhou Lo Chan Chan Leung Mok

Kwok Kwok Kwok Ka Ka Sau Liu Pei Ka Charnwut Yue Kwong, Tai Yiu Keung,

Wa Keung Ping Po Ho Chi Min Feng Leong Bernard Michael Chiu Peter Total

張國華張國強張國平林家寶張家豪陳秀姿劉敏周培峰羅家亮陳智思陳裕光梁體超莫耀強合計HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000

千港元千港元千港元千港元千港元千港元千港元千港元千港元千港元千港元千港元千港元千港元

Fees 袍金 – – – – – – – – – – – – – –

Other emoluments: 其他酬金：Salaries and other 薪金及其他

benefits 福利 2,300 2,078 2,078 1,781 772 703 604 557 1,165 180 180 180 180 12,758

Contributions to 退休福利計劃 retirement 供款 benefits scheme 99 83 89 76 33 30 24 23 35 – – – – 492

Performance related 工作表現獎勵 incentive payment 款項 9,500 9,500 9,500 9,500 1,625 1,625 400 400 – – – – – 42,050

Total emoluments 酬金總額 11,899 11,661 11,667 11,357 2,430 2,358 1,028 980 1,200 180 180 180 180 55,300

12. 董事及僱員酬金

(a) 董事酬金

已付或應付之酬金如下：

已付或應付各董事之酬金如下：


144


12. D I R E C T O R S ’ A N D E M P L O Y E E S ’EMOLUMENTS (continued)

(a) Directors’ emoluments (continued)

Year ended 31 December 2007

截至二零零七年十二月三十一日止年度

Cheung Cheung Cheung Lam Cheung Chan Zhou Lo Chan Chan Leung Mok

Kwok Kwok Kwok Ka Ka Sau Liu Pei Ka Charnwut Yue Kwong, Tai Yiu Keung,

Wa Keung Ping Po Ho Chi Min Feng Leong Bernard Michael Chiu Peter Total

張國華張國強張國平林家寶張家豪陳秀姿劉敏周培峰羅家亮陳智思陳裕光梁體超莫耀強合計HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000

千港元千港元千港元千港元千港元千港元千港元千港元千港元千港元千港元千港元千港元千港元

Fees 袍金 – – – – – – – – – – – – – –

Other emoluments: 其他酬金：Salaries and other 薪金及其他

benefits 福利 2,300 2,078 2,078 1,781 673 703 584 482 875 180 180 180 180 12,274

Contributions to 退休福利計劃 retirement benefits 供款

scheme 99 83 89 76 30 30 23 19 29 – – – – 478

Performance related 工作表現獎勵 Incentive payment 款項 13,850 13,000 13,620 13,000 2,225 2,225 700 600 – – – – – 59,220

Total emoluments 酬金總額 16,249 15,161 15,787 14,857 2,928 2,958 1,307 1,101 904 180 180 180 180 71,972

Note: The performance re lated incent ive payment is

determined with reference to the operating results,

individual performance and comparable market

statistics during both years.

No directors waived any emoluments in the years

ended 31 December 2008 and 31 December

2007.

(b) Employees’ emoluments

For the years ended 31 December 2007 and

31 December 2008, all of the five highest paid

employees are directors.

During both years, no emoluments were received

or receivable by the Directors or the Group’s five

highest paid individuals as an inducement to join

or upon joining the Group or as compensation for

loss of office.

12. 董事及僱員酬金（續）

(a) 董事酬金（續）

附註：工作表現獎勵款項乃參考兩個年度

之經營業績、個人表現及比較市場

數據釐定。

截至二零零八年十二月三十一日及二零零七年十二月三十一日止年度，概無董事放棄任何酬金。

(b) 僱員酬金

截至二零零七年十二月三十一日及二零零八年十二月三十一日止年度，全部五名最高薪金僱員均為董事。

於兩個年度內，董事或本集團五名最高薪金人士概無已收或應收任何酬金，作為吸引彼等加盟本集團或加盟本集團時支付之獎勵或作為離職之補償。


145


13. DIVIDENDS

2008 2007


千港元千港元

Dividends paid 已派發的股息Interim dividend of HK12 cents 中期股息

(2007: HK10 cents) 每股普通股12港仙 per ordinary share （二零零七：10港仙） 360,000 300,000

Final dividend for 2007 of 二零零七年末期股息HK20 cents per ordinary share 每股普通股20港仙(2007: no final dividend for 2006) （二零零七年：

二零零六年沒有末期股息） 600,000 –

960,000 300,000

Dividend proposed 建議股息Proposed final dividend 建議末期股息

of HK10 cents (2007: HK20 cents) 每股普通股10港仙 per ordinary share （二零零七年：20港仙） 300,000 600,000

The final dividend of HK10 cents per ordinary share has

been proposed by the Directors and is subject to the

approval by the shareholders of the Company in the

forthcoming annual general meeting.

13. 股息

董事會建議派發末期股息每股普通股10港仙，惟須待本公司股東於應屆股東週年大會批准，方可作實。


146


14. EARNINGS PER SHAREThe calculation of the basic earnings per share attributable

to the equity holders of the Company is based on the

following data:

2008 2007


千港元千港元

Earnings for the purpose of calculating 計算基本每股盈利basic earnings per share 之盈利 1,203,804 1,813,269

Number of shares

股份數目2008 2007

二零零八年二零零七年’000 ’000

千千

Number of ordinary shares for the 計算基本每股盈利之purpose of calculating basic 普通股股數earnings per share 3,000,000 3,000,000

No diluted earnings per share has been presented as the

Company does not have any dilutive potential ordinary

shares.

15. INVESTMENT PROPERTIES

HK$’000

千港元

FAIR VALUE 公平值At 1 January 2007 於二零零七年一月一日 40,220

Increase in fair value 公平值增加 317

At 31 December 2007 and 於二零零七年十二月三十一日及1 January 2008 二零零八年一月一日 40,537

Increase in fair value 公平值增加 1,468

At 31 December 2008 於二零零八年十二月三十一日 42,005

14. 每股盈利本公司權益持有人應佔基本每股盈利按下列數據計算：

由於本公司並無具潛在攤薄效應之普通股，故此並無呈列攤薄每股盈利。

15. 投資物業


147


15. INVESTMENT PROPERTIES (continued)

At 31 December 2007 and 31 December 2008, the fair

value of the Group’s investment properties had been

arrived at on the basis of a valuation carried out on that

date by Messrs. Chung, Chan & Associates, independent

qualified valuers not connected with the Group. Messrs.

Chung, Chan & Associates are members of the Royal

Institute of Chartered Surveyors. The valuation was

arrived at by reference to market evidence of transaction

prices for similar properties.

All of the Group’s property interests held under operating

leases to earn rentals or for capital appreciation purposes

are measured using the fair value model and are classified

and accounted for as investment properties.

The carrying value of investment properties shown above

comprises:

2008 2007


千港元千港元

Property interests situated 按下列租約於香港持有之in Hong Kong under: 物業權益：

Medium-term lease 中期租約 3,840 4,047

Property interests situated 按下列租約於香港以外outside Hong Kong under: 持有之物業權益：

Medium-term lease 中期租約 12,440 11,960

Long lease 長期租約 25,725 24,530

38,165 36,490

42,005 40,537

15. 投資物業（續）於二零零七年十二月三十一日及二零零八年十二月三十一日，本集團投資物業之公平值乃按與本集團並無關連之獨立合資格估值師衡量行於該日進行估值之基準達致。衡量行為英國皇家特許測量師學會會員。是次估值乃參考類似物業交易價值之市場憑證釐定。

本集團為賺取租金或資本增值並根據經營租約持有之所有物業權益，均利用按公平值模式計量，並分類及列作投資物業。

以上投資物業賬面值包括：


148


16. PROPERTIES, PLANT AND EQUIPMENT

Properties,

Furniture, plant and

Buildings fixtures equipment

for Leasehold Plant and and Motor under

own use improvements machinery equipment vehicles construction Total

租約傢俬、裝置在建物業、自用樓宇物業裝修廠房及機器及設備汽車廠房及設備合計HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000

千港元千港元千港元千港元千港元千港元千港元

COST 成本At 1 January 2007 於二零零七年一月一日 812,428 1,988 4,795,441 106,264 60,209 222,062 5,998,392

Exchange adjustments 匯兌調整 49,593 – 327,105 7,787 3,561 46,745 434,791

Additions 添置 6,038 592 239,987 11,483 7,522 1,098,757 1,364,379

Disposals and write off 出售及撇銷 (7,013 ) (23 ) (77,776 ) (7,342 ) (15,916 ) – (108,070 )

Acquisition of subsidiaries 收購附屬公司(Note 32 (c) & (d)) （附註32(c)及(d)） – – 44,018 446 811 – 45,275

Reclassifications 重新分類 977 – 338,893 19,291 – (359,161 ) –

At 31 December 2007 and 於二零零七年十二月三十一日1 January 2008 及二零零八年一月一日 862,023 2,557 5,667,668 137,929 56,187 1,008,403 7,734,767

Exchange adjustments 匯兌調整 45,813 – 329,407 8,146 3,066 62,040 448,472

Additions 添置 5,617 – 386,770 23,039 4,440 655,801 1,075,667

Disposals and write off 出售及撇銷 (43,824 ) – (15,370 ) (5,796 ) (6,656 ) – (71,646 )

Acquisition of subsidiaries 收購附屬公司(Note 32(a) & (b)) （附註32(a)及(b)） – – 12,883 674 174 110,330 124,061

Reclassifications 重新分類 49,223 – 1,177,201 24,159 – (1,250,583 ) –

At 31 December 2008 於二零零八年十二月三十一日 918,852 2,557 7,558,559 188,151 57,211 585,991 9,311,321

DEPRECIATION AND IMPAIRMENT 折舊及減值At 1 January 2007 於二零零七年一月一日 152,041 1,343 1,719,053 30,309 30,323 – 1,933,069

Exchange adjustments 匯兌調整 8,335 – 113,647 2,418 1,937 – 126,337

Provided for the year 本年度撥備 30,297 339 507,428 19,150 7,404 – 564,618

Eliminated on disposals and write off 出售時註銷及撇銷 (7,013 ) (23 ) (27,038 ) (1,002 ) (6,357 ) – (41,433 )

At 31 December 2007 and 於二零零七年十二月三十一日1 January 2008 及二零零八年一月一日 183,660 1,659 2,313,090 50,875 33,307 – 2,582,591

Exchange adjustments 匯兌調整 8,636 – 121,239 2,891 1,815 – 134,581

Provided for the year 本年度撥備 49,470 506 637,308 24,780 7,079 – 719,143

Eliminated on disposals and write off 出售時註銷及撇銷 (19,325 ) – (7,004 ) (2,302 ) (4,179 ) – (32,810 )

At 31 December 2008 於二零零八年十二月三十一日 222,441 2,165 3,064,633 76,244 38,022 – 3,403,505

CARRYING VALUE 賬面值At 31 December 2008 於二零零八年十二月三十一日 696,411 392 4,493,926 111,907 19,189 585,991 5,907,816

At 31 December 2007 於二零零七年十二月三十一日 678,363 898 3,354,578 87,054 22,880 1,008,403 5,152,176

16. 物業、廠房及設備


149


16. PROPERTIES, PLANT AND EQUIPMENT(continued)

All the Group’s buildings for own use are situated in the

PRC and held under medium-term leases.

The above items of properties, plant and equipment (other

than those under construction) are depreciated on a

straight-line basis at the following rates per annum:

Buildings for own use Over the remaining

unexpired terms of

the leases or fifty years,

whichever is the shorter

Leasehold improvements Over the remaining

unexpired terms of the

leases or five to ten years,

whichever is the shorter

Plant and machinery 10 – 20%

Furniture, fixtures and 10 – 331/3%

equipment

Motor vehicles 20%

17. PREPAID LEASE PAYMENTSAll of the Group’s prepaid lease payments are prepaid

for leasehold interest in land outside Hong Kong under

medium-term.

2008 2007


千港元千港元

Analysed for reporting purposes as: 就報告分析如下：

Current asset 流動資產 4,712 4,199

Non-current asset 非流動資產 266,993 193,187

271,705 197,386

16. 物業、廠房及設備（續）

本集團全部自用樓宇均位於中國，並按中期租約持有。

上述物業、廠房及設備項目（除在建項目外）按以下年度比率以直線基準計提折舊：

自用樓宇按照租約內剩餘未完約的年期或五十年（以較短者為準）

租約物業按照租約內剩餘未完約的裝修年期或五至十年

（以較短者為準）

廠房及機器 10－20%

傢俬、裝置 10－331/3%

及設備汽車 20%

17. 預付租賃款項本集團全部預付租賃款項均為香港以外租賃權益之中期租約預付租賃款項。


150


18. AVAILABLE-FOR-SALE INVESTMENTS

2008 2007


千港元千港元

Unlisted equity investments 非上市股本投資 19,800 19,800

The above unlisted investments represent a 10% equity

interest in unlisted equity securities issued by private entity

established in the PRC and is engaged in hotel operation.

It is measured at cost less impairment at each balance

sheet date because the range of reasonable fair value

estimates is so significant that the Directors are of the

opinion that its fair values cannot be measured reliably.

19. NON-CURRENT DEPOSITSNon-current deposits represent deposits paid for the

acquisition of properties, plant and equipment, and the

deposits will not be realised within twelve months from

the balance sheet date. Accordingly, the amounts were

included in the non-current assets. The deposits can

only be refundable to the Group when the vendors fail to

deliver the assets to the Group within the timeframe as

agreed with the Group. The Directors expected that the

assets will be delivered to the Group within the next two

years.

18. 可供出售投資

上述非上市投資指於中國成立之私營實體所發行非上市股本證券之10%股權，該私營實體從事酒店業務。由於公平值之合理估算幅度龐大，致使董事認為未能可靠計算其公平值，故非上市投資於各個結算日按成本扣除減值計算。

19. 非流動訂金非流動訂金指就購買物業、廠房及設備已支付之訂金。該等訂金在結算日起計12個月內不能變現。因此，該等款項計入非流動資產。該等訂金在賣方未能在與本集團協定的時間內將資產交付予本集團時，方可退回。董事預期，該等資產將於未來兩年內交付予本集團。


151


20. DEFERRED TAXATIONThe following are the major deferred tax assets and

liabilities recognised and movements thereon during the

current and prior reporting periods:

Revaluation

of properties Others Total

物業重估其他合計HK$’000 HK$’000 HK$’000

千港元千港元千港元

At 1 January 2007 於二零零七年一月一日 – 543 543

Credit for the year 本年度撥回 – (2,175 ) (2,175 )

At 31 December 2007 and 於二零零七年十二月三十一日1 January 2008 及二零零八年一月一日 – (1,632 ) (1,632 )

Charge (credit) for the year 本年度支出（撥回） 316 (3,136 ) (2,820 )

Effect of change in tax rate 稅率變動之影響 – 93 93

At 31 December 2008 於二零零八年十二月三十一日 316 (4,675 ) (4,359 )

The following is the analysis of the deferred tax balances

for financial reporting purposes:

2008 2007


千港元千港元

Deferred tax assets 遞延稅項資產 4,675 1,632

Deferred tax liabilities 遞延稅項負債 (316 ) –

4,359 1,632

At the balance sheet date, the Group has unused tax

losses of HK$73,847,000 (2007: HK$56,535,000)

available for offset against future profits. No deferred tax

asset has been recognised due to the unpredictability of

future profit streams. All tax losses can be carried forward

indefinitely.

20. 遞延稅項下表為本申報期及以前申報期內已確認之主要遞延稅項資產及負債以及當中之變動：

以下載列為財務報告目的而編製之遞延稅項結餘分析：

於結算日，本集團可供抵扣未來溢利之未動用稅項虧損為73,847,000港元（二零零七年： 56,535,000港元）。由於未來溢利流不可預測，故並無確認任何遞延稅項資產。全部稅項虧損可無限期結轉。


152


20. DEFERRED TAXATION (continued)

At the ba lance sheet date , the Group a lso has

unrecognised deferred tax asset of HK$6,833,000 (2007:

Nil) in relation to loss on cash flow hedge recognised in

hedging reserve due to the unpredictability of future profit

streams.

Under the New Law of the PRC, a withholding tax is

imposed on dividends declared in respect of profits

earned by PRC subsidiar ies from 1 January 2008

onwards. Deferred taxation has not been provided for

in the consolidated financial statements in respect of

temporary difference attributable to profits earned by

the Company’s PRC subsidiaries since 1 January 2008

amounting to HK$421,084,000 for the year ended 31

December 2008 as the Group is able to control the timing

of the reversal of the temporary differences and it is

probable that the temporary differences will not reverse in

the foreseeable future.

21. GOODWILL

HK$’000

千港元

CARRYING VALUE 賬面值At 1 January 2007 於二零零七年一月一日 –

Arising on acquisition of a subsidiary 收購一間附屬公司產生(see Note 32 (d)) （見附註32(d)） 238

At 31 December 2007, 1 January 2008 and 於二零零七年十二月三十一日、31 December 2008 二零零八年一月一日及

二零零八年十二月三十一日 238

20. 遞延稅項（續）於結算日，由於未來溢利流不可預測，故本集團亦有與於對沖儲備確認之現金流量對沖虧損相關之未確認遞延稅項資產6,833,000港元（二零零七年：沒有）。

中國新稅法規定，自二零零八年一月一日起，中國向個人須就中國附屬公司所賺取溢利而宣派之股息徵收預扣稅。截至二零零八年十二月三十一日止年度，本公司位於中國的附屬公司自二零零八年一月一日起賺取之應佔溢利之臨時差額為421,084,000港元，本集團並未就該筆款項於綜合財務報表作出撥備，原因是本集團能控制撥回臨時差額之時間，且有關臨時差額可能不會於可見將來撥回。

21. 商譽


153


21. GOODWILL (continued)

Particulars regarding impairment testing on goodwill

arising from acquisition of a subsidiary disclosed as

follows:

As explained in Note 7, the Group uses business

segments as its primary segment for reporting segment

information. For the purposes of impairment testing,

goodwill has been allocated to the cash generating unit

(“CGU”) of PVB resins business unit. The carrying amount

of goodwill allocated to the CGU of PVB resins business

unit is approximately HK$238,000 (2007: HK$238,000).

The recoverable amount of the PVB resins CGU has

been determined from value-in-use calculation. Goodwill

is expected to generate cash flow for indefinite period.

To calculate this, cash flow projections are based on

five year periods financial budgets approved by senior

management. The key assumptions for the value-in-use

calculations are the budgeted gross margin at a discount

rate of 12% (2007: 10%) and growth rate of 5% (2007:

7%), which are determined based on the unit’s past

performance and management’s expectations for the

market development. Since the recoverable amount of

the CGU is higher than its carrying amount, the Directors

consider that the carrying value of goodwill at the balance

sheet date is not significantly impaired.

22. INVENTORIES

2008 2007


千港元千港元

Raw materials 原料 1,256,688 1,221,514

Work in progress 在製品 314,009 195,005

Finished goods 製成品 98,237 94,067

1,668,934 1,510,586

21. 商譽（續）有關收購一間附屬公司所產生之商譽之減值測試詳情披露如下：

誠如附註7所闡釋，本集團以業務分部作為申報分部資料之主要分部。就減值測試而言，商譽已分配予聚烯醇縮丁醛（「PVB」）樹脂業務分部之現金產生單位（「現金產生單位」）。分配予PVB樹脂業務分部之現金產生單位之商譽賬面值約為238,000港元（二零零七年：238,000港元）。

PVB樹脂現金產生單位之可收回金額按使用價值計算法釐定。預期商譽將無限期產生現金流量。為計算使用價值，現金流量預測以經高級管理層所批准之五年期財政預算為基準。使用價值計算法之主要假設為預算毛利率之折現率及增長率分別為12%（二零零七年：10%）及5%（二零零七年：7%），乃按該單位過往表現及管理層對市場發展之期望釐定。由於現金產生單位之可收回金額高於其賬面值，故董事認為，於結算日之商譽賬面值並無出現重大減值。

22. 存貨


154


23. TRADE AND OTHER RECEIVABLES ANDPREPAYMENTS

2008 2007


千港元千港元

Trade receivables 貿易應收賬款 1,762,339 2,460,430

Bills receivables 應收票據 438,944 603,108

Other receivables and prepayments 其他應收賬款及預付款項 179,658 446,507

2,380,941 3,510,045

The Group allows credit periods of up to 120 days,

depending on the products sold, to its trade customers.

The following is an aged analysis of trade receivables at

the balance sheet dates:

2008 2007


千港元千港元

0 – 90 days 0至90日 1,016,067 1,740,770

91 – 180 days 91至180日 717,130 699,835

Over 180 days 180日以上 29,142 19,825

1,762,339 2,460,430

All bills receivables of the Group are aged within 90 days

at the balance sheet dates.

Before accepting any new customers, the Group has

an internal credit grading system to assess the potential

customers’ credit quality and the board of Directors

has delegated the management to be responsible for

determination of credit limits and credit approvals for any

customers. Limits and scoring attributed to customers

are reviewed every year. 88% (2007: 80%) of the trade

receivables that were neither past due nor impaired

have the best credit scoring attributable under the credit

grading system used by the Group.

23. 貿易及其他應收賬款及預付款項

本集團給予貿易客戶之信貸期最長為120

日，視乎所銷售產品而定。於結算日，貿易應收賬款之賬齡分析如下：

本集團所有應收票據之賬齡均為結算日起計的90日之內。

在接納任何新客戶前，本集團內部信用評級制度會評估潛在客戶之信用質素，董事會已任命管理層負責為任何客戶釐定信貸限額及信貸批核。客戶之限額及評分每年審閱。88%（二零零七年：80%）無逾期或減值之貿易應收賬款獲本集團所採用之信用評級制度之最高信用評分。


155


23. TRADE AND OTHER RECEIVABLES ANDPREPAYMENTS (continued)Included in the Group’s trade receivable balance

are debtors w i th aggregate car ry ing amount o f

HK$343,547,000 (2007: HK$484,879,000) which are

past due at the balance sheet date for which the Group

has not provided for impairment loss. The Group does not

hold any collateral over these balances. The average age

of these receivables is 120 days (2007: 120 days).

Ageing of trade receivables which are past due but not

impaired are as follows:

2008 2007


千港元千港元

91 – 120 days 91至120日 149,300 234,808

121 – 150 days 121至150日 135,244 185,377

151 – 180 days 151至180日 29,861 44,869

Over 180 days 180日以上 29,142 19,825

343,547 484,879

The Group has provided fully for all receivables that are

past due beyond 240 days because historical experience is

such that these receivables are generally not recoverable.

Allowance on trade receivables aged between 120 and

240 days are made based on estimated irrecoverable

amounts by reference to past default experience and

objective evidences of impairment determined by the

difference between the carrying amount and the present

value of the estimate future cash flow discounted at the

original effective interest rate.

In determining the recoverability of the trade receivables,

the Group monitors any change in the credit quality of

the trade receivables since the credit was granted and up

to the reporting date. The Directors considered that the

Group has no significant concentration of credit risk of

trade and other receivables, with exposure spread over a

number of counterparties and customers.

23. 貿易及其他應收賬款及預付款項（續）本集團貿易應收賬款餘額包括應收賬款，總賬面值為343,547,000港元（二零零七年： 484,879,000港元），於結算日已經逾期，本集團並無就該等款項作出減值虧損撥備。本集團就該等餘額並無持有任何抵押品。該等應收賬款之平均賬齡為120日（二零零七年：120日）。

逾期但無減值之貿易應收賬款之賬齡如下：

過往經驗顯示逾期240日以上之應收賬款一般無法收回，故本集團對該等應收賬款全數作出撥備。賬齡介乎120至240日之貿易應收賬款之撥備，乃參考過往欠賬經驗之估計不可收回金額及賬面值與以原有實際利率折讓估計日後現金流量現值間之差額計算的客觀證據來釐定的減值金額。

在釐定貿易應收賬款之可收回性時，自在早前授出信貸起至申報日期，本集團監察貿易應收賬款信用質素之任何變動。董事認為，本集團並無高度集中之貿易及其他應收賬款信貸風險，風險由多個交易方及客戶分攤。


156


23. TRADE AND OTHER RECEIVABLES ANDPREPAYMENTS (continued)

Movement in the allowance for doubtful debts

2008 2007


千港元千港元

Balance at beginning of the year 年初結餘 115,322 131,996

Impairment losses recognised on 就貿易應收賬款確認之 trade receivables 減值虧損 8,101 19,854

Amounts written off as uncollectible 撇銷為不可收回之款項 (1,414 ) (36,528 )

Balance at end of the year 年末結餘 122,009 115,322

Included in the a l lowance for doubtfu l debts are

individually impaired trade receivables with an aggregate

balance of HK$122,009,000 (2007: HK$115,322,000)

which have either been placed under liquidation or in

severe financial difficulties. The Group does not hold any

collateral over these balances.

Included in trade and other receivables and prepayments

are the following amounts denominated in a currency

other than the functional currency of the group entities to

which they relate:

2008 2007

二零零八年二零零七年Amount Amount

金額金額’000 ’000

千元千元

United States Dollars 美元 58,632 100,571

Japanese Yen 日圓 – 56,479

23. 貿易及其他應收賬款及預付款項（續）呆賬準備之變動

呆賬準備包括個別已減值之貿易應收賬款，總結餘為122,009,000港元（二零零七年：115,322,000港元），該等款項為清盤或重大財務困難項下之款項。本集團就該等結餘並無持有任何抵押品。

貿易及其他應收賬款及預付款項包括下列以集團實體相關之功能貨幣以外貨幣計值之款額：


157


24. BANK BALANCES AND CASHBank balances and cash comprise cash held by the

Group and short-term bank deposits with an original

maturity of one month or less. At 31 December 2008, the

bank balances and deposits carry interest at the prevailing

market interest rates which range from 0.01% to 3.28%

(2007: 0.18% to 3.40%) per annum.

At 31 December 2008 and 2007, the Group had bank

balances and cash that were not freely convertible or

were subject to exchange controls in the PRC amounting

to approximately HK$870.0 million and HK$650.0 million,

respectively.

Included in bank balances and cash are the following

amounts denominated in a currency other than the

functional currency of the group entities to which they

relate:

2008 2007


金額金額’000 ’000

千元千元


Japanese Yen 日圓 835 8,602

24. 銀行結餘及現金銀行結餘及現金包括本集團持有之現金及原到期日為一個月或以內之短期銀行存款。於二零零八年十二月三十一日，銀行結餘及存款按現行市場年利率介乎0.01厘至3.28厘（二零零七年：0.18厘至3.40厘）計息。

於二零零八年及二零零七年十二月三十一日，本集團不可自由兌換或須受中國外匯管制所規限之銀行結餘及現金分別約為870,000,000港元及650,000,000港元。

銀行結餘及現金包括下列以集團實體相關之功能貨幣以外貨幣計值之款額：


158


25. AMOUNTS DUE FROM (TO) FELLOWSUBSIDIARIES

2008 2007


千港元千港元

Amounts due from fellow subsidiaries 流動資產項下應收同系under current assets 附屬公司款項– trade nature －貿易性質 182,406 391,767

The Group allows credit period normally up to 120 days

for sales to its fellow subsidiaries. The amounts due are

non-interest bearing, unsecured and aged within 90 days

at the balance sheet date.

2008 2007


千港元千港元

Amounts due to fellow subsidiaries 流動負債項下應付同系under current liabilities 附屬公司款項– trade nature －貿易性質 10,818 4,042

The Group’s non-interest bearing amounts due to fellow

subsidiaries have repayment terms of less than 30 days.

The amounts due are non-interest bearing, unsecured

and aged within 90 days at the balance sheet date.

25. 應收（付）同系附屬公司款項

本集團就銷售給予其同系附屬公司之信貸期一般最長為120日。該等應收款項為免息及無抵押，其賬齡均為結算日起的90日之內。

本集團免息應付同系附屬公司款項之還款期少於30日。該等應付款項為免息及無抵押，其賬齡均為結算日起的90日之內。


159


26. DERIVATIVE FINANCIAL INSTRUMENTS

2008 2007

二零零八年二零零七年Assets Liabilities Assets Liabilities

資產負債資產負債HK$’000 HK$’000 HK$’000 HK$’000

千港元千港元千港元千港元

Commodity forward contracts 商品遠期合約 2,454 – 368 –

Foreign currency forward contracts 外匯遠期合約 573 255 1,269 1,184

Interest rate swap contracts 利率掉期合約 – 35,273 – –

3,027 35,528 1,637 1,184

Analysed for reporting purposes as: 就報告分析如下： Current 流動 3,027 255 1,637 1,184

Non-current 非流動 – 35,273 – –

3,027 35,528 1,637 1,184

Cash flow hedges

During the year ended 31 December 2008, the Group used

interest rate swap contracts (net quarterly settlement) to

minimise its exposure to certain cash flow changes of its

variable rate bank borrowings by swapping a proportion

of the variable rate borrowings from variable rate to fixed

rate. The terms of these interest rate swap contracts

were negotiated to match with those of the hedged bank

borrowings (i.e. same notional amount of the derivatives

match with principal amounts of bank borrowings, same

currency and same interest rate index). The Directors

consider that the interest rate swap contracts are highly

effective hedging instruments and have designated them

as hedging instruments for hedge accounting purposes.

26. 衍生金融工具

現金流量對沖

於截至二零零八年十二月三十一日止年度，本集團透過將部分浮息借貸由浮息轉為定息，利用利率掉期合約（季度結算淨額）減低按浮息計算之銀行借貸若干現金流量變動之風險。該等利率掉期合約之條款乃為配合對沖銀行借貸之條款而洽商得出（即相同衍生工具之相同面值配合銀行借貸之本金金額、相同幣別及相同利率指標）。董事認為，利率掉期合約為極有效的對沖工具，並指定利率掉期合約為就對沖會計用途的對沖工具。


160


26. DERIVATIVE FINANCIAL INSTRUMENTS

(continued)

Cash flow hedges (continued)

The major terms of the interest rate swap contracts are

set out below:

At 31 December 2008

Receive

Notional amount Maturity floating Pay fixed

面值到期日所收浮息所付定息

3 contracts of HK$100,000,000 each Within 2 to 3 years HIBOR 2.39% to 2.90%

三份每份100,000,000港元之合約兩至三年內香港銀行同業拆息 2.39厘至2.90厘8 contracts of HK$150,000,000 each Within 2 to 3 years HIBOR 2.37% to 2.76%

八份每份150,000,000港元之合約兩至三年內香港銀行同業拆息 2.37厘至2.76厘1 contract of HK$200,000,000 Within 2 to 3 years HIBOR 2.78%

一份200,000,000港元之合約兩至三年內香港銀行同業拆息 2.78厘1 contract of HK$300,000,000 Within 2 to 3 years HIBOR 3.88%

一份300,000,000港元之合約兩至三年內香港銀行同業拆息 3.88厘

During the year ended 31 December 2008, the hedge

was 80% to 118% effective in hedging the cash flow

exposure to interest rate movements. Fair value losses of

HK$41,411,000 have been deferred in hedging reserve

and are expected to be released to the consolidated

income statement when the hedged interest expense is

charged to profit or loss quarterly.

During the year ended 31 December 2008, an amount

of approximately HK$6,138,000 was transferred from

hedging reserve into profit or loss and was included in the

finance costs in the consolidated income statement.

26. 衍生金融工具（續）

現金流量對沖（續）利率掉期合約之主要條款如下：

於二零零八年十二月三十一日

截至二零零八年十二月三十一日止年度，就對沖利率變動的現金流量風險的對沖有效率為80%至118%。為數41,411,000港元之公平值虧損已於對沖儲備遞延處理，並預期當每季已對沖的利息開支於損益扣除時，於綜合收益表撥回。

截至二零零八年十二月三十一日止年度，金額約為6,138,000港元由對沖儲備轉撥至損益，並列入綜合收益表的融資成本內。


161


26. DERIVATIVE FINANCIAL INSTRUMENTS(continued)

Other derivatives (not under hedge accounting)

During both years, the Group entered into commodity

forward contracts to hedge against part of the Group’s

exposure in copper price fluctuations. At the respective

maturity dates, the contracts are net settled in cash with

the issuer. The major terms of the outstanding contract at

the balance sheet date are as follows:

At 31 December 2008

Contract amount

合約金額Currency Quantity Maturity Forward price

貨幣數量到期日遠期價

US$ Copper 500 Metric Tonnes 3 March 2009 Sell at US$3,617/metric tonne

美元 500公噸銅二零零九年三月三日於3,617美元╱公噸賣出

At 31 December 2007

Contract amount

合約金額Currency Quantity Maturity Forward price

貨幣數量到期日遠期價

US$ Copper 100 Metric Tonnes 31 January 2008 Buy at US$7,215/metric tonne

美元 100公噸銅二零零八年於7,215美元╱公噸買入一月三十一日


其他衍生工具（並非以對沖會計法列賬）

於該兩個年度內，本集團訂立商品遠期合約，藉以對沖本集團的部分銅價波動風險。於各到期日，與發行人以現金結算合約淨額。於結算日，該尚未到期之合約之主要條款如下：


於二零零七年十二月三十一日


162


26. DERIVATIVE FINANCIAL INSTRUMENTS(continued)

Other derivatives (not under hedge accounting)

(continued)

During both years, the Group entered into foreign

currency forward contracts to hedge against part of the

Group’s exposure in foreign currency fluctuations. At the

respective maturity dates, the contracts are settled net in

cash with the issuer. The major terms of the outstanding

contracts at the balance sheet date are as follows:

At 31 December 2008

Notional amount Maturity Forward contract rates

面值到期日遠期合約匯率

9 contracts to buy US$1,000,000 each Within 1 year US$1 to HK$7.695

九份每份購買1,000,000美元之合約一年內 1美元兌7.695港元9 contracts to sell US$2,000,000 each Within 1 year US$1 to HK$7.695

九份每份出售2,000,000美元之合約一年內 1美元兌7.695港元

At 31 December 2007

Notional amount Maturity Forward contract rates

面值到期日遠期合約匯率

9 contracts to buy US$1,000,000 each Within 1 year US$1 to HK$7.732

九份每份購買1,000,000美元之合約一年內 1美元兌7.732港元12 contracts to buy US$1,000,000 each Within 1 to 2 years US$1 to HK$7.695

十二份每份購買1,000,000美元之合約一至兩年內 1美元兌7.695港元9 contracts to sell US$2,000,000 each Within 1 year US$1 to HK$7.732

九份每份出售2,000,000美元之合約一年內 1美元兌7.732港元12 contracts to sell US$2,000,000 each Within 1 to 2 years US$1 to HK$7.695

十二份每份出售2,000,000美元之合約一至兩年內 1美元兌7.695港元

The above derivatives are measured at fair value at the

balance sheet date by reference to valuation provided by

counterparty financial institutions for these instruments.


其他衍生工具（並非以對沖會計法列賬）（續）

於該兩個年度內，本集團訂立外匯遠期合約，藉以對沖本集團的部分外匯波動風險。於各到期日，與發行人以現金結算合約淨額。於結算日，該尚未到期之合約之主要條款如下：


於二零零七年十二月三十一日

上述衍生工具乃經參照有關交易方金融機構於結算日就該等工具提供之估值後，按公平值計量。


163


27. TRADE AND OTHER PAYABLES ANDBILLS PAYABLEIncluded in trade and other payables are trade payables of

HK$389,502,000 (2007: HK$467,771,000). The following

is an aged analysis of trade payables at the balance sheet

dates.

2008 2007


千港元千港元

0 – 90 days 0至90日 299,958 413,504

91 – 180 days 91至180日 59,123 33,669

Over 180 days 180日以上 30,421 20,598

389,502 467,771

All bills payable of the Group are aged within 90 days at

the balance sheet dates.

Included in trade and other payables and bills payable are

the following amounts denominated in a currency other

than the functional currency of the group entities to which

they relate:

2008 2007


金額金額’000 ’000

千元千元


Japanese Yen 日圓 1,104,212 255,902

27. 貿易及其他應付賬款及應付票據

貿易及其他應付賬款中包括為數389,502,000 港元（二零零七年：467,771,000港元）的貿易應付賬款。貿易應付賬款於結算日之賬齡分析如下：

本集團所有應付票據之賬齡均為結算日起的90日之內。

貿易及其他應付賬款及應付票據包括下列以集團實體相關之功能貨幣以外貨幣計值之款額：


164


28. BANK BORROWINGS

2008 2007


千港元千港元

Unsecured: 無抵押：

Bank loans 銀行貸款 2,914,376 2,797,038

Trust receipt loans 信託收據貸款 294,018 413,058

3,208,394 3,210,096

Carrying amount repayable: 須於下列期間償還之賬面值：

Within one year 一年內 1,078,370 636,634

More than one year, but not 一年以上但不超過兩年exceeding two years 676,117 584,614

More than two years but not 兩年以上但不超過三年more than three years 1,106,840 584,614

More than three years but not 三年以上但不超過四年more than four years 247,047 1,404,234

More than four years but not 四年以上但不超過五年more than five years 100,020 –

2,130,024 2,573,462

Total 合計 3,208,394 3,210,096

Bank borrowings at 31 December 2008 are variable-

rate borrowings which carry interest ranging from

HIBOR+0.5% to HIBOR+2.0% (2007: HIBOR+0.5% to

HIBOR+1.0%) per annum.

The range of effective interest rates (which are also

equal to contracted interest rates) on the Group’s bank

borrowings is 2.1% to 4.6% (2007: 3.9% to 5.4%) per

annum.

28. 銀行借貸

於二零零八年十二月三十一日，銀行借貸為浮息之借貸，年利率介乎香港銀行同業拆息加0.5厘至加2.0厘不等（二零零七年：香港銀行同業拆息加0.5厘至加1.0厘）。

本集團銀行借貸之實際利率（亦等同訂約利率）範圍介乎年利率2.1厘至4.6厘（二零零七年：3.9厘至5.4厘）不等。


165


28. BANK BORROWINGS (continued)

Included in bank borrowings are the following amounts

denominated in a currency other than the functional

currency of the group entities to which they relate:

2008 2007


金額金額’000 ’000

千元千元


Japanese Yen 日圓 – 50,700

29. SHARE CAPITALTHE COMPANY

Issued and

Authorised fully paid

法定已發行及繳足Number of Number of

shares Amount shares Amount

股份數目金額股份數目金額’000 HK$’000 ’000 HK$’000

千千港元千千港元

Ordinary shares of 每股面值0.10港元HK$0.10 each : 之普通股：

At 1 January 2007, 於二零零七年一月一日、31 December 2007 二零零七年十二月三十一日及and 31 December 2008 二零零八年十二月三十一日 20,000,000 2,000,000 3,000,000 300,000

30. SPECIAL RESERVESSpecial reserve of the Group represents (i) the difference

between the net asset value of the acquired subsidiaries

and the nominal value of the Company’s shares issued

for the acquisition at the time of the group reorganisation

in 2006 and (ii) the reduction in the registered capital of a

wholly-owned subsidiary established in the PRC.

28. 銀行借貸（續）銀行借貸包括下列以集團實體相關之功能貨幣以外貨幣計值之款額：

29. 股本本公司

30. 特別儲備本集團之特別儲備為(i)被收購附屬公司之資產淨值與於二零零六年進行集團重組時為收購而發行之本公司股份面值兩者之間的差額；及( i i )一間於中國成立的全資附屬公司削減之註冊資本。


166


31. SHARE OPTIONSThe share option scheme of the Company (the “Scheme”)

was approved by the shareholders of the Company and

the shareholders of KCHL on 18 May 2007 and 25 June

2007 respectively. The Scheme has taken effect after

obtaining the approval from the Listing Committee of the

Stock Exchange on 6 July 2007.

The Scheme would be valid for a period of ten years. The

Board may, at its discretion, grant options to subscribe

for shares in the Company to eligible participants who

contribute to the long-term growth and profitability of

the Company and include (i) any employee or proposed

employee (whether full-time or part-time and including any

executive Director), consultants or advisers of or to the

Company, any of its subsidiaries or any entity (“Invested

Entity”) in which the Group holds an equity interest; (ii)

any non-executive Directors (including independent

non-executive Directors), any of its subsidiaries or any

Invested Entity; (iii) any supplier of goods or services to

any member of the Group or any Invested Entity; (iv) any

customer of the Group or any Invested Entity; (v) any

person or entity that provides research, development

or other technological support to the Group or any

Invested Entity; and (vi) any shareholder of any member

of the Group or any Invested Entity or any holder of any

securities issued by any member of the Group or any

Invested Entity.

The subscription price of the Company’s share in respect

of any option granted under the Scheme must be at

least the highest of (i) the closing price of the shares of

the Company as stated in the Stock Exchange’s daily

quotations sheet on the date of grant of the option, which

must be a business day; (ii) the average closing price

of the shares of the Company as stated in the Stock

Exchange’s daily quotations sheets for the five business

days immediately preceding the date of grant of the

option; and (iii) the nominal value of the shares of the

Company.

31. 優先購股權本公司股東及建滔化工之股東分別於二零零七年五月十八日及二零零七年六月二十五日批准本公司之優先購股權計劃（「該計劃」）。該計劃於二零零七年七月六日獲得聯交所上市委員會批准後，現已生效。

該計劃有效期為十年。董事會可酌情向合資格參與人士授出可認購本公司股份之優先購股權。合資格參與人士為對本公司長遠增長及盈利有貢獻之人士，包括( i )本公司、其任何附屬公司或任何本集團持有股權之實體（「被投資實體」）之任何僱員或擬聘用僱員（不論全職或兼職，且包括任何執行董事）、諮詢顧問或顧問；( i i )任何非執行董事（包括獨立非執行董事）、本公司任何附屬公司或任何被投資實體；( i i i )任何向本集團任何成員公司或任何被投資實體提供貨品或服務之供應商；( iv)本集團或任何被投資實體之任何客戶；(v)任何向本集團或任何被投資實體提供研究、開發或其他技術支援之人士或實體；及(vi)本集團任何成員公司或任何被投資實體之任何股東或本集團任何成員公司或任何被投資實體所發行任何證券之持有人。

任何根據該計劃授出之優先購股權所涉及本公司股份之最低認購價必須不能低於以下最高價格：(i)本公司股份於優先購股權授出日期（必須為營業日）之聯交所每日報價表所報收市價；( i i )本公司股份於緊接優先購股權授出日期前五個營業日之聯交所每日報價表所報收市價之平均價；及( i i i )本公司股份之面值。


167


31. SHARE OPTIONS (continued)

The option may be accepted by a participant within

28 days from the date of the offer for the grant of the

option upon the payment of a consideration of HK$1.

An option may be exercised at any time during a period

to be determined and notified by the Directors to each

grantee, and in the absence of such determination, from

the date upon which the offer for the grant of the option

is accepted but shall end in any event not later than 10

years from the date of grant of the option subject to the

provisions for early termination thereof. The Directors

may, at their absolute discretion, fix any minimum period

for which an option must be held, any performance

targets that must be achieved and any other conditions

that must be fulfilled before the options can be exercised

upon the grant of an option to a participant.

The total number of shares of the Company which may

be issued upon exercise of all options to be granted

under the Scheme and any other share option scheme of

the Company (excluding, for this purpose, options lapsed

in accordance with the terms of the Scheme and any

other share option scheme of the Company) must not in

aggregate exceed 10% of the total number of shares of

the Company in issue as at the date of approval of the

Scheme.

The maximum number of shares of the Company which

may be issued upon exercise of all outstanding options

granted and yet to be exercised under the Scheme and

any other share option scheme of the Company must not

exceed 30% of the issued share capital of the Company

from time to time.

The total number of shares of the Company issued and to

be issued upon exercise of the options granted (including

both exercised and outstanding options) to each

participant in any 12-month period must not exceed 1%

of the share capital of the Company then in issue unless

approved by the shareholders of the Company and KCHL

in general meetings.

No share option was granted pursuant to the Scheme

since its adoption.

31. 優先購股權（續）參與人士可於獲提呈授出優先購股權之日起計28天內，透過支付代價1港元接納優先購股權。優先購股權可於董事釐定及通知各承授人之期間內隨時行使，倘無釐定有關期間，則由優先購股權授出建議獲接納之日開始，並於任何情況下不遲於優先購股權授出日期起計十年之日為止，惟須受該計劃之提早終止條文所限。董事可全權酌情向參與人士訂定行使所授出之優先購股權前必須持有之最短期間、任何須予達成之表現目標及任何其他須予達成之條件。

根據該計劃及本公司任何其他優先購股權計劃授出之所有優先購股權（就此而言不包括按照該計劃及本公司任何其他優先購股權計劃之條款已失效之優先購股權）獲行使時可予發行之本公司股份總數，合共不得超過本公司於批准該計劃當日已發行股份總數之10%。

根據該計劃及本公司任何其他優先購股權計劃所有授出而尚未行使及有待行使之優先購股權獲行使時可予發行之本公司股份數目，最多不得超過本公司不時之已發行股本30%。

於任何十二個月期間向各參與人士授出之優先購股權（包括已行使及未行使之優先購股權）獲行使而已發行及將予發行之本公司股份總數，不得超過本公司當時已發行股本之1%，除非獲本公司及建滔化工之股東於股東大會批准則作別論。

自採納該計劃以來，概無根據該計劃授出任何優先購股權。


168


32. ACQUISITION OF SUBSIDIARIES

(a) On 1 January 2008, the Group acquired 100%

equity interest in a company from an independent

third party, of which the principal activity of its

subsidiary is manufacture and distribution of

industrial raw materials, for a cash consideration

of HK$1,941,000. This acquisition has been

accounted for using the purchase method. No

goodwill arise as a result of the acquisition.

The net assets acquired in the acquisition are as

follows:

Acquiree’s

carrying amount

before combination

and fair value

被收購方於合併前之賬面值及公平值

HK$’000

千港元

Net assets acquired: 購入資產淨值：Properties, plant and equipment 物業、廠房及設備 110,633

Prepaid lease payments 預付租賃款項 64,019

Non-current deposits 非流動訂金 52

Inventories 存貨 858

Trade and other receivables and 貿易及其他應收賬款及 prepayments 預付款項 7,720

Bank balances and cash 銀行結餘及現金 1,327

Trade and other payables 貿易及其他應付賬款 (182,668 )

Total consideration satisfied by cash 以現金支付之總代價 1,941

Net cash outflow arising on acquisition: 收購產生之現金流出淨額：Cash consideration paid 已付現金代價 (1,941 )

Bank balances and cash acquired 購入銀行結餘及現金 1,327

(614 )

T h e s u b s i d i a r y c o n t r i b u t e d a l o s s o f

HK$16,385,000 to the Group’s profit for the

period between the date of acquisition and the

balance sheet date.

32. 收購附屬公司(a) 於二零零八年一月一日，本集團向

一名獨立第三方收購一家公司的全部股權，該公司之附屬公司主要從事製造及分銷工業原材料，現金代價為1,941,000港元。此項收購以購買會計法列賬。此項收購並無產生商譽。

收購所購入之資產淨值如下︰

該附屬公司於收購日期起至結算日止期間為本集團溢利帶來16,385,000港元之虧損。


169


32. ACQUISITION OF SUBSIDIARIES (continued)

(b) On 1 June 2008, the Group acquired 100% equity

interest in a company from an independent third

party, of which the principal activity is manufacture

and distribution of electronic raw materials, for

a cash consideration of HK$40,620,000. This

acquisition has been accounted for using the

purchase method. No goodwill arise as a result of

the acquisition.

The net assets acquired in the acquisition are as

follows:

Acquiree’s

carrying amount

before combination

and fair value


HK$’000

千港元


Inventories 存貨 18,987





Net cash inflow arising on acquisition: 收購產生之現金流入淨額：Cash consideration paid 已付現金代價 (40,620 )


20,894

The subsidiary contributed a loss of HK$2,121,000

to the Group’s profit for the period between the

date of acquisition and the balance sheet date.

32. 收購附屬公司（續）(b) 於二零零八年六月一日，本集團向

一名獨立第三方收購一間主要從事製造及分銷電子原料之公司之全部股權，現金代價為40,620,000港元。此項收購以購買會計法列賬。此項收購並無產生商譽。


該附屬公司於收購日期起至結算日止期間為本集團溢利帶來2,121,000港元之虧損。


170



(c) On 1 January 2007, the Group acquired 100%

equity interest in a company of which the principal

activity is manufacture and distribution of laminates

for a cash consideration of HK$72,341,000. This

acquisition had been accounted for using the

purchase method. No goodwill arose as a result of

the acquisition.

The net assets acquired in the acquisition were as

follows:

Acquiree’s

carrying amount

before combination

and fair value


HK$’000

千港元


Inventories 存貨 4,278







(63,319 )

T h e s u b s i d i a r y c o n t r i b u t e d a p r o f i t o f

HK$6,526,000 to the Group’s profit for the period

between the date of acquisition and 31 December

2007.

32. 收購附屬公司（續）(c) 於二零零七年一月一日，本集團收

購一間主要從事製造及分銷覆銅面板之公司之全部股權，現金代價為72,341,000港元。此項收購以購買會計法列賬。此項收購並無產生商譽。


該附屬公司於收購日期起至二零零七年十二月三十一日止期間為本集團溢利貢獻6,526,000港元之溢利。


171


32. ACQUISITION OF SUBSIDIARIES (continued)(d) On 1 April 2007, the Group acquired 51% equity

interest in a company of which the principal

activity is manufacture of specialty resins and

related products, for a cash consideration of

HK$20,643,000. This acquisit ion had been

accounted for using the purchase method. The

amount of goodwill arising as a result of the

acquisition was HK$238,000.

The net assets acquired in the acquisition, and the

goodwill arising, were as follows:

Acquiree’s

carrying amount

before combination

and fair value


HK$’000

千港元

Net assets acquired: 購入資產淨值：

Properties, plant and equipment 物業、廠房及設備 37,153

Prepaid lease payments 預付租賃款項 2,076

Inventories 存貨 140

Trade and other receivables and 貿易及其他應收賬款 prepayments 及預付款項 1,212

Bank balances and cash 銀行結餘及現金 363

Trade and other payables 貿易及其他應付賬款 (934 )

40,010

Minority interests 少數股東權益 (19,605 )

Goodwill 商譽 238

Total consideration satisfied by: 以下列方式支付之總代價：

Cash 現金 20,643

Net cash outflow arising on acquisition: 收購產生之現金流出淨額：

Cash consideration paid 已付現金代價 (20,643 )

Bank balances and cash acquired 購入銀行結餘及現金 363

(20,280 )

T h e s u b s i d i a r y c o n t r i b u t e d a p r o f i t o f

HK$2,169,000 to the Group’s profit for the period

between the date of acquisition and 31 December

2007.

32. 收購附屬公司（續）(d) 於二零零七年四月一日，本集團收

購一間主要從事製造特殊樹脂及相關產品之公司之51%股權，現金代價為20,643,000港元。此項收購以購買會計法列賬。此項收購產生之商譽為238,000港元。

收購所購入之資產淨值及所產生之商譽如下︰

該附屬公司於收購日期起至二零零七年十二月三十一日止期間為本集團溢利貢獻2,169,000港元之溢利。


172



(e) On 1 October 2007, the Group acquired 100%

equi ty interest in a company of which the

principal activity is manufacture and distribution

of laminates , fo r a cash cons idera t ion o f

HK$29,250,000. This acquisit ion had been

accounted for using the purchase method. No

goodwill arose as a result of the acquisition.

The net assets acquired in the acquisition were as

follows:

Acquiree’s

carrying amount

before combination

and fair value


HK$’000

千港元

Net assets acquired: 購入資產淨值：Trade and other receivables and 貿易及其他應收賬款

prepayments 及預付款項 27,921


Trade and other payables 貿易及其他應付賬款 (592 )




(27,329 )

The subsidiary contributed a loss of HK$1,331,000

to the Group’s profit for the period between the

date of acquisition and 31 December 2007.

32. 收購附屬公司（續）(e) 於二零零七年十月一日，本集團收

購一間主要從事製造及分銷覆銅面板之公司之全部股權，現金代價為29,250,000港元。此項收購以購買會計法列賬。此項收購並無產生商譽。


該附屬公司自收購日期起至二零零七年十二月三十一日止期間為本集團溢利帶來1,331,000港元之虧損。


173



If the acquisitions in respect of items (a) and (b) had been

completed on the beginning of the year of acquisitions,

total group revenue for the year would have been

HK$10,266 million (2007: HK$10,429 million in respect

of items (c), (d) and (e)) and profit for that year would have

been HK$1,252 million (2007: HK$1,925 million). The

pro forma information is for illustrative purposes only and

is not necessarily an indication of revenue and results of

operations of the Group that actually would have been

achieved had the acquisitions been completed at the

beginning of the year, nor is intended to be a projection of

future results.

33. CAPITAL COMMITMENTS

2008 2007


千港元千港元

Capital expenditure contracted for but 就購買物業、廠房及not provided in the consolidated 設備而已訂約financial statements for the 但未於綜合財務acquisition of properties, plant 報表作出撥備之

and equipment 資本開支 132,670 141,932

34. OPERATING LEASES

2008 2007


千港元千港元

The Group as lessee: 本集團作為承租人：

Minimum lease payments charged to 年內於綜合收益表the consolidated income statements 扣除之最低租約during the year 付款– for premises －物業 3,794 1,246

32. 收購附屬公司（續）倘 (a)項及 (b)項收購於收購年初完成，期內總集團營業額將為 10,266,000,000港元（二零零七年 :就 (c)項、(d)項及 (e)項而言，10,429,000,000港元），本年度溢利將為1,252,000,000港元（二零零七年：1,925,000,000港元）。備考資料僅供說明用途，未必表示收購於年初完成，本集團實際達致之營業額及經營業績，亦不擬成為未來業績之預測。

33. 資本承擔

34. 經營租約


174


34. OPERATING LEASES (continued)

Operating lease payments represent rentals payable by

the Group for certain of its office properties and all lease

payments are fixed and predetermined.

At the balance sheet date, the Group’s future lease

payments under non-cancellable operating leases are

payable as follows:

2008 2007


千港元千港元

Within one year 一年內 520 646

After one year but not later than 一年後但於五年內 five years 1,816 1,791

After five years 五年後 17,549 16,631

19,885 19,068

The Group as lessor:

2008 2007


千港元千港元

Rental income credited to the 年內計入綜合收益表之consolidated income statement 租金收入（已扣除during the year, net of outgoing amount 支銷約為243,000港元of approximately HK$243,000 （二零零七年：

(2007: HK$157,000) 157,000港元）） 11,904 7,581

34. 經營租約（續）經營租約付款為本集團就若干辦公室物業應付之租金。所有租約付款之金額均為固定及預早釐定。

於結算日，本集團根據不可撤銷之經營租約於日後支付之租約付款須於下列期間支付：

本集團作為出租人：


175


34. OPERATING LEASES (continued)

The Group’s investment propert ies are rented to

outside parties for periods up to seven years at fixed

predetermined amounts. At the balance sheet date,

the Group had contracted with tenants to receive the

following future minimum lease payments under non-

cancellable operating leases:

2008 2007


千港元千港元

Within one year 一年內 7,390 7,496

After one year but not later than 一年後但於五年內 five years 12,227 15,967

After five years 五年後 1,565 2,098

21,182 25,561

35. RETIREMENT BENEFITS SCHEMEThe Group participates in both a defined contribution

scheme which was registered under the Occupational

Retirement Scheme Ordinance (the “ORSO Scheme”)

and a Mandatory Provident Fund Scheme which was

establ ished under the Mandatory Provident Fund

Ordinance in December 2000 (the “MPF Scheme”). The

assets of the schemes are held separately from those of

the Group and are invested in funds under the control of

independent trustees. Employees who were members of

the ORSO Scheme prior to the establishment of the MPF

Scheme are members of both the ORSO Scheme and

the MPF Scheme, whereas all new employees joining the

Group on or after December 2000 are required to join the

MPF Scheme.

34. 經營租約（續）本集團之投資物業均按預早釐定之定額租金租予外界人士，租期最長為七年。於結算日，本集團已與租戶訂立合約，根據不可撤銷之經營租約可於日後收取之最低租約付款如下：

35. 退休福利計劃本集團同時參加一項根據職業退休計劃條例註冊之定額供款計劃（「職業退休計劃」）及根據強制性公積金條例於二零零零年十二月成立之強制性公積金計劃（「強積金計劃」）。該等計劃之資產與本集團之資產分開持有，並投資於由獨立信託人控制之基金。於成立強積金計劃之前已參加職業退休計劃之僱員，同時成為職業退休計劃及強積金計劃之成員，而所有於二零零零年十二月或之後加入本集團之新僱員必須參加強積金計劃。


176


35. RETIREMENT BENEFITS SCHEME (continued)

Employees of subsidiaries in the PRC are members of the

state-sponsored pension schemes operated by the PRC

government. The subsidiaries are required to contribute a

certain percentage of their payroll to the pension schemes

to fund the benefits. The only obligation of the Group with

respect to the pension schemes is to make the required

contributions.

Payments to the ORSO Scheme, the MPF Scheme and

the state-sponsored pension schemes of approximately

HK$8,583,000 (2007: HK$7,501,000) had been charged

to the consolidated income statement.

36. RELATED PARTY TRANSACTIONSThe Group entered into the fo l lowing s igni f icant

transactions with related parties during the year:

2008 2007


千港元千港元

(i) Sales of goods and drilling (i) 向同系附屬公司services provided to fellow 銷售貨品及subsidiaries 提供鑽孔服務 2,302,441 2,082,382

(ii) Purchase of goods from (ii) 向同系附屬公司fellow subsidiaries 採購貨品 276,287 165,109

(iii) Rental expenses paid to (iii) 向同系附屬公司fellow subsidiaries 支付租金開支 2,122 –

(iv) Rental income received from (iv) 向同系附屬公司fellow subsidiaries 收取租金收入 396 528

35. 退休福利計劃（續）中國附屬公司之僱員為中國政府運作之國家資助退休計劃成員。該等附屬公司須將薪金支出之某一百分比投入退休計劃，以支付有關福利。本集團就退休計劃履行之唯一責任為支付所需供款。

向職業退休計劃、強積金計劃及國家資助退休計劃支付之供款約為8,583,000港元（二零零七年：7,501,000港元），已自綜合收益表中扣除。

36. 關連人士交易本集團與關連人士在年內進行之重大交易如下：


177


36. R E L A T E D P A R T Y T R A N S A C T I O N S(continued)

Compensation of key management personnel

The remuneration of Directors and other members of key

management during the year is as follows:

2008 2007


千港元千港元

Short-term benefits 短期福利 57,658 74,404

Post-employment benefits 退休後福利 562 519

58,220 74,923

The remuneration of Directors and key executives

is determined with reference to the performance of

individuals and market trends.

36. 關連人士交易（續）

主要管理人員酬金

年內，董事及其他主要管理人員之酬金如下：

董事及主要行政人員之酬金會考慮個別員工表現及市場趨勢後釐定。


178


37. P A R T I C U L A R S O F P R I N C I P A L

SUBSIDIARIES OF THE COMPANY

Details of the Company’s principal subsidiaries at 31

December 2007 and 2008 are as follows:

Place of Issued and Proportion of

incorporation/ fully paid the ownership

registration share capital/ interest held

Name of subsidiary and operation registered capital by the Group Principal activities

註冊成立╱ 已發行及繳足本集團所持有附屬公司名稱登記及經營地點股本╱註冊資本擁有權權益比例主要業務

2008 2007

二零零八年二零零七年% %

Chung (Taicang) Insulated PRC 1 US$3,000,000 100 100 Manufacture and distribution

Material Co., Ltd. 中國1 3,000,000美元 of bleached kraft paper

忠信（太倉）絕緣材料有限公司製造及分銷漂白木漿紙

Excel First Investments Limited British Virgin US$1 100 100 Investment holding

卓先投資有限公司 Islands# 1美元投資控股英屬處女群島#

Fogang Kingboard Industry Ltd. PRC 1 RMB878,100,000 63.66 62.15 Manufacture and distribution

佛岡建滔實業有限公司中國1 人民幣878,100,000元 of copper foil

製造及分銷銅箔

Guangzhou Chung Shun PRC 1 US$44,595,000 100 100 Manufacture and distribution

Century Fibre Glass Co., Ltd. 中國1 44,595,000美元 of glass yarn

廣州忠信世紀玻纖有限公司製造及分銷玻璃紗

Kingboard Copper Foil Holdings Bermuda# US$72,250,000 63.66 62.15 Investment holding

Limited 百慕達# 72,250,000美元投資控股

Kingboard (Fogang) Insulated PRC 1 US$7,615,000 100 100 Manufacture and distribution

Material Company Limited 中國1 7,615,000美元 of bleached kraft paper

建滔（佛岡）絕緣材料有限公司製造及分銷漂白木漿紙

37. 本公司主要附屬公司之詳情

於二零零七年及二零零八年十二月三十一日，本公司主要附屬公司之詳情如下：


179



SUBSIDIARIES OF THE COMPANY (continued)






2008 2007


Kingboard (Fogang) Laminates PRC 1 US$29,466,000 100 100 Manufacture and distribution Co. Limited 中國1 29,466,000美元 of laminates

建滔（佛岡）積層板有限公司製造及分銷覆銅面板

Kingboard (Fogang) Paper PRC 1 US$17,936,546 100 100 Manufacture and distributionLaminates Co. Ltd. 中國1 17,936,546美元 of laminates

建滔（佛岡）積層紙板有限公司製造及分銷覆銅面板

Kingboard Electronic Raw PRC 1 US$25,000,000 100 100 Manufacture and distributionMaterial (Jiang Yin) Co., Ltd. 中國1 25,000,000美元 of laminates

建滔電子材料（江陰）有限公司製造及分銷覆銅面板

Kingboard Laminates (Jiangmen) PRC 1 HK$189,491,052 100 100 Manufacture and distribution Co., Ltd. 中國1 189,491,052港元 of laminates

江門建滔積層板有限公司製造及分銷覆銅面板

Kingboard (Jiangsu) Chemical PRC 1 US$28,000,000 100 100 Manufacture and distribution Co., Ltd. 中國1 28,000,000美元 of chemicals

建滔（江蘇）化工有限公司製造及分銷化工產品

Kingboard Laminates (Kunshan) PRC 1 US$32,010,000 100 100 Manufacture and distribution Co., Ltd. 中國1 32,010,000美元 of laminates

建滔積層板（昆山）有限公司製造及分銷覆銅面板

Kingboard (Lian Zhou) Fibre PRC 1 US$13,700,000 100 100 Manufacture and distributionGlass Co. Limited 中國1 13,700,000美元 of glass fabric

建滔（連州）玻璃纖維有限公司製造及分銷玻璃纖維布

37. 本公司主要附屬公司之詳情（續）


180



SUBSIDIARIES OF THE COMPANY (continued)






2008 2007


Kingboard (Lian Zhou) Copper PRC 1 US$64,000,000 63.66 62.15 Manufacture and distribution

Foil Limited 中國1 64,000,000美元 of copper foil

建滔（連州）銅箔有限公司製造及分銷銅箔

Kingboard (Panyu Nansha) PRC 1 RMB250,000,000 100 100 Manufacture and distribution

Petrochemical Company Limited 中國1 人民幣250,000,000元 of chemicals

建滔（番禺南沙）石化有限公司製造及分銷化工產品

Kunshan Yattao Chemical Co., Ltd. PRC 1 US$12,500,000 100 100 Manufacture and distribution

昆山日滔化工有限公司中國1 12,500,000美元 of laminates

製造及分銷覆銅面板

Qing Yuan Chung Shun Century PRC 1 US$45,319,600 100 100 Manufacture and distribution

Fibre Glass Co., Limited 中國1 45,319,600美元 of glass yarn

清遠忠信世紀玻纖有限公司製造及分銷玻璃紗

# These are investment holding companies which have no specific

principal place of operations.

1 These companies were established in the PRC in the form of

Wholly Foreign-owned Enterprises.

The above table lists the subsidiaries of the Company

which, in the opinion of the Directors, principally affected

the results or assets of the Group. To give details of other

subsidiaries would, in the opinion of the Directors, result

in particulars of excessive length.

None of the subsidiaries had issued any debt securities at

the end of the year.

37. 本公司主要附屬公司之詳情（續）

# 此等公司乃投資控股公司，並無特定主要營業地點。

1 此等公司以外商獨資企業之形式在中國成立。

上表所列為董事認為主要影響本集團業績或資產之本公司附屬公司。董事認為列出其他附屬公司之詳情會過於冗長。

各附屬公司於年結時概無發行任何債務證券。

APPENDIX 3 – GENERAL INFORMATION RELATING TO KINGBOARD COPPER FOIL

181

1. DIRECTORS

The names, addresses and designations of the Directors as at the Latest Practicable Date are asfollows:


Cheung Kwok Wing 2/F., Harbour View 1, ChairmanNo.12 Science Park East Avenue,Phase II Hong Kong Science Park,Shatin, N.T., Hong Kong

Chan Wing Kwan 2/F., Harbour View 1, Executive Managing No.12 Science Park East Avenue, DirectorPhase II Hong Kong Science Park,Shatin, N.T., Hong Kong

Cheung Kwok Ping 2/F., Harbour View 1, Executive DirectorNo.12 Science Park East Avenue,Phase II Hong Kong Science Park,Shatin, N.T., Hong Kong

Lam Ka Po 2/F., Harbour View 1, Executive Director No.12 Science Park East Avenue, Phase II Hong Kong Science Park, Shatin, N.T., Hong Kong

Ho Yin Sang 2/F., Harbour View 1, Non-Executive Director No.12 Science Park East Avenue, Phase II Hong Kong Science Park, Shatin, N.T., Hong Kong

Ong Tiong Wee 2/F., Harbour View 1, IndependentNo.12 Science Park East Avenue, Non-Executive DirectorPhase II Hong Kong Science Park, Shatin, N.T., Hong Kong

Chim Hou Yan 2/F., Harbour View 1, Independent No.12 Science Park East Avenue, Non-Executive Director Phase II Hong Kong Science Park, Shatin, N.T., Hong Kong

2. PRINCIPAL ACTIVITIES

The principal activity of Kingboard Copper Foil is that of investment holding while its subsidiariesare engaged in the manufacture and trading of copper foil, a raw material for the laminates andprinted circuit board industries.

3. DISCLOSURES OF SHAREHOLDINGS AND DEALINGS

3.1 Shareholdings and Dealings in KBCF Shares

(i) Shareholdings. Annex 2 to the Letter from Kingboard Laminates to the Shareholders setout in Appendix 2 to this Scheme Document sets out the KBCF Shares owned,controlled or agreed to be acquired by the Directors as at the Latest Practicable Date.

(ii) No Other Holdings. Save as disclosed in the Letter from Kingboard Laminates to theShareholders set out in Appendix 2 to this Scheme Document, as at the LatestPracticable Date, none of the Directors owns, controls, or has agreed to acquire anyKBCF Shares during the Reference Period. There are no other securities which carryvoting rights in Kingboard Copper Foil, securities which are convertible into KBCF Shares,or rights to subscribe for, or options in respect of, such KBCF Shares or securities.

(iii) No Dealings. None of the Directors has dealt for value in any KBCF Shares during theReference Period.

3.2 Shareholdings and Dealings in KBL Shares

(i) Shareholdings. Annex 2 to the Letter from Kingboard Laminates to the Shareholders setout in Appendix 2 to this Scheme Document sets out the KBL Shares owned, controlledor agreed to be acquired by Kingboard Copper Foil, and the Directors as at the LatestPracticable Date.

(ii) No Other Holdings. Save as disclosed in the Letter from Kingboard Laminates to theShareholders set out in Appendix 2 to this Scheme Document, as at the LatestPracticable Date, none of Kingboard Copper Foil, or the Directors owns, controls, or hasagreed to acquire any KBL Shares during the Reference Period. There are no othersecurities which carry voting rights in Kingboard Laminates, securities which areconvertible into KBL Shares, or rights to subscribe for, or options in respect of, such KBLShares or securities.

(iii) No Dealings. None of Kingboard Copper Foil, and the Directors has dealt for value in anyKBL Shares during the Reference Period.

4. INTERESTS OF THE INDEPENDENT FINANCIAL ADVISER

4.1 Interests of the IFA. As at the Latest Practicable Date, none of the IFA, its related corporations orfunds whose investments are managed by the IFA or its related corporations on a discretionarybasis, own or control any KBCF Shares or KBL Shares.

4.2 Dealings by the IFA. None of the IFA, its related corporations or funds whose investments aremanaged by the IFA or its related corporations on a discretionary basis has dealt for value in theKBCF Shares or KBL Shares during the period commencing six months prior to theAnnouncement Date and ending on the Latest Practicable Date.


182

5. FINANCIAL INFORMATION ON THE KBCF GROUP

5.1 Financial Summary. Set out below are certain financial information extracted from KingboardCopper Foil’s annual reports for FY2006, FY2007 and FY2008 respectively and from the unauditedconsolidated interim results of the KBCF Group for the three months ended 31 March 2009. Thefinancial information for FY2006, FY2007 and FY2008 should be read in conjunction with theaudited consolidated financial statements and related notes thereto of the KBCF Group forFY2006, FY2007 and FY2008 respectively. In addition, the financial information for the threemonths ended 31 March 2009 should be read in conjunction with the unaudited consolidatedinterim financial results of the KBCF Group for the same period.

Threemonths

ended 31FY2006 FY2007 FY2008 March 2009

HK$‘000 HK$‘000 HK$‘000 HK$‘000

Turnover 2,795,324 3,582,815 3,360,726 411,436

Exceptional items – – – –

Profit/(Loss) before tax 282,858 301,821 132,708 (85,622)

Profit/(Loss) after tax 260,403 276,903 120,399 (80,283)

Minority interests – 1,063 219 34

Net earnings/(Net loss) per KBCF Share (Hong Kong cents) 36.04 38.18 16.63 (11.12)

Net tangible assets per KBCF Share(Hong Kong cents) 252.01 297.77 323.33 312.18

Working capital 663,074 872,214 854,954 794,462

Operating cash flow 284,218 287,132 582,486 (185,342)

Set out below is also a summary of the dividend per KBCF Share declared in respect of each ofFY2006, FY2007 and FY2008 by Kingboard Copper Foil. This information was also extracted fromKingboard Copper Foil’s annual reports for FY2006, FY2007 and FY2008 respectively. No interimdividend on KBCF Shares was declared in respect of the three months ended 31 March 2009.

Hong Kong Cents



Final dividend 4.0



Final dividend 4.5



Final dividend 1.0


183

Copies of the annual reports of Kingboard Copper Foil for FY2006, FY2007 and FY2008 areavailable for inspection at the office of the Singapore Share Transfer Agent. The balance sheets ofthe KBCF Group as at 31 December 2007, as at 31 December 2008 and as at 31 March 2009 aresummarised in the table set out in Part A of Appendix 4 to this Scheme Document. The summaryshould be read in conjunction with the audited consolidated financial statements of the KBCFGroup for FY2008 and the unaudited consolidated interim results of the KBCF Group for the threemonths ended 31 March 2009.

6. MATERIAL CHANGES IN FINANCIAL POSITION OF KINGBOARD COPPER FOIL

Save as disclosed in the unaudited consolidated interim results of the KBCF Group for the threemonths ended 31 March 2009 as announced on 29 April 2009 and any other information on theKBCF Group which is publicly available (including without limitation, the announcements releasedby Kingboard Copper Foil on the website of the SGX-ST), there have been no known materialchanges to the financial position of the KBCF Group since 31 December 2008, being the date ofthe last audited accounts of the KBCF Group laid before the shareholders of Kingboard CopperFoil in general meeting.

7. SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies of the KBCF Group are set out in the notes to the auditedfinancial statements of the KBCF Group for FY2008 and are set out in Part B of Appendix 4 tothis Scheme Document.

8. CHANGES IN ACCOUNTING POLICIES

The changes in the significant accounting policies of the KBCF Group are set out in the notes tothe audited financial statements of the KBCF Group for FY2008 and are set out in Part B ofAppendix 4 to this Scheme Document.

9. SHARE CAPITAL

9.1 Authorised Share Capital. As at the Latest Practicable Date, Kingboard Copper Foil has anauthorised share capital of US$200,000,000 comprising 2,000,000,000 ordinary shares of US$0.10each.

9.2 Issued Share Capital. As at the Latest Practicable Date, Kingboard Copper Foil has an issuedshare capital of US$72,250,000 comprising 722,500,000 ordinary shares of US$0.10 each.

9.3 Issued KBCF Shares Since 31 December 2008. As at 31 December 2008, being the end ofKingboard Copper Foil’s last financial year, Kingboard Copper Foil had issued 722,500,000 KBCFShares. Since 31 December 2008 and up to the Latest Practicable Date, Kingboard Copper Foilhas not issued any further KBCF Shares.

9.4 No Outstanding Options. As at the Latest Practicable Date, there are no outstanding instrumentsconvertible into, rights to subscribe for, and options in respect of, KBCF Shares which carry votingrights affecting the KBCF Shares.


184

9.5 KBCF Shares. As at the Latest Practicable Date, Kingboard Copper Foil has one class of ordinaryshares. The rights and privileges attached to the KBCF Shares are stated in the Memorandum ofAssociation and Bye-laws of Kingboard Copper Foil. For ease of reference, selected texts of theBye-laws of Kingboard Copper Foil have been reproduced in this paragraph 9.5 of this Appendix3. Capitalised terms used in this paragraph 9.5 of this Appendix 3 shall have the meaning givento them in the Bye-laws of Kingboard Copper Foil.

Share and Share Capital

(i) “Bye-law 3

(1) The authorised share capital of the Company at the date on which these Bye-lawscome into effect is US$200,000,000 divided into 2,000,000,000 ordinary shares of apar value of United States Dollars ten cents (US$0.10) each.

(2) Any power of the Company to purchase or otherwise acquire its own shares shallbe exercisable by the Board upon such terms and subject to such conditions as itthinks fit and shall also be subject to the Act, the Company’s memorandum ofassociation and, for so long as the shares of the Company are listed on theDesignated Stock Exchange, the prior approval of (if required) the DesignatedStock Exchange and any other governmental, regulatory or administrative bodieshaving jurisdiction over the Company and of the Members in general meeting forsuch purchase or acquisition (such approval to state the shares which may inaggregate be purchased or acquired during any one financial year of theCompany). Such approval of the Members shall be valid for a period of twelve (12)months from the date on which such approval is granted and may thereafter berenewed by the Members in general meeting. For so long as the shares of theCompany are listed on the Designated Stock Exchange, the Company shall makean announcement to the Designated Stock Exchange of any purchase oracquisition by the Company of its own shares on the market day next following theday of such purchase or acquisition.

(3) Neither the Company nor any of its subsidiaries shall directly or indirectly givefinancial assistance to a person who is acquiring or proposing to acquire shares inthe Company for the purpose of that acquisition whether before or at the same timeas the acquisition takes place or afterwards PROVIDED that nothing in this Bye-lawshall prohibit transactions permitted by the Act.

(ii) Bye-law 4

The Company may from time to time by ordinary resolution in accordance with Section 45of the Act:

(a) increase its capital by such sum, to be divided into shares of such amounts, as theresolution shall prescribe;

(b) consolidate and divide all or any of its capital into shares of larger amount than itsexisting shares;


185

(c) divide its shares into several classes and without prejudice to any special rightspreviously conferred on the holders of existing shares attach thereto respectivelyany preferential, deferred, qualified or special rights, privileges, conditions or suchrestrictions which in the absence of any such determination by the Company ingeneral meeting, as the Directors may determine provided always that where theCompany issues shares which do not carry voting rights, the words “non-voting”shall appear in the designation of such shares and where the equity capitalincludes shares with different voting rights, the designation of each class of shares,other than those with the most favourable voting rights, must include the words“restricted voting” or “limited voting”;

(d) sub-divide its shares, or any of them, into shares of smaller amount than is fixed bythe memorandum of association (subject, nevertheless, to the Act), and may bysuch resolution determine that, as between the holders of the shares resulting fromsuch sub-division, one or more of the shares may have any such preferred rights orbe subject to any such restrictions as compared with the other or others as theCompany has power to attach to unissued or new shares;

(e) change the currency denomination of its share capital;

(f) make provision for the issue and allotment of shares which do not carry any votingrights; and

(g) cancel any shares which, at the date of the passing of the resolution, have not beentaken, or agreed to be taken, by any person, and diminish the amount of its capitalby the amount of the shares so cancelled.

(iii) Bye-law 5

The Board may settle as it considers expedient any difficulty which arises in relation toany consolidation and division under the last preceding Bye-law and in particular butwithout prejudice to the generality of the foregoing may issue certificates in respect offractions of shares or arrange for the sale of the shares representing fractions and thedistribution of the net proceeds of sale (after deduction of the expenses of such sale) indue proportion amongst the Members who would have been entitled to the fractions, andfor this purpose the Board may authorise some person to transfer the shares representingfractions to their purchaser or resolve that such net proceeds be paid to the Company forthe Company’s benefit. Such purchaser will not be bound to see to the application of thepurchase money nor will his title to the shares be affected by any irregularity or invalidityin the proceedings relating to the sale.

(iv) Bye-law 6

The Company may from time to time by special resolution, subject to any confirmation orconsent required by law, reduce its authorised or issued share capital or any sharepremium account or other undistributable reserve in any manner permitted by law.

(v) Bye-law 7

Except so far as otherwise provided by the conditions of issue, or by these Bye-laws, anycapital raised by the creation of new shares shall be treated as if it formed part of theoriginal capital of the Company, and such shares shall be subject to the provisionscontained in these Bye-laws with reference to the payment of calls and instalments,transfer and transmission, forfeiture, lien, cancellation, surrender, voting and otherwise.


186

(vi) Bye-law 8

Subject to any special rights conferred on the holders of any shares or class of shares,any share in the Company (whether forming part of the present capital or not) may beissued with or have attached thereto such rights or restrictions whether in regard todividend, voting, return of capital or otherwise as the Company may by ordinary resolutiondetermine or, if there has not been any such determination or so far as the same shall notmake specific provision, as the Board may determine.

(vii) Bye-law 9

(1) In the event of preference shares being issued the total nominal value of issuedpreference shares shall not at any time exceed the total nominal value of the issuedordinary shares and preference shareholders shall have the same rights asordinary shareholders as regards receiving of notices, reports and balance sheetsand attending general meetings of the Company, and preference shareholders shallalso have the right to vote at any meeting convened for the purpose of reducing thecapital or winding-up or sanctioning a sale of the undertaking or where the proposalto be submitted to the meeting directly affects their rights and privileges or whenthe dividend on the preference shares is more than six (6) months in arrears.

(2) Subject to Sections 42 and 43 of the Act, any preference shares may be issued orconverted into shares that, at a determinable date or at the option of the Companyor the holder if so authorised by its memorandum of association, are liable to beredeemed on such terms and in such manner as the Company before the issue orconversion may by ordinary resolution of the Members determine.

(3) The Company has power to issue further preference capital ranking equally with, orin priority to, preference shares already issued.

(viii) Bye-law 10

Whenever the share capital of the Company is divided into different classes of shares,subject to the provisions of the Statutes, preference capital other than redeemablepreference capital may be repaid and the special rights attached to any class may bevaried or abrogated either with the consent in writing of the holders of three-quarters innominal value of the issued shares of the class or with the sanction of a special resolutionpassed at a separate general meeting of the holders of the shares of the class (but nototherwise) and may be so repaid, varied or abrogated either whilst the Company is agoing concern or during or in contemplation of a winding-up. To every such separategeneral meeting and all adjournments thereof all the provisions of these Bye-laws relatingto general meetings of the Company and to the proceedings thereat shall mutatismutandis apply, except that the necessary quorum (other than at an adjourned meeting)shall be two persons at least holding or representing by proxy at least one-third in nominalvalue of the issued shares of the class and at any adjourned meeting of such holder, twoholders present in person or by proxy (whatever the number of shares held by them) shallbe a quorum and that any holder of shares of the class present in person or by proxy maydemand a poll and that every such holder shall on a poll have one vote for every share ofthe class held by him, provided always that where the necessary majority for such aspecial resolution is not obtained at such general meeting, consent in writing if obtainedfrom the holders of three-quarters in nominal value of the issued shares of the classconcerned within two months of such general meeting shall be as valid and effectual as aspecial resolution carried at such general meeting. The foregoing provisions of this Bye-law shall apply to the variation or abrogation of the special rights attached to some only ofthe shares of any class as if each group of shares of the class differently treated formed aseparate class the special rights whereof are to be varied.


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(ix) Bye-law 11

The special rights conferred upon the holders of any shares or class of shares shall not,unless otherwise expressly provided in the rights attaching to or the terms of issue ofsuch shares, be deemed to be varied, modified or abrogated by the creation or issue offurther shares ranking pari passu therewith.

(x) Bye-law 12

(1) Subject to the Act, no shares may be issued by the Board without the prior approvalof the Company in general meeting but subject thereto and the terms of suchapproval if any and to these Bye-laws and without prejudice to any special rights orrestrictions for the time being attached to any shares or any class of shares, theunissued shares of the Company (whether forming part of the original or anyincreased capital) shall be at the disposal of the Board, which may offer, allot, grantoptions over or otherwise dispose of them to such persons, at such times and forsuch consideration and upon such terms and conditions as the Board may in itsabsolute discretion determine but so that no shares shall be issued at a discount,provided always that:-

(a) no shares shall be issued to transfer a controlling interest in the Companywithout the prior approval of the Members in general meeting; and

(b) (subject to any direction to the contrary that may be given by the Company ingeneral meeting) any issue of shares for cash to Members holding shares ofany class shall be offered to such Members in proportion as nearly as maybe to the number of shares of such class then held by them and theprovisions of the second sentence of Bye-law 12(2) with such adaptations asare necessary shall apply.

Neither the Company nor the Board shall be obliged, when making or granting anyallotment of, offer of, option over or disposal of shares, to make, or make available,any such offer, option or shares to Members or others with registered addresses inany particular territory or territories being a territory or territories where, in theabsence of a registration statement or other special formalities, this would or might,in the opinion of the Board, be unlawful or impracticable. Members affected as aresult of the foregoing sentence shall not be, or be deemed to be, a separate classof members for any purpose whatsoever.

(2) Subject to any direction to the contrary that may be given by the Company ingeneral meeting and as permitted by the rules of the Designated Stock Exchange,all new shares shall before issue be offered to such persons as at the date of theoffer are entitled to receive notices from the Company of general meetings inproportion, as nearly as the circumstances admit, to the amount of the existingshares to which they are entitled. The offer shall be made by notice specifying thenumber of shares offered, and limiting a time within which the offer, if not accepted,will be deemed to be declined, and, after the expiration of that time, or on thereceipt of an intimation from the person to whom the offer is made that he declinesto accept the shares offered, the Board may dispose of those shares in suchmanner as they think most beneficial to the Company. The Board may likewise sodispose of any new shares which (by reason of the ratio which the new shares bearto shares held by persons entitled to an offer of new shares) cannot, in the opinionof the Board, be conveniently offered under this Bye-law 12(2).

(3) The Board may issue warrants conferring the right upon the holders thereof tosubscribe for any class of shares or securities in the capital of the Company onsuch terms as it may from time to time determine.


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(xi) Bye-law 13

The Company may in connection with the issue of any shares exercise all powers ofpaying commission and brokerage conferred or permitted by the Act. Subject to the Act,the commission may be satisfied by the payment of cash or by the allotment of fully orpartly paid shares or partly in one and partly in the other.

(xii) Bye-law 14

Except as required by law, no person shall be recognised by the Company as holding anyshare upon any trust and the Company shall not be bound by or required in any way torecognise (even when having notice thereof) any equitable, contingent, future or partialinterest in any share or any fractional part of a share or (except only as otherwiseprovided by these Bye-laws or by law) any other rights in respect of any share except anabsolute right to the entirety thereof in the registered holder.

(xiii) Bye-law 15

(1) Subject to the terms and conditions of any application for shares, the Board shallallot shares applied for within ten (10) market days of the closing date of any suchapplication (or such other period as may be approved by the Designated StockExchange).

(2) Subject to the Act and these Bye-laws, the Board may at any time after theallotment of shares but before any person has been entered in the Register as theholder, recognise a renunciation thereof by the allottee in favour of some otherperson and may accord to any allottee of a share a right to effect such renunciationupon and subject to such terms and conditions as the Board considers fit toimpose.

Voting and Meetings

(xiv) Bye-law 55

An annual general meeting of the Company shall be held in each year other than the yearin which its statutory meeting is convened at such time (within a period of not more thanfifteen (15) months after the holding of the last preceding annual general meeting unlessa longer period would not infringe the rules of the Designated Stock Exchange, if any) andplace as may be determined by the Board.

(xv) Bye-law 56

Each general meeting, other than an annual general meeting, shall be called a specialgeneral meeting. General meetings may be held in any part of the world as may bedetermined by the Board.

(xvi) Bye-law 57

The Board may whenever it thinks fit call special general meetings, and, subject to theAct, Members holding at the date of deposit of the requisition not less than one-tenth ofthe paid up capital of the Company carrying the right of voting at general meetings of theCompany shall at all times have the right, by written requisition to the Board or theSecretary of the Company, to require a special general meeting to be called by the Boardfor the transaction of any business specified in such requisition; and such meeting shallbe held within two (2) months after the deposit of such requisition. If within twenty-one(21) days of such deposit the Board fails to proceed to convene such meeting therequisitionists themselves may do so in accordance with the provisions of Section 74(3) ofthe Act.


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(xvii) Bye-law 58

(1) An annual general meeting and, subject to Bye-Law 2(h), any special generalmeeting at which the passing of a special resolution is to be considered may becalled by not less than fourteen (14) clear days’ Notice but a general meeting maybe called by shorter notice if it is so agreed:

(a) in the case of a meeting called as an annual general meeting, by all theMembers entitled to attend and vote thereat; and

(b) in the case of any other meeting, by a majority in number of the Membershaving the right to attend and vote at the meeting, being a majority togetherholding not less than ninety-five per cent. (95%) in nominal value of theissued shares giving that right.

For so long as the shares of the Company are listed on the Designated StockExchange at least fourteen (14) days’ notice of any general meeting shall be givenby advertisement in an English daily newspaper in circulation in Singapore and inwriting to the Designated Stock Exchange.

(2) The period of notice shall be exclusive of the day on which it is served or deemedto be served and exclusive of the day on which the meeting is to be held, and thenotice shall specify the day, time and place of the meeting and, in case of specialbusiness, the general nature of the business. Any notice of a general meeting toconsider special business shall be accompanied by a statement regarding the effectof any proposed resolution on the Company in respect of such special business.The Notice convening an annual general meeting shall specify the meeting as such.Notice of every general meeting shall be given to all Members other than to suchMembers as, under the provisions of these Bye-laws or the terms of issue of theshares they hold, are not entitled to receive such notices from the Company, to allpersons entitled to a share in consequence of the death or bankruptcy or winding-up of a Member and to each of the Directors and the Auditors.

(xviii) Bye-law 60

(1) All business shall be deemed special that is transacted at a special generalmeeting, and also all business that is transacted at an annual general meeting, withthe exception of sanctioning dividends, the reading, considering and adopting of theaccounts and balance sheet and the reports of the Directors and Auditors and otherdocuments required to be annexed to the balance sheet, the election of Directorsand appointment of Auditors and other officers in the place of those retiring, thefixing of the remuneration of the Auditors, and the voting of remuneration or extraremuneration to the Directors.

(2) No business other than the appointment of a chairman of a meeting shall betransacted at any general meeting unless a quorum is present at thecommencement of the business. Two (2) Members entitled to vote and present inperson (or in the case of a Member being a corporation by its duly authorisedrepresentative) or by proxy shall form a quorum for all purposes.


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(xix) Bye-law 62

The president of the Company or the chairman shall preside as chairman at every generalmeeting. If at any meeting the president or the chairman, as the case may be, is notpresent within fifteen (15) minutes after the time appointed for holding the meeting, or ifneither of them is willing to act as chairman, the Directors present shall choose one oftheir number to act, or if one Director only is present he shall preside as chairman ifwilling to act. If no Director is present, or if each of the Directors present declines to takethe chair, or if the chairman chosen shall retire from the chair, the Members present inperson or by proxy and entitled to vote shall elect one of their number to be chairman.

(xx) Bye-law 63

The chairman may, with the consent of any meeting at which a quorum is present (andshall if so directed by the meeting), adjourn the meeting from time to time and from placeto place as the meeting shall determine, but no business shall be transacted at anyadjourned meeting other than the business which might lawfully have been transacted atthe meeting had the adjournment not taken place. When a meeting is adjourned forfourteen (14) days or more, at least seven (7) clear days’ Notice of the adjourned meetingshall be given specifying the time and place of the adjourned meeting but it shall not benecessary to specify in such notice the nature of the business to be transacted at theadjourned meeting and the general nature of the business to be transacted. Save asaforesaid, it shall be unnecessary to give notice of an adjournment.

(xxi) Bye-law 64

If an amendment is proposed to any resolution under consideration but is in good faithruled out of order by the chairman of the meeting, the proceedings on the substantiveresolution shall not be invalidated by any error in such ruling. In the case of a resolutionduly proposed as a special resolution, no amendment thereto (other than a mere clericalamendment to correct a patent error) may in any event be considered or voted upon.

(xxii) Bye-law 65

Subject to any special rights or restrictions as to voting for the time being attached to anyshares by or in accordance with these Bye-laws, at any general meeting on a show ofhands every Member present in person (or being a corporation, is present by arepresentative duly authorised under Section 78 of the Act), or by proxy shall have onevote, the chairman of the meeting to determine which proxy shall be entitled to vote wherea member (other than the Depository) is represented by two proxies and on a poll everyMember present in person or by proxy or, in the case of a Member being a corporation,by its duly authorised representative shall have one vote for every fully paid share ofwhich he is the holder or which he represents and in respect of which all calls due to theCompany have been paid, but so that no amount paid up or credited as paid up on ashare in advance of calls or instalments is treated for the foregoing purposes as paid upon the share. A resolution put to the vote of a meeting shall be decided on a show ofhands unless (before or on the declaration of the result of the show of hands or on thewithdrawal of any other demand for a poll) a poll is demanded:

(a) by the chairman of such meeting; or

(b) by at least three Members present in person (or in the case of a Member being acorporation by its duly authorised representative) or by proxy for the time beingentitled to vote at the meeting; or


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(c) by a Member or Members present in person (or in the case of a Member being acorporation by its duly authorised representative) or by proxy, or where such aMember has appointed two proxies any one of such proxies, or any proxyappointed by the Depository, or any number or combination of such Members orproxies, holding or representing as the case may be not less than one-tenth of thetotal voting rights of all Members having the right to vote at the meeting; or

(d) by a Member or Members present in person (or in the case of a Member being acorporation by its duly authorised representative) or by proxy, or where such aMember has appointed two proxies any one of such proxies, or any proxyappointed by the Depository, or any number or combination of such Members orproxies, holding or representing as the case may be shares in the Companyconferring a right to vote at the meeting being shares on which an aggregate sumhas been paid up equal to not less than one-tenth of the total sum paid up on allshares conferring that right.

A demand by a person as proxy for a Member or in the case of a Member being acorporation by its duly authorised representative shall be deemed to be the same as ademand by a Member.

(xxiii) Bye-law 66

Unless a poll is duly demanded and the demand is not withdrawn, a declaration by thechairman that a resolution has been carried, or carried unanimously, or by a particularmajority, or not carried by a particular majority, or lost, and an entry to that effect made inthe minute book of the Company, shall be conclusive evidence of the fact without proof ofthe number or proportion of the votes recorded for or against the resolution.

(xxiv) Bye-law 67

If a poll is duly demanded the result of the poll shall be deemed to be the resolution of themeeting at which the poll was demanded.

(xxv) Bye-law 68

A poll demanded on the election of a chairman, or on a question of adjournment, shall betaken forthwith. A poll demanded on any other question shall be taken in such manner(including the use of ballot or voting papers or tickets) and either forthwith or at such time(being not later than thirty (30) days after the date of the demand) and place as thechairman directs. It shall not be necessary (unless the chairman otherwise directs) fornotice to be given of a poll not taken immediately.

(xxvi) Bye-law 69

The demand for a poll shall not prevent the continuance of a meeting or the transaction ofany business other than the question on which the poll has been demanded, and, with theconsent of the chairman, it may be withdrawn at any time before the close of the meetingor the taking of the poll, whichever is the earlier.

(xxvii) Bye-law 70

On a poll votes may be given either personally or by proxy.

(xxviii) Bye-law 71

A person entitled to more than one vote on a poll need not use all his votes or cast all thevotes he uses in the same way.


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(xxix) Bye-law 72

In the case of an equality of votes, whether on a show of hands or on a poll, the chairmanof such meeting shall be entitled to a second or casting vote in addition to any other votehe may have.

(xxx) Bye-law-73

Where there are joint holders of any share any one of such joint holder may vote, either inperson or by proxy, in respect of such share as if he were solely entitled thereto, but ifmore than one of such joint holders be present at any meeting the vote of the senior whotenders a vote, whether in person or by proxy, shall be accepted to the exclusion of thevotes of the other joint holders, and for this purpose seniority shall be determined by theorder in which the names stand in the Register in respect of the joint holding. Severalexecutors or administrators of a deceased Member in whose name any share stands shallfor the purposes of this Bye-law be deemed joint holders thereof.

(xxxi) Bye-law 74

(1) A Member who is a patient for any purpose relating to mental health or in respectof whom an order has been made by any court having jurisdiction for the protectionor management of the affairs of persons incapable of managing their own affairsmay vote, whether on a show of hands or on a poll, by his receiver, committee,curator bonis or other person in the nature of a receiver, committee or curator bonisappointed by such court, and such receiver, committee, curator bonis or otherperson may vote on a poll by proxy, and may otherwise act and be treated as if hewere the registered holder of such shares for the purposes of general meetings,provided that such evidence as the Board may require of the authority of the personclaiming to vote shall have been deposited at the Office, head office or RegistrationOffice, as appropriate, not less than forty-eight (48) hours before the time appointedfor holding the meeting, or adjourned meeting or poll, as the case may be.

(2) Any person entitled under Bye-law 53 to be registered as the holder of any sharesmay vote at any general meeting in respect thereof in the same manner as if hewere the registered holder of such shares, provided that forty-eight (48) hours atleast before the time of the holding of the meeting or adjourned meeting, as thecase may be, at which he proposes to vote, he shall satisfy the Board of hisentitlement to such shares, or the Board shall have previously admitted his right tovote at such meeting in respect thereof.

(xxxii) Bye-law 75

No Member shall, unless the Board otherwise determines, be entitled to attend and voteand to be reckoned in a quorum at any general meeting unless he is duly registered andall calls or other sums presently payable by him in respect of shares in the Company havebeen paid.

(xxxiii) Bye-law 76

If:

(a) any objection shall be raised to the qualification of any voter; or

(b) any votes have been counted which ought not to have been counted or which mighthave been rejected; or

(c) any votes are not counted which ought to have been counted;


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the objection or error shall not vitiate the decision of the meeting or adjourned meeting onany resolution unless the same is raised or pointed out at the meeting or, as the casemay be, the adjourned meeting at which the vote objected to is given or tendered or atwhich the error occurs. Any objection or error shall be referred to the chairman of themeeting and shall only vitiate the decision of the meeting on any resolution if thechairman decides that the same may have affected the decision of the meeting. Thedecision of the chairman on such matters shall be final and conclusive.

(xxxiv) Bye-law 77

(1) Any Member entitled to attend and vote at a meeting of the Company who is theholder of two or more shares shall be entitled to appoint not more than two proxiesto attend and vote instead of him at the same general meeting provided that if theMember is the Depository:

(a) the Depository may appoint more than two proxies to attend and vote at thesame general meeting and each proxy shall be entitled to exercise the samepowers on behalf of the Depository as the Depository could exercise,including, notwithstanding Bye-law 65, the right to vote individually on a showof hands;

(b) the Company shall be entitled and bound:-

(i) to reject any instrument of proxy lodged if the proxy first named in thatinstrument, being the Depositor, is not shown in the records of theDepository as at a time not earlier than forty-eight (48) hours prior tothe time of the relevant general meeting supplied by the Depository tothe Company, to have any shares credited to a Securities Account; and

(ii) to accept as the maximum number of votes which in aggregate all theproxies appointed by the Depository in respect of a particularDepositor are able to cast on a poll a number which is the number ofshares credited to the Securities Account of that Depositor, as shownin the records of the Depository as at a time not earlier than forty-eight(48) hours prior to the time of the relevant general meeting supplied bythe Depository to the Company, whether that number is greater orsmaller than the number specified in any instrument of proxy executedby or on behalf of the Depository; and

(iii) the Company shall accept as valid in all respects the form of proxyapproved by the Depository (the “CDP Proxy Form”) for use at the daterelevant to the general meeting in question notwithstanding that thesame permits the Depositor concerned to nominate a person orpersons other than himself as the proxy or proxies appointed by theDepository. The Company shall be entitled and bound, in determiningrights to vote and other matters in respect of a completed CDP ProxyForm submitted to it, to have regard to the instructions given by andthe notes (if any) set out in the CDP Proxy Form.

(2) In any case where a form of proxy appoints more than one proxy (including thecase where such appointment results from a nomination by a Depositor), theproportion of the shareholding concerned to be represented by each proxy shall bespecified in the form of proxy.

(3) A proxy need not be a Member. In addition, subject to sub-paragraph (1) of thisBye-law, a proxy or proxies representing either a Member who is an individual or aMember which is a corporation shall be entitled to exercise the same powers onbehalf of the Member which he or they represent as such Member could exercise.


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(xxxv) Bye-law 78

The instrument appointing a proxy shall be in writing under the hand of the appointor or ofhis attorney duly authorised in writing or, if the appointor is a corporation, either under itsseal or under the hand of an officer, attorney or other person authorised to sign the sameor, in the case of the Depository, signed by its duly authorised officer by some method orsystem of mechanical signature as the Depository may deem appropriate. In the case ofan instrument of proxy purporting to be signed on behalf of a corporation by an officerthereof it shall be assumed, unless the contrary appears, that such officer was dulyauthorised to sign such instrument of proxy on behalf of the corporation without furtherevidence of the fact.

(xxxvi) Bye-law 79

The instrument appointing a proxy and (if required by the Board) the power of attorney orother authority (if any) under which it is signed on behalf of the appointer (which shall, forthis purpose, include a Depositor), or a certified copy of such power or authority, shall bedelivered to such place or one of such places (if any) as may be specified for that purposein or by way of note to or in any document accompanying the notice convening themeeting (or, if no place is so specified at the Registration Office or the Office, as may beappropriate) not less than forty-eight (48) hours before the time appointed for holding themeeting or adjourned meeting at which the person named in the instrument proposes tovote or, in the case of a poll taken subsequently to the date of a meeting or adjournedmeeting, not less than twenty-four (24) hours before the time appointed for the taking ofthe poll and in default the instrument of proxy shall not be treated as valid. No instrumentappointing a proxy shall be valid after the expiration of twelve (12) months from the datenamed in it as the date of its execution, except at an adjourned meeting or on a polldemanded at a meeting or an adjourned meeting in cases where the meeting wasoriginally held within twelve (12) months from such date. Delivery of an instrumentappointing a proxy shall not preclude a Member from attending and voting in person at themeeting convened and in such event, the instrument appointing a proxy shall be deemedto be revoked.

(xxxvii) Bye-law 80

Instruments of proxy shall be in any usual or common form (including any form approvedfrom time to time by the Depository) or in such other form as the Board may approve(provided that this shall not preclude the use of the two-way form) and the Board may, if itthinks fit, send out with the notice of any meeting forms of instrument of proxy for use atthe meeting. The instrument of proxy shall be deemed to confer authority to demand orjoin in demanding a poll and to vote on any amendment of a resolution put to the meetingfor which it is given as the proxy thinks fit. The instrument of proxy shall, unless thecontrary is stated therein, be valid as well for any adjournment of the meeting as for themeeting to which it relates.

(xxxviii) Bye-law 81

A vote given in accordance with the terms of an instrument of proxy shall be validnotwithstanding the previous death or insanity of the principal, or revocation of theinstrument of proxy or of the authority under which it was executed, provided that nointimation in writing of such death, insanity or revocation shall have been received by theCompany at the Office or the Registration Office (or such other place as may be specifiedfor the delivery of instruments of proxy in the notice convening the meeting or otherdocument sent therewith) two (2) hours at least before the commencement of the meetingor adjourned meeting, or the taking of the poll, at which the instrument of proxy is used.


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(xxxix) Bye-law 82

Anything which under these Bye-laws a Member may do by proxy he may likewise do byhis duly appointed attorney and the provisions of these Bye-laws relating to proxies andinstruments appointing proxies shall apply mutatis mutandis in relation to any suchattorney and the instrument under which such attorney is appointed.

(xl) Bye-law 83

(1) Any corporation which is a Member may by resolution of its directors or othergoverning body authorise such person as it thinks fit to act as its representative atany meeting of the Company or at any meeting of any class of Members. Theperson so authorised shall be entitled to exercise the same powers on behalf ofsuch corporation as the corporation could exercise if it were an individual Memberand such corporation shall for the purposes of these Bye-laws be deemed to bepresent in person at any such meeting if a person so authorised is present thereat.

(2) If permitted by the Act, where a Member is the Depository (or its nominee, in eachcase, being a corporation), it may authorise such persons as it thinks fit to act as itsrepresentatives at any meeting of the Company or at any meeting of any class ofMembers provided that the authorisation shall specify the number and class ofshares in respect of which each such representative is so authorised. Each personso authorised under the provisions of this Bye-law shall be entitled to exercise thesame rights and powers as if such person was the registered holder of the sharesof the Company held by the Depository (or its nominee).

(3) Any reference in these Bye-laws to a duly authorised representative of a Memberbeing a corporation shall mean a representative authorised under the provisions ofthis Bye-law.

(xli) Bye-law 84

(1) Subject to the Act, a resolution in writing signed (in such manner as to indicate,expressly or impliedly, unconditional approval) by or on behalf of all persons for thetime being entitled to receive notice of and to attend and vote at general meetingsof the Company shall, for the purposes of these Bye-laws, be treated as aresolution duly passed at a general meeting of the Company and, where relevant,as a special resolution so passed. Any such resolution shall be deemed to havebeen passed at a meeting held on the date on which it was signed by the lastMember to sign, and where the resolution states a date as being the date of hissignature thereof by any Member the statement shall be prima facie evidence that itwas signed by him on that date. Such a resolution may consist of severaldocuments in the like form, each signed by one or more relevant Members.

(2) Notwithstanding any provisions contained in these Bye-laws, a resolution in writingshall not be passed for the purpose of removing a Director before the expiration ofhis term of office under Bye-law 85(4) or for the purposes set out in Bye-law 152(3)relating to the removal and appointment of the Auditor.

Dividends and Distributions

(xlii) Bye-law 136

Subject to the Act, the Company in general meeting may from time to time declaredividends in any currency to be paid to the Members but no dividend shall be declared inexcess of the amount recommended by the Board. The Company in general meeting mayalso make a distribution to the Members out of any contributed surplus (as ascertained inaccordance with the Act).


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(xliii) Bye-law 137

No dividend shall be paid or distribution made out of contributed surplus if to do so wouldrender the Company unable to pay its liabilities as they become due or the realisablevalue of its assets would thereby become less than the aggregate of its liabilities and itsissued share capital and share premium accounts.

(xliv) Bye-law 138

Except in so far as the rights attaching to, or the terms of issue of, any share otherwiseprovide:

(a) all dividends shall be declared and paid according to the amounts paid up on theshares in respect of which the dividend is paid, but no amount paid up on a sharein advance of calls shall be treated for the purposes of this Bye-law as paid up onthe share; and

(b) all dividends shall be apportioned and paid pro rata according to the amounts paidup on the shares during any portion or portions of the period in respect of whichthe dividend is paid.

(xlv) Bye-law 139

The Board may from time to time pay to the Members such interim dividends as appear tothe Board to be justified by the profits of the Company and in particular (but withoutprejudice to the generality of the foregoing) if at any time the share capital of theCompany is divided into different classes, the Board may pay such interim dividends inrespect of those shares in the capital of the Company which confer on the holders thereofdeferred or non-preferential rights as well as in respect of those shares which confer onthe holders thereof preferential rights with regard to dividend and provided that the Boardacts bona fide the Board shall not incur any responsibility to the holders of sharesconferring any preference for any damage that they may suffer by reason of the paymentof an interim dividend on any shares having deferred or non-preferential rights and mayalso pay any fixed dividend which is payable on any shares of the Company half-yearly oron any other dates, whenever such profits, in the opinion of the Board, justifies suchpayment.

(xlvi) Bye-law 140

The Board may deduct from any dividend or other moneys payable to a Member by theCompany on or in respect of any shares all sums of money (if any) presently payable byhim to the Company on account of calls or otherwise.

(xlvii) Bye-law 141

No dividend or other moneys payable by the Company on or in respect of any share shallbear interest against the Company.

(xlviii) Bye-law 142

Any dividend, interest or other sum payable in cash to the holder of shares may be paidby cheque or warrant sent through the post addressed to the holder at his registeredaddress or, in the case of joint holders, addressed to the holder whose name stands firstin the Register in respect of the shares at his address as appearing in the Register oraddressed to such person and at such address as the holder or joint holders may inwriting direct. Every such cheque or warrant shall, unless the holder or joint holdersotherwise direct, be made payable to the order of the holder or, in the case of jointholders, to the order of the holder whose name stands first on the Register in respect of


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such shares, and shall be sent at his or their risk and payment of the cheque or warrantby the bank on which it is drawn shall constitute a good discharge to the Companynotwithstanding that it may subsequently appear that the same has been stolen or thatany endorsement thereon has been forged. Any one of two or more joint holders may giveeffectual receipts for any dividends or other moneys payable or property distributable inrespect of the shares held by such joint holders.

(xlix) Bye-law 143

All dividends or bonuses unclaimed for one (1) year after having been declared may beinvested or otherwise made use of by the Board for the benefit of the Company untilclaimed. Any dividend or bonuses unclaimed after a period of six (6) years from the dateof declaration shall be forfeited and shall revert to the Company. The payment by theBoard of any unclaimed dividend or other sums payable on or in respect of a share into aseparate account shall not constitute the Company a trustee in respect thereof.

(l) Bye-law 144

Whenever the Board or the Company in general meeting has resolved that a dividend bepaid or declared, the Board may further resolve that such dividend be satisfied wholly orin part by the distribution of specific assets of any kind and in particular of paid up shares,debentures or warrants to subscribe securities of the Company or any other company, orin any one or more of such ways, and where any difficulty arises in regard to thedistribution the Board may settle the same as it thinks expedient, and in particular mayissue certificates in respect of fractions of shares, disregard fractional entitlements orround the same up or down, and may fix the value for distribution of such specific assets,or any part thereof, and may determine that cash payments shall be made to anyMembers upon the footing of the value so fixed in order to adjust the rights of all parties,and may vest any such specific assets in trustees as may seem expedient to the Boardand may appoint any person to sign any requisite instruments of transfer and otherdocuments on behalf of the persons entitled to the dividend, and such appointment shallbe effective and binding on the Members. The Board may resolve that no such assetsshall be made available to Members with registered addresses in any particular territoryor territories where, in the absence of a registration statement or other special formalities,such distribution of assets would or might, in the opinion of the Board, be unlawful orimpracticable and in such event the only entitlement of the Members aforesaid shall be toreceive cash payments as aforesaid. Members affected as a result of the foregoingsentence shall not be or be deemed to be a separate class of Members for any purposewhatsoever.

(li) Bye-law 145

(1) Whenever the Board or the Company in general meeting has resolved that adividend be paid or declared on any class of the share capital of the Company, theBoard may further resolve either:

(a) that such dividend be satisfied wholly or in part in the form of an allotment ofshares credited as fully paid up, provided that the shareholders entitledthereto will be entitled to elect to receive such dividend (or part thereof if theBoard so determines) in cash in lieu of such allotment. In such case, thefollowing provisions shall apply:

(i) the basis of any such allotment shall be determined by the Board;


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(ii) the Board, after determining the basis of allotment, shall give not lessthan two (2) weeks’ Notice to the holders of the relevant shares of theright of election accorded to them and shall send with such noticeforms of election and specify the procedure to be followed and theplace at which and the latest date and time by which duly completedforms of election must be lodged in order to be effective;

(iii) the right of election may be exercised in respect of the whole or part ofthat portion of the dividend in respect of which the right of election hasbeen accorded; and

(iv) the dividend (or that part of the dividend to be satisfied by theallotment of shares as aforesaid) shall not be payable in cash onshares in respect whereof the cash election has not been dulyexercised (“the non-elected shares”) and in satisfaction thereof sharesof the relevant class shall be allotted credited as fully paid up to theholders of the non-elected shares on the basis of allotment determinedas aforesaid and for such purpose the Board shall capitalise and applyout of any part of the undivided profits of the Company (includingprofits carried and standing to the credit of any reserves or otherspecial account) as the Board may determine, such sum as may berequired to pay up in full the appropriate number of shares of therelevant class for allotment and distribution to and amongst the holdersof the non-elected shares on such basis; or

(b) that the shareholders entitled to such dividend shall be entitled to elect toreceive an allotment of shares credited as fully paid up in lieu of the whole orsuch part of the dividend as the Board may think fit. In such case, thefollowing provisions shall apply:

(i) the basis of any such allotment shall be determined by the Board;

(ii) the Board, after determining the basis of allotment, shall give not lessthan two (2) weeks’ Notice to the holders of the relevant shares of theright of election accorded to them and shall send with such noticeforms of election and specify the procedure to be followed and theplace at which and the latest date and time by which duly completedforms of election must be lodged in order to be effective;

(iii) the right of election may be exercised in respect of the whole or part ofthat portion of the dividend in respect of which the right of election hasbeen accorded; and

(iv) the dividend (or that part of the dividend in respect of which a right ofelection has been accorded) shall not be payable in cash on shares inrespect whereof the share election has been duly exercised (“theelected shares”) and in lieu thereof shares of the relevant class shallbe allotted credited as fully paid up to the holders of the electedshares on the basis of allotment determined as aforesaid and for suchpurpose the Board shall capitalise and apply out of any part of theundivided profits of the Company (including profits carried andstanding to the credit of any reserves or other special account otherthan the Subscription Rights Reserve) as the Board may determine,such sum as may be required to pay up in full the appropriate numberof shares of the relevant class for allotment and distribution to andamongst the holders of the elected shares on such basis.


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(2)(a) The shares allotted pursuant to the provisions of paragraph (1) of this Bye-law shall rank pari passu in all respects with shares of the same class (if any)then in issue save only as regards participation in the relevant dividend or inany other distributions, bonuses or rights paid, made, declared or announcedprior to or contemporaneously with the payment or declaration of the relevantdividend unless, contemporaneously with the announcement by the Board oftheir proposal to apply the provisions of sub-paragraph (a) or (b) ofparagraph (2) of this Bye-law in relation to the relevant dividend orcontemporaneously with their announcement of the distribution, bonus orrights in question, the Board shall specify that the shares to be allottedpursuant to the provisions of paragraph (1) of this Bye-law shall rank forparticipation in such distribution, bonus or rights.

(b) The Board may do all acts and things considered necessary or expedient togive effect to any capitalisation pursuant to the provisions of paragraph (1) ofthis Bye-law, with full power to the Board to make such provisions as it thinksfit in the case of shares becoming distributable in fractions (includingprovisions whereby, in whole or in part, fractional entitlements areaggregated and sold and the net proceeds distributed to those entitled, orare disregarded or rounded up or down or whereby the benefit of fractionalentitlements accrues to the Company rather than to the Membersconcerned). The Board may authorise any person to enter into on behalf ofall Members interested, an agreement with the Company providing for suchcapitalisation and matters incidental thereto and any agreement madepursuant to such authority shall be effective and binding on all concerned.

(3) The Company may upon the recommendation of the Board by ordinary resolutionresolve in respect of any one particular dividend of the Company thatnotwithstanding the provisions of paragraph (1) of this Bye-law a dividend may besatisfied wholly in the form of an allotment of shares credited as fully paid upwithout offering any right to shareholders to elect to receive such dividend in cashin lieu of such allotment.

(4) The Board may on any occasion determine that rights of election and the allotmentof shares under paragraph (1) of this Bye-law shall not be made available or madeto any shareholders with registered addresses in any territory where, in theabsence of a registration statement or other special formalities, the circulation of anoffer of such rights of election or the allotment of shares would or might, in theopinion of the Board, be unlawful or impracticable, and in such event the provisionsaforesaid shall be read and construed subject to such determination. Membersaffected as result of the foregoing sentence shall not be or be deemed to be aseparate class of Members for any purpose whatsoever.

(5) Any resolution declaring a dividend on shares of any class, whether a resolution ofthe Company in general meeting or a resolution of the Board, may specify that thesame shall be payable or distributable to the persons registered as the holders ofsuch shares at the close of business on a particular date, notwithstanding that itmay be a date prior to that on which the resolution is passed, and thereupon thedividend shall be payable or distributable to them in accordance with theirrespective holdings so registered, but without prejudice to the rights inter se inrespect of such dividend of transferors and transferees of any such shares. Theprovisions of this Bye-law shall mutatis mutandis apply to bonuses, capitalisationissues, distributions of realised capital profits or offers or grants made by theCompany to the Members.


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(lii) Bye-law 146

Before recommending any dividend, the Board may set aside out of the profits of theCompany such sums as it determines as reserves which shall, at the discretion of theBoard, be applicable for any purpose to which the profits of the Company may be properlyapplied and pending such application may, also at such discretion, either be employed inthe business of the Company or be invested in such investments as the Board may fromtime to time think fit and so that it shall not be necessary to keep any investmentsconstituting the reserve or reserves separate or distinct from any other investments of theCompany. The Board may also without placing the same to reserve carry forward anyprofits which it may think prudent not to distribute.

(liii) Bye-law 147

The Company may, upon the recommendation of the Board, at any time and from time totime pass an ordinary resolution to the effect that it is desirable to capitalise all or any partof any amount for the time being standing to the credit of any reserve or fund (includingthe profit and loss account) whether or not the same is available for distribution andaccordingly that such amount be set free for distribution among the Members or any classof Members who would be entitled thereto if it were distributed by way of dividend and inthe same proportions, on the footing that the same is not paid in cash but is applied eitherin or towards paying up the amounts for the time being unpaid on any shares in theCompany held by such Members respectively or in paying up in full unissued shares,debentures or other obligations of the Company, to be allotted and distributed credited asfully paid up among such Members, or partly in one way and partly in the other, and theBoard shall give effect to such resolution provided that, for the purposes of this Bye-lawand subject to Section 40(2A) of the Act, a share premium account and any reserve orfund representing unrealised profits, may be applied only in paying up in full unissuedshares of the Company to be allotted to such Members credited as fully paid. In carryingsums to reserve and in applying the same the Board shall comply with the provisions ofthe Act.

(liv) Bye-law 148

The Board may settle, as it considers appropriate, any difficulty arising in regard to anydistribution under the last preceding Bye-law and in particular may issue certificates inrespect of fractions of shares or authorise any person to sell and transfer any fractions ormay resolve that the distribution should be as nearly as may be practicable in the correctproportion but not exactly so or may ignore fractions altogether, and may determine thatcash payments shall be made to any Members in order to adjust the rights of all parties,as may seem expedient to the Board. The Board may appoint any person to sign onbehalf of the persons entitled to participate in the distribution any contract necessary ordesirable for giving effect thereto and such appointment shall be effective and bindingupon the Members.”

10. GENERAL DISCLOSURE

10.1 Financial Statements for FY2006, FY2007 and FY2008. The audited consolidated financialstatements of the KBCF Group for FY2006, FY2007 and FY2008 are available for inspection at theoffice of the Singapore Share Transfer Agent.

10.2 Directors’ Service Contracts. There are no (a) service contracts between any Director orproposed director with Kingboard Copper Foil or any of its subsidiaries with more than 12 monthsto run, which the employing company cannot, within the next 12 months, terminate withoutpayment of consideration and (b) service contracts entered into or amended between any of theDirectors or any proposed director and Kingboard Copper Foil or any of its subsidiaries during theperiod between the start of the six months immediately preceding the Announcement Date and theLatest Practicable Date.


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10.3 Material Contracts with Interested Persons. Save as disclosed in the audited consolidatedfinancial statements of the KBCF Group for FY2006, FY2007 and FY2008 and any otherinformation on the KBCF Group which is publicly available (including without limitation, theannouncements released by Kingboard Copper Foil on the website of the SGX-ST) as to thematerial contracts with interested persons (within the meaning of the Note to Rule 23.12 to theCode) which are not in the ordinary course of business, there are no other material contracts whichare not in the ordinary course of business which have been entered into by the KBCF Group andan interested person.

10.4 Costs and Expenses. In the event that the Scheme does not become effective and binding for anyreason, the expenses and costs incurred by Kingboard Copper Foil in connection with the Schemewill be borne by Kingboard Copper Foil. For the avoidance of doubt, Kingboard Laminates shall notbe liable for any costs, expenses and commission payable by Shareholders to UOB Kay Hian inrespect of Shareholders who utilise the services of UOB Kay Hian.

10.5 Changes since the Announcement Date. As at the Latest Practicable Date, there have been nomaterial changes to the information previously published by, or on behalf of, Kingboard Copper Foilsince the Announcement Date.

11. SPECIAL ARRANGEMENTS

11.1 No Payment or Other Benefit to Directors. There is no agreement, arrangement orunderstanding for any payment or other benefit to be made or given to any Director or to anydirector of corporations (which by virtue of Section 6 of the Companies Act, Chapter 50 ofSingapore, is deemed to be related to Kingboard Copper Foil) as compensation for loss of office orotherwise in connection with the Scheme.

11.2 No Agreement Conditional upon Outcome of the Scheme. Save as disclosed in paragraphs 4and 7.4 of the Explanatory Statement, there is no agreement, arrangement or understandingbetween any of the Directors and any other person in connection with or conditional upon theoutcome of the Scheme or is otherwise connected to the Scheme.

11.3 No Material Contracts with Directors. There is no material contract entered into by KingboardLaminates in which any Director has a material personal interest, whether direct or indirect.

11.4 Transfer Restrictions. The Memorandum of Association and Bye-laws of Kingboard Copper Foildo not contain any restrictions on the right to transfer the KBCF Shares, which has the effect ofrequiring holders of such KBCF Shares, before transferring them, to offer them for purchase tomembers of Kingboard Copper Foil or to any person.

12. CONSENTS

12.1 General. Messrs Allen & Gledhill LLP, Butterfield Fulcrum Group (Bermuda) Limited (formerlyknown as Butterfield Corporate Services Limited), Chang See Hiang & Partners, Conyers Dill &Pearman Pte. Ltd., DBS Bank Ltd., Mallesons Stephen Jaques, the Singapore Share TransferAgent and UOB Kay Hian have each given and have not withdrawn their respective writtenconsents to the issue of this Scheme Document with the inclusion herein of their names and thereferences to their names, in the form and context in which they respectively appear in thisScheme Document.

12.2 The IFA. The IFA has given and has not withdrawn its written consent to the issue of this SchemeDocument with the inclusion herein of its name, its letter dated 3 July 2009 relating to its advice tothe Independent Directors in respect of the Scheme set out in Appendix 1 to this SchemeDocument, and references to its name, in the form and context in which they appear in thisScheme Document.


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12.3 Deloitte & Touche LLP. Deloitte & Touche LLP has given and has not withdrawn its writtenconsent to the issue of this Scheme Document with the inclusion herein of its name, andreferences to the auditors’ report relating to the audited consolidated financial statements of theKBCF Group for FY2008, in the form and context in which they appear in this Scheme Document.

12.4 Deloitte Touche Tohmatsu. Deloitte Touche Tohmatsu has given and has not withdrawn its writtenconsent to references to the auditors’ report relating to the audited consolidated financialstatements of the KBL Group for FY2008 set out in Annex 3 of Appendix 2 to this SchemeDocument and references thereto in the form and context in which they appear in this SchemeDocument.

13. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection at the office of Intertrust SingaporeCorporate Services Pte. Ltd., being the Singapore Share Transfer Agent of Kingboard Copper Foil,at 3 Anson Road #27-01, Springleaf Tower, Singapore 079909, during normal business hours fromthe date of this Scheme Document up to the date of the Scheme Meeting:

(i) the Memorandum of Association and Bye-laws of Kingboard Copper Foil;

(ii) the annual reports of Kingboard Copper Foil for FY2006, FY2007 and FY2008;

(iii) the annual reports of Kingboard Laminates for FY2006, FY2007 and FY2008;

(iv) the Implementation Agreement;

(v) the IFA Letter;

(vi) the letters of consent referred to in paragraph 12 above; and

(vii) the Cash Consideration Irrevocable Undertakings.


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APPENDIX 4 – FINANCIAL INFORMATION ON THE KBCF GROUP

Part A

Summary of the Balance Sheets of the KBCF Groupas at 31 December 2008 and as at 31 December 2007

Group Company

As at As at As at As at31 December 31 December 31 December 31 December

2008 2007 2008 2007HK$’000 HK$’000 HK$’000 HK$’000

ASSETSCurrent assetsCash and bank balances 372,828 237,356 – –Derivative financial instruments 2,454 368 – –Trade and other receivables and prepayments 349,268 705,597 17,681 14,881Prepaid land use rights 1,018 958 – –Inventories 467,839 486,731 – –

Total current assets 1,193,407 1,431,010 17,681 14,881

Non-current assetsSubsidiaries – – 393,775 393,775Due from a subsidiary – – 862,983 865,259Property, plant and equipment 1,432,327 1,184,286 – –Prepaid land use rights 43,376 42,045 – –Available for sale investments 19,800 19,800 19,800 19,800Non-current deposits 8,328 54,613 – –Goodwil 238 238 – –

Total non-current assets 1,504,069 1,300,982 1,276,558 1,278,834

Total assets 2,697,476 2,731,992 1,294,239 1,293,715

LIABILITIES AND EQUITYCurrent liabilitiesDue to a subsidiary – – 1,155 639Bank borrowings 180,152 338,903 – –Trade payables 109,005 164,474 – –Income tax payable 49,296 55,419 38 –

Total current liabilities 338,453 558,796 1,193 639

Capital and reserves and minority interestsIssued capital 560,200 560,200 560,200 560,200Reserves 1,775,865 1,591,164 732,846 732,876

Equity attributable to equity holders of the Company 2,336,065 2,151,364 1,293,046 1,293,076Minority interests 22,958 21,832 – –

Total equity 2,359,023 2,173,196 1,293,046 1,293,076

Total liabilities and equity 2,697,476 2,731,992 1,294,239 1,293,715

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Part A

Summary of the Balance Sheets of the KBCF Groupas at 31 March 2009 and as at 31 December 2008

Group Company

As at As at As at As at31 March 31 December 31 March 31 December

2009 2008 2009 2008HK$’000 HK$’000 HK$’000 HK$’000

ASSETSCurrent assetsCash and bank balances 231,722 372,828 – –Derivative financial instruments – 2,454 – –Trade and other receivables and prepayments 526,237 349,268 17,681 17,681Prepaid land use rights 631 1,018 – –Inventories 463,394 467,839 – –

Total current assets 1,221,984 1,193,407 17,681 17,681

Non-current assetsSubsidiaries – – 393,775 393,775Due from a subsidiary – – 863,106 862,983Property, plant and equipment 1,420,501 1,432,327 – –Prepaid land use rights 43,508 43,376 – –Available for sale investments 19,800 19,800 19,800 19,800Non-current deposits – 8,328 – –Goodwill 238 238 – –

Total non-current assets 1,484,047 1,504,069 1,276,681 1,276,558

Total assets 2,706,031 2,697,476 1,294,362 1,294,239

LIABILITIES AND EQUITYCurrent liabilitiesDue to a subsidiary – – 1,270 1,155Bank borrowings 248,256 180,152 – –Trade payables 135,524 109,005 – –Income tax payable 43,742 49,296 38 38

Total current liabilities 427,522 338,453 1,308 1,193

Capital and reserves and minority interestsIssued capital 560,200 560,200 560,200 560,200Reserves 1,695,320 1,775,865 732,854 732,846

Equity attributable to equity holders of the Company 2,255,520 2,336,065 1,293,054 1,293,046Minority interests 22,989 22,958 – –

Total equity 2,278,509 2,359,023 1,293,054 1,293,046

Total liabilities and equity 2,706,031 2,697,476 1,294,362 1,294,239

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Part B

Significant Accounting Policies of the KBCF Group as Extracted from Note 2 to the AuditedConsolidated Financial Statements of the KBCF Group for FY2008

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESBASIS OF ACCOUNTING – The financial statements are prepared in accordance with the historical cost

convention, except as disclosed in the accounting policies below, and are drawn up in accordance with the

Singapore Financial Reporting Standards (“FRSs”).

ADOPTION OF NEW AND REVISED STANDARDS – In the current financial year, the Group has adopted all the

new and revised FRSs and Interpretations of FRS (“INT FRS”) that are relevant to its operations and effective for

annual periods beginning on or after January 1, 2008. The adoption of these new/revised FRSs and INT FRSs

does not result in changes to the Group’s and Company’s accounting policies and has no material effect on the

amounts reported for the current or prior years.

At the date of authorisation of these financial statements, the following FRSs, INT FRSs and amendments to FRS

that are relevant to the Group and the Company were issued but not effective:

FRS 1 – Presentation of Financial Statements (Revised)

FRS 1 – Presentation of Financial Statements (Amendments relating to Puttable Financial

Instruments and Obligations arising on liquidation)

FRS 23 – Borrowing Costs (Revised)

FRS 32 – Financial Instruments: Presentation (Amendments relating to Puttable Financial

Instruments and Obligations arising on liquidation)

FRS 102 – Share-based Payment (Amendments relating to Vesting Conditions

and Cancellations)

FRS 108 – Operating Segments

INT FRS 13 – Customer Loyalty Programmes

INT FRS 16 – Hedges of a Net Investment in a Foreign Operation

Notes to Financial StatementsDecember 31, 2008


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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)Consequential amendments were also made to various standards as a result of these new/revised standards.

The management anticipates that the adoption of the above FRSs, INT FRSs and amendments to FRS in future

periods will not have a material impact on the financial statements of the Group and of the Company in the

period of their initial adoption except for the following:

FRS 1 – Presentation of Financial Statements (Revised)FRS 1 (Revised) will be effective for annual periods beginning on or after January 1, 2009, and will change the

basis for presentation and structure of the financial statements. It does not change the recognition, measurement

or disclosure of specific transactions and other events required by other FRSs.

FRS 108 – Operating SegmentsFRS 108 will be effective for annual financial statements beginning on or after January 1, 2009 and supersedes

FRS 14 – Segment Reporting. FRS 108 requires operating segments to be identified on the basis of internal

reports about components of the Group that are regularly reviewed by the chief operating decision maker in

order to allocate resources to the segment and to assess its performance. In contrast, FRS 14 requires an

entity to identify two sets of segments (business and geographical), using a risks and rewards approach, with

the entity’s system of internal financial reporting to key management personnel serving only as the starting point

for the identification of such segments. As a result, following the adoption of FRS 108, the identification of the

Group’s reportable segments may change and management is still assessing the impact.

FRS 23 – Borrowing Costs (Revised)FRS 23 (Revised) will be effective for annual periods beginning on or after January 1, 2009 and eliminates

the option available under the previous version of FRS 23 to recognise all borrowing costs immediately as an

expense. An entity shall capitalise borrowing costs that are directly attributable to the acquisition, construction

or production of a qualifying asset as part of the cost of that asset. As the change in accounting policy is to be

applied prospectively, there will be no impact on amounts reported for 2008.

BASIS OF CONSOLIDATION – The consolidated financial statements incorporate the financial statements of the

Company and entities controlled by the Company (its subsidiaries) made up to December 31 each year. Control

is achieved where the Company has the power to govern the financial and operating policies of an entity so as to

obtain benefits from its activities.

The results of subsidiaries acquired or disposed of during the year are included in the consolidated income

statement from the effective date of acquisition or up to the effective date of disposal, as appropriate.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting

policies used in line with those used by other members of the Group.

All significant intra-group transactions, balances, income and expenses are eliminated on consolidation.


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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)Minority interests in the net assets of consolidated subsidiaries are identified separately from the Group’s

equity therein. Minority interests consist of the amount of those interests at the date of the original business

combination (see below) and the minority’s share of changes in equity since the date of the combination. Losses

applicable to the minority in excess of the minority’s interest in the subsidiary’s equity are allocated against the

interests of the Group except to the extent that the minority has a binding obligation and is able to make an

additional investment to cover its share of those losses.

In the Company’s financial statements, investments in subsidiaries are carried at cost less any impairment in net

recoverable value that has been recognised in the income statement.

BUSINESS COMBINATIONS – The acquisition of subsidiaries is accounted for using the purchase method.

The cost of the acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets

given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the

acquiree, plus any costs directly attributable to the business combination. The acquiree’s identifiable assets,

liabilities and contingent liabilities that meet the conditions for recognition under FRS 103 are recognised at their

fair values at the acquisition date, except for non-current assets (or disposal groups) that are classified as held

for sale in accordance with FRS 105 Non-Current Assets Held for Sale and Discontinued Operations, which are

recognised and measured at fair value less costs to sell.

Goodwill arising on acquisition is recognised as an asset and initially measured at cost, being the excess of the

cost of the business combination over the Group’s interest in the net fair value of the identifiable assets, liabilities

and contingent liabilities recognised. If, after reassessment, the Group’s interest in the net fair value of the

acquiree’s identifiable assets, liabilities and contingent liabilities exceeds the cost of the business combination,

the excess is recognised immediately in the consolidated income statement.

The interest of minority shareholders in the acquiree is initially measured at the minority’s proportion of the net

fair value of the assets, liabilities and contingent liabilities recognised.

FINANCIAL INSTRUMENTS – Financial assets and financial liabilities are recognised on the Group’s balance

sheet when the Group becomes a party to the contractual provisions of the instrument.

Effective interest methodThe effective interest method is a method of calculating the amortised cost of a financial instrument and of

allocating interest income or expense over the relevant period. The effective interest rate is the rate that exactly

discounts estimated future cash receipts or payments through the expected life of the financial instrument, or

where appropriate, a shorter period. Income is recognised on an effective interest basis for debt instruments.

Financial assetsFinancial assets are classified into the following specified categories: “available-for-sale” financial assets and “loans

and receivables”. The classification depends on the nature and purpose of financial assets and is determined at

the time of initial recognition.


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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)Financial assets (cont’d)Loans and receivablesTrade receivables, loans and other receivables that have fixed or determinable payments that are not quoted in

an active market are classified as “loans and receivables”. Loans and receivables are measured at amortised

cost using the effective interest method less impairment. Interest is recognised by applying the effective interest

rate method, except for short-term receivables when the recognition of interest would be immaterial.

Available-for-sale investmentsAvailable-for-sale investments are measured at cost less impairment loss, if any, with reference to the net

asset value of the investment as the fair value of the unquoted investment cannot be determined reliably and

reasonably as at year end. Impairment for such investments measured at cost is accounted for in accordance

with impairment of financial assets (see below).

Impairment of financial assetsFinancial assets are assessed for indicators of impairment at each balance sheet date. Financial assets are

impaired where there is objective evidence that, as a result of one or more events that occurred after the initial

recognition of the financial asset, the estimated future cash flows of the investment have been impacted.

For financial assets carried at amortised cost, the amount of the impairment loss is the difference between the

asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective

interest rate.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with

the exception of trade, bills and other receivables where the carrying amount is reduced through the use of

an allowance account. When such receivable is uncollectible, it is written off against the allowance account.

Subsequent recoveries of amounts previously written off are credited to the allowance account. Changes in the

carrying amount of the allowance account are recognised in income statement.

With the exception of available-for-sale equity instruments (at fair value), if in a subsequent period, the amount

of the impairment loss decreases and the decrease can be related objectively to an event occurring after

the impairment loss was recognised, the previously recognised impairment loss is reversed through income

statement to the extent the carrying amount of the investment at the date the impairment is reversed does not

exceed what the amortised cost would have been had the impairment not been recognised.

Any subsequent impairment in available-for-sale at cost cannot be reversed.

Financial liabilities and equity instrumentsClassification as debt or equityFinancial liabilities and equity instruments issued by the Group are classified according to the substance of the

contractual arrangements entered into and the definitions of a financial liability and an equity instrument.

Equity instrumentsAn equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting

all of its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs.


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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)Financial liabilities and equity instruments (cont’d)Financial liabilitiesTrade payables are initially measured at fair value, net of transaction costs, and are subsequently measured at

amortised cost, using the effective interest rate method, with interest expense recognised on an effective yield

basis.

Interest-bearing bank loans and overdrafts are initially measured at fair value, and are subsequently measured

at amortised cost, using the effective interest method. Any difference between the proceeds (net of transaction

costs) and the settlement or redemption of borrowings is recognised over the term of the borrowings in

accordance with the Group’s accounting policy for borrowing costs (see below).

Financial guarantee contract liabilities are measured initially at their fair values and subsequently at the higher

of the amount recognised as a provision and the amount initially recognised less cumulative amortisation in

accordance with the revenue recognition policies described below.

Derivative financial instrumentsThe Group enters into a variety of derivative financial instruments to manage its exposure to changes in

commodities (such as copper) price and foreign exchange rate risk, including foreign exchange forward

contracts and copper swaps.

Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are

subsequently remeasured to their fair value at each balance sheet date. The resulting gain or loss is recognised

in income statement immediately unless the derivative is designated and effective as a hedging instrument, in

which event the timing of the recognition in income statement depends on the nature of the hedge relationship.

The fair value of hedging derivatives is classified as a non-current asset or a non-current liability if the remaining

maturity of the hedge relationship is more than 12 months and as a current asset or a current liability if the

remaining maturity of the hedge relationship is less than 12 months.

Derivatives not designated into an effective hedge relationship are classified as a current asset or a current

liability.

LEASES – Leases are classified as finance leases whenever the terms of the lease transfer substantially all the

risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

The Group as lessorRental income from operating leases is recognised on a straight-line basis over the term of the relevant lease

unless another systematic basis is more representative of the time pattern in which use benefit derived from the

leased asset is diminished. Initial direct costs incurred in negotiating and arranging an operating lease are added

to the carrying amount of the leased asset and recognised on a straight-line basis over the lease term.


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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)The Group as lesseeRentals payable under operating leases are charged to income statement on a straight-line basis over the term

of the relevant lease. Benefits received and receivable as an incentive to enter into an operating lease are also

spread on a straight-line basis over the lease term.

INVENTORIES – Inventories are measured at the lower of cost (weighted average method) and net realisable

value. Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing the

inventories to their present location and condition. Net realisable value represents the estimated selling price less

estimated costs to completion and costs to be incurred in marketing, selling and distribution.

PROPERTY, PLANT AND EQUIPMENT – Property, plant and equipment are carried at cost, less accumulated

depreciation and any impairment losses.

Assets under construction are stated at cost. No depreciation is provided until the construction is completed and

the assets are put into use.

Depreciation is charged so as to write off the cost of other assets, less residual value, if appropriate, over their

estimated useful lives, using the straight line method at the following rates per annum:

Leasehold properties and improvements – 10 to 20%

Plant and equipment – 10 to 20%

Motor vehicles – 20%

The estimated useful lives, residual values and depreciation method are reviewed at each year end, with the

effect of any changes in estimate accounted for on a prospective basis.

Fully depreciated assets still in use are retained in the financial statements.

The gain or loss arising on disposal or retirement of an item of property, plant and equipment is determined

as the difference between the sales proceeds and the carrying amounts of the asset and is recognised in the

income statement.

GOODWILL – Goodwill arising on the acquisition of a subsidiary or a jointly controlled entity represents the

excess of the cost of acquisition over the Group’s interest in the net fair value of the identifiable assets, liabilities

and contingent liabilities of the subsidiary or jointly controlled entity recognised at the date of acquisition. Goodwill is

initially recognised as an asset at cost and is subsequently measured at cost less any accumulated impairment

losses.


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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)For the purpose of impairment testing, goodwill is allocated to each of the group’s cash generating units

expected to benefit from the synergies of the combination. Cash generating units to which goodwill has been

allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be

impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the

impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to

the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment

loss recognised for goodwill is not reversed in a subsequent period.

On disposal of a subsidiary, the attributable amount of goodwill is included in the determination of the profit or

loss on disposal.

PREPAID LAND USE RIGHTS – The cost acquiring land use rights in the People’s Republic of China (“PRC”)

are classified as prepaid land use right and are amortised on a straight line basis over the period of 50-70 years,

which represents the relevant land use rights have been granted to the Group.

IMPAIRMENT OF TANGIBLE ASSETS – At each balance sheet date, the Group reviews the carrying amounts

of its tangible assets to determine whether there is any indication that those assets have suffered an impairment

loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the

extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual

asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the

estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects

current market assessments of the time value of money and the risks specific to the asset.

If the recoverable amount of an asset (or cash generating unit) is estimated to be less than its carrying amount,

the carrying amount of the asset (cash generating unit) is reduced to its recoverable amount. An impairment loss is

recognised immediately in the income statement.

Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is

increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does

not exceed the carrying amount that would have been determined had no impairment loss been recognised for

the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in the

income statement.

PROVISIONS – Provisions are recognised when the Group has a present obligation (legal or constructive) as a

result of a past event, it is probable the Group will be required to settle the obligation, and a reliable estimate can

be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present

obligation at the balance sheet date, taking into account the risks and uncertainties surrounding the obligation.

When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is

the present value of those cash flows.


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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)When some or all of the economic benefits required to settle a provision are expected to be recovered from a

third party, the receivable is recognised as an asset if it is virtually certain that reimbursement will be received and

the amount of the receivable can be measure reliably.

REVENUE RECOGNITION – Revenue is measure at the fair value of the consideration received or receivables.

Revenue is reduced for estimated customer returns, rebates and other similar allowances.

Sale of goodsRevenue from the sale of goods is recognised when all the following conditions are satisfied:

• the Group has transferred to the buyer the significant risks and rewards of ownership of the goods;

• the Group retains neither continuing managerial involvement to the degree usually associated with

ownership nor effective control over the goods sold;

• the amount of revenue can be measured reliably;

• it is probable that the economic benefits associated with the transaction will flow to the entity; and

• the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Interest incomeInterest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest

rate applicable.

Dividend incomeDividend income from investments is recognised when the shareholders’ rights to receive payment have been

established.

BORROWING COSTS – Borrowing costs directly attributable to the acquisition, construction or production

of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their

intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready

for their intended use or sale. Investment income earned on the temporary investment of specific borrowings

pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.

All other borrowing costs are recognised as in the income statement in the period in which they are incurred.

RETIREMENT BENEFIT COSTS – Payments to the state-sponsored pension scheme operated by the PRC

government, are dealt with as payments to defined contribution plans where the Group’s obligations under the

plans are equivalent to those arising in a defined contribution retirement benefit plan.


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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)EMPLOYEE LEAVE ENTITLEMENTS – Employee entitlements to annual leave are recognised when they accrue

to employees. A provision is made for the estimated liability for annual leave as a result of services rendered by

employees up to the balance sheet date.

INCOME TAX – Income tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in

the income statement because it excludes items of income or expense that are taxable or deductible in other

years and it further excludes items that are not taxable or tax deductible. The Group’s liability for current tax is

calculated using tax rates that have been enacted or substantively enacted in countries where the Company and

subsidiaries operate by the balance sheet date.

Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial

statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for

using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary

differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will

be available against which deductible temporary differences can be utilised. Such assets and liabilities are

not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a

business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the

accounting profit.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries,

except where the Group is able to control the reversal of the temporary difference and it is probable that the

temporary difference will not reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent

that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be

recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or

the asset realised and based on the tax rates (and tax laws) that have been enacted or substantively enacted by

the balance sheet date.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets

against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the

Group intends to settle its current tax assets and liabilities on a net basis.

Current and deferred tax are recognised as an expense or income in income statement, except when they relate

to items credited or debited directly to equity, in which case the tax is also recognised directly in equity, or where

they arise from the initial accounting for a business combination. In the case of a business combination, the tax

effect is taken into account in calculating goodwill or determining the excess of the acquirer’s interest in the net

fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities over cost.


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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)FOREIGN CURRENCY TRANSACTIONS AND TRANSLATION – The individual financial statements of each

Group entity are prepared in the currency of the primary economic environment in which the entity operates (its

functional currency). The consolidated financial statements of the Group and the balance sheet and statement

of changes in equity of the Company are presented in Hong Kong dollars, which is the functional currency of the

Company, and the presentation currency for the consolidated financial statements.

In preparing the financial statements of the individual entities, transactions in currencies other than the entity’s

functional currency are recorded at the rates of exchange prevailing on the date of the transaction. At each

balance sheet date, monetary items denominated in foreign currencies are retranslated at the rates prevailing on

the balance sheet date. Non-monetary items carried at fair value that are denominated in foreign currencies are

retranslated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are

measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences arising on the settlement of monetary items, and on retranslation of monetary items are

included in income statement for the period. Exchange differences arising on the retranslation of non-monetary

items carried at fair value are included in profit or loss for the period except for differences arising on the

retranslation of non-monetary items in respect of which gains and losses are recognised directly in equity. For

such non-monetary items, any exchange component of that gain or loss is also recognised directly in equity.

For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group’s foreign

operations (including comparatives) are expressed in Hong Kong dollars using exchange rates prevailing on the

balance sheet date. Income and expense items (including comparatives) are translated at the average exchange

rates for the period, unless exchange rates fluctuated significantly during that period, in which case the exchange

rates at the dates of the transactions are used. Exchange differences arising, if any, are classified as equity and

transferred to the Group’s translation reserve. Such translation differences are recognised in profit or loss in the

period in which the foreign operation is disposed of.

On consolidation, exchange differences arising from the translation of the net investment in foreign entities

(including monetary items that, in substance, form part of the net investment in foreign entities), and of

borrowings designated as hedges of such investments, are taken to the foreign currency translation reserve.

Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and

liabilities of the foreign operation and translated at the closing rate.

CASH AND CASH EQUIVALENTS – Cash and cash equivalents comprise cash on hand and demand deposits

and other short-term highly liquid investments that are readily convertible to a known amount of cash and are

subject to an insignificant risk of changes in value.

CAPITAL RESERVE – This pertains to the surplus on acquisition of subsidiaries, pursuant to a Group

Restructuring Exercise.

APPENDIX 5 – CONDITIONS PRECEDENT

216

All capitalised terms used and not defined in this Appendix 5 shall have the same meanings given tothem in the Implementation Agreement, a copy of which is available for inspection at the office ofIntertrust Singapore Corporate Services Pte. Ltd. (formerly known as Compact Administrative ServicesPte Ltd), being the Singapore Share Transfer Agent of Kingboard Copper Foil, during normal businesshours until the Effective Date, and this Scheme Document.

The Scheme is conditional upon:

(1) Scheme: the approval of the Scheme by the KBCF Shareholders in compliance with therequirements of Section 99(2) of the Act;

(2) Court Order: the grant of the Scheme Court Order by the Court with no conditions or withconditions that are acceptable to the party, being Kingboard Copper Foil or Kingboard Laminates,who is affected by the conditions imposed in its discretion and such Scheme Court Order havingbecome final;

(3) Registration: the registration of the Scheme Court Order with the Registrar in accordance with theAct;

(4) Regulatory Approvals: prior to the first application to the Court for the order to convene theScheme Meeting, all Regulatory Approvals being obtained and not revoked or withdrawn, includingbut not limited to:

(i) confirmation from the SIC that Rules 14, 15, 16, 17, 20.1, 21, 22, 28, 29 and 33.2 and Note1(b) on Rule 19 of the Code shall not apply to the Scheme subject to any conditions the SICmay deem fit to impose; and

(ii) the approval-in-principle from the SGX-ST of the Scheme, the Scheme Document and forthe proposed delisting of Kingboard Copper Foil;

(5) No Prescribed Occurrence: between the date of the Implementation Agreement and the RecordDate, no Prescribed Occurrence in relation to the KBCF Group Companies having occurred;

(6) Authorisations and Consents: in addition to the approvals mentioned in paragraph (4) of thisAppendix 5, the receipt of all authorisations, consents, clearances, permissions and approvals asare necessary or required by either party, being Kingboard Copper Foil or Kingboard Laminates,under any and all applicable laws, from all Governmental Agencies for or in respect of theimplementation of the Scheme and the transactions contemplated under the ImplementationAgreement;

(7) Kingboard Copper Foil’s Representations, Warranties and Covenants:

(i) the representations and warranties of Kingboard Copper Foil set out in the ImplementationAgreement shall be true and correct in all material respects in each case as of the date ofthe Implementation Agreement and as of the Record Date (as though made on and as ofthat date) except to the extent any such representation or warranty expressly relates to anearlier date (in which case as of such earlier date); and

(ii) Kingboard Copper Foil shall have, as of the Record Date, performed and complied in allmaterial respects with all covenants and agreements contained in the ImplementationAgreement which are required to be performed by or complied with by it, on or prior to theRecord Date;

APPENDIX 5 – CONDITIONS PRECEDENT

(8) Kingboard Laminates’ Representations, Warranties and Covenants:

(i) the representations and warranties of Kingboard Laminates set out in the ImplementationAgreement shall be true and correct in all material respects in each case as of the date ofthe Implementation Agreement and as of the Record Date (as though made on and as ofthat date) except to the extent any such representation or warranty expressly relates to anearlier date (in which case as of such earlier date); and

(ii) Kingboard Laminates shall have, as of the Record Date, performed and complied in allmaterial respects with all covenants and agreements contained in the ImplementationAgreement which are required to be performed by or complied with by it, on or prior to theRecord Date; and

(9) Hong Kong Regulatory Approvals:

(i) the granting by SEHK of the listing of, and permission to deal in, the New KBL Shares whichfall to be allotted and issued pursuant to the Share Exchange Offer or the CombinationOffer; and

(ii) if required, the obtaining by Kingboard Laminates, its holding companies or its subsidiaries,of such other necessary consent, approval, authorisation, permission, waiver or exemptionwhich may be required from any appropriate government or government bodies, regulatorybodies, courts or institutions or other third parties in Hong Kong which are necessary ordesirable for the performance of the Scheme under the applicable Hong Kong laws andregulations.

217

APPENDIX 6 – PRESCRIBED OCCURRENCE


For the purpose of the Implementation Agreement, Prescribed Occurrence, in relation to KingboardCopper Foil and each KBCF Group Company, as the case may be, means any of the following:

(1) Injunctions: an injunction or other order issued by any court of competent jurisdiction or otherlegal restraint or prohibition preventing the consummation of the Scheme or any part thereof byKingboard Copper Foil;

(2) Resolution for Winding Up: resolving that it be wound up;

(3) Appointment of Liquidator and Judicial Manager: the appointment of a liquidator, provisionalliquidator, judicial manager and/or provisional judicial manager;

(4) Order of Court for Winding Up: the making of an order by a court of competent jurisdiction for thewinding up of such company;

(5) Composition: entering into any arrangement or general assignment or composition for the benefitsof its creditors generally;

(6) Appointment of Receiver: the appointment of a receiver or a receiver and manager, in relation tothe property or assets;

(7) Insolvency: becoming or being deemed by law or a court to be insolvent, or stops or suspends orthreatens to stop or suspend, payment of its debts;

(8) Cessation of Business: ceases or threatens to cease for any reason to carry on business in theusual course;

(9) Investigations and Proceedings: if Kingboard Copper Foil or any of its directors is or will be thesubject of any governmental, quasi-governmental, criminal, regulatory or stock exchangeinvestigation and/or proceeding; or

(10) Analogous Event: any event occurs which, under the laws of any jurisdiction, has an analogous orequivalent effect to any of the foregoing events.

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APPENDIX 7 – REPRESENTATIONS AND WARRANTIES OF KINGBOARD LAMINATES

219


Kingboard Laminates represents and warrants that:

1. Status

Kingboard Laminates is a company duly incorporated and validly existing under the laws of theCayman Islands.

2. Power

Kingboard Laminates has the corporate power to enter into and perform its obligations under theImplementation Agreement and to carry out the transactions contemplated by the ImplementationAgreement.

3. Authority

Kingboard Laminates has taken all necessary corporate action to authorise entry into theImplementation Agreement and has taken or will take all necessary corporate action to authorisethe performance of the Implementation Agreement and to carry out the transactions contemplatedby the Implementation Agreement.

4. Consents

All actions, conditions and things required to be taken, fulfilled and done (including the obtaining ofany necessary consents from third parties) in order to:

(i) enable Kingboard Laminates lawfully to enter into, exercise its rights and perform andcomply with its obligations under the Implementation Agreement; and

(ii) ensure that those obligations are valid and legally binding,

have been taken, fulfilled and done.

5. Binding Obligation

Kingboard Laminates’ obligations under the Implementation Agreement are valid, legally bindingand enforceable in accordance with its terms.

6. No Breach

Neither the execution nor performance by Kingboard Laminates of the Implementation Agreementnor any transaction contemplated under the Implementation Agreement will violate any provisionsof its Memorandum and Articles of Association, or any agreement or instrument to whichKingboard Laminates is a party or by which Kingboard Laminates or its assets are bound.

7. New KBL Shares

Subject to the grant of the clearance by SEHK in accordance with Clause 3.1.9(i) of theImplementation Agreement, if and when allotted and issued:

(i) the New KBL Shares shall be duly authorised, validly issued, credited as fully paid and freefrom any Encumbrance; and

(ii) the New KBL Shares shall be listed on SEHK and shall rank pari passu in all respects withthe then existing ordinary shares of HK$0.10 each in the capital of Kingboard Laminates.

APPENDIX 8 – REPRESENTATIONS AND WARRANTIESOF KINGBOARD COPPER FOIL


Kingboard Copper Foil represents and warrants as follows:

1. Status

Kingboard Copper Foil is a company duly incorporated and validly existing under the laws ofBermuda.

2. KBCF Shares

All the issued shares of Kingboard Copper Foil have been duly authorised and validly issued, arefully paid-up and rank pari passu in all respects with each other.

3. Power

Kingboard Copper Foil has the corporate power to enter into and perform its obligations under theImplementation Agreement and to carry out the transactions contemplated by the ImplementationAgreement.

4. Authority

Kingboard Copper Foil has taken all necessary corporate action to authorise entry into theImplementation Agreement and has taken or will take all necessary corporate action to authorisethe performance of the Implementation Agreement and to carry out the transactions contemplatedby the Implementation Agreement.

5. Consents

All actions, conditions and things required to be taken, fulfilled and done (including the obtaining ofany necessary consents from third parties) in order to:

(i) enable Kingboard Copper Foil lawfully to enter into, exercise its rights and perform andcomply with its obligations under the Implementation Agreement; and

(ii) ensure that those obligations are valid and legally binding,

have been taken, fulfilled and done.

6. Binding Obligation

Kingboard Copper Foil’s obligations under the Implementation Agreement are valid, legally bindingand enforceable in accordance with its terms.

7. No Breach

Neither the execution nor performance by Kingboard Copper Foil of the Implementation Agreementnor any transaction contemplated under the Implementation Agreement will violate any provisionsof its Memorandum of Association and Bye-laws, or any agreement or instrument to whichKingboard Copper Foil is a party or by which Kingboard Copper Foil or its assets are bound.

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APPENDIX 9 – ARRANGEMENTS FOR TRADING OR SALE OF NEW KBL SHARES

221

1. Trading in or Sale of New KBL Shares through UOB Kay Hian

1.1 UOB Kay Hian. Kingboard Laminates has arranged for the services of UOB Kay Hian to be madeavailable to Shareholders who have elected to receive the Scheme Price in the form of New KBLShares pursuant to the Share Exchange Offer or the Combination Offer. Please refer to theenclosed letter from UOB Kay Hian addressed to Shareholders for further information on theservices and fees of UOB Kay Hian (the “UOB Kay Hian Letter”).

1.2 Opening of Trading Account with UOB Kay Hian. Shareholders who wish to trade their NewKBL Shares may wish to open a trading account with UOB Kay Hian:

(i) an account opening form with UOB Kay Hian (the “Account Opening Form”) is enclosedwith the UOB Kay Hian Letter. Shareholders should sign and complete the Account OpeningForm and the transfer form (the “Transfer Form”) found on the reverse side of the KBLShare Certificate. Shareholders should not fill in the name of the transferee in the TransferForm;

(ii) Shareholders should submit the duly completed Account Opening Form, together with (a)the KBL Share Certificate and the duly completed Transfer Form, and (b) a certified truecopy of their identification card (in respect of Singaporean citizens or permanent residents)or passport (in respect of foreigners) (the “Identification Document”), in person to UOBKay Hian at the following address: 80 Raffles Place, 29th floor, UOB Plaza 1, Singapore048624; and

(iii) on receipt of the duly completed Account Opening Form and the Identification Document,UOB Kay Hian will open the trading account in the name of the Shareholder. UOB Kay Hianwill allow trading of the New KBL Shares by the Shareholder after approximately fourworking days following receipt of the KBL Share Certificate and the duly completed TransferForm for deposition.

1.3 Trading with an existing trading account with UOB Kay Hian. Shareholders who have anexisting trading account with UOB Kay Hian and who wish to trade their New KBL Shares maydeposit their New KBL Shares into their existing UOB Kay Hian trading account:

(i) Shareholders should complete and sign the Transfer Form. Shareholders should not fill inthe name of the transferee in the Transfer Form;

(ii) Shareholders should submit the KBL Share Certificate and the duly completed TransferForm in person to UOB Kay Hian at the following address: 80 Raffles Place, 29th floor,UOB Plaza 1, Singapore 048624 and quote their existing UOB Kay Hian trading accountnumber; and

(iii) UOB Kay Hian will allow trading of the New KBL Shares by the Shareholder afterapproximately four working days following receipt of the KBL Share Certificate and the dulycompleted Transfer Form for deposition.

1.4 Authorisation of Sale by UOB Kay Hian. A Shareholder, who does not wish to open a tradingaccount with UOB Kay Hian or does not wish to utilise his existing trading account with UOB KayHian, can authorise UOB Kay Hian to sell the New KBL Shares on his behalf:

(i) an authorisation form (the “Authorisation Form”) is enclosed with the UOB Kay Hian Letter.Shareholders should sign and complete the Authorisation Form and the Transfer Form.Shareholders should not fill in the name of the transferee in the Transfer Form;

(ii) Shareholders should submit the duly completed Authorisation Form, together with the KBLShare Certificate and the duly completed Transfer Form, in person to UOB Kay Hian at thefollowing address: 80 Raffles Place, 29th floor, UOB Plaza 1, Singapore 048624;


222

(iii) on receipt of the duly completed Authorisation Form, the KBL Share Certificate and the dulycompleted Transfer Form for deposition, UOB Kay Hian will take steps to sell the New KBLShares on behalf of the Shareholder. Shareholders should note that share prices canfluctuate and the price(s) at which their New KBL Shares are sold will be at the prevailingprice(s) at the time UOB Kay Hian puts in its order to sell the New KBL Shares. Whilst UOBKay Hian will endeavour to sell the New KBL Shares, it does not guarantee or undertakethat it can necessarily sell at the highest prevailing price. The Shareholder will bear the riskof the volatility of the share price of KBL Shares and its impact on the value of the sale ofthe New KBL Shares by UOB Kay Hian on his behalf and accept that the price(s) at whichthe New KBL Shares are sold by UOB Kay Hian may not be at the highest prevailing priceand may not necessarily be the price at which the Shareholder would like to sell the NewKBL Shares;

(iv) payment of the net sale proceeds of the New KBL Shares (less commission, stamp duty andother expenses) will be by way of “account payee” cheque in the name of the Shareholder(or, in the case of joint Shareholders, in the name of the one first named on the KBL ShareCertificate) and despatched by post (at the risk of the Shareholder) to the address of theShareholder as specified in the Authorisation Form (or, in the case of joint Shareholders, tothe address of the one first named on the KBL Share Certificate as specified in theAuthorisation Form) approximately two working days after the sale of the New KBL Sharesby UOB Kay Hian. Alternatively, Shareholders can request to collect the cheque in personfrom UOB Kay Hian. If no election is made on the method of payment to be made to UOBKay Hian or such election is incomplete, vague or incorrect as determined by UOB Kay Hianin its sole and absolute discretion, the cheque shall be despatched by post (at the risk of theShareholder); and

(v) Shareholders may elect to receive payment in Hong Kong dollars or Singapore dollars. If noelection is made to receive payment in Hong Kong dollars or Singapore dollars, or suchelection is incomplete, vague or incorrect as determined by UOB Kay Hian in its sole andabsolute discretion, payment shall be made in Singapore dollars. Payment in Singaporedollars shall be made based on the Hong Kong dollar / Singapore dollar rates of exchangeprevailing on or around the date of sale of the New KBL Shares as determined by UOB KayHian in its sole and absolute discretion.

1.5 Overseas Shareholders. Subject to compliance with and observation of the applicable laws ofthe relevant overseas jurisdictions, including Malaysia, the United States and Australia, OverseasShareholders who wish to utilise the services of UOB Kay Hian may:

(i) sign and complete the Account Opening Form and the Transfer Form if they wish to open atrading account with UOB Kay Hian to trade their New KBL Shares;

(ii) sign and complete the Transfer Form if they wish to trade their New KBL Shares through anexisting trading account which they have with UOB Kay Hian, and enclose a separate letterto UOB Kay Hian indicating their existing UOB Kay Hian trading account number; or

(iii) sign and complete the Authorisation Form and the Transfer Form if they wish to authoriseUOB Kay Hian to sell their New KBL Shares without having to open a trading account withUOB Kay Hian.

Overseas Shareholders should not fill in the name of the transferee in the Transfer Form.

Overseas Shareholders should note that they must execute the Account Opening Form or theAuthorisation Form, as the case may be, and the Transfer Form (the “Relevant Documents”)before a notary public in their jurisdiction. As stated above, the Account Opening Form mustenclose the Identification Document.


Overseas Shareholders may then post the Relevant Documents, together with the IdentificationDocument (as the case may be) and the KBL Share Certificate, to UOB Kay Hian at the followingaddress: 80 Raffles Place, 29th floor, UOB Plaza 1, Singapore 048624 at their own risk. OverseasShareholders should note that UOB Kay Hian shall be under no liability for any loss or damage toany of the Relevant Documents, the Identification Document (as the case may be) or the KBLShare Certificate through the postage of the said documents.

On receipt of the duly completed Relevant Documents, together with the Identification Document(as the case may be) and the KBL Share Certificate, for deposition, UOB Kay Hian will take stepsto open the trading account in the name of the Overseas Shareholder or sell the New KBL Shareson behalf of the Overseas Shareholder. UOB Kay Hian will allow trading or sale (as the case maybe) of the New KBL Shares by the Shareholder after approximately four (4) working days followingreceipt of the KBL Share Certificate and the duly completed Transfer Form for deposition.

Overseas Shareholders should note that the Relevant Documents, the Identification Documentsand the KBL Share Certificates received in an envelope postmarked in, or which otherwiseappears to have been sent from, Malaysia, the United States or Australia will not be accepted orprocessed.

Overseas Shareholders are to take note of paragraph 14 of the Explanatory Statement. Inaddition, the Overseas Shareholders as detailed in paragraph 14 of the Explanatory Statementare subject to the restrictions and requirements as set out in paragraph 14 of the ExplanatoryStatement.

2. Other Arrangements

If the Shareholder does not wish to utilise any of the options above or has an existing tradingaccount with another broker with whom he wishes to trade in his New KBL Shares, the KBL ShareCertificate will be delivered to the address of the Shareholder as reflected in the Register and theShareholder will have to make his own arrangements if he wishes to sell or trade in his New KBLShares.

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THE SCHEME

IN THE SUPREME COURT OF BERMUDA

COMMERCIAL COURTCIVIL JURISDICTION

NO. 192 OF 2009

IN THE MATTER OF KINGBOARD COPPER FOIL HOLDINGS LIMITED (REGISTRATION NO. 26998)

AND IN THE MATTER OF SECTION 99 OF THE BERMUDA COMPANIES ACT 1981

SCHEME OF ARRANGEMENT

under Section 99 of the Bermuda Companies Act 1981

Between

Kingboard Copper Foil Holdings Limited

And

the Members (as defined herein)

PRELIMINARY

(A) In this Scheme of Arrangement, unless inconsistent with the subject or context:

(i) the following expressions shall bear the following meanings:

Act the Bermuda Companies Act 1981;

Announcement Date 4 May 2009, being the date of the announcement of theScheme;

Books Closure Date a date and time to be announced (before the Effective Date)on and at which the Transfer Books and the Register ofMembers of the Company will be closed in order todetermine the entitlements of the Relevant Shareholders inrespect of the Scheme;

Business Day a day (other than a Saturday, Sunday or a public holiday) onwhich commercial banks are open for business in Bermuda,Hong Kong and Singapore;

Cash Consideration S$0.21 in cash for each KBCF Share;

CDP The Central Depository (Pte) Limited;

Combination Offer A combination of the Cash Consideration and the ShareExchange Offer;

Company Kingboard Copper Foil Holdings Limited;

Court the Supreme Court of Bermuda;

Directors the directors of the Company as at the date of the SchemeDocument;

224

THE SCHEME

225

Effective Date the date on which this Scheme becomes effective andbinding in accordance with Clause 5 of this Scheme;

HK$ Hong Kong dollars, the lawful currency of Hong Kong;

Hong Kong Hong Kong Special Administrative Region of the People’sRepublic of China;

Implementation the Scheme implementation agreement dated 4 May 2009Agreement entered into between Kingboard Laminates and the

Company in relation to the implementation of the Scheme;

KBCF Shares issued ordinary shares of nominal value of US$0.10 each inthe share capital of the Company;

KBL Shares ordinary shares of nominal value of HK$0.10 each in theshare capital of Kingboard Laminates;

Kingboard Laminates Kingboard Laminates Holdings Limited;

Latest Practicable 2 July 2009, being the latest practicable date prior to the Date printing of the document containing this Scheme for the

purpose of ascertaining certain information for inclusionherein;

Members Persons who are registered as holders of KBCF Shares inthe Register of Members of the Company;

New KBL Shares new KBL Shares, which are to be allotted and issued on afully paid up basis by Kingboard Laminates in connectionwith the Scheme as part of the Scheme Price;

Relevant Shareholders Shareholders (excluding subsidiaries of KingboardLaminates which hold KBCF Shares) as at 5.00 p.m.(Singapore time) on the Books Closure Date;

Scheme this scheme of arrangement in its present form or with orsubject to any modification thereof or addition thereto orcondition(s) approved or imposed by the Court;

Scheme Document the document dated 10 July 2009 and sent to theshareholders of the Company which includes theExplanatory Statement to the Scheme in compliance withSection 100 of the Act;

Scheme Meeting the meeting of the holders of the KBCF Shares convened atthe direction of the Court to consider the Scheme, andincluding any adjournment thereof;

Scheme Price the consideration for each KBCF Share to be paid to eachRelevant Shareholder;

SEHK The Stock Exchange of Hong Kong Limited;

SGX-ST Singapore Exchange Securities Trading Limited;

THE SCHEME

226

Share Exchange Offer 0.374 New KBL Shares at the issue price of HK$2.946 perNew KBL Share (the “Issue Price”) (equivalent to S$0.561at the exchange rate ratio of S$1 : HK$5.247 as at 30 April2009, being the Business Day immediately preceding theAnnouncement Date), for each KBCF Share. The Issue Priceis equal to the average closing price of the issued KBLShares on SEHK for the five trading days preceding theAnnouncement Date;

Shareholders Members, or if the Member is CDP and the context admits,Depositors who have KBCF Shares entered against theirnames in the Depository Register;

S$ Singapore dollars; and

% or per cent. per centum or percentage;

(ii) the terms Depositor, Depository Agent and Depository Register shall have the meaningsascribed to them in Section 130A of the Companies Act, Chapter 50 of Singapore;

(iii) the term Shareholder includes a person entitled by transmission;

(iv) any reference to a statutory provision shall include such provision and any regulations madein pursuance thereof as from time to time modified or re-enacted, whether before or after thedate of this Scheme;

(v) words denoting the singular number shall include the plural and vice versa;

(vi) words importing persons shall include corporations; and

(vii) any reference to a time in the day and date in this Scheme shall be a reference to Singaporetime and date respectively unless otherwise stated.

(B) The Company was incorporated as an exempted company in Bermuda on 10 September 1999.The Company is an indirect subsidiary of Kingboard Laminates, which has an approximately 63.97per cent. interest in the issued share capital of the Company. As at the Latest Practicable Date, theCompany had 722,500,000 KBCF Shares in issue. The KBCF Shares are listed on the SGX-ST.

(C) The primary purpose of this Scheme is the privatisation by Kingboard Laminates of the Companyby way of the acquisition of all the KBCF Shares held by the Relevant Shareholders by way of ascheme of arrangement under Section 99 of the Act.

(D) The parties have entered into an Implementation Agreement to set out their respective obligationswith respect to the Scheme.

(E) Kingboard Laminates has agreed to appear by Counsel at the hearing of the Originating Summonsto sanction this Scheme and to consent thereto, and to undertake to the Court to be bound therebyand to execute and do and procure to be executed and done all such documents, acts and thingsas may be necessary or desirable to be executed and done by it for the purpose of giving effect tothis Scheme.

THE SCHEME

227

PART I

TRANSFER OF THE KBCF SHARES

1. (a) With effect from the Effective Date and in consideration of the Scheme Price, all of theKBCF Shares shall be transferred to Kingboard Laminates (or such entity or person as maybe designated by Kingboard Laminates):

(i) fully paid;

(ii) free from all liens, equities, charges, encumbrances, rights of pre-emption and anyother third party rights or interests of any nature whatsoever; and

(iii) together with all rights, benefits and entitlements attaching thereto as at theAnnouncement Date and thereafter attaching thereto, including but not limited to theright to receive and retain all dividends (other than the final dividend of HK$0.01 perKBCF Share which was declared by the Company on 26 February 2009, approved atthe annual general meeting of the Shareholders on 27 April 2009 and paid to theShareholders on 26 May 2009), rights and other distributions (if any) which may bedeclared, paid or made by the Company on or after the Announcement Date.

(b) For the purpose of giving effect to the transfer of the KBCF Shares provided for in Clause1(a) of this Scheme:

(i) in the case of Relevant Shareholders not being Depositors, the Company shallauthorise any person to execute or effect on behalf of all such Relevant Shareholdersan instrument or instruction of transfer of all the KBCF Shares held by such RelevantShareholders and every such instrument or instruction of transfer so executed shall beeffective as if it had been executed by the Relevant Shareholder; and

(ii) in the case of Relevant Shareholders being Depositors, CDP shall not later than threeBusiness Days after the Effective Date, debit all the KBCF Shares standing to thecredit of the Securities Account of such Relevant Shareholders and credit all of suchKBCF Shares to the Securities Account of Kingboard Laminates or such SecuritiesAccount as directed by Kingboard Laminates.

PART II

PAYMENT OF SCHEME PRICE

2. In consideration for the transfer of the KBCF Shares provided for in Clause 1(a) of this Scheme,Kingboard Laminates shall pay or procure that there shall be paid to each Relevant Shareholderthe Scheme Price for each KBCF Share transferred by that Relevant Shareholder, in the form ofthe Cash Consideration or the Share Exchange Offer or the Combination Offer as that RelevantShareholder may elect.

THE SCHEME

228

3. Not later than ten (10) calendar days after the Effective Date and against the transfer of the KBCFShares set out in Clause 1(b) of this Scheme above:


Kingboard Laminates shall pay cash to the Relevant Shareholders who elect to and areentitled to receive the Cash Consideration for all of their KBCF Shares and those whoseElection Forms have not been received by the end of the Election Period which is expectedto be 16 September 2009 at 5.00 p.m..

(1) Relevant Shareholders whose KBCF Shares are not deposited with the CDP

Kingboard Laminates shall pay each Relevant Shareholder (not being a Depositor) bysending a cheque for the Cash Consideration payable to and made out in favour ofsuch Relevant Shareholder by ordinary post to his address in the Register ofMembers of the Company at the close of business on the Books Closure Date, at thesole risk of such Relevant Shareholder, or in the case of joint Relevant Shareholders,to the first named Relevant Shareholder made out in favour of such RelevantShareholder by ordinary post to his address in the Register of Members of theCompany at the close of business on the Books Closure Date, at the sole risk of suchjoint Relevant Shareholders; and

(2) Relevant Shareholders whose KBCF Shares are deposited with the CDP

Kingboard Laminates shall pay each Relevant Shareholder (being a Depositor) bymaking payment of the Cash Consideration payable to such Relevant Shareholder toCDP. CDP shall:

(i) in the case of a Relevant Shareholder (being a Depositor) who has registeredfor CDP’s direct crediting service, credit the Cash Consideration payable tosuch Relevant Shareholder, to the designated bank account of such RelevantShareholder; and

(ii) in the case of a Relevant Shareholder (being a Depositor) who has notregistered for CDP’s direct crediting service, send to such RelevantShareholder, by ordinary post to his address in the Depository Register at theclose of business on the Books Closure Date and at the sole risk of suchRelevant Shareholder, a cheque for the payment of such Cash Considerationmade out in favour of such Relevant Shareholder.

Assuming that the Scheme becomes effective and binding on 23 September 2009, thecrediting by CDP of the Cash Consideration into the designated bank accounts of theRelevant Shareholders (in the case of Relevant Shareholders being Depositors and whohave registered with CDP for its direct crediting service) or, as the case may be, the postingof cheques for the Cash Consideration in the manner set out in Clauses 3(a)(1) and 3(a)(2)above, is expected to take place on or before 2 October 2009.

On or after the day being six (6) calendar months after the posting of such cheques byKingboard Laminates, Kingboard Laminates shall have the right to cancel or countermandpayment of any such cheque which has not been cashed (or has been returned uncashed)and shall place all such moneys in a bank account in Kingboard Copper Foil’s name with alicensed bank in Singapore selected by Kingboard Copper Foil. Kingboard Copper Foil or itssuccessor entity shall hold such moneys until the expiration of six (6) years from theEffective Date and shall prior to such date make payments therefrom of the sums (withoutinterest) payable pursuant to Clause 2 of the Scheme to persons who satisfy the Company

THE SCHEME

229

or its successor entity that they are respectively entitled thereto and that the chequesreferred to in Clauses 3(a)(1) and 3(a)(2) of the Scheme set of which they are payees havenot been cashed. Kingboard Copper Foil or its successor entity shall, in its absolutediscretion, determine whether any such person is so entitled and any such determinationshall be conclusive and binding upon all persons claiming an interest in the relevant moneys.

On the expiry of six (6) years from the Effective Date, Kingboard Laminates shall bereleased from any further obligation to make any payments under the Scheme and theCompany or its successor entity shall transfer to Kingboard Laminates the balance (if any) ofthe sums then standing to the credit of the bank account referred to in Clause 3(a) of theScheme including accrued interest subject, if applicable, to the deduction of interest, tax orany withholding tax or any other deduction required by law and subject to the deduction ofany expenses.


Kingboard Laminates shall allot and issue New KBL Shares, credited as fully-paid, on thebasis of 0.374 New KBL Shares at the Issue Price per New KBL Share for every one KBCFShare held by such Relevant Shareholder (not being Depositors) or CDP (as regardsRelevant Shareholders who are Depositors), who elects to and is entitled to receive theScheme Price in the form of the Share Exchange Offer for all of their KBCF Shares.


Kingboard Laminates shall send the share certificates representing the relevantnumber of New KBL Shares to each Relevant Shareholder (not being a Depositor) bypost to his address in the Register of Members of the Company at the close ofbusiness on the Books Closure Date, at the sole risk of such Relevant Shareholder, orin the case of joint Relevant Shareholders, to the first named Relevant Shareholder bypost to his address in the Register of Members of the Company at the close ofbusiness on the Books Closure Date, at the sole risk of such joint RelevantShareholder.


Kingboard Laminates shall send the share certificates representing the relevantnumber of New KBL Shares to each Relevant Shareholder (being a Depositor) by postto his address in the Depository Register at the close of business on the BooksClosure Date and at the sole risk of such Relevant Shareholder.

Assuming that the Scheme becomes effective and binding on 23 September 2009, theposting of the share certificates representing the New KBL Shares to be allotted and issuedpursuant to the Scheme in the manner set out in sub-paragraphs 3(b)(1) and 3(b)(2)above, is expected to take place on or before 2 October 2009.

The New KBL Shares to be allotted and issued pursuant to the Scheme shall be allotted andissued and credited as fully paid and, if and when allotted and issued, will rank pari passu inall respects with the then existing KBL Shares.

The full terms and conditions of the KBL Shares are set out in the Memorandum andArticles of Association of Kingboard Laminates. An extract of some of these terms andconditions can be found in paragraph 1.4 of Annex 1 of Appendix 2 to the SchemeDocument.

THE SCHEME


In respect of the Cash Consideration component of the Combination Offer, the procedure forsettlement shall be as described above in respect of the Cash Consideration.


4. On and from the Effective Date, each existing certificate representing a former holding of the KBCFShares shall cease to have effect as a document for title of the KBCF Shares comprised thereinand each of the Relevant Shareholders (not being Depositors) shall be bound at the request ofeither the Company or Kingboard Laminates to deliver the certificates for his holdings of the KBCFShares for cancellation to the Singapore Share Transfer Agent, Intertrust Singapore CorporateServices Pte. Ltd., at 3 Anson Road #27-01, Springleaf Tower, Singapore 079909.

5. This Scheme shall become effective upon a copy of the Order of the Court sanctioning thisScheme under Section 99 of the Act being delivered to the Registrar of Companies of Bermuda.

6. Unless this Scheme shall have become effective as aforesaid on or before 26 October 2009 orsuch later date as the Court, on the application of the Company or Kingboard Laminates, allows,this Scheme shall lapse.

7. This Scheme is conditional upon such conditions precedent (as set out in Clause 3.1 of theImplementation Agreement which are reproduced in Appendix 5 to the Scheme Document) beingmet or waived in accordance with the terms of the Implementation Agreement.

8. The Company and Kingboard Laminates may jointly consent for and on behalf of all concerned toany modification of, or amendment to, this Scheme or to any condition which the Court may thinkfit to approve or impose.

9. In the event that the Scheme does not become effective for any reason, the costs and expensesincurred by the Company in connection with the Scheme will be borne by the Company.

10. This Scheme shall be governed by, and construed in accordance with, the laws of Bermuda, andthe Company, Kingboard Laminates and the Shareholders submit to the non-exclusive jurisdictionof the courts of Bermuda.

Dated 10 July 2009

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NOTICE OF SCHEME MEETING

231



NO. 192 OF 2009





Between


And



NOTICE IS HEREBY GIVEN that by an Order of Court dated 2 July 2009 made in the above matter, theSupreme Court of Bermuda has directed a Scheme Meeting to be convened of the Members (as definedin the Schedule below) of Kingboard Copper Foil Holdings Limited (the “Company”), and such SchemeMeeting shall be held at 2/F., Harbour View 1, No.12 Science Park East Avenue, Phase II Hong KongScience Park, Shatin, N.T., Hong Kong on 11 August 2009 at 9.30 a.m. (Hong Kong time), for thepurpose of considering and, if thought fit, approving (with or without modification) the following resolution:

“That the Scheme of Arrangement dated 10 July 2009 proposed to be made pursuant to Section99 of the Bermuda Companies Act 1981 between (a) the Company and (b) the Members, a copyof which has been circulated with the Notice convening this Scheme Meeting, be and is herebyapproved.”

A copy of the said Scheme of Arrangement and a copy of the Explanatory Statement required to befurnished pursuant to Section 100 of the Companies Act 1981 (the “Act”), are incorporated in the printeddocument of which this Notice forms part.

A Member (not being CDP) may vote in person at the said Scheme Meeting or may appoint one (and notmore than one) person, whether a member of the Company or not, as his proxy to attend and vote in hisstead. If the Member is CDP, it may appoint more than two persons, whether a member of the Companyor not, as its proxies to attend and vote in its stead. By the said Order of Court, each Member who holdsshares in their own name will have one vote and the value to be attributed to a Member’s vote at theScheme Meeting will be the number of shares of the Company held in the name of that Member in theRegister of Members of the Company and in respect of shares of the Company held by CDP as Member,each Depositor who has shares of the Company entered against their names in the Depository Registerwho votes as a proxy at the Scheme Meeting will be counted and their vote taken into account indetermining if a majority in number representing three fourths in value have voted to approve the Schemeat the Scheme Meeting.

The forms of proxy applicable for the said Scheme Meeting are enclosed with the printed document ofwhich this Notice forms part.


It is requested that forms appointing proxies be lodged at the office of Singapore Share Transfer Agent,Intertrust Singapore Corporate Services Pte. Ltd., at 3 Anson Road #27-01, Springleaf Tower, Singapore079909, not less than 48 hours before the time appointed for the Scheme Meeting.

In the case of joint Members, any one of such persons may vote, but if more than one of such personsbe present at the Scheme Meeting, the person whose name stands first on the Register of Members ofthe Company shall alone be entitled to vote.

By the said Order of Court, the Court has appointed Chan Wing Kwan or failing him, Cheung Kwok Ping,to act as Chairman of the said Scheme Meeting and has directed the Chairman to report the resultsthereof to the Court.

The said Scheme of Arrangement will be subject to the subsequent approval of the Court.

THE SCHEDULE

Expression Meaning

CDP The Central Depository (Pte) Limited

Depositor has the meaning ascribed to it in Section 130A of the Companies Act,Chapter 50 of Singapore

Depository Register has the meaning ascribed to it in Section 130A of the Companies Act,Chapter 50 of Singapore

Members Persons who are registered as holders of shares in the Register ofMembers of the Company

Dated this 10th day of July 2009

Conyers Dill & Pearman Pte. Ltd.50 Raffles Place#18-04 Singapore Land TowerSingapore 048623

Attorneys forKingboard Copper Foil Holdings Limited

232

NOTICE OF SHAREHOLDERS’ BRIEFING



NO. 192 OF 2009





Between


And


NOTICE OF SHAREHOLDERS’ BRIEFING

NOTICE IS HEREBY GIVEN that the Shareholders’ Briefing of Kingboard Copper Foil Holdings Limitedwill be held at Jurong Country Club, Ficus Ballroom, Level 2, 9 Science Centre Road, Singapore 609078on 31 July 2009 at 9.30 a.m. whereby Shareholders will be given the opportunity to raise any questionson the Scheme and for Kingboard Copper Foil Holdings Limited to address such queries prior to theScheme Meeting.

Dated this 10th day of July 2009

Conyers Dill & Pearman Pte. Ltd.50 Raffles Place#18-04 Singapore Land TowerSingapore 048623

Attorneys forKingboard Copper Foil Holdings Limited

233

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