09:29     CHEVALIER INT'L<00025> - Announcement (2)                           

    Capital contribution                                                      
    Pursuant to the Joint Venture Agreement, the total investment             
    of the Joint Venture Company will be RMB125.0 million                     
    (equivalent to approximately HK$117.9 million). The registered            
    capital of the Joint Venture Company is RMB50.0 million                   
    (equivalent to approximately HK$47.2 million) which will be               
    contributed as to RMB23.0 million in cash (equivalent to                  
    approximately 21.7 million) by the Group financed by its                  
    internal resources and as to RMB27.0 million in cash                      
    (equivalent to approximately HK$25.5 million) by the JV Partner.          
    Upon the establishment, the Joint Venture Company will be owned           
    as to 46% by the Group and as to 54% by the JV Partner.                   
                                                                              
    The Joint Venture Company will become a 46% owned associated              
    company of the Group upon its establishment and its accounts              
    will be equity accounted for in the Group's consolidated                  
    accounts.                                                                 
                                                                              
    Pursuant to the Joint Venture Agreement, it is agreed that in             
    the event when further injection of funds are required after              
    the registered capital is fulfilled, the Joint Venture Company            
    could raise fund through financial institution in the PRC or              
    from abroad. In the event that the additional fund could not              
    be obtained from financial institutions, it is agreed, after              
    arm's length negotiations between the JV Partner and the Group,           
    that the JV Partner and the Group should extend shareholders'             
    loan to the Joint Venture Company on a 50:50 basis.                       
                                                                              
    Profit sharing                                                            
    The Group and the JV Partner will share all profit and loss,              
    costs and risk in proportion to their respective interest in              
    the registered capital of the Joint Venture Company unless it             
    is specified otherwise under the Joint Venture Agreement (such            
    as the Xi Ling Project and the Cui Tian Project as described              
    below).                                                                   
                                                                              
    Composition of board of directors of the Joint Venture Company            
    The board of directors of the Joint Venture Company will                  
    comprise seven directors, of which four will be appointed by              
    the JV Partner and three will be appointed by Citiway.                    
                                                                              
    Responsibilities of the JV Partner and the Group                          
    The JV Partner is responsible for, among other things, the                
    followings:                                                               
                                                                              
    (i)   to apply for the relevant approvals from the relevant PRC           
    government authorities for the establishment of the Joint                 
    Venture Company;                                                          
                                                                              
    (ii)   to properly manage the demolition work and resettlement            
    of the existing residents on the development site (the                    
    "Resettlement") of Xi Ling Project and Cui Tian Project. The              
    JV Partner will be responsible for all claims or litigations              
    against the Joint Venture Company and relevant cost incurred              
    therefrom, should those claims or litigations relates to the              
    Resettlement. The Joint Venture Company will be responsible               
    for all claims or litigations against the Joint Venture Company           
    and relevant cost incurred therefrom, should those claims or              
    litigations relate to the design, quality or delay in                     
    completion of Xi Ling Project or Cui Tian Project;                        
                                                                              
    (iii)   to carry out the relevant procedures and apply for the            
    relevant approvals in relation to the change of the land usage            
    and the transfer of land use right for the parcel of land where           
    the Xi Ling Project is situated, such that the Joint Venture              
    Company could obtain the development rights and land use rights           
    within four months after the issue of the Joint Venture                   
    Company's business license;                                               
                                                                              
    (iv)   to carry out the relevant procedures and apply for the             
    relevant approvals in relation to the change of the land usage            
    and the transfer of land use right for the parcel of land where           
    the Cui Tian Project is situated, such that the Joint Venture             
    Company could obtain the development rights and land use rights;          
                                                                              
    (v)   to bear all the cost in relation to the application of              
    the land use rights for the Xi Ling Project, including, among             
    other things, the cost involved in the demolition work, the               
    Resettlement, and other cost associated with the change of land           
    usage.                                                                    
                                                                              
    The Group is responsible for, among other things, the                     
    followings: