09:53     XINAO GAS<02688> - Announcement (6)                                 

    Agreement"                                                                
    Date:   31 January 2005                                                   
                                                                              
    Parties:        a.      the Group                                         
                                                                              
    b.      Wang Family Companies                                             
                                                                              
    Subject matter:                                                           
    The Wang Family Companies have agreed, from time to                       
    time, to source capital for purchasing gas-related                        
    machinery and equipment (including but not limited                        
    to gas refueling stations and gas refueling daughter                      
    station trailers) at the direction of the Group and                       
    lease such equipment to the Group.                                        
                                                                              
    Duration and fees:                                                        
    For the lease of equipment, the Group will pay a rental                   
    fee to be determined between the parties by reference                     
    to the prevailing lending interest rate in the PRC                        
    from time to time in compliance with the relevant                         
    regulations imposed by the governmental authority in                      
    the PRC for a term of three years commencing 1 January                    
    2005 provided such fee shall not be higher than the                       
    fee charged to Independent Third Parties for leasing                      
    similar equipment by the Wang Family Companies.                           
                                                                              
    Reasons for and benefits of the Finance Leasing                           
    Agreement:                                                                
    Since various non-wholly owned subsidiaries of the                        
    Group require finance for the purchase of equipment                       
    for use in the ordinary course of their business, the                     
    entering into of the Finance Leasing Agreement                            
    enables such subsidiaries to obtain the use of such                       
    equipment by leasing the same from the Wang Family                        
    Companies. The Directors (including the independent                       
    non-executive Directors) are of the view that the                         
    terms of the Finance Leasing Agreement are fair and                       
    reasonable so far as the Independent Shareholders are                     
    concerned and that the Finance Leasing Agreement is                       
    on normal commercial terms, on terms not less                             
    favourable than those offered by Independent Third                        
    Parties and is in the interest of the Company and its                     
    shareholders as a whole.                                                  
                                                                              
    COMPLIANCE WITH THE LISTING RULES                                         
    Since the Board anticipates that the percentage                           
    ratios (other than the profit ratio) for New                              
    Transaction 3 on an annual basis will not be less than                    
    2.5% and the annual consideration is expected to be                       
    higher than HK$10,000,000, this Non-Exempt                                
    Continuing Connected Transaction will be subject to                       
    the reporting and announcement requirements under                         
    Chapter 14A of the Listing Rules and will also be                         
    required to be approved by way of poll by the                             
    Independent Shareholders. The Non-Exempt Continuing                       
    Connected Transaction which will be required to be                        
    approved by the Independent Shareholders will also                        
    be subject to the following conditions:                                   
                                                                              
    (1)     the Non-Exempt Continuing Connected                               
    Transaction will be entered into:                                         
                                                                              
    (i)     in the ordinary and usual course of business of                   
    the Group;                                                                
                                                                              
    (ii)    on normal commercial terms, or where there are                    
    not sufficient comparable transactions to judge                           
    whether they are on normal commercial terms, on terms                     
    no less favourable than those available to                                
    independent third parties; and                                            
                                                                              
    (iii)   in accordance with the relevant agreement(s)