09:52     E-LIFE INT'L<00370> - Announcement (2)                              

    PRC. Shanxi Changxing is currently owned as to 70% by Mr. Yu-wen and as   
    to 30% by Ms. Yu-wen.                                                     
                                                                              
    The Capital Increase and the Subscription                                 
    The registered capital of Shanxi Changxing will be increased by RMB106    
    million from RMB20 million to RMB126 million. Funeway and Mr. Yu-wen      
    agreed to subscribe for RMB64.26 million (equivalent to approximately     
    HK$60.62 million) and RMB41.74 million (equivalent to approximately       
    HK$39.38 million) respectively in the increased registered capital of     
    Shanxi Changxing. Mr. Yu-wen will make contribution of RMB41.74 million   
    (equivalent to approximately HK$39.38 million) in the form of plant,      
    machinery and land located in Jin Zhong City, Shanxi Province and that    
    will be subject to independent valuation report issued by a qualified     
    valuer for inclusion in the circular to be despatched to the              
    Shareholders.                                                             
                                                                              
    The existing 100,000 tonnes coke factory and 900,000 tonnes coal          
    preparation plant (as described below) are situated on the land to be     
    contributed by Mr Yu-wen and/or parties procured by Mr Yu-wen.            
                                                                              
    Upon completion of the Subscription, Shanxi Changxing will be owned as    
    to 51.00% by Funeway, as to approximately 44.24% by Mr. Yu-wen and as to  
    approximately 4.76% by Ms. Yu-wen.                                        
                                                                              
    Following the completion of the Subscription, Shanxi Changxing will       
    become a subsidiary of the Company and its financial results will be      
    consolidated into the Group's accounts.                                   
                                                                              
    Capital Injection                                                         
    The Capital Injection of RMB64.26 million (equivalent to approximately    
    HK$60.62 million) will be satisfied entirely by cash. The payment term    
    of the Capital Injection is as follows:                                   
                                                                              
    (a)        RMB9.639 million (equivalent to approximately HK$9.09          
    million), being 15% of the Capital Injection, as refundable cash deposit  
    is payable within 30 days after the signing of the Subscription           
    Agreement;                                                                
                                                                              
    (b)        RMB28.917 million (equivalent to approximately HK$27.28        
    million), being 45% of the Capital Injection, will be payable within 90   
    days after (i) the day Shanxi Changxing obtains its *                     
    (Certificate of Approval for Foreign Investment Enterprise) or (ii) the   
    date of the issuance of the circular to the Shareholders by the Company   
    (whichever the later one); and                                            
                                                                              
    (c)        RMB25.704 million (equivalent to approximately HK$24.25        
    million), being 40% of the Capital Injection, will be payable within the  
    period from the seventh month to the 12th month after Shanxi Changxing    
    has obtained its business licence (*).                                    
                                                                              
    The Capital Injection has been determined after arm's length              
    negotiations and based on the pro-rata contribution to the increase in    
    the registered capital of Shanxi Changxing which was determined taking    
    into account the expected future capital expenditure of Shanxi            
    Changxing.                                                                
                                                                              
    The Group intends to satisfy the Capital Injection for the Subscription   
    with internal resources.                                                  
                                                                              
    Conditions precedent                                                      
    The Subscription Agreement is conditional upon, among other things, the   
    following conditions being fulfilled or waived:                           
                                                                              
    (a)        Shanxi Changxing having provided to Funeway copies of the PRC  
    identity cards of its existing shareholders;                              
                                                                              
    (b)        Shanxi Changxing having provided information to Funeway on     
    Shanxi Changxing including but not limited to the following:-             
                                                                              
    i)        Shanxi Changxing's establishment documents;                     
                                                                              
    ii)        minutes of shareholders' meetings and board of directors'      
    meetings of Shanxi Changxing;                                             
                                                                              
    iii)        latest audited financial statements of Shanxi Changxing;      
                                                                              
    iv)        valuation report by a valuer with relevant qualification;      
                                                                              
    v)        confirmations and/or receipt issued by the relevant             
    governmental authorities showing Shanxi Changxing has paid in full the    
    sewage fees up to the Completion Date;                                    
                                                                              
    vi)        confirmations issued by the relevant governmental authorities  
    showing all relevant taxes have been paid by Shanxi Changxing up to the   
    Completion Date;