10:17 TAI PING CARPET<00146> - Announcement (1) The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this announcement, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. TAI PING CARPETS INTERNATIONAL LIMITED (Incorporated in Bermuda with limited liability) (Stock Code: 146) CONTINUING CONNECTED TRANSACTIONS BTCL, a substantial shareholder of the Company, is interested in more than 30% of the voting power of HSH. Accordingly, HSH and the other members of the HSH Group are considered connected persons of the Company for the purposes of the Listing Rules. The Tai Ping Group has, from time to time, entered into transactions on normal commercial terms with the HSH Group pursuant to which it has supplied Products and Services. Whilst the future occurrence of such transactions will depend upon the future requirements for such Products and Services by the HSH Group, it is anticipated that the Tai Ping Group and the HSH Group will continue to enter into such transactions on a regular basis. These transactions constitute continuing connected transactions for the purposes of the Listing Rules. The Company was granted a waiver by the Stock Exchange on 30th October 2002 from strict compliance with the disclosure requirements under the Listing Rules in relation to such transactions subject to certain conditions. That waiver expired on 31st December 2004. On the 8th February 2005, the Company announced, in accordance with the requirements of Chapter 14A of the Listing Rules, that CITPCL, a subsidiary of the Company, had entered into an agreement to supply Products and Services to SCHCL, a member of the HSH Group, and that as a result of this agreement, the aggregate value of such connected transactions of the Company since 1st January 2005 would exceed the de minimis levels set out in rule 14A.33(3) of the Listing Rules. The Company entered into the Supply of Products and Services Agreement on 22nd March 2005. The Supply of Products and Services Agreement provides that the Company is not obliged to supply any Products and Services ordered if the fulfilment of such an order would result in the annual consideration for the Products and Services either equalling or exceeding HK$8.5 million. This limit is below the de minimis levels for the Company referred to in rule 14A.34 of the Listing Rules. Accordingly, the Company is only subject to the reporting and announcement requirements in respect of the Supply of Products and Services Agreement set out in rules 14A.45 to 14A.47 of the Listing Rules. If for any reason these levels are exceeded, the Company will comply with its obligations under the Listing Rules including the requirement to seek independent shareholder approval for such transactions. BTCL is a substantial shareholder of the Company. BTCL is also interested in more than 30% of the voting power of HSH. Accordingly, HSH and the other members of the HSH Group are considered connected persons of the Company for the purposes of the Listing Rules. The Tai Ping Group has for many years, from time to time, entered into transactions on normal commercial terms with the HSH Group pursuant to which it has supplied Products and Services. Whilst the future occurrence of such transactions will depend upon the future requirements for such Products and Services by the HSH Group, it is anticipated that the Tai Ping Group and the HSH Group will continue to enter into such transactions on a regular basis. These transactions constitute continuing connected transactions for the purposes of the Listing Rules. AGREEMENT Date 22nd March 2005. Parties The Company (as supplier) and HSH (as customer). Nature of the transactions The provision by the Tai Ping Group, of Products and Services to the HSH Group. Term The Supply of Products and Services Agreement will be effective from 22nd March 2005 and will continue until 21st March 2008 (both dates inclusive). The parties may agree in writing to renew the Supply of Products and Services Agreement for a further 3 year term upon its expiry on 21st March 2008.