10:51     CHEVALIER INT'L<00025> - Announcement (2)                           

    PPR is principally engaged in the business of                             
    rehabilitating pipes for drinking water, flushing                         
    water, cooling water, gas, sewages and drainage using                     
    CIPP (Cured in Place Process) and spirally wound                          
    plastic pipe technologies. PPR has successfully                           
    secured contracts from non-government institutions                        
    as well as a number of government contracts from the                      
    Water Services Department, Drainage Services                              
    Department, Highways Department, Housing Authority                        
    and Airport Authority.                                                    
                                                                              
    For the years ended 31st March, 2003 and 2004, PPR                        
    recorded audited net losses of approximately HK$7.3                       
    million and HK$2.0 million respectively. There was                        
    no tax charged for the two years ended 31st March,                        
    2003 and 2004. As at 31st March, 2004, the                                
    shareholders' loan owed by PPR to the Vendors amounted                    
    to HK$1.0 million and the audited net tangible asset                      
    value of PPR amounted to approximately HK$21.0 million.                   
    The audited financial statements of PPR were prepared                     
    based on the generally accepted accounting principles                     
    in Hong Kong.                                                             
                                                                              
    Consideration:                                                            
    The aggregate consideration for the PPR Agreement is                      
    HK$19.3 million of which the consideration for PPR                        
    Shares and shareholders' loan are HK$18.3 million and                     
    HK$1.0 million respectively. The aggregate                                
    consideration for the PPR Agreement represents a 184%                     
    premium over the sum of the attributable audited net                      
    tangible asset value of PPR of approximately HK$5.8                       
    million and HK$1.0 million shareholders' loan due by                      
    PPR to the Vendors as at 31st March, 2004. The                            
    consideration, which will be funded by the internal                       
    resources of the Group, is payable in cash upon                           
    completion of the PPR Agreement.                                          
                                                                              
    The consideration has been determined after arm's                         
    length negotiations between the Group and the Vendors                     
    and taking into account principally PPR's contracts                       
    on hand, the growth potential of pipe rehabilitation                      
    industry in Hong Kong and the market leading position                     
    of PPR. The Board considers the consideration is fair                     
    and reasonable and the payment terms are acceptable                       
    given the current cashflow position of the Group.                         
                                                                              
    Completion:                                                               
    The PPR Agreement was completed on 15th March 2005.                       
                                                                              
    The Directors (including the independent                                  
    non-executive Directors) consider the PPR Agreement                       
    (including the consideration) are on normal                               
    commercial terms and are fair and reasonable to the                       
    Company and its shareholders as a whole.                                  
                                                                              
    NORDITUBE AGREEMENT DATED 11TH MARCH, 2005                                
    Purchaser:   Chevalier Pipe                                               
                                                                              
    Vendor:   rabmer is an investment holding company,                        
    which through its subsidiaries, is principally                            
    engaged in building construction, underground                             
    engineering, pipe rehabilitation and trading of pipe                      
    rehabilitation systems and products.                                      
                                                                              
    Assets acquired:                                                          
    16,603,320 NordiTube Shares, represents                                   
    approximately 33.34% of the issued share capital of                       
    NordiTube. NordiTube is listed on OTC market in Sweden.                   
    rabmer acquired the 16,603,320 NordiTube Shares in                        
    OTC market in Sweden for consideration ranged from                        
    SEK0.5 to SEK1.4 per NordiTube Share in recent years.