09:42 CHINA GAS HOLD<00384> - 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. CHINA GAS HOLDINGS LIMITED (incorporated in Bermuda in limited liability) (Stock Code: 384) ANNOUNCEMENT This announcement is made by the Company pursuant to Rule 13.09 of the Listing Rules. The Board is pleased to announce that the Joint Venture Agreement is entered into between China Natural Gas and the PRC Party pursuant to which a joint venture, Shaoxing Zhongran City Gas Development Company Limited, will be established in Shaoxing County, Zhejiang Province, the PRC. The Shaoxing JV will be owned as to 55% by China Natural Gas and the remaining 45% by the PRC Party. Upon the establishment of the Shaoxing JV, it will be a non-wholly owned subsidiary of the Company. This announcement is made by the Company pursuant to Rule 13.09 of the Listing Rules. The Board is pleased to announce that the Joint Venture Agreement is entered into between China Natural Gas and the PRC Party pursuant to which a joint venture, Shaoxing Zhongran City Gas Development Company Limited, will be established in Shaoxing County, Zhejiang Province, the PRC. Upon the establishment of the Shaoxing JV, it will be a non-wholly owned subsidiary of the Company. Details of the Joint Venture Agreement are set out below: THE JOINT VENTURE AGREEMENT Date: 11 April 2005 Parties (A) China Natural Gas; and (B) * (Shaoxing County China Qing Fang City Piped Gas Company Limited) (note), an independent third party which is independent of and not connected with the Company and its connected persons (as defined in the Listing Rules) and is not a connected person of the Company (as defined in the Listing Rules). Registered capital and total investment The parties to the Joint Venture Agreement agreed that a joint venture, Shaoxing Zhongran City Gas Development Company Limited will be established in Shaoxing County, Zhejiang Province, the PRC which will be engaged in the Shaoxing Gas Projects. The Joint Venture will obtain the exclusive rights for the operation of the piped gas business in Shaoxing County for 30 years and that the relevant government authorities in the PRC will not approve the operation of the business of piped gas and the projects of piped gas during such period of time. Pursuant to the Joint Venture Agreement, the registered capital of the Shaoxing JV will be RMB70,000,000 (equivalent to approximately HK$66,037,735.85), of which RMB31,500,000 (equivalent to approximately HK$29,716,981.13) will be contributed by the PRC Party by way of contribution in kind (including the gas pipes networks and related facilities) and RMB38,500,000 (equivalent to approximately HK$36,320,754.72) will be contributed by the Group by way of cash, both within one month from the date of the registration of the Shaoxing JV. The assets to be contributed by the PRC Party will be valued by an independent valuer in the PRC to be appointed by both parties to the JV Agreement. In the event that the value of the assets contributed by the PRC Party is less than RMB31,500,000 (equivalent to approximately HK$29,716,981.13), China Natural Gas agreed that the PRC Party should contribute the outstanding amount by way of cash. If the PRC Party fails to contribute the outstanding amount by way of cash, China Natural Gas agreed to further contribute for such outstanding amount and the equity interests of China Natural Gas in the Shaoxing JV will be increased accordingly. The total investment of the Shaoxing JV will be determined in accordance with the feasibility study report to be approved by the relevant government authority in the PRC and the difference between the total investment and the registered capital will be paid up by funds drawn from the profits generated by Shaoxing JV. Obligations of the parties