You are on page 1of 296

IMPORTANT
If you are in any doubt about any contents of this prospectus, you should obtain independent professional advice.

Tsun Yip Holdings Limited 進業控股有限公司
(Incorporated in the Cayman Islands with limited liability)

App1A(1)

LISTING ON THE GROWTH ENTERPRISE MARKET OF THE STOCK EXCHANGE OF HONG KONG LIMITED BY WAY OF PLACING OF SHARES
Number of Placing Shares : 24,800,000 Shares Placing Price : HK$1.28 per Placing Share (payable in full on application plus brokerage of 1%, Stock Exchange trading fee of 0.005% and SFC transaction levy of 0.004%) Nominal value : HK$0.01 per Share Stock code : 8356 Sponsor
App1A(15)(3)(c) Third Schedule 9

App1A(15)(3)(c)

Sole Bookrunner and Lead Manager

Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing Company Limited take no responsibility for the contents of this prospectus, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this prospectus. A copy of this prospectus, having attached thereto the documents specified in the section headed “Documents delivered to the Registrar of Companies and available for inspection” in Appendix VI to this prospectus, has been registered by the Registrar of Companies in Hong Kong as required by section 342C of the Companies Ordinance. The Securities and Futures Commission and the Registrar of Companies in Hong Kong take no responsibility as to the contents of this prospectus or any other documents referred to above. Prior to making an investment decision, prospective investors should carefully consider all the information set out in this prospectus, including the risk factors set out in the section headed “Risk factors” in this prospectus. Prospective investors of the Placing Shares should note that the Sponsor and the Lead Manager (for itself and on behalf of the Underwriters), acting jointly, are entitled to terminate the obligations of the Underwriters under the Underwriting Agreement, by notice in writing to the Company given by the Sponsor and the Lead Manager (for itself and on behalf of the Underwriters), upon the occurrence of any of the events set forth under the sub-paragraph headed “Grounds for termination” under the paragraph headed “Underwriting arrangements” in the section headed “Underwriting” in this prospectus at any time prior to 8:00 a.m. (Hong Kong time) on the Listing Date.

R14.04

S342C

20 August 2010

CHARACTERISTICS OF GEM
GEM has been positioned as a market designed to accommodate companies to which a higher investment risk may be attached than other companies listed on the Stock Exchange. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only after due and careful consideration. The greater risk profile and other characteristics of GEM mean that it is a market more suited to professional and other sophisticated investors. Given the emerging nature of companies listed on GEM, there is a risk that securities traded on GEM may be more susceptible to high market volatility than securities traded on the Main Board of the Stock Exchange and no assurance is given that there will be a liquid market in the securities traded on GEM.
R14.05

— i —

EXPECTED TIMETABLE
The Company will make an announcement on the Exchange Website if there is any change to the following expected timetable. 2010
(Note 1)

Commencement of Placing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Friday, 20 August Announcement of the level of indication of interest in the Placing to be published on the Exchange Website on or about . . . . . . . . . . . . . . . . . . . . Friday, 27 August Allotment of Placing Shares to placees on or about . . . . . . . . . . . . . . . . . . . . . . . Friday, 27 August Deposit of certificates for the Placing Shares into CCASS (Note 2) . . . . . . . . . . . . Friday, 27 August Dealings in the Shares on GEM to commence on (Note 3) . . . . . . . . . . . . . . . . . . Monday, 30 August
Notes:
App1A(22) App1A(15)(3)(k)

Third Schedule 8

1.

In this prospectus, all times and dates refer to Hong Kong local times and dates.

2.

The Share certificates are expected to be issued in the name of HKSCC Nominees Limited or in the name of the placee(s) or their agent(s) as designated by the Underwriters. Share certificates for the Placing Shares to be distributed via CCASS will be deposited into CCASS on or about 27 August 2010 for credit to the respective CCASS participant’s stock accounts designated by the Underwriters, the placees or their agents, as the case may be. The Company will not issue any temporary documents of title.
App1A(15)(3)(g)

3.

All Share certificates will only become valid certificates of title when the Placing has become unconditional in all respects and the Underwriting Agreement has not been terminated in accordance with its term prior to 8:00 a.m. on the Listing Date.

Details of the structure of the Placing, including the conditions thereto, are set out in the section headed “Structure and conditions of the Placing” in this prospectus.

— ii —

CONTENTS

You should rely only on the information contained in this prospectus to make your investment decision. The Company, the Sponsor, the Lead Manager and the Underwriters have not authorised anyone to provide you with information that is different from what is contained in this prospectus. Any information or representation not made in this prospectus must not be relied on by you as having been authorised by the Company, the Sponsor, the Lead Manager, the Underwriters, any of their respective directors or affiliates of any of them or any other person or parties involved in the Placing. The contents on the website at http://www.tsunyip.hk, which is the website of the Company, do not form part of this prospectus.

Page CHARACTERISTICS OF GEM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EXPECTED TIMETABLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . INFORMATION ABOUT THIS PROSPECTUS AND THE PLACING . . . . . . . . . . . . . . . . DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PARTIES INVOLVED IN THE PLACING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORPORATE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . INDUSTRY OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . LICENCING AND OTHER REQUIREMENTS FOR GOVERNMENT PROJECTS . . . . . . ENVIRONMENTAL PROTECTION LAWS AND REGULATIONS. . . . . . . . . . . . . . . . . . . . HISTORY AND DEVELOPMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i ii 1 18 25 34 37 38 40 41 54 68 70

— iii —

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inventory control . . . . . . . . . . . . . . . . . . 180 — iv — . . . . . . . . . . . . . . . . . . . . . . . 112 Environmental matters . . . . . . BOARD COMMITTEES AND STAFF . . . . . . . . . 113 CONNECTED TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 106 Property interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118 DIRECTORS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112 Intellectual property rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SENIOR MANAGEMENT. . . . . . . . . 127 CONTROLLING SHAREHOLDERS AND SUBSTANTIAL SHAREHOLDERS . . . . . . . . . 76 77 80 81 82 89 98 98 99 Competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107 Litigation and claim . . . . . . . . . . . . . . . . . . . . . . . 114 FUTURE PLANS AND USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Operations . . . . . . . . . 107 Relationship with MHCC/MHWE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144 FINANCIAL INFORMATION . . . . . . . . . . Contracts completed and contracts in progress . . . . . . . . . . . . . . . . . . . . . . . . . . Quality assurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Safety policy . . . . . . . . . . . . . . . . 106 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174 STRUCTURE AND CONDITIONS OF THE PLACING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Awards and accreditation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135 SHARE CAPITAL . . . . . . . . . . . . . . . . . . . . .CONTENTS Page BUSINESS Business overview . . 147 UNDERWRITING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Licences/registration held by the Group . . . . . . . . . . . . . Competitive strengths . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-1 Documents delivered to the Registrar of Companies and available for inspection . III-1 Summary of the constitution of the Company and Cayman Islands company law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1 Unaudited pro forma financial information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-1 Property valuation . . . . . . . . . . . . . . . . . . . . . . . . .CONTENTS Page APPENDICES I II III IV Accountants’ Report . . . . . . . VI-1 V VI — v — . . . . . . . . . . . . IV-1 Statutory and general information . . . . . . . . . . . .

Waterworks.SUMMARY This summary aims to give you an overview of the information contained in this prospectus. For each of the two years ended 31 March 2009 and 2010. BUSINESS OVERVIEW The Group is principally engaged in the provision of waterworks engineering services. You should read that section carefully before you decide to invest in the Placing Shares. Victory Trenchless Engineering Company Limited and Chit Cheung Construction Company Limited (formerly known as Ching Chit Cheung Construction Company Limited). Some of the particular risks in investing in the Placing Shares are set out in the section headed “Risk factors” of this prospectus.9% and approximately 88. representing approximately 26. Third Schedule 3 — 1 — . revenue generated from contracts in which the Group acted as a subcontractor represented approximately 73.5 million. as a subcontractor.1% and approximately 11. You should read the whole document before you decide to invest in the Placing Shares.5% of the Group’s total revenue during the Track Record Period.8 million and approximately HK$131. No revenue was derived from MHWE for the year ended 31 March 2010. During the Track Record Period. representing approximately 2.3% of the Group’s total revenue in the respective year.4 million respectively. Details of the Group’s completed contracts and contracts in progress are set out in the paragraph headed “Contracts completed and contracts in progress” under the section headed “Business” in this prospectus. In the capacity of a subcontractor. representing approximately 65. road works and drainage services and site formation works for the public sector in Hong Kong. MHCC/MHWE was the largest customer of the Group during the Track Record Period. There are risks associated with any investment. The main contractors to which the Group provided services during the Track Record Period included MHCC/MHWE (who has been the Group’s largest customer since the year ended 31 March 2008). revenue derived from MHWE amounted to HK$2. has provided waterworks engineering services and road works and drainage services to certain main contractors during the Track Record Period.5% of the Group’s total revenue respectively. Penta-Ocean-Peako Joint Venture. the Group had completed six contracts during the Track Record Period and had three contracts in progress as at the Latest Practicable Date. roads and drainage works and site formation works fall within a broader engineering discipline known as civil engineering. revenue derived from MHCC amounted to approximately HK$57.9% of the Group’s total revenue. Kwan On Construction Company Limited. it does not contain all the information that may be important to you.9% and approximately 88. For the year ended 31 March 2009. Revenue generated from the Group providing services in the capacity of a main contractor accounted for a lesser part of the Group’s total revenue. the Group generated a substantial part of its revenue from carrying out waterworks engineering services and road works and drainage services in the capacity of a subcontractor. The Group as a subcontractor The Group. For each of the years ended 31 March 2009 and 2010. As it is a summary.

footways and expressways. These services include construction of interchange. TYW and TY Civil were admitted to the List of Registered Subcontractors for participating in civil engineering works. carriageway. link bridge. pumping stations. foundations strengthening. TYW and TY Civil. access road. service reservoirs. These services generally involve demolition of existing buildings and structures. walkway. road works and drainage services and waterworks under the Registration Scheme in October 2006 and November 2008 respectively. water tanks. stabilisation. are not required to comply with the licencing requirements set forth in the ETWB Handbook and not subject to the restrictions on contract value and number of contracts applicable to main contractors as described below. LICENCES AND REGISTRATION REQUIREMENTS The Group as a subcontractor Members of the Group are required to be registered under the Primary Register of the Registration Scheme introduced by the Provisional Construction Industry Co-ordination Board (臨時建造業統籌委員會). These services include construction and maintenance of water mains. utilities diversion and electrical and mechanical works. undertaking Government contracts as a subcontractor. the contractor may also be required to make arrangements on traffic diversion and control. whose work was taken over by the Construction Industry Council (建造業議會) in February 2007. treatment works. — 2 — . watercourses for distribution systems and other related construction works. These services may also involve related civil construction works which include excavation. excavation to the design formation level and reduction and stabilisation of existing slopes. Road works and drainage services. drainage channel and the associated lighting. For projects that are carried out on existing traffic roads. reinstatement of carriageways. drainage. the Group had completed two waterworks contracts during the Track Record Period and had two waterworks contracts in progress as at the Latest Practicable Date. Services provided by the Group Waterworks engineering services. as a main contractor. Site formation works. covered footbridge. In the capacity of a main contractor. landscaping. Save for the aforesaid registration requirement.SUMMARY The Group as a main contractor The Group. impounding reservoirs. has provided waterworks engineering services to WSD during the Track Record Period. footpath. in order to act as a subcontractor for capital works contracts and maintenance contracts of the Government with tenders to be invited on or after 15 August 2004.

The following table summarises the details of the licences held by TYW as an approved contractor as at the Latest Practicable Date: Month and year of first relevant registration with the Government departments/ organisation May 2009 Government departments/ organisation WBDB Member of the Group which held the licence/ approval TYW Level/category of registration held as at the Latest Practicable Date Approved Contractors for Public Works — Waterworks Category (Group B) Approved Contractors for Public Works — Roads and Drainage Category (Group B) Approved Contractors for Public Works — Site Formation Category (Group B) Status as at the Latest Practicable Date Confirmed Current value of project which the Group is eligible to undertake under the relevant licence Contract value up to HK$75 million WBDB March 2009 TYW Confirmed Contract value up to HK$75 million WBDB March 2009 TYW Probationary Contract value up to HK$75 million Waterworks. TYW is eligible for the award of any number of Government contracts. Being a licenced contractor with confirmed status under Group B of the “Roads and Drainage” category since March 2009. According to the technical circular of WBDB. save for maintenance contracts which are grouped by the Government as subject to restrictions. save for maintenance contracts which are grouped by the Government as subject to restrictions. may not be awarded with more than two such waterworks maintenance contracts at any time. TYW is eligible for the award of any number of Government contracts. — 3 — . there is no other limitation or restriction on the number of contracts which TYW is eligible for award under this category. According to the technical circular of WBDB. under this category provided that the contract value of each individual contract does not exceed HK$75 million and TYW fulfills the minimum employed capital and working capital requirements. any approved contractor. may be subject to similar restriction or limitation on the number of maintenance contracts as those applicable to an approved contractor under the “Waterworks” category. Save as disclosed above. acting as a main contractor. under this category provided that the contract value of each individual contract does not exceed HK$75 million and TYW fulfills the minimum employed capital and working capital requirements. acting as a main contractor.SUMMARY The Group as a main contractor Members of the Group are required to comply with the licencing requirements set forth in the ETWB Handbook in order to tender for Government projects in the capacity of a main contractor. Being a licenced contractor with confirmed status under Group B of the “Waterworks” category since May 2009. any approved contractor under this category. Roads and drainage.

waterworks. According to the technical circular of WBDB. the Group. — 4 — . Further ISO accreditations were obtained by the Group in 2003. the Group has received the following awards or certificate from different departments of the Government and a professional accreditation organisation: Year of grant 2010* Description Certificate for compliance with the requirements of ISO9001:2008 quality management system standard for construction of civil engineering works (site formation. any approved contractor under this category. roads and drainage) Bronze prize in the renovation and maintenance works — Subcontractors in WSD Contract No. The Group intends to continue its focus on waterworks engineering services in the future. In order to be eligible to tender for Government contracts in the capacity of a main contractor under these three categories with individual contract value over HK$75 million. if undertakes waterworks maintenance contracts in the capacity of a subcontractor. Being a licenced contractor with probationary status under Group B of the “Site Formation” category since March 2009. During the Track Record Period. TYW is eligible to tender for such number of Government contracts under this category provided that the total value of Group B works does not exceed HK$75 million and TYW fulfills the minimum employed capital and working capital requirements. the Group may choose to undertake other waterworks contracts instead of waterworks maintenance contracts in the event that the limitation on the number of waterworks maintenance contract has been reached by the Group. On one hand. the Directors do not consider that the aforesaid limitation on the number of waterworks maintenance contracts which may be awarded to a contractor has any significant adverse impact on the Group. Nevertheless. TYW will be required to satisfy the financial criteria. 2/WSD/05 during the period from 1 January 2007 to 31 December 2007 under the Considerate Contractors Site Award Scheme Organisation Accredited Certification International Limited 2009 Labour Department of the Government 2007 Development Bureau of the Government * TYW was first accredited with ISO compliance certification in 2001. On the other hand. 21/WSD/06 under the Construction Industry Safety Award Scheme Merit award in recognition of the performance of TYW’s construction site in WSD Contract No.SUMMARY Site formation. the Group primarily focused on provision of waterworks engineering services. Details of the requirements are set out in the section headed “Licencing and other requirements for Government projects” in this prospectus. AWARDS AND ACCREDITATION In recognition of the Group’s outstanding performance and quality of works. acting as a main contractor. may be subject to similar restriction or limitation on the number of maintenance contracts as those applicable to an approved contractor under the “Waterworks” category. technical and management personnel criteria for application for promotion to Group C in the above categories. is not subject to the aforesaid limitation. 2006 and 2009.

the Directors and the Sponsor are of the view that the Group has achieved outstanding performance ratings during the Track Record Period. the Group has been receiving letters from WBDB in respect of its performance ratings which are derived from the performance scores given in all the reports written on its performance in Government works contracts in the preceding 12 reporting periods. the operating results of the Group could be adversely affected • • • — 5 — .9% and approximately 88. the Directors believe that the Group.5% of the Group’s total revenue respectively. the Directors believe that the Group possesses the following competitive strengths: • • • • • • Established operating history and track record Well-positioning to capture the emerging business opportunities Consistently high quality of services Well-established relationships with main contractors Good relationships with subcontractors Experienced management team RISK FACTORS Risks relating to the business of the Group • The Group’s revenue during the Track Record Period was generated substantially from carrying out waterworks engineering contracts and roads and drainage services contracts in the capacity of a subcontractor The Group relies heavily on MHCC/MHWE. Based on the aforesaid letters from WBDB.SUMMARY In addition. with its experienced management team and extensive experience in implementation of waterworks projects. has established a reputation in the waterworks engineering industry in Hong Kong. Revenue generated from contracts in which the Group acted as subcontractor represented approximately 73. In particular. The Group may continue to act in such capacity in the future. If the Group is unable to recover subcontracting fees from the relevant main contractor. COMPETITIVE STRENGTHS With an operating history of over 20 years. the Group’s largest customer during the Track Record Period The Group determines the tender price based on the estimated time and costs involved in a project which may deviate from the actual time and costs incurred The Group acted as a subcontractor in most of the contracts undertaken during the Track Record Period.

regulations and requirements The Group’s business could be materially and adversely affected by the Government’s level of spending on infrastructure and civil engineering projects The Group’s business could be adversely affected by the Government’s allocation of its 2010-2011 budget on waterworks The Group’s business could be affected by adverse weather conditions Work contracts with WSD are subject to termination for convenience by WSD • • • • Risks relating to the Placing • • The Sponsor and the Underwriters are entitled to terminate the Underwriting Agreement There has been no prior public market for the Shares and the liquidity. Fee collection and profit margin depend on the terms of individual work contract and may not be regular The Group’s operations are subject to construction risk • • • • • • Risks relating to the industry in which the Group operates • • • The Group’s business is subject to obtaining a number of licences and approvals The Group’s operations are restricted to Hong Kong The Group’s operations are subject to due compliance with a number of environmental protection laws. market price and trading volume of the Shares may be volatile Investors in the Placing may experience dilution if the Company issues additional Shares in the future • — 6 — .SUMMARY • Failure to meet schedule requirements of contracts may result in liquidated damages imposed on the Group The Group is relying on certain principal subcontractors to implement the contracts The Group’s success significantly depends on the key management and its ability to attract and retain additional technical and management staff The Group’s business is labour-intensive The Group’s cash flows may fluctuate The Group’s business is project-based.

At present. As such. With the proceeds from the Placing. The Group will continue to foster its reputation and increase its market share in the waterworks engineering industry by pursuing the following strategies: Expansion of business scale The Group’s business requires significant capital. “Roads and Drainage” and “Site Formation”. in the capacity of a main contractor. Over years of participation in waterworks engineering services. to tender for projects of these three categories in the public sector in Hong Kong. the Group is eligible. the Group’s expansion has been historically constrained by the availability of financial resources and manpower of the Group. acquire equipment and machinery and recruit project management and technical personnel required for undertaking the project.SUMMARY • • No guarantee that dividends will be declared in the future Granting options under the Share Option Scheme may affect the Group’s results of operations and dilute Shareholders’ percentage of ownership Risks relating to this prospectus • Certain statistics and facts in this prospectus are extracted from various official Government sources which have not been independently verified Forward-looking statements contained in this prospectus may not be accurate • BUSINESS OBJECTIVE AND STRATEGIES Being a licenced contractor on the Contractor List under the categories of “Waterworks”. “Roads and Drainage” and “Site Formation” within 12 months from the Listing Date. In addition. the Group intends to focus on the provision of waterworks engineering services and undertake more waterworks contracts in the capacity of a main contractor in the near future. The Company does not intend to apply for promotion to Group C under the respective categories of “Waterworks”. the Group will be required to purchase construction materials. With established operating history and track record in the waterworks engineering industry and an enhanced reputation through the Listing. At the early stage of a project. the Group has not yet fulfilled the requirements for applying for promotion to Group C under the category of “Waterworks” on probationary status. The Group aims at leveraging its competitive edge in the waterworks engineering industry to become one of the leading waterworks engineering services providers to the public sector in Hong Kong which commits to strive for excellence in service quality and timeliness. the Group has built up its reputation in the waterworks engineering industry and maintained good relationship with other main contractors. the Group will have additional funds to inject into — 7 — . The then levels of employed capital and working capital of the Group pose limitations on the number and size of Government contracts undertaken by the Group as a main contractor. the Group is required to comply with the minimum employed capital and working capital requirements for retention on the Contractor List (details of which are set out in the section headed “Licencing and other requirements for Government projects” in this prospectus) to carry out Government contracts.

REASONS FOR THE LISTING The Directors believe that the listing of the Shares on GEM will enhance the Group’s profile. A sound safety system lowers the risk of accidents and improves work efficiency. The Group has received outstanding performance ratings for the quality of its works from WBDB during the Track Record Period. roads and drainage and site formation areas. the infrastructure and development projects being currently implemented or to be implemented by the Government. roads and drainage works or site formation works at some stage. to scale up the Group’s business. — 8 — . FUTURE PROSPECTS The Directors believe the Group’s proven track record in delivering works of high quality in a timely manner has placed the Group in an advantageous position to seize the growth opportunities in the civil engineering sector. In order to enhance the Group’s safety system. Not only will the replacement and rehabilitation program launched by WSD (details of which are set out in the section headed “Industry overview” in this prospectus) continue to open up numerous waterworks opportunities to the Group. It is the Group’s responsibility to provide a safe and healthy working environment for the benefit of its staff. its subcontractors and the general public. The Directors consider that maintaining work quality is of utmost importance to the Group’s ongoing development in the waterworks engineering sector and the Group’s tendering of Government contracts in the future. the Directors plan to recruit additional personnel for quality assurance of the Group. particularly in waterworks. The Placing will also strengthen the Group’s capital base and provide the Group with additional working capital to implement the future plans set out in the paragraphs headed “Business objective and strategies” and “Implementation plan” in the section headed “Future plans and use of proceeds” in this prospectus respectively. will also create tremendous business opportunities to the Group in the coming years. which the Directors believe would inevitably involve waterworks. In order to uphold the work quality of the Group. in Hong Kong. Further enhancement in work quality The Directors believe that the Group’s success depends considerably on its ability to deliver works of high quality in a timely manner. Strengthening of safety team The Directors consider that enhancing the Group’s project safety and upholding the Group’s work quality are equally important. Going forward. in which the Group has already established a proven track record. the Directors plan to recruit additional personnel to strengthen the safety team of the Group.SUMMARY TYW for enhancing TYW’s employed capital and working capital and fulfill the hardware and staffing requirements for undertaking additional contract works. the Directors intend to participate more actively in the tendering process for Government’s contracts with a view to obtaining more waterworks contracts in the capacity of a main contractor from the Government.

50 0.20 1.40 4.20 0.50 2.34 1.00 — 0.20 0.79 0.00 — 9 — . USE OF PROCEEDS The net proceeds from the Placing.27 0.28 0.SUMMARY IMPLEMENTATION PLAN The Directors have drawn up an implementation plan for the period up to 31 March 2013 with a view to achieve the business objective along with the strategies as described above.28.45 0.02 0.82 0.00 1. after deducting the underwriting fees and estimated expenses payable by the Company in connection thereto.00 0.04 0.00 — 1.28 0.0 million based on the Placing Price of HK$1.54 4. are estimated to be approximately HK$21.97 4. The Directors intend to apply the aforesaid net proceeds in the following manner: For the For the For the For the For the For the six months six months six months six months six months six months ending ending ending ending ending ending 31 March 31 March 30 September 31 March 30 September 30 September 2013 Total 2012 2012 2011 2011 2010 approximately approximately approximately approximately approximately approximately approximately HK$ million HK$ million HK$ million HK$ million HK$ million HK$ million HK$ million Expansion of business scale • Acquisition of equipment and machinery • Recruitment of additional staff Further enhancement in work quality • Recruitment of additional quality assurance staff Strengthening of safety team • Recruitment of safety staff Repayment of Shareholder’s loan Repayment of finance leases 2.20 0.28 1.28 0.17 0.00 — — — — 6.00 # — 0.28 0.50 * 3.04 — — — — — 4.31 0.50 2.65 3.06 19.73 7. Details of the implementation plan are set out in the paragraph headed “Implementation plan” in the section headed “Future plans and use of proceeds” in this prospectus.20 0.

SUMMARY
* Out of HK$6.5 million, HK$4.0 million will be applied to the prospective projects, details of which are disclosed in the sub-paragraph headed “For the six months ending 31 March 2011” under the paragraph headed “Implementation plan” under the section headed “Future plans and use of proceeds” in this prospectus. # Out of HK$3.0 million, HK$2.0 million will be applied to the prospective projects, details of which are disclosed in the sub-paragraph headed “For the six months ending 31 March 2011” under the paragraph headed “Implementation plan” under the section headed “Future plans and use of proceeds” in this prospectus.

The balance of approximately HK$2.0 million will be used for general working capital of the Group. Based on current estimations by the Directors, the net proceeds from the Placing will be sufficient to finance the Group’s business plan as scheduled up to 31 March 2013. In particular, approximately HK$6.5 million and approximately HK$3.0 million of the net proceeds will be used to acquire equipment and machinery and recruit additional staff respectively to undertake waterwork contracts (including the New Project and the prospective projects) by the Group as a main contractor to enable the Group to scale up its business. In the event that the Group fails to obtain the prospective projects but is successfully awarded with other waterworks contract(s) from WSD, the Directors will apply the net proceeds originally allocated to the prospective projects to such waterworks contract(s). To the extent that the net proceeds from the Placing are not immediately required for the above purposes, the Directors currently intend that such proceeds will be placed on short-term deposits with licenced banks and/or financial institutions in Hong Kong. RELATIONSHIP WITH MHCC/MHWE Background MHCC and MHWE are both wholly-owned subsidiaries of Ming Hing Waterworks, a company with its issued shares listed on the Main Board of the Stock Exchange. Ming Hing Waterworks, through its subsidiaries, is principally engaged in the provision of maintenance and construction works on civil engineering contracts including waterworks engineering, road works and drainage and slope upgrading services in Hong Kong. Business relationship The business relationship between the Group and MHWE started in 2001 with a waterworks project in the North District in the New Territories, whereby TYW acted as a subcontractor to MHWE. TYW’s engagement in respect of the aforesaid waterworks project was initiated by Mr. Kan who approached MHWE after Mr. Kan becoming aware of the relevant Government contract being awarded to MHWE. Since the inception of business relationship with MHWE as described above, MHCC/MHWE, as a main contractor, had subcontracted a few contracts from WSD to the Group for implementation. In respect of the eight contracts completed by the Group during the Track Record Period, two contracts were obtained from MHCC/MHWE, and in respect of the five contracts in progress as at the Latest Practicable Date, three contracts were obtained from MHCC/MHWE. For the year ended 31 March 2009, revenue derived from MHWE amounted to approximately HK$2.5 million, representing approximately 2.9% of the Group’s total revenue. No revenue was derived from MHWE for the year ended 31 March 2010. For each of the two years ended 31 March 2009 and 2010, revenue

— 10 —

SUMMARY
derived from MHCC amounted to approximately HK$57.8 million and approximately HK$131.4 million respectively, representing approximately 65.9% and 88.3% of the Group’s total revenue in the respective year. MHCC/MHWE has been the Group’s largest customer since the year ended 31 March 2008. The Group had commenced obtaining interest-bearing advances from MHCC in 2007 in respect of a water mains replacement and rehabilitation project (contract numbered 21/WSD/06) subcontracted by MHCC. Apart from the above contract, the Group has also received advance from MHCC in respect of another water mains replacement and rehabilitation project (contract numbered 18/WSD/08) subcontracted by MHCC. Based on the disclosure in the annual report of Ming Hing Waterworks for the year ended 31 March 2010, the Directors believe that Ming Hing Waterworks has also made advances to its other principal subcontractors apart from the Group. As at 31 March 2009 and 2010, advances from MHCC/MHWE amounted to approximately HK$8.2 million and approximately HK$9.0 million respectively, and the maximum balances of advances during the aforesaid two years were approximately HK$14.0 million and approximately HK$11.2 million respectively. Among the balances outstanding as at 31 March 2009 and 2010, approximately HK$8.2 million and approximately HK$3.5 million respectively carried interest at HIBOR (being 0.11%) plus 4%. The aforesaid advances will normally be fully set off against certified payments payable by the main contractors to the Group upon completion of the relevant contracts. The terms of the aforesaid contracts, including the advances, were arrived at between the Group and MHCC/MHWE after arm’s length negotiation. The Directors consider that if advances were not made by MHCC/MHWE to the Group for implementation of the aforesaid contracts, the Group could have sought alternative financing methods such as obtaining loans from Mr. Kan, the Controlling Shareholder, bringing in new shareholder(s) to the Group or obtaining external borrowings. Given that the interest rate charged by MHCC/MHWE is comparable to the interest rates charged by a licenced bank in Hong Kong on the loans previously granted to the Group (being 1% per annum over the best lending rate of such bank of 5% for the HK$4.0 million non-revolving loan and a flat rate of 3.75% per annum (subject to the right of such bank to renegotiate in the event that its best lending rate, being 5%, changes between the date of the relevant facility letter and the date of drawdown) for the HK$2.0 million non-revolving loan respectively), the advances from MHCC/MHWE do not require any asset pledge or security from the Group or guarantee from the Controlling Shareholders and the obtaining of the advances would enhance the liquidity of the Group, the Directors consider it beneficial to the Group to obtain such advances for the purpose of recruiting additional workers and acquiring the equipment and machinery and/or materials necessary to carry out the contract works for which MHCC/MHWE was the main contractor. Furthermore, as it is indicated in the annual report of Ming Hing Waterworks for the year ended 31 March 2010 that Ming Hing Waterworks has made advances to its other principal subcontractors, and the Group also has past experience in receiving advances from another independent main contractor and making advances to subcontractors of the Group, the Directors believe it is not uncommon for a main contractor to make advances to subcontractors. MHCC/MHWE had purchased construction materials for the Group’s use in carrying out waterworks engineering services as its subcontractor pursuant to the terms of the contracts entered

— 11 —

SUMMARY
into between MHCC/MHWE and the Group during the Track Record Period. For each of the two years ended 31 March 2009 and 2010, purchase of construction materials by MHCC/MHWE for the Group amounted to approximately HK$16.1 million and approximately HK$29.8 million respectively. Details of the projects for which the above construction materials were purchased are disclosed in the sub-paragraph headed “Procurement of materials and equipment” in the paragraph headed “Operations” in the section headed “Business” in this prospectus. As there was another independent main contractor which had purchased construction materials for the Group and the Group also has past experience in purchasing construction materials for its subcontractors, the Directors believe that it is not uncommon for a main contractor to purchase materials for its subcontractor. The terms of the contracts entered into between the Group and MHCC/MHWE in respect of provision of waterworks engineering services by the Group as a subcontractor to MHCC/MHWE were arrived at after arm’s length negotiation, having taken into consideration the nature, size, capital requirement and complexity of the relevant projects, between the Group and MHCC/MHWE. The Directors are of the view that the terms of the relevant contracts (including the purchase of construction materials by and advances from MHCC/MHWE) were on normal commercial terms and the relevant contracts were entered into in the ordinary and usual course of business of the Group. Reliance on MHCC/MHWE For each of the two financial years ended 31 March 2009 and 2010, MHCC/MHWE was the largest customer of the Group, contributing approximately 68.8% and approximately 88.3% to the Group’s total turnover. The Directors consider the Group’s reliance on MHCC/MHWE during the Track Record Period is attributable to a combination of factors including (i) the length of the subject contracts; and (ii) the then financial resources and capacity of the Group. Due to the volume and complexity of works involved, civil engineering contracts (including waterworks contracts) generally cover a term of two years or more. As shown in the paragraph headed “Contracts completed and contracts in progress” under the section headed “Business” in this prospectus, most of the works contracts undertaken by the Group have a term of over two years. For this reason, certain subcontracts obtained by the Group from MHCC/MHWE prior to the Track Record Period remain to be in progress within the Track Record Period. Furthermore, the Group had, during the Track Record Period, devoted a considerable amount of financial resources and manpower on the implementation of contracts numbered 21/WSD/06 and 18/WSD/08, and the Group therefore had not taken on other large-scale projects. The Directors believe that the reliance on MHCC/MHWE will be gradually reduced after the Listing. On one hand, it is the Group’s business objective to undertake more work contracts in the capacity of a main contractor in the future and the Directors intend to more actively participate in the tendering process for Government contracts. As set out in the section headed “Future plans and use of proceeds” in this prospectus, the Directors expect to obtain two more waterworks contracts directly from WSD next year and have allocated an aggregate of HK$6.0 million out of the net proceeds from the Placing to acquire the necessary equipment and machinery and recruit the required staff for the aforesaid two projects. The Group’s effort in obtaining contracts directly from WSD is evidenced by the Group’s successful bid for a replacement and rehabilitation works contracts of approximately HK$74.7 million in contract value in May 2010. In anticipation of the completion of contract numbered 21/WSD/06 by early next year, the Group has been closely monitoring the tender notices

— 12 —

SUMMARY
and will participate in the tendering process if suitable opportunities arise. The Group has been pursuing business opportunities with main contractors other than MHCC/MHWE. In July 2010, the Group received a letter confirming acceptance of its quotation submitted in June 2010 from a main contractor in respect of a waterworks contract with estimated contract value of approximately HK$4.4 million. As at the Latest Practicable Date, the Group and such main contractor were still in the process of finalising the terms of the relevant waterworks contract. The Group also submitted a quotation to another main contractor in respect of waterworks with estimated contract value of approximately HK$52.4 million in July 2010. The latter quotation relates to waterworks which form part of a Highways Department (路政署) project. As at the Latest Practicable Date, the Directors were not able to estimate whether the Group would be awarded the subcontract works for such project. Both of the aforesaid main contractors are not associated with Ming Hing Waterworks or its subsidiaries. It is the intention of the Group to continue to actively seek business opportunities with main contractors other than MHCC/MHWE. In view of the above, the Directors believe the Group’s reliance on MHCC/MHWE after Listing will be significantly reduced from the current level. Recent development of Ming Hing Waterworks As disclosed in a circular of Ming Hing Waterworks dated 12 May 2010 (the “MH Circular”), its indirect wholly-owned subsidiary entered into an agreement relating to an acquisition of interest in a mining business. The directors of Ming Hing Waterworks consider that it is beneficial for its group to diversify its existing business portfolio in view of the deteriorating financial performance of its waterworks engineering business. In particular, the directors of Ming Hing Waterworks explained that the decline in its profit was primarily attributable to the drop in gross profit margin as a result of increasing construction material and labour costs. It is also disclosed in the MH Circular that, apart from expanding the business scope to engage in mining business, Ming Hing Waterworks intends to continue with the waterworks engineering business depending on the then business environment and prospects. Although MHCC/MHWE was the largest customer of the Group during the Track Record Period, the Directors and the Sponsor do not consider the diversification of Ming Hing Waterworks into mining business will pose significant adverse impact on the business and prospects of the Group. The Group has worked with a number of main contractors, some of which have business relationships with the Group for more than five years. During the Track Record Period, the Group worked with four main contractors apart from MHCC/MHWE. In the event that Ming Hing Waterworks scales down or discontinues its waterworks engineering business, the Directors are optimistic that the Group will be able to obtain contracts from other main contractors or directly obtain contracts from WSD based on the Group’s established operating history and track record. From an industry perspective, the Directors believe that the waterworks industry will continue to present numerous waterworks opportunities to the Group in view of the replacement and rehabilitation programme and other public sector projects. Furthermore, TYW has consistently achieved outstanding performance ratings for the quality of its works from WBDB, which will increase the Group’s competitiveness in tendering for Government contracts as a main contractor. The Directors note from the latest published financial reports of Ming Hing Waterworks that gross profit margin and net profit margin of Ming Hing Waterworks have been generally showing a declining trend. The Directors also note that the directors of Ming Hing Waterworks attributed the

— 13 —

SUMMARY
decline of the gross profit of Ming Hing Waterworks to rising raw material and labour costs. The Directors are not in a position to comment on the deteriorating financial performance of Ming Hing Waterworks due to the insufficiency of public information. However, based on the Group’s past business dealings with Ming Hing Waterworks, the Directors believe that the relatively low gross profit margin and net profit margin of Ming Hing Waterworks may be explained by the fact that Ming Hing Waterworks has subcontracted some of its contracts to subcontractors. In respect of the contracts the Group obtained from MHCC/MHWE, MHCC/MHWE entered into a main contract with WSD and then entered into a subcontract with the Group pursuant to which it subcontracted the overall management and implementation of the entire contract works to the Group. In return, MHCC/MHWE would charge the Group a contract fee representing a fixed percentage of the total contract value and a nominal handling fee for purchase of construction materials on behalf of the Group. As the certified payment for the interim works would be made to MHCC/MHWE by WSD, MHCC/MHWE would then make payment to the Group after deduction of the aforesaid contract fee, handling fee and if applicable, costs of purchase of construction materials and other reimbursements. Given that the fee receivable by MHCC/MHWE on the contracts granted to the Group largely comprise the contract fee which represents a fixed percentage of the total contract value, the gross profit margin of such contracts to MHCC/MHWE would be close to the aforesaid fixed percentage. The Group, as the party implementing the contracts, has more control over the costs of service through actively managing and implementing the project. The better the Group controlled its costs of service and minimized its execution risks, the higher the gross profit margin would be for the Group. Based on the Directors’ understanding, the Group’s gross profit margins for the contracts obtained from MHCC/MHWE are significantly higher than MHCC/MHWE’s gross profit margins for the same contracts. Therefore, despite the Directors generally share the view that the cost of construction materials and labour have been rising in the past few years, the management of the Group has been successfully maintaining its gross profit margin by carefully evaluating the cost requirement before submitting a tender, actively managing the projects and closely monitoring the costs involved in provision of service. Going forward, the management of the Group will continue to put considerable efforts in maintaining its gross profit margin. The Sponsor has reviewed the terms of the subcontracts entered into between the Group and MHCC/MHWE and the financial information in respect of such subcontracts provided by the Group. The Sponsor notes that the Group’s gross profit margins during the Track Record Period were significantly higher than the percentage of the contract fee charged by MHCC/MHWE to the Group for the same subcontracts. Based on the information available to the Sponsor, the Sponsor considers that the Directors’ belief in relation to the Group’s higher profit margin than Ming Hing Waterworks is reasonable. Director’s interest in Ming Hing Waterworks As at the Latest Practicable Date, Mr. Chia, an executive Director, was interested in less than 1.0% in the issued share capital of Ming Hing Waterworks. Mr. Chia has not held and does not presently hold any position in or otherwise was not involved and is not presently involved in the daily operations of Ming Hing Waterworks or any of its subsidiaries or associated companies. Mr. Chia

— 14 —

327) 11. are not connected persons of the Company under the GEM Listing Rules. including the notes thereto.558) 16.079 2.405 148.838 — 15 — . which is extracted from the Accountants’ Report set out in Appendix I to this prospectus.617) 17. set out in Appendix I to this prospectus.696 (70. The following summary should be read in conjunction with the financial statements set out in the Accountants’ Report. Combined statement of comprehensive income Year ended 31 March 2009 2010 HK$’000 HK$’000 Revenue Cost of service Gross profit Other income Administrative expenses Profit from operations Finance costs Profit before income tax Income tax Profit and total comprehensive income for the year 87.396 (3.972 811 (6. including its subsidiaries and associated companies.732 (2.539 (5.753) 21.872) 26.431) 14. none of the Directors or their associates had any shareholding interest in Ming Hing Waterworks as at the Latest Practicable Date.SUMMARY holds his interests in Ming Hing Waterworks for investment purpose. SUMMARY OF FINANCIAL INFORMATION The following tables set forth a summary of the combined financial information of the Group for the two years ended 31 March 2009 and 2010. Save as disclosed above.187 (455) 13.030 (634) 20.844 (121. Based on the above. Ming Hing Waterworks.

479) (1.242) (10.196 53.909 (1.324 29.072 36.484 39.SUMMARY Selected combined statement of financial position data As at 31 March 2009 2010 HK$’000 HK$’000 Assets Non-current assets Current assets Total assets Liabilities Current liabilities Non-current liabilities Total liabilities Total equity 8.389 61.893 13.308 48.169 (5.018) 11.873 2.697 45.340 Selected combined statement of cash flows data Year ended 31 March 2009 2010 HK$’000 HK$’000 Net cash generated from operating activities Net cash used in investing activities Net cash used in financing activities Net (decrease)/increase in cash and cash equivalents Cash and cash equivalents at the beginning of year Cash and cash equivalents at the end of year 4.579) 10.821 24.579) 27.834) (100) (1.124 (390) (3.330 — 16 — .497 2.357 22.697 27.

would provide additional capital for the Group to undertake more contract works.000. . .000 to Mr.000 respectively to Mr.000) during the Track Record Period were at reasonable levels respectively. . . . . . . . . to reward his past investments in and support and contribution to the Group.SUMMARY Dividend distribution The Group did not declare any dividends for the year ended 31 March 2009. Kan and TYC declared dividends of approximately HK$8. and (v) the Shareholders will be entitled to the future profits of the Group after the Listing. 31 March 2010: 29. . . . The market capitalisation is calculated on the basis of 99. . .000 Shares in issue immediately after completion of the Placing and the Capitalisation Issue. TYW and TY Civil declared and paid dividends of HK$245. . . . .0 million Unaudited pro forma net tangible asset value per Share (Note 2) Notes: . . Kan. . . HK cents 39. .7 1. — 17 — .000. For the year ended 31 March 2010. (ii) the level of distribution is appropriate as a sufficient portion of the net profits attributable to the Shareholders has been retained to support the Group’s ongoing operations and compliance with the employed capital and working capital requirements as required by WBDB for retention on the Contractor List. the Directors consider that it is commercially justified to declare and pay the aforesaid dividends to Mr. . . .1%) and the Group’s finance costs (for the year ended 31 March 2009: approximately HK$455. . . . The Directors also consider that it was in the interest of the Company and the Shareholders as a whole to declare and pay the aforesaid dividends to Mr. . . Despite the aforesaid dividends. . .000 Shares in issue at the Placing Price of HK$1.000 to Mr. . . . (iii) the Group could utilise a combination of retained profits and borrowings to finance the Group’s working capital needs rather than solely relying on retained profits. .000 and HK$9. for the year ended 31 March 2010: approximately HK$634. . Kan for the following reasons: (i) the aforesaid dividends were declared to Mr. calculated as a percentage of the aggregate of the amount of total bank borrowings and obligations under finance lease and advance received from customers to total assets (31 March 2009: 29. .28 R11. . . . Kan. . .200. . . . . . . . . . if otherwise not declared and paid. . . . . . . The unaudited pro forma adjusted net tangible asset value per Share has been arrived at after the adjustments referred to in the paragraph headed “Unaudited pro forma adjusted net tangible assets” under the section headed “Unaudited pro forma financial information” in Appendix II to this prospectus and on the basis of 99. . the then sole shareholder of TYW and TY Civil. . . 2. . . . . . (iv) the Group’s gearing ratios. . . .23(6) Market capitalisation (Note 1) . Kan as rewards for his past contribution and encouragement for his continued support to the Group’s business. .28 per Share immediately following completion of the Placing and the Capitalisation Issue but without taking into account any Shares which may be issued upon the exercise of any options which may be granted under the Share Option Scheme. . . . . . STATISTICS OF THE PLACING Placing Price . .625. . .200. .6%. .700. . approximately HK$127. Kan in April 2010. . . . . TY Civil also declared and paid a final dividend of HK$4. . . . . . . . . . Kan which was set off against the amount due from Mr. HK$1. .

as consolidated and revised) of the Cayman Islands the Companies Ordinance (Chapter 32 of the Laws of Hong Kong). Cheng the Companies Law. 22 (Law 3 of 1961. Cap. unless the context otherwise requires.DEFINITIONS In this prospectus. a Substantial Shareholder and a company incorporated in the BVI which is wholly and beneficially owned by Mr.000 Shares upon capitalisation of a certain sum standing to the credit of the share premium account of the Company referred to in the sub-paragraph headed “Written resolutions of all Shareholders passed on 11 August 2010” under the paragraph headed “Further information about the Company and its subsidiaries” in Appendix V to this prospectus the contractor all risk or third party liability insurances the Central Clearing and Settlement System established and operated by HKSCC Chuwei (BVI) Limited. a summary of which is set out in Appendix IV to this prospectus has the meaning ascribed to it under the GEM Listing Rules the board of Directors a day (other than a Saturday or Sunday or public holiday) on which licenced banks in Hong Kong are generally open for normal banking business the British Virgin Islands the issue of 74.399. the following expressions shall have the following meanings: “Accountants’ Report” the accountants’ report as set out in Appendix I to this prospectus the agreement dated 1 June 2010 entered into between the Company and HKLC in relation to the provision of announcement posting service by HKLC to the Company as more particularly described in the section headed “Connected transactions” in this prospectus the articles of association of the Company adopted on 11 August 2010 and as amended from time to time. as amended. supplemented or otherwise modified from time to time “Announcement Posting Agreement” “Articles” or “Articles of Association” “associate(s)” “Board” “Business Day” “BVI” “Capitalisation Issue” “CAR/TPL Insurance” “CCASS” “Chuwei” “Companies Law” “Companies Ordinance” — 18 — .

such subsidiaries or the businesses which have since been acquired or carried on by them the Hong Kong Special Administrative Region of the PRC Hong Kong Financial Reporting Standards (including Hong Kong Accounting Standards and Interpretations) issued by HKICPA “connected person(s)” “Contractor List” “Controlling Shareholder(s)” “Director(s)” “ETWB” “ETWB Handbook” “Exchange Website” “GEM” “GEM Listing Rules” “Government” “Government Gazette” “Group” “HK” or “Hong Kong” “HKFRSs” — 19 — . statutory notices for public tenders the Company and its subsidiaries or. Kan director(s) of the Company Environment. among other things.hkexnews. Transport and Works Bureau of the Government (環境運輸及工務局).DEFINITIONS “Company” Tsun Yip Holdings Limited (進業控股有限公司). formerly a policy bureau of the Government. in respect of the period before the Company became the holding company of its present subsidiaries. where the context otherwise requires. namely Shunleetat and Mr. a company incorporated in the Cayman Islands with limited liability on 15 March 2010 has the meaning ascribed to it under the GEM Listing Rules the list of approved contractors for public works (認可公共工 程承建商名冊) maintained by WBDB has the meaning ascribed to it under the GEM Listing Rules and. means the controlling shareholders of the Company. the duties of which are now taken over by Environment Bureau.hk. Transport and Housing Bureau and WBDB following the reorganisation of the Policy Bureau and Government Secretariat Contractor Management Handbook (Revision B) July 2005 (承建商管理手冊 — 修訂版B) issued by ETWB http://www. in the context of this prospectus. being an Internet website operated by the Stock Exchange the Growth Enterprise Market of the Stock Exchange the Rules Governing the Listing of Securities on GEM the Government of Hong Kong the official publication of the Government for.

a company incorporated in Hong Kong which is wholly and beneficially owned by Mr. type 4 (advising on securities) and type 6 (advising on corporate finance) regulated activities. the directors. the substantial shareholders (as defined in the GEM Listing Rules) of the Company and its subsidiaries and their respective associates International Organization for Standardization 13 August 2010.DEFINITIONS “HKICPA” “HKLC” Hong Kong Institute of Certified Public Accountants Hong Kong Listco Limited. 1 Anton Street. being the sole bookrunner and the lead manager of the Placing under the SFO the agreement dated 1 May 2009 entered into between TYW (as tenant) and HKLC (as landlord) (as amended by a supplemental agreement dated 7 May 2010 made by the same parties) in relation to the office premises situated at Rooms 1 & 3. being the latest practicable date prior to the printing of this prospectus for ascertaining certain information contained in this prospectus CIMB Securities (HK) Limited. a licenced corporation under the SFO permitted to engage in type 1 (dealing in securities). the chief executives. Anton Building. Wanchai. 7/F. Chia the Macau Special Administrative Region of the PRC “HKSCC” “HKSCC Nominees” “HSBC” “Independent Third Party(ies)” “ISO” “Latest Practicable Date” “Lead Manager” “Lease Agreement” “Listing” “Listing Date” “Listing Division” “Lotawater” “Macau” — 20 — . Hong Kong the listing of the Shares on GEM the date on which the trading of the Shares first commences on GEM the listing division of the Stock Exchange Lotawater (BVI) Limited. Chia Hong Kong Securities Clearing Company Limited HKSCC Nominees Limited. a wholly-owned subsidiary of HKSCC The Hongkong and Shanghai Banking Corporation Limited a person(s) or company(ies) which is/are independent of and not connected with any member of the Group. a company incorporated in the BVI which is wholly and beneficially owned by Mr.

800. an executive Director and a Substantial Shareholder Mr. Chia Thien Loong. an executive Director and a Controlling Shareholder the waterworks contract numbered 9/WSD/09 relating to replacement and rehabilitation of water mains in Sai Kung awarded by WSD to the Group in May 2010 with a term of 911 days commencing from 28 May 2010 and ending on 23 November 2012 Optima Capital Limited. Chia” “Mr. a company incorporated in the Cayman Islands with limited liability and whose issued shares are listed on the Main Board of the Stock Exchange. Cheng Ka Ming. a wholly-owned subsidiary of Ming Hing Waterworks. an executive Director Mr. which is an Independent Third Party Ming Hing Waterworks Holdings Limited (stock code: 402). Martin (鄭家銘). Stock Exchange trading fee and SFC transaction levy) of HK$1.000 new Shares being offered at the Placing Price for subscription under the Placing subject to the terms and conditions as described in the section headed “Structure and conditions of the Placing” in this prospectus “MHWE” “Ming Hing Waterworks” “Mr. Kan” “New Project” “Optima Capital” or “Sponsor” “Placing” “Placing Price” “Placing Shares” — 21 — .28 the 24. Eric John (謝天龍). Fung” “Mr.DEFINITIONS “MHCC” Ming Hing Civil Contractors Limited. Fung Chung Kin (馮中健). an executive Director and a Substantial Shareholder Mr. Kan Kwok Cheung (簡國祥). the founder of the Group. a wholly-owned subsidiary of Ming Hing Waterworks. which is an Independent Third Party Mr. a licenced corporation under the SFO permitted to engage in type 1 (dealings in securities). which is an Independent Third Party Ming Hing Waterworks Engineering Company Limited. type 4 (advising on securities) and type 6 (advising on corporate finance) regulated activities under the SFO the conditional placing of the Placing Shares by the Underwriters on behalf of the Company at the Placing Price as described in the section headed “Structure and conditions of the Placing” in this prospectus the price per Placing Share (exclusive of brokerage. Cheng” “Mr. the chairman of the Board.

01 each in the share capital of the Company holder(s) of the Share(s) the share option scheme of the Company adopted on 11 August 2010.DEFINITIONS “PRC” or “China” the People’s Republic of China which. a Controlling Shareholder and a company incorporated in the BVI which is wholly and beneficially owned by Mr. for the purpose of this prospectus. a summary of the principal terms of which is set out in the sub-paragraph headed “Share Option Scheme” under the paragraph headed “Further information about Directors. shall exclude Hong Kong. Kan the list of approved suppliers of materials and specialist contractors for public works (認可公共工程物料供應商及專 門承造商名冊) maintained by WBDB The Stock Exchange of Hong Kong Limited has the meaning ascribed to it in section 2 of the Companies Ordinance “Purplelight” “Registration Scheme” “Reorganisation” “SFC” “SFO” “Share(s)” “Shareholder(s)” “Share Option Scheme” “Shunleetat” “Specialist List” “Stock Exchange” “subsidiary(ies)” — 22 — . Macau and Taiwan Purplelight (BVI) Limited. staff and experts” in Appendix V to this prospectus Shunleetat (BVI) Limited. a Substantial Shareholder and a company incorporated in the BVI which is wholly and beneficially owned by Mr. management. Fung Voluntary Subcontractor Registration Scheme (非强制性分包 商註冊制度) the corporate reorganisation of the Group effected in preparation for the Listing as described under the sub-paragraph headed “Reorganisation” in the paragraph headed “Further information about the Company and its subsidiaries” in Appendix V to this prospectus the Securities and Futures Commission in Hong Kong the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) as amended or otherwise modified from time to time share(s) of HK$0.

in the context of this prospectus. Kan started to carry on the Group’s business in 1989 Tsun Yip Civil Construction Company Limited. a company incorporated in Hong Kong with limited liability on 16 June 2000 and an indirect wholly-owned subsidiary of the Company Tsun Yip Waterworks Construction Company Limited.. Lotawater. a company incorporated in Hong Kong with limited liability on 6 February 1996 and an indirect wholly-owned subsidiary of the Company TYW (BVI) Limited. a sole proprietorship through which Mr. respectively. and Purplelight and Mr. Chuwei. Shunleetat. the lawful currency of Hong Kong “Takeovers Code” “Track Record Period” “TYC” “TY Civil” “TYW” “TYW (BVI)” “Underwriters” “Underwriting Agreement” “WBDB” “WSD” “HK$” or “HK dollar(s)” and “HK cents” — 23 — . Purplelight. particulars of which are set forth in the section headed “Underwriting” in this prospectus Works Branch Development Bureau (發展局工務科) of the Government Water Supplies Department of the Government (水務署) Hong Kong dollar(s) and cent(s). namely Chuwei and Mr. the Lead Manager and the Underwriters. Fung the Hong Kong Code on Takeovers and Mergers the period comprising the two financial years ended 31 March 2009 and 2010 Tsun Yip Construction Co. means the substantial shareholders of the Company. Cheng. a company incorporated in the BVI with limited liability on 2 July 2009 and a wholly-owned subsidiary of the Company the underwriters of the Placing listed in the paragraph headed “Underwriters” in the section headed “Underwriting” in this prospectus the conditional underwriting agreement relating to the Placing dated 20 August 2010 and entered into between the Company. the Sponsor.DEFINITIONS “Substantial Shareholder(s)” has the meaning ascribed to it under the GEM Listing Rules and. the executive Directors.

” “%” kilometre metre square metre cubic metre million cubic metre square feet per cent.ft.DEFINITIONS “km” “m” “m 2 ” or “sq. — 24 — .m.” “m 3 ” “mcm” “sq.

MHCC/MHWE.9% and approximately 88.8% and approximately 88. Revenue generated from subcontract works granted by a main contractor. There is no assurance that the Group will be able to maintain its relationship with MHCC/MHWE and to continue to secure work contracts from them in the future. the business. The advance from such independent main contractor was unsecured and non-interest bearing. As the revenue generated from subcontract works granted by MHCC/MHWE accounted for a significant share of the Group’s revenue during the Track Record Period. In the event that the Group fails to secure such work contracts from the main contractors in future. In addition. the holding company of MHCC/MHWE. represented approximately 68. The Group relies heavily on MHCC/MHWE.3% of the Group’s total revenue respectively. If any of the following risk factors and uncertainties develops into actual events. recently announced its diversification into mining business. which has established business relationship with the Group since 2001. financial position and liquidity. the Group may incur additional finance costs which in turn may adversely affect the Group’s profitability.RISK FACTORS Prospective investors should carefully consider and evaluate the following risk factors and all other information contained in this prospectus before deciding to invest in the Shares. the Group’s largest customer during the Track Record Period During the Track Record Period. the Group generated a substantial part of its revenue from carrying out waterworks engineering contracts and roads and drainage services contracts in the capacity as a subcontractor. RISKS RELATING TO THE BUSINESS OF THE GROUP The Group’s revenue during the Track Record Period was generated substantially from carrying out waterworks engineering contracts and roads and drainage services contracts in the capacity of a subcontractor During the Track Record Period. Ming Hing Waterworks. revenue generated from contracts in which the Group acted as subcontractor represented approximately 73.22(1) — 25 — . Furthermore.5% of the Group’s total revenue respectively. obtained from them respectively. financial conditions or results of operations could be materially and adversely affected. as a subcontractor. the customer base of the Group was highly concentrated. There is no assurance that R14. results of operations and profitability may be adversely affected. the Group’s business. the Group had obtained advances from MHCC/MHWE and another independent main contractor during the Track Record Period for implementation of projects. the trading price of the Shares could decline due to any of these risk factors and uncertainties. or the advances (if made to the Group) are not sufficient to cover the cash flows required for project implementation so that the Group is required to obtain bank financing to fund the shortfall. In the event that the Group fails to obtain advances from such independent main contractor or other main contractors so that the Group is required to obtain bank financing for project implementation. the Group’s relatively high profit margin during the Track Record Period was due to the contracts with MHCC/MHWE. For each of the years ended 31 March 2009 and 2010. The aforesaid revenue was attributable to five and two main contractors respectively. In such case. All of these subcontract works the Group obtained from MHCC/MHWE was granted by WSD to MHCC/MHWE. or the terms of the advances (if made to the Group) are less favourable than the existing terms.

the Group’s business. The Group is therefore exposed to credit risk of main contractors in projects under which the Group acts as subcontractor. or the terms of the advances are less favourable than the existing terms. The Group needs to estimate the time and costs in order to determine the tender price. If the Group is unable to recover subcontracting fees from the relevant main contractor. additional variations to the construction plans requested by the customers. the main contractor may not be able to receive payment from the Government and may thus default payment to the Group. The Group may continue to act in such capacity in the future. Payment from the main contractors to the Group may also be affected by the progress of the project. which in turn may adversely affect the Group’s financial condition. In addition. profitability or liquidity. financial condition and liquidity. In the event that the Group fails to secure work contracts from MHCC/MHWE due to their scaling down or discontinuation of waterworks engineering business or other reasons and the Group fails to secure work contracts from other customers to replace such loss of business.5% of the Group’s total revenue was derived from projects under which the Group was engaged as a subcontractor during the Track Record Period. The actual time taken and cost involved in completing contracts undertaken by the Group may be adversely affected by many factors. Revenue generated from contracts in which the Group acted as subcontractor represented approximately 73. the Group had obtained advances from MHCC/MHWE which were unsecured and interest-bearing for implementation of the projects the Group obtained from MHCC/MHWE during the Track Record Period. There is no assurance that the actual execution time and costs would not exceed the Group’s estimation during the actual implementation of the project. the Group may incur additional finance costs which in turn may adversely affect the Group’s profitability. adverse weather conditions. disputes with subcontractors.9% and approximately 88. the operating results of the Group could be adversely affected During the Track Record Period. Any of these adverse factors can give rise to delays in completion of works or cost overruns or even unilateral termination of projects by the clients.RISK FACTORS Ming Hing Waterworks or its subsidiaries will not scale down or discontinue its waterworks engineering business in the future. The Group determines the tender price based on the estimated time and costs involved in a project which may deviate from the actual time and costs involved Contracts are normally awarded through competitive tendering process. In the event that the main contract is terminated due to the fault or negligence of the main contractor. approximately 73.9% and approximately 88. In the event that the Group fails to obtain advances from MHCC/MHWE so that the Group is required to obtain bank financing for project implementation.5% of the Group’s total revenue respectively. accidents. all of the Group’s revenue was generated from providing civil engineering services to the public sector. changes in the Government’s priorities and unforeseen problems and circumstances. The Group acted as a subcontractor in most of the contracts undertaken during the Track Record Period. In particular. including shortage or cost escalation of materials and labour. or the advances offered by MHCC/MHWE are not sufficient to cover the cash flows required for project implementation so that the Group is required to obtain certain bank financing to fund the shortfall. the financial — 26 — . results of operations and profitability may be adversely affected.

Mr. which could adversely affect our liquidity and cash flows and have a material adverse effect on our business. Lau Wai Chun. Liquidated damages are typically levied at a rate provided in the relevant contract for each day of delay. representing approximately 34. who is an executive Director. result of operations. Kan. In the event that any of the major subcontractors is unable to provide the required services to the Group or the costs for them to provide those required services increase substantially.9% of the total costs of service respectively. Mr. who is a project manager of the Group. the Group’s business. The Group’s success significantly depends on the key management and its ability to attract and retain additional technical and management staff The Directors believe that the success of the Group is. has over 20 years of experience in the field of civil engineering services in Hong Kong.8% and approximately 22. During the same period. has more than 30 years of experience in project management for civil engineering projects. reputation and prospects. who is the founder of the Group and the chairman of the Board. Fung. attributable to the managerial skills and experience of certain key members of the management. Mr. the Group’s subcontracting costs amounted to approximately HK$24. There is no assurance that those major subcontractors will be able to continue to provide services to the Group at fees acceptable to the Group or the Group can maintain its relationship with them in the future. Furthermore. results of operations.1% of the Group’s total subcontracting costs respectively. has more than 14 years of experience in corporate finance.RISK FACTORS position of the main contractors and the creditworthiness of the main contractors. the executive Directors. financial condition. who is a contracts manager of the Group. namely Mr. profitability and liquidity may be adversely affected. management and investment. has more than 28 years of experience in supervision of construction work. Cheng. profitability and liquidity of the Group may be adversely affected. who is an executive Director. to a significant extent.6 million and approximately HK$40.3% and approximately 48. Failure to meet schedule requirements of contracts may result in liquidated damages imposed on the Group Substantially all of the Group’s work contracts are subject to specific completion schedule requirements with liquidated damages charged to the Group if the Group does not meet the schedules. the results of operations. Leung Hon Chung. who is an executive Director. Any failure to meet the schedule requirements of the work contracts could cause the Group to pay significant liquidated damages. has more than 25 years of experience in civil engineering or construction. Chia. Jacky. and Mr. the business. Mr. there is no assurance that the main contractors would honour payment to the Group after having received contract payments from the Government. In the event of any delay and/or default in payment by the main contractors.9% and approximately 32. The Group is relying on certain principal subcontractors to implement the contracts For the two financial years ended 31 March 2009 and 2010. has more than 29 years of experience in the construction industry.1% of the Group’s total subcontracting costs and the Group’s five largest subcontractors accounted for approximately 71. Further information about their experiences is set out in the — 27 — . in particular.1 million respectively. the Group’s largest subcontractor accounted for approximately 35.

During the Track Record Period. the income flow of the business of the Group may not be entirely regular and may be subject to various factors beyond the control of the Directors. the length of the contract period. results of operation and profitability of the Group. As at 31 March 2009. In the event that the Group or its subcontractors fail to retain the existing labour and/or recruit sufficient skilled labour in a timely manner to cope with the demand of the Group’s existing or future projects and/or there is a significant increase in the costs of labour. and the profit margin and time for profit recognition depend on the terms of the work contracts and may also not be regular. there is no assurance that the supply of skilled labour and average labour costs will remain stable. As a result. there could be an adverse impact on the business. In light of the foregoing. The Group’s cash flows may fluctuate As far as a single contract is concerned in which the Group acts as main contractor. the Group may not be able to complete the projects on schedule and within budget and the Group’s operations and profitability may be adversely affected. However. 92 and 96 respectively. net cash outflows are normally incurred at the early stage of carrying out the contract works when the Group is required to acquire equipment and machinery and recruit additional workers required without any advances from the customer. such as the proposed expenditure of the customers. the fee collection by the Group. the total number of full-time direct workers employed by the Group was 54. If the fee collection pattern significantly deviates from the estimation of the Directors. board committees and staff” in this prospectus. Successful implementation of contract works significantly depend on the availability of workers and their experiences and skills. Accordingly. Progress payments will only be received after commencement of works and after the works and payments are certified by the Group’s customers. the efficiency of implementation of the contract works and the general market conditions. Furthermore. Should any of these executive Directors or key personnel of the Group cease to be involved in the management of the Group in the future and the Group fails to recruit suitable replacements. — 28 — . the terms of the work contracts. The Group’s business is labour-intensive Provision of waterworks engineering services. the Group and its subcontractors have not encountered any difficulties in recruiting labour to work on the Group’s projects. senior management. Fee collection and profit margin depend on the terms of the work contract and may not be regular The Group’s business is project-based. the financial position and liquidity of the Group could be adversely affected. 31 March 2010 and the Latest Practicable Date. road works and drainage services and site formation works are basically labour intensive works. Fee collection and profit margin significantly depend on various factors.RISK FACTORS section headed “Directors. The Group’s business is project-based. the cash flows for a particular contract may turn from net outflow at the early stage gradually into accumulative net inflow as the works progress. there can be no assurance that the profitability of a project can be maintained or estimated at any level.

the Noise Control Ordinance (Chapter 400 of the Laws of Hong Kong). The Group may also be liable for damages claimed by the worker or customer. revocation or downgrading of any of the Group’s licences in any work category. In the event of a withdrawal. The Group’s operations are subject to due compliance with a number of environmental protection laws. in respect of all or any of the work categories. if the contractor’s performance or tendering record is found to be unsatisfactory or the contractor is unable to meet the relevant financial. the Government reserves the right to remove any contractor from the list or take other regulatory actions against a contractor such as suspension. the contractor has to apply for inclusion in the list of the particular work categories and/or group.22(2) — 29 — . If any underground cables or active water mains are damaged in the course of excavation. There is no assurance that the Group will be able to obtain business in other jurisdictions even if it desires to do so. In the course of providing the aforesaid services. road works and drainage services and site formation works in jurisdictions other than Hong Kong. regulations and requirements in Hong Kong including but not limited to the Air Pollution Control Ordinance (Chapter 311 of the Laws of Hong Kong). regulations and requirements The Group is required to comply with a number of environmental protection laws. RISKS RELATING TO THE INDUSTRY IN WHICH THE GROUP OPERATES The Group’s business is subject to obtaining a number of licences and approvals A contractor has to be included in the “List of Approved Contractors for Public Works” or the “List of Approved Suppliers of Materials and Specialist Contractors for Public Works” under one or more of the work categories maintained by WBDB so as to be eligible to tender for projects in the public sector in Hong Kong. The Group’s operations are restricted to Hong Kong The licences currently held by the Group only permit the Group to carry on its business in Hong Kong under the relevant work categories stipulated by WBDB. the Group is often required to excavate the underground water mains to carry out replacement and rehabilitation works. the Group may be required to apply for specific licences in such jurisdictions. the prospects and operation of the Group could be adversely affected. To become listed as an approved contractor. downgrading in status or demotion to a lower level group. Despite the admission of a contractor to the list. technical and management criteria for retention on the list.RISK FACTORS The Group’s operations are subject to construction risk The Group’s business has been primarily focused on provision of waterworks engineering services. The aforesaid unforeseen circumstances may pose risks on the workers or affect the Group’s work progress. which may have adverse impact on the Group’s cash flow. In the event that the Group’s R14. the business. the Waste Disposal Ordinance (Chapter 354 of the Laws of Hong Kong) and the Environmental Impact Assessment Ordinance (Chapter 499 of the Laws of Hong Kong). it may cause electric shocks or water leakages. reputation and profitability. the Water Pollution Control Ordinance (Chapter 358 of the Laws of Hong Kong). In the event that the Group intends to engage in provision of waterworks engineering services.

the business of the Group may be interrupted or otherwise affected by adverse weather conditions.RISK FACTORS operations fail to meet the applicable environmental protection laws. tropical cyclones and continuous rain may cause difficulties to the Group in completing its projects. namely Groups A. in addition to any other power enabling it to terminate the relevant contract. which in turn may adversely affect the profitability of the Group. The Group’s business could be affected by adverse weather conditions Most of the Group’s projects are undertaken outdoor. the estimated total amount of capital to be spent on waterworks by WSD is approximately HK$5. the Group may incur additional cost in complying with the new law(s). regulation(s) and requirement(s). Therefore. Accordingly. any change or significant delay in the level of spending on public works by the Government may affect the business and operating results of the Group. The Group’s business could be affected by the Government’s allocation of its 2010-2011 budget on waterworks Based on the 2010-2011 budget of the Government. all of the Group’s revenue was generated from providing civil engineering services. regulations and requirements. the Group will not be eligible to tender for such contracts as a main contractor. and the Group’s business and results of operations may be adversely affected. there is no assurance that the environmental protection laws. The Group’s business could be materially and adversely affected by the Government’s level of spending on infrastructure and civil engineering projects During the Track Record Period.22(3) — 30 — . with contract values fall under the respective groups of waterworks. There is no publicly available information as to how such budgeted amount will be allocated to waterworks projects. and the level of the Government’s spending budget may change from year to year. regulations and requirements will not be changed in the future. In addition. In the event that all or substantially all of the aforesaid budget is allocated to contracts which are only available for tender by Group C contractors. Work contracts with WSD are subject to termination for convenience by WSD It is a standard special condition contained in the work contracts between WSD and a contractor that WSD is. Group B and Group C.944 million for the fiscal year of 2010/2011. In the event that the Government reduces its level of spending on public works and the Group fails to secure business from the private sector or to diversify its business into the private sector. entitled to terminate a work contract at any time by notice in writing to the contractor (“right to terminate for convenience”) and the termination shall take effect on a date specified in the notice but without R14. Should there be any change to the environmental protection laws. the business and profitability of the Group could be adversely affected. Some infrastructure projects are non-recurring in nature. Any delay in completion of projects could adversely affect the operating results of the Group. the Group may be subject to fines or required to make remedial measures which may in turn have an adverse effect on the operations and financial conditions of the Group. regulations and regulations applicable to the Group. Rain storms.

According to the guidance of a technical circular issued by ETWB dated 21 July 2004. There is no assurance as regards the market price and trading volume of the Shares after Listing. without limitation. However. economic sanctions. implementation or proposal of investment plans. war. Upon Listing. the trading volume and market price of the Shares may be affected by numerous factors. no work contract of the Group with WSD has been terminated pursuant to the exercise of the right to terminate for convenience and no subcontract to which the Group is a party has been terminated in the foregoing circumstances. military action. If additional funds are raised through the issuance of new equity or equity-linked securities of the Company other than on a pro rata basis to existing Shareholders. civil commotion. In the event that WSD exercises such right to terminate a work contract which affects the Group (whether as main contractor or subcontractor). (Hong Kong time) on the Listing Date. there is no assurance that WSD will not exercise such right to terminate for convenience.RISK FACTORS prejudice to the claims of either party in respect of any antecedent breach thereof. the percentage ownership of the Shareholders in the Company may be diluted. terrorism. profitability and cash flow of the Group. merges and acquisitions and economic conditions. strike or lock-out. explosion. There has been no prior public market for the Shares and the liquidity. any acts of God. market price and trading volume of the Shares may be volatile The Shares have not been traded in any open market before completion of the Placing. As the trading volume of the Shares will not be guaranteed by the Group upon Listing. Such events include. change of senior management. the Group’s work plan and financial position may be adversely affected. fire. RISKS RELATING TO THE PLACING The Sponsor and the Underwriters are entitled to terminate the Underwriting Agreement Prospective investors of the Placing Shares should note that the Sponsor and the Underwriters are entitled to terminate their obligations under the Underwriting Agreement by the Lead Manager (acting on its behalf and the other Underwriters) giving notice in writing to the Company upon the occurrence of any of the events stated in the sub-paragraph headed “Grounds for termination” under the paragraph headed “Underwriting arrangements” under the section headed “Underwriting” in this prospectus at any time prior to 8:00 a. public disorder. flood. the trading market of the Shares may not be active enough for the investors to cash in its investments in the Shares in the market. including but not limited to the income. and the Placing Price shall therefore not be treated as an indicator of the price of the Shares to be traded on GEM in the future. Investors in the Placing may experience dilution if the Company issues additional Shares in the future Additional funds may be required in the future to finance the expansion of the business and operations of the Group. The actual market price of the Shares may deviate from the Placing Price. During the Track Record Period. it is a policy of the Government that the right to terminate for convenience shall only be exercised in very exceptional and justified circumstances. All of the aforesaid may result in fluctuations in the market price and/or trading volume of the Shares. — 31 — . riot.m.

For the year ended 31 March 2010.000 respectively to Mr. Kan which was set off by the amount due from Mr. which may materially and adversely affect the Group’s results of operations.700. Kan in April 2010. Kan.RISK FACTORS No guarantee that dividends will be declared in the future The Group did not declare any dividends for the year ended 31 March 2009. Due to different methods or other factors. Granting options under the Share Option Scheme may affect the Group’s results of operations and dilute Shareholders’ percentage of ownership The Company may grant share options under the Share Option Scheme in the future. RISKS RELATING TO THIS PROSPECTUS Certain statistics and facts in this prospectus are extracted from various official Government sources which have not been independently verified Certain statistics and facts set out in the section headed “Industry overview” in this prospectus have been extracted from various official Government sources. no representation is given as to the completeness or accuracy of these statistics and facts. but the Company has not carried out any independent verification on these statistics and facts. payment and amount of any future dividends are subject to the discretion of the Board depending on. — 32 — .625. A summary of the terms of the Share Option Scheme is set out in the paragraph headed “Share Option Scheme” in Appendix V to this prospectus. TYW and TY Civil declared and paid dividends of HK$245. Accordingly. no further dividend will be declared or paid prior to Listing. Save for the final dividend of HK$4. among other things. No options had been granted pursuant to the Share Option Scheme as at the Latest Practicable Date.000 and HK$9. information. The dividend distribution record during the Track Record Period and the final dividend declared and paid subsequent to the Track Record Period but prior to Listing may not be used as a reference or basis to determine the level of dividends that may be declared and paid by the Company to the Shareholders in the future after Listing. The declaration. analysis and facts extracted from various official Government sources contained in this prospectus may be inaccurate and should not be unduly relied upon. Issuance of Shares for the purpose of satisfying any award made under the Share Option Scheme will also increase the number of Shares in issue after such issuance and thus may result in the dilution to the percentage of ownership of the Shareholders and the net asset value per Share. Kan and TYC declared dividends of approximately HK$8. applicable laws and other relevant factors. The fair value of the options at the date on which they are granted with reference to the valuer’s valuation will be charged as share-based compensation. the Group’s earnings. There is no assurance that the Group will declare dividends in amount similar to or exceeding historical dividends declared or at all. The Directors have taken reasonable care in extracting and reproducing such information and have no reason to believe that such information is false or misleading in any material respects or that any fact has been omitted that would render such information false or misleading in any material respects.000 declared by TY Civil to Mr.000 to Mr. financial condition and cash requirements and the provisions governing the declaration and distribution as contained in the Articles of Association.000. the statistics.

The actual results. Such forward-looking statements are based on assumptions as to the present and future business strategies of the Group and the environment in which the Group will operate in the future. Such forward-looking statements involve known and unknown risks.RISK FACTORS Forward-looking statements contained in this prospectus may not be accurate This prospectus contains certain forward-looking statements relating to the plans. performance or achievements of the Group expressed or implied by these forward-looking statements in this prospectus. — 33 — . performance or achievements of the Group may differ materially from those discussed in this prospectus. performance or achievements of the Group to be materially different from the anticipated results. expectations and intentions of the Directors. uncertainties and other factors which may cause the actual results. objectives.

Far East Finance Centre 16 Harcourt Road Admiralty Hong Kong Gransing Securities Co.K. Fung House 19-20 Connaught Road Central Hong Kong I-Access Investors Limited Unit 2001. for information purposes only. Far East Consortium Building 121 Des Voeux Road Central Hong Kong App1A(2) R14..m. confirm that to the best of their knowledge and belief the information contained in this prospectus is accurate and complete in all material respects and not misleading or deceptive.M. Securities Limited 8th Floor. The Directors. Limited Room 804-806. from 20 August 2010 up to and including 25 August 2010: Optima Capital Limited Suite 1501. having made all reasonable enquiries. at the offices of the following parties involved in the Placing during normal office hours from 9:00 a. to 5:00 p. and there are no other matters the omission of which would make any statement herein or this prospectus misleading. 15th Floor Jardine House 1 Connaught Place Central Hong Kong CIMB Securities (HK) Limited 25th Floor. Central Tower 28 Queen’s Road Central Hong Kong K.INFORMATION ABOUT THIS PROSPECTUS AND THE PLACING DIRECTORS’ RESPONSIBILITY FOR THE CONTENTS OF THIS PROSPECTUS This prospectus.23 — 34 — . 20th Floor 100 Queen’s Road Central Hong Kong Sinomax Securities Limited Room 1601.m. for which the Directors collectively and individually accept full responsibility. includes particulars given in compliance with the GEM Listing Rules for the purpose of giving information with regard to the Group. Printed copies of this prospectus are available.

and has not been offered.tsunyip. As at the Latest Practicable Date.hk do not form part of this prospectus.INFORMATION ABOUT THIS PROSPECTUS AND THE PLACING PLACING SHARES ARE FULLY UNDERWRITTEN This prospectus is published solely in connection with the Placing. which is sponsored by Optima Capital and managed by the Lead Manager and is fully underwritten by the Underwriters (subject to the terms and conditions of the Underwriting Agreement). this prospectus may not be used for the purposes of. the Sponsor. and does not constitute.800. RESTRICTIONS ON SALE OF PLACING SHARES Each person acquiring the Placing Shares will be required to confirm and is deemed by his acquisition of the Placing Shares to have confirmed that he is aware of the restrictions on offers of the Placing Shares described in this prospectus and that he is not acquiring. the Underwriters. the Company was not seeking or proposing to seek a listing of. and permission to deal in. No action has been taken in any jurisdiction other than Hong Kong to permit any of the offering of the Placing Shares or the distribution of this prospectus. or permission to deal in. The Placing is made solely on the basis of the information contained and the representations made in this prospectus. APPLICATION FOR LISTING ON GEM The Company has applied to the Listing Division for the listing of. an offer or invitation in any jurisdiction or in any circumstances in which such an offer or invitation is not authorised or to any person to whom it is unlawful to make such an offer or invitation. any part of its share or loan capital on any other stock exchange. Only securities registered on the branch register of members of the Company kept in Hong Kong may be traded on GEM unless the Stock Exchange otherwise agrees. A total of 24.23(7) of the GEM Listing Rules. Pursuant to Rule 11. please refer to the section headed “Underwriting” in this prospectus. App1A(11) — 35 — . at least 25% of the total issued share capital of the Company must at all times be held by the public. The contents as shown in the website of the Company of http://www. No person is authorised in connection with the Placing to give any information or to make any representation not contained in this prospectus. representing 25% of the Company’s issued share capital as enlarged by the allotment and issue of the Placing Shares will be in the hands of the public immediately following the completion of the Placing and the Capitalisation Issue and upon Listing. Accordingly. and any information or representation not contained herein must not be relied upon as having been authorised by the Company. the Lead Manager. No part of the Company’s share capital or loan capital is listed or dealt in on any other stock exchange. For further information about the Underwriters and the underwriting arrangement. any Placing Shares in circumstances that contravene any such restrictions.000 Placing Shares. any of their respective directors or affiliates of any of them or any other person and party involved in the Placing. the Shares in issue and to be issued as mentioned in this prospectus on GEM.

All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time. App1A(14)(3) App1A(14)(2) R14. the Underwriters. The GEM stock code for the Shares is 8356. SHARES WILL BE ELIGIBLE FOR ADMISSION INTO CCASS Subject to the granting of the approval for the listing of. Dealings in the Shares registered on the Company’s branch register of members maintained in Hong Kong will be subject to Hong Kong stamp duty.INFORMATION ABOUT THIS PROSPECTUS AND THE PLACING PROFESSIONAL TAX ADVICE RECOMMENDED Potential investors for the Placing Shares are recommended to consult their advisers if they are in doubt as to the taxation implications of the subscription for. or the exercise of any rights in relation to the Placing Shares. clearance and settlement in CCASS with effect from the Listing Date or any other date as determined by HKSCC. on Monday. any of their respective directors. holding. The Company. Investors should seek the advice of their stockbrokers or other professional advisers for details of those settlement arrangements and how such arrangements will affect their rights and interests. dealing in. disposal of or dealing in the Shares or exercising their rights thereunder. including its conditions. Shares will be traded in board lots of 2. STAMP DUTY All the Placing Shares will be registered on the branch register of members of the Company in Hong Kong.08(7)(b) — 36 — . holding. 30 August 2010. COMMENCEMENT OF DEALINGS IN THE SHARES Dealings in the Shares on GEM are expected to commence at 9:30 a. agents or advisers or any other person involved in the Placing do not accept responsibility for any tax effects on or liabilities resulting from the subscription for. the Shares will be accepted as eligible securities by HKSCC for deposit.m. and permission to deal in. STRUCTURE AND CONDITIONS OF THE PLACING Details of the structure of the Placing. the Directors.000 Shares each. are set out in the section headed “Structure and conditions of the Placing” in this prospectus. the Shares on GEM and the compliance with the stock admission requirements of HKSCC. the Sponsor. the Lead Manager. purchase. Settlement of transactions between participants of the Stock Exchange is required to take place in CCASS on the second Business Day after any trading day. disposing of. All necessary arrangements have been made for the Shares to be admitted into CCASS. purchase.

Block 9 Beverly Villas. 10/F Tower 1 Island Resort 28 Siu Sai Wan Road Hong Kong Flat H. 16/F Kwun Fung Mansion Lei King Wan 51 Tai Hong Street Hong Kong Chinese Mr. Cheng Ka Ming. 2/F. 18 Pak Lok Path Shatin New Territories Hong Kong Flat H... Lo Ho Chor (盧浩初) Chinese Mr. Chia Thien Loong. Sung Lee Kwok (宋利國) Chinese — 37 — .(41) R24. Martin (鄭家銘) Chinese Mr. 21/F. Kan Kwok Cheung (簡國祥) Flat B. Block 7 Pristine Villa. Tower 8 The Palazzo No. Lim Hung Chun (林洪進) Flat 3. Tuen Mun New Territories Hong Kong Chinese Address Nationality App1A. 1/F. Nerine Cove 23 Hang Fu Street. Shatin New Territories Hong Kong Flat H. Shing Wing House Yue Shing Court.. 37/F.05(2b) Third Schedule 6 Mr. Fung Chung Kin (馮中健) Chinese Mr. Eric John (謝天龍) Chinese Independent non-executive Directors Mr. 5/F. 28 Lok King Street Shatin New Territories Hong Kong Flat A.DIRECTORS Name Executive Directors Mr.. 16 La Salle Road Kowloon Tong Kowloon Hong Kong Flat A.

Fung House 19-20 Connaught Road Central Hong Kong I-Access Investors Limited Unit 2001.M. Securities Limited 8th Floor. 15th Floor Jardine House 1 Connaught Place Central Hong Kong CIMB Securities (HK) Limited 25th Floor. Limited Room 804-806. 20th Floor 100 Queen’s Road Central Hong Kong Sinomax Securities Limited Room 1601.09 Lead Manager Underwriters — 38 — . 14th Floor. Far East Consortium Building 121 Des Voeux Road Central Hong Kong Legal advisers to the Company As to Hong Kong laws: Michael Li & Co. Far East Finance Centre 16 Harcourt Road Admiralty Hong Kong Gransing Securities Co. Central Tower 28 Queen’s Road Central Hong Kong K.. Printing House 6 Duddell Street Central Hong Kong As to Cayman Islands laws: Conyers Dill & Pearman Cricket Square Hutchins Drive Grand Cayman KY1-1111 Cayman Islands App1A(15)(3)(h) App1A(3) R11.K.PARTIES INVOLVED IN THE PLACING Sponsor Optima Capital Limited Suite 1501.

hk* * The contents of this website do not form part of this prospectus App1A(43) App1A(4) Third Schedule 18 Auditor and reporting accountants Property valuer Registered office Head office and principal place of business in Hong Kong App1A(6) Company website Company Secretary Authorised representatives (for the purpose of the GEM Listing Rules and for the purpose of Part XI of the Companies Ordinance) Mr. 3/F. 18 Pak Lok Path.05(2)(a) — 39 — . 1/F..PARTIES INVOLVED IN THE PLACING Legal advisers to the Sponsor and the Underwriters As to Hong Kong laws: Leung & Lau 13th Floor. Wing On Centre 111 Connaught Road Central Hong Kong Vigers Appraisal and Consulting Limited 10/F The Grande Building 398 Kwun Tong Road Kowloon Hong Kong Cricket Square Hutchins Drive PO Box 2681 Grand Cayman. Public Bank Centre 120 Des Voeus Road Central Central Hong Kong BDO Limited Certified Public Accountants 25th Floor. Nerine Cove 23 Hang Fu Street. Tuen Mun New Territories Hong Kong R11.tsunyip.07(4) R24. Fuk Shing Commercial Building 28 On Lok Mun Street. CPA Mr. Block 7 Pristine Villa. Eric John Flat H. Chia Thien Loong.. Fung Chung Kin Flat A. Shatin New Territories Hong Kong Mr. Fanling New Territories http://www. KY1-1111 Cayman Islands Flat 314. Tam Tsang Ngai. FCCA. 37/F.

Lo Ho Chor Mr. Lim Hung Chun Codan Trust Company (Cayman) Limited Cricket Square Hutchins Drive PO Box 2681 Grand Cayman. Sung Lee Kwok Mr. Lim Hung Chun (Chairman) Mr. KY1-1111 Cayman Islands Tricor Investor Services Limited 26/F.CORPORATE INFORMATION Compliance adviser Optima Capital Limited Suite 1501. 15th Floor Jardine House 1 Connaught Place Central Hong Kong Mr. Hong Kong R11.09 Compliance officer Audit committee Remuneration committee Nomination committee Principal share registrar and transfer office in the Cayman Islands Branch share registrar and transfer office in Hong Kong Principal bankers — 40 — . Bank of China Tower 1 Garden Road. Central Hong Kong Hang Seng Bank Limited 83 Des Voeux Road Central Hong Kong Bank of China (Hong Kong) Limited 52/F. Kan Kwok Cheung (Chairman) Mr. Sung Lee Kwok Mr. Wanchai Hong Kong The Hongkong and Shanghai Banking Corporation Limited 1 Queen’s Road Central. Eric John Mr.05(3) R11.08 R24. Lo Ho Chor Mr. Lo Ho Chor Mr. Tesbury Centre 28 Queen’s Road East. Chia Thien Loong. Kan Kwok Cheung (Chairman) Mr.

Under the 2008 Dongjiang Agreement. unreliable rainfall pattern and continuous increase in demand for safe drinking fresh water due to rapid growth of population. People’s livelihood and development of the Hong Kong economy were severely affected by the water rationing imposed from time to time. In 1989. It enables WSD to better control storage levels in reservoirs.INDUSTRY OVERVIEW The information presented in this section has been derived from various official Government sources. The information has not been independently verified by the Company. the information contained herein should not be unduly relied upon. OVERVIEW OF WATER SUPPLY IN HONG KONG Water shortage used to be a serious problem in Hong Kong before 1980s because of geographical constraints. their respective advisers or affiliates or any other party involved in the Placing and no representation is given as to its accuracy. and such rate is guaranteed through to 2030. Local demand for fresh water could not be satisfied by collection of runoff from rain and the limited supply of fresh water from Shenzhen Reservoir in the PRC. minimising waste and ensuring optimal pumping costs. The Directors believe that the sources of this information are appropriate sources for such information and have taken reasonable care in extracting and reproducing such information. the Government reached an agreement with the government of Guangdong Province of the PRC on a regular supply of fresh water from Dongjiang (or the East River) to Hong Kong. By giving a one-month notice. the annual costs to be paid by Hong Kong for the Dongjiang water has been fixed at HK$2. and accordingly. The new Dongjiang Water Supply Agreement was signed on 11 December 2008 (the “2008 Dongjiang Agreement”).959 million for 2009.344 million for 2011. the system for supplying fresh water from Guangdong Province to Hong Kong has undergone continuous expansion with the annual import volume increasing substantially after a series of agreements. the Sponsor. These costs have taken into account the substantial appreciation in China’s RMB against the Hong Kong dollar and escalating rates of inflation that have been recorded since 2006.146 million for 2010 and HK$3. the Underwriters. — 41 — . Over the years. HK$3. Hong Kong can stipulate the amount of water to be imported from Dongjiang for the subsequent month after taking into account its existing storage held in reservoirs and short term weather patterns and forecasts. the Lead Manager. The ultimate annual supply rate is fixed at 1. The Directors have no reason to believe that such information is false or misleading in any material respects or that any fact has been omitted that would render such information false or misleading in any material respects. It provides a flexible long term supply of water to Hong Kong that will precisely meet the city’s needs.100 mcm.

approximately 70% to 80% of Hong Kong’s water supply is piped into Hong Kong from Dongjiang. if any. The charts below illustrate the annual quantity of water supply from 2004 to 2008 and the fresh water consumption in 2008 by sectors.2% Industrial use 6.000 900 800 700 600 500 400 300 200 100 0 2004 2005 2006 2007 Local supply of water 2008 Imported water from Dongjiang 955 968 963 951 956 Source: Annual report of WSD 2008/09 Fresh Water Consumption by sector in 2008 Use for construction & shipping industries 1.7% Flushing use 8.2% Free supply 4.INDUSTRY OVERVIEW At present. the daily water supply rate from Dongjiang roughly equals to Hong Kong’s daily water consumption rate. The remaining 20% to 30% of Hong Kong’s water supply comes from a network of domestic rainwater catchments that are located across the city’s extensive country parks and rural areas of Hong Kong. — 42 — . The daily surplus of imported water.2% Domestic use 54.5% Use for services and trading industries 25.2% Source: Annual report of WSD 2008/09 Except for annual shutdown period. Annual Quantity of Water Supply mcm 1. will be stored in fresh water impounding reservoirs. the PRC.

The pressure in the system is generally sufficient to provide a direct supply to six or seven storeys above street level. WSD is responsible for designing. According to WSD. as at 31 March 2009. — 43 — . it is necessary for the water to be pumped in stages to service reservoirs situated at different suitable levels. seven combined fresh and salt water pumping stations.INDUSTRY OVERVIEW WATER SUPPLY SYSTEMS IN HONG KONG The provision of an adequate water supply is supported by a reliable water supply network in Hong Kong. Water from the service reservoirs is distributed to customers by gravity via extensive networks of water mains.613km of fresh water mains and sea water mains respectively. the pressure in distribution network system is normally sufficient to provide a direct supply to three storeys above ground level. Upper floors of tall buildings are supplied from their own roof tanks. constructing. approximately 120km of catchwater.267km and 1. each serving a particular area. in some cases it flows by gravity. Hong Kong’s water supply system included 17 impounding reservoirs. after leaving the treatment works to the service reservoirs which are located at various places and elevations throughout the territory. 149 fresh water pumping stations. For higher level areas. and approximately 199km of water tunnel. Fresh water supply system The water is pumped and. operating and maintaining reliable and efficient fresh water and sea water supply and distribution systems to meet the round-the-clock demand of water in Hong Kong. such as mid-level developments on Hong Kong Island. For remote village areas. The distribution system serves to transfer water from one location to another by means of mechanical pumping or by gravity. filled by their own pumping systems. Most of the pumping equipment is electrically powered. 29 salt water pumping stations. 21 water treatment works. approximately 6. 166 fresh water and 46 salt water service reservoirs.

WSD has supplied seawater. conserving an equivalent amount of potable water.hk. covering about 80% of the population in Hong Kong.gov.www. seawater is already available for toilet flushing in metropolitan areas and most of the new towns. At present. an average of 742. The extensive use of seawater has helped to reduce the demand on fresh water for flushing.000 cubic metres per day of seawater was supplied for flushing purposes. — 44 — . During 2009.wsd. February 2009 Seawater supply system Since the late 1950’s. in Government and Government-aided high density development schemes.INDUSTRY OVERVIEW The following diagram illustrates a typical fresh water supply system in Hong Kong: Source: The website of WSD . primarily for flushing.

water treatment works.INDUSTRY OVERVIEW The following diagram illustrates a typical sea water supply system in Hong Kong: Source: The website of WSD — www. — 45 — . operation and maintenance of catchwater. WSD carries out design and supervision of construction of waterworks projects which include catchwater. Works orders given by WSD during the term of the contract will usually cover the maintenance of waterworks installations.gov. service reservoirs. pumping stations. trunk and distribution mains to ensure a reliable water supply to the customers. WSD divides Hong Kong into several districts and in each district. such as catchwaters. access roads. treatment works.wsd. WSD from time to time grants term contracts in respect of maintenance of water supply systems to approved contractors. January 2010 WATERWORKS ENGINEERING SERVICES The Government is solely responsible for maintaining a reliable water supply and distribution system in Hong Kong. For the provision of water supply services and maintenance of the relevant facilities. service reservoirs.hk. reservoirs. the maintenance of waterworks installations is covered by the relevant term contract. watercourses and all the associated construction works in the district. pumping stations and pipeworks. dam construction and major water supply projects are usually undertaken by consulting engineers. The maintenance contracts offered by WSD are usually for a term of three years. intakes.com. pumping stations. water mains. water treatment works. Specialist works such as laying of submarine pipeline. impounding reservoirs. In this regard. The awarded contractor is also required to manage the maintenance works of waterworks installations on behalf of WSD in emergency situations. tunnels. WSD also monitors water storage.

Please refer to the section headed “Licencing and other requirements for Government projects” in this prospectus for details of the licencing requirements. the number of approved contractors listed on the Contractor List under the category “Waterworks” as at 31 July 2010 was as follows: Group Waterworks Confirmed Probationary 2 4 20 22 7 15 A B C For number of approved contractors listed on the Contractor List under the categories. “Roads and Drainage” and “Site Formation”. Based on the active WSD capital works contract list of July 2010 as extracted from WSD’s website on 21 July 2010. Based on the information contained in the above table. In general. Upon fulfillment of the licencing requirements. there were 34 contractors (including joint ventures formed by approved contractors) undertaking a total of 67 contracts of various contract values requiring different licences. the tender limits were HK$30 million for Group A contractors. please refer to the paragraph headed “Contractor List” under the section headed “Licencing and other requirements for Government contracts” in this prospectus. — 46 — . TYW is one of the confirmed contractors in Group B under the category of “Waterworks”. technical and management personnel capabilities. there were only four contractors with confirmed status and seven contractors with probationary status in Group B under the category of “Waterworks” as at 31 July 2010.INDUSTRY OVERVIEW Contractors tendering for Government projects in the capacity of a main contractor are required to comply with the licencing requirements stipulated by WBDB. the contractor will be admitted to different category and different group on the Contractor List based on its financial. There are specific limits for contractors in each group on the value of contracts for which they are normally eligible to tender. contractors undertaking Government projects in the capacity of a subcontractor are not required to satisfy the relevant licencing requirements that are applicable to main contractors. According to WBDB. with 13 of which are due to complete in 2010 and the remaining 54 contracts are due to complete during 2011 to 2014. HK$75 million for Group B contractors and any value exceeding HK$75 million for Group C contractors. As at the Latest Practicable Date.

Group A and Group B probationary contractors are subject to the restriction that the aggregate value of works undertaken by them in their respective categories shall not exceed HK$30 million and HK$75 million respectively whilst Group A and Group B confirmed contractors are not subject to the aforesaid restriction. Group C contractors are normally not allowed to tender for contracts in Groups A and B unless the relevant department considers that there may be an inadequate number of tenderers as a result of the restriction. Among the aforesaid 34 contractors. The joint venture partners are registered contractors on the Contractor List. Taking into account that there are 10 contracts with contract value between HK$30 million and HK$75 million and considering that there are only four contractors out of 11 contractors with Group B licence on the Contractor List currently undertaking waterworks contracts as main contractors. Group B contractors. however. 3. Out of the aforesaid 67 contracts. One of the Group A contractors is also on the Specialist List. One of the Group B contractors is also on the Specialist List. are allowed to tender for contracts in Group A. seven of them have been awarded four or more contracts by WSD.INDUSTRY OVERVIEW Set out below is the status of the aforesaid 34 contractors: Contractor List Group A Group B Group C Subtotal Specialist List Joint ventures (Note 1) Building/construction related licence Total number of contractors on the active WSD capital works contract list Confirmed Probationary 1 2 10 1 2 6 Number of contractors 2 (Note 2) 4 (Note 3) 16 (Note 4) 22 7 3 2 34 Notes: 1. the Directors consider that the competition among Group B contractors is not particularly keen. Among the aforesaid seven active players. 2. Eight of the Group C contractors are also on the Specialist List. — 47 — . 16 of which with contract value below HK$30 million and 10 of which with contract value between HK$30 million and HK$75 million. 4. In addition. three of them are subsidiaries of companies listed in Hong Kong.

WSD commissioned an underground asset management plan to develop a comprehensive and cost-effective asset management plan for the water supply network. Having taken into account the future savings in maintenance costs.944 million for the fiscal year of 2010/2011. • • Phase 2: • Works comprise replacement and rehabilitation of about 250km of water mains throughout the territory. These water mains are approaching the end of their service life and have become increasingly difficult and costly to maintain. A substantial portion of the water mains was laid more than 30 years ago as part of the development of urban areas and new towns.INDUSTRY OVERVIEW Based on the 2010-11 budget of the Government. the Government implemented a programme to replace and rehabilitate approximately 3. salt water mains and raw water mains) in Hong Kong at different stages within a period of 15 years for the purpose of preventing further deterioration in the water supply infrastructure in Hong Kong. REPLACEMENT AND REHABILITATION OF WATER MAINS The supply of fresh and salt water in Hong Kong is provided through a network of approximately 7. the loss of water and social implications of leakages and main bursts. the estimated total amount of capital to be spent on waterworks by WSD is approximately HK$5. As a result. The implementation plan of the replacement and rehabilitation program as disclosed on the website of WSD is summarised as follows: Stage 1 Phase 1: • Works comprise replacement and rehabilitation of about 350km of water mains throughout the territory. Advance works in Sha Tin and Tai Wai comprising replacement and rehabilitation of about 9km of water mains commenced in September 2005 and were completed by end of 2007.800km of water mains. Most of these water mains are underground. the Government estimated that the total cost for replacement and rehabilitation of the aged water mains would be approximately HK$22.550 million respectively. In addition. there are 19 waterworks related projects under planning and 22 projects under design with a total contractual value of approximately HK$6. Main works (remaining works) commenced in June 2003 for completion in December 2008. In this connection. • — 48 — .081 million and approximately HK$6.8 billion and the entire programme would be completed by 2015.000km of water mains (which comprises fresh water mains. Advance works comprising replacement of about 33km of water mains commenced in December 2000 and were completed in February 2006.

INDUSTRY OVERVIEW • Stage 2 • Works comprise replacement and rehabilitation of about 750km of water mains throughout the territory. • Stage 3 • Works comprise replacement and rehabilitation of about 800km of water mains throughout the territory. Main works (remaining works) commenced in August 2006 for completion in March 2010. Investigation and detailed design for the project has commenced in October 2006. Works commenced in September 2008 for completion in 2013. Works commenced in January 2007 for completion in 2011. Investigation and detailed design for the project commenced in September 2008. • • — 49 — . • • Stage 4 • Works comprise replacement and rehabilitation of about 850km of water mains throughout the territory. Works have been scheduled to commence in early 2011 for completion in 2015.

therefore. As the condition of the water supply network will be strengthened upon completion of these replacement and rehabilitation works. the anticipated number of pipe failures per year will be decreased from the level of 24.970 in 2000 to 15. inconvenience to general public and the disruption of water supply to consumers arising from water main leaks and bursts is expected to be minimized. — 50 — . the maintenance cost of these water mains is expected to be reduced. cost effective. the loss of water through leakage and bursting of water mains is also expected to be reduced. The disturbances due to disruption of traffic. Upon completion of the replacement and rehabilitation programme which has been scheduled to be in 2015.000 in 2015. To replace and rehabilitate these water mains is. loss of trade. Moreover.INDUSTRY OVERVIEW The chart below illustrates the progress of works in respect of different stages: Percentage of completion of replacement and rehabilitation works at different stages as at June 2010 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% All Stages Stage 1 phase 1 Stage 1 phase 2 Completed Stage 2 Stage 3 Stage 4 Uncompleted Source: Reproduced from the Replacement and Rehabilitation Programme of Water Mains published by WSD Benefit from the works of the replacement and rehabilitation programme of water mains Ageing water mains are approaching the end of their service life and have become increasingly difficult and costly to maintain.

812 1. about 80% of Hong Kong’s population uses salt water for flushing purposes. pumping stations and associated main laying in Pok Fu Lam and construction of salt water service reservoir.885 1.500 2.000 2.064 Source: Reproduced from the Replacement and Rehabilitation Programme of Water Mains published by WSD The Government will commission a review to appraise the condition of the remaining water mains which are not subject to the current replacement and rehabilitation programme. Apart from conducting study to assess the water pollution risks and impacts. — 51 — . Subject to the review findings. of pipe burst 3. main laying and associated work in Yuen Long and Tin Shui Wai.693 3. the Government may extend the programme beyond 2015 to cover the remaining distribution network of water mains.000 No. The aforesaid projects involve construction of service reservoir.000 9.321 08/09 4.000 1.360 13.936 23.000 Year 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 2.585 1.479 2.000 14.500 No. Yuen Long and Tin Shui Wai.INDUSTRY OVERVIEW The chart below illustrates the historical annual figures of number of pipe burst and pipe leak in Hong Kong from 2000 to 2009. Sea water is a key alternative and is an importance source of flushing water. Major projects include new salt water supply systems to service Pok Fu Lam.393 14.500 1.000 No.000 2. of pipe leak 24.211 1. ALTERNATIVE WATER SUPPLY AND WATER RESOURCES PROTECTION Hong Kong is constantly looking for alternative sources of water to supplement its domestic supplies. Currently. of pipe burst 21. WSD will start a capital works project by 2011 to improve the existing catchwater system for safe and effective collection of surface water. No details of the ring main system for Cheung Sha Wan is currently available on the website of WSD. The upgrading of the salt water supply system in Wan Chai was scheduled for tendering in late 2009.651 19.000 20.639 1.820 No.816 13.657 12.199 17. A ring main system will be implemented for Cheung Sha Wan and the salt water supply system in Wan Chai will be upgraded. WSD also plans to strengthen the current practice of protecting local water resources. of pipe leak 19. WSD will undertake a programme of capital works for system improvements and extensions to the salt water supply system for flushing. Numbers of pipe bursts and leaks 4. Contracts in respect of the above projects have been awarded by WSD.472 1.

additional information and instructions applicable to a particular contract. The formula approach is applied for general work projects. In general. on the internet and in selected overseas journals. (iii) Prequalified tendering Tender invitations are sent to those prequalified contractors approved by the Permanent Secretary for Financial Services and the Treasury. in the local press. (iv) Single and restricted tendering Tender invitations are sent to only one or a limited number of contractors/suppliers approved by the Permanent Secretary for Financial Services and the Treasury or the Director of Government Logistics. Tenders may be invited in the following ways: (i) Open tendering Tender invitations are published in the Government Gazette and. if necessary. Tenders are generally evaluated by the formula approach or the marking scheme approach. procuring departments are required to provide in the tender documents all the necessary information to assist the bidders to prepare their tenders. All interested contractors/suppliers are free to submit tenders. detailed price schedules. Services are procured by the individual works departments concerned under the general supervision of WBDB. — 52 — . These two methods basically involve a systematic evaluation of the tenderers’ experience. The procuring department is responsible for evaluating the tenders to determine whether they meet the conditions and specifications laid down in the tender document. (ii) Selective tendering Tender invitations are published in the Government Gazette or are sent by letter to all contractors/suppliers on the relevant approved lists of qualified contractors/suppliers established by WBDB for the purpose of selective tendering. This tendering method is only used when circumstances do not permit open tendering. on grounds of extreme urgency or security. past performance record and particular technical ability.INDUSTRY OVERVIEW TENDERING FOR PUBLIC SECTOR PROJECTS Contracts in the public sector in Hong Kong are normally awarded through open and competitive tendering procedures with a view to obtaining the best value for money. for proprietary products or for reasons of compatibility. WSD is the principal Government authority that is responsible for procuring waterworks services for the public sector. special conditions of contract. Invitations to apply for prequalification may take the form of open tendering or selective tendering and the respective procedures will apply. for example. including standard contract forms covering the general aspects of tender and contract requirements.

TENDERING FOR PRIVATE SECTOR PROJECTS In the private sector. The selection criteria and process for subcontracting are determined by the main contractors. for substantial projects implemented by established organisations.INDUSTRY OVERVIEW while the marking scheme approach is generally used for non-recurring and relatively complicated projects which require evaluation on particular ability and past experience on the contractor candidate. tenders are usually by invitation and the contracts are awarded at the discretion of the clients. — 53 — . information and belief. invitations are usually given to selected contractors or specialist contractors which are licenced by the Government under the respective categories. In selecting subcontractors. may adopt similar selection processes. based on the Directors’ best knowledge. Therefore. Both approaches take into consideration the quality of work of the tenderers in addition to their financial bids. It is therefore important to establish good relationships with customers and main contractors as well as a good reputation in the market. Contractors for the private sector are in general not required to satisfy the licencing requirements that are applicable to the undertaking of contract works as a main contractor for the public sector. the main contractors. the job experience and track record of the contractors are also the determining factors in winning a contract. either for private or public projects. However. the winning bid is not necessarily awarded to the lowest bid. Public sector projects are sometimes contracted out by the main contractors to subcontractors and such subcontracts may also be awarded by way of tenders or upon private invitation. In addition to the competitiveness of the price quoted by the contractors.

LICENCING AND OTHER REQUIREMENTS FOR GOVERNMENT PROJECTS INTRODUCTION WBDB is responsible for ensuring the effective planning. timely and cost-effective manner and to maintain high quality and standards. management and implementation of public sector infrastructure development and works programmes in a safe. Subcontractors undertaking contracts in the public sector for main contractors are not required to satisfy the relevant licencing requirements under the ETWB Handbook that are applicable to the main contractors. pursuant to a technical circular issued by WBDB on 14 June 2004. — 54 — . The following table sets forth the five work categories and the respective managing departments of the Government: Category Buildings Port Works Managing department Architectural Services Department (建築署) Civil Engineering and Development Department (土木工程拓展署) Highways Department (路政署) Civil Engineering and Development Department (土木工程拓展署) WSD Roads and Drainage Site Formation Waterworks The managing department for a work category is the department most closely connected with that particular type of work and is responsible for servicing and monitoring the performance of all contractors within that category. However. specialised or domestic) that are registered for the respective trades under the Primary Register of the Registration Scheme introduced by the Provisional Construction Industry Co-ordination Board (臨時建造業統籌委員會) whose work was taken over by the Construction Industry Council (建造業議會) in February 2007. are required to comply with the licencing requirements set forth in the ETWB Handbook. a contractor must be included in at least one of the aforesaid lists. to be eligible for providing civil engineering services to the Government in the capacity of a main contractor. In order to be eligible. Members of the Group. It has maintained the Contractor List and the Specialist List to monitor the eligibility of a contractor to tender for Government contracts. CONTRACTOR LIST The Contractor List comprises contractors who are approved for carrying out public works in one or more of the five work categories of building and civil engineering works classified by WBDB. all capital works contracts and maintenance contracts of the Government with tenders to be invited on or after 15 August 2004 require the contractors to employ subcontractors (whether nominated.

The financial criteria for admission to and retention on the Contractor List as at the Latest Practicable Date are set forth below: — 55 — . including contingent liabilities. (iii) supplementary information including but not limited to a statement giving details of significant events which occurred after the year end date of the latest audited financial statements which would affect the contractor’s financial position. a statement listing current or outstanding contracts in hand with total and outstanding contract sums. having the appropriate technical and management capabilities and in all other ways being considered suitable for confirmation. (ii) certified statements of outstanding workload. subject to a minimum probationary period of 24 months. contract period and time required to complete the outstanding portion of the contract. According to WBDB.LICENCING AND OTHER REQUIREMENTS FOR GOVERNMENT PROJECTS According to the ETWB Handbook. A probationary contractor may. if not covered in the audited financial statements. Except in the most exceptional circumstances. bank letters or agreements on existing banking facilities such asterm loans and overdraft. In addition. A confirmed contractor may apply for promotion to a higher group in a particular category if it is able to meet the financial criteria applicable to the higher group and it has the appropriate technical and management capabilities. Group C contractors are generally not allowed to tender for contracts in Groups A and B unless the responsible Government department considers that there may be an inadequate number of tenderers as a result of the restriction. A contractor’s status in a particular group will either be probationary or confirmed. HK$75 million for Group B contractors and any value exceeding HK$75 million for Group C contractors. Admission into a certain group and category will be subject to certain financial criteria and the appropriate technical and management capabilities. apply for a confirmed status when it has satisfactorily completed works appropriate to its probationary status in accordance with the criteria for confirmation. The tender limits for contractors in each group are periodically adjusted and are currently set as to HK$30 million for Group A contractors. B and C respectively according to the value of contracts for which they are normally eligible to tender. contractors within each of the above five categories are further divided into Groups A. Confirmation will also be subject to the contractor being able to meet the financial criteria applicable to confirmed status. Other than in the most exceptional circumstances. and (iv) answer all reasonable enquiries from WBDB. a contractor applying for promotion will first be admitted on probation to the next higher group and the rules applicable to probationary contractors in that particular group will apply. Contractors are limited in the number and value of contracts for which they are eligible to tender according to their status in their respective group and category. a contractor will be admitted initially on probation to the appropriate group and category. a statement giving details of any off-balance sheet liabilities. with a satisfactory record of performance. a contractor is required to maintain certain minimum levels of employed and working capital applicable to the appropriate group and status by submitting (i) the original or certified true copy of their latest audited accounts and latest yearly management accounts in case the contractor is a Group C contractor on the Contractor List.

000.800.000 or 10% on annualised outstanding works. whichever is higher Group A .probationary Minimum employed capital # HK$1.000 or 10% on annualised outstanding works.000 or 8% on the first HK$800 million of annualised outstanding works and 10% on remainder. whichever is higher HK$4.000 Group C .600.000 for every HK$100 million of annualised outstanding works or part thereof above HK$800 million Group C .LICENCING AND OTHER REQUIREMENTS FOR GOVERNMENT PROJECTS Group/Status Group A .800. whichever is higher HK$8.400.600.600.200.000 plus HK$2. whichever is higher HK$3.000.000 plus HK$2.000.000 or 8% on the first HK$800 million of annualised outstanding works and 10% on remainder.000 Group B .200.400.600.000 Minimum working capital* HK$1. whichever is higher HK$16. whichever is higher HK$12.confirmed HK$8.000 for every HK$100 million of annualised outstanding works or part thereof above $800 million HK$16.000 or 15% on annualised outstanding works.confirmed HK$3.000 or 15% on annualised outstanding works.000 Group B .probationary HK$4.probationary HK$12.confirmed # * Employed capital represents shareholders’ equity with adjustments made by WBDB Working capital represents net current assets with adjustments made by WBDB — 56 — .000.

There are no Group A contractors for the Site Formation category. within the past five years. 1) Satisfactory completion of at least one mainlaying contract in the waterworks category of value over 75% of the Group A limit or two or more mainlaying contracts in the waterworks category with a total value of not less than HK$20 million. — 57 — . after inclusion in Group A on probation.LICENCING AND OTHER REQUIREMENTS FOR GOVERNMENT PROJECTS According to WBDB. Waterworks 1) Possession of adequate waterworks construction experience either acquired as contractor or subcontractor for Government contracts. 2) Mainlaying experience is a pre-requisite. Confirmation 1) to Group A Satisfactory completion of at least one Government roads and drainage contract of value over 50% of the Group A limit after inclusion in Group A on probation. Site Formation There are no Group A contractors for the Site Formation category. Experience as a subcontractor may count. Experience as a subcontractor may count. 3) Normally expected to have undertaken works of a waterworks nature with a total value of over HK$10 million in the past ten years. confirmation and promotion of contractors for the Contractor List as at the Latest Practicable Date are set forth below: Group/Status Roads and Drainage Entry on probation to Group A 1) Satisfactory completion of Government roads and drainage works. to a total value of not less than 50% of the Group A limit. the minimum technical and management criteria for admission. Private sector experience may also be accredited.

of which one contract would involve earthworks quantity not less than 50. If in the capacity of a subcontractor. B. 2) Private sector experience may be accepted to supplement public sector experience. 1) By promotion Satisfactory completion of at least one Government roads and drainage contract of value not less than 75% of the Group A limit after confirmation in Group A. By promotion Satisfactory completion of three or more contracts in the waterworks category of totally not less than HK$25 million in value after confirmation in Group A. Experience as a subcontractor may count. Satisfactory completion of three or more contracts of a waterworks nature of totally not less than HK$75 million in value in the past ten years. Experience as a subcontractor may count. Mainlaying experience is a pre-requisite. Private sector experience may also be accredited. within the past five years. slope stabilization.000 m 3 . within the past 5 years. Site Formation 1) Satisfactory completion. Experience as a subcontractor may be accredited.000 m 3 in one or more of the following: 2) i) bulk excavation and filling (excluding quarrying and maintenance of spoil dumps). the applicant must prove to have a major involvement in the works. 3) Waterworks A. 1) Direct entry Possession of waterworks construction experience either acquired as contractor or subcontractor for private sector contracts. ii) iii) 2) sanitary landfill. 1) Direct entry Satisfactory completion of Government roads and drainage works. 1) B. to a total value of not less than the Group B limit.LICENCING AND OTHER REQUIREMENTS FOR GOVERNMENT PROJECTS Group/Status Roads and Drainage Entry on probation to Group B A. — 58 — . one contract or contracts involving total earthworks quantity not less than 100. or as subcontractor for Government contracts.

1) Direct Entry Satisfactory completion in the past 5 years of at least two contracts in the works category. The value of each contract shall be over 75% of the Group B limit. Experience as a subcontractor is not accredited. or as subcontractor for Government contracts. Experience as a subcontractor may count. the applicant must prove to have a major involvement in the works. Waterworks 1) Satisfactory completion of at least one contract in the waterworks category of value over 75% of the Group B limit or an aggregate value of work of at least HK$50 million with at least one contract in Group B value.LICENCING AND OTHER REQUIREMENTS FOR GOVERNMENT PROJECTS Group/Status Roads and Drainage Confirmation 1) to Group B Satisfactory completion of at least one Government roads and drainage contract of value not less than 75% of the Group B limit after inclusion in Group B on probation. or one Government contract with earthworks quantity not less than 200. A. after admission to Group B on probation. 1) Direct entry Satisfactory completion in the past 10 years of a sufficient number of roads and drainage contracts of a total value not less than two times the probationary Group C limit. each of value over 75% of the Group B limit. Site Formation 1) Satisfactory completion of at least one Government Site Formation contract within the past 5 years of value not less than 50% of the Group B limit. 2) Mainlaying experience is a pre-requisite.000 m 3 since inclusion. Entry on probation to Group C A. Experience as a subcontractor is not accredited. A. — 59 — . If in the capacity of a subcontractor. 3) Satisfactory completion of four or more contracts of at least two different types of work totally valued at not less than HK$180 million with at least one contract of Group C value in the past 10 years. Experience as a subcontractor is not accredited. 1) Direct entry Possession of waterworks construction experience either acquired as contractor or subcontractor for private sector contracts.

retention. or one Government contract involving earthworks quantity not less than 300.LICENCING AND OTHER REQUIREMENTS FOR GOVERNMENT PROJECTS Group/Status Roads and Drainage B. Experience as a subcontractor is not accredited. Waterworks (Note 1) Top management (Notes 2. confirmation or promotion as at the Latest Practicable Date are set forth below: Group/Status Group A (probationary or confirmed) Roads and Drainage. Experience as a subcontractor is not accredited. 1) Satisfactory completion of at least one Government Group C site formation contract within the past 5 years of value over $90 million. Private sector experience may be accepted to supplement public sector experience. Confirmation 1) to Group C Satisfactory completion of at least one Government roads and drainage contract of value over HK$90 million. the minimum number and qualifications of full time management and technical personnel to be employed by a contractor for the Contractor List before admission. 1) By promotion Satisfactory completion of at least one Government roads and drainage contract of value not less than 75% of the Group B limit after confirmation to Group B. after confirmation to Group B. after confirmation to Group B. 1) By Promotion Satisfactory completion of three or more contracts in the waterworks category of at least two different types of work totally valued at not less than HK$60 million with at least one contract of Group B value. Experience as a principal subcontractor is not accredited. Experience as a subcontractor is not accredited. 1) Satisfactory completion of two Group C contracts in the waterworks category of two different types of work totally valued of not less than HK$120 million after admission to Group C on probation. 3 and 4) At least one member of the resident top management shall have a minimum of one year local experience in managing a construction firm obtained in the past three years. 2) Waterworks B. — 60 — . 1) By Promotion Satisfactory completion of at least one Government Group B site formation contract within the past 5 years. of value not less than 75% of the Group B limit.000 m 3 . 2) Private sector experience may be accepted to supplement public sector experience. Site Formation B. According to WBDB.

or Ordinary Certificate in Civil Engineering from a Hong Kong polytechnic. a Hong Kong recognised training institution or equivalent and three years local working experience in the relevant category of works. Technical staff (Notes 3 and 4) At least one person with the following qualifications: (i) Higher Certificate in Civil Engineering from a Hong Kong polytechnic. 3 and 4) At least one member of the resident top management shall have a minimum of three years local experience in managing a construction firm obtained in the past five years.LICENCING AND OTHER REQUIREMENTS FOR GOVERNMENT PROJECTS Technical staff (Notes 3 and 4) At least one person with one or more of the following qualifications: (i) Higher Certificate in Civil Engineering from a Hong Kong polytechnic. or Ordinary Certificate in Civil Engineering from a Hong Kong polytechnic. Site Formation. Group/Status Group B (probationary or confirmed) Roads and Drainage. a Hong Kong recognised training institution or equivalent and two years local working experience in the relevant category of works. a Hong Kong recognised training institution or equivalent and one year local working experience in the relevant category of works. a Hong Kong recognised training institution or equivalent and two years local working experience in the relevant category of works. Waterworks Top management (Notes 2. or (ii) (iii) at least ten years local working experience in the relevant category of works. (ii) — 61 — .

The admission. confirmation or promotion in more than one category. According to WBDB. retention. Some contractors within a category are further divided into classes according to the types of works within that particular category and groups according to the value of contracts for which they are normally eligible to tender. 3 and 4) At least one member of the resident top management shall have a minimum of five years local experience in managing a construction firm obtained in the past eight years. However. 2. Technical staff (Notes 3 and 4) At least two persons with a relevant degree from a Hong Kong university or equivalent with at least five years post-graduate local working experience in the relevant category of works. confirmation and probation criteria for the Specialist List are also subject to financial. executive director. managing director. — 62 — . chairman. For admission. or general manager etc. The experience and qualifications of the technical staff shall be as specified for the appropriate group and category in the above table. no member of the Group has been admitted to the Specialist List. technical and management criteria similar to those under the Contractor List. director. 4.LICENCING AND OTHER REQUIREMENTS FOR GOVERNMENT PROJECTS Group C (probationary or confirmed) Top management (Notes 2. The top management and the technical staff must be two individual persons. 3. the number of approved contractors listed on the Contractor List for each work category as at 31 July 2010 was as follows: Group Waterworks Confirmed Probationary 2 4 20 22 7 15 Roads and Drainage Confirmed Probationary 10 17 38 33 34 18 Site Formation Confirmed Probationary 0 3 21 0 42 16 A B C SPECIALIST LIST The Specialist List comprises suppliers of materials/specialist contractors who are approved for carrying out public works in one or more of the 49 categories of specialist works classified by WBDB. he is required to employ a minimum of one experienced technical staff for each category regardless of the number specified in the above table. Group tender limits are applicable to eight categories of works and are periodically adjusted. retention. except that the length of probationary period for each category (if any) varies. the contractor is required to employ one top management with qualifications and experience appropriate to the highest group only instead of one for each category. Top management shall be the president. Notes: 1. There are no Group A contractors for the Site Formation category. As at the Latest Practicable Date.

A weighting shall be assigned to each contract according to the original contract sum based on the scale set out in the Contractor’s Performance Index System. professional bodies and tertiary institutions. the performance rating of a contractor is based on a scale of 0 to 100 and there is no passing mark defined in the Contractors’ Performance Index System. Pursuant to the Technical Circular (Works) No. a closer examination of the contractor’s past performance should be carried out and full justification must be provided before its tender is recommended for acceptance. if a contractor’s current performance rating falls below 40. The aforesaid letter from WBDB sets out the highest. The performance rating of a contractor is the weighted average of the aforesaid performance scores of all the reports on the performance of the contractor in the preceding 12 reporting periods. The 3-month periods in between the aforesaid due dates are referred to as the reporting periods. progress. environmental pollution control. August and November. industry awareness. The contractors’ performance reports are normally due on the last day of February. The evaluation of contractors’ performance is based on the reports written on the contractors’ performance in Government works contracts in accordance with the ETWB Handbook. resources and attitude to claims. the performance of a contractor is represented by a performance rating which is derived from the performance scores given in all the reports written on the performance of the contractors in Government works contracts in the preceding 12 reporting periods. PRIMARY REGISTER OF THE REGISTRATION SCHEME The purpose of the Registration Scheme is to build up a pool of capable and responsible subcontractors with specialised skills and strong professional ethics and provide a platform for the launching of new improvement initiatives through collaboration with training institutions. Instead. including but not limited to workmanship. each contractor on the Contractor List will be advised of its performance rating in the form of a letter by post. site safety. The performance score of a contractor’s performance report is determined by the percentage of the scores attained by the contractor over the maximum scores in 11 different attributes. lowest. WBDB will then generate the performance rating of each contractor on the Contractor List on the first working day of February. 3/2007 issued by the ETWB on 12 March 2007. or if there is an obvious and consistent downward trend. May. organisation. The Registration Scheme will be overseen by a management committee made up of representatives nominated by major client organisations and contractors trade associations formed under auspices of the Construction Industry Council (建造業議會). The performance ratings are not publicly viewable. Under the Contractors’ Performance Index System. May. However.LICENCING AND OTHER REQUIREMENTS FOR GOVERNMENT PROJECTS CONTRACTORS’ PERFORMANCE INDEX SYSTEM A contractors’ performance index system (the “Contractors’ Performance Index System”) was established by the ETWB in 2000 to provide a ready indication of contractors’ performance standard for reference by the project office and relevant tender board in tender evaluation. August and November. median and average ratings of contractors rated under each specific group of the relevant categories during the reporting period. general obligations. This committee assumes the responsibility for enforcing the registration rules and — 63 — .

(iii) failure to submit accounts or meet the financial criteria within the prescribed time. GENERAL The Contractor List. If doubts arise about the ability of a contractor to meet the minimum standards generally or for a particular class of contracts. screening and approving applications for registration. a contractor will be given adequate warning of the action proposed and advised of the reasons for it and given the opportunity to present their views of the matter. the Group was in full compliance with the requirement of engaging subcontractors that are registered for the respective trades under the Primary Register of the Registration Scheme for implementation of Government contracts. (vi) winding-up.LICENCING AND OTHER REQUIREMENTS FOR GOVERNMENT PROJECTS procedures. During the Track Record Period. or where applicable. (iv) failure to answer queries or provide information relevant to the listing status of a contractor on the Contractor List and/or the Specialist List within the prescribed time. Before deciding on such action. it may not be allowed to tender for any new work until it can demonstrate that it can meet the required standard. in respect of all or any of the works categories the contractor is in. bankruptcy or other financial problems. downgrading to probationary status or demotion to a lower group. technical expertise. the Specialist List and the associated regulatory regime are put in place to ensure that certain standards of financial capability. Circumstances which may lead to the taking of regulating actions include. The Secretary of WBDB reserves the right to remove any contractor from the Contractor List and/or the Specialist List or take other regulating action against a contractor such as suspension. (viii) failure or refusal to implement an accepted tender. but not limited to: (i) (ii) unsatisfactory performance. As at the Latest Practicable Date. there were a total 792 subcontractors registered for “general civil works” including but not limited to “road drainage and sewer” and “others (water mains)” under the Registration Scheme. as well as instigating regulatory actions under justifiable circumstances. management and safety are maintained by the contractors carrying out Government works. (v) misconduct or suspected misconduct. (vii) poor site safety record. — 64 — . failure to submit a valid competitive tender for a period of three years. (ix) poor environmental performance.

such as contravention of site safety legislation and Employment Ordinance and employment of illegal workers. TYW is eligible for the award of any number of Government contracts. TYW has been admitted to the Contractor List. Waterworks projects sometimes involve civil works which are associated with roads and drainage and site formation. under this category provided that the contract value of each individual contract does not exceed HK$75 million and TYW fulfills the minimum employed capital and working capital requirements. Being a licenced contractor with confirmed status under Group B of the “Waterworks” category since May 2009. (xii) violation of laws. (xi) failure to employ the minimum number of full time management and technical personnel. Work categories which are generally relevant in respect of the undertaking of waterworks projects from the Government are as follows: Waterworks As a requirement for undertaking waterworks projects in the public sector as a main contractor. According to the technical circular — 65 — . As advised by the Directors. A project may occasionally involve several types of works which are inter-related to one another but are classified under different work categories. a contractor is required to be listed in the Contractor List under the category of “Waterworks” maintained by WBDB. (xiv) public interest. WSD is responsible for servicing and monitoring the performance of all contractors within such category. In general. save for maintenance contracts which are grouped by the Government as subject to restrictions. (xiii) poor integrity of its employees. and (xvii) failure to comply with any of the rules for administration of the Contractor List or the Specialist List giving rise to reasonable suspicions as to the capacity or integrity of the contractor. none of the members of the Group (including TYC) has been subject to any regulatory action from WBDB.LICENCING AND OTHER REQUIREMENTS FOR GOVERNMENT PROJECTS (x) court convictions. In that case a contractor may be required to be listed on the Contractor List and/or the Specialist List with approved status in all the relevant work categories. (xv) public safety and public health. Waterworks contracts usually come from WSD. agents and subcontractors in relation to any public works contract unless the misconduct is not within the control of the contractor. (xvi) serious or suspected serious poor performance or other serious causes in any public or private sector works contract.

there is no other limitation or restriction on the number of contracts which TYW is eligible for award under this category. any approved contractor under this category. any approved contractor under this category. a contractor is required to be listed in the Contractor List under the category of “Roads and Drainage” maintained by WBDB. — 66 — . According to the technical circular of WBDB.LICENCING AND OTHER REQUIREMENTS FOR GOVERNMENT PROJECTS of WBDB. may be subject to similar restriction or limitation on the number of maintenance contracts as those applicable to an approved contractor under the “Waterworks” category. and the Company’s legal advisers as to Hong Kong laws concurred. and the Highways Department (路政署) of the Government is generally responsible for servicing and monitoring the performance of all contractors within such category. save for maintenance contracts which are grouped by the Government as subject to restrictions. Being a licenced contractor with confirmed status under Group B of the “Roads and Drainage” category since March 2009. may not be awarded with more than two such waterworks maintenance contracts at any time. Being a licenced contractor with probationary status under Group B of the “Site Formation” category since March 2009. and has secured sufficient amount of minimum working capital and employed capital in accordance with the requirements under the ETWB Handbook during the Track Record Period and up to the Latest Practicable Date. acting as a main contractor. acting as a main contractor. Save as disclosed above. and TYW is able to meet the financial criteria for its retention on the Contractor List and for acceptance of a tender during the Track Record Period and up to the Latest Practicable Date. TYW is eligible to tender for such number of Government contracts under this category provided that the total value of Group B works does not exceed HK$75 million and TYW fulfills the minimum employed capital and working capital requirements. TYW has complied with the minimum number and qualifications of full time management and technical personnel for retention on the Contractor List. a contractor must be listed in the Contractor List under the category of “Site Formation” maintained by WBDB and the Civil Engineering and Development Department (土木工程拓展署) is mainly responsible for servicing and monitoring the performance of all contractors within that category. acting as a main contractor. Site formation As a reqirement for undertaking works projects in relation to site formation as a main contractor. may be subject to similar restriction or limitation on the number of maintenance contracts as those applicable to an approved contractor under the “Waterworks” category. TYW is eligible for the award of any number of Government contracts. under this category provided that the contract value of each individual contract does not exceed HK$75 million and TYW fulfills the minimum employed capital and working capital requirements. COMPLIANCE WITH THE RELEVANT REQUIREMENTS The Directors confirmed. any approved contractor. In addition. that each of TYW and TY Civil has obtained all relevant permits/licences/registrations for their operations. Roads and drainage As a requirement for undertaking public works projects in relation to roads and drainage as a main contractor. According to the technical circular of WBDB.

the chief financial officer of the Group will also assess and working capital every time prior to the submission of a tender for for submission to WBDB to capital for retention on the its level of employed capital new project. the Directors will check the latest requirements from time to time stipulated by WBDB.LICENCING AND OTHER REQUIREMENTS FOR GOVERNMENT PROJECTS In order to ensure the ongoing compliance with the applicable requirements by the relevant members of the Group. the Construction Industry Council and the Government respectively for the Group’s business operations and take appropriate steps. — 67 — . if required. to comply with the latest requirements. Apart from preparation of financial statements on a yearly basis demonstrate that TYW has sufficient employed capital and working Contractor List.

treatment. any person in any domestic premises or public place making noise causing annoyance to any other person and the noise from construction sites. At present.m. Waste Disposal Ordinance (Chapter 354 of the Laws of Hong Kong) The Waste Disposal Ordinance controls the production. all discharges or deposits are controlled by a licencing system. Within each water control zone. among other situations. collection. Water Pollution Control Ordinance (Chapter 358 of the Laws of Hong Kong) The Water Pollution Control Ordinance provides the main statutory framework for the declaration of water control zones to cover the whole of Hong Kong and the establishment of water quality objectives. Hand-held percussive breakers and air compressors must comply with noise emissions standards and be issued with a noise emission label from the Environmental Protection Department. The objectives describe the water quality that should be achieved and maintained in order to promote the conservation and best use of the waters of Hong Kong in the public interest. unless prior approval has been granted by the Environmental Protection Department through the construction noise permit system. — 68 — .ENVIRONMENTAL PROTECTION LAWS AND REGULATIONS Air Pollution Control Ordinance (Chapter 311 of the Laws of Hong Kong) The Air Pollution Control Ordinance is the principal legislation in Hong Kong for controlling emission of air pollutants and noxious odour from industry. recycling and disposal of wastes. Percussive pile-driving is allowed on weekdays only with prior approval. construction noise permits are required from the Noise Control Authority in advance. Under the Noise Control Ordinance. Usage of certain equipment is also subject to restrictions. recycling. storage. A contractor shall comply with the Noise Control Ordinance and its subsidiary regulations in carrying out its works. commercial operations and construction work.m. including but not limited to the Air Pollution Control (Construction Dust) Regulation (Chapter 311R of the Laws of Hong Kong). Subsidiary regulations of the Air Pollution Control Ordinance impose control on air pollutant emissions from certain operations through the issue of licences and permits. A contractor shall observe and comply with the Air Pollution Control Ordinance and its subsidiary regulations. The contractor responsible for a work site shall carry out the works in such a manner so as to minimise dust impacts on the surrounding environment. works that produce noises and the use of powered mechanical equipment in populated areas are not allowed between 7 p. Noise Control Ordinance (Chapter 400 of the Laws of Hong Kong) The Noise Control Ordinance controls. and 7 a. or at any time on general holidays. in the form of a construction noise permit from the Environmental Protection Department. For engineering works that are to be carried out during the restricted hours and for percussive piling at all times. The Director of Environmental Protection is the Authority responsible for licencing and controlling these discharges. livestock waste and chemical waste are subject to specific controls whilst deposition of waste in public places or on Government land or on private premises without the consent of the owner or occupier is prohibited.

a main contractor who undertakes construction work with a value of HK$1 million or above will be required to establish a billing account in respect of that particular contract with the Environmental Protection Department to pay any disposal charges payable in respect of the construction waste generated from construction work undertaken under that contract.ENVIRONMENTAL PROTECTION LAWS AND REGULATIONS A contractor shall observe and comply with the Waste Disposal Ordinance and its subsidiary regulations. none of the members of the Group was involved in any litigations and/or legal proceedings which were related to committing an offence by any member of the Group under any of the aforesaid environmental protection laws and regulations. to comply with the latest requirements. public utility facilities. Lau will check the latest requirements from time to time stipulated by the Government in this respect and take appropriate steps. — 69 — . minimise and control the adverse environmental impacts from designated projects as specified in Schedules 2 and 3 to the Environmental Impact Assessment Ordinance (for example. The Directors confirmed that there were no events or circumstances which have led to or are likely to lead to the Group being sued by the Government for committing an offence under the aforesaid environmental protection laws and regulations applicable in Hong Kong during the Track Record Period and up to the Latest Practicable Date. Jacky as the head of environmental compliance. community facilities. Mr. if required. During the Track Record Period and up to the Latest Practicable Date. Lau Wai Chun.) through the application of the environmental impact assessment process and the environmental permit system prior to their construction and operation (and decommissioning. unless exempted. if applicable). Under the Waste Disposal (Charges for Disposal of Construction Waste) Regulation. Environmental Impact Assessment Ordinance (Chapter 499 of the Laws of Hong Kong) The Environmental Impact Assessment Ordinance is to avoid. certain large-scale industrial activities. etc. based on the litigation search conducted at the instruction of the Company and the opinion of the legal advisers to the Company as to Hong Kong laws. including but not limited to the Waste Disposal (Charges for Disposal of Construction Waste) Regulation (Chapter 354N of the Laws of Hong Kong). the Directors have appointed Mr. In order to ensure the ongoing compliance with the applicable environmental protection requirements by the relevant members of the Group.

by the then Territory Development Department of the Government. roads and drainage works and site formation works up to the Latest Practicable Date. TYW. started the Group’s business in the provision of civil engineering services in Hong Kong through TYC. The established reputation for timely delivery and work quality had brought TYW opportunities to work with a number of main contractors. the founder of the Group. a sole proprietorship. Kan’s personal assets and liabilities. the New Territories. BDO Limited (“BDO”). TYW was admitted as a Group A contractor (on probation) under the categories of “Waterworks” and “Roads and Drainage” in the Contractor List in January 1997 and April 1997 respectively and as a Group B contractor (on probation) under the category of “Site Formation” in the Contractor List in July 1997. TYW was formed by Mr. other than Mr. Besides. In March 1998. however. the New Territories. some directors of the Group have also been involved in TYC’s daily operations during the Track Record Period to ensure that the assets and liabilities of TYC were solely used for its business purposes. Kan beneficially owned 90% of the issued share capital of TYW. as a main contractor. has been involved in various civil engineering works in the public sector in Hong Kong and has undertaken more than 30 projects relating to waterworks.HISTORY AND DEVELOPMENT HISTORY AND DEVELOPMENT In 1989. Mr. in the capacity as a main contractor or a subcontractor. BDO considers that TYC has maintained separate books and records throughout the Track Record Period and its assets and liabilities were properly segregated from Mr. as a main contractor. TYW was awarded its first public waterworks contract as a main contractor by WSD in connection with the reprovisioning of Mainland West Laboratory in Tuen Mun. its first contract in connection with the site formation work for Yuen Long Combined Wholesale Food Market. in particular. No audited financial statements have been prepared for TYC since its date of incorporation as there is no statutory requirement for the preparation of audited financial statements for unlimited company. the reporting accountants of the Group. Please refer to the paragraph headed “Contracts completed and contracts in progress” in the section headed “Business” in this prospectus for some of the main contractors which the Group has worked with. Kan. Kan and an Independent Third Party as a limited company to carry out civil engineering works and to apply for admission to the Contractor List in order to tender for public projects as a main contractor. In February 1996. After conducting businesses through TYC for a few years. Since then. (2) Third Schedule 21 — 70 — . Mr. Kan. TYW. App1A(29)(1). Soon after its admission to the Contractor List. Mr. bank account in the name of TYC has been maintained for business purposes only and sufficient management and control systems have been in place on TYC’s daily operations. At that time. Kan recognised the prospects of the civil engineering services industry in Hong Kong and decided to set up a limited company for the purpose of tendering for public projects. have performed independent audit procedures in accordance with the Hong Kong Standards of Auditing issued by the HKICPA on the unaudited management accounts of TYC for the Track Record Period. TYW was awarded. Separate books and records were maintained by TYC since its date of incorporation and throughout the Track Record Period. was also awarded its first drainage works contract by the Drainage Services Department of the Government in connection with the improvement works to low-flow interceptor on Siu Hong Road. In the same year.

road works and drainage services and waterworks engineering services maintained by the Provisional Construction Industry Co-ordination Board. TYW was accredited with the ISO 9001:2000 by the Hong Kong Quality Assurance Agency which certified that the quality management system of TYW complied with the relevant requirements applicable to construction of civil engineering works (site formation. Mr. Kan became the sole legal and beneficial owner of TYW. In August 2000. TY Civil was formed for holding motor vehicles for the Group’s use. TYW obtained its confirmed status in Group A under the category of “Roads and Drainage” and in Group B under the category of “Site Formation”. TYW was admitted to the List of Registered Subcontractors for participating in civil engineering works. Kan acquired such 110. roads and drainage). Kan’s wife. Since its incorporation. In October 2006. TY Civil was admitted to the List of Registered Subcontractors for participating in civil engineering works.000 so that Mr. waterworks engineering services and road works and drainage services. whose work was taken over by the Construction Industry Council (建造業議會) in February 2007. Mr. acquired the remaining 110. under the Registration Scheme. TYW also obtained its confirmed status in Group A under the category of “Waterworks”. With a view to concentrating its resources in the waterworks and roads and drainage projects. Kan so that the shareholding of Mr. Kan in TYW increased to 98. Rosita. TYW was accredited with ISO 9002:1994 by the Hong Kong Quality Assurance Agency which certified that the quality assurance system of TYW complied with the relevant requirements applicable to construction of civil engineering works (site formation).HISTORY AND DEVELOPMENT In June 2000. From 1996 to 2001. In October 2001. On 13 June 2005. certifying that TYW’s quality management system complied — 71 — . Ms. waterworks. TYW had allotted and issued additional shares to Mr. the purpose of which is to build up a pool of capable and responsible subcontractors with specialized skills and strong professional ethics and provide a platform for launching of new improvement initiatives through collaboration with training institutions.000 shares of TYW at a total consideration of HK$110.000 and on 28 September 2009. The ISO9001:2000 certificate was renewed by Accredited Certification International Limited in May 2006 and February 2009. Lam Shun Kiu. professional bodies and tertiary institutions. TYW requested for its removal from the category of “Site Formation” on the Contractor List in March 2003 and such removal took effect in April 2003. In June 2003.89% in 2001. TYW was admitted to Group B on probation under the categories of “Roads and Drainage” and “Waterworks” in December 2003 and in June 2004 respectively.000 shares of TYW from his wife at a total consideration of HK$110. In November 2008. TYW had primarily focused on undertaking waterworks projects and roads and drainage projects. In December 2002.

90% of contract income received by TYW would be distributed to TYC as subcontracting costs. TYW obtained its confirmed status in Group B under the category of “Roads and Drainage” and “Waterworks” in March 2009 and May 2009 respectively. the Group enjoyed a tax saving of approximately HK$193.387. roads and drainage). certifying that its quality management system complied with the standards applicable to construction of civil engineering works (site formation. Although TYC has been a significant member of the Group in terms of revenue and profits contribution in previous years.926. while TYC was responsible for execution of the projects as it was the practice of the Group since its foundation by Mr.000 for the year ended 31 March 2009. Kan in 1989 and it was considered that the continuance of such subcontracting arrangement and segregating the licence holder from the project executor was in the interest of the Group. The following historical timeline diagram illustrates the progression of TYW’s category status on the Contractor List: * TYW requested for its removal from this category in March 2003 and was re-admitted into this category on probationary status. As a result of the aforesaid segregation. TYW has been responsible for bidding and signing as it is the holder of the relevant licences for various civil engineering services. Prior to 1 April 2009. waterworks. roads and drainage) in February 2010.HISTORY AND DEVELOPMENT with the standards applicable to construction of civil engineering works (site formation. For the financial year ended 31 March 2009. TYW was responsible for bidding and signing civil engineering contracts with clients and subcontracting all the contract works to TYC for implementation. with — 72 — . it is not a limited company and so the Directors consider that it may not be suitable for seeking a listing on the Stock Exchange. waterworks. In order to prepare for the Listing. TYW was further accredited with ISO 9001:2008. TYW had subcontracted all its contract works to TYC and provided 90% of income from contracts to TYC as subcontracting costs which amounted to HK$78. TYW was re-admitted as a Group B contractor (on probation) under the category of “Site Formation” on the Contractor List in March 2009.

Fung at a consideration of HK$3. (ii) 1.72. Mr. The TYW (BVI) Shares transferred to Chuwei. Fung and Mr. Fung outstanding as at the date of transfer. In recognition of Mr. as part of the Reorganisation.656. all credited as fully paid up. and (iii) 1.750 TYW (BVI) Shares to Chuwei which is wholly and beneficially owned by Mr.682. Chia’s extensive experience in the civil engineering industry and/or financial industry. at a consideration of HK$3.500 TYW (BVI) Shares to Purplelight which is wholly and beneficially owned by Mr. accounts receivables. and their confidence in the future prospects of the Group. The Board considers that the equity investment in the Group by each of Mr. Mr. On 26 April 2010. Cheng. Chia. past and future contributions to the business development of the Group.250 TYW (BVI) Shares to Lotawater which is wholly and beneficially owned by Mr. Since then. Fung and Mr.089. which was offset against an equivalent amount of debt due from Mr. Chia on the other. and TY Civil acquired the remaining part of business carried out under the name of TYC from Mr. TYW acquired part of the business carried out under the name of TYC together with related assets (including. Kan to Mr. Kan at a consideration of HK$7. Mr.299. TYC has become inactive and ceased to be part of the Group. Kan in consideration of the allotment and issue of a total of 9. Kan on the one hand and Mr.31.611. Kan to Mr. TYW (BVI) acquired the entire issued share capital of TY Civil and TYW (other than the 133. which was offset against an equivalent amount of the debts due from Mr. chattels.756. At present. to Shunleetat. and the terms and conditions (including consideration received by Mr. Cheng. cash. Kan to TYW.467. Mr.311.134. which was offset against an equivalent amount of loan due from Mr. Cheng.57. the Group’s businesses are carried out through TYW and TY Civil respectively with TYW responsible for signing and implementing civil engineering contracts as a main contractor while TY Civil responsible for signing and implementing civil engineering contracts as a subcontractor.157. among others.916.2809. Kan) for their equity investment was arrived at after arms’ length commercial negotiations between Mr.22.53. which was offset against an equivalent amount of loan due from Mr. Chia outstanding as at the date of transfer. Details of the Reorganisation are set out in the sub-paragraph headed “Reorganisation” under the paragraph headed “Further information about the Company and its subsidiaries” in Appendix V to this prospectus. Cheng outstanding as at the date of transfer.83. Kan. Cheng. The Company was incorporated in the Cayman Islands as an exempted company with limited liability on 15 March 2010 and became the holding company of the subsidiaries now comprising the Group pursuant to the Reorganisation. Kan at a consideration of HK$1. Fung and Mr.HISTORY AND DEVELOPMENT effect from 1 April 2009. Kan to Mr. Kan to TY Civil. Chia at a consideration of HK$2.000 shares of TYW which were already owned by TYW (BVI) at the time of such acquisition) from Mr. Mr. Fung and Mr. Cheng. Chia would be beneficial to the development and operations of the Group.999 ordinary shares of TYW (BVI) of US$1 each (each a “TYW (BVI) Share”). Lotawater and Purplelight are not subject to any lock-up arrangements while pursuant to the App1A(5) — 73 — . which was offset against an equivalent amount of loan due from Mr. The average subscription price per TYW (BVI) Share paid by each of the three subscribers is approximately HK$2. goodwill and documents in connection with the business) and assumed certain liabilities of TYC from Mr. after arm’s length negotiations with Mr. and the effective subscription price per Share paid by each of them is approximately HK$0. entered into share sale and purchase agreements on 26 April 2010 whereby Shunleetat transferred (i) 1.

Mr. the aggregate contract sum of the contracts in which the Group was involved as a main contractor or a subcontractor was over HK$672 million. Kan. will be subject to another six months lock-up period commencing immediately after the expiry of first six months lock-up period as required under Rule 13. SHAREHOLDING STRUCTURE OF THE COMPANY The following diagram illustrates the shareholding structure of the Company immediately after the Reorganisation and before completion of the Placing and the Capitalisation Issue: R11. Mr. The Group is also the principal subcontractor of two water mains replacement and rehabilitation works contracts awarded by WSD and one term contract for waterworks District W-New Territories. In parallel.HISTORY AND DEVELOPMENT terms of the Underwriting Agreement. the Shares beneficially held by Mr.13(2) Mr. Details of the contracts completed and the contracts in progress as at the Latest Practicable Date are set out in the paragraph headed “Contracts completed and contracts in progress” under the section headed “Business” in this prospectus. Kan 100% Shunleetat (BVI) 55% Mr. Details of their undertakings are disclosed in the paragraph headed “Undertakings” under the section headed “Underwriting” in this prospectus. Currently. Chia at the time of Listing will be subject to a lock-up period which will commence on the Latest Practicable Date and ending six months from the Listing Date. As at the Latest Practicable Date. Kan and Shunleetat. provision of waterworks and laying of water pipes — 74 — . TYW has gained promotion in two categories. namely “Waterworks” and “Roads and Drainage”. Fung and Mr. Mr. Cheng 100% Chuwei (BVI) 17.5% The Company (Cayman Islands) Investment holding 100% TYW (BVI) (BVI) Investment holding 100% TYW (Hong Kong) Provision of waterworks and laying of water pipes 100% TY Civil (Hong Kong) Holding of motor vehicles.16A(1) of the GEM Listing Rules.13(1) R11. the Group is the main contractor of one contract awarded by WSD involving construction of water tank. During the past 20 years. Chia 100% Lotawater (BVI) 12. Cheng.5% Mr. the Group has established solid business relationships with a number of major civil engineering contractors in Hong Kong. pump house and water main laying and one water mains replacement and rehabilitation works contract. on the Contractor List to its current status. being the Controlling Shareholders. Fung 100% Purplelight (BVI) 15% Mr.

Cheng 100% Chuwei (BVI) Mr.25% 13. Kan 100% Public Shareholders Shunleetat (BVI) Mr. Fung 100% Purplelight (BVI) Mr.0% 41.HISTORY AND DEVELOPMENT The following diagram illustrates the shareholding structure of the Company immediately following completion of the Placing and the Capitalisation Issue: Mr. Chia 100% Lotawater (BVI) 25.375% The Company (Cayman Islands) Investment holding 100% TYW (BVI) (BVI) Investment holding 100% TYW (Hong Kong) Provision of waterworks and laying of water pipes 100% TY Civil (Hong Kong) Holding of motor vehicles.25% 9.125% 11. provision of waterworks and laying of water pipes — 75 — .

For projects that are carried out on existing trafficked roads. drainage channel and the associated lighting. Waterworks engineering services Waterworks engineering services include construction and maintenance of water mains. pumping stations. covered footbridge.06 App1A(28)(1)(A) — 76 — .5% of the Group’s total revenue respectively. treatment works. water tanks. R11.1% and approximately 11. link bridge. impounding reservoirs. excavation to the design formation level and reduction and stabilisation of existing slopes. watercourses for distribution systems and other related construction works. Site formation works Site formation works generally involve demolition of existing structures. These services may also involve related civil construction works which include excavation. access road. utilities diversion and electrical and mechanical works.9% and approximately 88. For each of the two years ended 31 March 2009 and 2010.5% of the Group’s total revenue during the Track Record Period. During the Track Record Period. representing approximately 26. revenue generated from contracts in which the Group acted as a subcontractor represented approximately 73. Waterworks. road works and drainage services and site formation works for the public sector in Hong Kong. drainage. footways and expressways.BUSINESS BUSINESS OVERVIEW The Group is principally engaged in the provision of waterworks engineering services. stabilisation. roads and drainage works and site formation works fall within a broader engineering discipline known as civil engineering. reinstatement of carriageways. the Group generated a substantial part of its revenue from carrying out waterworks engineering services and road works and drainage services in the capacity of a subcontractor. the contractor may also be required to make arrangements on traffic diversion and control. Road works and drainage services Road works and drainage services include construction of interchange. Revenue generated from the Group providing services in the capacity of a main contractor only accounted for a lesser part of the Group’s total revenue. walkway. footpath. service reservoirs. foundations strengthening. carriageway. landscaping.

rising mains. construction of service reservoirs. Well-positioning to capture the emerging business opportunities Approximately 45% of the underground water mains in Hong Kong were laid 30 years ago. Those ageing water mains are approaching the end of their service life and have become increasingly difficult and costly to maintain. with its experienced management team and extensive experience in implementation of waterworks projects. on civil engineering contracts including waterworks engineering. the Group had participated in a total of five replacement and rehabilitation work(s) contracts and another five waterworks contracts involving. Yuen Long and Kam Tin. which benefits the Group in tendering future contracts. in Hong Kong Island South and outlying islands (contract numbered 18/WSD/08) and in Tai Po and Fanling (contract numbered 21/WSD/06).BUSINESS COMPETITIVE STRENGTHS With an operating history of over 20 years. the condition of the water supply network will be strengthened upon completion of the works in 2015 and the number of pipe failures is expected to decrease accordingly. In view of these. the Group was able to secure a nine-month contract from WSD as the main contractor in connection with the reprovisioning of Mainland West Laboratory in Tuen Mun. The Directors believe that the Group has built up its reputation through its established operating history. In particular. roads and drainage works and site formation works in Hong Kong since TYW was admitted into the Contractor List in 1997. has secured work contracts for replacement and rehabilitation of water mains in Fanling. including Fanling. In September 2007 and May 2010. in July 1996. Under the water mains replacement and rehabilitation programme. the Group. as a main contractor. both as subcontractor and main contractor. Sheung Shui and Ping Che. which involved mainlaying from Tuen Mun fresh water pumping station to Siu Lang Shui (contract numbered 9/WSD/95). the Directors believe that the Group. Prior to such admission. the New Territories in September 1997 (contract numbered 3/WSD/97). the Group has been able to secure contracts as main contractor or subcontractor for the construction or maintenance of various waterworks infrastructure and undertaking various waterworks engineering services in different WSD’s operational regions. the Group has been involved in various construction and maintenance works. Over the years. has established a reputation in the waterworks engineering industry in Hong Kong. — 77 — . Sheung Shui and Ping Che (contract numbered 5/WSD/06). the Group participated in WSD’s contract as a subcontractor in connection with the improvement of fresh water and salt water supply to Tuen Mun Western Areas — Phase 1. the Government had launched the water mains replacement and rehabilitation programme in 2000 to replace and rehabilitate approximately 3. Subsequently. water tanks and pumping stations. has secured work contracts for replacement and rehabilitation of water mains in Ngan Tam Mei (contract numbered 13/WSD/06) and Sai Kung (contract numbered 9/WSD/09) respectively. The Group. During the Track Record Period and up to the Latest Practicable Date. as a subcontractor. the Directors believe that the Group possesses the following competitive strengths: Established operating history and track record As disclosed in the section headed “History and development” in this prospectus. sewer. among other things. Tuen Mun and Tai Po.000 km of water mains.

has established solid business relationships with the main contractors. Consistently high quality of services The Group has adopted a set of stringent quality assurance measures to ensure the quality of its civil engineering work. subject to the review findings. In addition. may extend the program beyond 2015 to cover the remaining distribution network of water mains. Despite the fact that as at 31 July 2010 there were 11 Group B and 35 Group C contractors in the “Waterworks” Contractor List. In particular. In recognition of the quality assurance procedures in place. the Directors believe that the Group can benefit from its proven track record of participation in the replacement and rehabilitation works contracts and various other waterworks contracts. The Directors believe that the Group. Details of the contractors’ performance index system and the assessment criteria of the performance ratings are disclosed in the paragraph headed “Contractors’ performance index system” under the section headed “Licencing and other requirements for Government projects” in this prospectus.BUSINESS The Government will commission a review to appraise the condition of the remaining water mains which are not subject to the current replacement and rehabilitation programme and. The Directors consider the recurring businesses from those main contractors have contributed to the success of the Group. the quality management system of TYW was accredited with the ISO9002: 1994 certificate and the ISO9001:2000 certificate in 2001 and 2003 respectively. through its delivery of timely services and quality works. TYW has consistently achieved outstanding performance ratings in respect of the projects undertaken by it issued by WBDB. TYW further obtained ISO9001:2008 accreditation in February 2010. Taking into account the Group’s experience in the industry with the licencing requirements for the aforesaid Government’s projects. the Group may undertake projects with contract value over HK$75 million (which is the maximum contract value which the Group is eligible to undertake as a Group B main contractor on the Contractor List) in the capacity of a subcontractor. In addition. WSD also plans to implement new salt water supply systems and upgrade certain existing systems to enhance the use of salt water for flushing purpose. — 78 — . the Directors consider that the Group is well-positioned to capture the emerging business opportunities and will benefit from the implementation of the replacement and rehabilitation programme and other capital works by WSD. WSD plans to start a capital works project by 2010 to improve the existing catchwater system for safe and effective collection for surface water. The Group can benefit from such performance ratings as such rating is a factor taken into account by the Government in the evaluation process of tenders. its outstanding performance ratings for the quality of its works received from WBDB during the Track Record Period and its experienced management team as described below could provide an edge to capture the emerging business opportunities. Some of the main contractors have business relationships with the Group for more than five years. Well-established relationships with main contractors The Group has worked with a number of main contractors since the commencement of its civil engineering business. The ISO9001: 2000 certificate was renewed in May 2006 and February 2009.

Such business relationships are crucial to the day-to-day business operations and the future business development of the Group. His experience in handling civil engineering projects was gained from his employment in other construction companies and the management of the Group’s business. throughout its established operating history and recognition in the industry. to a certain extent. Experienced management team Mr. In addition to these executive Directors who have been in charge of the business development of the Group over the years. The Directors consider that such subcontractors can facilitate the timely completion of projects of the Group. an executive Director. the vice-chairman of the Board and an executive Director. the chairman of the Board. The Group. founder of the Group and an executive Director. Chia. management and investment and is responsible for overseeing the financial aspects of the Group. Mr. has more than 14 years’ experience in corporate finance. The Directors believe that successful completion of projects. has over 25 years’ experience in civil engineering construction and is responsible for overseeing the overall project management and the daily operation of the Group. has over 29 years’ experience in the construction industry and is responsible for the business management and corporate development of the Group. Kan. the chief executive officer of the Group and an executive Director. — 79 — . depends on the work quality and efficiency of the subcontractors. Mr. has over 20 years’ experience in handling civil engineering projects of various types. around nine of which have been working with the Group for at least four years. the Group also has a professional management team with members having strong academic background and industry experience.BUSINESS Good relationships with subcontractors Some of the Group’s projects are undertaken by the Group’s subcontractors. Fung. He is responsible for the overall business planning and corporate strategy of the Group. Cheng. has maintained over 40 subcontractors on the Group’s list of approved subcontractors. Mr.

Such financial criteria primarily concern the levels of employed capital and working capital of a contractor. the Group is required to: — 80 — . general civil works As a main contractor WBDB May 2009 TYW Approved Contractors Confirmed (Notes 2 for Public Works — Waterworks Category and 3) (Group B) Approved Contractors Confirmed (Notes 2 for Public Works — and 4) Roads and Drainage Category (Group B) Approved Contractors Probationary (Notes 2 for Public Works — and 5) Site Formation Category (Group B) Current contract value up to HK$75 million WBDB March 2009 TYW Current contract value up to HK$75 million WBDB March 2009 TYW Current contract value up to HK$75 million Notes: 1.BUSINESS LICENCES/REGISTRATION HELD BY THE GROUP The following table summarises the details of the licences/registration held by members of the Group as an approved contractor as at the Latest Practicable Date: Month and year of first relevant registration with the Government departments/ organisation Government departments/ organisation As a subcontractor Construction Industry Council (建造業議會) Member of the Group which held the licence/ approval Level/category of registration held as at the Latest Practicable Date Status as at the Latest Practicable Date Value of project which the Group is eligible to undertake under the relevant licence/ registration October 2006 TYW November 2008 TY Civil Registered under the Not applicable Not applicable (Note 1) (Note 1) Primary Register of the Registration Scheme for participating in. The purpose of the aforesaid scheme is to build up a pool of capable and responsible subcontractors with specialised skills and strong professional ethics and provide a platform for the launching of new improvement initiatives through collaboration with training institutions. professional bodies and tertiary institutions. 2. among others. The List of Registered Subcontractors is maintained by Construction Industry Council (建造業議會) as part of the Registration Scheme. The financial criteria for retention on the Contractor List for respective categories (on confirmed and probationary status) are established by WBDB. To ascertain that the required financial criteria and requirements are met.

TYW is still in probationary status as TYW has so far been focusing on the waterworks engineering sector and has not yet actively pursued business in the site formation sector. an executive Director and Mr. As at the Latest Practicable Date. (iii) provide supplementary information. 3. the minimum management and technical personnel criteria for the “Waterworks” category were fulfilled by two executive Directors. roads and drainage) Organisation Accredited Certification International Limited — 81 — . Kan and Mr.BUSINESS (i) submit the original or a certified true copy of their latest audited accounts. a senior management of the Group. and (iv) answer all reasonable enquiries from WBDB. (ii) submit certified statements of outstanding workload. an executive Director and Mr. the minimum management and technical personnel criteria for the “Roads and Drainage” category were fulfilled by Mr. AWARDS AND ACCREDITATION In recognition of the Group’s outstanding performance and quality of works. there is no time limit as to how long an approved contractor must apply for promotion to confirmed status in any categories of the contractor list. the minimum management and technical personnel criteria for the “Site Formation” category were fulfilled by Mr. Lau Wai Chun. waterworks. As at the Latest Practicable Date. As at the Latest Practicable Date. Leung Hon Chung. Kan. a senior management of the Group. the Group has not undertaken a Government contract of such value or with such earth works quantity to satisfy the requirement for promotion to confirmed status and has therefore remained as an approved contractor in Group B on probation. 5. 4. the Group is also required to employ a minimum number of full time management and technical personnel with the required qualifications as stipulated in the Contractor Management Handbook (Revision B) July 2005 (承建商管理手冊—修訂版B) in order to be retained on the Contractor List (on confirmed and probationary status). Kan. the Group has received the following awards or certificate from different departments of the Government and a professional accreditation organisation: Year of grant 2010* Description Certificate for compliance with the requirements of ISO9001:2008 quality management system standard for construction of civil engineering works (site formation. As at the Latest Practicable Date. namely Mr. According to the Government licencing criteria. The Directors confirm that each member of the Group has been granted all the required licences and approval for carrying on its business activities and confirm that such required licences and approvals were valid and subsisting as at the Latest Practicable Date. Jacky. Apart from the aforesaid financial criteria. Fung.

the Group has been receiving letters from WBDB in respect of its performance ratings which are derived from the performance scores given in all the reports written on the Group’s performance in Government works contracts in the preceding 12 reporting periods. are specifically stated in the contractual documents. The work orders will specifically set out the particulars of the works required and the expected completion time of such work orders. The scope of work. 2006 and 2009. works for replacement and rehabilitation of water mains. the Directors and the Sponsor are of the view that the Group has achieved outstanding performance ratings during the Track Record Period. Replacement and rehabilitation of water mains are contract works under the water mains replacement and rehabilitation programme (please refer to the paragraph headed “Replacement and rehabilitation of water mains” under the section headed “Industry overview” in this prospectus). 2/WSD/05 during the period from 1 January 2007 to 31 December 2007 under the Considerate Contractors Site Award Scheme Organisation Labour Department of the Government 2007 Works Bureau of the Government * TYW was first accredited with ISO compliance certification in 2001. it is therefore difficult for the Government to ascertain specifically the amount of pipes to be replaced and rehabilitated in its preliminary assessment. The contractual documents of works for replacement and rehabilitation normally include the scope of work and the estimated contract values. but all works shall not be carried out without a work order. The aggregate sum of work orders during the contract term may sometimes be larger than the initial estimated contract values due to additional works requirements identified subsequent to commencement of work. On the other hand. Works contracts involving construction of water tank. Further ISO accreditations were obtained by the Group in 2003. The replacement and rehabilitation programme covers certain extent of urban areas and new development districts. CONTRACTS COMPLETED AND CONTRACTS IN PROGRESS The waterworks contracts undertaken by the Group principally involve construction of water tank. together with the estimated contract value.BUSINESS Year of grant 2009 Description Bronze prize in the renovation and maintenance works — Subcontractors in WSD Contract No. 21/WSD/06 under the Construction Industry Safety Award Scheme Merit award in recognition of the performance of TYW’s construction site in WSD Contract No. the estimated contract values specified on the contractual — 82 — . the aggregate sum of work orders during the contract term may sometimes be smaller than the initial estimated contract values due to reduction in works after commencement of works. Based on the aforesaid letters from WBDB. In this respect. pump house and main laying. and maintenance works. pump house and main laying are work contracts with estimated quantities of work. In addition.

had been contracted to undertake three replacement and rehabilitation works contracts (contracts numbered 5/WSD/06. 21/WSD/06 and 18/WSD/08) covering an aggregate sum of 155. Despite the Group undertook most of the waterwork contracts in the capacity of a subcontractor during the Track Record Period. revenue and profit recognised during the contract term could be different from the estimated contract values depending on the work orders received. Details of the work required to be performed will be set forth in each of the works order received during the term of the maintenance contracts. representing approximately 0.BUSINESS documents only act as an indication and the Group’s actual amount of work. Contracts involving maintenance works normally do not include a clear extent on the works required to be performed and also do not have estimated contract values stated on the contractual documents. the Group. The three waterworks contracts which contributed most to the Group’s revenue during the Track Record Period were the contracts in connection with replacement and rehabilitation of water mains in Tai Po and Fanling (contract numbered 21/WSD/06) in which the Group acts as subcontractor.9% of total length of water mains under the replacement and rehabilitation programme. the Group had undertaken a number of work contracts with most of them being waterworks contracts. As at the Latest Practicable Date. the aforesaid three contracts generated approximately 80. In addition.5% respectively of the Group’s total revenue. as a main contractor. replacement and rehabilitation of water mains in Ngau Tam Mei (contract numbered 13/WSD/06) in which the Group acts as main contractor and replacement and rehabilitation of water mains in Hong Kong Island South and outlying islands (contract numbered 18/WSD/08) in which the Group acts as subcontractor.1km of water mains. and as a subcontractor. had been awarded with two replacement and rehabilitation works contracts (contracts numbered 13/WSD/06 and 9/WSD/09) covering an aggregate sum of approximately 28.9km of water mains. For each of the two financial years ended 31 March 2010. Maintenance contracts normally have a set of general charging rates for different types of works. it is the Group’s business objective to undertake more waterworks contracts in the capacity of a main contractor in the near future.2% of total length of water mains under the replacement and rehabilitation programme. — 83 — . During the Track Record Period. representing approximately 5. Variation orders may reduce or increase the amount of works previously prescribed. variation orders may sometimes be given to vary the works prescribed in prior work orders issued. Details of the Group’s strategies and implementation plan in connection with the aforesaid objective are set out in the paragraphs headed “Business objective and strategies” and “Implementation plan” respectively under the section headed “Future plans and use of proceeds” in this prospectus.6% and approximately 84.

Stage II 03/2006 road works at Area 34 and 52 02/2009 in Shui Chuen O and Area 56A in Kau To 17/10/2008 ST/2005/02 Roadworks and drainage services 3/11/2008 DC/2005/02 Roadworks and drainage services Victory Trenchless Engineering Construction of sewer.628.968.51 — 84 — .05 Total amount of works certified (Note 2) HK$201. phase 01/2010 2 — mains in Fanling.222.49 WSD Replacement and rehabilitation 17/9/2007 of water mains stage 2 — 15/11/2009 mains in Ngau Tam Mei 31/8/2009 * Total contract value HK$204.598. Sheung Shui and Ping Che Penta-Ocean-Peako Joint Ventrue Sha Tin New Town.BUSINESS Contracts completed Set out below are the details of the contracts completed by the Group during the Track Record Period and up to the Latest Practicable Date: Contract period under main Time of contract completion (Note 1) The Group as a subcontractor (Note 4) 1/WSD/05(K) Waterworks engineering services Waterworks engineering services MHCC/MHWE Term contract for waterworks District K — Kowloon 1/9/2005 31/8/2008 15/08/2008 Contract number Types of contract Client/Main contractor Particulars of the contract 3/WSD/01 MHCC/MHWE Water supply to Wu Kau Tang. stage 1.267.188.830.00 WSD Water supply to Sha Tin Development Area 56A — construction of Kau To high level fresh water service reservoir and Kau To fresh water pumping station 8/5/2006 1/1/2009 2/12/2008 13/WSD/06 Waterworks engineering services Original contract value: HK$26. Nam Sang Wai and Au Tau in Yuen Long Chit Cheung Construction Co Ltd 2/9/2003 Main drainage channels for Yuen Long and Kam Tin-Shan 31/3/2009 Ha Tsuen to Lam Hau Tseun section 10/02/2010 YL 56/03 Roadworks and drainage services 31/3/2009 The Group as a main contractor 2/WSD/05 Waterworks engineering services Original contract value: HK$28.793. 26/08/2004 North District (Note 3) 12/08/2008 5/WSD/06 Waterworks engineering services Kwan On Construction Co Ltd Replacement and rehabilitation 1/12/2006 of water mains. rising 29/12/2005 Company Limited mains and pumping stations at 30/6/2010 Kam Tin. 15/11/2001 Kau Tam Tso and Lai Chi Wo.

the contract values specified on those contractual documents only act as an indication and the Group’s actual amount of work.e.BUSINESS Contracts in progress as at the Latest Practicable Date Set out below are the details of the Group’s contracts in progress as at the Latest Practicable Date: Contract period under main contract Contract number Types of contract Client/Main contractor Particulars of the contract The Group as a subcontractor (Note 4) 21/WSD/06 Waterworks MHCC/MHWE engineering services Replacement and 8/8/2007 rehabilitation of water mains 5/1/2011 stage 2 — mains in Tai Po and Fanling Replacement and 18/3/2009 rehabilitation of water mains 13/9/2013 stage 3 — mains on Hong Kong Island South and outlying islands Term contract for Waterworks District W-New Territories 1/9/2009 31/8/2012 18/WSD/08 Waterworks MHCC/MHWE engineering services 1/WSD/09(W) Waterworks MHCC/MHWE engineering services The Group as a main contractor 3/WSD/09 Waterworks WSD engineering services Original contract value: HK$9. the statement of final accounts received from the main contractor or last completion certificate received from the main contractor.47 9/WSD/09 Waterworks WSD engineering services Original contract value: HK$74.898. due to the nature of certain works contracts (i. — 85 — . Time of completion is determined with reference to. contract works for replacement and rehabilitation).503. and in the case of subcontract works. the certificate of completion received from the engineer appointed by WSD.301.86 21% Total amount of works certified (Note 2) HK$260. in the case of main contract works. revenue and profit recognised during the contract term could be varied from the estimated contract values depending on the work orders received.3% Remark: As mentioned in the sub-paragraph headed “Contracts completed and contracts in progress” in this section. Tai Po — Construction of water tank.38 Water supply to Ta Tit Yan. Notes: 1.708. pump house and mainlaying 26/6/2009 10/10/2010 Replacement and 28/5/2010 rehabilitation of water mains 23/11/2012 stage 3 .mains in Sai Kung * Percentage of work certified (Note 5) 66% Total contract value HK$672.939.328.47 N/A (Note 6) 97% 2.837.012.

therefore percentage of work certified is not applicable. For details of contract certification and payment. The statement of final accounts between the main contractor and WSD was not finalised until 11 August 2008 as there was disagreement of amount in variation orders between the main contractor and WSD. 3. As this type of contract neither has a clear specification on the works required to be performed nor contract value stated on its contractual document. The percentage of work certified is based on the certificates issued by the Group’s client on the respective projects. The amount set out in application for payment is calculated based on the amount of work completed in the period pursuant to terms of the works order received and the agreed rates for the relevant works. In respect of the contracts that the Group act as the subcontractor. This is a term contract for maintenance works. 4. 5. the Directors confirm that the main contractors are Independent Third Parties. — 86 — . 2. 6. Details of the disagreement were not disclosed by such main contractor to the Company. time of completion is determined with reference to a letter issued by the Group to the main contractor confirming completion and hand-over of works. please refer to the sub-paragraph headed “Application for payment and certification” under the paragraph headed “Operations” in this section. Details of the maintenance works contract are disclosed in the paragraph headed “Contracts completed and contracts in progress” in this section.BUSINESS In the case of contract numbered ST/2005/02. It represents the amount of works certified as a percentage of the original contract value. Amount of works certified is based on the certificates of payment received from WSD or the main contractor (as the case may be).

and (ii) the Group’s contracts in progress as at the Latest Practicable Date: (i) Locations of contracts completed during the Track Record Period and up to the Latest Practicable Date Note: Marks on the map are for indication of the approximate locations of contracts completed during the Track Record Period and up to the Latest Practicable Date.BUSINESS The following maps illustrate the locations of (i) contracts completed by the Group during the Track Record Period and up to the Latest Practicable Date. — 87 — .

— 88 — .BUSINESS (ii) Locations of contracts in progress as at the Latest Practicable Date Note: Marks on the map are for indication of the approximate locations of contracts in progress as at the Latest Practicable Date.

such work is inspected and. the main contracts of which are generally awarded through open tendering procedures. project implementation. The following diagram illustrates the general operational procedures undertaken by the Group for its business: Preparation stage Identification of projects Preparation of tender document or quotation Submission of tender document or quotation Award of contract by client Formation of project management team If subcontractor is not engaged Project implementation by direct labour of the Group Procurement of required materials and equipment Manpower allocation Implementation stage Quality assurance Preparation of master program Project implementation by subcontractors Assignment of work to appointed subcontractors Selection of subcontractors Procurement of required materials and equipment If subcontractor is engaged Maintenance stage Inspection Certification and application for contract payments Release of payment by client Release of payment to subcontractor (if any) — 89 — . The general operational procedures are largely identical for both the Group’s role as a main contractor and subcontractor. the Group commences procurement of materials. When the contract work is completed to a certain stage. Thereafter. if satisfactory. the Group may apply for contract payments. After a contract is awarded to the Group. selection of subcontractor (if required) and implementation of quality assurance and quality control procedures. the Group’s operation initially involves preparation and submission of tender document (as regards tender from the Government) or quotation (as regards subcontracting work). In general. certified by the engineer appointed for the project.BUSINESS OPERATIONS The Group is primarily engaged in the provision of civil engineering works for the public sector.

The tender notice includes a brief description of the works required.8 million and approximately HK$131. In particular.4 million respectively.5% of the Group’s total revenue respectively. representing approximately 65. revenue generated from contracts in which the Group acted as a subcontractor represented approximately 73. none of the Directors. The aforesaid revenue from contracts in which the Group acted as subcontractor was attributable to five and two main contractors respectively.1% and approximately 11.9% and approximately 88.9% and approximately 88. No revenue was derived from MHWE for the year ended 31 March 2010. For each of the two financial years ended 31 March 2009 and 2010. Chia. on which tender invitations from different Government departments are published.9% of the Group’s total revenue was attributable to five customers. For the year ended 31 March 2009. revenue derived from MHCC amounted to approximately HK$57. an executive Director. over 99. Save for Mr. revenue derived from MHWE amounted to HK$2. the contact details of the office from which forms of tender and further particulars of the project may be obtained and the closing time and date of the tender.5% of the Group’s total revenue was generated from contracts obtained from WSD in which the Group acted as the main contractor. Mr. If the main contractors are satisfied with the Group’s preliminary specifications and quotation. For each of the two years ended 31 March 2009 and 2010. whilst for the year ended 31 March 2010. Details of Directors’ interests are set out in the paragraph headed “Competing interests” in the section headed “Controlling Shareholders and Substantial Shareholders” in this prospectus. the Group began undertaking projects as a subcontractor for MHCC/MHWE. The majority of the contracts undertaken by the Group during the Track Record Period were subcontracted by main contractors. customers and subcontractors as at the Latest Practicable Date. There would not be any contractual relationship between the Group and the relevant Government department in respect of the public sector projects in which the Group acts as a subcontractor. in 2001.5 million. The Group has established business relationship with these main contractors for three to over ten years.BUSINESS Identification of projects Projects are generally identified by the Group by reviewing Government Gazette. subcontracting agreement will be entered into between the main contractors and the Group.3% of the Group’s total revenue in the respective year. the Group’s total revenue was attributable to three customers.9% of the Group’s total revenue.(iv) — 90 — . Chia’s shareholding interest in Ming Hing Waterworks. representing approximately 2. had shareholding interest in Ming Hing Waterworks as at the Latest Practicable Date. the Group’s largest main contractor. The Group is normally approached by the main contractors and requested to provide an indication of its interest in the subject projects after obtaining the preliminary specifications from the main contractors. the expected commencement date and contract period. App1A(28)(1)(b) (iii). their associates or any Shareholder had any shareholding interest in Ming Hing Waterworks or the Group’s five largest suppliers. The Group is also informed of projects subject to tender by receiving invitation letter(s) directly from the Government department concerned. The remaining approximately 26. For the year ended 31 March 2009.

BUSINESS
As the Group mainly undertook waterworks projects in public sector during the Track Record Period in the capacity of either a main contractor or subcontractor, the following table summarises the rights, obligations and risks of a main contractor and a subcontractor in a typical public sector waterworks project: Main contractor Rights (i) (ii) To receive payment from WSD directly; and no advances can be drawn from WSD. Subcontractor (i) (ii) To receive payment from the main contractor; advance from main contractor may be obtained, subject to parties’ negotiation and agreement; and

(iii) may rely on the insurance policies taken out by the main contractor. Obligations (i) To implement the work contract according to the terms set out in the contract entered with WSD; shall effect and maintain employees’ compensation and employer’s common law liability insurance in respect of any accident or injury to any workman or other person in the employment of the contractor in connection with the main contractor works or the subcontractor occurring as a result of or in connection with the execution of the subcontractor works; (i) To implement the work contract according to the terms set out in the contract entered into with the main contractor; shall bear the initial loss under any excess clause (i.e. the deductible) under the CAR/TPL Insurances and any uninsured losses in the event of a claim under the CAR/TPL Insurances which relate to the subcontract works; and

(ii)

(ii)

(iii) shall take out its own insurance for its own plant and equipment at its discretion.

(iii) shall effect and maintain CAR/TPL Insurances as required under the main contract; and (iv) shall take out its own insurance for its own plant and equipment at its discretion. Risks Minimal credit risk in receiving payment from WSD. Higher credit risk in the event of delay and/or default in payment by the main contractor.

— 91 —

BUSINESS
The gross profit margin of a typical public sector waterworks project, such as a replacement and rehabilitation of water mains project, may fluctuate throughout the term of a contract as the amount of work and associated costs usually vary from time to time depending on the work orders received. During the Track Record Period, the Group has undertaken replacement and rehabilitation of water mains projects in the capacity of a main contractor (contract numbered 13/WSD/06) and a subcontractor (contract numbered 21/WSD/06). The gross profit margins of contracts numbered 13/WSD/06 and 21/WSD/06 for the year ended 31 March 2009 were both significantly higher than those for the year ended 31 March 2010. When comparing the gross profit margins between the aforesaid two contracts in the two years ended 31 March 2009 and 2010, the gross profit margin of contract numbered 13/WSD/06 was slightly lower than that of contract numbered 21/WSD/06 in the year ended 31 March 2009 whilst the gross profit margin of contract numbered 13/WSD/06 was lower, to a greater extent, than that of contract numbered 21/WSD/06 in the year ended 31 March 2010. Preparation of tender document or quotation The Group will commence preliminary work for the preparation of tender documents (in the case of Government contracts) or quotations (in the case of subcontracted works) after obtaining the specifications from the Government department concerned or the main contractor. For preparing tender documents in the case of Government contracts, the preliminary work begins with understanding the specifications and requirements of the project and involves a visit to the site at which the project is to be undertaken. The Directors consider the site visit to be a crucial step in preparing the tender document as it enables the Group to better assess the complexity of works involved and determine which method to adopt for carrying out the work in an efficient and cost-effective manner. After the site visit, the quantity surveyors of the Group will conduct a detailed analysis on the technical and financial aspects of the project, taking into consideration the expected amount and complexity of works to be involved, the estimated amount and prices of the required materials, the technical skills required, the expected time of delivery, the involvement of subcontractor(s) and other factors that may affect the Group’s obligations. Market information and data relevant to the Group’s business and, in particular, preparation of tenders such as price trend of construction materials, wage trend and the Group’s tender record are maintained and updated regularly by the Group to facilitate the preparation of competitive tenders. After conducting the aforesaid analysis, the Group’s quantity surveyor will prepare a preliminary pricing list, insert the preliminary prices for each item in the bill of quantity and will then submit them to the Group’s contract manager for review. The contract manager will scrutinize the preliminary pricing list and bill of quantity, make adjustments (if necessary) based on his experience and recent market information and then submit and discuss with Mr. Kan, the chairman of the Board and an executive Director, and Mr. Fung, an executive Director, for their final review and approval. For preparing quotations in the case of subcontracted works, the Group will carry out procedures similar to those set out above to arrive at the quotations for submission to or negotiation with the main contractors.

— 92 —

BUSINESS
Submission of tender document or quotation In the case of Government contracts, apart from ascertaining the bill of quantity is in compliance with the specifications of the project subject to tender, Mr. Kan and Mr. Fung will, based on their experience and market knowledge, consider whether the tender is competitive in terms of pricing whilst certain level of profitability can be achieved during their review of the tender documents. Upon finalising the bill of quantity and other documents required for submission, the Group will submit the tender documents to the relevant Government department. In the case of subcontracted works, submission of formal quotation may or may not be required. In the event that a formal quotation is required, the Group will prepare the quotations in the similar way as those for preparing the tender documents as set out above and submit documentation to the main contractor. Formation of project management team Once a contract is awarded, a project management team will be formed which generally comprises the project manager, a foreman and a number of workers chosen by the project manager. In choosing the members of the project management team, the project manager usually takes into account of the nature, technical requirement and timing of delivery of the project, the available manpower of the Group, the need for recruitment of additional workers and the skills of the workers. The project management team will have monthly meeting with the engineer appointed for the project to review working progress and conduct daily inspection to enhance the quality assurance. In the case that the Group being a subcontractor, depending on the terms of the subcontracting agreement, the main contractor may designate some of its staff to provide the necessary on-site support to the Group on implementation of the contract work in order to ensure a smooth operation and have a better communication with the engineer appointed for the project. The Group will reimburse the relevant costs on a dollar-to-dollar basis to the main contractor after reviewing and assessing the validity and accuracy of the relevant costs as shown on the schedule prepared by the main contractor. The costs of on-site support from the main contractors paid by the Group for each of the two financial years ended 31 March 2010 were approximately HK$2.3 million and approximately HK$7.0 million respectively. Procurement of materials and equipment During the Track Record Period, the Group was principally focused on waterworks projects and roads and drainage projects. The principal construction materials used by the Group include various kinds of pipes (including mild steel pipes, ductile iron pipes and polyethylene pipes), fittings, steel bars, concrete and asphalt, which are sourced from a number of suppliers.

— 93 —

BUSINESS
For each of the contracts undertaken by the Group, a master program setting out the particulars on the implementation of such project and a project quality plan setting out the specifications, the timing of delivery, the construction materials and manpower required will be prepared. The Group will place the purchase orders (as and when required under the relevant main contract where the Group is a subcontractor, through the relevant main contractor) with the suppliers on the Group’s approved list for the required materials and equipment according to the project quality plan. Under normal circumstances, purchase orders will be placed whenever necessary. In addition to the required amount of inventory, the site agent will, based on his past experience in similar projects, order extra amount of inventory as buffer to cater for unforeseen circumstances, such as receipt of additional work orders by the Group. The Group will regularly review the inventory balance to ensure that a sufficient level of inventory is maintained for carrying out contract works and contingencies. During the Track Record Period, there were over 140 suppliers on the Group’s approved list of suppliers. Factors considered by the Group before admitting a supplier on its approved list include product quality, timeliness of delivery, job references and reputation in the industry. The Group reviews its approved list of suppliers on an annual basis to ensure that the Group is maintaining a diversified base of reliable suppliers which offer competitive prices. During the Track Record Period, the Group’s largest construction materials supplier (in respect of construction materials for which the Group directly placed purchase orders) accounted for approximately 3.8% and approximately 2.8% of the Group’s total purchases and the Group’s five largest construction materials suppliers (in respect of construction materials for which the Group directly placed purchase orders) accounted for approximately 9.8% and approximately 6.0% of the Group’s total purchases respectively. All of the five largest suppliers are Independent Third Parties. None of the Directors or their associates or any Shareholder holding more than 5% of the Company’s issued share capital had any interests in the five largest suppliers as at the Latest Practicable Date. During the Track Record Period, the Group had not experienced any significant disruption in the supply of materials by its suppliers. The Group has established business relationship with its top five suppliers during Track Record Period from one to nine years. No long term contract had been entered into between the Group and the suppliers. The normal credit period granted to the Group is 30 days. For contracts undertaken by the Group as a subcontractor, if the subcontracts entered into between the Group and the main contractor so provides, the main contractor may be responsible for purchasing the required materials for the Group’s use to carry out the subcontracted works concerned. For the year ended 31 March 2009, total purchases of construction materials by the Group amounted to approximately HK$20.5 million, which comprised (i) purchases of construction materials made by the Group directly with suppliers of approximately HK$4.2 million; (ii) purchase of construction materials by an independent main contractor for the Group’s use in carrying out waterworks engineering services as a subcontractor in respect of a water mains replacement and rehabilitation project (contract numbered 5/WSD/06) of approximately HK$0.2 million; and (iii) purchase of construction materials by MHCC/MHWE for the Group’s use in carrying out waterworks engineering services as a subcontractor to MHCC/MHWE in respect of a water mains replacement and rehabilitation project (contract numbered 21/WSD/06) of approximately HK$16.1 million.
App1A(28)(1)(b) (i),(ii)

App1A(28)(1)(b)(v)

— 94 —

BUSINESS
Pursuant to the terms of the subcontracts entered into between MHCC/MHWE and the Group, MHCC/MHWE, upon the written request of the subcontractor (i.e. the Group), would be responsible for purchasing the required materials for the Group’s use and is entitled to deduct the corresponding costs of construction materials from the payments to the Group in respect of works completed. For the year ended 31 March 2010, total purchases of construction materials by the Group amounted to approximately HK$32.4 million, which comprised (i) purchases of construction materials made by the Group directly with suppliers of approximately HK$2.6 million; and (ii) purchase of construction materials by MHCC/MHWE for the Group’s use in carrying out waterworks engineering services as a subcontractor to MHCC/MHWE in respect of the project as referred to the aforesaid water mains replacement and rehabilitation project (contract numbered 21/WSD/06) and another water mains replacement and rehabilitation project (contract numbered 18/WSD/08) of approximately HK$29.8 million. Similar to the subcontract entered into between MHCC/MHWE and the Group relating to contract numbered 21/WSD/06, the subcontracts in respect of contract numbered 18/WSD/08 and contract numbered 1/WSD/09(W) provide that MHCC/MHWE, upon the written request of the subcontractor (i.e. the Group), would be responsible for purchasing the required materials for the Group’s use and is entitled to deduct the corresponding costs of construction materials from the payments to the Group in respect of works completed. As the ”buy-sell” relationship for construction materials was established between MHCC/MHWE and the construction materials suppliers concerned and MHCC/MHWE was responsible for making payments to such suppliers, the Group has not included the suppliers from which MHCC/MHWE purchased the construction materials as suppliers of the Group in its books and records. Similarly, the Group had not included the suppliers from which the aforesaid independent main contractor purchased the construction materials as suppliers of the Group in its books and records. Construction materials purchased through the independent main contractor according to the subcontracting contract signed with such main contractor were accounted for as inventory of the Group. This accounting treatment is the same as that if the Group purchased these materials by itself. The Group settled the cost of construction materials purchased through the independent main contractor on a monthly basis by offsetting an equivalent sum against the progress billing to such main contractor. Project implementation The project management team, headed by a project manager, is responsible for all aspects of the project including preparation of the master program and project quality plan, manpower management, resources allocation, budget monitoring and overall project execution and administration. The project manager who is normally stationed at the site is responsible for site supervision and monitoring work progress. Meetings between the client and the project manager are held regularly to review work progress, to resolve issues identified during implementation of the project and to revise the work program if variation orders are received.

— 95 —

the Group may appoint subcontractors to carry out certain parts of a contract. quality of work and skill sets of workers. cost effectiveness and licencing requirements. supervision and terms of measure of contract works follow those contained in the relevant main contract. During the same period. App1A(28)(1) (b)(v) — 96 — . to its subcontractors. there were more than 40 subcontractors on the Group’s list of approved subcontractors.3 million respectively. It is not uncommon in the civil engineering industry or construction industry in general for the main contractor to make advances to subcontractors as initial start-up capital for undertaking contract works. the selection of which are based on a set of criteria as set out in the Group’s internal quality procedure including previous job references. all other material terms including payment.6 million and approximately HK$40. In situations where subcontractors do not have sufficient funds to recruit additional workers or acquire the materials necessary to carry out their works.9% and approximately 32. the Group’s largest subcontractor accounted for approximately 35. the expertise required. The list of approved subcontractors is reviewed and updated on an annual basis based on the performance assessment of each subcontractor by the Group.1% of the Group’s total subcontracting costs respectively.1 million respectively.BUSINESS Subcontracting arrangements The contract period of the contracts awarded to the Group in the past varied from nine months to approximately 66 months and such contracts may involve works that require other expertise such as mechanical and electrical works and landscaping and plantation works. To ensure the overall quality of work on a project. reputation in the industry. the subcontractor’s timeliness of delivery of work in the past. During the Track Record Period.9% of the total costs of service respectively. the main contractor may make advances to the subcontractors for such purposes. All of the five largest subcontractors are Independent Third Parties. the balance of the advances made by the Group to its subcontractors amounted to nil and approximately HK$2. which were non-interest bearing.8% and approximately 22. During the Track Record Period. representing approximately 34. the level of complexity of work involved. Depending on the Group’s manpower availability. the Group as a main contractor has made advances. the Group will take into consideration the manpower allocated to the project by the subcontractor. which terms will require the subcontractor to observe all the requirements and provisions of the relevant main contract entered into between the Group and its client. the subcontractor’s quality of work.1% of the Group’s total subcontracting costs and the Group’s five largest subcontractors accounted for approximately 71. the Group has maintained a list of approved subcontractors. price competitiveness.3% and approximately 48. In determining the appointment of a subcontractor. The Group will enter into a subcontract agreement with the subcontractor appointed. Except for situations where subcontract rates and specifications of subcontracted works are particularly stated in the subcontract agreement. During the Track Record Period. None of the Directors or their associates or any Shareholder holding more than 5% of the Company’s issued share capital had any interests in the five largest subcontractors as at the Latest Practicable Date. the management control of the subcontractor and the price competitiveness of quotation. the Group’s subcontracting costs amounted to approximately HK$24. As at 31 March 2009 and 2010.

During the Track Record Period and up to the Latest Practicable Date. The Directors are of the view that costs of repair or rectification were immaterial during the Track Record Period. The maintenance period. In the case of the Group being a subcontractor. there were over 40 subcontractors on the Group’s list of approved subcontractors. Similar to the monthly interim payment. the Group will apply for monthly interim payment pursuant to the terms of the work contract by submitting to the engineer appointed for the project a statement of account. The engineer appointed for the project will issue a certificate of payment by no later than 21 days of the date of receipt of such notice if. During the maintenance period or within 14 days after its expiry. together with other supporting documents as may be required by the engineer appointed for the project for payment of interim works. showing the value of the work completed in the period.BUSINESS During the Track Record Period. handling fee. cost of purchase of construction materials (where applicable) and other reimbursements payable by the Group. the procedures for application for payment and certification are similar to those in the case of the Group being a main contractor. will first deduct. if any. Inspection During the course of work. the final payment shall be made to the Group within 21 days of the issue of the completion certificate by the engineer appointed for the project. the Group had not experienced any incidents whereby the Group’s subcontractors have caused delay in completing the required services which resulted in any material adverse impact on the Group’s operations or financial position. — 97 — . settlement or other faults identified within the maintenance period. the engineer appointed for the project may by notice in writing require the Group to carry out any work of repair or rectification. upon receipt of payment from the relevant Government departments. except that the Group will submit the relevant documents to the main contractor instead of the engineer appointed for the project. The payment of interim works will be received within 21 days after the receipt of the certificate of payment. the works were satisfactorily completed upon the relevant time frame in accordance with the relevant contract. or make good any defect. imperfection. Under normal circumstances. before making payment to the Group. the contract fee. in his/her opinion. shrinkage. shall commence on the day following the date of completion stated in the completion certificate and last for about a year. such application for payment and certification will be conducted monthly until the entire project is completed. As described above. nine of which had been working with the Group for at least four years. the Group is entitled to apply for interim payment for the work in progress per month according to the terms of the work contract. the site agent or other team members assigned by him will conduct inspection on all works completed on a regular basis to ensure that the works performed by the Group comply with the requirements as set out in the relevant contract. The main contractor. a further inspection will be conducted together with the engineer’s representative before application for interim payment. the value of the materials used for the project and any other sums to which the Group considers to be due to it under the relevant contract. Application for payment and certification In the case of the Group being a main contractor. Under normal circumstances. as specified on the form of tender.

roads and drainage). the respective performance ratings for the fourth quarter of 2009 and the first quarter of 2010 of TYW were the same as the respective highest rating given by WBDB to a total of ten Group B contractors under the category of “Waterworks” during the relevant period. In particular. quality of construction materials and manpower required for a project are met. TYW achieved outstanding performance ratings in respect of the projects undertaken by it and did not receive any poor performance ratings from ETWB. Details of his qualifications and industry experiences are disclosed in the section headed “Directors. the Directors could not rule out the possibility that there might be other contractors getting the same rating as TYW did during the relevant period. — 98 — . there were 12 personnel responsible for quality assurance in the Group and Mr. Generally speaking. The current ISO 9001:2008 certificate will expire on 2 June 2012. As the letters from WBDB do not specify the number of contractors achieving the highest rating. which is designed to ensure that the specifications. In recognition of the quality assurance procedures in place. As at the Latest Practicable Date. The time required for delivery of materials by the suppliers and the expected commencement date of site work will also be taken into consideration when determining the size of order. In addition. The project management committee regularly reviews the level of inventory to ensure that there is sufficient inventory for utilisation by the projects. the amount of construction materials to be ordered is assessed by the site agent on a project-by-project basis depending on the work orders (if any) and specific requirements of each project. Each project is implemented according to its project quality plan. waterworks. the quality management system of TYW has been certified that it complies with the requirements of ISO9001:2000 quality management system standard applicable to construction of civil engineering works (site formation. senior management. The Group’s inventory level is monitored on an ongoing basis. According to the letters received from WBDB dated 1 February 2010 and 3 May 2010 respectively. The ISO certificate would be renewed once every three years and ISO surveillance visit would be conducted once every six months. Lau Wai Chun. The project manager reviews the aforesaid aspects of a project against the requirements set out in the project quality plan from time to time and makes modifications and rectifications whenever necessary. the Group may increase the inventory of certain materials required for a project in advance if the project management committee foresees that the prices of those materials will rise in the near future. the site agent or foreman will inspect the workmanship of the work completed and prepare an as-constructed drawing. daily inspection will be conducted by the site agent or foreman to ensure that the work completed conforms to the specifications and requirements set out in the contract. Prior to making an application for certification of completion. board committees and staff” in this prospectus.BUSINESS INVENTORY CONTROL The primary objective of the inventory control is to maintain a sufficient level of inventory for carrying out the projects without delay and contingencies. QUALITY ASSURANCE The Group has adopted a series of quality assurance measures to ensure the quality of its work. Jacky is the head of quality assurance of the Group. timing of delivery. During the Track Record Period.

which is not significant as compared to the aforesaid number of industrial accidents. whichever is earlier. The injured persons in two of the accidents were the employees of the Group’s subcontractors and as the Group was neither the main contractor of the projects nor direct employer of the injured persons in such two accidents. Such three industrial accidents involved personal injuries of labours and no casualties were recorded. with the maximum indemnity of HK$200 million per single event. the Board considers the risk exposure of the Group in this regard is minimal. the safety officer will provide a safety briefing regularly to highlight major safety issues to the workers. the Group has not resolved the case with the injured employee of the Group yet and no injury claim has been received by the Group from such injured employee.BUSINESS Nevertheless. The injured employee sustained left ankle fracture in the accident. the number of industrial accidents in the construction industry in Hong Kong were 3. and thereafter the site agent will be responsible for implementing appropriate safety precautions or rectification measures in respect of the issues identified. based on the letters from WBDB during the Track Record Period. In respect of the one accident occurred where the Group was the main contractor of the project. In addition. Given part of the evaluation process of tenders is based on a formula. In order to minimise the occurrence of industrial accidents and improve the Group’s safety policies. As the Group had taken out and maintained employees’ compensation insurance policy. Each worker at site is provided with an induction training on the safety policies of the Group. subject to the terms and conditions of the relevant policy. For each of the financial years ended 31 March 2009 and 2010.755 in 2009 respectively. As at the Latest Practicable Date. site agent and the Group’s client will carry out weekly on-site inspection to identify existing and potential safety issues. The safety officer. Details of the Contractors’ Performance Index System and the assessment criteria of the performance ratings are disclosed in the section headed “Licencing and other requirements for Government projects” in this prospectus. the Directors and the Sponsor are of the view that the Group has achieved outstanding performance ratings during the Track Record Period. safety reminders and warnings are posted at prominent areas at the sites. The aforesaid accident happened on 21 January 2010 in which a plant and equipment operator slipped off from a truck while he was off-loading the raw materials on the truck. According to the Occupational Safety and Health Statistics issued by the Government. injury claims were made by the relevant injured persons to their respective main contractors of the projects. SAFETY POLICY The Group has implemented a stringent set of safety policies in order to provide a safe and healthy working environment to its employees. (i) 6 January 2011 or (ii) the practical completion of the project and during the maintenance period of 12 months immediately following the aforesaid period. should be insured against the claim made by the injured employee for his injury subtained within the insurance period commencing from 26 June 2009 and terminating upon. Depending on the scope of work at each site. a material component of which is a tenderer’s performance rating. Although the injured employee has the right to lodge a claim against the Group for compensation or other remedies. the injured person was a direct employee of the Group. given the Group has insurance with a maximum indemnity of HK$200 million covering such potential liabilities.033 in 2008 and 2. the Group will keep on conducting safety trainings to uphold the safety awareness of the — 99 — . the Group. the Group recorded one and two accident(s) respectively. TYW’s recent outstanding performance ratings are beneficial to its bidding of tenders.

no material safety issues were identified by the safety auditor. Mr. personal protective programme.000. Qualified safety staff to assist the line organization on implementing the safety management system was insufficient. the safety auditor. Choi Kwok Kin Paul held various safety supervisory or safety managerial positions in several corporate entities from 1993 to 2007. had made certain recommendations to the Group including. from the most senior executives down to the front line supervisory staff. safety rules. has engaged external safety firm or auditor to carry out review or audit on the Group’s safety aspects on a half-yearly basis. The following tables set out the key recommendations made by the safety auditor. occupational health assurance programme and other safety aspects of the Group. He has been a registered safety officer and a registered safety auditor under the Labour Department of Hong Kong since 1997 and 2000 respectively. The Group. Choi Kwok Kin Paul. the aggregate fee paid to the safety auditor or the consultancy firm amounted to HK$55. He has been providing external safety audit and safety review services since 2008. — 100 — . since August 2008. Sequence Management Consultants Limited is an independent consultancy firm specialising in providing site safety inspection and safety audit services to engineering and construction company in Hong Kong. The follow-up actions in response of the above recommendations have been completed by the Group as at the Latest Practicable Date. revisions of safety plan and emergency plan and arrangement of emergency drill. Choi Kwok Kin Paul is a registered safety auditor under the Factories and Industrial Undertakings (Safety Management) Regulation (Chapter 59AF. Aspect Safety policy Recommendations and findings Responsible person Project Manager/ No commitment was stated in the safety policy Safety Officer that safety and health are the prime responsibilities of the management at all levels. among other things. The scope of safety audit generally included assessment of safety policy. Mr. safety organization. Choi Kwok Kin Paul. During the Track Record Period. in the latest safety reports and the follow-up actions undertaken by the Group in response thereto: TYW Follow-up actions undertaken/ implementation results Safety policy has been revised to include the required information. In the latest safety report.BUSINESS labour. During the Track Record Period. Mr. Mr. the Laws of Hong Kong). Project Manager Organisational structure Adequate qualified safety staff has been appointed to assist the line organization for implementation of the safety management system.

Aspect Safety training Recommendations and findings Safety training plan was not set up to cope with the training needs. Safety plan did not specify the line supervisor/line management’s involvement in the accident/incident investigation. Training material of the site-specific induction training has been revised to include in-house safety rules. lifting appliance turn over. damage of town gas pipes. The safety plan did not mention about the identification of the residual risks after reasonably practicable engineering and administrative controls have been applied. “In-house safety rules” was not an item of site-specific induction training. — 101 — . Project Manager/ Safety Officer Personal protective programme The safety plan has been revised accordingly.BUSINESS Follow-up actions undertaken/ implementation results Training plan has been established to cope with the training needs. Accident/Incident investigation Project Manager/ Safety Officer The safety plan has been revised to stipulate the line supervisor/line management’s involvement in the accident/incident investigation. lifting appliance turn over. The project safety plan has been revised to include inspection programme. Emergency situations including damage of electrical cable. leakages of chemicals have been stipulated in the safety plan. leakages of chemicals had not been identified as emergency situations. Emergency preparedness Project Manager/ Damage of electrical Safety Officer cable. damage of town gas pipes. Responsible person Project Manager/ Safety Officer In-house safety rules and regulations Safety Officer Programme for inspection of hazardous conditions Safety Officer Project safety plan did not mention about any inspection programme by the senior management at regular intervals.

Promotion of safety and health awareness The progress/status of Considerate Contractors Site Awards (公德地盤) was not reported/ discussed in the site safety and environmental meeting. — 102 — . Appointment of banksman has been properly documented. Safety committee meeting minutes have been displayed on the safety bulletin boards. Safety Officer Job hazard analysis Chemical hazard. Aspect Evaluation selection and control of sub-contractors Recommendations and findings There was not any pre-work meeting held with subcontractors to discuss the safety and health aspects. Process control programme Site Agent/Safety Record was not Officer documented for the appointment of banksman to control the moving of vehicles or equipment in areas where the safety of public may be endangered was not documented. The progress/status of safety promotional competition has been reported/discussed in the site safety and environmental meeting. dangerous substance and road work was not included in the list of foreseeable hazard. The noise assessment/ requirement was not mentioned in the safety plans. Responsible person Project Manager/ Site Agents/ Safety Officer Safety committee Safety committee meeting Safety Officer minutes was not brought to all employees’ knowledge at regular intervals. dangerous substance and road work have been included in the safety plan as foreseeable hazards. Project Manager/ Safety Officer Occupational health assurance programme Safety Officer The noise assessment/ requirement has been included in the safety plan.BUSINESS Follow-up actions undertaken/ implementation results Pre-work meeting have been held with subcontractors to discuss the safety and health aspects. Chemical hazard.

trainer and target trades. Programme for inspection of hazardous conditions Analysis of the results and trends of safety inspection had not been analyzed to identify the repeated items. The training plan should specify the course titles. Project Manager/ Safety Officer — 103 — . Project Manager/ Safety Officer In-house safety rules and regulations Training materials of site-specific induction training have been revised to include in-house safety rules. “In-house safety rules” was not an item of site-specific induction training. Review and revise Safety Plan for the analysis of results and trends of repeated sub-standard items. Safety training Project Manager/ Training plan could not Safety Officer be provided during the audit.BUSINESS TY Civil Follow-up actions undertaken/ implementation results Safety plan has been revised to include the required details. time required for training. The lines of communication and responsibility were not defined clearly. Training plan has been prepared accordingly. and had not been stated in the corporate safety plan. Aspect Safety policy Recommendations and findings Responsible person Safety plan mentioned Project Manager/ that the safety policy will Safety Committee be reviewed in safety committee meeting. However. Safety Officer Organisational structure Safety organisation chart has been revised to include the required details. the safety plan had not stated the details and specific period for reviewing the safety policy. aims.

Project Manager/ No monitoring system Safety Officer was shown in the safety plan to ensure that the equipment.BUSINESS Follow-up actions undertaken/ implementation results Safety plan for accident/ incident investigation procedure review has been revised accordingly and discussed and reviewed at safety committee meeting. emergency plans for two of the contracts undertaken by TY Civil had not defined the duties of emergency team members clearly. Safety Plan has been revised to clearly define the duties of emergency team members. Safety plan addressed the Project Manager/ distribution of minutes of Safety Officer corporate safety committee meeting. Safety committee Safety committee meeting minutes have been displayed on bulletin boards at relevant work sites. Evaluation selection and control of subcontractors Safety plan has been revised to include the required information. this minute could not be observed on the safety bulletin board during the time of audit. tools and materials provided by subcontractors comply with statutory and contractual requirements. However. plants. Responsible person Project Manager/ Safety Committees/ Safety Officer Emergency preparedness Project Manager/ Safety plan defined the Safety Officer duties of the emergency team members. However. Aspect Accident/Incident investigation Recommendations and findings TY Civil was recommended to mention a time frame for reviewing the accident /incident investigation procedure such as one or two years and to review the investigation procedure under the condition of corporate safety and health committee meeting. — 104 — .

Responsible person Project Manager/ Safety Officer/ Site Agent/ Sub-Agents Promotion of safety and health awareness TY Civil was advised to Project Manager/ participate in the Site Agents/ quarterly award of Safety Officer Considerate Contractors Site Awards (公德地盤). The progress of such awards should also be reported in the minutes of site safety and environmental meeting. such method statement and safe working procedure had not been produced for specific lifting operations during audit. progress has been discussed in site safety and environmental meeting. Documentary audit on two of the projects revealed that project safety plan had not mentioned non-standard lifting operation. Also. Project Manager/ Safety Officer Participated in the Considerate Contractor Site Awards (公德地盤). Physical observation revealed that noise warning signs and noise labels could not be observed on all air compressors and excavators in two of the work sites. Process control programme Project Manager/ Safety Officer Safety procedures have been produced for specific lifting operations. TY Civil was advised that the risk assessment report should be discussed in the site safety and environmental meeting. Aspect Job hazard analysis Recommendations and findings There was no arrangement to distribute the risk assessment report to the relevant subcontractors and parties.BUSINESS Follow-up actions undertaken/ implementation results Risk assessment reports have been discussed in site safety and environmental meetings and corporate safety committee meeting. — 105 — . Occupational health assurance programme Noise warning signs/ labels have been displayed on all air compressors and excavators in the relevant work sites.

at Unit 3. The Directors also consider that the requirements on the financial. as compared to a total of 46 approved contractors listed on the Contractor List under the category of “Buildings” for Group B. Jacky. who is satisfied with the implemented follow-up actions.m. Mr. at G/F.35 sq. 28 On Lok Mun Street. New Territories. Wanchai.. Fanling.m. The aforesaid follow-up actions will be reviewed by the safety auditor in the next safety audit which is expected to be conducted in September 2010. in which a tenderer’s performance rating is taken into account to a significant extent. the Group primarily focused on providing waterworks engineering services for the public sector in Hong Kong. one unit with a saleable area of approximately 62.563 sq. the Group has leased one office unit with a saleable area of approximately 79.91 sq. 3/F. Fuk Shing Commercial Building.49 sq. Details of the licencing requirements for a contractor to be eligible to tender for work contracts of the Government are set out in the section headed “Licencing and other requirements for Government projects” in this prospectus. Choi Kwok Kin Paul to conduct the next safety review or audit for the Group. Hong — 106 — . 86 San Uk Ka.. 1 Anton Street. Tai Po.m. Lau Wai Chun.. 7/F. 28 On Lok Mun Street. The Directors consider the competition in the aforesaid sector is less intense as compared with that in other types of civil engineering works such as building construction. Apart from the Group’s head office and principal place of business in Hong Kong. at Rooms 1 and 3. there were a total of 11 approved contractors listed on the Contractors List under the category of “Waterworks” for Group B. TYW achieved outstanding performance ratings for the quality of its works from WBDB during the Track Record Period. technical and management aspects of a contractor for inclusion on the Contractor List provide effective barriers to entry for international and local contractors who are not currently on the approved list from entering the sector as a main contractor. COMPETITION During the Track Record Period. Hong Kong with a saleable area of approximately 129. 3/F.m. The Group intends to engage Mr. Fanling. New Territories... As disclosed in the paragraph headed “Quality assurance” in this section. PROPERTY INTERESTS Property interests leased by the Group in Hong Kong (i) Offices The Group’s head office and principal place of business in Hong Kong is located at Unit 14. Fuk Shing Commercial Building. Hong Kong for general office use. The Directors believe that TYW’s recent outstanding performance ratings enhance its competitiveness in tendering a project.BUSINESS The above follow-up actions have been implemented by the Group and reviewed by the Group’s safety officer. Based on the information available from WBDB’s website as at 31 July 2010. Anton Building. Some evaluations of tenders are based on a formula approach. Hong Kong for office use and two rooms in a unit with an aggregate total saleable area of approximately 14. New Territories.

summary of values and valuation certificate from Vigers Appraisal and Consulting Limited are set out in Appendix III to this prospectus. Ming Hing Waterworks.BUSINESS Kong for office use.32 million and approximately HK$0. the Group did not own any property interests. The coverage of such insurance policies includes all works performed by the main contractor and all its subcontractors.. is principally engaged in the provision of maintenance and construction works on civil engineering contracts including waterworks engineering. As at the Latest Practicable Date. Chia. the relevant member of the Group will not take out separate insurance policies but will rely on the insurance policies taken out and maintained by the relevant main contractor. RELATIONSHIP WITH MHCC/MHWE Background MHCC and MHWE are both wholly-owned subsidiaries of Ming Hing Waterworks. During the Track Record Period. Property valuation Vigers Appraisal and Consulting Limited. When acting as a subcontractor. The reliance of the Group on the main contractors’ insurance policies is explicitly provided for in the relevant subcontracting agreements. Hong Kong with a gross floor area of approximately 170. which have no commercial value. INSURANCE It is a practice in the Hong Kong construction industry. No. Details of the lease agreement in respect of aforesaid leased properties are set out in Appendix III to this prospectus. 21/F. — 107 — . 28 Lok King Street. Details of the valuation and the text of the letter. which is wholly owned by Mr.29 million respectively. has valued the property interests of the Group as at 31 May 2010. Particulars of the Lease Agreement entered into between the Group and HKLC are set out in the section headed “Connected transactions” in this prospectus. insurance cost for projects amounted to approximately HK$0. Shatin. an independent property valuer. The Palazzo.48 sq. as well as a contractual term between the relevant main contractor and a client. The Directors confirm that the Group has obtained adequate insurance coverage for the operation of its business.m. that the main contractor of a project will take out and maintain employees’ compensation insurance and contractor’s all risks insurance for the entire project. a company with its issued shares listed on the Main Board of the Stock Exchange. New Territories. an executive Director. road works and drainage and slope upgrading services in Hong Kong.. The aforesaid office premises located at Wanchai are sub-leased from HKLC. through its subsidiaries. The Directors confirm that the Group has taken out and maintained all its necessary and required insurance policies in respect of employees’ compensation and contractors’ all risks for the projects in which members of the Group act as main contractors. (ii) Director’s quarter The Group has leased a residential unit as its Director’s quarter at Flat B. Tower 8.

and the maximum balances of advances during the aforesaid two years were approximately HK$14. being 5%. In respect of the eight contracts completed by the Group during the Track Record Period.BUSINESS Business relationship The business relationship between the Group and MHWE started in 2001 with a waterworks project in the North District in the New Territories. revenue derived from MHWE amounted to approximately HK$2. Kan who approached MHWE after Mr. the Group has also received advance from MHCC in respect of another water mains replacement and rehabilitation project (contract numbered 18/WSD/08) subcontracted by MHCC.3% of the Group’s total revenue in the respective year. Among the balances outstanding as at 31 March 2009 and 2010.75% per annum (subject to the right of such bank to renegotiate in the event that its best lending rate.2 million and approximately HK$3. The Directors consider that if advances were not made by MHCC/MHWE to the Group for implementation of the aforesaid contracts. No revenue was derived from MHWE for the year ended 31 March 2010.4 million respectively. and in respect of the five contracts in progress as at the Latest Practicable Date. as a main contractor.5 million. the Directors believe that Ming Hing Waterworks has also made advances to its other principal subcontractors apart from the Group. Given that the interest rate charged by MHCC/MHWE is comparable to the interest rates charged by a licenced bank in Hong Kong on the loans previsously granted to the Group (being 1% per annum over the best lending rate of such bank of 5% for the HK$4.5 million respectively carried interest at HIBOR (being 0. Since the inception of business relationship with MHWE as described above. As at 31 March 2009 and 2010. revenue derived from MHCC amounted to approximately HK$57. approximately HK$8. The Group had commenced obtaining interest-bearing advances from MHCC in 2007 in respect of a water mains replacement and rehabilitation project (contract numbered 21/WSD/06) subcontracted by MHCC.0 million respectively.8 million and approximately HK$131. including the advances. bringing in new shareholder(s) to the Group or obtaining external borrowings. representing approximately 2. Based on the disclosure in the annual report of Ming Hing Waterworks for the year ended 31 March 2010. Kan becoming aware of the relevant Government contract being awarded to MHWE. For the year ended 31 March 2009. MHCC/MHWE.0 million non-revolving loan and a flat rate of 3.9% and approximately 88.11%) plus 4%.2 million and approximately HK$9. Kan. had subcontracted a few contracts from WSD to the Group for implementation. whereby TYW acted as a subcontractor to MHWE. representing approximately 65. the Controlling Shareholder. were arrived at between the Group and MHCC/MHWE after arm’s length negotiation.0 million and approximately HK$11. advances from MHCC/MHWE amounted to approximately HK$8. the Group could have sought alternative financing methods such as obtaining loans from Mr.2 million respectively. three contracts were obtained from MHCC/MHWE. The terms of the aforesaid contracts. changes between the date of the relevant facility letter and the date of — 108 — . The aforesaid advances will normally be fully set off against certified payments payable by the main contractors to the Group upon completion of the relevant contracts.9% of the Group’s total revenue. MHCC/MHWE has been the Group’s largest customer since the year ended 31 March 2008. Apart from the above contract. two contracts were obtained from MHCC/MHWE. TYW’s engagement in respect of the aforesaid waterworks project was initiated by Mr. For each of the two years ended 31 March 2009 and 2010.

8 million respectively. For this reason. during the Track Record Period. having taken into consideration the nature. The Directors consider the Group’s reliance on MHCC/MHWE during the Track Record Period is attributable to a combination of factors including (i) the length of the subject contracts. and the Group also has past experience in receiving advances from another independent main contractor and making advances to subcontractors of the Group. the Directors believe it is not uncommon for a main contractor to make advances to subcontractors.8% and approximately 88. the Directors consider it beneficial to the Group to obtain such advances for the purpose of recruiting additional workers and acquiring the equipment and machinery and/or materials necessary to carry out the contract works for which MHWE/MHCC was the main contractor. The terms of the contracts entered into between the Group and MHCC/MHWE in respect of provision of waterworks engineering services by the Group as a subcontractor to MHCC/MHWE were arrived at after arm’s length negotiation. MHCC/MHWE had purchased construction materials for the Group’s use in carrying out waterworks engineering services as its subcontractor pursuant to the terms of the contracts entered into between MHCC/MHWE and the Group during the Track Record Period. As there was another independent main contractor which had purchased construction materials for the Group and the Group also has past experience in purchasing construction materials for its subcontractors. between the Group and MHCC/MHWE.0 million non-revolving loan respectively). the advances from MHCC/MHWE do not require any asset pledge or security from the Group or guarantee from the Controlling Shareholders and obtaining the advances would enhance the liquidity of the Group. Reliance on MHCC/MHWE For each of the two financial years ended 31 March 2009 and 2010. devoted a considerable amount of financial resources and manpower on the implementation of contracts numbered 21/WSD/06 and 18/WSD/08. most of the works contracts undertaken by the Group have a term of over two years. The Directors are of the view that the terms of the relevant contracts (including the purchase of construction materials by and advances from MHCC/MHWE) were on normal commercial terms and the relevant contracts were entered into in the ordinary and usual course of business of the Group. the Directors believe that it is not uncommon for a main contractor to purchase materials for its subcontractor. Furthermore. civil engineering contracts (including waterworks contracts) generally cover a term of two years or more. size. certain subcontracts obtained by the Group from MHCC/MHWE prior to the Track Record Period remain to be in progress within the Track Record Period. and the Group therefore had not taken on other large-scale projects. As shown in the paragraph headed “Contracts completed and contracts in progress” under this section. purchase of construction materials by MHCC/MHWE for the Group amounted to approximately HK$16.3% to the Group’s total turnover. For each the two years ended 31 March 2009 and 2010.BUSINESS drawdown) for the HK$2. MHCC/MHWE was the largest customer of the Group. Due to the volume and complexity of works involved.1 million and approximately HK$29. and (ii) the then financial resources and capacity of the Group. as it is indicated in the annual report of Ming Hing Waterworks for the year ended 31 March 2010 that Ming Hing Waterworks has made advances to its other principal subcontractors. capital requirement and complexity of the relevant projects. contributing approximately 68. Furthermore. — 109 — . the Group had. Details of the projects for which the above construction materials were purchased are disclosed in the sub-paragraph headed “Procurement of materials and equipment” in this section.

In view of the above. an indirect wholly-owned subsidiary of Ming Hing Waterworks entered into an agreement relating to an acquisition of interest in a mining business. the Directors expect to obtain two more waterworks contracts directly from WSD next year and have allocated an aggregate of HK$6. As set out in the section headed “Future plans and use of proceeds” in this prospectus. The Group’s effort in obtaining contracts directly from WSD is evidenced by the Group’s successful bid for a replacement and rehabilitation works contracts of approximately HK$74. In anticipation of the completion of contract numbered 21/WSD/06 by early next year. the Group received a letter confirming acceptance of its quotation submitted in June 2010 from a main contractor in respect of a waterworks contract with estimated contract value of approximately HK$4. The Group has been pursuing business opportunities with main contractors other than MHCC/MHWE.7 million in contract value in May 2010. the Group has been closely monitoring the tender notices and will participate in the tendering process if suitable opportunities arise. On one hand. As at the Latest Practicable Date. the Group and such main contractor were still in the process of finalising the terms of the relevant waterworks contract. Recent development of Ming Hing Waterworks As disclosed in the MH Circular. the Directors were not able to estimate whether the Group would be awarded the sub-contractor works for such project. Ming Hing Waterworks intends to continue with the waterworks engineering business depending on the then business environment and prospects. the Directors believe the Group’s reliance on MHCC/MHWE after Listing will be significantly reduced from the current level. In July 2010. the directors of Ming Hing Waterworks explained that the decline in its profit was primarily attributable to the drop in gross profit margin as a result of increasing construction material and labour costs. In particular. The Group also submitted a quotation to another main contractor in respect of waterworks with estimated contract value of approximately HK$52. — 110 — .BUSINESS The Directors believe that the reliance on MHCC/MHWE will be gradually reduced after the Listing. It is also disclosed in the MH Circular that. apart from expanding the business scope to engage in mining business. It is the intention of the Group to continue to actively seek business opportunities with main contractors other than MHCC/MHWE.4 million in July 2010. As at the Latest Practicable Date.0 million out of the net proceeds from the Placing to acquire the necessary equipment and machinery and recruit the required staff for the aforesaid two projects.4 million. Both of the aforesaid main contractors are not associated with Ming Hing Waterworks or its subsidiaries. The directors of Ming Hing Waterworks consider that it is beneficial for its group to diversify its existing business portfolio in view of the deteriorating financial performance of its waterworks engineering business. The latter quotation relates to waterworks which form part of a Highways Department (路政署) project. it is the Group’s business objective to undertake more work contracts in the capacity of a main contractor in the future and the Directors intend to more actively participate in the tendering process for Government contracts.

the Directors believe that the relatively low gross profit margin and net profit margin of Ming Hing Waterworks may be explained by the fact that Ming Hing Waterworks has subcontracted some of its contracts to subcontractors. Given that the fee receivable by MHCC/MHWE on the contracts granted to the Group largely comprise the contract fee which represents a fixed percentage of the total contract value. Furthermore. The Group. The better the Group controlled its costs of service and minimized its execution risks.BUSINESS Although MHCC/MHWE was the largest customer of the Group during the Track Record Period. MHCC/MHWE entered into a main contract with WSD and then entered into a subcontract with the Group pursuant to which it subcontracted the overall management and implementation of the entire contract works to the Group. The Directors also note that the directors of Ming Hing Waterworks attributed the decline of the gross profit of Ming Hing Waterworks to rising raw material and labour costs. In return. The Directors note from the latest published financial reports of Ming Hing Waterworks that the gross profit margin and net profit margin of Ming Hing Waterworks have been generally showing a declining trend. the higher the gross profit margin would be for the Group. The Directors are not in a position to comment on the deteriorating financial performance of Ming Hing Waterworks due to the insufficiency of public information. the Group worked with four main contractors apart from MHCC/MHWE. MHCC/MHWE would charge the Group a contract fee representing a fixed percentage of the total contract value and a nominal handling fee for purchase of construction materials on behalf of the Group. Based on the Directors’ understanding. Therefore. In the event that Ming Hing Waterworks scales down or discontinues its waterworks engineering business. based on the Group’s past business dealings with Ming Hing Waterworks. During the Track Record Period. the management of the Group has been — 111 — . as the party implementing the contracts. In respect of the contracts the Group obtained from MHCC/MHWE. From an industry perspective. some of which have business relationships with the Group for more than five years. the Directors believe that the waterworks industry will continue to present numerous waterworks opportunities to the Group in view of the replacement and rehabilitation programme and other public sector projects. which will increase the Group’s competitiveness in tendering for Government contracts as a main contractor. However. The Group has worked with a number of main contractors. the Directors are optimistic that the Group could obtain contracts from other main contractors or directly obtain contracts from WSD based on the Group’s established operating history and track record. handling fee and if applicable. costs of purchase of construction materials and other reimbursements. the Directors and the Sponsor do not consider the diversification of Ming Hing Waterworks into mining business will pose significant adverse impact on the business and prospects of the Group. the gross profit margin of such contracts to MHCC/MHWE would be close to the aforesaid fixed percentage. TYW has consistently achieved outstanding performance ratings for the quality of its works from WBDB. the Group’s gross profit margins for the contracts obtained from MHCC/MHWE are significantly higher than MHCC/MHWE’s gross profit margins for the same contracts. has more control over the costs of service through actively managing and implementing the project. despite the Directors generally share the view that the cost of construction materials and labour have been rising in the past few years. MHCC/MHWE would then make payment to the Group after deduction of the aforesaid contract fee. As the certified payment for the interim works would be made to MHCC/MHWE by WSD.

0% in the issued share capital of Ming Hing Waterworks. LITIGATION AND CLAIM As at the Latest Practicable Date. an executive Director. the Group is required to submit an environmental management plan to the engineer appointed by WSD which sets out the steps or measures to be taken by the Group to monitor the Group’s works that are carried out in the interests of environmental protection. Chia has not held and does not presently hold any position in or otherwise was not involved and is not presently involved in the daily operations of Ming Hing Waterworks or any of its subsidiaries or associated companies. Save as disclosed above. the Group has put in place an environmental management policy and prepared and implemented a waste management plan to encourage on-site sorting of construction and demolition materials and minimise generation of waste and disposal of waste during the course of work in compliance with the requirements of ETWB. are not connected persons of the Company under the GEM Listing Rules. the Group was not engaged in any litigation or arbitration of material importance and no litigation or claim of material importance was known to the Directors to be pending or threatened by or against the Group. Based on the information available to the Sponsor. was interested in less than 1. In delivering civil engineering services. The Group will designate certain staff to be responsible for monitoring the ongoing compliance with the environmental management plan and reporting to the site manager regarding non-compliance of — 112 — . the Group aims to ensure that all services are delivered to a high quality and conducted in an environmentally responsible manner. Chia. none of the Directors or their associates had any shareholding interest in Ming Hing Waterworks as at the Latest Practicable Date. actively managing the projects and closely monitoring the costs involved in provision of service. In particular. For waterworks projects. Chia holds his interests in Ming Hing Waterworks for investment purpose.BUSINESS successfully maintaining its gross profit margin by carefully evaluating the cost requirement before submitting a tender. Based on the above. ENVIRONMENTAL MATTERS The Group is committed to enhancing and improving technology and services to fulfill its responsibilities to both the community and environment. Ming Hing Waterworks. Director’s interest in Ming Hing Waterworks As at the Latest Practicable Date. Going forward. including its subsidiaries and associated companies. the Sponsor considers that the Directors’ belief in relation to the Group’s higher profit margin than Ming Hing Waterworks is reasonable. Mr. Mr. Mr. The Sponsor has reviewed the terms of the subcontracts entered into between the Group and MHCC/MHWE and the financial information in respect of such subcontracts provided by the Group. The Sponsor notes that the Group’s gross profit margins during the Track Record Period were significantly higher than the percentage of the contract fee charged by MHCC/MHWE to the Group for the same subcontracts. save as disclosed in the sub-paragraph headed “Litigation” in the paragraph headed “Other information” in Appendix V to this prospectus. the management of the Group will continue to put considerable effort in maintaining its gross profit margin.

During the Track Record Period.000 and approximately HK$47. Details of his qualification and industry experiences are disclosed in the section headed “Directors. The assigned person or the environmental supervisor shall provide on-site training to the workers and ensure the Group’s continued compliance with the environmental management plan. — 113 — . details of which are set out in the section headed “Environmental protection laws and regulations” in this prospectus. Lau Wai Chun. Designated staff shall attend environmental protection courses given by recognised organisations. the annual cost of compliance with applicable environmental laws and regulations were approximately HK$25. INTELLECTUAL PROPERTY RIGHTS As at the Latest Practicable Date. board committees and staff” in this prospectus. Mr. During the Track Record Period. Noise Control Ordinance. In addition. The breach of the aforesaid environmental protection ordinances may lead to penalty or fine by the relevant government authorities or even termination of works. the Group will assess the implications and requirements of the aforesaid ordinances and apply for the necessary permits (if any) to conduct its work. The Group expects such cost going forward would be around the same range as in the Track Record Period.BUSINESS environmental management issues.000 respectively which was mainly attributable to the cost of waste disposal. Prior to the commencement of work. Waste Disposal Ordinance and Environmental Impact Assessment Ordinance. the Group was the registered proprietor and beneficial owner of three trademarks registered in Hong Kong. Particulars of such registered trademarks are set out in the sub-paragraph headed “Intellectual property rights of the Group” under the paragraph headed “Further information about the business” in Appendix V to this prospectus. the Group was in full compliance with the applicable environmental laws and regulations. senior management. Jacky is designated by the Group as the head of environmental compliance. Water Pollution Control Ordinance. the Group has continuously observed the laws and regulations in relation to environmental protection in Hong Kong including Air Pollution Control Ordinance.

. Hong Kong at a monthly rent of HK$4. Vigers Appraisal and Consulting Limited. — 114 — . Anton Building. HKLC agreed to lease to TYW the office premises situated at Rooms no. Chia. Personal guarantees provided by Mr. HKLC is a company incorporated in Hong Kong and is wholly and beneficially owned by Mr. is of the view that the lease arrangement under the Lease Agreement reflects a fair and reasonable market rental for such type of property in the area.1 and 3. the actual rental expenses paid to HKLC by the Group in respect of the office premises amounted to nil and approximately HK$44. who is also the sole director of both HKLC and Super Pizza Holdings Limited. press releases or other documents as required by the GEM Listing Rules on the website(s) of the Group at a monthly service fee of HK$750 for a term of one year commencing from 1 July 2010. The aforesaid office premises were leased by HKLC from Super Pizza Holdings Limited. The Group made a prepayment of HK$76. Mr. Chia. Kan Pursuant to the terms of the finance leases in respect of certain motor vehicles and rental arrangements in respect of certain photocopying machines of the Group. Wanchai. and Super Pizza Holdings Limited is a company incorporated in Hong Kong and is owned as to 50% by Mr. For the two years ended 31 March 2009 and 2010. Nature of transactions Lease Agreement Pursuant to the Lease Agreement. 7/F. Kan and HKLC during the Track Record Period. 1 Anton Street.CONNECTED TRANSACTIONS EXEMPTED CONTINUING CONNECTED TRANSACTIONS The transactions set out below have been carried out by the Group with each of Mr. an executive Director. The Company considers it more cost effective to engage a professional firm to take up this announcement posting obligation after Listing. The Lease Agreement has a term of 30 months from 1 May 2009 to 31 October 2011. and some of them are expected to continue following the Listing.000. the Company entered into an agreement with HKLC pursuant to which HKLC will provide the Company with the service of dissemination of announcements including hosting and posting of announcements.000 for the remaining term of the Lease Agreement to HKLC during the year ended 31 March 2010. Kan has provided personal guarantees in respect of the payment obligations of the Group under the aforesaid finance leases and rental arrangements.000 respectively. Announcement Posting Agreement On 1 June 2010. an independent valuer.

Kan. the General Facilities and the Credit Card Facility are expected to continue for not more than 6 months after Listing.2 million banking facility on corporate credit cards (the “Credit Card Facility”) issued by HSBC. Chia. Chia In addition to the personal guarantees. the Loans.CONNECTED TRANSACTIONS Pursuant to the terms of the facility letters dated 13 May 2009 (as supplemented by a letter dated 2 June 2010) and 3 November 2009 (as supplemented by a letter dated 2 June 2010) in respect of a HK$4. pursuant to a loan agreement dated 9 July 2010 entered into between the Group and Mr. Hence. Kan lent a sum of HK$4.040. the Group has repaid the sums due to HSBC under the Loan. the facility letter dated 2 July 2009 in respect of HK$6. Mr. The personal guarantees provided by Mr. However. Further details of the aforesaid personal guarantees are disclosed in the sub-paragraph headed “Financial independence” in the section headed “Controlling Shareholders and Substantial Shareholders” in this prospectus.000 from Mr. Kan (as guarantor of the Group) could be liable for immediate repayment of all outstanding sum due under the relevant finance lease documents (including payment of all arrears of rent and all outstanding rent which would be payable during or in respect of the unexpired term of the original period of the finance lease). Kan in respect of the Loans. As at the Latest Practicable Date.000 to the Group). Due — 115 — . Kan in respect of the finance leases of certain motor vehicles. Mr. Given that the Group has committed a technical breach under certain finance lease documents for the motor vehicles.0 million non-revolving loan and a HK$2. Kan (under which Mr.040. Such shareholder’s loan to the Group is non-interest bearing. Kan in turn obtained the sum of HK$4. who will in turn repay to Mr. Kan’s personal guarantees. Shareholder’s loan from Mr. the Group shall be under no obligations to indemnify Mr. Kan to the Group will be settled shortly after the Listing. please refer to the sub-paragraph headed “Litigation” under the paragraph headed “Other information” in Appendix V to this prospectus. Kan for the purpose of repaying all the outstanding liabilities due to HSBC as disclosed above. Chia. and is due on the earlier of (i) the third Business Day after which the Company receives the net proceeds from the Placing and (ii) the date falling six months from 9 July 2010. the Group has owed a sum of HK$4.0 million banking facilities (the “General Facilities”) and the facility letter dated 13 May 2009 (as supplemented by a letter dated 2 June 2010) in respect of a HK$0. Kan and Mr. Chia by way of a loan arrangement with Mr.000 to Mr. The personal guarantees from Mr. which is normally six months after full repayment of the relevant facilities in accordance with the internal policy of HSBC. Kan as a result of the aforesaid matters. Kan in respect of the aforesaid finance leases and rental arrangements are intended to continue after the Listing while the personal guarantees provided by Mr. However. The loan advanced by Mr. For details of the technical breach.0 million non-revolving loan (together the “Loans”). Kan has provided personal guarantees in respect of the payment obligations of the Group under the aforesaid facility letters. Kan are expected to be released after the expiry of the retention period as determined by HSBC. The Group borrowed such sum from Mr.040. the General Facilities and the Credit Card Facility in full. and the Group has not provided any security over the assets of the Group in respect of Mr. the aforesaid personal guarantees provided by Mr. the General Facilities and the Credit Card Facility as disclosed are provided at nil consideration. part of the proceeds from the Placing will be used for repayment of debts due to Mr. Kan since 9 July 2010. A substantial portion of the monies for repayment to HSBC was lent to the Group by Mr. rental arrangements of certain photocopying machines. Kan. Mr.

announcement and independent shareholders’ approval requirements under Chapter 20 of the GEM Listing Rules. Kan for the benefit of the Group on normal commercial terms (or better to the Group) and no security over the assets of the Group was granted in respect of such financial assistance. Accordingly. Kan.040. The Group intends to apply part of the proceeds from the Placing to repay the loan due to Mr. Kan after Listing.000. — 116 — . The Directors (including the independent non-executive Directors) and the Sponsor have confirmed that the Lease Agreement and the Announcement Posting Agreement were entered into in the ordinary and normal course of the Group’s business and the terms thereof (including the respective annual caps) are on normal commercial terms which are fair and reasonable and in the interests of the Company and Shareholders as a whole. transactions contemplated under the Lease Agreement and the Announcement Posting Agreement constitute continuing connected transactions for the Company. and is due on the earlier of (i) the third Business Day after the Company receives the net proceeds from the Placing. Kan will be settled shortly after Listing. Accordingly. annual review. the provision of the aforesaid personal guarantees by Mr. Kan’s loan with Mr. Kan Mr. Mr. is a connected person of the Company. who will in turn apply such funds to repay his debts owing to Mr. Chia. and that the Lease Agreement and the Announcement Posting Agreement were entered into in the ordinary and usual course of business of the Group. which are exempt from reporting. and (ii) the date falling six months from 9 July 2010. Mr. Chia on the same day in order to provide the necessary funding to the Group. Kan.000 from Mr. Kan’s inability to provide sufficient funds to the Group for repayment of debts to HSBC within a relatively short period of time. equals or exceeds 5%.65(4) of the GEM Listing Rules. Chia bears interest at the rate of 5% per annum.33(3)(c) of the GEM Listing Rules.CONNECTED TRANSACTIONS to Mr. is a connected person (within the meaning of Chapter 20 of the GEM Listing Rules) of the Company. being an associate of Mr. Kan borrowed HK$4. announcement and independent shareholders’ approval requirements under Chapter 20 of the GEM Listing Rules. Personal guarantees by Mr. As such. Kan constitutes financial assistance to the Company under Chapter 20 of the GEM Listing Rules. the shareholder’s loan owing to Mr. being a Controlling Shareholder. Given that the annual rental payable under the Lease Agreement and the annual service fee payable under the Announcement Posting Agreement referred to above are both less than HK$1. the provision of the aforesaid personal guarantees is an exempt connected transaction for the Company pursuant to Rule 20. GEM Listing Rules Implication Lease Agreement and Announcement Posting Agreement HKLC.000 and none of the percentage ratios. which is exempt from reporting. Chia. the transactions under the aforesaid agreements are exempt continuing connected transactions of the Company pursuant to Rule 20. on an annual basis. and the Board considers that there will not be undue financial reliance of the Group on Mr. Given that such financial assistance was provided by Mr.

Kan. the provision of the aforesaid shareholder’s loan is an exempt connected transaction for the Company pursuant to Rule 20. being the executive Director and Controlling Shareholder. are connected persons of the Company. Accordingly. which is exempt from reporting. Kan which is in turn financed by Mr. and Mr. the provision of aforesaid shareholder’s loan by Mr. Given that such financial assistance was provided by Mr. Chia Mr. Kan and Mr. — 117 — . announcement and independent shareholders’ approval requirements under Chapter 20 of the GEM Listing Rules.CONNECTED TRANSACTIONS Shareholder’s loan from Mr. Chia constitutes financial assistance to the Company under Chapter 20 of the GEM Listing Rules. Kan and Mr. being an executive Director. Chia for the benefit of the Group on normal commercial terms (or better to the Group) and no security over the assets of the Group was granted in respect of such financial assistance. Chia.65(4) of the GEM Listing Rules.

to scale up the Group’s business. The Directors consider that App1A. At the early stage of a project.21 — 118 — . As such. the Group intends to focus on the provision of waterworks engineering services and undertake more waterworks contracts in the capacity of a main contractor in the near future. At present. the Group will have additional funds to inject into TYW for enhancing TYW’s employed capital and working capital and fulfill the hardware and staffing requirements for undertaking additional contract works. “Roads and Drainage” and “Site Formation” within 12 months from the Listing Date.FUTURE PLANS AND USE OF PROCEEDS BUSINESS OBJECTIVE AND STRATEGIES Being a licenced contractor on the Contractor List under the categories of “Waterworks”. The Group will continue to foster its reputation and increase its market share in the waterworks engineering industry by pursuing the following strategies: Expansion of business scale The Group’s business requires significant capital. the Group is required to comply with the minimum employed capital and working capital requirements for retention on the Contractor List (details of which are set out in the section headed “Licencing and other requirements for Government projects” in this prospectus) to carry out Government contracts. The then levels of employed capital and working capital of the Group pose limitations on the number and size of Government contracts undertaken by the Group as a main contractor. Over years of participation in waterworks engineering services. the Group is eligible. Further enhancement in work quality The Directors believe that the Group’s success depends considerably on its ability to deliver works of high quality in a timely manner. the Group has not yet fulfilled the requirements for applying for promotion to Group C under the category of “Waterworks” on probationary status. (b) R14. in which the Group has already established a proven track record. the Group will be required to purchase construction materials. the Group’s expansion has been historically constrained by the availability of financial resources and manpower of the Group.15 App1A(28)(8) R14. “Roads and Drainage” and “Site Formation”. acquire equipment and machinery and recruit project management and technical personnel required for undertaking the project. (4) R14. With established operating history and track record in the waterworks engineering industry and an enhanced reputation through the Listing. the Directors intend to participate more actively in the tendering process for Government’s projects with a view to obtaining more waterworks contracts in the capacity of a main contractor from the Government. With the proceeds from the Placing.19(1)(a). The Group has received outstanding performance ratings for the quality of its works from WBDB during the Track Record Period.(48) R11. The Group aims at leveraging its competitive edge in the waterworks engineering industry to become one of the leading waterworks engineering services providers to the public sector in Hong Kong which commits to strive for excellence in service quality and timeliness. The Company does not intend to apply for promotion to Group C under the respective categories of “Waterworks”. to tender for projects of these three categories in the public sector in Hong Kong. Going forward. the Group has built up its reputation in the waterworks engineering industry and maintained good relationship with other main contractors. in the capacity of a main contractor. In addition.19(2)(3).

the Directors plan to recruit additional personnel for quality assurance of the Group. have already commenced at the end of 2009. in Hong Kong. The ten major infrastructure projects comprise three transport infrastructure projects. Construction works or site formation works for some of the aforesaid projects. namely the Hong Kong-Zhuhai-Macao Main Bridge project. whilst the construction of the terminal building and ancillary facilities of the Kai Tai Cruise Terminal and the crossing facilities of the Hong Kong-Zhuhai-Macao Main Bridge are expected to commence in 2010. and site formation areas. It is the Group’s responsibility to provide a safe and healthy working environment for the benefit of its staff. will also create tremendous business opportunities to the Group in the coming years. particularly in waterworks. the development of a science park in Pak Shek Kok in Tai Po. the infrastructure and development projects being currently implemented or to be implemented by the Government. In addition.FUTURE PLANS AND USE OF PROCEEDS maintaining work quality is of utmost importance to the Group’s ongoing development in the waterworks engineering sector and the Group’s tendering of Government contracts in the future. roads and drainage works or site formation works at some stage. the Directors plan to recruit additional personnel to strengthen the safety team of the Group. Apart from the aforesaid major infrastructure projects. Projects-in-progress of the Civil Engineering and Development Department (土木工程拓展署) include. roads and drainage. the development of lower intensity residential area at Town Centre South and Pak Shing Kok in Tseung Kwan O and the development of — 119 — . MARKET POTENTIAL AND FUTURE PROSPECTS The Directors believe the Group’s proven track record in delivering works of high quality in a timely manner has placed the Group in an advantageous position to seize the growth opportunities in the civil engineering sector. construction of the core arts and cultural facilities of the West Kowloon Cultural District is expected to commence in 2013. A sound safety system lowers the risk of accidents and improves work efficiency. four cross-boundary infrastructure projects and three new urban development projects. Strengthening of safety team The Directors consider that enhancing the Group’s project safety and upholding the Group’s work quality are equally important. the Civil Engineering and Development Department (土木工程拓展署) has been devoting continuous effort to new town development and urban development. In order to enhance the Group’s safety system. In order to uphold the work quality of the Group. The 2007-08 Policy Address sets out ten major infrastructure projects that the Government would undertake to boost economic growth. among other things. the Central-Wan Chai Bypass project and the Kai Tak Development project. the widening of certain roads in Tsuen Wan. Not only will the replacement and rehabilitation program launched by WSD (details of which are set out in the section headed “Industry overview” in this prospectus) continue to open up numerous waterworks opportunities to the Group. its subcontractors and the general public. which the Directors believe would inevitably involve waterworks.

schools and related community facilities in Sau Mau Ping. (iii) TYW’s outstanding performance ratings received from WSD during the Track Record Period. which will bring the Group to a better position to tender for contracts from WSD. more specifically. and (iv) the Group’s historical financial and human resources constraints are expected to be lessened by the availability of the net proceeds from the Placing. REASONS FOR THE LISTING The Directors believe that the Listing will enhance the Group’s profile. in the six months ending 31 March 2011. The following implementation plan involves. Furthermore. the “New Project”) from WSD with contract value of approximately HK$75.FUTURE PLANS AND USE OF PROCEEDS public housing. the Group’s expansion has been historically constrained by the availability of financial resources and manpower of the Group. which is not limited to waterworks. (ii) the Group’s past experience in handling various replacement and rehabilitation works contracts. The Directors believe the aforesaid infrastructure projects and new town or urban development projects would drive the demand for civil engineering services and. the Directors are optimistic that the Group can obtain waterworks contracts from WSD. The Group’s actual course of — 120 — . undertaking additional waterworks contracts by the Group in the capacity of a main contractor to expand the Group’s business scale. roads and drainage works or site formation works at some stage. The Government estimated that the capital expenditure. the Group will have additional funds to enhance TYW’s capital base. roads and drainage and site formation areas. the Group intends to acquire additional equipment and machinery and recruit additional staff for undertaking of the aforesaid contracts. of Hong Kong would increase to HK$49. IMPLEMENTATION PLAN The Directors have drawn up an implementation plan for the period up to 31 March 2013 with a view to achieve the business objective along with the strategies as described above. Coupled with the opportunities entailed in the continued implementation of the replacement and rehabilitation program by WSD. acquire the necessary equipment and machinery and recruit additional staff to undertake new contracts. Having considered (i) the Group’s past track record on successfully bidding for contracts from WSD. in particular. subject to WSD’s acceptance. among other things. the Placing will strengthen the Group’s capital base and provide the Group with additional working capital to implement the future plans set out in the paragraphs headed “Business objective and strategies” and “Implementation plan” respectively in this section. the Directors believe that the civil engineering services industry has significant market potential and promising prospects. Subject to the obtaining of such contracts.0 million and a term of 911 days in May 2010. Investors should note that the implementation plan is drawn up based on the current economic status and the assumptions as set out in the paragraph headed “Bases and assumptions” below which are inherently subject to uncertainties and unpredictable factors. would inevitably involve waterworks. Details of the implementation plan and expected timetable are set out below. With the net proceeds from the Placing.1 billion in 2009-10. As disclosed in the sub-paragraph headed “Expansion of business scale” in this section. the successful bidding for a new waterworks contract (contract number 9/WSD/09.6 billion in 2010-11 from HK$45.

FUTURE PLANS AND USE OF PROCEEDS business may vary from the business objective set out in this prospectus. submit tender(s) for waterworks contracts • — 121 — . For the six months ending 30 September 2010 Expansion of business scale • Form the project management team for the New Project recently obtained from WSD in which the Group acts as the main contractor Draw up the master program for the New Project Source the required equipment and machinery for the implementation of the New Project Implementation of contract works under the New Project in progress Monitor the forecasts of work tenders published on the website of WBDB for upcoming tenders for the period from April 2010 to September 2010 Review the existing quality assurance policy of the Group and the staffing Identify suitable candidate(s) for the quality assurance team Review the existing safety policy of the Group and the staffing Identify suitable candidate(s) for the safety team • • • • Further enhancement in work quality Strengthening of safety team • • • • For the six months ending 31 March 2011 Expansion of business scale • Closely monitor the tender notices published by the relevant Government department for contract works and identify prospective projects In the capacity as a main contractor. There can be no assurance that the plans of the Group will materialise in accordance with the expected time frame or that the objective of the Group will be accomplished at all. The Directors will use their best endeavors to anticipate future changes in the market. take measures and be flexible so that the Group may stay ahead of or react timely and appropriately to such changes.

project management and technical personnel) Form the project management team and draw up the master programs for the Prospective Projects Commence the sourcing of required equipment and machinery and the recruitment of required project management and technical personnel Implementation of contract works under the New Project in progress Recruit additional staff to be responsible for quality assurance Identify the areas of improvement based on the quality assurance policy and formulate steps or procedures to address the areas of improvement Maintain ongoing quality assurance review on the works performed by the Group Recruit additional staff for the safety team Identify the areas of improvement based on the existing safety policy and formulate steps or procedures to address the areas of improvement • • • Further enhancement in work quality • • • Strengthening of safety team • • For the six months ending 30 September 2011 Expansion of business scale • Acquire the equipment and machinery and recruit the project management and technical personnel required for implementation of the Prospective Projects Implementation of the New Project and the Prospective Projects in progress Implementation of the steps or procedures formulated to address the areas of improvement Review the quality assurance policy after implementation of the aforesaid steps and procedures Maintain ongoing quality assurance review on the works performed by the Group • Further enhancement in work quality • • • — 122 — .FUTURE PLANS AND USE OF PROCEEDS • Assuming the Group successfully obtains waterworks contracts (the “Prospective Projects”) relating to replacement and rehabilitation of water mains with terms of around 2.5 years and estimated aggregate contract value of HK$150.0 million from WSD. prepare the kick-off of project implementation (including analysing the requirements on equipment and machinery.

FUTURE PLANS AND USE OF PROCEEDS Strengthening of safety team • • Implementation of the steps or procedures formulated to address the areas of improvement Review the safety policy after implementation of the aforesaid steps and procedures For the six months ending 31 March 2012 Expansion of business scale • • • Implementation of the New Project and the Prospective Projects contracts in progress Maintain ongoing quality assurance review on the works performed by the Group Maintain ongoing inspection at the work site to ensure the safety policy is properly implemented Further enhancement in work quality Strengthening of safety team For the six months ending 30 September 2012 Expansion of business scale • • Implementation of the New Project and the Prospective Projects contracts in progress Monitor the forecasts of work tenders published on the website of WBDB for upcoming tenders for the period from April 2012 to September 2012 Maintain ongoing quality assurance review on the works performed by the Group Maintain ongoing inspection at the work site to ensure the safety policy is properly implemented Further enhancement in work quality Strengthening of safety team • • For the six months ending 31 March 2013 Expansion of business scale • Closely monitor the tender notices published by the relevant Government department for contract works. identify prospective projects and evaluate the viability of taking on additional contract works by the Group Implementation of the New Project and the Prospective Projects in progress Maintain ongoing quality assurance review on the works performed by the Group Maintain ongoing inspection at the work site to ensure the safety policy is properly implemented • Further enhancement in work quality Strengthening of safety team • • — 123 — .

the Group will be able to retain key personnel in the management and the technical staff. economic or market conditions in Hong Kong. permits and registration held by the Group. policies. and there will be no material adverse change in the political. industry or regulatory requirements applicable to the Group and its business. • • • • — 124 — . the Group will be able to recruit additional key project personnel and technical staff when required. there will be no change in the effectiveness of the licences.FUTURE PLANS AND USE OF PROCEEDS BASES AND ASSUMPTIONS Potential investors should note that the attainability of the Group’s business objective depends on the following assumptions: • there will be no material changes in the existing laws. and • the Group will not be materially and adversely affected by the risk factors as set out in the section headed “Risk factors” in this prospectus. • the Group will be able to continue its operation in substantially the same way as it has been operating and the Group will also be able to carry out its implementation plans without significant disruptions. there will be no material changes in the funding required for each of the scheduled achievements as outlined under the paragraph headed “Implementation plan” in this section.

after deducting the underwriting fees and estimated expenses payable by the Company in connection thereto.00 0.54 4.5 million.50 2.50 0.65 4.17 0.28 1.28 0.20 1.04 0.20 0.82 — 0.45 — 0.0 million based on the Placing Price of HK$1.50 2.20 0.00 — — — — 6.28 0.40 4.00 — 0.00 — 1.79 — 0.FUTURE PLANS AND USE OF PROCEEDS USE OF PROCEEDS The net proceeds from the Placing.06 19.28 0.73 7. The Directors intend to apply the aforesaid net proceeds in the following manner: For the For the For the For the For the For the six months six months six months six months six months six months ending ending ending ending ending ending 31 March 31 March 30 September 31 March 30 September 30 September 2013 Total 2012 2012 2011 2011 2010 approximately approximately approximately approximately approximately approximately approximately HK$ million HK$ million HK$ million HK$ million HK$ million HK$ million HK$ million Expansion of business scale • Acquisition of equipment and machinery • Recruitment of additional staff Further enhancement in work quality • Recruitment of additional quality assurance staff Strengthening of safety team • Recruitment of safety staff Repayment of Shareholder’s loan Repayment of finance leases 2.97 4.27 — 0.20 0.50 * 3.28. are estimated to be approximately HK$21.00 * Out of HK$6.04 3.0 million will be applied to the Prospective Projects — 125 — .34 1.00 1.0 million will be applied to the Prospective Projects # Out of HK$3.00 # — 0.20 0. HK$4.31 0. HK$2.0 million.28 0.02 — 0.

approximately HK$6.0 million of the net proceeds will be used to acquire equipment and machinery and recruit additional staff respectively to undertake the New Project and the Prospective Projects by the Group as a main contractor to enable the Group to scale up its business. Based on current estimations by the Directors.FUTURE PLANS AND USE OF PROCEEDS It is expected that the equipment and machinery to be acquired by the Group will include heavy crane lorries. small generators and small hydraulic breakers.0 million will be used for general working capital of the Group. — 126 — .5 million and approximately HK$3. the Directors currently intend that such proceeds will be placed on short-term deposits with licenced banks or financial institutions in Hong Kong. To the extent that the net proceeds from the Placing are not immediately required for the above purposes. small excavators. the Directors will apply the net proceeds originally allocated to the Prospective Projects to such waterworks contract(s). light vehicles. The balance of approximately HK$2. light lorries. In particular. the net proceeds from the Placing will be sufficient to finance the Group’s business plan as scheduled up to 31 March 2013. In the event that the Group fails to obtain the Prospective Projects but is successfully awarded with other waterworks contract(s) from WSD. heavy grab lorries.

Subsequently. and will continue thereafter until terminated by not less than three months’ notice in writing served by either party on the other or three months’ salary being payment in lieu of notice. namely Ming Hing Waterworks. Mr. Kan formed TYC as a sole proprietorship to carry out civil engineering subcontracting works. In 1989. aged 52. Mr. at which he worked during 1976 to 2000. Mr.07(1) Third Schedule 6 — 127 — . Mr.(41) R11. Kan later formed TYW and TY Civil in 1996 and 2000 respectively and has been the director of both companies since their formation. Cheng Ka Ming. Cheng obtained a bachelor’s degree in civil engineering from the National Cheng Kung University. is the founder of the Group. from 1 October 2008 to 20 February 2009. he held no directorships in other listed public companies in the last three years. In addition. Mr. Mr. Mr. Mr. and will continue thereafter until terminated by not less than three months’ notice in writing served by either party on the other or three months’ salary being payment in lieu of notice. Prior to joining the Group. University of London in 1975.DIRECTORS. Fung Chung Kin (馮中健). Mr.12A(3) R11. In the last three years. aged 59. Mr. SENIOR MANAGEMENT. Taiwan in 1973 and a master’s degree in analytical soil mechanics from the King’s College. He has over 29 years of experience in the construction industry. Save as disclosed above. namely MHCC. from February 2009 to April 2009. Cheng was a project director of Gammon-Nishimatsu Joint Venture from March 2001 to December 2002 and prior to that he held a managerial position at Gammon Construction Limited. Mr. Kan has entered into an employment contract with TYW to act as the director of TYW for a continuous term commencing from 6 February 1996 until terminated by not less than thirty days’ notice in writing served by either party on the other or thirty days’ salary being payment in lieu of notice. Legge. Mr. Kan has over 20 years of experience in handling civil engineering projects of various types. Piesold & Uhlmann Consulting Engineers (UK) from 1974 to 1976. Martin (鄭家銘). Cheng was appointed as a consultant of a subsidiary of Ming Hing Waterworks. Mr. is the vice-chairman of the Board and an executive Director and is responsible for the business management and corporate development of the Group. as a foreman in the construction industry before founding the Group. His experience in handling civil engineering projects was gained from running the construction business through his employment. Mr. Kan is the chairman of the Board and is responsible for the overall business planning and corporate strategy of the Group. Fung joined the Group as director of TYW in April 2006 and has been appointed as a director of TY Civil since March 2009. Mr. Cheng was an engineer at Watermeye. Kan has entered into a service contract with the Company for an initial term of three years commencing from 11 August 2010. He has entered into a service contract with the Company for an initial term of three years commencing from 11 August 2010. Cheng was an independent non-executive director and a member of the audit committee of a Hong Kong listed company. Mr. Cheng joined the Group as a director of TYW and a director of TY Civil in May 2009. Cheng has entered into an employment contract with TYW to act as the director of TYW for a continuous term commencing from 1 May 2009 until terminated by not less than thirty days’ notice in writing served by either party on the other or thirty days’ salary being payment in lieu of notice. BOARD COMMITTEES AND STAFF DIRECTORS Executive Directors Mr. Mr. Fung has been App1A. he held no directorships in any listed public companies. After he resigned as a consultant of MHCC. Kan Kwok Cheung (簡國祥). aged 46. is the chief executive officer of the Group and an executive Director and is responsible for overseeing the overall project management and the daily operation of the Group. In addition.

Prior to joining the Group. Chia graduated with a degree of Bachelor of Science in accounting and finance from Purdue University. Chia Thien Loong. He re-joined the Listing Division of the Stock Exchange as an assistant manager during the period between August 1999 and July 2001 and joined Worldwide Finance Capital Limited as a senior manager in August 2001. a company incorporated in Bermuda. Mr. Chia has over 14 years of experience in corporate finance. In the last three years. He worked as a resident assistant inspector of works at Harris & Sutherland (Far East) Ltd from July 1986 to January 1989. Mr. Mr. Fung also obtained a bachelor’s degree in civil engineering from the University of Greenwich in 1998. up to now. Fung held various supervisory or managerial positions in several companies since December 1978 and has. In addition. is an executive Director and the compliance officer of the Group and is responsible for overseeing the financial and compliance aspects of the Group. Chia has entered into an employment contract with TYW to act as the director of TYW for a continuous term commencing from 1 May 2009 until terminated by not less than thirty days’ notice in writing served by either party on the other or thirty days’ salary being payment in lieu of notice. Mr. Mr. Mr. Fung was appointed as an executive director of Hoi Sing Holdings Limited (presently known as ITC Corporation Limited. Chia joined the Listing Division of the Stock Exchange as an executive from March 1997 to June 1998 and joined BNP Peregrine Paribas Capital Limited as an assistant manager in June 1998. Mr. USA in 1994. BOARD COMMITTEES AND STAFF a general manager of Flame Construction Company Limited from July 2000 to August 2002. SENIOR MANAGEMENT. and will continue thereafter until terminated by not less than three months’ notice in writing served by either party on the other or three months’ salary being payment in lieu of notice. he held no directorships in any listed public companies. Mr. Fung was admitted as an associate member of the Hong Kong Institution of Engineers in January 1986. He worked as a project manager at Chun Wo Construction & Engineering Company Limited from December 1999 to April 2000. Fung obtained the diploma in civil engineering from Hong Kong Polytechnic (now The Hong Kong Polytechnic University) in 1978 and the higher certificate in civil engineering from the same institution in 1980. Super Pizza Holdings Limited and HKLC. Mr. whose shares are listed on the Stock Exchange). Chia held directorate positions in Gransing Securities Company Limited from 2003 to 2007. He has entered into a service contract with the Company for an initial term of three years commencing from 11 August 2010. In the last three years. he held no directorships in any listed public companies. He joined Apple Computer International Limited as a financial analyst from June 1995 to March 1997. He has entered into a service contract with the Company for an initial term of three years commencing from 11 August 2010. Mr. Mr. Mr. Chia is also currently the director of Vietnam Infrastructure (BVI) Limited. — 128 — . Fung has entered into an employment contract with TYW to act as the director of TYW for a continuous term commencing from 1 April 2006 until terminated by not less than thirty days’ notice in writing served by either party on the other or thirty days’ salary being payment in lieu of notice. Mr. and will continue thereafter until terminated by not less than three months’ notice in writing served by either party on the other or three months’ salary being payment in lieu of notice. aged 40. management and investment. Eric John (謝天龍). accumulated over 25 years of experience in the fields of civil engineering or construction. Fung acted as a graduate engineer for Owen Williams Railways Limited for approximately one year until October 1999. Indiana. Mr. from January 1992 to September 1993 and then he was appointed as a director and general manager at Hoi Sing Construction Company Limited from September 1991 to June 1995. Chia joined the Group as director of TYW and TY Civil in May 2009. In addition. He worked as a resident inspector of works at Mott MacDonald Hong Kong Limited from January 1989 to August 1991. Mr. He worked as a works supervisor at Maunsell Consultants Asia from December 1978 to July 1986.DIRECTORS.

Lim has been engaging in business consulting industry providing business solutions. Lim held no directorships in other listed public companies in the last three years. internal control and auditing. by himself or through his firm in which he practices. sales and distribution of Chinese sauces and condiments. China with a doctorate degree in laws in 1995. Lo was an executive trainee at The Bank of East Asia Limited from August 1978 to March 1980. provided professional services to the Company during the Track Record Period. Lim was appointed as an independent non-executive director of Sanyuan Group Limited (“Sanyuan”) which was then under delisting procedures. He has not. Sung graduated from the Peking University. He is currently a foreign legal consultant of PRC laws in Jones Day. Lo graduated from the University of Hong Kong in 1978 holding the degree of Bachelor of Social Sciences. He is a fellow of the Association of Chartered Certified Accountants and an associate of the Hong Kong Institute of Certified Public Accountants. for approximately two years. Sung Lee Kwok (宋利國). aged 54. He has obtained the PRC attorney qualification in 1999 and is now a registered foreign lawyer in Hong Kong. Based on Mr. Mr. He has over 21 years of experience in the banking industry. information technology and human resources management in various industries. financial advisory and company secretary services to clients. provided professional services to the Company during the Track Record Period. Mr. Mr. Save as disclosed above. He served as the Corporate Director of Finance in Lee Kum Kee Group. has been appointed by the Company as the independent non-executive Director on 11 August 2010. Lim graduated from the Hong Kong Polytechnic (now The Hong Kong Polytechnic University) in Accountancy in 1988. Lo was a manager in credit & marketing department at Banco Central Hispano Americano S. finance and administration.A. SENIOR MANAGEMENT. Lo Ho Chor (盧浩初). Mr. Since 2008. by himself or through his firm in which he practices.DIRECTORS. registered arbitrators of 中國國際經濟貿易仲裁委員會 (China International Economic and Trading Arbitration Commission) and 深圳仲裁委員會 (Shenzhen Arbitration Commission). He worked as a credit officer for The Ka Wah Bank Limited from March 1981 to March 1982 and in the credit review department at Far East Bank Limited from June 1982 to March 1989. On 21 September 2009. Lim’s experience in corporate and strategic planning. He then acted as a chief accountant in Hong Kong Toy Centre International Limited. Mr. Mr. He has not. management consultancy. an associate professor in laws of Anhui University and an independent director of — 129 — . Lim has extensive experience of over 20 years in corporate and strategic planning. BOARD COMMITTEES AND STAFF Independent non-executive Directors Mr. Hong Kong Branch. Lim resigned from his position on 14 December 2009 as resumption of trading of Sanyuan failed and Sanyuan had been subsequently delisted on 24 December 2009. Mr. In the last three years. Mr. from January 1990 to July 1991 and prior to that he acted as an Assistant Vice President at Security Pacific Asian Bank Ltd. aged 45. from 1997 to 2007. aged 46. has been appointed by the Company as the independent non-executive Director on 11 August 2010. Mr. Lo held no directorships in any listed public companies. Mr. He worked in Deloitte Touche Tohmatsu (formerly called Deloitte Ross Tohmatsu) for two years from 1988 to 1990. He was appointed as a general manager in an electronic company from 1993 to 1997. Mr. has been appointed by the Company as the independent non-executive Director on 11 August 2010. Mr. Mr. He has proven track records in managing two credit card centres as operations head with ORIX Asia Limited and Industrial and Commercial Bank of China Limited. Lim Hung Chun (林洪進). he was invited by the then board of directors of Sanyuan to assist in the application for resumption of trading of shares in Sanyuan. a fast moving consumer goods company engaged in manufacturing.

Leung held no directorships in any listed public companies. Lau returned to the Group as the project manager of TYW and was also appointed as the head of quality assurance and the head of environmental compliance of the Group.50(2) of the GEM Listing Rules. aged 50. Save as disclosed in this prospectus. He has not. Mr. SENIOR MANAGEMENT. a company listed on the Shanghai Stock Exchange. a company listed on the Shanghai Stock Exchange. by himself or through his firm in which he practices. Sung held no directorships in any listed public companies. SENIOR MANAGEMENT OF THE GROUP Contracts Manager Mr. Jacky. Leung worked as a deputy project manager for Sum Kee Construction Limited from 2007 to 2008. Mr. He worked as works supervisor and assistant inspector of works at Maunsell Consultants Asia Limited from 1979 to 1989 and as senior inspector of works at Scott Wilson (Hong Kong) Limited from 2003 to 2005. each of the Directors has confirmed that there are no other matters relating to his appointment as a Director that need to be brought to the attention of the Shareholders and there is no other information in relation to his appointment which is required to be disclosed pursuant to Rule 17. In July 2008. Mr. staff and experts” in Appendix V to this prospectus for information regarding particulars of the Directors’ service contracts and emoluments and information regarding their respective interests (if any) in shares of the Company within the meaning of Part XV of the SFO. management.DIRECTORS. Lau also worked as an inspector of works for Watson Hawksley Consulting Engineers and Pypun Engineering Consultants Ltd from 1991 to 1993. Ltd*). PRC starting from 2009. provided professional services to the Company during the Track Record Period. Rogers Preston Limited during the period between June 1995 and September 1997. Save as disclosed above. Leung is experienced in overseeing contractual matters in relation to construction projects and has over 30 years of experience in project management for civil engineering projects. He worked as an assistant site agent. Leung Hon Chung. Mr. Mr. In the last three years. has been the contracts manager of TYW since August 2008. Please refer to the paragraph headed “Further information about Directors. He worked as a * For identification purpose only — 130 — . Sung was an independent director of 國電南京自動化股份有限公司 (Guodian Nanjing Automation Company Limited*). Lau Wai Chun. Prior to joining the Group. Mr. Leung worked as a senior inspector of works at J. site agent and project manager at Shun Hing Construction Company Limited from 1978 to 1995 and worked as a project manager at Sequence Construction Company Limited from 1997 to 2007. Project Manager Mr. first joined the Group as a project manager of TYW between May 2002 and March 2003. Leung obtained a diploma in civil engineering and a higher certificate in civil engineering from the Hong Kong Polytechnic (now The Hong Kong Polytechnic University) in 1978 and 1980 respectively. BOARD COMMITTEES AND STAFF 北京電子城投資開發股份有限公司 (Beijing Electric City Investment and Development Co. Mr. PRC from 2003 to 2009. in the last three years. Mr. Mr. aged 53.. Lau has over 28 years of experience in supervision of construction work. Mr.

Kan Kwok Cheung. Kan has no family relationship with Mr. At present. Ms. aged 35. Chief Financial Officer and Company Secretary Mr. Mr. Please refer to his biography set out in the sub-paragraph headed “Executive Directors” in this section. Mabel. Lim Hung Chun is the chairman of the audit committee. Tam worked in Deloitte Touche Tohmatsu from 1997 to 2000. who is also an executive Director also acts as the compliance officer of the Group. The written terms of reference are in compliance with paragraph C3. Lo Ho Chor and Mr. BOARD COMMITTEES Audit committee The Company established the audit committee pursuant to a resolution of the Directors passed on 11 August 2010 in compliance with Rule 5. Tam held no directorships in any listed public companies. Prior to joining the Group. Kan May Bo. the audit committee of the Company consists of three members.3 of the Code on Corporate Governance Practices as set out in Appendix 15 to the GEM Listing Rules. Eric John. Mr. Mr. Kan has over 13 years of experience in clerical and administrative work for various companies from 1985 to 1996 prior joining to the Group. has been working in TYW since October 1996. In the last three years. Ms. Tam graduated with a bachelor’s degree in business administration from The Chinese University of Hong Kong in 1997. Mr. aged 42. Mr. Tam is a member of Hong Kong Institute of Certified Public Accountants and a fellow of the Association of Chartered Certified Accountants. Ms. Lau holds the diploma in civil engineering and the higher certificate in civil engineering from the Hong Kong Polytechnic in 1978 and 1980 respectively. COMPLIANCE OFFICER Mr.07(3) — 131 — . Mr.07(5) App1A(42)(2) App1A(42)(1)(b) R11. Ms. Sung Lee Kwok. Administration Officer Ms. Lau obtained the certificate of proficiency in industrial safety from the Hong Kong Polytechnic (now The Hong Kong Polytechnic University) in 1983 and was a registered safety officer in 1997 and such registration was re-validated in March 2008. Kan is currently the administration officer of the Group and is responsible for the general administration of the Group. has been the chief financial officer and company secretary of TYW since April 2010. Lau was a senior inspector of works of the Mass Transit Rail Corporation from 2005 to 2008. Lau held no directorships in any listed public companies. Mr. Mr. Mr. namely Mr. Lim Hung Chun. SENIOR MANAGEMENT. In the last three years. Mr. In the last three years.DIRECTORS. R11. Mr. Kan held no directorships in any listed public companies. The primary duties of the audit committee are to review and supervise the financial reporting process and internal control system of the Group. Tam worked as the finance manager in both MHCC from 2008 to March 2010 and China Resources Petrochems (Group) Company Limited and China Resources Gas (Holdings) Limited from 2001 to 2007. BOARD COMMITTEES AND STAFF senior inspector of works for Freeman Fox Maunsell Consulting Engineers from 1993 to 1998 and a project manager for Man Wah New Concepts Engineering Ltd from 1998 to 2002. Chia Thien Loong. Tam Tsang Ngai.28 of the GEM Listing Rules.

1 of the Code on Corporate Governance Practices as set out in Appendix 15 to the GEM Listing Rules. estimate. where a transaction. Lo Ho Chor and Mr. bonuses and other compensation payable to them. Mr. whichever is earlier. developments or results of the Company deviate from any forecast. The primary function of the nomination committee is to make recommendations to the Board on the appointment of Directors and the management of the Board succession. Kan. Kan. namely Mr.23 of the GEM Listing Rules. (3) (4) — 132 — . Kan is the chairman of the remuneration committee. Mr. Lo Ho Chor and Mr.DIRECTORS. Directors and other officers at all times.03 of the GEM Listing Rules in respect of its financial results for the second full financial year commencing after the Listing Date.4 of the Code on Corporate Governance Practices as set out in Appendix 15 to the GEM Listing Rules.19 of the GEM Listing Rules. the Company has appointed Optima Capital to be the compliance adviser. is contemplated including share issues and share repurchases. COMPLIANCE ADVISER In accordance with Rule 6A. The chairman of the nomination committee is Mr. who will have access to the Company’s authorised representatives. Lim Hung Chun. which might be a notifiable or connected transaction. Nomination committee The Company established a nomination committee on 11 August 2010. and where the Stock Exchange makes an inquiry of the Company concerning unusual movements in the price or trading volume of the Company. circular or financial report. Kan. The remuneration committee consists of three members. Pursuant to Rule 6A. or other information in this prospectus. The compliance adviser will advise the Company on on-going compliance requirements and other issues under the GEM Listing Rules. The written terms of reference are in compliance with paragraph A4. where the Company proposes to use the proceeds of the Placing in a manner different from that detailed in this prospectus or where the business activities. Sung Lee Kwok. namely Mr. The nomination committee consists of three members. BOARD COMMITTEES AND STAFF Remuneration committee The Company established a remuneration committee on 11 August 2010 with written terms of reference in compliance with paragraph B1. the compliance adviser will advise the Company in the following circumstances: (1) (2) before the publication of any regulatory announcement. The compliance adviser’s appointment shall commence on the Listing Date and end on the date on which the Company complies with Rule 18. SENIOR MANAGEMENT. or until the agreement is terminated. The primary duties of the remuneration committee are to make recommendation to the Board on the overall remuneration policy and structure relating to all Directors and senior management of the Group and to review and determine the terms of remuneration packages. Mr.

allowances and benefits in kind paid by the Group to the Directors for each of the two financial years ended 31 March 2009 and 2010 amounted to approximately HK$1. The appraisal provides the Group with an opportunity to assess each individual staff ’s strengths and areas for improvement. Under the respective service contracts or appointment letters. STAFF Number of staff members As at the Latest Practicable Date. Each of the executive Directors has entered into a service contract with the Company for an initial term of three years commencing on 11 August 2010 while each of independent non-executive Directors is appointed for a term of three years commencing from 11 August 2010. The following table sets out the number of staff of the Group as at 31 March 2009. accounting and finance Direct workers Total As at 31 March 2009 35 11 54 100 As at 31 March 2010 51 18 92 161 Remuneration The employees of the Group are remunerated by way of fixed salary. All the staff undergoes a performance appraisal once a year.000. the aggregate basic annual remuneration (excluding payment of discretionary bonus) payable by the Group to the Directors will be HK$336.DIRECTORS. BOARD COMMITTEES AND STAFF DIRECTORS’ REMUNERATION The aggregate amount of fees. the Group had a total of 171 full-time staff members in Hong Kong.000 respectively. salaries. SENIOR MANAGEMENT. management. thereby enabling the Group to effectively train and develop each individual staff. Further details of the service contracts and appointment letters of the Directors and their respective remuneration after Listing are set out in the sub-paragraph headed “Particulars of Directors’ service contracts” in the paragraph headed “Further information about Directors.000 and HK$2. 31 March 2010 and the Latest Practicable Date by job functions: As at Latest Practicable Date 51 24 96 171 App1A(28)(7) Job function Project management Administration.720.554. staff and experts” in Appendix V to this prospectus. — 133 — . The Directors’ remuneration policy of the Group after Listing will be substantially the same as the remuneration policy of the Group for the year ended 31 March 2010. The Group has devised an assessment system for its employees and the Group uses the assessment result for salary reviews and promotion decisions.

fee. BOARD COMMITTEES AND STAFF The five highest paid individuals whose emoluments were the highest in the Group included two and three Directors for the years ended 31 March 2009 and 2010 respectively. Under the MPF Scheme. Contributions to the plan vest immediately. gratuity perquisite and allowance (excluding housing allowance or housing benefits). subject to a minimum and maximum level of the monthly relevant income of HK$5. PROVIDENT FUND The Group participates in a mandatory provident fund scheme (the “MPF Scheme”) under the Mandatory Provident Fund Schemes Ordinance (Chapter 485 of Laws of Hong Kong) for its employees in accordance with the requirements of such ordinance.000 respectively. The Group has not encountered any difficulty in recruitment and retention of staff for its operation or experienced any material disruption of its operation as a result of labour disputes since the establishment of its business. SENIOR MANAGEMENT.(d) — 134 — . both the Group and the employees have to contribute an amount equal to 5% of the relevant income of such employees to the MPF Scheme. salaries. no emoluments were paid by the Group to any of the aforesaid five highest paid individuals as an inducement to join the Group or upon joining the Group as compensation for loss of office. leave pay. (b). bonuses and benefits in kind paid by our Group to its remaining three and two highest paid individuals and the contributions for mandatory provident fund made by the Group for such highest paid individuals for each of the two financial years ended 31 March 2010 were approximately HK$1.000 and HK$20. During the Track Record Period.135.000 respectively. bonus. The MPF Scheme is a defined contribution retirement plan administered by independent trustees. commission. The aggregate salaries. Relationship with staff The Directors consider that the Group maintains good working relationship with its staff.324.DIRECTORS. App1A(33)(4)(a). “Relevant income” includes wages.000 and approximately HK$1.

000 (L) 13.160. Accordingly. Capacity and nature of interest Beneficial owner Interest of controlled corporation Beneficial owner Interest of controlled corporation Percentage of shareholding 13. Mr. Kan. — 135 — . 2.125% 11. SUBSTANTIAL SHAREHOLDERS So far as the Directors are aware. immediately following completion of the Placing and the Capitalisation Issue.000 (L) 11.000 (L) Name Chuwei (Note 2) Mr. Shunleetat is wholly and beneficially owned by Mr. Kan is deemed to be interested in the 40.000 (L) The letter “L” denotes a long position in the shareholder’s interest in the share capital of the Company.CONTROLLING SHAREHOLDERS AND SUBSTANTIAL SHAREHOLDERS CONTROLLING SHAREHOLDERS So far as the Directors are aware. Capacity and nature of interest Beneficial owner Percentage of shareholding 41.25% The letter “L” denotes a long position in the shareholder’s interest in the share capital of the Company.020.920. immediately following completion of the Placing and the Capitalisation Issue. Fung (Note 3) Notes: 1. the following entity/person are entitled to exercise or control the exercise of 30% or more of the voting power at the general meetings of the Company: Number of Shares (Note 1) 40.920.020. Kan (Note 2) Notes: 1. Save for the entity/person disclosed above. immediately following completion of the Placing and the Capitalisation Issue. be directly or indirectly entitled to exercise or control the exercise of 30% or more of the voting power at general meetings of the Company.125% 13.000 (L) 11.920. there are no other persons who will.160.25% Interest of controlled corporation 40.000 Shares held by Shunleetat under the SFO. Cheng (Note 2) Purplelight (Note 3) Mr. the following entities/persons (other than the entity/person as disclosed in the paragraph headed “Controlling Shareholders” above) are entitled to exercise or control the exercise of 10% or more of the voting power at general meetings of the Company: Number of Shares (Note 1) 13.000 (L) App1A(27A) Name Shunleetat (Note 2) Mr.25% 11.25% 41.

the Directors and their respective associates is interested in any business which competes or is likely to compete. carry on. Purplelight is wholly and beneficially owned by Mr. It has also been provided in the deed of non-competition undertaking that if a Covenantor and/or any of his/its associates is offered of any project or new App1A(28) (1)(b)(v) R11. Save for the entities/persons disclosed above. Deed of non-competition undertaking Mr. invest or be interested or otherwise involved or engaged in any business that is in competition with or is likely to be in competition with any business carried on by any member of the Group from time to time in Hong Kong. Cheng is deemed to be interested in the 13. Cheng. Kan. As at the Latest Practicable Date. The civil engineering services provided by Vietnam Infrastructure (BVI) Limited are similar to those provided by the Group but are limited to Vietnam. Macau or the PRC (the “Restricted Business”). be directly or indirectly entitled to exercise or control the exercise of 10% or more of the voting power at general meetings of the Company. Purplelight. firm or company and whether directly or indirectly. the Substantial Shareholders. Mr. was the largest customer of the Group. Fung is deemed to be interested in the 11. there are no other entities/persons (other than the entity/person as disclosed in the paragraph headed “Controlling Shareholders” above) who will. Chia confirms that Vietnam Infrastructure (BVI) Limited does not intend to extend its business to Hong Kong. the Directors consider that the business of Vietnam Infrastructure (BVI) Limited is not in direct competition with that of the Group. with the business of the Group.04 — 136 — . Mr. whether for profit or not. Chuwei is wholly and beneficially owned by Mr. engage. a company whose issued shares are listed on the Main Board of the Stock Exchange. immediately following completion of the Placing and the Capitalisation Issue. As the Group and Vietnam Infrastructure (BVI) Limited are carrying on business in two distinct jurisdictions. Chia was interested in less than 1.160. and procure his/its associates not to. Mr. Chia and Lotawater (the “Covenantors”) have executed a deed of non-competition undertaking in favour of the Group. Cheng. Mr. each a subsidiary of Ming Hing Waterworks. undertaking that he/it shall not. a company engaged in provision of civil engineering services in Vietnam. During the Track Record Period. whether on his/its own account or in conjunction with or on behalf of any person. Fung. Save as disclosed above.CONTROLLING SHAREHOLDERS AND SUBSTANTIAL SHAREHOLDERS 2. MHCC/MHWE. Mr. COMPETING INTERESTS Mr. Accordingly. Chia is the director and the beneficial owner of Vietnam Infrastructure (BVI) Limited. Fung. 3. none of the Controlling Shareholders.000 Shares held by Purplelight under the SFO. Shunleetat. Mr. Chia has not held and does not presently hold any position in or otherwise was not involved and is not presently involved in the daily operations of Ming Hing Waterworks or any of its subsidiaries or associated companies. Mr. Macau or the PRC or in which any member of the Group is engaged or has invested or is otherwise involved in in Hong Kong. Accordingly.000 Shares held by Chuwei under the SFO. Chia holds its interests in Ming Hing Waterworks for investment purpose.020. Mr. Chuwei. Mr.0% in the issued share capital of Ming Hing Waterworks. which is engaged in a business similar to that of the Group. directly or indirectly.

whether directly or indirectly. and (ii) (iii) the investment. he/it shall: (i) promptly notify the Company in writing of such opportunity and provide such information as is reasonably required by the Company in order to enable the Company to come to an informed assessment of such opportunity. and (ii) use his/its best endeavours to procure that such opportunity is offered to the Company or one of its subsidiaries on terms no less favourable than the terms on which such opportunity is offered to such Covenantor and/or his/its associates. whether directly or indirectly. the holding of shares or other securities in any company which has an involvement in the Restricted Business. — 137 — . participation or engagement by the relevant Covenantor in any project or business opportunity in the Restricted Business in relation to which the Company has rejected or declined to be involved or engaged. and (ii) use his/its best endeavours to procure that such opportunity is offered to the Company or one of its subsidiaries on terms no less favourable than the terms on which such opportunity is offered to such Covenantor and/or his/its associates. he/it shall: (i) promptly notify the Company in writing of such opportunity and provide such information as is reasonably required by the Company in order to enable the Company to come to an informed assessment of such opportunity. The deed of non-competition undertaking does not apply to: (i) the holding of shares or other securities issued by the Company or any of its subsidiaries from time to time. the resources of the Company required for carrying out such project or business opportunity. (c) the principal terms on which the relevant Covenantor or the relevant associate invests. or to participate in provided that the following procedures having been complied with: (a) the information about the principal terms of the relevant project or business opportunity have been disclosed to the Company and the Directors. participates or engages in the such project or business opportunity are substantially the same as or not more favourable than those disclosed to the Company. The Covenantors have further undertaken that if such Covenantor and/or any of his/its associates becomes aware of any project or new business opportunity that relates to the Restricted Business. (b) the decision to reject or decline is made after review by the independent non-executive Directors based on the profitability of such project or business opportunity. the relevant expertise required in such project or business opportunity and the impact on the Company’s business and competitiveness if such project or business opportunity is not taken up by the Company but by the relevant Covenantor. provided that such shares or securities are listed on a recognised stock exchange and the aggregate interest of the relevant covenantor and his respective associates (as “interest” is construed in accordance with the provisions contained in Part XV of the SFO) do not amount to more than 5% of the relevant share capital of the company concerned. and (d) the investment. participation and engagement by the relevant Covenantor or the relevant associate in such project or business opportunity shall be subject to any conditions that may be imposed by the independent non-executive Directors.CONTROLLING SHAREHOLDERS AND SUBSTANTIAL SHAREHOLDERS business opportunity that relates to the Restricted Business. provided that such restriction shall not apply to any project or new business opportunity in connection with any invitation for tender for the Restricted Business announced by the Government.

enforcement or implementation of the terms of the deed of non-competition undertaking. Mr. on an annual basis. Kan. Mr. Mr. ceases to own or hold 5% or more of the entire issued share capital of the Company. Mr. Mr. Cheng.CONTROLLING SHAREHOLDERS AND SUBSTANTIAL SHAREHOLDERS The undertakings are effective in respect of each Covenantor from the Listing Date until the earlier of: (i) the day when the Shares cease to be listed on GEM or other stock exchange. Kan. Cheng. The declaration and disclosure regarding compliance with and enforcement of the deed of non-competition undertaking shall be consistent with the principles of making voluntary disclosures in the Corporate Governance Report of the Company to be issued in accordance with Appendix 16 to the GEM Listing Rules. Fung and Mr. (iv) Mr. Mr. the Articles of Association provide that a Director shall not be counted as quorum and shall not vote on any resolution of the board approving any contract or arrangement or other proposal in which he or any of his — 138 — . Mr. Mr. Chia and their respective associates under the deed of non-competition undertaking including the right of first refusal for any new project or business opportunity. Chia including the decisions reached in respect of the right of first refusal for any new project or business opportunity either in the annual report or by issuing an announcement of the Company. the Company will adopt the following measures for the purpose of monitoring the due compliance with the deed of non-competition undertaking: (i) the independent non-executive Directors will review. Fung and Mr. or the day when the relevant Covenantor. Mr. Cheng. or (ii) the day when the relevant Covenantor ceases to be a Director. at the costs of the Company when they consider appropriate to do so. under the deed of non-competition undertaking in the annual report of the Company. (ii) (iii) the Company will disclose decisions on matters reviewed by the independent non-executive Directors relating to compliance and enforcement of the undertaking of Mr. Kan. Fung and Mr. Kan. each of Mr. and (vi) the independent non-executive Directors shall be entitled to engage or appoint appropriate professional advisors to provide necessary assistance for the interpretation. In addition to the provisions under the deed of non-competition undertaking. Mr. whichever is later. taken as a whole with his/its associates. Fung and Mr. the compliance with the undertakings by Mr. As a matter of good corporate governance practices and to improve transparency. Chia and their respective associates undertakes to provide all information requested by the Company which is necessary for the annual review by the independent non-executive Directors and the enforcement of the deed of non-competition undertaking. Cheng. (v) Mr. Chia will make an annual declaration on compliance with his undertaking. Fung and Mr. Cheng. Kan. Chia shall abstain from voting at any general meeting of the Company if there is any actual or potential conflict of interests.

The Company’s management and operational decisions are made by the Board and senior management. The Directors currently do not expect that following the Listing Date. Administrative independence The Group has its own capabilities and personnel to perform all essential administrative functions including financial and accounting management. Financial independence The Group has certain bank loans/facilities. Kan. the Group has established a set of internal controls to facilitate the effective operation of its business. there will be any material business transactions between the Company and the Controlling Shareholders. During the Track Record Period. who are experienced in managing business generally and in the civil engineering industry. The Board comprises three independent non-executive Directors who will bring independent judgment to the decision-making process of the Board.CONTROLLING SHAREHOLDERS AND SUBSTANTIAL SHAREHOLDERS associates is materially interested. and general business management. the Controlling Shareholder. The Group has established a set of organisational structure made up of individual departments. the General Facilities and the Credit Card Facility. Based on the above. The company secretary and senior management staff are independent of the Controlling Shareholders. INDEPENDENCE FROM THE CONTROLLING SHAREHOLDER Management independence and operational independence Although the Controlling Shareholders will retain a controlling interest in the Company after the Listing Date.75% per annum (subject to HSBC’s right to renegotiate in the event that the best lending rate of HSBC (currently 5%) changes between the date of the relevant App1A(27A) — 139 — . The Group also has independent access to sources of supplies or construction materials as well as customers.0 million non-revolving loan. Bank loans and facilities Mr. the Group had drawn down the Loans in full. certain obligations under finance leases and rental arrangements which are secured by the personal guarantees given by Mr. the Company has full rights to make all decisions on and to carry out its business operations independently. there should be sufficient safeguards for the Company to manage any potential or actual conflicts of interests between the Company on the one hand and the Controlling Shareholder(s). In addition. and (ii) at a flat rate of 3. Kan has provided personal guarantee to the HSBC in respect of the Loans. the Directors are of the view that the Company is independent of the Controlling Shareholders in terms of management and business operations. Based on the reasons above. subject to fluctuation) which was charged on a daily basis for the HK$4. each with specific areas of responsibilities. which carried interest (i) at 1% per annum over the best lending rate of HSBC (currently 5%. the Substantial Shareholders and/or the Directors on the other hand so as to protect the interests of the minority Shareholders.

Also. among other things. in consideration of HSBC advancing monies to TYW. among other things. have substantive business operations and personal guarantee provided by shareholders together holding more than 50% of the equity interest of the enterprise. To be eligible for the Scheme. Kan and HSBC. the Directors had informed HSBC of the Breach and commenced discussions with HSBC thereon in early July 2010. As such. Kan’s personal guarantee after the expiry of the retention period as determined by HSBC. the best way to resolve the issue was to fully repay all the outstanding liabilities due to HSBC. fees and expenses incurred by HSBC demanding repayment of the loans. after discussions with HSBC. The Loans were granted by HSBC under the Special Loan Guarantee Scheme (the “Scheme”) launched by the Government in December 2008. and (iii) overdue interest charged by HSBC in accordance with the relevant facility letters entered into between HSBC and TYW in the event that TYW fails to repay the outstanding loans immediately upon demand of HSBC. Soon after becoming aware of the Breach. Pursuant to a subordination agreement (the “Subordination Agreement”) dated 19 May 2009 and entered into between TYW. and did not indicate therein that they would take legal actions against the Group for the Breach. the Directors consider that the risk and the liabilities of Group in respect of the matters related to the Breach are minimal. In January 2010. the Group had not been served with any legal notice regarding HSBC’s right to take legal action against the Group as a result of the Breach. The personal guarantees provided by Mr. an enterprise must. (ii) all the costs.0 million of the Loans. Kan shall not be repayable unless HSBC otherwise consented to such repayment. — 140 — . approximately HK$2. Mr. TYW has been in breach of the terms of the Subordination Agreement (the “Breach”). The Directors considered. On 12 July 2010. the Group set off an account payable to Mr. all outstanding sums under the Loans. the General Facilities and the Credit Card Facility have not been released before the Listing due to the internal policy of HSBC.0 million was used for general working capital purpose.6 million was used to repay a bank overdraft with a commercial bank. up to the Latest Practicable Date. the indebtedness owed by TYW to Mr. As at the Latest Practicable Date. HSBC issued letters confirming repayment of all outstanding liabilities by the Group. As a result of the Breach. so long as there were any sums due from TYW to HSBC. Kan against certain sums paid by the Group for Mr. which is normally six months after full repayment of the aforesaid loans and facilities. approximately HK$1. Kan in advance. aiming at assisting enterprises to secure loans from participating lending institutions for meeting general business needs to tide over the liquidity problem during the global financial crisis with the Government acting as the guarantor.4 million was used to acquire machinery and the remaining approximately HK$2. Out of HK$6. Kan and TYW undertook to HSBC that.CONTROLLING SHAREHOLDERS AND SUBSTANTIAL SHAREHOLDERS facility letter and the date of drawdown) for the HK$2.0 million non-revolving loan. which would only permit release of Mr. TYW may be legally liable for (i) immediate repayment of all the outstanding sums due to HSBC by TYW at the time of the Breach. the General Facilities and the Credit Card Facility had been fully repaid by the Group. each of Mr. Kan in respect of the Loans. Hence. The Group has made use of the Scheme to obtain the Loans at favorable terms for its business operation use.

a breach under certain finance leases because of Mr. there were eight photocopying machines with an aggregate outstanding rental payment amount of approximately HK$453.000 secured by the personal guarantees provided by Mr.CONTROLLING SHAREHOLDERS AND SUBSTANTIAL SHAREHOLDERS Finance leases and rental arrangements Mr. please refer to the sub-paragraph headed “Litigation” under the paragraph headed “Other information” in Appendix V to this prospectus. Hence. technically speaking. However. (ii) the finance companies providing finance leases to the Group in respect of the aforesaid motor vehicles and the lessor providing rental arrangements to the Group in respect of the photocopying machines did not accept a replacement of Mr. Kan (as guarantor of the Group) could be liable for immediate repayment of all outstanding sum due under the relevant finance lease documents (including payment of all arrears of rent and all outstanding rent which would be payable during or in respect of the unexpired term of the original period of the finance lease). the rental arrangements may not be terminated by the Group during the aforesaid fixed rental period. For details of the technical breach.e. the Group has also entered into rental arrangements in respect of photocopying machines for office use. Kan. due to expire from December 2012 to October 2014. As at 30 June 2010. During the Track Record Period. The aforesaid personal guarantees from Mr. Mr. Kan’s personal guarantees by the — 141 — . Kan have not been released before the Listing for the following reasons: (i) the Directors consider that acquiring motor vehicles by way of finance leases and leasing the photocopying machines for office use allow the Group to better utilise its financial resources. Kan as a result of the aforesaid matters. the payment obligations of which are secured by the personal guarantees given by Mr. The Group has already paid off the finance leases relating to some of the motor vehicles entered into before or during the Track Record Period. Kan has also been providing personal guarantee in respect of the finance leases of certain motor vehicles and machinery prior to the commencement of and during the Track Record Period. With regard to the Breach under the Subordination Agreement between TYW and HSBC (under which Mr. Kan has provided personal guarantee in respect of the finance lease documents. Kan) has defaulted under other loan agreements which entitles the lender thereof to declare such loans due prematurely. Kan (in the capacity of guarantor) could be required to repay the loans due to HSBC prematurely. Given that the Group has committed a technical breach under certain finance lease documents for the motor vehicles and Mr. The aforesaid finance leases are due to expire from September 2010 to August 2013. Kan. Mr. Certain agreements entered into by TY Civil and the financiers in relation to the finance leases of certain motor vehicles and machinery contain a “cross-default” clause stipulating that if TY Civil or the guarantor (i. the Group has committed. Kan’s potential liability for premature repayment of loans to HSBC. Mr.01 million were secured by personal guarantees provided by Mr. The aforesaid rental arrangements are subject to a fixed rental period of 60 months. the Group shall be under no obligations to indemnify Mr. Kan is the guarantor for the Group’s obligations). Pursuant to the terms of the rental agreements. which are largely under terms from two to three years. Kan. the relevant financier is entitled to regard such default under other loan agreements as a breach under the finance lease concerned and to terminate such finance lease as a result. 30 motor vehicles of the Group under finance leases with an aggregate outstanding principal amount of approximately HK$3. As at 30 June 2010.

In consideration of the above. Kan’s loan with Mr. Kan borrowed HK$4. Kan in connection thereto will be gradually released from September 2010 to August 2013. The Group has established its own financial management system. Kan. Shareholder’s loan On 9 July 2010.06 million will be used to fully repay the finance leases according to their respective repayment schedules.1 million out of the net proceeds to fully repay all the finance leases and the loan due to Mr.0 million from the Placing. Kan for the purpose of repaying all the outstanding liabilities due to HSBC under the Loans. The Company intends to apply HK$7. Kan upon Listing.04 million from Mr. Kan to the Group is non-interest bearing. Kan in respect of the aforesaid finance leases and rental arrangements shall continue after the Listing. the Group borrowed a sum of HK$4. Kan will be settled shortly after Listing. the Company has obtained an offer letter from Hang Seng Bank Limited in respect of a revolving loan facility of HK$10. and (iii) the early termination of the finance leases and rental arrangements may involve penalties to be imposed on the Group. Among which. Conclusion Notwithstanding that Mr. which are not in the interest of the Company. Such shareholder’s loan from Mr. In this connection. Mr. the Directors consider the — 142 — . the Directors consider that the Group is not financially dependent on Mr. approximately HK$3. and an internal control functions independent from Mr. Due to Mr.04 million to the Group. Such revolving loan facility is conditional on the Listing and will be secured by a corporate guarantee from the Company and a charge over Hong Kong dollars time deposit by TYW. Kan. and approximately HK$4.CONTROLLING SHAREHOLDERS AND SUBSTANTIAL SHAREHOLDERS Company’s corporate guarantees with the principal finance company and the lessor of photocopying machines expressed that they could not accept corporate guarantee due to their company policies. Chia bears interest at the rate of 5% per annum.0 million. In addition. and is due on the earlier of (i) the third Business Day after which the Company receives the net proceeds from the Placing and (ii) the date falling six months from 9 July 2010. he will not demand for release of the personal guarantees prior to the maturity of the respective finance leases and rental arrangements. Chia. In view of the above. and thus the personal guarantees from Mr. Chia on the same day in order to provide the necessary funding to the Group. Kan unilaterally demand for release of such guarantee. whereby the personal guarantees from Mr.04 million will be used to fully repay the loan due to Mr. its own finance department for discharging the treasury function for cash receipt and payment. As the shareholder’s loan owing to Mr.04 million from Mr. and therefore it is unlikely that the Group’s business and operations will be materially affected by Mr. and is due on the earlier of (i) the third Business Day after which the Company receives the net proceeds from the Placing and (ii) the date falling six months from 9 July 2010. Upon Listing. the Board considers that there will not be undue financial reliance of the Group on Mr. Kan will provide an undertaking to the Company that. the Directors are of the view that the early termination of such personal guarantees may expose the Group to additional and unnecessary costs and business disruption. The Group intends to apply part of the proceeds from the Placing to repay the loan due to Mr. Mr. Kan. the Company will obtain net proceeds of approximately HK$21. Kan has provided certain personal guarantees in respect of the Group’s financial leases and rental arrangements and has provided a loan of HK$4. the General Facilities and the Credit Card Facility as aforesaid. who will in turn apply such funds to repay his debts owing to Mr. after Listing. Mr. Kan’s inability to provide sufficient funds to the Group for repayment of debts to HSBC within a relatively short period of time. Kan. Kan after Listing.

Kan at the time of Listing or shortly thereafter at the latest. or application for bank loans or facilities in the future. it is the intention of the Directors that the Group will not seek personal guarantees from Mr. Kan should remain after Listing as described above as the premature release of such guarantees is not commercially sound or practical.CONTROLLING SHAREHOLDERS AND SUBSTANTIAL SHAREHOLDERS Group will be able to operate financially independent of Mr. However. After Listing.04 million to him. the Directors are of the view that it is in the interests of the Company and the Shareholders as a whole that the personal guarantees in respect of the existing finance leases and rental arrangements from Mr. — 143 — . Kan again after repayment of HK$4. the Group has no intention to obtain loans from Mr. rental of office equipment. Also. Kan in relation to acquisitions of motor vehicles or machinery.

000 Assumptions The table above assumes that the Placing and the Capitalisation Issue become unconditional and the issue of Shares pursuant thereto are made.000. or any Shares which may be allotted and issued or repurchased under the general mandates for the allotment and issue or repurchase of the Shares granted to the Directors as described below.200. at the time of the Listing and at all times thereafter.000 74.399. will qualify in full for all dividends and other distributions declared.000 App1A(15)(1) App1A(14)(4) App1A(15)(1) — 144 — . Ranking The Placing Shares will rank pari passu in all respects with all other Shares in issue or to be issued as mentioned in this prospectus and. fully paid or credited as fully paid: 1. Minimum public float Pursuant to Rule 11.000 App1A(23)(1) Third Schedule 2 Issued and to be issued.990 248. in particular.000 992. Shares in issue Shares to be issued under the Capitalisation Issue Shares to be issued under the Placing Shares 10 743. but takes no account of any Shares falling to be allotted and issued upon exercise of any options which may be granted under the Share Option Scheme.000 24. made or paid after the date of this prospectus save for any entitlement under the Capitalisation Issue.000.000 99.23(7) of the GEM Listing Rules.000.SHARE CAPITAL Share capital Authorised share capital: 50.000 Shares HK$ 500.800. the Company must maintain the “minimum prescribed percentage” of 25% of the total issued share capital of the Company in the hands of the public (as defined in the GEM Listing Rules).

whichever is the earliest. pursuant to the repurchase mandate as described below). varying or renewing such mandate. the Directors are authorised to allot and issue a total of 74. and the Shares to be allotted and issued pursuant to this resolution shall rank pari passu in all respects with the existing issued Shares. 20% of the aggregate nominal amount of the Shares in issue immediately following completion of the Placing and the Capitalisation Issue. the expiration of the period within which the next annual general meeting of the Company is required by the Articles or any other applicable laws of the Cayman Islands to be held. or — the passing of an ordinary resolution of the Shareholders in general meeting revoking.990 standing to the credit of the share premium account of the Company. the aggregate amount of Shares purchased by the Company (if any. General mandate to issue new Shares Subject to the Placing becoming unconditional. Further details of this general mandate is set forth under the sub-paragraph headed “Written resolutions of all Shareholders passed on 11 August 2010” as set out in the paragraph headed “Further information about the Company and its subsidiaries” in Appendix V to this prospectus. and 2. the Directors have been conditionally granted a general unconditional mandate to allot. issue and deal with Shares with a total nominal value not exceeding the sum of: 1.399. subject to the share premium account of the Company being credited as a result of the issue of the Placing Shares. — 145 — .SHARE CAPITAL CAPITALISATION ISSUE Pursuant to the resolutions of the Shareholders passed on 11 August 2010. This mandate will remain in effect until: — — the conclusion of the next annual general meeting of the Company.000 Shares credited as fully paid at par to the holders of Shares on the register of members of our Company at the close of business on 11 August 2010 in proportion to their respective shareholdings (save that no Shareholder shall be entitled to be allotted or issued any fraction of a Share) by way of capitalisation of the sum of HK$743.

management. staff and experts” in Appendix V to this prospectus. or on any other stock exchange on which the Shares are listed (and which is recognised by the SFC and the Stock Exchange for this purpose).SHARE CAPITAL General mandate to repurchase shares Subject to the Placing becoming unconditional. A summary of the relevant GEM Listing Rules is set out in the sub-paragraph headed “Repurchase of the Company’s own securities” as set out in the paragraph headed “Further information about the Company and its subsidiaries” in Appendix V to this prospectus. warrants. SHARE OPTION SCHEME The Company has conditionally adopted the Share Option Scheme. — 146 — . the Directors have been conditionally granted a general unconditional mandate authorising them to exercise all the powers of the Company to repurchase Shares with an aggregate nominal value of not exceeding 10% of the aggregate nominal amount of the Shares in issue immediately following completion of the Placing and the Capitalisation Issue. A summary of the principal terms of the Share Option Scheme is set out in the sub-paragraph headed “Share Option Scheme” as set out in the paragraph headed “Further information about Directors. the expiration of the period within which the next annual general meeting of the Company is required by the Articles or any other applicable laws of the Cayman Islands to be held. varying or renewing such mandate. whichever is the earliest. or — the passing of an ordinary resolution of the Shareholders in general meeting revoking. convertible instruments. This mandate will remain in effect until: — — the conclusion of the next annual general meeting of the Company. pre-Listing share options or similar rights convertible into the Shares as at the Latest Practicable Date. This mandate only relates to purchases made on GEM. The Group did not have any outstanding share options. Further details of this general mandate is set forth under the sub-paragraph headed “Written resolutions of all Shareholders passed on 11 August 2010” as set out in the paragraph headed “Further information about the Company and its subsidiaries” in Appendix V to this prospectus.

a substantial portion was derived from projects subcontracted by Third Schedule 1 R14. The Accountants’ Report has been prepared in accordance with HKFRSs. The Reorganisation involved business combinations of entities under common control before and immediately after the Reorganisation. revenue generated from undertaking waterworks projects of WSD in the capacity as a main contractor or a subcontractor represented approximately 96. the Company became the holding company of the subsidiaries now comprising the Group pursuant to the Reorganisation. the combined statement of comprehensive income. Over the years. please refer to the section headed “Risk factors” in this prospectus. BASIS OF PRESENTATION On 11 August 2010. pumping stations. Accordingly. For the two financial years ended 31 March 2009 and 2010.8% of the Group’s total revenue.FINANCIAL INFORMATION You should read the following discussion and analysis of the Group’s financial condition and results of operations together with the combined financial statements for the financial years ended 31 March 2009 and 2010 and the accompanying notes included in the Accountants’ Report. the major customers of the Group were WSD and MHCC/ MHWE. The following discussion and analysis contains forward-looking statements that involve risks and uncertainties. the Group. The Group resulting from the Reorganisation is regarded and accounted for as a continuing group. service reservoirs. details of which are set out in the sub-paragraph headed “Reorganisation” in the paragraph headed “Further information about the Company and its subsidiaries” in Appendix V to this prospectus. Potential investors should read the whole of the Accountants’ Report and not rely merely on the information contained in this section. Of all the revenue generated from these WSD projects. OVERVIEW The Group is principally engaged in the provision of waterworks engineering services. water tank. road works and drainage services and site formation works for the public sector in Hong Kong. in the capacity as a main contractor or a subcontractor.4% and 99. irrigation works and other related construction works and provision of site formation and road improvement works. combined statement of changes in equity and combined statement of cash flows of the Group for the Track Record Period have been prepared and included the financial information of the companies now comprising the Group as if the current group structure had been in existence throughout the Track Record Period. has been providing civil engineering services in Hong Kong including construction and maintenance of water mains drainage channel and sewer. FACTORS AFFECTING THE GROUP’S RESULTS OF OPERATIONS AND FINANCIAL CONDITION Relationship with major customers During the Track Record Period.08(7)(a) — 147 — . The combined statement of financial positions of the Group as at 31 March 2009 and 31 March 2010 have been prepared to present the assets and liabilities of the Group as at the end of the reporting periods as if the current structure of the Group had been in existence at those dates. For additional information regarding these risks and uncertainties.

Unexpected fluctuations in cost of service The contracts of the Group were mainly secured by way of public tendering. There may be fluctuations in the costs of service during the contract period which generally lasts for a few years. costs of subcontracting. Contract costs comprise direct materials. — 148 — . Certain critical accounting policies and estimates are set out as follows: Construction contracts Contract revenue comprises the agreed contract amount and appropriate amounts for variation orders. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. if any. revenue is recognised only to the extent of contract costs incurred that will probably be recoverable. In determining the tender price. The estimates and judgement are based on historical records. The actual costs of service may be different from the Group’s estimation due to shortage of labour and materials. adverse weather conditions. experience and other factors that are considered by the management to be relevant. In the event that there is a significant reduction of work contracts or a reduction in the value of the work contracts from the major customers and the Group fails to secure work contracts from other customers to compensate for such loss of business. revenue and contract costs associated with the construction contract are recognised as revenue and expenses respectively by reference to the stage of completion of the contract activity at the end of the reporting periods. a small portion was derived from another main contractor while the rest was related to projects secured from WSD directly by the Group. CRITICAL ACCOUNTING POLICIES AND ESTIMATES The preparation of the combined financial statements requires the use of certain critical accounting estimates. direct labour. There is no assurance that the Group will be able to maintain its relationship with its major customers and to continue to secure work contracts from them. claims and incentive payments. direct labour and cost of construction materials. Actual results may differ from these estimates. When the outcome of a construction contract can be estimated reliably. the financial performance and profitability of the Group will be adversely affected. borrowing costs attributable directly to the construction and an appropriate portion of variable and fixed construction overheads.3% of the Group’s total revenue respectively. When the outcome of a construction contract cannot be estimated reliably. the Group needs to estimate the cost of service including but not limited to subcontracting charges. Revenue generated from subcontracting works granted by MHCC/MHWE represented approximately 68. and other unforeseen reasons. The significant accounting policies adopted by the Group are detailed in note 2 to the Accountants’ Report. and contract costs are recognised as expenses in the period in which they are incurred.FINANCIAL INFORMATION MHCC/MHWE to the Group.8% and 88. In the event that the cost of construction materials and labour cost increase unexpectedly to the extent that the Group has to incur substantial extra costs without sufficient compensations. the Group’s business. results of operations and profitability may be adversely affected.

the surplus is treated as an amount due from contract customers. They arise principally through provision of goods and services to customers and also incorporate other types of contractual monetary assets. Loans and receivables are initially recognised at fair value plus directly attributable transaction costs. An impairment loss is recognised in profit or loss and directly reduces the carrying amount of the financial asset. and is measured as the difference between the asset’s carrying amount and the present value of the estimated future cash flows discounted at the original effective interest rate. less any identified impairment losses. measured by reference to the certification by architects. Subsequent to initial recognition.FINANCIAL INFORMATION When it is probable that total contract costs will exceed total contract revenue. subject to a restriction that the carrying amount of the asset at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised. which was determined based on the estimated total construction costs and total construction contract sums. When progress billings exceed contract costs incurred to date plus recognised profits less recognised losses. — 149 — . If the actual gross profit margin of construction contract differs from the management’s estimates. the expected loss is recognised as an expense immediately. Financial asset is impaired if there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset and that event has an impact on the estimated future cash flows of the financial asset that can be reliably estimated. the Group needs to estimate the gross profit margin of each construction contract. Where contract costs incurred to date plus recognised profits less recognised losses exceed progress billings. the construction contract revenue to be recognised within the next year will need to be adjusted accordingly. Revenue recognition Revenue from construction contracts is recognised on the percentage of completion method. Upon applying the percentage of completion method. including confirmed variation orders and claims. the Group assesses whether there is any objective evidence that financial asset is impaired. Interest income is accrued on a time basis on the principal outstanding at the applicable interest rate. Impairment losses are reversed in subsequent periods when an increase in the asset’s recoverable amount can be related objectively to an event occurring after the impairment was recognised. Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. At the end of each reporting period. they are measured at amortised cost using the effective interest method. the surplus is treated as an amount due to contract customers. and liquidated damages.

732 (2.396 (3. Net realisable value represents the estimated selling price in the ordinary course of business less the estimated costs of completion and applicable selling expenses.FINANCIAL INFORMATION Financial liabilities Financial liabilities include trade and other payables and borrowings.030 (634) 20. net of directly attributable transaction costs incurred and are subsequently measured at amortised cost using the effective interest method.872) 26. costs of conversion and other costs incurred in bringing the inventories to their present location and condition.696 (70. Year ended 31 March 2009 2010 HK$’000 HK$’000 Revenue Cost of service Gross profit Other income Administrative expenses Profit from operations Finance costs Profit before income tax Income tax Profit and total comprehensive income for the year 87. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the amortisation process. Combined Statement of Comprehensive Income Third Schedule 1 Third Schedule 27 The following table sets forth the audited combined statement of comprehensive income of the Group for the two years ended 31 March 2009 and 2010 which are extracted from the Accountants’ Report.079 2.838 — 150 — . They are initially recognised at fair value. Cost comprises all costs of purchase.617) 17.972 811 (6.844 (121.405 148.539 (5. The related interest expense is recognised in profit or loss. MANAGEMENT DISCUSSION AND ANALYSIS I.187 (455) 13. and subsequently at the lower of cost and net realisable value. Inventories Inventories are initially recognised at cost.558) 16.753) 21. Cost is calculated using the weighted average method.327) 11.431) 14.

5 million respectively.1 73.1 million to the Group’s revenue for the financial year ended 31 March 2010.767 87.844 11.8% of the Group’s revenue for the year. which commenced in September 2009. The contract for Waterworks District W — New Territories (contract numbered 1/WSD/09(W)). For the years ended 31 March 2009 and 31 March 2010. The increase in revenue for the financial year ended 31 March 2010 was largely attributable to the new contract for the replacement and rehabilitation of water mains stage 3 — mains on Hong Kong Island South and outlying islands (contract numbered 18/WSD/08).8% and approximately 17. During the Track Record Period.0 17. the Group recorded revenue from the two aforesaid contracts in a total of approximately HK$72. The revenue for the financial year ended 31 March 2010 of approximately HK$148. the Group recorded revenue from undertaking of waterworks projects of WSD as a main contractor or a subcontractor of approximately HK$84. The breakdown of total revenue by nature of capacity of the Group is set forth below: Financial year ended 31 March 2009 % of total 2010 % of total HK$’000 HK$’000 Main contractor Subcontractor Total 22. the Group carried out the work projects in the capacity as a main contractor or a subcontractor.8 million respectively.690 148.6% of the Group’s revenue for the year. representing approximately 35. the Group’s revenue was mainly generated from the undertaking of waterworks projects of WSD in the capacity as a main contractor or subcontractor.9 100. For the financial year ended 31 March 2009.5 million and approximately HK$148.8 million represented an increase of approximately 69.7% over the revenue for the year ended 31 March 2009. representing approximately 62. For the year ended 31 March 2010.5 88. also contributed approximately HK$14.5 100. which generated revenue of approximately HK$53. respectively.8 million from the two contracts carried forward from the preceding financial year. During the Track Record Period.8% of the total revenue for the respective year.929 64.4% and 99.1 million and the contract for replacement and rehabilitation of water mains stage 2 — mains in Ngau Tam Mei (contract numbered 13/WSD/06) of approximately HK$15.696 26. the Group’s revenue was mainly attributable to the revenue generated from the contract for replacement and rehabilitation of water mains (Stage 2) — Tai Po and Fanling (contract numbered 21/WSD/06) of approximately HK$55. representing approximately 96.0 million.0 — 151 — .6 million.154 131.7 million and approximately HK$148.FINANCIAL INFORMATION Revenue The Group’s revenue for the financial years ended 31 March 2009 and 31 March 2010 was approximately HK$87.

643 15.9 32.1 million to the Group for the financial year ended 31 March 2010. representing approximately 73. representing approximately 88.3% from the preceding financial year of approximately HK$64. The subcontracting revenue amounted to approximately HK$64.8 34.899 28.8 million respectively. These two contracts generated a total revenue of approximately HK$67.8 23.7 million.8 100.891 15.8 million.388 70. By acting as a subcontractor.872 24. the maximum contract value which the Group is eligible to undertake as a Group B contractor on the Contractor List in the capacity as a main contractor is HK$75 million.695 24. the Group continued to generate the majority of the revenue from undertaking waterworks contracts as a subcontractor.617 20.331 40.5% of the total revenue for the year and an increase of approximately 103.0 30.9 22.0 million and approximately HK$359.9 18.8 million. the revenue of the Group was primarily generated from the undertaking of waterworks contracts in the capacity of a subcontractor. The higher subcontracting revenue in the financial year ended 31 March 2010 was mainly attributable to the additional revenue generated from the contracts for the replacement and rehabilitation of water mains stage 3 — mains on Hong Kong Island South and outlying islands (contract numbered 18/WSD/08) and the maintenance contract for Waterworks District W-New Territories (contract numbered 1/WSD/09(W)).5 21. which were the contract for replacement and rehabilitation of water mains (Stage 2) — Tai Po and Fanling (contract numbered 21/WSD/06) and the contract for the replacement and rehabilitation of water mains stage 3 — mains on Hong Kong Island South and outlying islands (contract numbered 18/WSD/08) were contracts undertaken by the Group in the capacity of a subcontractor. As disclosed in the section headed “Business” in this prospectus.9% of the total revenue for the year. The two contracts carried the original contract value of approximately HK$228. Cost of service The following table sets out a breakdown of the Group’s cost of service during the Track Record Period: Financial year ended 31 March 2009 % of total 2010 % of total HK$’000 HK$’000 Costs of materials Costs of subcontracting Direct labour Other direct costs Total 14. The subcontracting revenue for the year was approximately HK$131.519 121.4 100.0 — 152 — . This explained why the revenue generated from undertaking of waterworks contract as a subcontractor contributed a significant share of the total revenue of the Group during the Track Record Period.FINANCIAL INFORMATION For the year ended 31 March 2009.123 22. For the year ended 31 March 2010. During the Track Record Period. the Group is able to undertake projects with contract value over HK$75 million. the two contracts with the highest original contract value.

materials and services necessary for the completion of the projects undertaken by the Group. The higher usage of consumables. direct labour and other direct costs. was a result of increasing amount of construction work conducted on the roads for a project (contract numbered 21/WSD/06) and also in extensive areas in outlying islands for another project (contract numbered 18/WSD/08) during the financial year ended 31 March 2010. The costs of subcontracting remained the largest item of cost of service throughout the Track Record Period. lights.3 million.9 million for the financial year ended 31 March 2010. there had not been significant fluctuation in the composition of the cost of service during the Track Record Period. For the financial year ended 31 March 2009. The costs of subcontracting represent charges and fees paid to the subcontractors and services providers of the Group which provide labour. The other direct costs refer to a great variety of items including but not limited to the consumables for the projects.0 million and interest for advance payment from customers of approximately HK$242. the other direct costs mainly comprised project consumables of approximately HK$9. the other direct costs mainly comprised project consumables of approximately HK$1. motor vehicles and machinery of approximately HK$3.7 million. The major reason for the fluctuation in the other direct costs for the financial year ended 31 March 2010 was the substantial increase in the project consumables from approximately HK$1. depreciation expenses of site office.9 million for the year 2009 to approximately HK$9. material costs will be deducted from the costs of subcontracting accordingly.3 million for the year 2010.000. depreciation expenses of machinery and motor vehicles.6 million for the financial year ended 31 March 2009 to approximately HK$121. implying that certain part of the works performed by the Group were subcontracted to the subcontractors and the engagement of subcontractors was an important part of the project management of the Group during the Track Record Period. For the financial year ended 31 March 2010. motor vehicles and machinery of approximately HK$3. The Group’s cost of service mainly includes costs of subcontracting. Generally speaking. the accessibility and location of the site areas. contract administration fee of approximately HK$6. and fuel and expenses relating to motor vehicles of approximately HK$4. including but not limited to road signs.5 million and interest for advance payment from customers of approximately HK$429. As shown in the table above.6% from approximately HK$70. The increase in cost of service was generally in line with the growth of the Group’s business. and the intensity of the labour and technology employed. — 153 — . fuel and other expenses such as repair and maintenance costs relating to motor vehicles. interest for advance payment from customers and contract administration fee paid to main contractor(s). costs of materials.9 million. gates. depreciation expenses of site office.FINANCIAL INFORMATION The cost of service has increased by approximately 72.5 million. the composition of cost of service of projects varies. and is affected by factors such as the nature of the projects.000. In the event that the materials are purchased by the Group on behalf of the subcontractors. pavement sealant and metal boards.6 million. contract administration fee of approximately HK$2. and fuel and expenses relating to motor vehicles of approximately HK$2. complexity of the projects.1 million.

Other income For each of the two financial years ended 31 March 2009 and 2010. the Group recorded other income of approximately HK$2. The increase in gross profit was mainly attributable to the higher revenue for the financial year ended 31 March 2010 as compared with that for the financial year ended 31 March 2009.5 million. and was in line with the growth in revenue.1% for the financial year ended 31 March 2010. There were no significant factors to the knowledge of the Directors that had caused such slight decrease in the gross profit margin.1 million for the year ended 31 March 2009 to approximately HK$27. The other income of the Group for the financial year ended 31 March 2009 represented the write-off of long outstanding trade payables of approximately HK$2. the other income represented write-off of long outstanding trade payables of approximately HK$802.0 million for the year ended 31 March 2010. For the financial year ended 31 March 2010. — 154 — .FINANCIAL INFORMATION Gross profit The Group’s gross profit during the Track Record Period is as follows: Financial year ended 31 March 2009 2010 (HK$’000) (HK$’000) Gross Profit Gross Profit margin (%) 17.1 Gross profit increased by approximately 57.5% for the financial year ended 31 March 2009 to approximately 18.972 18.079 19. The gross profit margin on the other hand has decreased slightly from approximately 19.000.5 million and approximately HK$811.5 26.000 respectively.000 and sundry income of approximately HK$9.9% from approximately HK$17.

the Group had increased the manpower and recruited additional staff at the head office.720 252 531 559 284 40 459 6. which explained the increase in staff cost during the year. The increase in directors’ remuneration was mainly due to the appointment of two Directors during the financial year ended 31 March 2010. plant and equipment of approximately HK$598. which mainly relate to the salaries of accounting and administrative staff (other than Directors) in the head office of the Group.5% of the revenue for the respective year. plant and equipment of approximately HK$40. representing approximately 6. Save for the above.753 Administrative expenses of the Group amounted to approximately HK$5. Administrative expenses refer to expenses incurred on a regular basis to support the Group’s normal course of business.4 million and approximately HK$6. — 155 — . Staff costs and directors’ remuneration were the two major items under the administrative expenses during the Track Record Period. Directors’ remuneration amounted to approximately HK$1.3 million for the years ended 31 March 2009 and 31 March 2010 respectively.6 million for the year ended 31 March 2009 and approximately HK$2. The Company disposes of the machinery according to its working conditions. directors’ remuneration and depreciation expenses.277 2. A loss on disposal of property.000 in the year ended 31 March 2010.554 315 772 415 199 598 447 5. staff costs. during the financial year ended 31 March 2010.431 500 131 1.000 and approximately HK$1. plant and equipment Others Total 403 75 653 1. legal and professional fees.8 million for the financial years ended 31 March 2009 and 31 March 2010 respectively. Financial year ended 31 March 2009 2010 HK$’000 HK$’000 Auditor’s remuneration Legal and professional fees Staff costs Directors’ remuneration Depreciation Entertainment Motor vehicles related expenses Office rental Loss on disposal of property.000 was resulted from the disposal of machinery in the year ended 31 March 2009 while the Group recorded a loss on disposal of property.2% and approximately 4. including principally audit fees.7 million for the year ended 31 March 2010. Staff costs. amounted to approximately HK$653. there were no significant fluctuations in other major items under the administrative expenses.FINANCIAL INFORMATION Administrative expenses The table below sets out the administrative expenses for the Track Record Period. To meet the operation needs and accommodate the increase in administrative work for the development of Group’s business.

000 respectively.000 and approximately HK$634. The increase in the income tax of the Group from approximately HK$2.9% for the year ended 31 March 2009.5% of the estimated assessable profits of TYW and TY Civil and 15% of that of TYC for the Track Record Period. The net profit margin has decreased from approximately 13.7 million during the year ended 31 March 2010. In addition.5 million. During the financial year ended 31 March 2010. For the financial years ended 31 March 2009 and 31 March 2010.0% for the financial year ended 31 March 2009 to approximately 11.6 million for the financial year ended 31 March 2010 was primarily due to the increase in profit before income tax from approximately HK$13. plant and equipment during the year ended 31 March 2010. The interest costs on finance lease were approximately HK$390. As a result. which is slightly higher than that of 16. as the Group acquired approximately HK$8. which resulted in an increase in the current tax by approximately HK$0.4%.0 million which were granted by a bank in Hong Kong pursuant to a scheme launched by the Government with an aim to assist small to medium-sized enterprises to secure loans from participating lending institution to meet general business needs to tide over the liquidity problem during the global financial crisis in late 2008. the resulting tax benefit from accelerated tax depreciation deductible for these property.7 million of property. Net profit The net profit of the Group for the financial years ended 31 March 2009 and 31 March 2010 was approximately HK$11. the interests on bank overdrafts were approximately HK$65. finance costs amounted to approximately HK$455.000 and the Group did not record any interest on bank loans. As a result.000 during the financial year ended 31 March 2010. the Group recorded bank loan interests of approximately HK$218. as the Group only used bank overdraft facilities to support its working capital uses. while the decrease in net profit margin for the financial year ended 31 March 2010 was mainly because the net profit for the financial year ended 31 March 2009 was attributable to a higher amount of other income from write-off of long outstanding payables. For the year ended 31 March 2009. — 156 — .8 million respectively. the Group obtained three loan facilities in the total amount of HK$12.3 million for the financial year ended 31 March 2009 to approximately HK$3.4 million for the year ended 31 March 2010.000 for each of the two financial years ended 31 March 2009 and 2010 respectively. The Group had no other tax payable in other jurisdictions during the Track Record Period. The increase in net profit was resulted from the increase in revenue for the financial year ended 31 March 2010.4 million and approximately HK$16.FINANCIAL INFORMATION Finance costs Finance costs represented the interest on finance leases and interest on bank loans and overdrafts of the Group. Income tax The income tax paid by the Group is subject to the applicable tax rate in Hong Kong and the tax expenses were calculated at 16. the effective tax rate of the Group for the year ended 31 March 2010 was approximately 17. plant and equipment led to additional recognition of deferred tax expense of approximately HK$0.000 and approximately HK$396.000 attributable to the drawdown of such loans of HK$6 million on top of the interest on bank overdrafts of approximately HK$20.3% for the financial year ended 31 March 2010.7 million for the year ended 31 March 2009 to approximately HK$20.

072 9. Combined Statement of Financial Position As at 31 March 2009 2010 HK$’000 HK$’000 Non-current assets Property.FINANCIAL INFORMATION II.763 37.821 -----------------------------------------24.516 -----------------------------------------24.775 27.052 4.868 12.824 -----------------------------------------826 1.868 14.365 — 36.340 — 157 — .658 2.451 3.532 473 4.738 3.015 222 196 45. plant and equipment Current assets Inventories Trade and other receivables Tax recoverable Cash and cash equivalents 8.357 -----------------------------------------22.330 48.196 ------------------------------------------ 13.271 — 10.324 ------------------------------------------ Total assets less current liabilities Non-current liabilities Finance lease creditors Deferred tax liabilities Total liabilities 29.204 24.788 28.340 Total assets Current liabilities Trade and other payables Finance lease creditors Borrowings Employee benefits Current tax liabilities Bank overdraft 53.873 -----------------------------------------11.893 --------19.531 793 2.697 --------7.697 --------24.497 ------------------------------------------ Net current assets 17.389 -----------------------------------------61.484 -----------------------------------------39.087 — 513 2.472 22.384 1.396 -----------------------------------------1.072 TOTAL NET ASSETS Capital and reserves Share capital Reserves TOTAL EQUITY 9.308 --------9.699 -----------------------------------------26.

and subsequently at the lower of cost and net realisable value.495 7. of which the acquisition cost of motor vehicles and machinery amounted to approximately HK$4. The property. approximately 41. the Group acquired additional property. The comparatively higher level of inventory as at 31 March 2010 as compared to that as at 31 March 2009 was principally due to the stock-up of more construction materials for the use of projects which were of larger size than those of the previous year.446 17.6% and approximately 97. plant and equipment mainly comprised motor vehicles.4% of the total inventory of the Group as at 31 March 2009 and 31 March 2010 respectively. plant and equipment of approximately HK$8.8 million as 31 March 2009 and 31 March 2010 respectively. fittings and valves which accounted for approximately 93.635 — 594 28. During the financial year ended 31 March 2010. They are durable in nature and have long useful lives.7 million and HK$13. motor vehicles are necessary for the transport of materials to various project sites which are located all over the territory. plant and equipment The net carrying value of the property.FINANCIAL INFORMATION Property.6% of the inventory balance of the Group as at 31 March 2010 has been used. costs of conversion and other costs incurred in bringing the inventories to their present location and condition and is calculated using the weighted average method. As at 30 June 2010. Given the nature of the Group’s business.449 458 4. Trade and other receivables Trade and other receivables of the Group comprised: As at 31 March 2009 2010 HK$’000 HK$’000 Trade receivables Retention receivables Other receivables and prepayments Amounts due from customers for contract works Amount due from a director Deposits 3.9 million respectively. plant and equipment amounted to approximately HK$8. Inventories are initially recognised at cost.935 10. Net realisable value represents the estimated selling price in the ordinary course of business less the estimated costs of completion and applicable selling expenses.015 2.614 10. The inventory of the Group amounted to approximately HK$7.3 million as at 31 March 2009 and 31 March 2010 respectively.271 — 158 — . Inventory The inventory of the Group comprises construction materials for the contract work including mainly pipes. machinery.7 million.671 377 37. Cost comprises all costs of purchase.8 million and approximately HK$9.612 6. site offices and office equipment.7 million and HK$2.

Retention money. The Directors believe that no impairment allowance is necessary in respect of the trade receivables as at 31 March 2009 and 31 March 2010. the duration of maintenance period is one year. The related customers are mainly Government departments/organisations and well-established corporations. For projects which are divided into two or more sections or comprising several work orders. the Group grants credit period ranging from 14 to 30 days to its trade customers of contract works.614 2.612 In general. charges. the Company will still monitor the creditworthiness of the two customers on an on-going basis by reference to the settlement status of the related receivables. These customers have established business relationship with the Group and have no history of defaulting payment to the Group. costs. usually represents a specified percentage on the certified payment. As at 31 March 2009 2010 HK$’000 HK$’000 Current Less than 1 month past due 1 to 3 months past due More than 3 months but less than 12 months past due 2.757 857 — — 3. debts or sums for which the contractor/subcontractor is liable to the customers in connection with the undertaking of the relevant project. Based on the historical payment record of the two major customers. the balance of retention receivables is somewhat floating in nature and may be subject to both upward and downward movements throughout the contract term. As at 30 June 2010. is retained by the customers for a period of time according to the terms of respective contract to ensure satisfactory completion of the projects.4 million and approximately HK$6. The trade receivables as at 31 March 2009 and 31 March 2010 were aged less than 1 month as shown in the table above. all the trade receivables as at 31 March 2010 were settled.612 — — — 2.FINANCIAL INFORMATION Trade receivables are mainly derived from provision of construction work on civil engineering contracts. Despite this. In general. The following table sets out the aging analysis of the trade receivables as at 31 March 2009 and 31 March 2010. In such cases. Application for progress payments of contract works is made regularly. As at 31 March 2009 and 31 March 2010 respectively. the retention money will be released after the maintenance period of respective sections or completion of respective work orders. the retention money may be released before the completion of the whole project.5 million. The Group does not hold any collateral over these balances. Accordingly. the retentions held by customers for contract works included in other receivables amounted to approximately HK$10. Retention receivables refer to the sum retained by the customers for retention purpose and can generally be used for recovery of the damages. usually on a monthly basis. the Company considers that the exposure to credit risk is minimal. The reduction in the retention receivables as at 31 March 2010 was mainly attributable to the release of retention money from the customer of approximately HK$3.7 million in — 159 — . expenses.

Amounts due from customers will become trade receivables upon certification. which will be expensed towards the completion of the projects and upon successful Listing respectively. under normal circumstances. After certification. the Group will submit the monthly application for interim payment to the engineer appointed for the project or the main contractor (as appropriate) showing the estimated value of the work in progress and other relevant information as in accordance with the terms of the contracts. the works were satisfactorily completed within the relevant time frame in accordance with the relevant contract.7 million was the insurance cost relating to the new contract for the replacement and rehabilitation of water mains stage 3 .000 and approximately HK$7. in his/her opinion. it is common that the work done by the Group is still subject to certification at the end of each reporting period.3 million and the deferred expenses in relation to the professional fees for listing of the Shares of approximately HK$1.New Territories (contract numbered 1/WSD/09(W)). the engineer will issue a certificate of payment no later than 21 days of the date of receipt of such notice if. The substantial increase in other receivables and prepayments as at 31 March 2010 was mainly due to the increase in prepaid project insurance which amounted to approximately HK$3. for which relevant interim payment has not been applied. They will become trade receivables upon certification of the relevant work by the customers.5 million as at 31 March 2010.8 million as at 31 March 2010 also accounted partly for the increase in other receivables and prepayments. the amounts due from customers for contract work amounted to approximately HK$4.2 million as at 31 March 2010 was principally due to the work done by the Group in respect of the contract for the replacement and rehabilitation of water mains stage 3 — mains on Hong Kong Island South and outlying islands (contract numbered 18/WSD/08) and the contract for Waterworks District W. the retention receivables of approximately HK$0.9 million as at 31 March 2009 and 31 March 2010 respectively. The advance to subcontractors of the Group of approximately HK$2. As the time periods for interim payment application and certification vary in accordance with the specific terms of each project. subsequent settlements thereof are not presented. of which approximately HK$2. As other receivables and prepayments comprised mainly insurance cost and deferred professional fees for the listing of the Shares on GEM. the amount due from customers was mainly related to work pending payment application and certification in relation to the contract for replacement and rehabilitation of water mains (Stage 2) — Tai Po and Fanling (contract numbered 21/WSD/06) of approximately HK$3.4 million and approximately HK$ 10. Other receivables and prepayments amounted to approximately HK$458. As at 31 March 2009 and 31 March 2010 respectively. the Group has not encountered material claims from its customers which have resulted in a significant deduction from the retention receivables. As at 31 March 2009. — 160 — .6 million.mains on Hong Kong Island South and outlying islands (contract numbered 18/WSD/08). The increase in amount due from customers of approximately HK$7. As detailed in the section headed “Business” in this prospectus. During the Track Record Period.6 million.7 million as at 31 March 2010 has been received by the Group. hence it is not relevant to present subsequent settlement thereof. As at 30 June 2010.FINANCIAL INFORMATION respect of the contract for replacement and rehabilitation of water mains (stage 2) — Tai Po and Fanling (contract numbered 21/WSD/06). The amounts due from customers for contract works relate to the estimated revenue before the application for interim payment is made by the Group or the certificate of payment is issued by the engineer or the main contractor.

7 million as at 31 March 2009.3 million and HK$8.550 4.738 8.104 385 1.FINANCIAL INFORMATION The amount due from a director of approximately HK$17. which was unsecured. Trade and other payables Trade and other payables of the Group comprised: As at 31 March 2009 2010 HK$’000 HK$’000 Trade payables Retention money payables Advances received from customers Other payables and accruals 5.986 19.046 Note: The upper ceiling for the trade payables under aging catagory “more than 12 months” was six years.492 21 5.418 1.001 24. The following table sets out the ageing analysis of the trade payables as at 31 March 2009 and 31 March 2010.0 million. As at 31 March 2009 and 31 March 2010 respectively.328 1. The increase in trade payables as at 31 March 2010 was resulted from the increase in waterworks work done by the Group for the year as indicated by the increase in revenue for the financial year ended — 161 — . As at 31 March 2009 2010 HK$’000 HK$’000 Current or less than 1 month 1 to 3 months More than 3 months but less than 12 months More than 12 months (Note) 3.139 8. the trade payables amounted to approximately HK$5.451 Trade payables represented the amounts due to subcontractors of the Group.572 2. interest-free and repayable on demand.328 5. The trade payables are short term and hence their carrying values are considered by the Directors to be a reasonable approximation of their fair value.046 2. The Group normally settles trade payables within a credit period ranging from 14 to 42 days. The majority of trade payables as at 31 March 2009 and 31 March 2010 were current or aged less than 1 month. related to current account with a director and had been fully settled as at 31 March 2010.854 9.852 9.258 557 1. suppliers of materials and consumables.

FINANCIAL INFORMATION
31 March 2010. As a result of an increased amount of contract work, the charges by the subcontractors and the cost of materials were both higher in the financial year ended 31 March 2010. The trade payables represented the outstanding amounts payable to the subcontractors and suppliers as at 31 March 2010. The trade payables aged more than 12 months as at 31 March 2010 were mainly related to the charges payable to a subcontractor of the Company. As there was certain outstanding work to be completed by such subcontractor, the related payables of approximately HK$900,000 were still unsettled as at the 30 June 2010. As at 30 June 2010, the subsequent settlement of the trade payables as at 31 March 2010 amounted to approximately HK$6.8 million. Retention money payables represented the money withheld by the Group when making interim payment to the subcontractors. Retention money will usually be retained by the Group for a period of time according to the terms of respective contract to ensure satisfactory completion of the projects by the Group’s subcontractors. For projects which are divided into two or more sections or comprising several work orders, the retention money will be released after the maintenance period of respective sections or completion of respective work orders. In such cases, the retention money may be released before the completion of the whole project. Accordingly, the balance of retention money payable of a particular project may be subject to both upward and downward movements during the term of the project. The retention money payables amounted to approximately HK$1.9 million at 31 March 2009 and approximately HK$2.9 million as at 31 March 2010. The increase in such balance as at 31 March 2010 was mainly due to the retention money withheld by the Group from the major subcontractors which were involved in the contract for replacement and rehabilitation of water mains (Stage 2) — Tai Po and Fanling (contract numbered 21/WSD/06) and contract for replacement and rehabilitation of water mains stage 2 - mains in Ngau Tam Mei (contract numbered 13/WSD/06). The advances received from customers refer to the funds advanced by the main contractors to the Group for the general working capital of the relevant projects undertaken by the Group as a subcontractor of such customers. Such advances are unsecured and repayable on demand except for an amount of approximately HK$8.2 million and approximately HK$3.5 million as at 31 March 2009 and 31 March 2010 respectively which are interest-bearing. As such advances from customers are directly related to a specific project, the interest cost on such advances is included as part of the Group’s cost of services during the Track Record Period. As at 31 March 2009, the advances received from customers in a total amount of approximately HK$9.6 million comprised mainly funds advanced by the main contractor in respect of the contract for replacement and rehabilitation of water mains (Stage 2) — Tai Po and Fanling (contract numbered 21/WSD/06). The advances received from customers as at 31 March 2010 amounted to approximately HK$9.6 million and represented mainly the advances from the main contractor in respect of the aforesaid contract in 2009 and the contract for the replacement and rehabilitation of water mains stage 3 — mains on Hong Kong Island South and outlying islands (contract numbered 18/WSD/08). The advances from customers are reviewed periodically by the Group and the main contractors. The balance of advances from customer on a particular project may also be subject to change as the main contractor may raise or reduce the advances with reference to the anticipated funds required and the internally generated resources of that particular project. The advance from customers is usually set off against certified payments payable by the main contractors to the Group.

— 162 —

FINANCIAL INFORMATION
Due to the floating nature of the retention money payables and advance from customers as described above, the subsequent settlement thereof are not presented. Other payables and accruals of the Group amounted to approximately HK$3.0 million and approximately HK$4.0 million as at 31 March 2009 and 31 March 2010 respectively. The major item of other payables and accruals was the provision for salaries of the employees of the Group for the month of March which are paid in the first week of the following month according to the Group’s policy, and amounted to approximately HK$1.8 million and approximately HK$2.6 million as at 31 March 2009 and 31 March 2010 respectively. The increase in provision for salaries as a result of increase in manpower of the Group together with the corresponding increase in mandatory provident fund payable accounted for the increase in other payables and accruals as at 31 March 2010. The other payables were related to the outstanding payment for the sundry creditors including but not limited to machinery suppliers and petroleum companies. As at 30 June 2010, approximately HK$3.8 million of the other payables and accruals as at 31 March 2010 was subsequently settled. Finance lease creditors The Company leases a number of motor vehicles and machinery for use in its projects. Such assets are classified under as assets held under finance lease as the rental period approximates the estimated useful economic life of the assets concerned and often the Group has the right to purchase the assets outright at the end of the minimum lease term by paying nominal amount. As at 31 March 2009 and 2010, the outstanding amounts of the finance lease creditors amounted to approximately HK$4.6 million and approximately HK$3.9 million respectively. The outstanding balance as at 31 March 2010 was mainly related to new finance lease of approximately HK$3.2 million from the hire purchase of the motor vehicles. Borrowings During the financial year ended 31 March 2010, the Group borrowed loans of HK$6.0 million from a bank, of which approximately HK$1.5 million was repaid. The bank loans were interest-bearing and were drawn down from the loan facilities granted by a bank under the Scheme as mentioned above. The interest rate in respect of a non-revolving loan of HK$4.0 million was 1% per annum over the best lending rate offered by the bank. One of the bank loans in the amount of HK$2.0 million, also a non-revolving loan, was borrowed at a flat rate of 3.75% per annum. As at 31 March 2010, the bank loans due within one year amounted to approximately HK$4.5 million. The weighted average interest rate of the borrowings for the year was approximately 5.1%.

— 163 —

FINANCIAL INFORMATION
III. Selected key financial ratios The following tables set out certain key financial ratios of the Group for the Track Record Period: Year ended 31 March 2009 2010 Trade receivables turnover days Trade payables turnover days Inventory turnover days 77.0 37.1 192.8 48.4 32.6 117.8

Notes:

1.

Trade receivables turnover days equal to the balance of trade receivables, retention receivables and amounts due from customers for contract works as at the financial year end dates divided by total revenue for the respective financial year and multiplied by 365 days.

2.

Trade payables turnover days equal to the balance of trade payables and retention payables as at the financial year end dates divided by cost of service for the respective financial year and multiplied by 365 days.

3.

Inventory turnover days equal to the inventories as at the financial year end dates divided by total cost of materials for the respective financial year and multiplied by 365 days.

Trade receivables turnover days The trade receivables and amounts due from customers for contract works were mainly derived from provision of contract works service. In general, the Group grants an average credit period ranging from 14 to 30 days to its trade customers of contract works. The average credit period granted by the Group refers to the period starting from the certification of contract work until the settlement of the trade receivables. Application for progress payments of contract works is made regularly, usually on a monthly basis. In general, the Group’s customers are able to make payments for settlement of the trade receivables to the Group within the credit period. For the financial years ended 31 March 2009 and 31 March 2010, the Group’s trade receivable turnover days were approximately 77.0 days and 48.4 days respectively. The turnover days shown above were longer than the average credit period of the Group, as the balances of retention receivables were included in the calculation of the trade receivables turnover days. If the retention receivable balances as at 31 March 2009 and 31 March 2010 were not taken into account in the calculation of trade receivable turnover days, the trade receivable turnover for the financial years ended 31 March 2009 and 31 March 2010 would have been approximately 38.1 days and 34.0 days respectively.

— 164 —

FINANCIAL INFORMATION
In the calculation of the trade receivables turnover days above, the amounts due from customers for contract work are included in addition to trade receivables. As discussed in the above section, the amounts due from customers for contract works relate to the estimated revenue before the application for interim payment is made or the certificate of payment is issued. The amounts due from customers will become trade receivables upon certification of the relevant work by the customers. As such, the inclusion of the amounts due from customers would also result in the turnover days as calculated slightly longer than the average credit period granted to the customers. Trade payables turnover days Trade payables comprised mainly the subcontracting charge payable to the Group’s subcontractors and the amount due to suppliers of materials and consumables. The Group normally settles trade payables within a credit period ranging from 14 days to 42 days. For the financial years ended 31 March 2009 and 31 March 2010, the Group’s trade payables turnover days were approximately 37.1 days and 32.6 days respectively. The trade payables turnover days were consistent with the settlement period of the Group during the Track Record Period. Inventory turnover days For the financial year ended 31 March 2009 and 31 March 2010, the Group’s inventory turnover days were approximately 192.8 days and 117.8 days respectively. During the financial year ended 31 March 2009, the Group has purchased more materials in anticipation of the commencement of works for a project of significant size (contract numbered 21/WSD/06). However, due to the unexpected time taken to obtain the necessary excavation permits from the relevant government authorities necessary for the commencement of work, the materials purchased have not been utilised as expected. As a result, the inventory turnover days for the year ended 31 March 2009 was comparatively higher than that for the year ended 31 March 2010. Year ended 31 March 2009 2010 Return on equity (Note 1) Return on assets (Note 2) 47.4% 21.2% 75.4% 27.3%

Notes:

1.

Return on equity equals to net profit for the financial year divided by shareholders’ equity as at the financial year end date and multiplied by 100%.

2.

Return on assets equals to net profit for the financial years divided by total assets as at the financial year end date and multiplied by 100%.

— 165 —

FINANCIAL INFORMATION
Return on equity increased from approximately 47.4% for the year ended 31 March 2009 to approximately 75.4% for the year ended 31 March 2010. This was mainly caused by an increase in net profit for the year ended 31 March 2010. Given that there was no significant change in the Group’s shareholders’ equity, an increase in net profit would cause the return on equity to increase for the financial year ended 31 March 2010, implying a better rate of return for the equity holders. Return on assets also improved, increasing from approximately 21.2% for the year ended 31 March 2009 to approximately 27.3% for the year ended 31 March 2010. This was mainly due to the combined effect of a higher growth of net profit of approximately 47.6% and a smaller increase in total assets of approximately 14.5%. Both the return on equity and return on assets were increasing during the Track Record Period. The larger increase in return on equity as compared with the return on assets for the year ended 31 March 2010 was because the total assets had increased while there was no significant change in equity. The increase in total assets was mainly attributable to the increase in cash and cash equivalents generated from the payment by the customers. LIQUIDITY, FINANCIAL RESOURCES AND CAPITAL STRUCTURE The Group generally finances its operations through internally generated cash flows and bank borrowings. Depending on the terms of the relevant contracts, the Group can receive advances from customers for general working capital of the project(s) in respect of the contract(s) undertaken by the Group as a subcontractor. In addition to the internally generated cash flows from the projects and the advances from customers which are main contractors, one of the main source of funds is bank borrowing. Save for the bank overdrafts and the bank borrowings, there was no other material external financing for the Group during the Track Record Period. As at the Latest Practicable Date, all the bank overdrafts and the bank borrowings have been fully repaid by the Group. The Directors consider that the regulatory licencing requirement on the working capital of the Company, which is detailed under the section headed “Licencing and other requirement for Government projects” in this prospectus, and funds required for execution of or generated from the projects are major factors affecting the liquidity and working capital of the Company. For the projects undertaken by the Company as a main contractor, there are no advances from WSD for daily operations of the projects. As disclosed above, in some cases where the Company undertakes a project as a subcontractor, the Company may request for advances from the main contractor for project use. Thus, whether or not the Company is able to obtain advances from the customers also affects the liquidity of the Group. As at the Latest Practicable Date, the Company has planned capital expenditures of up to HK$6.5 million, mainly for acquisition of equipment and machinery to meet the use of new project(s). The Company intends to finance the acquisition by the net proceeds from the Placing. Saved for the Placing, there are no other external financing plans for the Group.
App1A(32)(5)(a)

— 166 —

the amount of total current assets increased as at 31 March 2010 and was a bit higher than the total current assets as at 31 March 2009. The Directors believe that the Group’s current ratio is healthy. consisting of current assets of approximately HK$48. — 167 — .6 as at 31 March 2009 to approximately 1.494 1. being the latest practicable date for the purpose of the statement of indebtedness.7 million. mainly attributable to higher trade and other payables and current tax liabilities as a result of more business activities as compared with that for the year ended 31 March 2009.5 million.985 473 3. has decreased from approximately 1.605 Current liabilities Trade and other payables Finance lease creditors Borrowings Employee benefits Current tax liabilities 26.203 36.3 as at 31 March 2010.279 37.6 million and current liabilities of approximately HK$36. the net current assets of the Group were approximately HK$17. Due to the settlement of the trade and other receivables and an increase in cash and cash equivalents. As at 30 June 2010. which was defined as the total current assets divided by total current liabilities. the net current assets of the Group were approximately HK$11.FINANCIAL INFORMATION Net current asset As at 31 March 2009. As at 31 March 2010.411 3.219 Current ratio The current ratio.147 2.4 million. As at 30 June 2010 HK$’000 Current assets Inventories Trade and other receivables Cash and cash equivalents 9. the Group’s net current assets was approximately HK$12.2 million.832 48. The decrease in net current assets was primarily due to higher current liabilities as at 31 March 2010.

9 million and HK$61. For the financial year ended 31 March 2009.242) (10.9 million.169 (5.834) (100) (1.330 — 168 — . Gearing ratio The gearing ratio.0 as at 31 March 2010 respectively. advance received from customers of approximately HK$9. was approximately 1.8 million as at 31 March 2009.7 million as at 31 March 2009 and 31 March 2010 respectively. The advance received from customers was approximately HK$9.1% as at 31 March 2009 and 31 March 2010 respectively.6 million and the obligation under finance lease was approximately HK$4. which is based on the amount of total bank borrowings and obligations under finance lease and advance received from customers divided by total assets.4 as at 31 March 2009 and approximately 1. As at 31 March 2010. Although a lower quick ratio usually suggests a lower liquidity of an entity and lower ability to convert the current assets into cash.579) 27.909 (1. the liquidity of the Group was not worse-off as at 31 March 2010 in view of the higher level of cash and cash equivalents as compared with that of the preceding financial year. the Group had total bank borrowings of approximately HK$4.124 (390) (3.6% and approximately 29. Cashflow The following table summaries the Group’s cash flows during the Track Record Period: Financial year ended 31 March 2009 2010 HK$’000 HK$’000 Net cash generated from operating activities Net cash used in investing activities Net cash used in financing activities Net (decrease)/increase in cash and cash equivalents Cash and cash equivalents at the beginning of year Cash and Cash equivalents at the end of year 4. The lower quick ratio as at 31 March 2010 was due to the higher inventory balance at the financial year end date. The slight decrease in gearing ratio of the Group as at 31 March 2010 was mainly due to the drawdown of the bank loans and an increase in total assets.018) 11.6 million and obligation under finance lease of approximately HK$3.579) 10. there are no bank borrowing other than the bank overdraft of approximately HK$1.479) (1.5 million.FINANCIAL INFORMATION Quick ratio The quick ratio. which was defined as total current assets less inventories divided by total current liabilities. was approximately 29. The total assets of the Group was approximately HK$53.6 million as at 31 March 2009.

2 million for the year ended 31 March 2010 which was related to the purchases of property.2 million. The increase in trade and other payables caused a net working capital inflow of approximately HK$2. plant and equipment of approximately HK$0.0 million for the year ended 31 March 2010. This was mainly attributable to the repayment of finance lease of approximately HK$3.7 million and operating profit before changes in working capital of approximately HK$16. Investing activities Net cash used in investing activities was approximately HK$390.0 million. The Group recorded profit before income tax of approximately HK$20.2 million.000 for the year ended 31 March 2009.FINANCIAL INFORMATION Operating activities For the financial year ended 31 March 2009. plant and equipment of approximately HK$5. plant and equipment of approximately HK$654. Net cash used in financing activities was approximately HK$10. the Group recorded net cash inflow from operating activities of approximately HK$27.2 million. the cash inflow from operating activities was mainly generated from the payment by the customers for the Group’s undertaking of the projects for the year.5 million offset partially by the proceeds from sale of property.8 million for the year ended 31 March 2009. For the financial year ended 31 March 2010. Net cash used in investing activities was approximately HK$5.1 million for the year. the Group acquired new machinery.3 million. resulting in a higher trade and other payables. During the year. During the year. trade and other receivables and the increase in trade and other payables mainly accounted for a cash outflow of approximately HK$12. During the financial year ended 31 March 2010. The higher cash inflow as compared with the preceding year was mainly due to cash generated from larger amount of work done by the Group for the year. The cash outflow mainly represented the dividend paid to an owner of the Company of approximately HK$9. an increase in inventories.3 million.9 million and repayment of finance lease of approximately HK$4. The Group recorded profit before income tax of approximately HK$13. plant and equipment of approximately HK$1.000. — 169 — . equipment and motor vehicles for replacement of the old ones and for use in the new projects. which was related to the purchases of property.0 million offset partially by the proceeds from the sale of property.4 million and operating profit before changes in working capital of approximately HK$24. which was partly offset by cash used in the purchase of inventories.8 million. resulting in net cash inflow from operating activities of approximately HK$4.1 million. Financing activities Net cash used in financing activities was approximately HK$3. the growth of the Group’s business had led to the increase in trade payables to subcontractors and the salaries payable to the employees of the Group.

0 million. the Group of approximately HK$4.2 million comprise of business credit revolving credit of HK$2. and cross guarantee within the Group.9 million.0 million which were secured. the Group had operating lease commitments of approximately HK$0.5 million has been repaid before 31 March 2010. being the latest practicable date for the purpose of preparing this indebtedness statement prior to the printing of this prospectus.0 million. Kan. Security and guarantees As at the close of business on 30 June 2010.0 million were secured by personal guarantees from Mr. App1A(32)(4) App1A(32)(3) Third Schedule 24 App1A(32)(1). The cash inflow represented the drawdown of bank loans of HK$6.1 million. As the revenue and cost of services are principally denominated in Hong Kong dollars. of which approximately HK$1. the Group did not have any material contingent liabilities. the Group had outstanding bank loans of approximately HK$4. As at the close of business on 30 June 2010. As at 30 June 2010.0 million and import facilities of Contingent liabilities As at 30 June 2010. the exposure to the risk of foreign exchange rate fluctuations for the Group is minimal. 30 motor vehicles of the Group under hire purchase with an aggregate outstanding principal amount of approximately HK$3. interest-bearing and repayable on demand. overdraft and HK$4.0 million and banking facilities of facilities of HK$6. INDEBTEDNESS Borrowings As at the close of business on 30 June 2010. The unutilised banking card of HK$0. the Group borrowed bank loans during the financial year ended 31 March 2010. Commitments The Group leased its office properties. — 170 — . and director’s quarter and certain office equipment under operating lease arrangements which was negotiated for terms from two to three years.(2) Third Schedule 23 App1A(31)(2) had total outstanding non-revolving loan HK$6. Kan. Foreign exchange exposure The Group is principally engaged in the undertaking of engineering projects in Hong Kong. The obligations under finance leases amounted to approximately 3.FINANCIAL INFORMATION Instead of relying on the bank overdrafts to meet its financial needs. the bank loans together with the banking facilities were secured by personal guarantees given by the chairman.2 million. Mr. As at the close of business on 30 June 2010.2 million.

debt securities or other similar indebtedness.000. WORKING CAPITAL Taking into account the internally generated funds of approximately HK$12. The Directors confirm that there have been no material changes in the Group’s indebtedness and contingent liabilities since 30 June 2010. loan capital. (iv) the Group’s gearing ratios.FINANCIAL INFORMATION Disclaimers Save as disclosed aforesaid and apart from intra-group liabilities. (iii) the Group could utilise a combination of retained profits and borrowings to finance the Group’s working capital needs rather than solely rely on retained profits. Kan.4 million available to the Group and the net proceeds from the issue of Shares under the Placing of approximately HK$21.1%) and the Group’s finance costs (for the year ended 31 March 2009: approximately HK$455. charges. OFF-BALANCE SHEET TRANSACTIONS Except for the commitments and contingent liabilities set forth above. calculated as a percentage of the aggregate of the amount of total bank borrowings and obligations under finance lease and advance received from customers to total assets (31 March 2009: 29.625. loans. the Directors consider that it is commercially justified to declare and pay the aforesaid dividends to Mr.000 respectively to Mr. would provide additional capital for the Group to undertake more contract works.000. debentures.700. Kan in April 2010.000) during the Track Record Period were App1A(36) — 171 — . the Group did not have any outstanding mortgages. 31 March 2010: 29. For the year ended 31 March 2010. if otherwise not declared and paid. the Directors are of the opinion that the Group will have sufficient funds to meet the working capital and financial requirements for at least next 12 months commencing from the date of this prospectus. liabilities under acceptance or acceptance credits or any guarantees or other material contingent liabilities outstanding as at the close of business on 30 June 2010. finance leases or hire purchase commitments. TYW and TY Civil declared and paid dividends of HK$245. the then sole shareholder of TYW and TY Civil.000 to Mr. (ii) the level of distribution is appropriate as a sufficient portion of the net profits attributable to the Shareholders has been retained to support the Group’s ongoing operations and compliance with the employed capital and working capital requirements as required by WBDB for retention on the Contractor List.000 and HK$9. the Group has not entered into any material off-balance sheet transactions or arrangements as at 31 March 2010.6%. Kan. for the year ended 31 March 2010: approximately HK$634. Despite the aforesaid dividends. Kan and TYC declared dividends of approximately HK$8. bank overdrafts.0 million. to reward his past investments in and support and contribution to the Group. DIVIDEND POLICY AND DISTRIBUTABLE RESERVES The Group did not declare any dividends for the year ended 31 March 2009. Kan for the following reasons: (i) the aforesaid dividends were declared to Mr.000 to Mr. TY Civil also declared and paid a final dividend of HK$4. Kan which was set off against the amount due from Mr.

Audited Unaudited combined net pro forma tangible adjusted assets combined attributable Add: Less: net tangible to owners of Estimated Dividends assets the Company net proceeds declared after attributable to as at 31 from the 31 March the owners of March 2010 Placing 2010 the Company HK$’000 HK$’000 HK$’000 HK$’000 (Note 1) (Note 2) (Note 3) Based on the Placing Price of HK$1.7. The Company does not have any pre-determined dividend distribution ratio. Any final dividend for a financial year will be subject to our Shareholders’ approval.7 Notes: 1.7.28 per Share App1A(21) R. The declaration of future dividends will be subject to the decision by the Board and will depend on.340. The Company had no reserve available for distribution to the Shareholders as at 31 March 2010. and any other factors that the Directors may consider relevant. may not give a true and fair picture of the financial position of the Group. It has been prepared for illustrative purpose only and. cash requirements and availability. The audited combined net tangible assets attributable to owners of the Company as at 31 March 2010 is based on the audited combined net assets of the Company as at 31 March 2010 of HK$22. being the date of which the Group’s latest audited financial statements were made up.000. and (v) the Shareholders will be entitled to the future profits of the Group after the Listing. R. among other things. The Directors also consider it was in the interest of the Company and the Shareholders as a whole to declare and pay the aforesaid dividends to Mr.000 (4. for the purpose of illustrating the effect of the Placing as if it had taken place on 31 March 2010.31(4) — 172 — .340 21. The unaudited pro forma adjusted net tangible assets of the Group as at 31 March 2010 is based on the audited combined net tangible assets attributable to owners of the Company as at 31 March 2010 as shown in the Accountants’ Report set out in Appendix I to this prospectus and the adjustments described below. Kan as rewards for his past contribution and encouragement for his continued support to the Group’s business.340 39.7. the earnings. on the basis of the notes set forth below. UNAUDITED PRO FORMA ADJUSTED NET TANGIBLE ASSETS The unaudited pro forma adjusted net tangible assets of the Group has been prepared.31(3)(b) R. financial condition.FINANCIAL INFORMATION at reasonable level respectively.31(3)(2) App1A(35) Unaudited pro forma adjusted combined net tangible assets per Share HK cents (Note 4) 22. because of its hypothetical nature.000) 39.

The full text of the letter. The Directors confirm that they have performed sufficient due diligence on the Company to ensure that.21 OF THE GEM LISTING RULES The Directors have confirmed that as at the Latest Practicable Date. the date to which the latest audited financial statements of the Group were made up. The estimated net proceeds from the Placing are based on 24.7.15 TO 17.15 to 17. or any Shares which may be allotted and issued or repurchased by the Company pursuant to the general mandates for the allotment and issue or repurchase of Shares as referred to in Appendix V to this prospectus or otherwise. It does not take into account any Shares which may fall to be allotted and issued pursuant to the exercise of any options which may be granted under the Share Option Scheme.000. NO MATERIAL ADVERSE CHANGE The Directors confirm that there has been no material adverse change in the financial or trading positions or prospects of the Company since 31 March 2010.21 of the GEM Listing Rules. up to the Latest Practicable Date. summary of values and valuation certificate with regard to such property interests are set out in Appendix III to this prospectus. has valued the property interests of the Group as at 31 May 2010 and is of the opinion that the property interest is of no commercial value.000 as estimated by the Directors. App1A(34)(2) App1A(38) — 173 — .31(6) 3. PROPERTY VALUATION The Group has leased a number of properties in Hong Kong for office use and as director’s quarter. there has been no material adverse change in the Group’s financial or trading positions or prospects since 31 March 2010. and there is no event since 31 March 2010 which would materially affect the information shown in the Accountants’ Report. the date to which the latest audited financial statements of the Group was made up. Dividend declared after 31 March 2010 represents a final dividend of HK$4.000 Shares to be issued under the Placing at the Placing Price of HK$1. Vigers Appraisal and Consulting Limited.000 declared and paid by TY Civil on 9 April 2010 in respect of the year ended 31 March 2010 to its then shareholders prior to the Reorganisation.FINANCIAL INFORMATION 2.28 each.7. after deduction of the underwriting fees and related expenses payable of approximately HK$10. 4. an independent property valuer.800. DISCLOSURE REQUIRED UNDER RULES 17.000 Shares to be in issue immediately following the completion of the Placing and the Capitalisation Issue and the payment of final dividend by TY Civil.31(5) R.200. they were not aware of any circumstances that would give rise to a disclosure requirement under Rules 17. R. The unaudited pro forma adjusted combined net tangible assets per Share is calculated based on 99.744.

any time before the Termination Time: (a) there comes to the knowledge of the Sponsor. the Listing Division granting the listing of. the Lead Manager or any of the Underwriters of any matter or event showing any of the representations. Securities Limited I-Access Investors Limited Sinomax Securities Limited Gransing Securities Co. in any such cases. Subject to. The Sponsor and the Lead Manager (for itself and on behalf of the other Underwriters).M. on a jointly basis. the Placing Shares are subject to termination. or procure subscribers to subscribe for.. inaccurate or misleading in any respect when given or repeated or there has been a breach of any of the warranties or any other obligations imposed on any party to the Underwriting Agreement (other than those undertaken by the Underwriters. subject to the terms and conditions of the Underwriting Agreement. in the sole and absolute opinion of the Lead Manager (for itself and on behalf of the other Underwriters). the Placing Shares under the Placing. inter alia. warranties or undertakings contained in the Underwriting Agreement to be untrue. the Underwriters have severally agreed to subscribe for or procure placees to subscribe for. or such later date as the Sponsor (on behalf of the Lead Manager and the Underwriters) may agree in writing with the Company.m. or App1A(15)(3)(i) A1A(15)(3)(h) — 174 — .UNDERWRITING UNDERWRITERS Lead Manager CIMB Securities (HK) Limited Underwriters CIMB Securities (HK) Limited K. the Company is offering the Placing Shares under the Placing at the Placing Price for subscription by professional. institutional and/or other investors on and subject to the terms and conditions set forth in this prospectus. the Shares in issue and to be issued as mentioned in this prospectus on or before the date falling 30 days from the date of this prospectus.K. Grounds for termination The obligations of the Underwriters to subscribe for. the Sponsor and/or the Lead Manager) which. Limited UNDERWRITING ARRANGEMENTS Underwriting Agreement Pursuant to the Underwriting Agreement. to be material in the context of the Placing. is considered. are entitled to terminate the Underwriting Agreement at their sole and absolute discretion forthwith upon the occurrence of any of the following events by notice in writing to the Company (for itself and on behalf of the executive Directors and the Substantial Shareholders) given at any time prior to 8:00 a. and permission to deal in. on the Listing Date (the “Termination Time”) if.

or any event or series of events or development resulting or likely to result in any adverse change in Hong Kong. if it had occurred before the date of the Underwriting Agreement would have rendered any of the warranties contained in the Underwriting Agreement untrue. regional or international financial. or any adverse change in. or any matter which. or any of the jurisdictions in which the Group operates or has or is deemed by any applicable law to have a presence (by whatever name called) or any other jurisdiction relevant to the Group. stock market or other market conditions or prospects. national. the local. warranties or undertakings contained in the Underwriting Agreement. the Cayman Islands. economic. is material. or there shall have developed. to be material in the context of the Placing. or any event. the Cayman Islands. or (c) (d) (e) (f) (g) (ii) — 175 — . the BVI or any of the jurisdictions in which the Group operates or has or is deemed by any applicable law to have a presence (by whatever name called) or other jurisdiction relevant to the Group. industrial. being events. the Lead Manager or any of the Underwriters any breach by any party to the Underwriting Agreement (other than the Sponsor. incorrect or misleading in any respect. in the sole and absolute opinion of the Lead Manager (for itself and on behalf of the other Underwriters). matters or circumstances whether occurring or continuing before. or there comes to the notice of any of the Sponsor.UNDERWRITING (b) any statement contained in this prospectus has become or been discovered to be untrue. series of events. matters or circumstances occurs or arises on or after the date of the Underwriting Agreement and before the Termination Time. incorrect or misleading in any material respect. an material omission in the context of the Placing. the BVI. the Lead Manager or the Underwriters) of any provision thereof which. Lotawater and the executive Directors arising out of or in connection with any representations. would have constituted. existed or come into effect any event or series of events. currency. on and/or after the date of the Underwriting Agreement and including an event or change in relation to or a development of an existing state of affairs concerning or relating to any of the following: (i) any new law or regulation or any change in existing laws or regulations or any change in the interpretation or application thereof by any court or other competent authority in Hong Kong. had it arisen or been discovered immediately before the date of this prospectus and not having been disclosed in this prospectus. Purplelight. Chuwei. military. and comes to the knowledge of any of the Sponsor. occurred. act or omission which gives or is likely to give rise to any material liability of the Company or any of Shunleetat. in the sole and reasonable opinion of the Lead Manager (for itself and on behalf of the other Underwriters). or any event. matters or circumstances which. the Lead Manager or any of the Underwriters and which is considered. in the sole and reasonable opinion of the Lead Manager (for itself and on behalf of the other Underwriters). political.

inadvisable or inexpedient for the Underwriters to proceed with the Placing as a whole. which. in whatever form. or (iv) the imposition of any moratorium. or (cc) for any reason makes it impracticable. outbreak of an infectious disease. epidemic. financial or trading condition or prospects of the Group taken as a whole or. — 176 — . or (bb) has or will have or is likely to have a material adverse effect on the success of the Placing as a whole or the level of the Placing Shares being demanded. or (vii) the imposition of economic sanction or withdrawal of trading privileges. or (ix) any event of force majeure including. the BVI. in the case of sub-paragraph (v) above. strike or lock-out (whether or not covered by insurance). fire. calamity. in the reasonable opinion of the Lead Manager (for itself and on behalf of the other Underwriters): (aa) is or will be or is likely to be adverse. in any material respect. or (vi) any adverse change or prospective adverse change. riot. any act of God. terrorism.UNDERWRITING (iii) any adverse change in the conditions of Hong Kong. the US. flood. or (v) any adverse change or development involving a prospective adverse change in taxation or exchange control (or the implementation of any exchange control) in Hong Kong. the PRC or international equity securities or other financial markets. without limiting the generality thereof. to the business. on any present or prospective shareholder in his/its capacity as such shareholder of the Company. civil commotion. war. in the business or in the financial or trading position or prospects of the Group taken as a whole. or (viii) a general moratorium on commercial banking activities in the PRC or Hong Kong declared by the relevant authorities. public disorder. suspension or material restriction on trading in securities generally on any of the markets operated by the Stock Exchange due to exceptional financial circumstances or otherwise. explosion. the Cayman Islands. or (x) any other change. applied for or accepted or the distribution of the Placing Shares. or any of the jurisdictions in which the Group operates or has or is deemed by any applicable law to have a presence (by whatever name called) or other jurisdiction relevant to the Group. in any material respect. economic sanctions. crisis. by the United States or by the European Union (or any member thereof) on Hong Kong or the PRC.

interests or encumbrances in respect of. (i) a change in the system under which the value of the Hong Kong currency is linked to that of the currency of the United States or any change of the value of Hong Kong currency under such system shall be taken as an event resulting in a change in currency conditions. the Sponsor. disclosing the details specified in Rules 17. the Stock Exchange. App1A(55) — 177 — . Purplelight and Mr. either individually or taken together with the others of them. he/it must inform the Company immediately in the event that he/it becomes aware that the pledgee or chargee has disposed of or intends to dispose of such interest and of the number of Shares affected. Chuwei and Mr. interests or encumbrances.18(4) of the GEM Listing Rules. immediately following such disposal or upon the exercise or enforcement of such options. irrevocably and unconditionally undertaken to the Company. (b) in the event that the Controlling Shareholder pledges or charges any of his/its direct or indirect interest in the Shares pursuant to a pledge or charge in favour of an authorised institution (as defined in the Banking Ordinance (Chapter 155 of the Laws of Hong Kong)). UNDERTAKINGS Each of Shunleetat and Mr. cease to be a Controlling Shareholder. Kan and Shunleetat. whether or not within the normal range therefor. Mr.18 of the GEM Listing Rules. and (c) having pledged or charged any interest in the Shares referred to in (b) above. as security for a bona fide commercial loan or pursuant to any right or waiver granted by the Stock Exchange pursuant to Rule 13. may be considered as a change of market conditions referred to above. each being a Controlling Shareholder. the Lead Manager and the Underwriters to comply with the following requirements: (a) in the period of six months commencing on the date on which the First Six Months’ Period expires. Fung and Lotawater and Mr. in the period commencing on the Latest Practicable Date and ending on the date which is six months from the Listing Date (“First Six Months’ Period”) dispose of. has irrevocably and unconditionally undertaken to the Company. at any time during the First Six Months’ Periods. any of the Shares in respect of which he/it is shown by this prospectus to be the beneficial owner if. nor enter into any agreement to dispose of or otherwise create any options. he/it will not dispose of.UNDERWRITING For the purposes of the above grounds of termination. and (ii) any market fluctuations. the Lead Manager and the Underwriters that he/it shall not and shall procure that the relevant registered holder(s) (if any) shall not save as provided in Rule 13. any of the Shares in respect of which he/it is shown by this prospectus to be the beneficial owner. has jointly and severally. Cheng.43(1) to (4) of the GEM Listing Rules. the Stock Exchange. the Controlling Shareholders would. Chia. interests or encumbrances in respect of. the Sponsor. rights. Kan. rights. he/it must inform the Company immediately thereafter. nor enter into any agreement to dispose of or otherwise create any options. rights.

the Stock Exchange trading fee. save for the Placing Shares. the estimated commissions and expenses relating to the Placing including the underwriting commission. or (c) during the First Six Months’ Period purchase any Shares or securities of the Company. and any Shares which may fall to be issued pursuant to the exercise of any options which may be granted under the Share Option Scheme.43 of the GEM Listing Rules. the Lead Manager and the Underwriters as soon as it has been informed of such matters and must forthwith publish an announcement giving details of the same in accordance with the requirements of Rule 17.28 per Placing Share and the total subscription money. printing.UNDERWRITING The Company will inform the Stock Exchange. the estimated net proceeds of the Placing is approximately HK$21.3 million has been paid by the Company as at 30 June 2010 and the remaining HK$5. The Sponsor will also receive a financial advisory and documentation fee. On the basis of the Placing Price of HK$1. and other expenses relating to the Placing.4 million is payable by the Company. the Lead Manager and the Underwriters that.0 million.7 million in aggregate.5% of the aggregate Placing Price of the Placing Shares. The Company has undertaken to and covenanted with the Sponsor. the Shares to be issued pursuant to the Capitalisation Issue. of which approximately HK$5. or by way of scrip dividend schemes or similar arrangements in accordance with the articles of association of the Company. out of the proceeds of the Placing. App1A(20)(2) COMMISSIONS AND EXPENSES The Underwriters will receive an underwriting commission of an amount equivalent to 2. would cease to be the single largest shareholder of the Company. the Sponsor. Third Schedule 14 — 178 — . immediately following such allotment and issue. or (b) allot and issue or agree to allot and issue any of the shares or other interests referred to in (a) above during the six months after the First Six Months’ Period if. legal and other professional fees (including the fee of the Sponsor). and subject always to the requirements of the Stock Exchange. the Lead Manager and the Underwriters to procure that. the SFC transaction levy. taken together with the others of them. the Stock Exchange listing fee. the Substantial Shareholders. amount to approximately HK$10. neither the Company nor any of its subsidiaries from time to time shall: (a) allot and issue or agree to allot and issue any shares in the Company or any subsidiary of the Company from time to time or agree to grant any options. the grant of any options under the Share Option Scheme. and each of the Substantial Shareholders and the executive Directors has jointly and severally undertaken and covenanted with the Sponsor. without the prior written consent of the Sponsor (for itself and on behalf of the Lead Manager and the Underwriters). warrants or other rights carrying any rights to subscribe for or otherwise acquire any securities of the Company or any subsidiary of the Company from time to time during the First Six Months’ Period. out of which they will pay any sub-underwriting commissions.

No director or employee of Optima Capital who is involved in providing advice to the Company has or may have. and (ii) the financial advisory fee to be paid to Optima Capital as the Company’s compliance adviser pursuant to the requirements under Rule 6A.07 of the GEM Listing Rules.UNDERWRITING UNDERWRITERS’ INTEREST IN THE COMPANY Save for the underwriting commitment under the Underwriting Agreement. SPONSOR’S INTEREST IN THE COMPANY The Sponsor. any interest in any class of securities of the Company or any of its subsidiaries (including options or rights to subscribe for such securities that may be subscribed for or purchased by any such director or employee pursuant to the Placing). No director or employee of Optima Capital has a directorship in the Company or any of its subsidiaries. none of the Underwriters has any shareholding in any member of the Group or any right or option (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for or purchase securities in any member of the Group. Optima Capital is independent from the Group under Rule 6A.19 of the GEM Listing Rules. neither Optima Capital nor any of its associates has or may have. App1A(54) — 179 — .19 of the GEM Listing Rules. as a result of the Placing. any interest in any class of securities in the Company or any of its subsidiaries (including options or rights to subscribe for such securities). will also receive a financial advisory fee from the Company during the term of its appointment as the compliance adviser of the Company. being the Company’s compliance adviser pursuant to Rule 6A. as a result of the Placing. Save for (i) the advisory and documentation fees to be paid to Optima Capital as the sponsor to the Placing.

one board lot of 2. Professional and institutional investors generally include brokers. the waiver of any condition(s) by the Sponsor and the Lead Manager (for itself and on behalf of the Underwriters). If such conditions have not been fulfilled or waived (as the case may be) prior to the times and dates specified.004% SFC transaction levy and 0.E. for subscription by way of the Placing. Note(11) App1A(15)(2).004% SFC transaction levy) with selected professional and institutional investors in Hong Kong. and permission to deal in. on behalf of the Company. plus 1% brokerage. high net worth individuals and companies (including fund managers) whose ordinary business involves dealing and investing in securities.23(10) Third Schedule 14 — 180 — . the Placing will lapse and the Listing Division will be notified immediately.000 Shares amounting to a total of approximately HK$2.23(7) R11.800. being the date which is 30 days after the date of this prospectus.(3)(a) R11.000 Placing Shares. and the obligations of the Underwriters under the Underwriting Agreement becoming unconditional (including. Notice of the lapse of the Placing will be published by the Company on the Exchange Website on the next Business Day following such lapse. App1A(15)(3)(d) Third Schedule 9 (ii) I. will conditionally place the Placing Shares at the Placing Price (plus 1% brokerage. CONDITIONS OF THE PLACING Acceptance of all applications for the Placing Shares will be conditional upon: (i) the Listing Division granting the listing of. it is expected that the Underwriters.STRUCTURE AND CONDITIONS OF THE PLACING PLACING PRICE ON SUBSCRIPTION Based on the Placing Price of HK$1. representing 25% of the enlarged issued share capital of the Company. and such listing and permission not subsequently having been revoked prior to the commencement of dealings in the Shares on GEM. 0.28. the Placing and the exercise of the options granted under the Share Option Scheme as described in this prospectus. on or before the dates and times specified in the Underwriting Agreement (unless and to the extent such conditions are validly waived on or before such dates and times) and in any event not later than 19 September 2010.585. THE PLACING The Company is offering 24. The Placing is fully underwritten by the Underwriters on and subject to the terms and conditions of the Underwriting Agreement. and not being terminated in accordance with the terms of the Underwriting Agreement or otherwise.86 will be payable upon subscription. 0. dealers.005% Stock Exchange trading fee. the Shares in issue and to be issued pursuant to the Capitalisation Issue.005% Stock Exchange trading fee and 0. if relevant. in each case. Pursuant to the Placing.

Settlement of transactions between participants of the Stock Exchange is required to take place in CCASS on the second Business Day after any trading day.08 and 16. Details of the Placing will be announced in accordance with Rules 10. 16. In particular. Such allocation is generally intended to result in a distribution of the Placing Shares on a basis which would lead to the establishment of a solid and broad shareholder base to the benefit of the Company and the Shareholders as a whole.29(2) R11. SHARES WILL BE ELIGIBLE FOR ADMISSION INTO CCASS Subject to the granting of the approval for the listing of. Investors should seek the advice of their stockbrokers or other professional advisers for details of those settlement arrangements and how such arrangements will affect their rights and interests. and permission to deal in. All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time.12(2) R11. Dealings in the Shares on GEM are expected to commence on 30 August 2010. All necessary arrangements have been made for the Shares to be admitted into CCASS.29(1) R11. the Shares on GEM and the compliance with the stock admission requirements of HKSCC.STRUCTURE AND CONDITIONS OF THE PLACING BASIS OF ALLOCATION Allocation of the Placing Shares is based on a number of factors.16 of the GEM Listing Rules.23(8) of the GEM Listing Rules. The Shares will be traded in board lots of 2. R10. the Shares will be accepted as eligible securities by HKSCC for deposit. The Company has not submitted any application or obtained any approval for the listing of the Shares on any other overseas stock exchange.12(1) R10. that not more than 50% of the Shares in public hands at the time of Listing will be owned by the three largest public Shareholders. LISTING ON ANY OTHER STOCK EXCHANGE The Directors are not considering any listing of the Company’s securities on any other overseas stock exchange. without the prior written consent of the Stock Exchange. No allocations will be permitted to nominee companies unless the name of the ultimate beneficiary is disclosed.12(4).29(3) — 181 — . clearance and settlement in CCASS with effect from the Listing Date or any other date as determined by HKSCC.33 App1A(15)(3)(a) R11. including the level and timing of demand and whether or not it is expected that the relevant investor is likely to buy further and/or hold or sell its Shares after the Listing. the Placing will be allocated pursuant to Rule 11.000 each.

The Group is principally engaged in the provision of waterworks engineering services.APPENDIX I ACCOUNTANTS’ REPORT App1A(37) R7. As at the date of this report.08(4) R11. The particulars of the subsidiaries and controlled entity are set out below: Place and date of incorporation and form of business structure Third Schedule 29 Name of company Percentage of equity attributable Nominal value to the Company of issued capital Direct Indirect Principal activities App1A (28)(1)(a) Subsidiaries TYW (BVI) Limited (“TYW (BVI)”) British Virgin Islands (the “BVI”). the Company became the holding company of the subsidiaries now comprising the Group pursuant to a group reorganisation (the “Reorganisation”) as set out in the subsection headed “Reorganisation” in Appendix V to the Prospectus. for inclusion in the prospectus of the Company dated 20 August 2010 (the “Prospectus”) in connection with the initial listing of the shares of the Company on the Growth Enterprise Market of The Stock Exchange of Hong Kong Limited (the “GEM of the Stock Exchange”). BDO Limited.000. limited liability company 100% — United States Dollars (“US$”) 10. 2 July 2009. prepared for the purpose of incorporation in this prospectus.08(5) Third Schedule 31 The following is the text of a report.00 each Investment holding App1A(28)(2) App1A(29)(1) App1A(29)(2) — I-1 — . divided into 10.22 (Law 3 of 1961.000 shares of US$1. all of which are private companies.10 R11. Cap. as consolidated and revised) of the Cayman Islands.01 R7. received from the Company’s reporting accountants. On 11 August 2010. The Company and its subsidiaries have adopted 31 March as their financial year-end date. prepared on the basis set out in Section II below. 20 August 2010 The Directors Tsun Yip Holdings Limited Optima Capital Limited Dear Sirs We set out below our report on the financial information of Tsun Yip Holdings Limited (the “Company”). Certified Public Accountants. the Company had direct or indirect interests in the following subsidiaries and controlled entity. Hong Kong. its subsidiaries and controlled entity (hereinafter collectively referred to as the “Group”) for each of the years ended 31 March 2009 and 2010 (the “Relevant Periods”).11 App1A(9)(3) R7. The Company was incorporated in the Cayman Islands on 15 March 2010 as an exempted company with limited liability under the Companies Law. road works and drainage services and site formation works for the public sector in Hong Kong.

No audited financial statements have been prepared for TYW (BVI) and TYC since their respective dates of incorporation as there is no statutory requirement for these companies to prepare audited financial statements. provision of waterworks and laying of water pipes Provision of waterworks and laying of water pipes Tsun Yip Waterworks Construction Company Limited (“TYW”) Hong Kong.000.000. R7. The statutory financial statements of TY Civil and TYW for the Relevant Periods have been prepared in accordance with all applicable Hong Kong Financial Reporting Standards (“HKFRSs”).000 shares of HK$1. Hong Kong Accounting Standards (“HKASs”) and Interpretations (hereinafter collectively referred to as the “HKFRSs”) issued by the HKICPA. 1989 Sole proprietorship — 100% — Provision of waterworks and laying of water pipes. reviewed all the relevant transactions of TYW (BVI) since its date of incorporation.000. In respect of TYC.000 shares of HK$1. We have. reviewed all the relevant transactions of the Company since its date of incorporation. 6 February 1996. (“TYC”) Hong Kong.00 each Controlled entity Tsun Yip Construction Co. 16 June 2000. limited liability company — 100% Hong Kong Dollars (“HK$”) 10. and were audited by ourselves. inactive since 1 April 2009 and ceased to be part of the Group No audited financial statements have been prepared for the Company since its date of incorporation as it has not carried out any business. divided into 1. however.00 each Rental of motor vehicles. we have performed independent audit procedures in accordance with Hong Kong Standards of Auditing (“HKSAs”) issued by the Hong Kong Institute of Certified Public Accountants (the “HKICPA”) on the unaudited management accounts for the Relevant Periods for the purpose of this report. 1 August.08(1)(a) R7. however.APPENDIX I Place and date of incorporation and form of business structure ACCOUNTANTS’ REPORT Name of company Percentage of equity attributable Nominal value to the Company of issued capital Direct Indirect Principal activities App1A (28)(1)(a) Tsun Yip Civil Construction Company Limited (“TY Civil”) Hong Kong. divided into 10.08(1)(b) — I-2 — . We have.000. limited liability company — 100% Hong Kong Dollars (“HK$”) 1. other than the Reorganisation as referred to above.

we have carried out an independent audit on the Combined Financial Information for the Relevant Periods in accordance with HKSAs issued by the HKICPA. unaudited management accounts of the companies now comprising the Group. implementing and maintaining internal control relevant to the preparation and the true and fair presentation of the Combined Financial Information that are free from material misstatement. the directors of the Company have prepared the combined financial statements of the Group for the Relevant Periods (the “Underlying Financial Statements”). whether due to fraud or error. It is our responsibility to form an independent opinion on the Combined Financial Information. the Combined Financial Information.340 “Prospectuses and the Reporting Accountant” issued by the HKICPA. The responsibility includes designing. where appropriate. based on our audit. based on the audited financial statements or.18 R7.11 R7. for the purpose of preparing this report for inclusion in the Prospectus. In our opinion. The Combined Financial Information also includes the applicable disclosure requirements of the Hong Kong Companies Ordinance (the “Companies Ordinance”) and the Rules Governing the Listing of Securities on the GEM of the Stock Exchange (the “GEM Listing Rules”). and the combined statement of financial position of the Group as at 31 March 2009 and 2010 together with the notes thereon (collectively the “Combined Financial Information”) have been prepared based on the Underlying Financial Statements on the basis set out in note 1 of Section II below. The combined statement of comprehensive income. The directors of the Company are responsible for the preparation of the Combined Financial Information which gives a true and fair view and the contents of the Prospectus in which this report is included. For the purpose of this report. and have carried out such additional procedures as are necessary in accordance with the Auditing Guideline 3. gives a true and fair view of the state of affairs of the Group as at 31 March 2009 and 2010 and of the combined results and combined cash flows of the Group for the Relevant Periods.08 (3) App1A (35) R7. R7.APPENDIX I ACCOUNTANTS’ REPORT R7. No adjustments on the Underlying Financial Statements for the Relevant Periods are considered necessary for the purpose of preparing the Combined Financial Information. and to report our opinion to you.09 For the purpose of this report. for the purpose of this report.08(2) — I-3 — . and making accounting estimates that are reasonable in the circumstances. combined statement of changes in equity and combined statement of cash flows of the Group for the Relevant Periods. selecting and applying appropriate accounting policies.

03 (1) Revenue Cost of service Gross profit Other income Administrative expenses Profit from operations Finance costs Profit before income tax Income tax Profit and total comprehensive income for the year 4 R7.431) 14.187 (455) 13. COMBINED FINANCIAL INFORMATION Combined Statement of Comprehensive Income ACCOUNTANTS’ REPORT Notes Year ended 31 March 2009 2010 HK$’000 HK$’000 87.04(1)(g) R7.539 (5.844 (121.753) 21.838 R7.030 (634) 20.APPENDIX I I.732 (2.396 (3.04(1)(h) 9 R7.04(1)(j) — I-4 — .558) 16.696 (70.04(1)(b) 5 7 R7.04(1)(e) R7.04(1)(d) 4 R7.872) 26.972 811 (6.617) 17.327) 11.079 2.405 148. 1.04(1)(a) R7.

03(4)(a) Notes As at 31 March 2009 2010 HK$’000 HK$’000 R7.015 222 196 45.APPENDIX I 2.271 — 10.04(2)(d) Total assets less current liabilities R7.516 -----------------------------------------24.699 -----------------------------------------26.04(2)(b) 13 14 7.330 48.052 4.04(2)(a) Non-current assets Property.396 ------------------------------------------ R7.697 --------- R7.384 1.04(2)(c)(i) Net current assets 17.873 -----------------------------------------11.087 — 513 2.532 473 4.497 ------------------------------------------ 24.308 --------R7.03(3)(a) R7.824 ------------------------------------------ R7.04(2)(b)(i) R7.196 ------------------------------------------ 9.697 --------- 13.04(2)(b)(ii) R7.788 28.451 3.04(2)(iii) Total assets 53.365 — 36. plant and equipment Current assets Inventories Trade and other receivables Tax recoverable Cash and cash equivalents 12 8.738 3.04(2)(e) — I-5 — .389 -----------------------------------------61.04(2)(c) 16 17 18 19 19.893 --------- Current liabilities Trade and other payables Finance lease creditors Borrowings Employee benefits Current tax liabilities Bank overdraft R7.04(2)(c)(ii) R7.763 37. Combined Statement of Financial Position ACCOUNTANTS’ REPORT R7.775 27.

04(2)(g) 21 22 9.03(3)(a) Non-current liabilities Finance lease creditors Deferred tax liabilities 17 20 1.821 -----------------------------------------24.072 9.340 R7.658 2.324 ------------------------------------------ 826 1.357 -----------------------------------------22.868 14.072 TOTAL NET ASSETS Capital and reserves Share capital Reserves TOTAL EQUITY R7.484 -----------------------------------------39.868 12.204 24.340 — I-6 — .472 22.APPENDIX I ACCOUNTANTS’ REPORT As at 31 March 2009 2010 HK$’000 HK$’000 Notes R7.04(2)(f) Total liabilities 29.531 793 2.

Combined Statement of Cash Flows ACCOUNTANTS’ REPORT Note Year ended 31 March 2009 2010 HK$’000 HK$’000 R7.025) (124) 5.03(4A) Cash flows from operating activities Profit before income tax Adjustments for: Depreciation of property.732 3.124 ------------ 20.539) 105 598 455 — 16.423) 3.044) 654 — (390) ------------ (5.464) 213 9 (5.354 103 4.APPENDIX I 3.659 (536) 46 27.12A(1) Increase in inventories Increase in trade and other receivables Increase in trade and other payables Increase/(decrease) in employee benefits Cash generated from operations Income tax paid Income tax refunded Net cash from operating activities Cash flows from investing activities Purchases of property.333 (2. plant and equipment Finance costs Interest income 13.515 (40) 27.831 — (802) 243 40 634 (9) 24. plant and equipment Interest received Net cash used in investing activities (1.396 3.169 ------------ R11.786) (9.242) ------------ — I-7 — . plant and equipment Waiver of loan to staff Write-off of long outstanding trade payables Impairment loss on trade receivables Loss on disposal of property. plant and equipment Proceeds from sale of property.456 (332) — 4.789 68 (2.208 (5.

03(4A) Note Cash flows from financing activities Proceeds from borrowings Repayment of borrowings Repayment of loan from staff Interest element of finance lease creditors Repayment of finance lease creditors Interest paid Dividend paid to an owner of the Company Net cash used in financing activities Net (decrease)/increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year 23 23 — — (50) (390) (3.479) (1.909 (1.330 — I-8 — .329) (65) — (3.018) --------------------------------------------------------11.579) 6.834) --------------------------------------------------------(100) (1.579) 10.971) (238) (9.945) (10.000 (1.APPENDIX I ACCOUNTANTS’ REPORT Year ended 31 March 2009 2010 HK$’000 HK$’000 R7.468) — (396) (3.

868 — ACCOUNTANTS’ REPORT Retained earnings HK$’000 2.570) — 22.405 App1A(33)(5) R7.000 24.799 11.072 16.000 4.868 14.667 11. Combined Statement of Changes in Equity Share capital HK$’000 Balance as at 1 April 2008 Total comprehensive income for the year Balance as at 31 March 2009 and 1 April 2009 Total comprehensive income for the year Interim dividends paid during the year (note 10) Proposed final dividend (note IV(c)) Balance as at 31 March 2010 9.APPENDIX I 4.570) (4.868 — — — 9.000) 8.340 — I-9 — .03(4B) 9.204 16.838 (18.838 (18.472 — — — 4.405 Proposed dividend HK$’000 — — Total HK$’000 12.

2. 1. The Combined Financial Information also includes the applicable disclosure required by the GEM Listing Rules and by the Companies Ordinance.APPENDIX I II. the Combined Financial Information has been prepared on a combined basis by applying the principles of merger accounting in accordance with the Accounting Guideline No. The preparation of the Combined Financial Information in conformity with HKFRSs requires the use of certain critical accounting estimates. New Territories. or areas where assumptions and estimates are significant to the Combined Financial Information. Pursuant to the Reorganisation as detailed in the subsection headed “Reorganisation” in Appendix V to the Prospectus. are disclosed in note 3. 28 On Lok Mun Street. The Combined Financial Information is presented in Hong Kong Dollars (“HK$”). The Group is regarded and accounted for as a continuing group resulting from the Reorganisation since all of the entities which took part in the Reorganisation were under common control in a manner similar to pooling of interests. which is also the functional currency of the Company. 5 (“AG5”). The Reorganisation involved business combinations of entities under common control before and immediately after the Reorganisation. Cayman Islands and Flat 314. “Merger Accounting for Common Control Combination” issued by the HKICPA. Consequently. there was a continuation of the risks and benefits to the controlling parties that existed prior to the Reorganisation.03(8) R7. Grand Cayman. ACCOUNTANTS’ REPORT NOTES TO THE COMBINED FINANCIAL INFORMATION CORPORATE INFORMATION AND BASIS OF PRESENTATION App1A(5) App1A(6) The Company was incorporated in the Cayman Islands on 15 March 2010 as an exempted company with limited liability under the Companies Law. The Group is principally engaged in the provision of waterworks engineering services. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Statement of compliance The Combined Financial Information set out in this report has been prepared in accordance with all applicable HKFRSs issued by the HKICPA. immediately after the Reorganisation. for the purpose of this report. R7. The registered office and principal place of business of the Company are located at the offices of Cricket Square. KY1-1111. the Company became the holding company of the subsidiaries now comprising the Group on 11 August 2010. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. road works and drainage services and site formation works for the public sector in Hong Kong.. Hong Kong. Accordingly. as consolidated and revised) of the Cayman Islands. in preparation for the listing of shares of the Company on the GEM of the Stock Exchange and for the purpose of rationalising the Group’s structure. Fanling.11 R7. Hutchins Drive. respectively. Cap. 22 (Law 3 of 1961. Fuk Shing Commercial Building. The areas involving a higher degree of judgement or complexity.12 — I-10 — . PO Box 2681. 3/F.

but are not yet effective for any of the Relevant Periods: HKFRSs (Amendments) Amendment to HKFRS 5 as part of Improvements to HKFRSs 2 Improvements to HKFRSs 2009 3 Improvements to HKFRSs 2010 7 Share-based Payment — Group Cash-settled Share-based Payment Transactions 1 Related Party Disclosures 5 Consolidated and Separate Financial Statements 2 Business Combinations 2 Financial Instruments 6 Extinguishing Instruments 4 on on on on on on or or or or or or after after after after after after 1 1 1 1 1 1 R7.17 HKFRSs (Amendments) HKFRSs (Amendments) Amendments to HKFRS 2 HKAS 24 (Revised) HKAS 27 (Revised) HKFRS 3 (Revised) HKFRS 9 HK(IFRIC) — Interpretation 19 1 2 3 4 5 6 Effective Effective Effective Effective Effective Effective for for for for for for annual annual annual annual annual annual periods periods periods periods periods periods beginning beginning beginning beginning beginning beginning Financial Liabilities with Equity January 2010 July 2009 July 2009 and 1 January 2010. as appropriate The adoption of HKFRS 3 (Revised) may affect the Group’s accounting for business combination for which the acquisition dates are on or after 1 April 2010. 2. the Group has adopted all the new and revised HKFRSs that are effective for annual periods beginning on or after 1 January 2009 consistently throughout the Relevant Periods except for the following new or revised HKFRSs that have been issued. Changes in the Group’s ownership that do not result in a loss of control of the subsidiary will be accounted for as equity transactions.APPENDIX I Application of new and revised HKFRSs ACCOUNTANTS’ REPORT For the purpose of preparing the Combined Financial Information. — I-11 — .1 Merger accounting for common control combination The Combined Financial Information incorporate the financial statements of the combining entities or businesses in which the common control combination occurs as if they had been combined from the date when the combining entities or businesses first came under the control of the controlling party. HKAS 27 (Revised) will affect the accounting treatment for changes in a Group’s ownership interest in a subsidiary. potentially relevant to the Group’s operations. as appropriate July 2010 January 2011 January 2013 7 Effective for annual periods beginning on or after 1 July 2010 and 1 January 2011. The Group is in the process of making an assessment of the potential impact of other new/revised HKFRSs and the directors so far concluded that the application of the other new/revised HKFRSs will have no material impact on the results and the financial position of the Group.

Property. plant and equipment are depreciated at rates sufficient to write off their cost or valuation net of expected residual value over their estimated useful lives on a straight-line basis. whichever is shorter 30% 20% 20% 20% Machinery Furniture and fixtures Office equipment Motor vehicles — I-12 — . The combined statement of comprehensive income includes the results of each of the combining entities from the earliest date presented or since the date when the combining entities first came under the common control. The useful lives. plant and equipment includes its purchase price and the costs directly attributable to the acquisition of the items. The carrying amount of the replaced part is derecognised. only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably.2 Property. as appropriate. The cost of property. at the end of each reporting period. plant and equipment Property. regardless of the date of the common control combination. liabilities and contingent liabilities over cost at the time of common control combination. All inter-company transactions. All other repairs and maintenance are recognised in profit or loss during the financial period in which they are incurred. and adjusted if appropriate. residual value and depreciation method are reviewed. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset. plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses. The principal annual rates are as follows: Site offices Leasehold improvements Over the respective project terms 30% or over the respective life of the leases. where this is a shorter period. No amount is recognised in respect of goodwill or excess of acquirer’s interest in the net fair value of acquiree’s identifiable assets.APPENDIX I ACCOUNTANTS’ REPORT The net assets of the combining entities or businesses are combined using the existing book values from the controlling parties’ perspective. 2. cash flows and balances between the companies now comprising the Group are eliminated. to the extent of the continuation of the controlling party’s interest.

less any identified impairment losses. They arise principally through the provision of goods and services to customers (trade debtors).5 Financial instruments (i) Financial assets — loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Net realisable value represents the estimated selling price in the ordinary course of business less the estimated costs of completion and applicable selling expenses. All other leases are classified as operating leases. the present value of the minimum lease payments. Loans and receivables are initially recognised at fair value plus directly attributable transaction costs. The corresponding lease commitment is shown as a liability. The gain or loss on disposal of an item of property.4 Leasing Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to lessee.3 Inventories Inventories are initially recognised at cost. they are measured at amortised cost using the effective interest method. Lease payments are analysed between capital and interest. Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets. and is recognised in profit or loss on disposal. Subsequent to initial recognition. 2. costs of conversion and other costs incurred in bringing the inventories to their present location and condition. The total rentals payable under the operating leases are charged to profit or loss on a straight-line basis over the lease term. plant and equipment is the difference between the net sale proceeds and its carrying amount. Lease incentives received are recognised as an integrated part of the total rental expense. over the term of the lease. 2. 2. Cost is calculated using the weighted average method. — I-13 — . Cost comprises all costs of purchase. and subsequently at the lower of cost and net realisable value. if lower. and also incorporate other types of contractual monetary asset. The capital element reduces the balance owed to the lessor.APPENDIX I ACCOUNTANTS’ REPORT An asset is written down immediately to its recoverable amount if its carrying amount is higher than the asset’s estimated recoverable amount. The interest element is charged to profit or loss over the period of the lease and is calculated so that it represents a constant proportion of the lease liability. The Group as lessee Assets held under finance leases are initially recognised as assets at their fair value or.

they are initially recognised at fair value.APPENDIX I (ii) Impairment loss on financial assets ACCOUNTANTS’ REPORT The Group assesses. The related interest expense is recognised in profit or loss. subject to a restriction that the carrying amount of the asset at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised. or it becoming probable that the debtor will enter bankruptcy or other financial reorganisation. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the amortisation process. granting concession to a debtor because of debtors’ financial difficulty. whether there is any objective evidence that financial asset is impaired. net of directly attributable transaction costs incurred and are subsequently measured at amortised cost using the effective interest method. at the end of each reporting period. Impairment losses are reversed in subsequent periods when an increase in the asset’s recoverable amount can be related objectively to an event occurring after the impairment was recognised. a breach of contract. and is measured as the difference between the asset’s carrying amount and the present value of the estimated future cash flows discounted at the original effective interest rate. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues — I-14 — . • • An impairment loss is recognised in profit or loss and directly reduces the carrying amount of financial asset when there is objective evidence that the asset is impaired. Financial asset is impaired if there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset and that event has an impact on the estimated future cash flows of the financial asset that can be reliably estimated. such as a default or delinquency in interest or principal payments. Evidence of impairment may include: • • significant financial difficulty of debtor. (iii) Financial liabilities Financial liabilities include trade and other payables and borrowings. (iv) Derecognition The Group derecognises a financial asset only when the contractual rights to the future cash flows in relation to the financial asset expire or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity.

the Group continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset.6 Employee benefits (i) Defined contribution retirement plan App1A(33)(4)(b) Contributions to defined contribution retirement plans are recognised as an expense in profit or loss when the services are rendered by the employees. 2. the Group recognises its retained interest in the asset and an associated liability for amounts it may have to pay. discounted to its present value and reduced by entitlements accrued under the Group’s retirement plans that are attributable to contributions made by the Group. a provision is made for the estimated liability for annual leave as a result of services rendered by employees up to the end of reporting period. the Group demonstrably commits itself to terminate employment or to provide benefits as a result of voluntary redundancy by having a detailed formal plan which is without realistic possibility of withdrawal. claims and incentive payments. direct labour. and only when. Contract costs comprise direct materials. cancelled or expires. The obligation is calculated using the projected unit credit method. (iii) Termination benefits Termination benefits are recognised when. — I-15 — . 2. costs of subcontracting. In particular. Financial liabilities are derecognised when the obligation specified in the relevant contract is discharged. (ii) Short-term employee benefits Short-term employee benefits are recognised when they accrue to employees. borrowing costs attributable directly to the construction and an appropriate portion of variable and fixed construction overheads.7 Construction contracts Contract revenue comprises the agreed contract amount and appropriate amounts for variation orders. Non-accumulating compensated absences such as sick leave and maternity leave are not recognised until the time of leave.APPENDIX I ACCOUNTANTS’ REPORT to control the transferred asset. (iv) Long service payments The Group’s net obligation in respect of long service payments payable on cessation of employment in certain circumstances under the Hong Kong Employment Ordinance is the amount of future benefit that employees have earned in return for their service in the current and prior periods.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries. Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the corresponding amounts used for tax purposes. the expected loss is recognised as an expense immediately.APPENDIX I ACCOUNTANTS’ REPORT When the outcome of a construction contract can be estimated reliably. measured by reference to the certification by architects (note 2.8 Revenue recognition App1A(33)(1) Revenue from construction contracts is recognised on the percentage of completion method. Where progress billings exceed contract costs incurred to date plus recognised profits less recognised losses. When the outcome of a construction contract cannot be estimated reliably. the surplus is treated as an amount due to contract customers. Current tax is based on the profit or loss from ordinary activities adjusted for items that are non-assessable or disallowable for income tax purposes and is calculated using tax rates that have been enacted or substantively enacted at the end of the reporting period. except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. revenue and contract costs associated with the construction contract are recognised as revenue and expenses respectively by reference to the stage of completion of the contract activity at the end of the reporting period. revenue is recognised only to the extent of contract costs incurred that will probably be recoverable. deferred tax liabilities are recognised for all temporary differences.9 Income taxes Income taxes for the year comprise current tax and deferred tax. Except for recognised assets and liabilities that affect neither accounting nor taxable profits. and contract costs are recognised as an expense in the period in which they are incurred. Deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. 2. Interest income is accrued on a time basis on the principal outstanding at the applicable interest rate. 2. the surplus is treated as an amount due from contract customers. When it is probable that total contract costs will exceed total contract revenue. Where contract costs incurred to date plus recognised profits less recognised losses exceed progress billings. Deferred tax is measured at the tax rates expected to apply in the period when the liability is settled or the asset is realised based on tax rates that have been enacted or substantively enacted at the end of the reporting period. — I-16 — .7).

A reversal of an impairment loss is recognised immediately in profit or loss. the carrying amount of the asset is reduced to its recoverable amount. seldom equal the related actual results. the greater of the fair value less costs to sell and value in use) of an asset is estimated to be less than its carrying amount. An impairment loss is recognised immediately in profit or loss. the existence of which will only be confirmed by the occurrence or non-occurrence of one or more future events. or the amount cannot be estimated reliably. 3. unless the probability of outflow of economic benefits is remote. The estimates that have liabilities Group makes estimates and assumptions concerning the future. the obligation is disclosed as a contingent liability. CRITICAL ACCOUNTING JUDGEMENT AND KEY SOURCES OF ESTIMATION UNCERTAINTY Estimates and judgements are continually evaluated and are based on historical experience and other factors. 2. Where an impairment loss subsequently reverses. the carrying amount of the asset is increased to the revised estimate of its recoverable amount.10 Provisions and contingent liabilities Provisions are recognised for liabilities of uncertain timing or amount when the Group has a legal or constructive obligation arising as a result of a past event. including expectations of future events that are believed to be reasonable under the circumstances. Where it is not probable that an outflow of economic benefits will be required.11 Impairment of non-financial assets At each end of the reporting period. 2. Possible obligations. the Group reviews the carrying amounts of property. but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. If the recoverable amount (i. which will probably result in an outflow of economic benefits that can be reasonably estimated.e. by definition. are also disclosed as contingent liabilities unless the probability of outflow of economic benefits is remote. The estimates and assumptions a significant risk of causing a material adjustment to the carrying amounts of assets and within the next financial year are discussed below. — I-17 — . plant and equipment to determine whether there is any indication that those assets have suffered an impairment loss or an impairment loss previously recognised no longer exists or may have decreased.APPENDIX I ACCOUNTANTS’ REPORT Income taxes are recognised in profit or loss except when they relate to items directly recognised in other comprehensive income in which case the taxes are also directly recognised in other comprehensive income. The resulting accounting will.

issuance of legal action for recovery of debts that remained outstanding for over 6 years was precluded and the management considered that the Group no longer had the legal or constructive obligation to repay.539 — 2. As a result. the Group uses the percentage of completion method to determine the appropriate revenues to be recognised in a given period. the Group needs to estimate the gross profit margin of each construction contract. REVENUE AND OTHER INCOME Revenue and other income recognised during the Relevant Periods are as follows: Year ended 31 March 2009 2010 HK$’000 HK$’000 Revenue Turnover — revenue from construction works Other income Write-off of long outstanding trade payables which were overdue for more than 6 years Sundry income 87. trade payables aged more than six years were written off during the Relevant Periods. no payments were made for such outstanding trade payables.APPENDIX I (i) Construction contract revenue recognition ACCOUNTANTS’ REPORT According to the accounting policies of construction contracts as stated in note 2.696 148. Upon applying the percentage of completion method.539 802 9 811 (i) As there was dispute with the supplier/subcontractor. and liquidated damages. The assets are reviewed for the impairment whenever events or changes in circumstances indicate that the carrying amount of the assets exceeds its recoverable amount.11 respectively.7. The Group did not recognise such trade payables due to the aforesaid dispute. According to the Limitation Ordinance. — I-18 — . (ii) Impairment of assets The Group assesses annually whether the financial assets and other assets have suffered any impairment in accordance with accounting policies stated in note 2. 4. including confirmed variation orders and claims. which was determined based on the estimated total construction contract costs and total construction contract sum. If the actual gross profit margin of construction contract differs from the management’s estimates. The stage of completion is measured by reference to the contract costs incurred up to the end of the reporting period as percentage of total estimated costs for each contract. the construction contract revenue to be recognised within the next year will need to be adjusted accordingly. The determination of recoverable amount requires an estimation of future cash flows and the selection of appropriate discount rates.5(ii) and 2.844 2.

896 — R7.154 131.872 500 3.696 17. PROFIT FROM OPERATIONS Profit from operations is arrived at after charging: Year ended 31 March 2009 2010 HK$’000 HK$’000 Contract costs recognised as expense.617 403 3.789 105 598 18.098 68 121.929 60.APPENDIX I Operating segments ACCOUNTANTS’ REPORT During the Relevant Periods. including borrowing costs of HK$242. the Group is principally engaged in the waterworks engineering services.04(1)(f) — I-19 — . Information about major customers Revenues from major customers are as follows: Year ended 31 March 2009 2010 HK$’000 HK$’000 Water Supplies Department Ming Hing Civil Contractors Limited/Ming Hing Waterworks Engineering Company Limited Others 22.844 R7.462 87.000 (2009: HK$429.831 243 40 26. road works and damage services and site formation works for the public sector in Hong Kong.04(4) 5.305 4.376 314 148. plant and equipment Staff costs (note 6) Waiver of loan to staff 70.000) Auditor’s remuneration Depreciation Impairment loss on trade receivables Loss on disposal of property.

732 366 18. FINANCE COSTS Year ended 31 March 2009 2010 HK$’000 HK$’000 Interest on finance leases Interest on bank overdraft Interest on bank loans wholly repayable within five years 390 65 — 455 396 20 218 634 — I-20 — .086 810 26. salaries and other benefits Contribution on defined contribution retirement plan 17.098 26.896 App1A (33)(4)(c) 7. STAFF COSTS ACCOUNTANTS’ REPORT Year ended 31 March 2009 2010 HK$’000 HK$’000 Staff costs (including directors) comprise: Wages.APPENDIX I 6.

Chia Thien Loong.155 2. Kan Kwok Cheung App1A(33)(2)(c) App1A(33)(3) (a). (i) ACCOUNTANTS’ REPORT DIRECTORS’ REMUNERATION AND SENIOR MANAGEMENT’S EMOLUMENTS Directors’ emoluments The aggregate amounts of the emoluments paid and payable to the directors of the Company by the companies now comprising the Group for each of the Relevant Periods are as follows: Defined contribution retirement benefit scheme contributions HK$’000 Salaries and Fees allowances HK$’000 HK$’000 Year ended 31 March 2009 Executive directors Mr.584 — — 50 50 100 11 1 12 12 36 891 12 662 1. Fung Chung Kin Mr.093 2. Martin Mr. Fung Chung Kin Mr. Chia Thien Loong.APPENDIX I 8. Cheng Ka Ming. Martin Mr. Eric John Mr. (b) Bonus HK$’000 Total HK$’000 — — — — — — — 600 830 1. Eric John Mr.554 Fees HK$’000 Year ended 31 March 2010 Executive directors Mr. Cheng Ka Ming.720 — I-21 — .430 — — 50 50 100 — — 12 12 24 — — 662 892 1. Kan Kwok Cheung Salaries and allowances HK$’000 Defined contribution retirement benefit scheme Bonus contributions HK$’000 HK$’000 Total HK$’000 — — — — — 880 11 600 1.

or as compensation for loss of office. The emoluments of the remaining three and two highest paid individuals for the years ended 31 March 2009 and 2010 respectively are as follows: Year ended 31 March 2009 2010 HK$’000 HK$’000 Basic salaries.135 1. bonuses and other allowances Defined contribution retirement benefit scheme contributions 1. of employees employees Nil to HK$1. or upon joining the Group or as compensation for loss of office. none of the directors waived or agreed to waive any remuneration and there were no emoluments paid by the Group to the directors as an inducement to join.APPENDIX I ACCOUNTANTS’ REPORT During the Relevant Periods. of No. or upon joining the Group. none of the senior management waived or agreed to waive any remuneration and there were no emoluments paid by the Group to any of the five highest paid individuals as an inducement to join.000.109 26 1. (ii) Five highest paid individuals The five highest paid individuals whose emoluments were the highest in the Group included two and three directors for the years ended 31 March 2009 and 2010 respectively whose emoluments are reflected in the analysis as shown in note 8(i).324 App1A(33)(3)(c) App1A(33)(2)(d) Their emoluments were within the following band: Year ended 31 March 2009 2010 No.300 24 1. — I-22 — .000 3 2 During the Relevant Periods.

167 — 2.under-provision in respect of prior years 2.167 --------- 2.558 Income tax 2.327 Hong Kong profits tax is calculated at 16.APPENDIX I 9. — I-23 — .tax for the year .Hong Kong Profits tax .current year .attributable to decrease in tax rate 182 (22) 160 ------------------------------------------ 865 — 865 -----------------------------------------3.603 90 2.693 --------- Deferred tax (note 20) .5% of the estimated assessable profits of TYW & TY Civil and 15% that of TYC for the Relevant Periods. INCOME TAX ACCOUNTANTS’ REPORT The amount of income tax in the combined statement of comprehensive income represents: Year ended 31 March 2009 2010 HK$’000 HK$’000 Current tax .

03(5) No earnings per share information is presented as its inclusion.558 10.03(5) R7. The rates of dividend and the number of shares ranking for dividends are not presented as such information is not meaningful for this report.266 (186) 47 284 (39) (22) — (23) 2. TY Civil and TYC to its then shareholders prior to the Reorganisation.04(1)(k) No dividend has been paid or declared by the Company since its date of incorporation on 15 March 2010.327 3.365 — 63 40 — — 90 — 3. EARNINGS PER SHARE R7. Year ended 31 March 2009 2010 HK$’000 HK$’000 Interim dividends — 18. — I-24 — .5% Effect of difference tax rate of sole proprietorship Tax effect of expenses not deductible for tax purpose Utilisation of deductible temporary difference previously not recognised Tax loss not recognised Effect on opening deferred tax balances resulting from a decrease in applicable tax rate Under-provision for prior years Others Income tax 2. The dividends during the Relevant Periods represented those declared by TYW.570 11.732 20.396 Tax calculated at the domestic tax rate of 16.APPENDIX I ACCOUNTANTS’ REPORT The income tax for the Relevant Periods can be reconciled to the profit per the combined statement of comprehensive income as follows: Year ended 31 March 2009 2010 HK$’000 HK$’000 Profit before income tax 13. is not meaningful due to the Reorganisation and the preparation of the results for the Relevant Periods on a combined basis as described in note 1 above. for the purpose of this report. DIVIDENDS R7.

APPENDIX I 12.928 1.516 1.831 (92) At 31 March 2010 Net book value At 31 March 2010 36 ------------------------------------------44 2.619 (622) 1.120 288 ------------------------------------------407 779 ------------------------------------------1.992) 500 61 — 1. PROPERTY.695 (345) At 31 March 2010 Accumulated depreciation At 1 April 2008 Depreciation Eliminated on disposals 80 --------- 5.322) 31 130 — 51 367 — 269 1.213 5.889 — 561 137 (3) 1.080 661 8.505 --------- 695 --------- 1.275 400 1.789 (1.631 367 (1) 7.913 3.308 At 31 March 2009 68 1.044 — 161 128 (1) 418 361 — 1.362) At 31 March 2009 and at 1 April 2009 Depreciation Eliminated on disposals 12 24 — 1.381 (1.037 8.408 --------- 1.697 — I-25 — . PLANT AND EQUIPMENT ACCOUNTANTS’ REPORT Leasehold Furniture Office improvements Machinery and fixtures equipment HK$’000 Cost At 1 April 2008 Additions at cost Disposals — 80 — 3.699 (40) 46 434 — 1.728 ------------------------------------------7.385 ------------------------------------------3.218 3.008 4.461 3.227 1.616 2.582 49 — HK$’000 HK$’000 HK$’000 Motor vehicles HK$’000 Site offices HK$’000 Total HK$’000 6.997 --------- 11.614) At 31 March 2009 and at 1 April 2009 Additions at cost Disposals 80 — — 2.341 1.891 (91) 480 383 — 4.702 --------- 21.147 (1.079 ------------------------------------------13.387 --------- — 12 — 1.141 — — 12.190 (2.741 (341) 1.011 1.340 3.680 863 ------------------------------------------839 8.141 561 — 13.

TRADE AND OTHER RECEIVABLES As at 31 March 2009 2010 HK$’000 HK$’000 Trade receivables (note (i)&(iii)) Retention receivables (note (ii)&(iii)).495 7.APPENDIX I ACCOUNTANTS’ REPORT The net carrying amount of property.671 377 37.091 189 4.871 Trade receivables as at the end of the reporting period mainly derived from provision of construction works on civil engineering contracts.614 10. plant and equipment includes the following assets held under finance leases (note 17).635 — 594 28. (note 15) Other receivables and prepayments Amounts due from customers for contract works (note 15) Amount due from a director (note (iv)) Deposits 3. These customers have established good track records with the Group and have no history of default payments. management believes that no impairment allowance is necessary in respect of the trade receivables as at the end of each reporting period.449 458 4.446 17. On this basis. The Group does not hold any collateral over these balances.284 13.271 7.015 (i) 2. The related customers are mainly government department/organisation and reputable corporations.788 327 — — 5.417 6. INVENTORIES As at 31 March 2009 2010 HK$’000 HK$’000 Construction materials 14.935 10.612 6.544 5.763 9. — I-26 — . As at 31 March 2009 2010 HK$’000 HK$’000 Machinery Office equipment Furniture and fixtures Motor vehicles 587 1.

04 (2)(b) The ageing of trade receivables.612 — — — 2. The balance included in trade receivables of HK$2.000 as at 31 March 2009 and 2010. respectively. Included in trade and other receivables are trade debtors (net of impairment losses) with the following ageing analysis as of the end of the reporting period: As at 31 March 2009 2010 HK$’000 HK$’000 Current Less than 1 month past due 1 to 3 months past due More than 3 months but less than 12 months past due 2. (iii) Trade and other receivables including the retention receivables are short term and hence the directors consider the carrying amount of trade and other receivables approximate their fair values at the end of each reporting periods. Application for progress payments of contract works is made on a regular basis.612 R7.APPENDIX I ACCOUNTANTS’ REPORT The Group grants an average credit period of 30 days to its trade customers of contract works. which are past due but not impaired are as follows: As at 31 March 2009 2010 HK$’000 HK$’000 Less than 1 month past due 1 to 3 months past due More than 3 months past due but less than 12 months past due Amount past due at end of the reporting period but not impaired 857 — — — — — 857 — (ii) Retention monies withheld by customers of contract works are released after the completion of maintenance period of the relevant contract or in accordance with the terms specified in the relevant contract.000 and HK$2.614 2.757. — I-27 — . was neither past due nor impaired which relate to customers as government department/organisation and reputable corporations for whom there is no recent history of default.757 857 — — 3.612.

The Group has not made any provision for doubtful debts in respect of the amount due from the director. — I-28 — . is as follows: Maximum Maximum amount amount outstanding Balance at outstanding during the 31 March during the year ended 2009 and year ended 31 March 1 April 31 March 2010 2009 2009 HK$’000 HK$’000 HK$’000 17. AMOUNTS DUE FROM CUSTOMERS FOR CONTRACT WORKS As at 31 March 2009 2010 HK$’000 HK$’000 Contracts in progress at the end of the reporting period: Contract costs incurred to date plus recognised profits Less: recognised losses 200. direct labour. which is measured by reference to the certification by architects.449.440) 10. who is also a shareholder of the Company. an appropriate portion of variable and fixed construction overheads incurred and gross profit earned to date of the contracts.550. At 31 March 2009 and 2010.000 and HK$9.446 210.075 — 210.000 respectively.190 — 200. At 31 March 2009 and 2010.000 respectively.635 Progress billings “Contract costs incurred to date plus recongised profits” comprise direct materials.000 and HK$6.190 (195. interest-free and repayable on demand. costs of subcontracting.572.671 17.671 Name of borrower Balance at 31 March 2010 HK$’000 — Balance at 1 April 2008 HK$’000 12.495.671 17. advances received from customers included in other payables (note 16) under current liabilities amounted to HK$9.APPENDIX I ACCOUNTANTS’ REPORT (iv) Particulars of the amount due from a director. Kan Kwok Cheung The amount due from a director is unsecured.075 (199.744) 4.491 Mr. retentions held by customers for contract works included in other receivables (note 14) amounted to HK$10. “Progress billings” represent the amounts billed to the customers for work performed up to the end of each of the Reporting Periods. 15.

852 9.451 (i) Advances received from customers are unsecured and repayable on demand except for an amount of HK$8.572 2.170. LEASES Finance leases The Group leases a number of its motor vehicles and machinery.328 5. the weighted average interest rates were 7.3% and 7. The lease terms ranged from one to three years. For the years ended 31 March 2009 and 2010.139 8. — I-29 — .APPENDIX I 16.258 557 1.328 1.550 4.738 8.000 and HK$3. Based on the invoice date. TRADE AND OTHER PAYABLES ACCOUNTANTS’ REPORT As at 31 March 2009 2010 HK$’000 HK$’000 Trade payables Retention money payables Advances received from customers (note (i)) (note 15) Other payables and accruals 5.000 at 31 March 2009 and 2010 respectively which bears interest at a rate of HIBOR + 4% per annum.450. 17.046 All amounts are short term and hence the carrying values of trade payables are considered to be a reasonable approximation of fair value.9% respectively.854 9.046 2. ageing analysis of trade payables at the end of the reporting period is as follows: As at 31 March 2009 2010 HK$’000 HK$’000 Current or less than 1 month 1 to 3 months More than 3 months but less than 12 months More than 12 months 3. Such assets are classified as finance leases as the rental period approximates the estimated useful economic life of the assets concerned and often the Group has the right to purchase the assets outright at the end of the minimum lease term by paying a nominal amount.986 19. R7.001 24.492 21 5.04(2)(b) The Group normally settles trade payables within 30 days’ credit term.104 385 1.418 1.

087 1.878 Interest HK$000 283 49 332 Operating leases — lessee The Group leased its office property.635 4.531 4.210 Present value HK$’000 3. None of the leases includes contingent rentals.335 875 4.975 Present value HK$’000 3. The lease payments recognised as an expenses are as follows: As at 31 March 2009 2010 HK$’000 HK$’000 Minimum lease payments 338 991 — I-30 — .052 826 3.340 1.APPENDIX I Future lease payments are due as follows: ACCOUNTANTS’ REPORT As at 31 March 2009 Minimum lease payments HK$’000 Not later than one year Later than one year and not later than five years 3.618 Interest HK$’000 253 104 357 As at 31 March 2010 Minimum lease payments HK$’000 Not later than one year Later than one year and not later than five years 3. director’s quarter and certain office equipment under operating lease arrangement which was negotiated for terms from two to three years with an option to renew the leases upon expiry when all terms are renegotiated.

among other things.03(7) — 4. — I-31 — . This constituted a breach of the terms of the Subordination Agreement and caused the bank loans became immediately repayable. the Group has set off certain sums of indebtedness owed to Mr. Kan and the Group undertook to the bank that. Pursuant to a subordination agreement (the “Subordination Agreement”) dated 19 May 2009 entered into between the Group. In January 2010. The unutilised banking facilities as at 31 March 2010 amounted to HK$6. Kan and a bank (“the bank”). The bank loans were originally repayable in full in June 2012.070 18. and a cross guarantee from TY Civil. a director of the Company. the Group has repaid all the outstanding bank loans (note IV(d)). Mr. Therefore. each of Mr.200. Kan in advance without obtaining prior consent of the bank in accordance with the Subordination Agreement. Subsequent to the year ended 31 March 2010. the aforesaid bank loans were classified as current.1%. The bank loans together with the banking facilities are secured by personal guarantees executed by Mr. Kan shall not be repayable unless the bank otherwise consented to such repayment. the weighted average interest rate of borrowings was 5. BORROWINGS As at 31 March 2009 2010 HK$’000 HK$’000 Interest bearing: Bank loans — on demand R7. Kan Kwok Cheung. the indebtedness owed by the Group to Mr.APPENDIX I ACCOUNTANTS’ REPORT The total future minimum lease payments are due as follows: As at 31 March 2009 2010 HK$’000 HK$’000 Not later than one year Later than one year and not later than five years Later than five years 549 132 — 681 658 412 — 1. in consideration of granting facilities and advancing monies to the Group. so long as there were any sums due from the Group to the bank.532 For the year ended 31 March 2010. Kan against certain sums paid by the Group for Mr.000.

658 21.000. one ordinary share was allotted and issued nil paid to initial subscriber. SHARE CAPITAL The Company was incorporated in Cayman Islands on 15 March 2010 with an authorised share capital of HK$380. the share capital of the Group as at 31 March 2009 and 2010 represented the aggregate amount of the nominal value of the issued share capital of the entities now comprising the Group at the end of reporting periods. — I-32 — .01 each. On the same date. For the purpose of this report.000 ordinary shares of HK$0. DEFERRED TAX Details of the deferred tax liabilities recognised and movements during the Relevant Periods are as follows: Accelerated depreciation allowances HK$’000 At 1 April 2008 Charge to profit or loss for the year (note 9) Effect of change in tax rate (note 9) At 31 March 2009 and 1 April 2009 Charge to profit or loss for the year (note 9) At 31 March 2010 633 182 (22) 793 865 1. EMPLOYEE BENEFITS ACCOUNTANTS’ REPORT As at 31 March 2009 2010 HK$’000 HK$’000 Liabilities for employee benefits comprise provision for: Annual leave entitlement Long service payments entitlement 360 153 513 330 143 473 20.000 divided into 38. Further details on the Company’s share capital are set out in the sub-paragraph headed “Changes in the share capital of the Company” in Appendix V to the Prospectus.APPENDIX I 19.

NOTES SUPPORTING COMBINED STATEMENT OF CASH FLOWS Cash and cash equivalents comprise: As at 31 March 2009 2010 HK$’000 HK$’000 Cash and bank balances Overdrafts 196 (1.579) 10.330 Major non-cash transactions during the Relevant Periods are as follows: (i) During the year ended 31 March 2010.775) (1.204 16.799 11. dividend of approximately HK$8.330 — 10.000 14. there was no reserve available for distribution to the shareholders.000 4.000) 8.000 payable to a shareholder of one of the Company’s subsidiaries was settled by offsetting the current account with the director who was also the then shareholder of that subsidiary under the instruction of the then shareholder.472 — — — 4.570) — 12. 23.838 (18.APPENDIX I 22.405 14.405 Proposed dividend HK$’000 — — R7.625.799 11. RESERVES ACCOUNTANTS’ REPORT Retained earnings HK$’000 Balance as at 1 April 2008 Total comprehensive income for the year Balance as at 31 March 2009 and 1 April 2009 Total comprehensive income for the year Interim dividends paid during the year (note 10) Proposed final dividend (note IV(c)) Balance as at 31 March 2010 2.472 (i) Distributable reserves App1A(33)(5) The Company was incorporated on 15 March 2010. — I-33 — .03(6) Total HK$’000 2.838 (18.204 16.570) (4. As at 31 March 2010.

Fung Chung Kin (a) Rental expense for an office premise paid (note (a)) Sale of a motor vehicle to the Group (note (b)) — 150 Rental expense was charged at a term mutually agreed between the Group and the related company. RELATED PARTY TRANSACTIONS (i) In addition to the transactions and balances disclosed elsewhere in these Combined Financial Information. plant and equipment with a capital value at the inception of the leases of approximately HK$1. The purchase of motor vehicle from the spouse of a director of the Company was made according to the published price.636.000 respectively and other payables of HK$510. has provided personal guarantee to the lessor in respect of the Group’s obligations under finance lease and bank loans as at each of the reporting period as disclosed in note 17 and 18 respectively. This related party transaction is one-off nature and expected not to be continued after floatation.000 and HK$3. the Group entered into the following related party transactions. Details of the remuneration paid to them during the Relevant Periods are set out in note 8 to the Combined Financial Information. 25. Financial liabilities of the Group include trade and other payables.APPENDIX I (ii) ACCOUNTANTS’ REPORT During the years ended 31 March 2009 and 2010. Eric John had material interest Spouse of Mr. This related party transaction is expected to be continued after floatation. (ii) Key management personnel compensation The key management personnel of the Group are the directors of the Company.000 during the year ended 31 March 2009. The directors considered that the above related party transactions were conducted on normal commercial terms and in the ordinary and usual course of the Group’s business. (b) One of the Group’s directors.231. 24. Related party relationship Type of transaction Transaction amount 2009 2010 HK$’000 HK$’000 — 44 A company that Mr. Chia Thien Loong. who is also a shareholder of the Group. the Group entered into finance lease arrangements in respect of purchase of property. — I-34 — . FINANCIAL INSTRUMENTS — RISK MANAGEMENT The Group’s principal financial assets are trade and other receivables and cash and cash equivalents.

635 1. (ii) Liquidity risk The Group’s objective is to ensure adequate funds to meet commitments associated with its financial liabilities.557 2. which comprise bank balances. The table below summarises the maturity profile of the Group’s financial liabilities at 31 March based on contractual undiscounted payments. On Less than demand 3 months HK$’000 HK$’000 2. Trade receivables are due within one year after the completion of project. The Group will raise funds either through the advances from shareholders or from the realisation of its assets if required.986 121 3. Management has a credit policy in place and the exposures to these credit risks are monitored on an ongoing basis. and take into account information specific to the customer as well as pertaining to the economic environment in which the customer operates.961 Other payables and accruals Finance lease creditors — I-35 — .APPENDIX I ACCOUNTANTS’ REPORT The Group has not issued and does not hold any financial instruments for trading purposes at the end of the reporting period. The credit risk of Group’s trade and retention receivables (note 14) is concentrated as 93% (2009: 86%) of the carrying amount was derived from two major customers. These evaluation focus on the customer’s past history of making payment when due and current ability to pay.107 — 662 662 3 to 12 months HK$’000 — 2.557 Over 1 year HK$’000 — 1. Normally. (i) Credit risk The Group’s trade on credit terms only with recognised and creditworthy third parties. The main risks arising from the Group’s financial instruments are credit risk and liquidity risk.635 Year ended 31 March 2009 Total HK$’000 2. the Group does not obtain collateral from customers.975 7. The Group’s financial risk management policy seeks to ensure that adequate resources are available to manage the above risks and to create value for its shareholders. prepayments and other receivables. arise from default of the counterparty. The credit risks of the Group’s other financial assets.986 4. with a maximum exposure equal to the carrying amounts of these financial instruments. In respect of trade and other receivables. individual credit evaluations performed on all customers requiring credit over a certain amount. Cash flows are closely monitored on an ongoing basis.

001 4.340 45.855 4.855 1. issue new shares or sell assets to reduce debt.136 1.662 10.330) 23. finance lease creditors.004 22.644 (196) 26.066 Other payables and accruals Bank loans Finance lease creditors (iii) Capital management The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholder and to maintain an optimal capital structure to reduce the cost of capital. which is net debt divided by total capital plus net debt.072 50. the Group may adjust the dividend payment to shareholders. in light of changes in economic conditions. To maintain or adjust the capital structure.448 24. policies or processes were made during the Relevant Periods.APPENDIX I On Less than demand 3 months HK$’000 HK$’000 4. 2009 HK$’000 Total debt Less: Cash and cash equivalents Net debt Equity Net debt and equity 26.001 4.210 13.518 — — 537 537 ACCOUNTANTS’ REPORT 3 to 12 months HK$’000 — — 1. The Group manages its capital structure and makes adjustments to it. employee benefits.520 2010 HK$’000 33.344 Gearing ratio 52% 51% — I-36 — .136 Over 1 year HK$’000 — — 875 875 Year ended 31 March 2010 Total HK$’000 4.334 (10. No changes in the objectives. Capital includes equity attributable to owners of the Group. The Group monitors capital using a gearing ratio. bank overdraft and less cash and cash equivalents. return capital to shareholders. borrowings. Net debt is calculated as the total of trade and other payables.

has repaid all the outstanding bank loans of the Group.000.962. there are no other significant events which have taken place subsequent to 31 March 2010. V.000. written resolutions were passed to effect the transactions as set out in the sub-paragraph headed “Written resolutions of all Shareholders passed on 11 August 2010” in Appendix V to the Prospectus. Kan Kwok Cheung provided for the loans and other banking facilities will be released in six months period from the date of aforesaid repayment. the following significant events have taken place: (a) On 11 August 2010.02 R7.08(4) — I-37 — .000 in respect of the year ended 31 March 2010 to its then shareholders prior to the Reorganisation. Mr. Kan Kwok Cheung. IV.01 each of the Company were issued as consideration for the acquisition of the entire issued share capital of TYW (BVI). 2010. 999 shares of HK$0. On 11 August 2010.000 shares. TY Civil declared and paid a final dividend of HK$4. (d) Save as disclosed above.000. the entities now comprising the Group underwent a group reorganisation to rationalise the Group’s structure in preparation of the listing of shares of the Company on the GEM of the Stock Exchange.APPENDIX I III.000 by the creation of additional 49. Yours faithfully. (b) (ii) (c) On 9 April 2010.03(9) Subsequent to 31 March 2010 and up to the date of this report. DIRECTORS’ REMUNERATION ACCOUNTANTS’ REPORT Saved as disclosed in note 8(i) of Section II above. SUBSEQUENT EVENTS R7. SUBSEQUENT FINANCIAL STATEMENTS No audited financial statements have been prepared by the Company in respect of any period subsequent to 31 March 2010. no other remuneration has been paid or is payable in respect of the Relevant Periods to the directors of the Company. a director and shareholder of the Company. certain of which is disclosed as follows: (i) The authorised share capital of the Company was increased from HK$380.000 to HK$500. Subsequent to the year ended 31 March. BDO Limited Certified Public Accountants Li Yin Fan Practising Certificate Number P03113 Hong Kong R7. The personal guarantees of Mr.

and is included herein for illustrative purposes only. as set forth in Appendix I to this prospectus. prospective investors who read the information should bear in mind that these figures are inherently subject to adjustments and may not give a true picture of the Group’s financial position. The information set forth in this appendix does not form part of the Accountants’ Report prepared by BDO Limited. As a result of these assumptions. estimates and uncertainties. estimates and uncertainties.31(1) R7. Hong Kong.31(2)(c) R7.31(1) and paragraph 21 of Appendix 1A of the GEM Listing Rules is for illustrative purpose only.31(2)(b) — II-1 — . the reporting accountants of the Company. The unaudited pro forma financial information should be read in conjunction with the section headed “Financial Information” in this prospectus and the Accountants’ Report set forth in Appendix I to this prospectus. and is set out herein to provide the prospective investors with further financial information about how the proposed listing might have affected the net tangible assets of the Group after the completion of the Placing as if the Placing had taken place on 31 March 2010. the accompanying unaudited pro forma financial information of the Group does not purport to predict the Group’s future financial position. The accompanying unaudited pro forma financial information of the Group is based on currently available information along with a number of assumptions.31(2)(a) The following unaudited pro forma financial information prepared in accordance with Rule 7.APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION R7. Although reasonable care has been exercised in preparing the said information. R7. Certified Public Accountants.

7 Notes: (1) The audited combined net tangible assets attributable to owners of the Company as at 31 March 2010 is based on the audited combined net assets of the Company as at 31 March 2010 of HK$22.000 on 9 April 2010 in respect of the year ended 31 March 2010 to its then shareholders prior to the Reorganisation.31(3)(a) R7.340.31(5)(b) Unaudited pro forma adjusted combined net tangible assets per Share HK cents (Note 4) 22. It has been prepared for illustrative purpose only and.340 39. The unaudited pro forma adjusted combined net tangible assets per Share is calculated based on 99.31(6)(a) R7.000 as estimated by the Directors.800. or any Shares which may be allotted and issued or repurchased by the Company pursuant to the general mandates for the allotment and issue or repurchase of Shares referred to in Appendix V to this Prospectus or otherwise.31(3)(b) (2) R7.000) 39.28 per share R7. on the basis of the notes set forth below. after deduction of the underwriting fees and related expenses payable of approximately HK$10.000. The estimated net proceeds from the Placing are based on 24.340 21.31(3)(a) Audited combined net tangible assets attributable Add: Less: to owners of Estimated Dividends the Company net proceeds declared after as at 31 from the 31 March March 2010 Placing 2010 HK$’000 HK$’000 HK$’000 (Note 1) (Note 2) (Note 3) Based on the Placing Price of HK$1. for the purpose of illustrating the effect of the Placing as if it had taken place on 31 March 2010.000.APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION App1A(21) (A) UNAUDITED PRO FORMA ADJUSTED NET TANGIBLE ASSETS The unaudited pro forma adjusted net tangible assets of the Group has been prepared. It does not take into account any Shares which may fall to be allotted and issued pursuant to the exercise of any options which may be granted under the Share Option Scheme.000 (4. The unaudited pro forma adjusted net tangible assets of the Group as at 31 March 2010 is based on the audited combined net tangible assets attributable to owners of the Company as at 31 March 2010 as shown in the Accountants’ Report set out in Appendix I to this prospectus and the adjustments described below. Unaudited pro forma adjusted combined net tangible assets attributable to the owners of the Company HK$’000 R7.200.000 Shares in issue immediately following the completion of the Placing and the Capitalisation Issue and declared and paid a final dividend of TY Civil. Dividend declared after 31 March 2010 representing TY Civil declared and paid a final dividend of HK$4. R7.000 Placing Shares at the Placing Price of HK$1.744. may not give a true and fair picture of the financial position of the Group. because of its hypothetical nature.28 each.31(6)(b) (3) (4) — II-2 — .

on the Unaudited Pro Forma Financial Information and to report our opinion solely to you. — II-3 — . as required by paragraph 31(7) of Chapter 7 of the GEM Listing Rules. The basis of preparation of the Unaudited Pro Forma Financial Information is set out on section A of Appendix II to the Prospectus. Report on the unaudited pro forma financial information to the directors of Tsun Yip Holdings Limited (the “Company”) We report on the unaudited pro forma financial information relating to the adjusted net tangible assets (the “Unaudited Pro Forma Financial Information”) of the Company and its subsidiaries (collectively referred to as the “Group”). received from the independent reporting accountants of the Company. We do not accept any responsibility for any reports previously given by us on any financial information used in the compilation of the Unaudited Pro Forma Financial Information beyond that owed to those to whom whose reports were addressed by us at the dates of their issue.31(7)(b) R7. prepared for inclusion in this prospectus. to provide information about how the proposed listing of the Company’s shares might have affected the financial information presented. for illustrative purpose only.APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION (B) LETTER FROM THE INDEPENDENT REPORTING ACCOUNTANTS ON THE UNAUDITED PRO FORMA FINANCIAL INFORMATION The following is the text of a report. Respective Responsibilities of Directors of the Company and the Reporting Accountants It is the responsibility solely of the directors of the Company to prepare the Unaudited Pro Forma Financial Information in accordance with paragraph 31 of Chapter 7 of the Rules Governing the Listing of Securities on the Growth Enterprise Market of The Stock Exchange of Hong Kong Limited (the “GEM” Listing Rules”) and with reference to Accounting Guideline 7 “Preparation of Pro Forma Financial Information for Inclusion in Investment Circulars” issued by the Hong Kong Institute of Certified Public Accountants (the “HKICPA”). Certified Public Accountants. R7. BDO Limited. in respect of the Group’s unaudited pro forma financial information.31(7)(a) R7. which has been prepared by the directors of the Company. Hong Kong. It is our responsibility to form an opinion.31(7)(c) App1A(9)(3) 20 August 2010 The Directors Tsun Yip Holdings Limited Optima Capital Limited Dear Sirs. for inclusion in section A of Appendix II the prospectus dated 20 August 2010 (the “Prospectus”) issued by the Company.

does not give any assurance or indication that any event will take place in the future and may not be indicative of the financial position of the Group as at 31 March 2010 or at any future date. that such basis is consistent with the accounting policies of the Group and that the adjustments are appropriate for the purposes of the Unaudited Pro Forma Financial Information as disclosed pursuant to paragraph 31(1) of Chapter 7 of the GEM Listing Rules. BDO Limited Certified Public Accountants Li Yin Fan Practising Certificate Member P03113 Hong Kong — II-4 — . we did not express any such assurance on the Unaudited Pro Forma Financial Information. This engagement did not involve independent examination of any of the underlying financial information.31(7)(b) R7. We planned and performed our work so as to obtain the information and explanations we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the Unaudited Pro Forma Financial Information has been properly compiled by the directors of the Company on the basis stated. and because of its hypothetical nature.31(7)(c) (b) (c) Yours faithfully.APPENDIX II Basis of opinion UNAUDITED PRO FORMA FINANCIAL INFORMATION We conducted our engagement in accordance with Hong Kong Standard on Investment Circular Reporting Engagements 300 “Accountants’ Reports on Pro Forma Financial Information in Investment Circulars” issued by the HKICPA. The Unaudited Pro Forma Financial Information is for illustrative purposes only. R7. considering the evidence supporting the adjustments and discussing the Unaudited Pro Forma Financial Information with the directors of the Company. Opinion In our opinion: (a) the Unaudited Pro Forma Financial Information has been properly compiled by the directors of the Company on the basis stated. such basis is consistent with the accounting policies of the Group. Our work did not constitute an audit or a review made in accordance with Hong Kong Standards on Auditing or Hong Kong Standards on Review Engagements or Hong Kong Standards on Assurance Engagements issued by the HKICPA. and the adjustments are appropriate for the purposes of the Unaudited Pro Forma Financial Information as disclosed pursuant to paragraph 31(1) of Chapter 7 of the GEM Listing Rules. and accordingly. Our work consisted primarily of comparing the unadjusted financial information with source documents.31(7)(a) R7. based on the judgements and assumptions of the directors of the Company.

Our valuations have been prepared in accordance with “The HKIS Valuation Standards on Properties (First Edition 2005)” published by The Hong Kong Institute of Surveyors. The Grande Building 398 Kwun Tong Road Kowloon Hong Kong 8. Hong Kong Dear Sirs. prudently and without compulsion”. in connection with the valuations of the property interests of the properties rented by the Group as at 31 May 2010. New Territories. App1A(9)(3) 8.05(9) — III-1 — . 3/F. an independent valuer. we confirm that we have inspected the properties. the relevant provisions in the Companies Ordinance and the Rules Governing the Listing of Securities on the Growth Enterprise Market of The Stock Exchange of Hong Kong Limited. In accordance with your instruction for us to value the property interests held by Tsun Yip Holdings Limited (referred to as “the Company”) and its subsidiaries (hereinafter together referred to as “the Group”) as listed in the attached Summary of Values. Vigers Appraisal and Consulting Limited International Property Consultants 10th Floor. summary of values and valuation certificate prepared for the purpose of incorporation in this prospectus received from Vigers Appraisal and Consulting Limited. Fanling.APPENDIX III PROPERTY VALUATION App1A.05(7) 20 August 2010 The Board of Directors Tsun Yip Holdings Limited Flat 314. made relevant enquiries and investigations as well as obtained such further information as we consider necessary for the purpose of providing our opinion of values of the property interests of the properties as at 31 May 2010 (the “Valuation Date”). 28 On Lok Mun Street.05(8) 8. Fuk Shing Commercial Building.04 8.39 The following is the text of a letter. Basis of Valuation Our valuations are our opinion of market values of the property interests of the properties in concern which is defined as intended to mean “the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller on an arm’s length transaction after proper marketing wherein the parties had each acted knowledgeably.30 8.

Valuation Consideration We have inspected the properties included in the attached valuation certificate. we are of the opinion that such property interests carry no commercial value due to the prohibition against assignment or sub-letting or otherwise due to lack of substantial profit rent and/or the short term nature of the property interests. Our valuations have been carried out on the assumption that these aspects are satisfactory. We have also assumed that all necessary consents. leaseback. no account has been taken into of any option or right of pre-emption concerning or affecting the sale of the property interests of the properties. we have assumed that the owners of the property interests of the properties in concern have free and uninterrupted rights to use and assign the properties during the whole of the unexpired terms granted subject to the payment of usual land-use fees. unless otherwise noted or stated. joint venture. we did not note any serious defect.APPENDIX III Property Categorisation PROPERTY VALUATION In respect of the property interests of the properties rented by the Group in the Hong Kong Special Administrative Region (“Hong Kong”). In addition. No investigation has been carried out to determine the suitability of the ground conditions or the services for any property development(s) erected on the properties. During the course of our inspections. However. — III-2 — . Other special assumptions for the property interests of the properties have been stated in the footnotes of the respective valuation certificate. Valuation Assumptions Our valuations have been made on the assumption that the property interests of the properties can be sold in the prevailing market in existing state without the effect of any deferred term contract. Title Investigation The properties are located in Hong Kong and we have conducted land searches for the properties but we have not searched the original documents to ascertain ownership nor to verify any lease amendments which may not appear on the copies handed to us. management agreement or any other similar arrangement which may serve to affect the values of the property interests of the properties. In valuing the property interests of the properties. and no allowance has been made for the property interests of the properties to be sold to a single party and/or as a portfolio or portfolios. approvals and licences from relevant government authorities have been or will be granted without onerous conditions or delay. infestation or other structural or non-structural defect. neither structural survey nor test on any of the services has been made and we are therefore unable to report as to whether the properties are free from rot.

Unless otherwise noted.APPENDIX III PROPERTY VALUATION Having examined all relevant documentation. For and on behalf of VIGERS APPRAISAL AND CONSULTING LIMITED David W. I. We enclose herewith our Summary of Values and Valuation Certificate. particularly in respect of planning approvals. Cheung is a Registered Professional Surveyor in General Practice Division with over 27 years’ valuation experience on properties in Asia Pacific including the People’s Republic of China and Hong Kong. we have not carried out detailed on-site measurement to verify the correctness of the site and floor areas in respect of the properties in concern but we have assumed that the site and floor areas shown on the documents handed to us are correct. — III-3 — . who has been vetted on the list of property valuers for undertaking valuations for incorporation or reference in listing particulars and circulars and valuations in connection with takeovers and mergers published by The Hong Kong Institute of Surveyors. all dimensions. Remarks We declare hereby that we are independent to the Group and we are not interested directly or indirectly in any shares in any member of the Group. site and floor areas.32(1) Note: Mr. easements.31(1) 8. I. tenure. mortgages or amounts owing on the property interests of the properties being valued for any expenses or taxation which may be incurred in effecting a sale. No allowance has been made in our valuations for any charges.31(2) 8. David W. Yours faithfully. statutory notices. Unless otherwise stated. and is suitably qualified for undertaking valuations relating to listing exercises. occupancy status. restrictions and outgoings of an onerous nature which may serve to affect the values of the property interests of the properties. we have relied to a considerable extent on the information given by the Group. We do not have any right or option whether legally enforceable or not to subscribe for or to nominate persons to subscribe for any shares in any member of the Group.05(7) Executive Director 8. building age and specifications. measurements and areas included in the valuation certificate are based on the information contained in the documents provided to us by the Group and are therefore approximations. and in the identification of the properties in concern. we have assumed that the property interests of the properties are free from any encumbrances. Unless otherwise stated. We have had no reason to doubt the truth and accuracy of the information made available to us and we have been advised by the Group that no material facts have been omitted from the information so given. CHEUNG MRICS MHKIS RPS(GP) CREA MCIArb 8.

86 San Uk Ka. New Territories. New Territories. Anton Building. No. Property Address Interest attributable to the Group Capital Value attributable to the Group as at 31 May 2010 Property Interests Rented by the Group in Hong Kong 1. No. Hong Kong Ground Floor.APPENDIX III SUMMARY OF VALUES Capital Value in Existing State as at 31 May 2010 PROPERTY VALUATION No. North. No commercial value 4. Shatin. No. Hong Kong Rooms 1 & 3 on 7th Floor. 1 Anton Street. The Palazzo. New Territories. Tai Po. New Territories. No commercial value 8. No. Fuk Shing Commercial Building. Hong Kong Unit 3 on 3rd Floor.05(1)(a) 3. No commercial value 5. North. Fuk Shing Commercial Building. 28 On Lok Mun Street. No. Wan Chai Hong Kong No commercial value 2. No commercial value GRAND TOTAL NO COMMERCIAL VALUE — III-4 — . Hong Kong Flat B (with A/C (Rooms) pertaining thereto which is/are accessible from the Flat itself) on 21st Floor of Tower 8. Unit 14 on 3rd Floor. 28 On Lok Mun Street. 28 Lok King Street.

3. As measured from the assignment plan.APPENDIX III VALUATION CERTIFICATE Property Interests Rented by the Group in Hong Kong PROPERTY VALUATION No. but exclusive of other out-goings. 2. N568376 dated 28 August 2004. Property Unit 14 on 3rd Floor. N568375 dated 28 August 2004. iv. North. 1. Particulars of Occupancy The property is occupied by the Group for office use. Deed of Mutual Covenant and Management Agreement vide Memorial No. Fanling Sheung Shui Town Lot No. 13092 commencing on 19 November 1996 and expiring on 30 June 2047 at an annual Government Rent equivalent to 3% of the Rateable Value. No.000. Tripartite Legal Charge/Mortgage for All Monies in favour of Standard Chartered Bank (Hong Kong) Limited vide Memorial No.398 square feet (129. Fuk Shing Commercial Building. Certificate of Compliance vide Memorial No. 162 is held under New Grant No. NT 60/99) vide Memorial No. Pursuant to a tenancy agreement entered into between Golden Opportunity Development Limited as lessor and Tsun Yip Waterworks Construction Company Limited as lessee dated 27 August 2008. the property has a saleable area of approximately 1. New Territories. the property is leased for a term of two years commencing on 1 September 2008 and expiring on 31 August 2010 at a monthly rent of HK$20. N473125 dated 6 November 1999. Capital Value in Existing State as at 31 May 2010 No commercial value 8. inclusive of Government Rent. the property is subject to the following salient encumbrances: i. The property lies on an area zoned “Industrial” under Fanling/Sheung Shui District Outline Zoning Plan (No. v. Hong Kong All those 21/1380th shares of parts or parcels of ground known and registered at the Land Registry as Fanling Sheung Shui Town Lot No. N483900 dated 29 May 2000. Occupation Permit (Permit No. 162 Description and Tenure The property comprises an office unit on the 3rd floor in a 7-storey industrial/office building completed in 1999. S/FSS/14).91 square metres).05 (1)(a) (1)(b) (1)(c) (1)(d) (1)(e)(ii) (1)(f) (1)(g) (1)(i) (1)(j) Note (Property 1): 1. 28 On Lok Mun Street. ii. N468856 dated 25 January 2000. Pursuant to our land search record. — III-5 — . The current registered owner of the property is “Golden Opportunity Development Limited”. and Rental Assignment vide Memorial No. iii. Rates and management fees.

Tripartite Legal Charge/Mortgage for All Monies in favour of Standard Chartered Bank (Hong Kong) Limited vide Memorial No. As measured from the assignment plan. Hong Kong All those 13/1380 shares of parts or parcels of ground known and registered at the Land Registry as Fanling Sheung Shui Town Lot No.05 (1)(a) (1)(b) (1)(c) (1)(d) (1)(e)(ii) (1)(f) (1)(g) (1)(i) (1)(j) Note (Property 2): 1. NT 60/99) vide Memorial No. iv. N473125 dated 6 November 1999. 162 Pursuant to a tenancy agreement entered into between Golden Opportunity Development Limited as lessor and Tsun Yip Waterworks Construction Company Limited as lessee dated 8 September 2009. 162 is held under New Grant No. N568375 dated 28 August 2004. Pursuant to our land search record. North. the property is leased for a term of two years commencing on 7 October 2009 and expiring on 6 October 2011 at a monthly rent of HK$8. Deed of Mutual Covenant and Management Agreement vide Memorial No. S/FSS/14). inclusive of Government Rent. Property Unit 3 on 3rd Floor. Occupation Permit (Permit No. 28 On Lok Mun Street. — III-6 — . 3. The current registered owner of the property is “Golden Opportunity Development Limited”. iii. New Territories. Description and Tenure The property comprises an office unit on the 3rd floor in a 7-storey industrial/office building completed in 1999. 8. Fuk Shing Commercial Building. The property lies on an area zoned “Industrial” under Fanling/Sheung Shui District Outline Zoning Plan (No. 13092 commencing on 19 November 1996 and expiring on 30 June 2047 at an annual Government Rent equivalent to 3% of the Rateable Value. Rates and management fees . Occupancy The property is occupied by the Group for office use. N568376 dated 28 August 2004. 2. but exclusive of other out-goings.35 square metres). the property has a saleable area of approximately 854 square feet (79. ii. N483900 dated 29 May 2000.APPENDIX III PROPERTY VALUATION Capital Value in Existing State as at 31 May 2010 No commercial value Particulars of No. No. the property is subject to the following salient encumbrances: i. Certificate of Compliance vide Memorial No. Rental Assignment vide Memorial No. Fanling Sheung Shui Town Lot No. and v.800. 2. N468856 dated 25 January 2000.

8. the property is registered at the Land Registry as “No. TP709887 dated 17 September 2003. the property has a saleable area of approximately 673 square feet (62. — III-7 — . Tai Po. According to our on-site measurement. but exclusive of other out-goings. inclusive of Government Rent and Rates. 2. Pursuant to our land search record.05 (1)(a) (1)(b) (1)(c) (1)(d) (1)(e)(ii) (1)(f) (1)(g) (1)(i) Note (Property 3): 1. Hong Kong” and the current registered owner of the property is “Wong Yuet Sang”.500. the property is leased for a term of two years commencing on 1 August 2009 and expiring on 31 July 2011 at a monthly rent of HK$7. the property is subject to the following salient encumbrances: i. Hong Kong All those certain parts or parcels of ground known and registered at the Land Registry as Sub-Section 13 of Section A of Lot No. New Territories. Deed of Grant of Right of Way vide Memorial No. Occupancy The property is occupied by the Group for office use. 3. 20 in D. Pursuant to our land search record. 86 San Uk Ka. Tai Po. TP581823 dated 6 October 1997. Description and Tenure The property comprises a residential unit on ground floor in a 3-storey village type house completed in or about 2005.56 square metres). No. No sub-division registration for the property is made available at the Land Registry. Property Ground Floor. Deed of Grant of Right of Way vide Memorial No.APPENDIX III PROPERTY VALUATION Capital Value in Existing State as at 31 May 2010 No commercial value Particulars of No. New Territories.D. 21 The property is held under Government Lease for a term of 75 years commencing on 1st July 1898 renewed for a further lease term of 24 years less the last three days and has been renewed for a further lease term of 50 years expiring on 30th June 2047 without paying additional premium but an annual Government Rent equivalent to 3% of the then Rateable Value by virtue of the relevant provisions contained in Annex III of the Joint Declaration of the Government of the United Kingdom and the Government of the People’s Republic of China on the question of Hong Kong as well as the New Territories Leases (Extension) Ordinance 1988. 86 San Uk Ka. ii. Pursuant to a tenancy agreement entered into between Wong Yuet Sang as lessor and Tsun Yip Waterworks Construction Company Limited as lessee dated 16 July 2009.

Building Licence No. vi. Deed of Dedication vide Memorial No.P. v.13 of S. iv. 177/2002 from District Lands Officer Tai Po for and on behalf of The Chief Executive of the HKSAR vide Memorial No. PROPERTY VALUATION Deed of Consent regarding R. TP710665 dated 10 October 2003.APPENDIX III iii. 20 in DD21 vide Memorial No. (1)(j) — III-8 — . TP717016 dated 27 January 2004. Permission Letter from District Lands Officer/Tai Po vide Memorial No. TP709888) vide Memorial No. and vii. TP713676 dated 17 September 2003. 3. & SS. TP717508 dated 29 December 2003. The property lies on an area zoned “Village Type Development” under Tai Po District Outline Zoning Plan (No. Re-registration of Deed of Agreement and Undertaking (previously registered by Memorial No. S/TP/21). 05110900350123 dated 6 October 2005.A of Lot No.

57th Floor to 59th Floor and 64th Floor omitted. As measured from the assignment plan. 53rd Floor. New Territories.49 square metres) but excluding bay window of appropriately 46 square feet (4.81 square metres) and utility platform of appropriately 16 square feet (1. the property has a gross floor area of approximately 1. Pursuant to a tenancy agreement entered into between Kim Nam Woon and Yu Su Yeon as lessors and Tsun Yip Waterworks Construction Company Limited as lessee dated 1 April 2010. The Palazzo. 17th Floor. the property is leased for a term of two years commencing on 16 April 2010 and expiring on 15 April 2012 at a monthly rent of HK$37. 29th Floor designated as Refuge Floor. 4.415 square feet (131. Property Flat B (with A/C (Rooms) pertaining thereto which is/are accessible from the Flat itself) on 21st Floor of Tower 8. Rates and management fees. ST13170 for a term of 50 years commencing on 3 March 2003 at an annual Government Rent equivalent to 3% of the Rateable Value. 34th Floor.05 (1)(a) (1)(b) (1)(c) (1)(d) (1)(e)(ii) (1)(f) (1)(g) (1)(i) — III-9 — . 24th Floor. 470 Description and Tenure The property comprises a residential unit on the 21st Floor in a 37-storey (designation of 7th.APPENDIX III PROPERTY VALUATION Capital Value in Existing State as at 31 May 2010 No commercial value Particulars of No. 40th Floor to 49th Floor.27 square metres). According to the developer’s sales brochure. 14th Floor. 54th Floor. No.000. The property is held under New Grant No. Sha Tin. 37th Floor. but exclusive of other out-goings. 13th Floor. inclusive of Government Rent. 27th Floor. Hong Kong All those 14/ 25263rd shares of parts or parcels of ground known and registered at the Land Registry as Sha Tin Town Lot No. 16th Floor and 18th Floor designated as Sky Garden Floors) residential building erected over a 3-storey club house/carpark podium completed in 2008.835 square feet (170.46 square metres) including balcony of appropriately 41 square feet (3. the property has a saleable area of approximately 1. 28 Lok King Street. 8. Occupancy The property is occupied by the Group for domestic use.27 square metres) and air-conditioning plant room of approximately 46 square feet (4.48 square metres).

Deed of Mutual Covenant and Management Agreement in favour of MTR Corporation Limited (Manager) vide Memorial No. (1)(j) — III-10 — . the property is subject to the following salient encumbrances: i. 09042902560310 dated 24 April 2009. 2. The current registered owners of the property are “Kim Nam Woon” (1/2) and “Yu Su Yeon” (1/2) (Tenants in Common). and v. Occupation Permit Nos. 09061000880093 dated 21 May 2009.S/ST/23). Mortgage to Secure All the Banking Facilities made or to be made Available to the Mortgagor in favour of Standard Chartered Bank (Hong Kong) Limited vide Memorial No. iii. The property lies on an area zoned “Other Specified Uses(Railway Depot Comprehensive Development Area)” under Sha Tin Outline Zoning Plan (No. PR7/2008 (OP) and PR1/2009(OP) from Building Authority of Hong Kong vide Memorial Nos. Certificate of Compliance vide Memorial No. 3. 08121902440019 and 09020502080017 dated 12 December 2008 and 23 January 2009 respectively. ii. Second Mortgage to Secure All Moneys in respect of General Credit Facilities in favour of Rich Treasure Investments Limited vide Memorial No. 09051802240182 dated 4 May 2009. Pursuant to our land search record. 09061000880105 dated 21 May 2009.APPENDIX III Note (Property 4): PROPERTY VALUATION 1. iv.

inclusive of Government Rent.21 sq. S/H5/25). but exclusive of other out-goings. the property has a total saleable area of approximately 156 square feet (14.ft. 7. the property is sub-leased for a term of two years and six months commencing on 1 May 2009 and expiring on 31 October 2011 at a monthly rent of HK$4.m.000. 2. According to our on-site measurement.28 sq.m. 65 Marine Lot No. 65 is held under Government Lease for a term of 999 years commencing on 25 June 1863 with total Government Rent payable of HK$26. The property lies on an area zoned “Residential (Group A)” under Wan Chai District Outline Zoning Plan (No. Note (Property 5): 1.ft. Pursuant to our land search record. 3. 7. Rates and management fees.49 square metres) with breakdown shown as follows: Occupancy The property is occupied by the Group for office use. 5. the property is subject to Deed of Mutual Covenant (previously registered by Memorial No. 78 sq.49 sq.ft.00 per annum. UB2571530) vide Memorial No. UB3948191 dated 10 April 1984. Hong Kong All those certain portion of 2/34th shares of parts or parcels of ground known and registered at the Land Registry as Sub-Section 2 of Section A of Marine Lot No. 8. Pursuant to a sub-lease agreement and a supplementary tenancy agreement entered into between Hong Kong Listco Limited as lessor and Tsun Yip Waterworks Construction Company Limited as lessee dated 1 May 2009 and 7 May 2010 respectively. The current registered owner of the property is “Super Pizza Holdings Limited”. Anton Building. Description and Tenure The property comprises two office units on the 7th floor in a 15-storey office commercial building completed in or about 1984. No.05 (1)(a) (1)(b) (1)(c) (1)(d) (1)(e)(ii) (1)(f) (1)(g) (1)(h) (1)(i) (1)(j) 156 sq. Portion Room 1 Room 3 Total Saleable Area 78 sq.APPENDIX III PROPERTY VALUATION Capital Value in Existing State as at 31 May 2010 No commercial value Particulars of No. Wan Chai. Property Rooms 1 & 3 on 7th Floor. — III-11 — . 14. 1 Anton Street.m.

voting. The memorandum of association of the Company (the “Memorandum”) and the Articles comprise its constitution. for the time being unpaid on the Shares respectively held by them and that the objects for which the Company is established are unrestricted (including acting as an investment company). The Company may by special resolution alter its Memorandum with respect to any objects. as the board may determine). firm or corporation except in furtherance of the business of the Company carried on outside the Cayman Islands. The Company was incorporated in the Cayman Islands as an exempted company with limited liability on 15 March. as the Company may by ordinary resolution determine (or. ARTICLES OF ASSOCIATION A1A7 S342(1)(a)(i) The Articles were adopted on 11 August 2010. The following is a summary of certain provisions of the Articles: (a) Directors (i) Power to allot and issue shares and warrants Subject to the provisions of the Companies Law and the Memorandum and Articles and to any special rights conferred on the holders of any shares or class of shares. or such restrictions. if any. (23) R11.09 (2). 1. MEMORANDUM OF ASSOCIATION (a) The Memorandum states. any share may be issued on terms that. inter alia. return of capital. or otherwise. that the liability of members of the Company is limited to the amount. any share may be issued with or have attached thereto such rights. at the option of the Company or the holder thereof. powers or other matters specified therein.31 S342 (b) 2. the rules of any Designated Stock Exchange (as defined in the Articles) and the Memorandum and Articles. 3rd Sch. whether with regard to dividend. The board may issue warrants conferring the right upon the holders thereof to subscribe for any class of shares or securities in the capital of the Company on such terms as it may from time to time determine. 2010 under the Companies Law. and that the Company shall have and be capable of exercising all the functions of a natural person of full capacity irrespective of any question of corporate benefit.(3) Set out below is a summary of certain provisions of the Memorandum and Articles of Association of the Company and of certain aspects of Cayman company law. they are liable to be redeemed. in the absence of any such determination or so far as the same may not make specific provision. Subject to the Companies Law. as provided in section 27(2) of the Companies Law and in view of the fact that the Company is an exempted company that the Company will not trade in the Cayman Islands with any person. A3 6(1) — IV-1 — .APPENDIX IV SUMMARY OF THE CONSTITUTION OF THE COMPANY AND CAYMAN ISLANDS COMPANY LAW R24.

offer of. participation in profits or otherwise) in addition to any remuneration provided for by or pursuant to any other Articles. however. a separate class of members for any purpose whatsoever. which may offer. (v) Disclosure of interests in contracts with the Company or any of its subsidiaries. where applicable. when making or granting any allotment of. A Director may be or become a director or other officer of. for such consideration and on such terms and conditions as it in its absolute discretion thinks fit. subject to the Articles. exercise all powers and do all acts and things which may be exercised or done or approved by the Company and which are not required by the Articles or the Companies Law to be exercised or done by the Company in general meeting. grant options over or otherwise dispose of them to such persons. at such times. (ii) Power to dispose of the assets of the Company or any subsidiary There are no specific provisions in the Articles relating to the disposal of the assets of the Company or any of its subsidiaries. all unissued shares in the Company shall be at the disposal of the board. in the opinion of the board.APPENDIX IV SUMMARY OF THE CONSTITUTION OF THE COMPANY AND CAYMAN ISLANDS COMPANY LAW Subject to the provisions of the Companies Law and the Articles and. (iv) Loans and provision of security for loans to Directors There are provisions in the Articles prohibiting the making of loans to Directors. in the absence of a registration statement or other special formalities. Members affected as a result of the foregoing sentence shall not be. or be deemed to be. The Directors may. (iii) Compensation or payments for loss of office Pursuant to the Articles. commission. payments to any Director or past Director of any sum by way of compensation for loss of office or as consideration for or in connection with his retirement from office (not being a payment to which the Director is contractually entitled) must be approved by the Company in general meeting. offer. option over or disposal of shares. upon such terms as the board may determine. to make. but so that no shares shall be issued at a discount. option or shares to members or others with registered addresses in any particular territory or territories being a territory or territories where. and may be paid such extra remuneration therefor (whether by way of salary. or make available. allot. this would or might. or otherwise interested in. Neither the Company nor the board shall be obliged. any company promoted by the Company or any other company in which the — IV-2 — . the rules of any Designated Stock Exchange (as defined in the Articles) and without prejudice to any special rights or restrictions for the time being attached to any shares or any class of shares. be unlawful or impracticable. A11B 5(2) A1A 7(1) A11B 5(4) A Director may hold any other office or place of profit with the Company (except that of the auditor of the Company) in conjunction with his office of Director for such period and. any such allotment.

or from his interest in. if he knows his interest then exists. interested in a contract or arrangement or proposed contract or arrangement with the Company shall declare the nature of his interest at the meeting of the board at which the question of entering into the contract or arrangement is first taken into consideration. nor shall any Director so contracting or being so interested be liable to account to the Company or the members for any remuneration. (bb) any contract or arrangement for the giving of any security or indemnity to a third party in respect of a debt or obligation of the Company or any of its subsidiaries for which the Director or his associate(s) has himself/themselves assumed responsibility in whole or in part whether alone or jointly under a guarantee or indemnity or by the giving of security. or voting or providing for the payment of remuneration to the directors or officers of such other company. the board may also cause the voting power conferred by the shares in any other company held or owned by the Company to be exercised in such manner in all respects as it thinks fit. whether directly or indirectly. or in any other case. profits or other benefits received by him as a director. profit or other benefits realised by any such contract or arrangement by reason of such Director holding that office or the fiduciary relationship thereby established.APPENDIX IV SUMMARY OF THE CONSTITUTION OF THE COMPANY AND CAYMAN ISLANDS COMPANY LAW Company may be interested. including the exercise thereof in favour of any resolution appointing the Directors or any of them to be directors or officers of such other company. no Director or proposed or intended Director shall be disqualified by his office from contracting with the Company. but this prohibition shall not apply to any of the following matters. A Director who to his knowledge is in any way. either with regard to his tenure of any office or place of profit or as vendor. officer or member of. A Director shall not vote (nor be counted in the quorum) on any resolution of the board approving any contract or arrangement or other proposal in which he or any of his associates is materially interested. such other company. at the first meeting of the board after he knows that he is or has become so interested. and shall not be liable to account to the Company or the members for any remuneration. namely: (aa) any contract or arrangement for giving to such Director or his associate(s) any security or indemnity in respect of money lent by him or any of his associates or obligations incurred or undertaken by him or any of his associates at the request of or for the benefit of the Company or any of its subsidiaries. App1A(7)(1) A3 4(1) A11B 5(3) — IV-3 — . Subject as otherwise provided by the Articles. nor shall any such contract or any other contract or arrangement in which any Director is in any way interested be liable to be avoided. purchaser or in any other manner whatsoever. Subject to the Companies Law and the Articles.

APPENDIX IV

SUMMARY OF THE CONSTITUTION OF THE COMPANY AND CAYMAN ISLANDS COMPANY LAW

(cc) any contract or arrangement concerning an offer of shares or debentures or other securities of or by the Company or any other company which the Company may promote or be interested in for subscription or purchase, where the Director or his associate(s) is/are or is/are to be interested as a participant in the underwriting or sub-underwriting of the offer; (dd) any contract or arrangement in which the Director or his associate(s) is/are interested in the same manner as other holders of shares or debentures or other securities of the Company by virtue only of his/their interest in shares or debentures or other securities of the Company; (ee) any contract or arrangement concerning any other company in which the Director or his associate(s) is/are interested only, whether directly or indirectly, as an officer or executive or a shareholder or in which the Director and any of his associates are not in aggregate beneficially interested in 5 percent. or more of the issued shares or of the voting rights of any class of shares of such company (or of any third company through which his interest or that of any of his associates is derived); or (ff) any proposal or arrangement concerning the adoption, modification or operation of a share option scheme, a pension fund or retirement, death, or disability benefits scheme or other arrangement which relates both to Directors, his associates and employees of the Company or of any of its subsidiaries and does not provide in respect of any Director, or his associate(s) as such any privilege or advantage not accorded generally to the class of persons to which such scheme or fund relates. (vi) Remuneration The ordinary remuneration of the Directors shall from time to time be determined by the Company in general meeting, such sum (unless otherwise directed by the resolution by which it is voted) to be divided amongst the Directors in such proportions and in such manner as the board may agree or, failing agreement, equally, except that any Director holding office for part only of the period in respect of which the remuneration is payable shall only rank in such division in proportion to the time during such period for which he held office. The Directors shall also be entitled to be prepaid or repaid all travelling, hotel and incidental expenses reasonably expected to be incurred or incurred by them in attending any board meetings, committee meetings or general meetings or separate meetings of any class of shares or of debentures of the Company or otherwise in connection with the discharge of their duties as Directors.
A1A 7(2)

3rd Sch. (5)

— IV-4 —

APPENDIX IV

SUMMARY OF THE CONSTITUTION OF THE COMPANY AND CAYMAN ISLANDS COMPANY LAW

Any Director who, by request, goes or resides abroad for any purpose of the Company or who performs services which in the opinion of the board go beyond the ordinary duties of a Director may be paid such extra remuneration (whether by way of salary, commission, participation in profits or otherwise) as the board may determine and such extra remuneration shall be in addition to or in substitution for any ordinary remuneration as a Director. An executive Director appointed to be a managing director, joint managing director, deputy managing director or other executive officer shall receive such remuneration (whether by way of salary, commission or participation in profits or otherwise or by all or any of those modes) and such other benefits (including pension and/or gratuity and/or other benefits on retirement) and allowances as the board may from time to time decide. Such remuneration may be either in addition to or in lieu of his remuneration as a Director. The board may establish or concur or join with other companies (being subsidiary companies of the Company or companies with which it is associated in business) in establishing and making contributions out of the Company’s monies to any schemes or funds for providing pensions, sickness or compassionate allowances, life assurance or other benefits for employees (which expression as used in this and the following paragraph shall include any Director or ex-Director who may hold or have held any executive office or any office of profit with the Company or any of its subsidiaries) and ex-employees of the Company and their dependents or any class or classes of such persons. The board may pay, enter into agreements to pay or make grants of revocable or irrevocable, and either subject or not subject to any terms or conditions, pensions or other benefits to employees and ex-employees and their dependents, or to any of such persons, including pensions or benefits additional to those, if any, to which such employees or ex-employees or their dependents are or may become entitled under any such scheme or fund as is mentioned in the previous paragraph. Any such pension or benefit may, as the board considers desirable, be granted to an employee either before and in anticipation of, or upon or at any time after, his actual retirement. (vii) Retirement, appointment and removal At each annual general meeting, one third of the Directors for the time being (or if their number is not a multiple of three, then the number nearest to but not less than one third) will retire from office by rotation provided that every Director shall be subject to retirement at an annual general meeting at least once every three years. The Directors to retire in every year will be those who have been longest in office since their last re-election or appointment but as between persons who became or were last re-elected Directors on the same day those to retire will (unless they otherwise agree among themselves) be determined by lot. There are no provisions relating to retirement of Directors upon reaching any age limit.
App1A(7)(4) A1A 7(4)

— IV-5 —

APPENDIX IV

SUMMARY OF THE CONSTITUTION OF THE COMPANY AND CAYMAN ISLANDS COMPANY LAW
A3 4(2)

The Directors shall have the power from time to time and at any time to appoint any person as a Director either to fill a casual vacancy on the board or as an addition to the existing board. Any Director appointed to fill a casual vacancy shall hold office until the first general meeting of members after his appointment and be subject to re-election at such meeting and any Director appointed as an addition to the existing board shall hold office only until the next following annual general meeting of the Company and shall then be eligible for re-election. Neither a Director nor an alternate Director is required to hold any shares in the Company by way of qualification. A Director may be removed by an ordinary resolution of the Company before the expiration of his period of office (but without prejudice to any claim which such Director may have for damages for any breach of any contract between him and the Company) and may by ordinary resolution appoint another in his place. Unless otherwise determined by the Company in general meeting, the number of Directors shall not be less than two. There is no maximum number of Directors. The office or director shall be vacated: (aa) if he resigns his office by notice in writing delivered to the Company at the registered office of the Company for the time being or tendered at a meeting of the Board; (bb) becomes of unsound mind or dies; (cc) if, without special leave, he is absent from meetings of the board (unless an alternate director appointed by him attends) for six (6) consecutive months, and the board resolves that his office is vacated; (dd) if he becomes bankrupt or has a receiving order made against him or suspends payment or compounds with his creditors; (ee) if he is prohibited from being a director by law; (ff) if he ceases to be a director by virtue of any provision of law or is removed from office pursuant to the Articles. The board may from time to time appoint one or more of its body to be managing director, joint managing director, or deputy managing director or to hold any other employment or executive office with the Company for such period and upon such terms as the board may determine and the board may revoke or terminate any of such appointments. The board may delegate any of its powers, authorities and discretions to committees consisting of such Director or Directors and other persons as the board thinks fit, and it may from time to time revoke such delegation or revoke the appointment of and discharge any

App1A(7)(5) A3 4(3)

A11B 5(1)

— IV-6 —

APPENDIX IV

SUMMARY OF THE CONSTITUTION OF THE COMPANY AND CAYMAN ISLANDS COMPANY LAW

such committees either wholly or in part, and either as to persons or purposes, but every committee so formed shall, in the exercise of the powers, authorities and discretions so delegated, conform to any regulations that may from time to time be imposed upon it by the board. (viii) Borrowing powers The board may exercise all the powers of the Company to raise or borrow money, to mortgage or charge all or any part of the undertaking, property and assets (present and future) and uncalled capital of the Company and, subject to the Companies Law, to issue debentures, bonds and other securities of the Company, whether outright or as collateral security for any debt, liability or obligation of the Company or of any third party.
Note: These provisions, in common with the Articles in general, can be varied with the sanction of a special resolution of the Company.
App1A(7)(3) A1A 7(3) Third Schedule 22

(ix) Proceedings of the Board The board may meet for the despatch of business, adjourn and otherwise regulate their meetings as they think fit. Questions arising at any meeting shall be determined by a majority of votes. In the case of an equality of votes, the chairman of the meeting shall have an additional or casting vote. (x) Register of Directors and Officers

The Companies Law and the Articles provide that the Company is required to maintain at its registered office a register of directors and officers which is not available for inspection by the public. A copy of such register must be filed with the Registrar of Companies in the Cayman Islands and any change must be notified to the Registrar within thirty (30) days of any change in such directors or officers. (b) Alterations to constitutional documents
A11B 1

The Articles may be rescinded, altered or amended by the Company in general meeting by special resolution. The Articles state that a special resolution shall be required to alter the provisions of the Memorandum, to amend the Articles or to change the name of the Company. (c) Alteration of capital

A1A 7(6) App1A(7)(6)

The Company may from time to time by ordinary resolution in accordance with the relevant provisions of the Companies Law: (i) increase its capital by such sum, to be divided into shares of such amounts as the resolution shall prescribe;

— IV-7 —

APPENDIX IV

SUMMARY OF THE CONSTITUTION OF THE COMPANY AND CAYMAN ISLANDS COMPANY LAW

(ii)

consolidate and divide all or any of its capital into shares of larger amount than its existing shares;

(iii) divide its shares into several classes and without prejudice to any special rights previously conferred on the holders of existing shares attach thereto respectively any preferential, deferred, qualified or special rights, privileges, conditions or restrictions as the Company in general meeting or as the directors may determine; (iv) sub-divide its shares or any of them into shares of smaller amount than is fixed by the Memorandum, subject nevertheless to the provisions of the Companies Law, and so that the resolution whereby any share is sub-divided may determine that, as between the holders of the shares resulting from such sub-division, one or more of the shares may have any such preferred or other special rights, over, or may have such deferred rights or be subject to any such restrictions as compared with the others as the Company has power to attach to unissued or new shares; or (v) cancel any shares which, at the date of passing of the resolution, have not been taken, or agreed to be taken, by any person, and diminish the amount of its capital by the amount of the shares so cancelled.

The Company may subject to the provisions of the Companies Law reduce its share capital or any capital redemption reserve or other undistributable reserve in any way by special resolution. (d) Variation of rights of existing shares or classes of shares
App1A25(3)

Subject to the Companies Law, all or any of the special rights attached to the shares or any class of shares may (unless otherwise provided for by the terms of issue of that class) be varied, modified or abrogated either with the consent in writing of the holders of not less than three-fourths in nominal value of the issued shares of that class or with the sanction of a special resolution passed at a separate general meeting of the holders of the shares of that class. To every such separate general meeting the provisions of the Articles relating to general meetings will mutatis mutandis apply, but so that the necessary quorum (other than at an adjourned meeting) shall be two persons holding or representing by proxy not less than one-third in nominal value of the issued shares of that class and at any adjourned meeting two holders present in person or by proxy whatever the number of shares held by them shall be a quorum. Every holder of shares of the class shall be entitled on a poll to one vote for every such share held by him. The special rights conferred upon the holders of any shares or class of shares shall not, unless otherwise expressly provided in the rights attaching to the terms of issue of such shares, be deemed to be varied by the creation or issue of further shares ranking pari passu therewith.

A3 6(2) A11B 2(1)

— IV-8 —

in the case of corporations. if it is so agreed by a majority in number of the members having a right to attend and vote at such meeting. by proxy at a general meeting of which notice of not less than twenty-one (21) clear days and not less than ten (10) clear business days specifying the intention to propose the resolution as a special resolution. the authorisation shall specify the number and class of shares in respect of which each such person is so authorised. by their duly authorised representatives or. by its duly authorised representative shall have one vote for every fully paid share of which he is the holder but so that no amount paid up or credited as paid up on a share in advance of calls or installments is treated for the foregoing purposes as paid up on the share. by proxy at a general meeting held in accordance with the Articles. An ordinary resolution is defined in the Articles to mean a resolution passed by a simple majority of the votes of such members of the Company as. where proxies are allowed. in the case of an annual general meeting. A member entitled to more than one vote need not use all his votes or cast all the votes he uses in the same way. (95%) in nominal value of the shares giving that right and. in the case of a member being a corporation. A person authorised pursuant to this provision shall be deemed to have been duly authorised without further evidence of the facts and be entitled to exercise the same powers on behalf of the recognised clearing house (or its nominee(s)) as if such person was the registered holder of the shares of the Company held by that clearing house (or its nominee(s)). being entitled to do so. being entitled so to do. a special resolution of the Company must be passed by a majority of not less than three-fourths of the votes cast by such members as. If a recognised clearing house (or its nominee(s)) is a member of the Company it may authorise such person or persons as it thinks fit to act as its representative(s) at any meeting of the Company or at any meeting of any class of members of the Company provided that. if more than one person is so authorised. if so agreed by all Members entitled to attend and vote thereat. A copy of any special resolution must be forwarded to the Registrar of Companies in the Cayman Islands within fifteen (15) days of being passed. (f) Voting rights App1A(25)(1) Subject to any special rights or restrictions as to voting for the time being attached to any shares by or in accordance with the Articles. in the case of such members as are corporations. vote in person or.APPENDIX IV SUMMARY OF THE CONSTITUTION OF THE COMPANY AND CAYMAN ISLANDS COMPANY LAW (e) Special resolution-majority required A11B1 Pursuant to the Articles. except in the case of an annual general meeting. a resolution may be proposed and passed as a special resolution at a meeting of which notice of less than twenty-one (21) clear days and less than ten (10) clear business days has been given. by their duly authorised representatives or. At any general meeting a resolution put to the vote of the meeting is to be decided by way of a poll. Provided that if permitted by the Designated Stock Exchange (as defined in the Articles). at any general meeting on a poll every member present in person or by proxy or. A1A 13A A11B 6 — IV-9 — . where proxies are allowed. has been duly given. vote in person or. being a majority together holding not less than ninety-five per cent.

subject to compliance with all applicable laws. A11B 4(2) A11B 4(1) A3 5 A11B 3(3) 4(2) — IV-10 — .APPENDIX IV SUMMARY OF THE CONSTITUTION OF THE COMPANY AND CAYMAN ISLANDS COMPANY LAW App. A copy of every balance sheet and profit and loss account (including every document required by law to be annexed thereto) which is to be laid before the Company at its general meeting. unless a longer period would not infringe the rules of any Designated Stock Exchange (as defined in the Articles)) at such time and place as may be determined by the board. other than the year of adoption of the Articles (within a period of not more than fifteen (15) months after the holding of the last preceding annual general meeting or a period of eighteen (18) months from the date of adoption of the Articles. assets. in addition to summarised financial statements. any votes cast by or on behalf of such shareholder in contravention of such requirement or restriction shall not be counted. and of the property. a complete printed copy of the Company’s annual financial statement and the directors’ report thereon. The accounting records shall be kept at the registered office or at such other place or places as the board decides and shall always be open to inspection by any Director. and the matters in respect of which such receipt and expenditure take place. shall not less than twenty-one (21) days before the date of the meeting and at the same time as the notice of annual general meeting be sent to every person entitled to receive notices of general meetings of the Company under the provisions the Articles. including the rules of the Designated Stock Exchange (as defined in the Articles). (h) Accounts and audit The board shall cause true accounts to be kept of the sums of money received and expended by the Company. under the rules of the Designated Stock Exchange (as defined in the Articles). however. together with a printed copy of the Directors’ report and a copy of the auditors’ report. No member (other than a Director) shall have any right to inspect any accounting record or book or document of the Company except as conferred by law or authorised by the board or the Company in general meeting. the Company may send to such persons summarised financial statements derived from the Company’s annual accounts and the directors’ report instead provided that any such person may by notice in writing served on the Company. 3 14 Where the Company has any knowledge that any shareholder is. credits and liabilities of the Company and of all other matters required by the Companies Law or necessary to give a true and fair view of the Company’s affairs and to explain its transactions. demand that the Company sends to him. required to abstain from voting on any particular resolution of the Company or restricted to voting only for or only against any particular resolution of the Company. (g) Requirements for annual general meetings An annual general meeting of the Company must be held in each year.

If so. it shall be deemed to have been duly called if it is so agreed: (i) in the case of a meeting called as an annual general meeting. All other extraordinary general meeting shall be called by at least fourteen (14) clear days and not less than ten (10) clear business days. under the provisions of the Articles or the terms of issue of the shares they hold. The financial statements of the Company shall be audited by the auditor in accordance with generally accepted auditing standards. The generally accepted auditing standards referred to herein may be those of a country or jurisdiction other than the Cayman Islands. are not entitled to receive such notices from the Company. (ii) All business shall be deemed special that is transacted at an extraordinary general meeting and also all business shall be deemed special that is transacted at an annual general meeting with the exception of the following. by all members of the Company entitled to attend and vote thereat. by a majority in number of the members having a right to attend and vote at the meeting. In addition notice of every general meeting shall be given to all members of the Company other than such as. — IV-11 — . the financial statements and the report of the auditor should disclose this fact and name such country or jurisdiction.APPENDIX IV SUMMARY OF THE CONSTITUTION OF THE COMPANY AND CAYMAN ISLANDS COMPANY LAW Auditors shall be appointed and the terms and tenure of such appointment and their duties at all times regulated in accordance with the provisions of the Articles. (i) Notices of meetings and business to be conducted thereat A11B 3(1) An annual general meeting shall be called by notice of not less than twenty-one (21) clear days and not less than twenty (20) clear business days and any extraordinary general meeting at which it is proposed to pass a special resolution shall (save as set out in sub-paragraph (e) above) be called by notice of at least twenty-one (21) clear days and not less than ten (10) clear business days. The remuneration of the auditors shall be fixed by the Company in general meeting or in such manner as the members may determine. which shall be deemed ordinary business: (aa) the declaration and sanctioning of dividends. the general nature of that business. The notice must specify the time and place of the meeting and. and also to the auditors for the time being of the Company. and in the case of any other meeting. in the case of special business. The auditor shall make a written report thereon in accordance with generally accepted auditing standards and the report of the auditor shall be submitted to the members in general meeting. Notwithstanding that a meeting of the Company is called by shorter notice than that mentioned above if permitted by the rules of the Designated Stock Exchange. being a majority together holding not less than ninety-five per cent (95%) in nominal value of the issued shares giving that right.

APPENDIX IV SUMMARY OF THE CONSTITUTION OF THE COMPANY AND CAYMAN ISLANDS COMPANY LAW (bb) the consideration and adoption of the accounts and balance sheet and the reports of the directors and the auditors. (j) Transfer of shares A1A 7(8) All transfers of shares may be effected by an instrument of transfer in the usual or common form or in a form prescribed by the Designated Stock Exchange (as defined in the Articles) or in such other form as the board may approve and which may be under hand or. if the transferor or transferee is a clearing house or its nominee(s). in the case of shares on a branch register. All transfers and other documents of title shall be lodged for registration and registered. (dd) the appointment of auditors and other officers. grant options over or otherwise dispose of the unissued shares of the Company representing not more than twenty per cent (20%) in nominal value of its existing issued share capital. in its absolute discretion. The board may also resolve either generally or in any particular case. upon request by either the transferor or the transferee. and (gg) the granting of any mandate or authority to the directors to repurchase securities of the Company. (cc) the election of directors in place of those retiring. no shares on the principal register shall be transferred to any branch register nor may shares on any branch register be transferred to the principal register or any other branch register. in its discretion. (ee) the fixing of the remuneration of the directors and of the auditors. The instrument of transfer shall be executed by or on behalf of the transferor and the transferee provided that the board may dispense with the execution of the instrument of transfer by the transferee in any case in which it thinks fit. The board in so far as permitted by any applicable law may. allot. at the registered office in the Cayman Islands or such other place at which the principal register is kept in accordance with the Companies Law. to accept mechanically executed transfers. (ff) the granting of any mandate or authority to the directors to offer. Unless the board otherwise agrees. at any time and from time to time transfer any share upon the principal register to any branch register or any share on any branch register to the principal register or any other branch register. at the relevant registration office and. by hand or by machine imprinted signature or by such other manner of execution as the board may approve from time to time. to do so and the transferor shall be deemed to remain the holder of the share until the name of the transferee is entered in the register of members in respect thereof. in the case of shares on the principal register. App1A(7)(8) A3 1(4) A3 1(1) — IV-12 — .

and it may also refuse to register any transfer of any share to more than four joint holders or any transfer of any share (not being a fully paid up share) on which the Company has a lien. in its absolute discretion. The board may decline to recognise any instrument of transfer unless a fee of such maximum sum as any Designated Stock Exchange (as defined in the Articles) may determine to be payable or such lesser sum as the Directors may from time to time require is paid to the Company in respect thereof. where applicable. the instrument of transfer. the authority of that person so to do). at such times and for such periods as the board may determine and either generally or in respect of any class of shares. The registration of transfers may be suspended and the register closed on giving notice by advertisement in a relevant newspaper and. (l) Power for any subsidiary of the Company to own shares in the Company and financial assistance to purchase shares of the Company There are no provisions in the Articles relating to ownership of shares in the Company by a subsidiary. — IV-13 — . refuse to register a transfer of any share (not being a fully paid up share) to a person of whom it does not approve or any share issued under any share incentive scheme for employees upon which a restriction on transfer imposed thereby still subsists. The register of members shall not be closed for periods exceeding in the whole thirty (30) days in any year. if applicable. the Company may give financial assistance for the purpose of or in connection with a purchase made or to be made by any person of any shares in the Company. (k) Power for the Company to purchase its own shares A3 1(2) 1(3) A3 1(1) A11B 3(2) A1A 7(9) The Company is empowered by the Companies Law and the Articles to purchase its own Shares subject to certain restrictions and the Board may only exercise this power on behalf of the Company subject to any applicable requirements imposed from time to time by any Designated Stock Exchange (as defined in the Articles). Subject to compliance with the rules and regulations of the Designated Stock Exchange (as defined in the Articles) and any other relevant regulatory authority. and without assigning any reason. any other newspapers in accordance with the requirements of any Designated Stock Exchange (as defined in the Articles).APPENDIX IV SUMMARY OF THE CONSTITUTION OF THE COMPANY AND CAYMAN ISLANDS COMPANY LAW The board may. is in respect of only one class of share and is lodged at the relevant registration office or registered office or such other place at which the principal register is kept accompanied by the relevant share certificate(s) and such other evidence as the board may reasonably require to show the right of the transferor to make the transfer (and if the instrument of transfer is executed by some other person on his behalf. is properly stamped.

With the sanction of an ordinary resolution dividends may also be declared and paid out of share premium account or any other fund or account which can be authorised for this purpose in accordance with the Companies Law. in the case of joint holders. the board may further resolve either (a) that such dividend be satisfied wholly or in part in the form of an allotment of shares credited as fully paid up. Any one of two or more joint holders may give effectual receipts for any dividends or other moneys payable or property distributable in respect of the shares held by such joint holders. the Company in general meeting may declare dividends in any currency to be paid to the members but no dividend shall be declared in excess of the amount recommended by the board. A1A 7(7) App1A(7)(7) A3 3(1) — IV-14 — . (i) all dividends shall be declared and paid according to the amounts paid up on the shares in respect whereof the dividend is paid but no amount paid up on a share in advance of calls shall for this purpose be treated as paid up on the share and (ii) all dividends shall be apportioned and paid pro rata according to the amount paid up on the shares during any portion or portions of the period in respect of which the dividend is paid. or in the case of joint holders. The Company may also upon the recommendation of the board by an ordinary resolution resolve in respect of any one particular dividend of the Company that it may be satisfied wholly in the form of an allotment of shares credited as fully paid up without offering any right to shareholders to elect to receive such dividend in cash in lieu of such allotment. and shall be sent at his or their risk and payment of the cheque or warrant by the bank on which it is drawn shall constitute a good discharge to the Company. or the terms of issue of. interest or other sum payable in cash to the holder of shares may be paid by cheque or warrant sent through the post addressed to the holder at his registered address. to the order of the holder whose name stands first on the register in respect of such shares. realised or unrealised. provided that the shareholders entitled thereto will be entitled to elect to receive such dividend (or part thereof) in cash in lieu of such allotment. Every such cheque or warrant shall. The Directors may deduct from any dividend or other monies payable to any member or in respect of any shares all sums of money (if any) presently payable by him to the Company on account of calls or otherwise. Except in so far as the rights attaching to. or (b) that shareholders entitled to such dividend will be entitled to elect to receive an allotment of shares credited as fully paid up in lieu of the whole or such part of the dividend as the board may think fit. any share may otherwise provide. Any dividend. Whenever the board or the Company in general meeting has resolved that a dividend be paid or declared on the share capital of the Company. or from any reserve set aside from profits which the directors determine is no longer needed. be made payable to the order of the holder or. unless the holder or joint holders otherwise direct.APPENDIX IV SUMMARY OF THE CONSTITUTION OF THE COMPANY AND CAYMAN ISLANDS COMPANY LAW A1A 16 (m) Dividends and other methods of distribution Subject to the Companies Law. addressed to the holder whose name stands first in the register of the Company in respect of the shares at his address as appearing in the register or addressed to such person and at such addresses as the holder or joint holders may in writing direct. The Articles provide dividends may be declared and paid out of the profits of the Company.

all or any part of the monies uncalled and unpaid or installments payable upon any shares held by him. (n) Proxies App1A(7)(7) A3 3(2) Any member of the Company entitled to attend and vote at a meeting of the Company is entitled to appoint another person as his proxy to attend and vote instead of him. in the case of a member being a corporation. receive from any member willing to advance the same. by its duly authorised representative) or by proxy. the board may from time to time make such calls upon the members in respect of any monies unpaid on the shares held by them respectively (whether on account of the nominal value of the shares or by way of premium). A member who is the holder of two or more shares may appoint more than one proxy to represent him and vote on his behalf at a general meeting of the Company or at a class meeting. All dividends or bonuses unclaimed for six years after having been declared may be forfeited by the board and shall revert to the Company. either in money or money’s worth. A proxy need not be a member of the Company and shall be entitled to exercise the same powers on behalf of a member who is an individual and for whom he acts as proxy as such member could exercise. (o) Call on shares and forfeiture of shares A11B 2(2) Subject to the Articles and to the terms of allotment. (20%) per annum as the board may agree to accept from the day appointed for the payment thereof to the time of actual payment. In addition.APPENDIX IV SUMMARY OF THE CONSTITUTION OF THE COMPANY AND CAYMAN ISLANDS COMPANY LAW Whenever the board or the Company in general meeting has resolved that a dividend be paid or declared the board may further resolve that such dividend be satisfied wholly or in part by the distribution of specific assets of any kind. A call may be made payable either in one lump sum or by installments. the person or persons from whom the sum is due shall pay interest on the same at such rate not exceeding twenty per cent. if it thinks fit. Votes may be given either personally (or. — IV-15 — . but the board may waive payment of such interest wholly or in part. If the sum payable in respect of any call or instalment is not paid on or before the day appointed for payment thereof. and upon all or any of the monies so advanced the Company may pay interest at such rate (if any) as the board may decide. a proxy shall be entitled to exercise the same powers on behalf of a member which is a corporation and for which he acts as proxy as such member could exercise if it were an individual member. No dividend or other monies payable by the Company on or in respect of any share shall bear interest against the Company. All dividends or bonuses unclaimed for one year after having been declared may be invested or otherwise made use of by the board for the benefit of the Company until claimed and the Company shall not be constituted a trustee in respect thereof. The board may.

or by any other person upon a maximum payment of HK$2.APPENDIX IV SUMMARY OF THE CONSTITUTION OF THE COMPANY AND CAYMAN ISLANDS COMPANY LAW If a member fails to pay any call on the day appointed for payment thereof.00 or such lesser sum specified by the board. in the case of a member being a corporation. at the registered office or such other place at which the register is kept in accordance with the Companies Law or. the shares in respect of which the call was made will be liable to be forfeited. notwithstanding. In respect of a separate class meeting (other than an adjourned meeting) convened to sanction the modification of class rights the necessary quorum shall be two persons holding or representing by proxy not less than one-third in nominal value of the issued shares of that class. the board may serve not less than fourteen (14) clear days’ notice on him requiring payment of so much of the call as is unpaid. at the Registration Office (as defined in the Articles). together with any interest which may have accrued and which may still accrue up to the date of actual payment and stating that. upon a maximum payment of HK$1.50 or such lesser sum specified by the board. A person whose shares have been forfeited shall cease to be a member in respect of the forfeited shares but shall. (20%) per annum as the board determines. (p) Inspection of register of members Pursuant to the Articles the register and branch register of members shall be open to inspection for at least two (2) hours on every business day by members without charge. before the payment required by the notice has been made. were payable by him to the Company in respect of the shares. in the event of non-payment at or before the time appointed. be forfeited by a resolution of the board to that effect. (q) Quorum for meetings and separate class meetings A11B 3(2) No business shall be transacted at any general meeting unless a quorum is present when the meeting proceeds to business. together with (if the board shall in its discretion so require) interest thereon from the date of forfeiture until the date of actual payment at such rate not exceeding twenty per cent. by its duly authorised representative) or by proxy and entitled to vote. any share in respect of which the notice has been given may at any time thereafter. remain liable to pay to the Company all monies which. If the requirements of any such notice are not complied with. but the absence of a quorum shall not preclude the appointment of a chairman. unless the register is closed in accordance with the Articles. Save as otherwise provided by the Articles the quorum for a general meeting shall be two members present in person (or. Such forfeiture will include all dividends and bonuses declared in respect of the forfeited share and not actually paid before the forfeiture. App1A(7)(2) A3 6(2) — IV-16 — . at the date of forfeiture.

with the authority of a special resolution and any other sanction required by the Companies Law divide among the members in specie or kind the whole or any part of the assets of the Company whether the assets shall consist of property of one kind or shall consist of properties of different kinds and the liquidator may. If the Company shall be wound up (whether the liquidation is voluntary or by the court) the liquidator may. (s) Procedures on liquidation A resolution that the Company be wound up by the court or be wound up voluntarily shall be a special resolution. set such value as he deems fair upon any one or more class or classes of property to be divided as aforesaid and may determine how such division shall be carried out as between the members or different classes of members. shall think fit. with the like authority. such assets shall be distributed so that. as summarised in paragraph 3(f) of this Appendix. as nearly as may be. (r) Rights of the minorities in relation to fraud or oppression There are no provisions in the Articles relating to rights of minority shareholders in relation to fraud or oppression. — IV-17 — . the losses shall be borne by the members in proportion to the capital paid up. The liquidator may. vest any part of the assets in trustees upon such trusts for the benefit of members as the liquidator. certain remedies are available to shareholders of the Company under Cayman law. the excess shall be distributed pari passu amongst such members in proportion to the amount paid up on the shares held by them respectively and (ii) if the Company shall be wound up and the assets available for distribution amongst the members as such shall be insufficient to repay the whole of the paid-up capital. with the like authority. but so that no contributory shall be compelled to accept any shares or other property in respect of which there is a liability. privileges or restrictions as to the distribution of available surplus assets on liquidation for the time being attached to any class or classes of shares (i) if the Company shall be wound up and the assets available for distribution amongst the members of the Company shall be more than sufficient to repay the whole of the capital paid up at the commencement of the winding up. or which ought to have been paid up. Subject to any special rights. for such purpose. at the commencement of the winding up on the shares held by them respectively.APPENDIX IV SUMMARY OF THE CONSTITUTION OF THE COMPANY AND CAYMAN ISLANDS COMPANY LAW A corporation being a member shall be deemed for the purpose of the Articles to be present in person if represented by its duly authorised representative being the person appointed by resolution of the directors or other governing body of such corporation to act as its representative at the relevant general meeting of the Company or at any relevant general meeting of any class of members of the Company. However.

CAYMAN ISLANDS COMPANY LAW The Company is incorporated in the Cayman Islands subject to the Companies Law and. therefore. which may differ from equivalent provisions in jurisdictions with which interested parties may be more familiar: (a) Operations As an exempted company. (u) Subscription rights reserve The Articles provide that to the extent that it is not prohibited by and is in compliance with the Companies Law.APPENDIX IV SUMMARY OF THE CONSTITUTION OF THE COMPANY AND CAYMAN ISLANDS COMPANY LAW (t) Untraceable members A3 13(2)(a) 13(2)(b) Pursuant to the Articles. the Company’s operations must be conducted mainly outside the Cayman Islands. to be called the “share premium account”. although this does not purport to contain all applicable qualifications and exceptions or to be a complete review of all matters of Cayman company law and taxation. 3. the Company has not during that time received any indication of the existence of the member. whether for cash or otherwise. (ii) upon the expiry of the 12 year period. operates subject to Cayman law. if warrants to subscribe for shares have been issued by the Company and the Company does any act or engages in any transaction which would result in the subscription price of such warrants being reduced below the par value of a share. (b) Share capital The Companies Law provides that where a company issues shares at a premium. The Company is required to file an annual return each year with the Registrar of Companies of the Cayman Islands and pay a fee which is based on the amount of its authorised share capital. a subscription rights reserve shall be established and applied in paying up the difference between the subscription price and the par value of a share on any exercise of the warrants. and (iii) the Company has caused an advertisement to be published in accordance with the rules of the Designated Stock Exchange (as defined in the Articles) giving notice of its intention to sell such shares and a period of three (3) months. Set out below is a summary of certain provisions of Cayman company law. The net proceeds of any such sale shall belong to the Company and upon receipt by the Company of such net proceeds. a sum equal to the aggregate amount of the value of the premiums on those shares shall be transferred to an account. has elapsed since the date of such advertisement and the Designated Stock Exchange (as defined in the Articles) has been notified of such intention. it shall become indebted to the former member of the Company for an amount equal to such net proceeds. or such shorter period as may be permitted by the Designated Stock Exchange (as defined in the Articles). At the option — IV-18 — . the Company may sell any of the shares of a member who is untraceable if (i) all cheques or warrants in respect of dividends of the shares in question (being not less than three in total number) for any sum payable in cash to the holder of such shares have remained uncashed for a period of 12 years.

No distribution or dividend may be paid to members out of the share premium account unless immediately following the date on which the distribution or dividend is proposed to be paid. (d) writing-off the preliminary expenses of the company. any holding company of the Company or any subsidiary of any such holding company (including salaried Directors). or the commission paid or discount allowed on. a company may provide financial assistance if the directors of the company consider. by special resolution reduce its share capital in any way. if so authorised by its articles of association. The Companies Law provides that. The Companies Law provides that the share premium account may be applied by the company subject to the provisions. The Articles includes certain protections for holders of special classes of shares. (c) the redemption and repurchase of shares (subject to the provisions of section 37 of the Companies Law). any issue of shares or debentures of the company. the company will be able to pay its debts as they fall due in the ordinary course business. the Company may give financial assistance to Directors and employees of the Company. the Company may give financial assistance to a trustee for the acquisition of Shares in the Company or shares in any such subsidiary or holding company to be held for the benefit of employees of the Company.APPENDIX IV SUMMARY OF THE CONSTITUTION OF THE COMPANY AND CAYMAN ISLANDS COMPANY LAW of a company. these provisions may not apply to premiums on shares of that company allotted pursuant to any arrangement in consideration of the acquisition or cancellation of shares in any other company and issued at a premium. subject to confirmation by the Grand Court of the Cayman Islands (the “Court”). There is no statutory restriction in the Cayman Islands on the provision of financial assistance by a company to another person for the purchase of. of its memorandum and articles of association in (a) paying distributions or dividends to members. Accordingly. (b) paying up unissued shares of the company to be issued to members as fully paid bonus shares. that such assistance can properly be given. its subsidiaries. in discharging their duties of care and acting in good faith. (e) writing-off the expenses of. and (f) providing for the premium payable on redemption or purchase of any shares or debentures of the company. (c) Financial assistance to purchase shares of a company or its holding company Subject to all applicable laws. its subsidiaries. its holding company or any subsidiary of such holding company in order that they may buy Shares in the Company or shares in any subsidiary or holding company. its own or its holding company’s shares. a company limited by shares or a company limited by guarantee and having a share capital may. The consent of the specified proportions of the holders of the issued shares of that class or the sanction of a resolution passed at a separate meeting of the holders of those shares is required. if any. or subscription for. requiring their consent to be obtained before their rights may be varied. for a proper purpose and in the interests of the company. — IV-19 — . Such assistance should be on an arm’s-length basis. subject to all applicable laws. Further.

APPENDIX IV SUMMARY OF THE CONSTITUTION OF THE COMPANY AND CAYMAN ISLANDS COMPANY LAW (d) Purchase of shares and warrants by a company and its subsidiaries Subject to the provisions of the Companies Law. — IV-20 — . section 34 of the Companies Law permits. if so authorised by its articles of association. (f) Protection of minorities The Cayman Islands courts ordinarily would be expected to follow English case law precedents which permit a minority shareholder to commence a representative action against or derivative actions in the name of the company to challenge (a) an act which is ultra vires the company or illegal. may acquire such shares. the payment of dividends and distributions out of the share premium account (see paragraph 2(m) above for further details). (e) Dividends and distributions With the exception of section 34 of the Companies Law. a company cannot purchase any of its own shares unless the manner of purchase has first been authorised by an ordinary resolution of the company. which is regarded as be persuasive in the Cayman Islands. A payment out of capital by a company for the redemption or purchase of its own shares is not lawful unless immediately following the date on which the payment is proposed to be made. of the company’s memorandum and articles of association. issue shares which are to be redeemed or are liable to be redeemed at the option of the company or a shareholder. there is no statutory provisions relating to the payment of dividends. subject to a solvency test and the provisions. a company limited by shares or a company limited by guarantee and having a share capital may. there would no longer be any member of the company holding shares. as a result of the redemption or purchase. Under Cayman Islands law. purchase its own shares. in certain circumstances. There is no requirement under Cayman Islands law that a company’s memorandum or articles of association contain a specific provision enabling such purchases and the directors of a company may rely upon the general power contained in its memorandum of association to buy and sell and deal in personal property of all kinds. if any. In addition. and (c) an irregularity in the passing of a resolution which requires a qualified (or special) majority. the company shall be able to pay its debts as they fall due in the ordinary course of business. Based upon English case law. such a company may. (b) an act which constitutes a fraud against the minority and the wrongdoers are themselves in control of the company. including any redeemable shares. dividends may be paid only out of profits. if the articles of association do not authorise the manner or purchase. A company is not prohibited from purchasing and may purchase its own warrants subject to and in accordance with the terms and conditions of the relevant warrant instrument or certificate. a subsidiary may hold shares in its holding company and. A company may not redeem or purchase any of its shares if. if authorised to do so by its articles of association. In addition. At no time may a company redeem or purchase its shares unless they are fully paid. However.

appoint an inspector to examine into the affairs of the company and to report thereon in such manner as the Court shall direct. as an alternative to a winding up order. (h) Accounting and auditing requirements A company shall cause proper books of account to be kept with respect to (i) all sums of money received and expended by the company and the matters in respect of which the receipt and expenditure takes place. However. Any shareholder of a company may petition the Court which may make a winding up order if the Court is of the opinion that it is just and equitable that the company should be wound up or.APPENDIX IV SUMMARY OF THE CONSTITUTION OF THE COMPANY AND CAYMAN ISLANDS COMPANY LAW In the case of a company (not being a bank) having a share capital divided into shares. (a) an order regulating the conduct of the company’s affairs in the future. on the application of members holding not less than one fifth of the shares of the company in issue. as a matter of general law. managing director and secretary. Generally claims against a company by its shareholders must be based on the general laws of contract or tort applicable in the Cayman Islands or their individual rights as shareholders as established by the company’s memorandum and articles of association. (b) an order requiring the company to refrain from doing or continuing an act complained of by the shareholder petitioner or to do an act which the shareholder petitioner has complained it has omitted to do. and (iii) the assets and liabilities of the company. which includes a director. in exercising his powers and discharging his duties must do so honestly and in good faith with a view to the best interests of the company and exercise the care. the Court may. a reduction of the company’s capital accordingly. diligence and skill that a reasonably prudent person would exercise in comparable circumstances. (g) Management The Companies Law contains no specific restrictions on the power of directors to dispose of assets of a company. or (d) an order providing for the purchase of the shares of any shareholders of the company by other shareholders or by the company itself and. in the case of a purchase by the company itself. Proper books of account shall not be deemed to be kept if there are not kept such books as are necessary to give a true and fair view of the state of the company’s affairs and to explain its transactions. (c) an order authorising civil proceedings to be brought in the name and on behalf of the company by the shareholder petitioner on such terms as the Court may direct. every officer of a company. — IV-21 — . (ii) all sales and purchases of goods by the company.

and (2) that the aforesaid tax or any tax in the nature of estate duty or inheritance tax shall not be payable on or in respect of the shares.APPENDIX IV SUMMARY OF THE CONSTITUTION OF THE COMPANY AND CAYMAN ISLANDS COMPANY LAW (i) Exchange control There are no exchange control regulations or currency restrictions in the Cayman Islands. from time to time. The Cayman Islands currently levy no taxes on individuals or corporations based upon profits. income. The Cayman Islands are not party to any double tax treaties. They will. There are no other taxes likely to be material to the Company levied by the Government of the Cayman Islands save certain stamp duties which may be applicable. (m) Inspection of corporate records Members of the Company will have no general right under the Companies Law to inspect or obtain copies of the register of members or corporate records of the Company. — IV-22 — . income. the Company has obtained an undertaking from the Governor-in-Cabinet: (1) that no law which is enacted in the Cayman Islands imposing any tax to be levied on profits. on certain instruments executed in or brought within the jurisdiction of the Cayman Islands. gains or appreciation shall apply to the Company or its operations. (j) Taxation Pursuant to section 6 of the Tax Concessions Law (1999 Revision) of the Cayman Islands. debentures or other obligations of the Company. gains or appreciations and there is no taxation in the nature of inheritance tax or estate duty. The undertaking for the Company is for a period of twenty years from 23 March 2010. have such rights as may be set out in the Company’s Articles. however. (k) Stamp duty on transfers No stamp duty is payable in the Cayman Islands on transfers of shares of Cayman Islands companies except those which hold interests in land in the Cayman Islands. (l) Loans to directors There is no express provision in the Companies Law prohibiting the making of loans by a company to any of its directors.

the company is unable to pay its debts. — IV-23 — . or during any vacancy in such office.APPENDIX IV SUMMARY OF THE CONSTITUTION OF THE COMPANY AND CAYMAN ISLANDS COMPANY LAW An exempted company may. if no official liquidator is appointed. think fit. just and equitable to do so. For the purpose of conducting the proceedings in winding up a company and assisting the Court. all the property of the company shall be in the custody of the Court. In the case of a members’ voluntary winding up of a company. maintain its principal register of members and any branch registers at such locations. whether within or without the Cayman Islands. In the case of a voluntary winding up. under supervision of the Court. or. The names and addresses of the members are. A foreign practitioner may be appointed to act jointly with a qualified insolvency practitioner. subject to the provisions of its articles of association. either provisionally or otherwise. The Court has authority to order winding up in a number of specified circumstances including where it is. such company is obliged to cease to carry on its business from the time of passing the resolution for voluntary winding up or upon the expiry of the period or the occurrence of the event referred to above. and the Court may appoint to such office such person or persons. There is no requirement under the Companies Law for an exempted company to make any returns of members to the Registrar of Companies of the Cayman Islands. A person shall be qualified to accept an appointment as an official liquidator if he is duly qualified in terms of the Insolvency Practitioners Regulations. The Court may also determine whether any and what security is to be given by an official liquidator on his appointment. A declaration of solvency must be signed by all the directors of a company being voluntarily wound up within twenty-eight (28) days of the commencement of the liquidation. when the period fixed for the duration of the company by its memorandum or articles expires. failing which. or. (n) Winding up A company may be wound up compulsorily by order of the Court. from time to time. and if more persons than one are appointed to such office. as it thinks fit. accordingly. the Court shall declare whether any act hereby required or authorised to be done by the official liquidator is to be done by all or any one or more of such persons. its liquidator must apply to Court for an order that the liquidation continue under the supervision of the Court. or. or. or the event occurs on the occurrence of which the memorandum or articles provides that the company is to be dissolved. the company in general meeting must appoint one or more liquidators for the purpose of winding up the affairs of the company and distributing its assets. as the directors may. not a matter of public record and are not available for public inspection. A company may be wound up voluntarily when the members so resolve in general meeting by special resolution. there may be appointed one or more than one person to be called an official liquidator or official liquidator. voluntarily. the company does not commence business for a year from its incorporation (or suspends its business for a year). in the opinion of the Court. in the case of a limited duration company.

A dissenting shareholder may apply to the Court within one (1) month of the notice objecting to the transfer. as are present at a meeting called for such purpose and thereafter sanctioned by the Court. (p) Compulsory acquisition Where an offer is made by a company for the shares of another company and. discharge the company’s liability to them (pari passu if insufficient assets exist to discharge the liabilities in full) and to settle the list of contributories (shareholders) and divide the surplus assets (if any) amongst them in accordance with the rights attaching to the shares. as the case may be. and thereupon call a general meeting of the company for the purposes of laying before it the account and giving an explanation thereof. the holders of not less than ninety per cent. place and object of the meeting to each contributory in any manner authorised by the company’s articles of association and published in the Gazette in the Cayman Islands. As soon as the affairs of the company are fully wound up.APPENDIX IV SUMMARY OF THE CONSTITUTION OF THE COMPANY AND CAYMAN ISLANDS COMPANY LAW Upon the appointment of a liquidator. the liquidator must make up an account of the winding up. At least twenty-one (21) days before the final meeting. Whilst a dissenting shareholder would have the right to express to the Court his view that the transaction for which approval is sought would not provide the shareholders with a fair value for their shares. which it will be unlikely to do unless there is evidence of fraud or bad faith or collusion as between the offeror and the holders of the shares who have accepted the offer as a means of unfairly forcing out minority shareholders. showing how the winding up has been conducted and the property of the company has been disposed of. the Court is unlikely to disapprove the transaction on that ground alone in the absence of evidence of fraud or bad faith on behalf of management. the responsibility for the company’s affairs rests entirely in his hands and no future executive action may be carried out without his approval. the offeror may at any time within two (2) months after the expiration of the said four (4) months. The burden is on the dissenting shareholder to show that the Court should exercise its discretion. the liquidator shall send a notice specifying the time. subject to the rights of preferred and secured creditors and to any subordination agreements or rights of set-off or netting of claims. (o) Reconstructions There are statutory provisions which facilitate reconstructions and amalgamations approved by a majority in number representing seventy-five per cent. (75%) in value of shareholders or class of shareholders or creditors. (90%) of the shares which are the subject of the offer accept. settle the list of creditors and. by notice in the prescribed manner require the dissenting shareholders to transfer their shares on the terms of the offer. within four (4) months of the offer. A liquidator’s duties are to collect the assets of the company (including the amount (if any) due from the contributories). — IV-24 — .

APPENDIX IV SUMMARY OF THE CONSTITUTION OF THE COMPANY AND CAYMAN ISLANDS COMPANY LAW (q) Indemnification Cayman Islands law does not limit the extent to which a company’s articles of association may provide for indemnification of officers and directors.g. is available for inspection as referred to in the paragraph headed “Documents available for inspection” in Appendix VI. together with a copy of the Companies Law. for purporting to provide indemnification against the consequences of committing a crime). — IV-25 — . This letter. the Company’s special legal counsel on Cayman Islands law. except to the extent any such provision may be held by the court to be contrary to public policy (e. have sent to the Company a letter of advice summarising certain aspects of Cayman Islands company law. 4. GENERAL Conyers Dill & Pearman. Any person wishing to have a detailed summary of Cayman Islands company law or advice on the differences between it and the laws of any jurisdiction with which he is more familiar is recommended to seek independent legal advice.

000 Shares. Chia has been appointed as the authorised representative of the Company for acceptance of service of process and notice in Hong Kong under Part XI of the Companies Ordinance. STATUTORY AND GENERAL INFORMATION FURTHER INFORMATION ABOUT THE COMPANY AND ITS SUBSIDIARIES Incorporation of the Company R11. Each of Mr. As the Company was incorporated in the Cayman Islands. 3/F.APPENDIX V A. which was then transferred by Codan Trust Company (Cayman) Limited to Shunleetat at nil consideration on the same date. 1.000 Shares. A summary of certain parts of its constitution and relevant aspects of the Cayman Islands company law is set out in Appendix IV to this prospectus. Hong Kong and was registered with the Registrar of Companies in Hong Kong as a non-Hong Kong company under Part XI of the Companies Ordinance on 12 May 2010.000 by the creation of an additional 49. Purplelight and Lotawater in the following numbers: Number of Shares allotted 549 175 150 125 999 App1A(23)(1) App1A(26)(1) App1A(26)(2) Third Schedule 11 (b) Name Shunleetat Chuwei Purplelight Lotawater TOTAL In addition. Changes in share capital of the Company The authorised share capital of the Company as at the date of its incorporation was HK$380.000. 28 On Lok Mun Street. Fuk Shing Commercial Building. one Share was allotted and issued nil paid to Codan Trust Company (Cayman) Limited as the initial subscriber. all credited as fully paid. The Company has established its principal place of business in Hong Kong at Unit 14.000. its operation is subject to the Cayman Islands laws and its constitutional documents comprising a memorandum of association and the Articles of Association. the Company increased its authorised share capital from HK$380. in consideration of the acquisition by the Company of the entire issued share capital of TYW (BVI).000 divided into 38. Fanling. New Territories. (c) on 11 August 2010.05 R24.05(2) App1A(6) S342 The Company was incorporated in the Cayman Islands under the Companies Law as an exempted company with limited liability on 15 March 2010. to Shunleetat. Fung and Mr.962. Chuwei. and — V-1 — . a total of 999 Shares were allotted and issued by the Company on 11 August 2010. The following alterations in the share capital of the Company have taken place since its incorporation: (a) on 15 March 2010. the one nil-paid Share acquired by Shunleetat was credited as fully paid at par.000 to HK$500. pursuant to the resolutions in writing of all Shareholders passed on 11 August 2010. 2.000.

Other than pursuant to the exercise of any options which may be granted under the Share Option Scheme. the authorised share capital of the Company will be HK$500.000 Shares. there is no present intention to issue any of the authorised but unissued share capital of the Company and. grant options to subscribe for Shares thereunder and to allot. Written resolutions of all Shareholders passed on 11 August 2010 Pursuant to the written resolutions of all the then Shareholders passed on 11 August 2010: (a) (b) the Company approved and adopted the Articles of Association.000 Shares will remain unissued. the principal terms of which are set out in sub-paragraph headed “Share Option Scheme” in the paragraph headed “Further information about Directors. there has been no alteration in the share capital of the Company since its incorporation.800. (ii) the rules of the Share Option Scheme. (2) modifying and/or amending the Share Option Scheme from time to time provided that such modification and/or amendment is effected in accordance with the rules of the Share Option Scheme and the requirement of the GEM Listing Rules.000.000 by the creation of an additional 49.APPENDIX V (d) STATUTORY AND GENERAL INFORMATION immediately following the completion of the Placing and the Capitalisation Issue. no issue of Shares will be made which would effectively alter the control of the Company. without the prior approval of the members in general meeting. staff and experts” of this appendix.962. management.000 Shares. 3. (c) conditional on the same conditions as stated in the paragraph headed “Conditions of the Placing” in the section headed “Structure and conditions of the Placing” in this prospectus: (i) the Placing was approved and the Directors were authorised to allot and issue the Placing Shares.000. Save as disclosed above. the authorised share capital of the Company was increased from HK$380.000 Shares and the issued share capital will be HK$992.000.000 to HK$500.900. issue and deal with Shares pursuant thereto and to take all such steps as they consider necessary or desirable to implement the Share Option Scheme including without limitation: (1) administering the Share Option Scheme.000 divided into 99. (3) granting options under the Share Option Scheme and issuing and allotting from time to time any Shares pursuant to the exercise of the options that may be granted under the Share Option Scheme with an aggregate nominal value not exceeding 10% of the total nominal value of the share capital of the Company in issue — V-2 — .000.000. all fully paid or credited as fully paid and 49. were approved and adopted and the Directors were authorised to implement the same.000 divided into 50.200.

or the passing of an ordinary resolution by the Shareholders revoking or varying the authority given to the Directors. an amount of HK$743.APPENDIX V STATUTORY AND GENERAL INFORMATION on the Listing Date. scrip dividend schemes or similar arrangements in accordance with the Articles of Association. (v) a general unconditional mandate was given to the Directors authorising them to exercise all powers of the Company to purchase Shares on the Stock Exchange with an aggregate nominal amount of not exceeding 10% of the aggregate nominal amount of the share capital of the Company in issue immediately following the completion of the Capitalisation Issue and the Placing (excluding Shares which may fall to be issued pursuant to the exercise of any option which may be granted under the Share Option Scheme). or the passing of an ordinary resolution by the Shareholders revoking or varying the authority given to the Directors.399. and permission to deal in. whichever is the earliest. any Shares or any part thereof that may hereafter from time to time be issued and allotted pursuant to the exercise of the options granted under the Share Option Scheme. and (vi) the general unconditional mandate mentioned in sub-paragraph (iv) above was extended by the addition of an amount representing the aggregate nominal value of the share capital of the Company repurchased by the Company pursuant to the mandate to repurchase Shares referred to in sub-paragraph (v) above to the aggregate nominal — V-3 — . (iii) subject to the share premium account of the Company being credited as a result of the issue of the Placing Shares. save for the entitlements to the Capitalisation Issue. until the conclusion of the next annual general meeting of the Company. and (4) making application at the appropriate time or times to the Stock Exchange for the listing of. and the Directors were authorised to give effect to the Capitalisation Issue and the Shares to be allotted and issued shall. or pursuant to the exercise of any option which may be granted under the Share Option Scheme or under the Placing or the Capitalisation Issue) Shares with an aggregate nominal amount of not exceeding 20% of the aggregate nominal amount of the share capital of the Company in issue and as enlarged immediately following completion of the Capitalisation Issue and the Placing (excluding Shares which may fall to be issued pursuant to the exercise of any option which may be granted under the Share Option Scheme) until the conclusion of the next annual general meeting of the Company.990 which will then be standing to the credit of the share premium account of the Company be capitalised and applied to pay up in full at par a total of 74. issue and deal with (otherwise than by way of rights. or the date by which the next annual general meeting of the Company is required by the Articles of Association or any applicable law to be held. (iv) a general unconditional mandate was given to the Directors to allot. whichever is the earliest.000 Shares for allotment and issue to holders of Shares whose names shall appear on the register of members of the Company at the close of business on 11 August 2010 (or as they may direct) in proportion (as nearly as possible without involving fractions) to their respective then existing shareholdings in the Company. or the date by which the next annual general meeting of the Company is required by the Articles of Association or any applicable law to be held. rank pari passu in all respects with all the then existing Shares.

72.467. Kan to TYW. In such transfer. Mr. TYW (BVI) was incorporated in the BVI. on 28 September 2009. (b) (c) (d) (e) (f) (g) — V-4 — . which was offset against an equivalent amount of the debts due from Mr. TYW allotted and issued 133. and TY Civil acquired the remaining part of business carried out under the name of TYC from Mr. credited as fully paid up. at a total consideration of HK$110.APPENDIX V STATUTORY AND GENERAL INFORMATION amount of the share capital of the Company which may be allotted or agreed to be allotted by the Directors pursuant to such general mandate provided that such extended amount shall not exceed 10% of the aggregate of the total nominal amount of the share capital of the Company in issue immediately following completion of the Capitalisation Issue and the Placing (excluding Shares which may fall to be issued pursuant to the exercise of any option which may be granted under the Share Option Scheme). Lam Shun Kiu. TYW acquired part of the business (including the assets and liabilities thereof) carried out under the name of TYC from Mr. 4. Lam at a total consideration of HK$100 and became the sole legal and beneficial owner of TY Civil.000 shares of TYW which were held by Ms. representing its entire issued share capital. acquired the one nil paid Share from Codan Trust Company (Cayman) Limited at nil consideration.22. Reorganisation The companies comprising the Group underwent a reorganisation in preparation for the Listing which involved the following steps: (a) with effect from 1 April 2009. Kan acquired all the 110.000. Rosita (“Ms. a company wholly and beneficially owed by Mr. Kan acquired 100 shares of TY Civil. the Company was duly incorporated in the Cayman Islands.157. which was offset against an equivalent amount of debts due from Mr. Kan on the same date. Kan to TY Civil. Mr. suppliers’ contracts.311. to TYW (BVI) (which was wholly and beneficially owned by Mr. and other assets and liabilities originally belonged to the business of TYC were transferred to TYW and TY Civil. on 15 March 2010. on 2 July 2009. One share of TYW (BVI) was allotted and issued and fully paid or credited as fully paid to Mr. Lam”). Kan at a consideration of HK$7. One nil paid Share was allotted and issued to Codan Trust Company (Cayman) Limited on the same date. Kan. on 15 March 2010.756. on 29 September 2009. which were held by Ms. Kan at a consideration of HK$1. Kan at that time). Shunleetat.000 new shares of TYW. and became the sole legal and beneficial owner of TYW. on 28 September 2009. all the customers’ contracts.

all credited as fully paid up. Ms. Purplelight and Lotawater respectively. all credited as fully paid up.000. on 26 April 2010. which was offset against an equivalent amount of loan due from Mr. 150 and 125 Shares. the Company acquired the entire issued share capital of (TYW) BVI from Shunleetat. Kan at an aggregate consideration of HK$110.250 TYW (BVI) shares to Lotawater at a consideration of HK$2. Shunleetat transferred: (i) 1.299. Kan to Mr. Shunleetat acquired the one share in TYW (BVI) from Mr. and (ii) crediting the one nil paid Share transferred to Shunleetat on 15 March 2010 as fully paid up. Chuwei. all credited as fully paid up. — V-5 — .00 and Shunleetat become the sole member of TYW (BVI).080 ordinary shares of TYW (BVI) of US$1 each.000 divided into 10.916. TYW (BVI) acquired the entire issued share capital of TYW (other than the 133. Chia outstanding as at the date of transfer. Kan became the sole legal and beneficial owner of TYW.00 each. to Shunleetat. Changes in the share capital of subsidiaries of the Company Third Schedule 11 The subsidiaries of the Company are listed in the Accountants’ Report.750 TYW (BVI) shares to Chuwei at a consideration of HK$3. (i) (j) (k) (ii) (iii) 1. 175. On 29 September 2009. Purplelight and Lotawater in consideration of (i) the allotment and issue of 549. on 26 April 2010. Kan in consideration of the allotment and issue of a total of 5. Kan in consideration of the allotment and issue of a total of 4.000. 5.00 each to Mr. on 26 April 2010. the following alterations in the share capital of each of the Company’s subsidiaries took place during the two years immediately preceding the date of this prospectus: (a) TYW On 28 September 2009. to Shunleetat. Cheng outstanding as at the date of transfer.000.000 shares of TYW which were already owned by TYW (BVI) at the time of such acquisition) from Mr. Chuwei.134.500 TYW (BVI) shares to Purplelight at a consideration of HK$3. to Shunleetat.000. TYW (BVI) acquired the entire issued share capital of TY Civil from Mr. Kan to Mr.611. 1. Fung outstanding as at the date of transfer.656. TYW allotted and issued 133. which was offset against an equivalent amount of loan due from Mr. Lam transferred all her 110. Since then. Mr. In addition to the alterations described in the sub-paragraph headed “Reorganisation” above.682.83.000 new shares of TYW of HK$1.APPENDIX V (h) STATUTORY AND GENERAL INFORMATION on 26 April 2010.000 shares of HK$1. and (l) on 11 August 2010.00 each to TYW (BVI) at an aggregate issue price of HK$133. which was offset against an equivalent amount of loan due from Mr.919 ordinary shares of TYW (BVI) of US$1 each. and as a result. Kan to Mr. the issued share capital of TYW has become HK$10.000 shares of TYW of HK$1.31.57. Kan at a consideration of HK$1.

Kan on the 2 July 2009 at US$1.000 divided into 50. Under the Cayman Islands laws. Repurchase of the Company’s own securities A general unconditional mandate (the “Repurchase Mandate”) was granted to the Directors pursuant to a resolution of the Shareholders passed on 11 August 2010 authorising them to exercise all powers of the Company to purchase Shares on the Stock Exchange with an aggregate nominal amount of not exceeding 10% of the aggregate nominal amount of the share capital of the Company in issue immediately following the completion of the Capitalisation Issue and the Placing (excluding Shares which may fall to be issued pursuant to the exercise of any option which may be granted under the Share Option Scheme) until the conclusion of the next annual general meeting of the Company. Lam transferred all her 100 shares of TY Civil to Mr. The following part includes information required by the Stock Exchange to be included in this prospectus concerning the repurchase by the Company of its own securities. out of capital. whichever is the earliest. (c) TY Civil On 28 September 2009. Any premium payable on a redemption or purchase over the par value of the Shares to be purchased must be provided for out of the profits of the Company or from sums standing to the credit of the share premium account of the Company or. Kan at an aggregate consideration of HK$100 and Mr. (a) Source of funds Repurchases must be funded out of funds legally available for the purpose in accordance with the memorandum and articles of association of the Company. The existing authorised share capital of TYW (BVI) is US$50. Kan transferred the one share in TYW (BVI) he held to Shunleetat on 26 April 2010 and Shunleetat became the sole member of TYW (BVI). or the date by which the next annual general meeting of the Company is required by the Articles of Association or any applicable law to be held. the GEM Listing Rules and the applicable laws of the Cayman Islands. or the passing of an ordinary resolution by the Shareholders revoking or varying the authority given to the Directors.APPENDIX V (b) TYW (BVI) STATUTORY AND GENERAL INFORMATION TYW (BVI) was incorporated in the BVI on 2 July 2009. if authorised by its Articles of Association and subject to the provisions of the Companies Law. if so authorised by its Articles of Association and subject to the provisions of the Companies Law. Kan became the sole beneficial owner of TY Civil. Save as disclosed above. — V-6 — . Ms. Mr. One share of TYW (BVI) was allotted and issued and fully paid to Mr. out of capital.000 shares of US$1 each. there has been no alteration in the share capital of any of the subsidiaries of the Company within the two years immediately preceding the date of this prospectus. any repurchase by the Company may be made out of profits of the Company or out of the proceeds of a fresh issue of Shares made for the purpose of the repurchase or. 6.

Such repurchases may. would result in up to 9.APPENDIX V (b) Reasons for repurchases STATUTORY AND GENERAL INFORMATION The Directors believe that it is in the best interest of the Company and the Shareholders for the Directors to have a general authority from the Shareholders to enable the Company to repurchase Shares in the market.000 Shares in issue immediately after the Listing. (c) Funding of repurchases In repurchasing securities. If. The exercise in full of the Repurchase Mandate. they will exercise the Repurchase Mandate in accordance with the GEM Listing Rules and the applicable laws of the Cayman Islands. lead to an enhancement of the net asset value of the Company and/or earnings per Share and will only be made when the Directors believe that such repurchases will benefit the Company and the Shareholders. it might have a material adverse effect on the working capital and/or the gearing position of the Group as compared with the position disclosed in this prospectus. depending on market conditions and funding arrangements at the time. However. the Directors do not propose to exercise the Repurchase Mandate to such an extent as would.200. as a result of a securities repurchase. if the Repurchase Mandate were to be exercised in full. to the best of their knowledge having made all reasonable inquiries. the Company may only apply funds legally available for such purpose in accordance with its Articles of Association. — V-7 — . any of their associates currently intends to sell any Shares to the Company or its subsidiaries.000 Shares being repurchased by the Company during the period in which the Repurchase Mandate remains in force. on the basis of 99.920. On the basis of the current financial position of the Group as disclosed in this prospectus and taking into account the current working capital position of the Group. a Shareholder’s proportionate interest in the voting rights of the Company increases. (d) General None of the Directors nor. The Directors have undertaken to the Stock Exchange that. have a material adverse effect on the working capital requirements of the Group or the gearing levels which in the opinion of the Directors are from time to time appropriate for the Group. such increase will be treated as an acquisition for the purpose of the Takeovers Code. the Directors consider that. the GEM Listing Rules and the applicable laws of the Cayman Islands. in the circumstances. so far as the same may be applicable.

Mr. the deed of indemnity dated 20 August 2010 and entered into by Mr. No connected person (as defined in the GEM Listing Rules) has notified the Company that he has a present intention to sell Shares to the Company. Fung. to Shunleetat. Cheng. B. relocation cost and disruption in operation suffered by any members of the Group in connection with the forfeiture or early termination of two lease agreements entered into by the Group. Mr. liability. Mr. all credited as fully paid. Chuwei. the “Indemnifiers”) with and in favour of the Company. (ii) all loss. or has undertaken not to do so if the Repurchase Mandate is exercised. a shareholder or a group of shareholders acting in concert could obtain or consolidate control of the Company and become obliged to make a mandatory offer in accordance with rule 26 of the Takeovers Code. and (iii) all losses. pursuant to which the Indemnifiers have agreed to provide indemnity for (i) all taxation liabilities of the Group incurred before the Placing becoming unconditional in favour of the Company and its subsidiaries. Shunleetat. the sale and purchase agreement dated 26 April 2010 and entered into between TYW (BVI) as purchaser and Mr. increment in rental charges. Kan as vendor relating to the acquisition of the entire issued share capital in TYW by TYW (BVI) in consideration of TYW (BVI) allotting and issuing 4. the Directors are not presently aware of any consequences which would arise under the Takeovers Code as a consequence of any repurchases pursuant to the Repurchase Mandate immediately after the Listing.919 ordinary shares of TYW (BVI). cost suffered by the Group in obtaining or preserving the right to use the same or substantially the same kind of vehicle for the Group’s operations. Chia and Lotawater (collectively. damages. the sale and purchase agreement dated 11 August 2010 and entered into between the Company as purchaser and Shunleetat.APPENDIX V STATUTORY AND GENERAL INFORMATION Accordingly. 1. Kan. FURTHER INFORMATION ABOUT THE BUSINESS Summary of material contracts App1A(51) The following contracts (not being contracts in the ordinary course of business) have been entered into by members of the Group within the two years immediately preceding the date of this prospectus and are or may be material: (a) (b) the Underwriting Agreement. Chuwei. to Shunleetat. Third Schedule 17 (c) (d) — V-8 — . in the enforcement of any provisions of the finance leases by the financier(s) and in disrupting the Group’s business in connection with the breach under certain finance lease of the motor vehicles and machinery of the Group. Save as disclosed above. Chuwei. Purplelight and Lotawater. all credited as fully paid. damages. Purplelight. liability. and (ii) crediting the one nil-paid Share transferred to Shunleetat on 15 March 2010 as fully-paid at par. Purplelight and Lotawater as vendors relating to the acquisition of the entire issued share capital in TYW (BVI) by the Company in consideration of the Company (i) allotting and issuing an aggregate of 999 Shares.

the deed of assignment dated 9 March 2010 and entered into between Mr. (f) (g) (h) (i) — V-9 — .311.22. Kan and TYW in relation to the assignment of part of the goodwill and certain assets held by “Tsun Yip Construction Company” with effect from 1 April 2009.72. all credited as fully paid.157.467. to Shunleetat. and the deed of assignment dated 9 March 2010 and entered into between Mr. Kan and TY Civil in relation to the assignment of part of the goodwill and certain assets held by “Tsun Yip Construction Company” with effect from 1 April 2009.756. Kan and TY Civil in relation to the acquisition of part of the business (including the assets and libailites thereof) carried on by “Tsun Yip Construction Company” with effect from 1 April 2009 at a consideration of HK$1. Kan as vendor relating to the acquisition of the entire issued share capital in TY Civil by TYW (BVI) in consideration of TYW (BVI) allotting and issuing 5. Kan and TYW in relation to acquisition of part of the business (including the assets and liabilities thereof) carried on by “Tsun Yip Construction Company” with effect from 1 April 2009 at a consideration of HK$7.080 ordinary shares of TYW (BVI). the sale and purchase agreement dated 9 March 2010 and entered into between Mr.APPENDIX V (e) STATUTORY AND GENERAL INFORMATION the sale and purchase agreement dated 26 April 2010 and entered into between TYW (BVI) as purchaser and Mr. the sale and purchase agreement dated 9 March 2010 and entered into between Mr.

Hong Kong 37 (Note) 31 December 30 December 2009 2019 TYW (BVI) 301514088 App1A(28)(4) Hong Kong 37 (Note) 31 December 30 December 2009 2019 TYW (BVI) 301514097 Hong Kong 37 (Note) 31 December 30 December 2009 2019 TYW (BVI) 301514105 Note: The services covered under Class 37 include civil engineering services. the Group had engaged in dealings with certain Directors and their associates as described in note 24 to section II of the Accountants’ Report. TYW owned the domain name. restoration and demolition of roads. ground investigation and improvement. FURTHER INFORMATION ABOUT DIRECTORS. renovation. MANAGEMENT. (a) (ii) — V-10 — . STATUTORY AND GENERAL INFORMATION Intellectual property rights of the Group As at the Latest Practicable Date. maintenance and repair of waterworks. advisory. pavings and drainage and water installations. maintenance. site formation. construction. construction. pumping station and water main laying. C. As at the Latest Practicable Date.tsunyip.APPENDIX V 2. maintenance. Such registration will expire on 12 September 2013. The ownership has been registered with Hong Kong Domain Name Registration Company Limited. www. waterworks engineering.hk. STAFF AND EXPERTS Disclosure of interests Disclosure of interests of Directors and experts (i) During the two years immediately preceding the date of this prospectus. installation and repair services. the Group was the registered proprietor and beneficial owner of the following trademarks: Place of Trademark registration Class Date of registration Expiration Date Owner Trade Mark No. excavation. consultancy and information services relating to the foregoing. construction. maintenance and repair of service reservoir. construction. conducting construction of foundation works. and Each of the executive Directors is interested in the Group reorganisation referred to under the sub-paragraph headed “Reorganisation” in the paragraph headed “Further information about the Company and its subsidiaries” of this appendix. 1. dredging.

000 Mr. Cheng. Mr. Cheng. The Directors’ remuneration policy of the Group after Listing will be substantially the same as the remuneration policy of the Group for the year ended 31 March 2010. Kan Cheng Fung Chia In addition.390. Fung and Mr. each of Mr. Fung and Mr. Mr. Chia under the said employment contracts in force for the year ending 31 March 2010 and the commencement date of employment are set out below: Commencement date of employment 6 February 1 May 1 April 1 May 1996 2009 2006 2009 HK$ Mr. Mr. Mr.720. Kan.46(4) App1A(33)(2)(a).500 960.000 and HK$2. being all the executive Directors. Each of these executive Directors is entitled to the respective basic annual emoluments set out below.000 900. Mr. App1A. Chia.000 12.000 Each of Mr. and will continue thereafter until terminated by not less than three months’ notice in writing served by either party on the other or three months’ salary being payment in lieu of notice. Cheng.(46)(1) App1A.(b) App1A(46)(2) — V-11 — . Mr. Kan.000 respectively. Save as disclosed above. Kan Cheng Fung Chia 1. (c) Directors’ remuneration (i) During the two financial years ended 31 March 2009 and 2010.000 12.APPENDIX V (b) STATUTORY AND GENERAL INFORMATION Particulars of Directors’ service contracts Each of Mr. Mr. Kan. Fung and Mr. Mr.554. Mr. Mr. plus a discretionary bonus to be determined by the Board every year.000 12. Mr. Cheng. Mr. HK$ 12. has entered into a service contract with the Company for an initial term of three years commencing from 11 August 2010. The basic annual emoluments and benefits in kind for each of Mr. Mr. Chia has entered into an employment contract with TYW to act as the director of TYW for a continuous term until teminated by not less than thirty days’ notice in writing served by either party on the other or thirty days’ salary being payment in lieu of notice. Kan. Mr. none of the Directors has or is proposed to have a service contract with the Company or any of its subsidiaries (other than contracts expiring or determinable by the employer within one year without the payment of compensation (other than statutory compensation)). Chia is also entitled to a discretionary bonus at every Lunar New Year end with reference to their respective performance. the remuneration policy of the Group and the prevailing market conditions. Each of the above remunerations is determined by the Group with reference to the duties and level of responsibilities of each Director. the aggregate emoluments paid and benefits in kind granted by the Group to the Directors were approximately HK$1. Fung and Mr.000 132.

the General Facilities and the Credit Card Facility previously granted by HSBC to the Group (all of which have been fully repaid by the Group). (v) Each of the executive Directors is entitled to reimbursement of all reasonable out-of-pocket expenses properly incurred in connection with the performance of his duties. (iii) None of the Directors or any past directors of any member of the Group has been paid any sum of money for each of the two financial years ended 31 March 2009 and 2010 (1) as an inducement to join or upon joining the Company or (2) for loss of office as a director of any member of the Group or of any other office in connection with the management of the affairs of any member of the Group. (d) Personal guarantees As at the Latest Practicable Date.6 million.000. Other than the personal guarantee relating to item (ii) (which is expected to be released after six months after full repayment of the relevant facilities in accordance with the internal policy of HSBC).(f) App1A(33) (2)(g) — V-12 — . the aggregate emoluments payable by the Group to and benefits in kind receivable by the Directors for the year ending 31 March 2011 will be approximately HK$3. App1A(33)(2) (e). and (ii) the Loans. Kan’s personal guarantee for item (i) is intended to continue after Listing. (iv) There has been no arrangement under which a Director has waived or agreed to waive any emoluments for each of the two financial years ended 31 March 2009 and 2010. (vi) Each independent non-executive Directors is entitled to monthly director’s fee of HK$8. Mr. please refer to the section headed “Controlling Shareholders and Substantial Shareholders” of this prospectus.46 million. Mr. For details of such personal guarantees.APPENDIX V (ii) STATUTORY AND GENERAL INFORMATION App1A(46)(3) Under the arrangements currently in force. Kan has been providing personal guarantees in respect of (i) the finance leases in respect of certain motor vehicles and rental arrangements in respect of certain photocopying machines of the Group in the aggregate sum of approximately HK$3.

000 Shares. 4. once the Shares are listed.920.45A(2) Name of Director Mr. Cheng is the sole beneficial owner of Chuwei. Mr.000 13. the interests and short positions of the Directors in the shares.020. Chia is the sole beneficial owner of Lotawater.160.375 App1A.000 11.020.46 to 5. Fung is deemed to be interested in all the Shares held by Purplelight. Cheng (Note 2) Mr. which is interested in 40. Chia (Note 4) Nature of interest Interest in controlled corporation Interest in controlled corporation Interest in controlled corporation Interest in controlled corporation No. 3. Mr.(c) Third Schedule 30 Note: 1.300. which is interested in 11. Mr. Under the SFO.25 13. underlying shares or debentures of the Company and its associated corporations Immediately following completion of the Placing and the Capitalisation Issue. Mr. Under the SFO. Mr. will be as follows: Percentage of issued share Position capital Long Long Long Long 41.125 11.000 Shares.25 9. Kan is the sole beneficial owner of Shunleetat.000 9. Under the SFO. Cheng is deemed to be interested in all the Shares held by Chuwei. of Shares held 40.000 Shares. Fung is the sole beneficial owner of Purplelight. Mr.45(1) (a).45A (1)(a) App1A.(b).920.APPENDIX V (e) STATUTORY AND GENERAL INFORMATION Interests and short positions of Directors in the shares. 2. Fung (Note 3) Mr. Kan (Note 1) Mr. which is interested in 13. which is interested in 9. Under the SFO.000 Shares.000 App1A.67 of the GEM Listing Rules. — V-13 — .300. Kan is deemed to be interested in all the Shares held by Shunleetat. Chia is deemed to be interested in all the Shares held by Lotawater. or which will be required to notify to the Company and the Stock Exchange pursuant to Rules 5. Mr. Mr. underlying shares or debentures of the Company and its associated corporations (within the meaning of the SFO) which will have to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions in which they are taken or deemed to have under such provisions of the SFO) or which will be required pursuant to section 352 of the SFO to be entered in the register referred to therein.160.

920. Mr. Cheng is the sole beneficial owner of Chuwei. of Shares held 40.300. 2. Rosita (Note 1) Chuwei (Note 2) Purplelight (Note 3) Cham Yee Wa (Note 3) Lotatwater (Note 4) Wan Pui Ki (Note 4) Note: Nature of interest Beneficial owner Spouse interest Beneficial owner Beneficial owner Spouse interest Beneficial owner Spouse interest No.25 41. discounts. commissions. (g) Agency fees or commissions received No agency fees. Mr.000 Shares under the SFO.25 13.300.45(3) Interests and short position of Substantial Shareholders in the Shares underlying shares or debentures of the Company Immediately following completion of the Placing and the Capitalisation Issue. Cham Yee Wa is the spouse of Mr. 3.APPENDIX V (f).000 40.920. Kan is the sole beneficial owner of Shunleetat.000 13.375 9. Kan and is deemed to be interested in 40. Fung and is deemed to be interested in 11. Rosita is the spouse of Mr.160. STATUTORY AND GENERAL INFORMATION App1A.160. App1A(13) Third Schedule 14 — V-14 — . Lam Shun Kiu.125 11.000 11.25 9.000 Shares under the SFO. Fung is the sole beneficial owner of Purplelight.375 App1A.45(4) App1A. Chia is the sole beneficial owner of Lotawater. Mr. brokerages or other special terms have been granted by the Group to the Directors or the experts named in the sub-paragraph headed “Consents and qualifications of experts” in this appendix within the two years immediately preceding the date of this prospectus in connection with the issue or sale of any share or loan capital of any member of the Group.000 Shares under the SFO.020. Ms.920. Ms.000 1. Mr. the following parties (not being a Director or chief executive of the Company) will have an interest or short position in the Shares or underlying Shares which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO or will be directly or indirectly interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other member of the Group: Percentage of issued share Position capital Long Long Long Long Long Long Long 41.45B(1)(a) Name of Shareholders Shunleetat (Note 1) Lam Shun Kiu.000 11.25 11. Chia and is deemed to be interested in 9.000 9.300.160. 4.000 9. Wan Pui Ki is the spouse of Mr. Ms.

(iv) no Director is materially interested in any contract or arrangement subsisting at the date of this prospectus which is significant in relation to the business of the Group taken as a whole. interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other member of the Group.45(3) (ii) (iii) none of the Directors or the experts named in the sub-paragraph headed “Consents and qualifications of experts” in the paragraph headed “Other information” in this appendix has been interested in the promotion of. or which are proposed to be acquired or disposed of by or leased to any member of the Group nor will any Director apply for the Placing Shares either in his own name or in the name of a nominee. (v) no Director is interested in more than 1% shareholding in any of the five largest customers.46 to 5. any interests and short positions in the shares. the five largest suppliers and subcontractors of the Group during the Track Record Period.67 of the GEM Listing Rules.APPENDIX V (h) Disclaimers STATUTORY AND GENERAL INFORMATION Save as disclosed in this prospectus: (i) and taking no account of any Shares which may be taken up or acquired under the Placing and the Capitalisation Issue or upon the exercise of any options which may be granted under the Share Option Scheme. or has any direct or indirect interest in any assets acquired or disposed of by or leased to. underlying shares and debentures of the Company or any associated corporations (within the meaning of the SFO) or any interests which will have to be entered in the register to be kept by the Company pursuant to section 352 of the SFO or which will be required to be notified to the Company and the Stock Exchange pursuant to the Rules 5. the Directors are not aware of any person who immediately following the completion of the Placing and the Capitalisation Issue will have an interest or short position in the Shares and underlying Shares which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO or who is. any member of the Group within the two years immediately preceding the date of this prospectus. App1A. nor is any of them taken to or deemed to have under Divisions 7 and 8 of Part XV of the SFO. App1A(9)(1) — V-15 — . none of the Directors has for the purpose of Divisions 7 and 8 of Part XV of the SFO or the GEM Listing Rules. either directly or indirectly. and Third Schedule 19 App1A(47)(1)(a) 3rd Sch19(b) App1A(47)(2) (vi) none of the experts named in the sub-paragraph headed “Consents and qualifications of experts” in the paragraph headed “Other information” in this appendix has any shareholding in any company in the Group or the right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any company in the Group.

manager. in aggregate. As at the Latest Practicable Date. its subsidiaries and any Invested Entity. being 10% of the total number of Shares in issue as at the date of listing of the Shares unless the Company obtains the approval of the Shareholders in general meeting for refreshing the 10% limit (the “Scheme Mandate Limit”) under this Share (2) — V-16 — . (2) (3) (4) (5) (iii) Maximum number of Shares (1) Notwithstanding anything to the contrary herein. the maximum number of Shares which may be issued upon the exercise of all outstanding options granted and yet to be exercised under the Share Option Scheme and any other share option schemes of the Company must not. any customer of the Group or any Invested Entity.APPENDIX V 2. there are no “Invested Entity” other than members of the Group.920. and the Group has not identified any potential “Invested Entity” for investment. the Board shall be entitled at any time and from time to time within the period of 10 years after the date of adoption of the Share Option Scheme to make an offer to any of the following classes of persons: (1) any employee (whether full time or part time employee. any non-executive director (including independent non-executive directors) of the Company. any supplier of goods or services to any member of the Group or any Invested Entity. (ii) Who may join Third Schedule 10 Subject to the provisions in the Share Option Scheme. (a) (i) Share Option Scheme STATUTORY AND GENERAL INFORMATION App1A(44) Summary of terms of the Share Option Scheme Purpose of the Share Option Scheme The purpose of this Share Option Scheme is to provide incentive or reward to eligible persons for their contribution to the Group and/or to enable the Group to recruit and retain high-calibre employees and attract human resources that are valuable to the Group or any entity in which the Group holds any equity interest (the “Invested Entity”). officer or entity that provides research.000 Shares. and any consultant. any of its subsidiaries or any Invested Entity. development or other technological support to the Group or any Invested Entity. adviser. including any executive director but not the non-executive directors) of the Company. The total number of Shares in respect of which options may be granted under the Share Option Scheme and any other share option schemes of the Company shall not exceed 9. exceed 30% of the total number of Shares in issue from time to time.

(3) The Company may seek separate approval of the Shareholders in general meeting for refreshing the Scheme Mandate Limit such that the total number of Shares in respect of which options may be granted under the Share Option Scheme and any other share option schemes of the Company as “refreshed” shall not exceed 10% of the total number of Shares in issue as at the date of the approval of the Shareholders on the refreshment of the Scheme Mandate Limit. a circular regarding the grant has been dispatched to the Shareholders in a manner complying with. (4) The Company may seek separate approval of the Shareholders in general meeting for granting options beyond the Scheme Mandate Limit provided that the proposed grantee(s) of such option(s) must be specifically identified by the Company before such approval is sought and that the proposed grantee(s) and his associates shall abstain from voting in the general meeting. in the manner prescribed by the relevant provisions of Chapter 23 of the GEM Listing Rules. the number and terms of the options to be granted and options previously granted to such eligible person). the Company must send a circular to the Shareholders containing a generic description of the specified proposed grantees of such options. at which the eligible person and his associates shall abstain from voting. lapsed in accordance with the terms of the Share Option Scheme or any other share option scheme of the Company or exercised) will not be counted for the purpose of calculating the limit as “refreshed”. unless: (1) such grant has been duly approved. provided that options previously granted under the Share Option Scheme or any other share option schemes of the Company (including options outstanding. the purpose of granting such options to the proposed grantees with an explanation as to how the terms of options serve such purpose and the information as required under the GEM Listing Rules. by resolution of the Shareholders in general meeting. cancelled or lapsed in accordance with the terms of this Share Option Scheme or any other share option schemes of the Company) will not be counted for the purpose of calculating the Scheme Mandate Limit. and (2) — V-17 — . provided that the options previously granted (including options outstanding. and containing the information specified in. the number and terms of the options to be granted. cancelled and outstanding options) in the 12-month period up to and including such further grant would exceed 1% of the total number of Shares in issue. cancelled.APPENDIX V STATUTORY AND GENERAL INFORMATION Option Scheme. (iv) Maximum entitlement of each eligible person No option shall be granted to any eligible person if any further grant of options would result in the Shares issued and to be issued upon exercise of all options granted and to be granted to such person (including exercised. For the purpose of seeking the approval of the Shareholders. For the purpose of seeking the approval of Shareholders. a circular containing the information as required under the GEM Listing Rules must be sent to the Shareholders. the relevant provisions of Chapter 23 of the GEM Listing Rules (including the identity of the eligible person.

and containing the matters specified in. (2) (3) (vi) Time of acceptance and exercise of an option An offer of grant of an option may be accepted by an eligible person within the date as specified in the offer letter issued by the Company.APPENDIX V (3) STATUTORY AND GENERAL INFORMATION the number and terms (including the subscription price) of such option are fixed before the general meeting of the Company at which the same are approved. and (b) the grant has been approved by the independent Shareholders in general meeting (taken on a poll). a recommendation from the independent non-executive Directors (excluding the independent non-executive Director who is the prospective grantee of the option) to the independent Shareholders as to voting). being a date not later than 21 business days from the date upon which it is made. such grant shall not be valid unless: (a) a circular containing the details of the grant has been dispatched to the Shareholders in a manner complying with.00 is payable on acceptance of the offer of grant of an option. such change shall not be valid unless the change has been approved by the independent Shareholders in general meeting. (v) Grant of options to connected persons (1) The grant of options to a Director. and such grant will result in the Shares issued and to be issued upon exercise of all options already granted and to be granted (including options exercised. An option may be exercised in whole or in part by the grantee (or his legal personal representatives) at any time before the expiry of the period to be determined and notified by the Board to the grantee which in any event shall not be longer than ten years commencing on the date of the offer letter and expiring on the last day of such ten-year period subject to the provisions for early termination as contained in the scheme. — V-18 — . A consideration of HK$1. at which all connected persons of the Company shall abstain from voting in favour of the grant. Where any change is to be made to the terms of any option granted to a substantial shareholder or an independent non-executive Director (or any of their respective associates). Where an option is to be granted to a substantial shareholder or an independent non-executive Director (or any of their respective associates). cancelled and outstanding) to such person in the 12-month period up to and including the date of such grant: (1) exceeding 0. and (2) exceeding an aggregate value (based on the closing price of the Shares on the Stock Exchange on the date of each grant) of HK$5 million.1% of the total number of Shares in issue at the relevant time of grant. in particular. by which the eligible person must accept the offer or be deemed to have declined it. management shareholder or substantial shareholder of the Company or any of their respective associates requires the approval of all the independent non-executive Directors (excluding any independent non-executive Director who is a prospective grantee of the option) and shall comply with the relevant provisions of Chapter 23 of the GEM Listing Rules. provided that such date shall not be more than ten years after the date of adoption of the Share Option Scheme or after the termination of the Share Option Scheme. the relevant provisions of Chapter 23 of the GEM Listing Rules (including. Such consideration shall in no circumstances be refundable. chief executive.

and (3) the nominal value of a Share on the Offer Date. and ending on the date of the results announcement. Where an option is to be granted. (x) Restrictions on the time of grant of options No option shall be granted after a price sensitive development concerning the Company or any subsidiary has occurred or a price sensitive matter concerning the Company or any subsidiary has been the subject of a decision until such price sensitive information has been announced pursuant to the requirements of the GEM Listing Rules. half-year. during the period commencing one month immediately preceding the earlier of (1) the date of the meeting of the Board (as such date is first notified to the Stock Exchange in accordance with the GEM Listing Rules) for the approval of the Company’s result for any year. and (2) the deadline for the Company to publish an announcement of its results for any year or half-year or quarterly or any other interim period (whether or not required under the GEM Listing Rules). and shall be at least the highest of: (1) the closing price of the Shares as stated in the Stock Exchange’s daily quotations sheet on the date (the “Offer Date”). (ix) Ranking of Shares The Shares to be issued and allotted upon the exercise of an option shall be subject to the Company’s constitutional documents for the time being in force and shall rank pari passu in all respects with the fully-paid Shares in issue of the Company as at the date of allotment and will entitle the holders to participate in all dividends or other distributions declared or recommended or resolved to be paid or made in respect of a record date falling on or after the date of allotment. on which the Board passes a resolution approving the making of an offer of grant of an option to an eligible employee. (viii) Subscription price for Shares The subscription price of a Share in respect of any particular option granted under the Share Option Scheme shall be such price as determined by the Board and notified to an eligible person.APPENDIX V (vii) Performance targets STATUTORY AND GENERAL INFORMATION There is no performance target that has to be achieved or minimum period in which the option must be held before the exercise of any option save as otherwise imposed by the Board on the relevant offer of options. which must be a trading day. the date of the Board meeting at which the grant was proposed shall be taken to be the date of the offer of such option. In particular. (2) the average closing price of the Shares as stated in the Stock Exchange’s daily quotation sheets for the 5 trading days immediately preceding the Offer Date. the offer price shall be taken to be the closing price for any business day before listing. quarterly or any other interim period (whether or not required under the GEM Listing Rules). — V-19 — . no option shall be granted. where an option is to be granted less than 5 business days after the listing of the Shares on the Stock Exchange. For the purpose of calculating the subscription price.

the option may be exercised in full or in part (to the extent not already exercised) by his personal representative(s) within 12 months from the date of death. after which period no further option shall be granted. each grantee (or his legal representative(s)) shall be entitled to exercise all or any of his options (to the extent which has become exercisable and not already exercised) at any time not later than 2 business days prior to the proposed general meeting of the Company by giving notice in — V-20 — . whether by way of take-over offer. if thought fit. or scheme of arrangement or otherwise in like manner is made to all the holders of Shares. and assuming that they will become. a grantee shall be entitled to exercise his option (to the extent not already exercised) to its full extent or to the extent specified in the grantee’s notice to the Company in exercise of his option at any time thereafter and up to the close of such offer (or any revised offer).APPENDIX V STATUTORY AND GENERAL INFORMATION (xi) Period of the Share Option Scheme Subject to earlier termination by the Company in general meeting or by the Board. by the exercise in full of the options granted to them. All options granted prior to expiry of the Share Option Scheme shall continue to be valid and exercisable in accordance with the terms of the Share Option Scheme. or all such holders other than the offeror and/or any person controlled by the offeror and/or any person acting in concert with the offeror. The date of such cessation shall be his last actual working day at his work place with the Company or the relevant subsidiary or the relevant Invested Entity whether salary is paid in lieu of notice or not. approving a resolution to voluntarily wind-up the Company. (xii) Rights on cessation of employment Where the grantee of an outstanding option ceases to be an employee of the Group for any reason other than his death or the termination of his employment on one or more of the grounds specified in (xxi)(5). (xiii) Rights on death Where the grantee of an outstanding option dies before exercising the option in full or at all. If such offer becomes or is declared unconditional. (xiv) Rights on a general offer In the event of a general or partial offer. the Share Option Scheme shall be valid and effective for a period of 10 years commencing on the date of adoption of the Share Option Scheme. (xv) Rights on winding-up In the event a notice is given by the Company to its Shareholders to convene a general meeting for the purposes of considering and. shareholders of the Company. share re-purchase offer. mutatis mutandis. the Company shall use all reasonable endeavours to procure that such offer is extended to all the grantees on the same terms. the Company shall on the same date as or soon after it despatches such notice to each Shareholder give notice thereof to all grantees (together with a notice of existence of this provision) and thereupon. the grantee may exercise the option up to his entitlement at the date of cessation in whole or in part (to the extent which has become exercisable and not already exercised) within the period of 1 month following the date of such cessation.

whether by way of capitalisation of profits or reserves. no later than the business day immediately prior to the date of the proposed general meeting referred to above.APPENDIX V STATUTORY AND GENERAL INFORMATION writing to the Company. rights issue. subdivision or reduction of the share capital of the Company (other than an issue of Shares as consideration in respect of a transaction). consolidation. which Shares shall rank pari passu with all other Shares in issue on the date prior to the passing of the resolution to wind-up the Company to participate in the distribution of assets of the Company available in liquidation. in accordance with the GEM Listing Rules and any applicable guidance/interpretation of the GEM Listing Rules issued by the Stock Exchange from time to time (including but not limited to the supplemental guidance issued on 5 September 2005) to: (1) the number and/or nominal amount of Shares subject to the options already granted so far as they remain exercisable. whereupon the Company shall as soon as possible and. (xvii) Reorganisation of capital structure In the event of any alteration in the capital structure of the Company whilst any option has been granted and remains exercisable. any such alterations must be made so that each grantee is given the same proportion of the equity capital of the Company as that to which he was previously entitled. allot the relevant Shares to the grantee credited as fully paid. but the exercise of the option shall be conditional upon such compromise or arrangement being sanctioned by the Court and becoming effective. in connection with a scheme for the reconstruction or amalgamation of the Company. (2) (3) (b) — V-21 — . and/or the subscription price. in any event. the Company shall (if applicable) make corresponding alterations (if any). and thereupon any grantee (or his legal representative(s)) may forthwith and until the expiry of the period commencing with such date and ending with the earlier of the date falling 2 calendar months thereafter or the date on which such compromise or arrangement is sanctioned by Court be entitled to exercise his option (to the extent which has become exercisable and not already exercised). and/or the maximum number of Shares referred to in paragraphs (iii) and (iv) above provided that: (a) no such alteration shall be made in respect of an issue of Shares or other securities by the Company as consideration in a transaction. The Company may thereafter require such grantee to transfer or otherwise deal with the Shares issued as a result of such exercise of his option so as to place the grantee in the same position as nearly as possible as would have been the case had such Shares been subject to such compromise or arrangement. (xvi) Rights on compromise or arrangement between the Company and its creditors In the event of a compromise or arrangement between the Company and its creditors (or any class of them) or between the Company and its Shareholders (or any class of them). accompanied by a remittance for the full amount of the aggregate exercise price for the Shares in respect of which the notice is given. the Company shall give notice thereof to all grantees on the same day as it gives notice of the meeting to its Shareholders or creditors to consider such a scheme or arrangement.

transfer. Options granted prior to such termination shall continue to be valid and exercisable in accordance with the Share Option Scheme. save those made on a capitalisation issue. mortgage. shall be confirmed by an independent financial adviser or the auditors in writing to the Directors as satisfying the requirements of provisos paragraphs (bb) and (cc) above. the date on which the grantee ceases to be an eligible person by reason of summary dismissal for misconduct or other breach of the terms of his employment or other contract (4) (5) — V-22 — . (d) (xviii) Cancellation of options The Company may cancel an option granted but not exercised with the approval of the Board. or the Board may at any time terminate the operation of the Share Option Scheme and in such event no further option will be offered but in all other respects the provision of the Share Option Scheme shall remain in full force and effect. subject to the court of competent jurisdiction not making an order prohibiting the offeror from acquiring the remaining shares in the offer. Any options cancelled by approval of the Board cannot be re-granted to the same eligible person. (xx) Rights are personal to grantee An option shall be personal to the grantee and shall not be assignable or transferable. and no grantee shall in any way sell. and any such alterations. (xxi) Lapse of option The right to exercise an option (to the extent not already exercised) shall terminate immediately upon the earliest of: (1) (2) (3) the expiry of the period to be determined and notified by the Board to the grantee. the expiry of the periods referred to in sub-paragraphs (xii) and (xiii) respectively. by resolution in general meeting. the expiry of the period referred to in sub-paragraph (xvi). subject to the scheme of arrangement becoming effective. (xix) Termination of the Share Option Scheme The Company. charge. the expiry of the period referred to in sub-paragraph (xiv). encumber or create any interest (whether legal or beneficial) in favour of any third party over or in relation to any option.APPENDIX V (c) STATUTORY AND GENERAL INFORMATION no such alterations shall be made which would result in the subscription price for a Share being less than its nominal value.

on which he begins to appear to be unable to pay or has no reasonable prospect of being able to pay his debts or has committed an act of bankruptcy or has become insolvent or has made any arrangements or composition with his creditors generally or on which he has been convicted of any criminal offence involving his integrity or honesty. — V-23 — . (c) (d) (e) (2) Notwithstanding the other provisions of the Share Option Scheme. and any change to the authority of the Board in relation to any alteration to the terms of the Scheme except where such alterations take effect automatically under the existing terms of the Share Option Scheme.APPENDIX V STATUTORY AND GENERAL INFORMATION constituting him an eligible person. mortgages. the date of the commencement of the winding-up of the Company. grantee and option period. any change to the terms of options granted. encumbers or creates any interest (whether legal or beneficial) in favour of any third party over or in relation to any option or purport to do any of the foregoing in breach of the Share Option Scheme. (6) subject to sub-paragraph (xv). the Share Option Scheme may be altered in any respect by resolution of the Board without the approval of the Shareholders or the grantee(s) to the extent such amendment or alteration is required by the GEM Listing Rules or any guidelines issued by the Stock Exchange from time to time. any alteration to the terms and conditions of the Share Option Scheme which are of a material nature. any changes to the terms and conditions of the Share Option Scheme to the advantage of the grantees of the options. charges. (7) (xxii) Alterations to the Share Option Scheme (1) The Share Option Scheme may be amended or altered in any respect to the extent allowed by the GEM Listing Rules by resolution of the Board except that the following alteration must be approved by a resolution of the Shareholders in general meeting: (a) (b) any changes to the definitions of eligible person. transfers. provided that: (aa) the amended terms of the Share Option Scheme or the options must comply with Chapter 23 of the GEM Listing Rules. and the date on which the grantee sells. and (bb) no such alteration shall operate to affect adversely the terms of issue of any option granted or agreed to be granted prior to such alteration except with the consent or sanction in writing of such number of grantees as shall together hold options in respect of not less than three-fourths in nominal value of all Shares then subject to the option granted under the Scheme.

provided that options lapsed in accordance with the terms of the Share Option Scheme or any other share option schemes of the Company will not be counted for the purpose of calculating the 10% limit above mentioned. and permission to deal in. being 10% of the total number of Shares in issue as at the date of listing of the Shares unless the Company obtains the approval of the Shareholders in general meeting for refreshing the said 10% limit under the Share Option Scheme. (b) (c) (b) (i) Present status of the Share Option Scheme Approval and adoption of the rules of the Share Option Scheme The rules of the Share Option Scheme. issue and deal with Shares pursuant to the exercise of any options granted under the Share Option Scheme.000 Shares. the principal terms of which are set out above. the passing of the necessary resolution to approve and adopt the Share Option Scheme by the Shareholders in general meeting or by way of written resolution to authorise the Directors to grant options at their absolute discretion thereunder and to allot. — V-24 — . (iii) Grant of option As at the date of this prospectus. (ii) Application for approval Application has been made to the Listing Division of the Stock Exchange for the listing of and permission to deal in the Shares to be issued pursuant to the exercise of options which may be granted under the Share Option Scheme. The total number of Shares in respect of which options may be granted under the Scheme and any other share option schemes of the Company shall not exceed 9. were approved and adopted by the Shareholders on 11 August 2010. (xxiii) Conditions (1) The Share Option Scheme is conditional upon: (a) the Stock Exchange granting approval of the listing of. The provisions of the Share Option Scheme comply with Chapter 23 of the GEM Listing Rules in all material respects.APPENDIX V (3) STATUTORY AND GENERAL INFORMATION The Company must provide to all grantees all details relating to changes in the terms of the Share Option Scheme during the life of the Share Option Scheme immediately upon such changes taking effect. and the commencement of dealings in the Shares on the GEM.920. the Shares in issue and any Shares which may fall to be issued pursuant to the exercise of any option granted under the Share Option Scheme. no options have been granted or agreed to be granted under the Share Option Scheme.

or transaction voluntarily effected by. relocation cost and disruption in operation suffered by any members of the Group in connection with the forfeiture or early termination of two lease agreements entered into by the Group. OTHER INFORMATION Tax and other indemnities App1A(10) The Indemnifiers have entered into a deed of indemnity with and in favour of the Company (for itself and as trustee for each of its present subsidiaries) (being the material contract referred to in sub-paragraph headed “Summary of material contracts” in the paragraph headed “Further information about the business” of this appendix) and all its present subsidiaries to provide indemnities in respect of. and (iii) all losses. profits or gains earned. the exercise period. omission or transaction. damages. The deed of indemnity does not cover any claim (and the Indemnifiers shall be under no liability under the deed of indemnity) to the extent: (a) that provision has been made for such taxation in the audited accounts of the Company or any of its subsidiaries up to 31 March 2010. (ii) all loss. which depends on various assumptions including the exercise price. accrued or received on or before the date on which the Placing becomes unconditional (the “Relevant Date”). Any such valuation will have to be made on the basis of certain option pricing model or other methodology. whenever occurring) with the prior written consent or agreement of the Indemnifiers other than any such act. omission or transaction: (1) (2) carried out or effected in the ordinary course of business after 31 March 2010. among other matters. damages. or that such taxation falling on any member of the Group in respect of their current accounting periods or any accounting period commencing on or after 1 April 2010 unless liability for such taxation would not have arisen but for some act or omission of. increment in rental charges. The Directors believe that any calculation of the value of options as at the Latest Practicable Date based on a number of speculative assumptions would not be meaningful and would be misleading to investors. made or entered into pursuant to a legally binding commitment created on or before 31 March 2010 or pursuant to any statement of intention made in this prospectus. (i) any taxation which might be payable by any member of the Group in respect of any income. in the enforcement of any provisions of the finance leases by the financiers and in disrupting the Group’s business in connection with the breach under certain finance leases of the motor vehicles and machinery of the Group as a result of the Breach (as defined below).APPENDIX V (iv) Value of options STATUTORY AND GENERAL INFORMATION The Directors consider it inappropriate to disclose the value of options which may be granted under the Share Option Scheme as if they had been granted as at the Latest Practicable Date. certain variables are not available for calculating the value of options. interest rate. liability. or (b) — V-25 — . As no options have been granted. any member of the Group (whether alone or in conjunction with some other act. liability. 1. cost suffered by the Group in obtaining or preserving the right to use the same or substantially the same kind of vehicles for the Group’s operations. or carried out. D. expected volatility and other variables.

TYW has been in breach of the terms of the Subordination Agreement (the “Breach”). provided that the amount of any such provision or reserve applied pursuant to the deed of indemnity to reduce the Indemnifiers’ liability in respect of such taxation shall not be available in respect of any such liability arising thereafter. the indebtedness owed by TYW to Mr. since the Group has repaid all the outstanding loans to HSBC in full. save as disclosed below. in consideration of HSBC advancing monies to TYW.30(1) App1A(14)(1) The Sponsor has made an application on behalf of the Company to the Stock Exchange for the listing of. Kan and TYW undertook to HSBC that. Mr. the Group could also have been in breach of certain finance leases in respect of the motor vehicles of the Group as a result of the Breach. Kan against certain sums paid by the Group for Mr. fees and expenses incurred by HSBC demanding repayment of the loans. the Shares in issue and to be issued as mentioned in this prospectus and any Shares which may fall to be issued pursuant to the exercise of any options which may be granted under the Share Option Scheme on the Stock Exchange. TYW may be legally liable for (i) immediate repayment of all the outstanding sums due to HSBC by TYW at the time of the Breach. As at the Latest Practicable Date. Kan shall not be repayable unless HSBC otherwise consented to such repayment. Hence. Application for listing of Shares R11. 3. Pursuant to a subordination agreement (the “Subordination Agreement”) dated 19 May 2009 and entered into between TYW. each of Mr. in which case the Indemnifiers’ liability (if any) in respect of such taxation shall be reduced by an amount not exceeding such provision or reserve. and permission to deal in. the Group set off an account payable to Mr. — V-26 — . so long as there were any sums due from TYW to HSBC. among other things. In January 2010. neither the Company nor any of its subsidiaries is engaged in any litigation or arbitration of material importance and no litigation or claim of material importance is known to the Directors to be pending or threatened against the Company or any of its subsidiaries. Kan and HSBC. App1A(40) (d) 2. and (iii) overdue interest charged by HSBC in accordance with the relevant facility letters entered into between HSBC and TYW in the event that TYW fails to repay the outstanding loans immediately upon demand of HSBC. given there are cross-default clauses under such finance leases. or that such claim arises or is incurred as a result of the imposition of taxation as a consequence of any retrospective change in the law or practice coming into force after the Relevant Date or that such claim arises or is increased by an increase in rates of taxation after the Relevant Date with retrospective effect. Kan in advance. the Directors consider that the risk and the liabilities of Group in respect of the matters related to the Breach are minimal. As a result of the Breach. Moreover. (ii) all the costs.APPENDIX V (c) STATUTORY AND GENERAL INFORMATION to the extent that any provision or reserve made for such taxation in the audited accounts of any member of the Group up to 31 March 2010 which is finally established to be an over-provision or an excessive reserve. Litigation As at the Latest Practicable Date. Under the relevant finance leases documents. the motor vehicles of the Group which are subject to hire purchase could be re-possessed by the relevant financial institutions or the Group could be liable for immediate payment of all the outstanding sum due under the finance leases documents (including all arrears of the hire rent and all outstanding hire rent which would be payable during or in respect of the unexpired term of the original hiring period).

Binding effect App1A(9)(2) App1A(9)(3) S342B App1A(9)(1) This prospectus shall have the effect. 5.07 of the GEM Listing Rules. S342B BDO Limited Michael Li & Co. — V-27 — .000 and are payable by the Company. 6.05(3) The Company’s register of members will be maintained in Hong Kong by its branch share registrar and transfer office. Unless the Directors otherwise agree. Conyers Dill & Pearman Vigers Appraisal and Consulting Limited App1A(4) The Sponsor has confirmed that it satisfies the independence test under Rule 6A. Consents and qualifications of experts Third Schedule 15 The qualifications of the experts who have given opinions and/or whose names are included in this prospectus are as follows: Optima Capital Limited a licenced corporation under the SFO permitted to engage in type 1 (dealings in securities). Tricor Investor Services Limited.APPENDIX V 4. all transfers and other documents of title to Shares must be lodged for registration with and registered by the branch share registrar in Hong Kong. type 4 (advising on securities) and type 6 (advising on corporate finance) regulated activities under the SFO Certified Public Accountants Legal advisers of the Company as to Hong Kong laws Cayman Islands attorneys-at-law Professional valuers Companies Ord. of rendering all persons concerned bound by all of the provisions (other than the penal provisions) of sections 44A and 44B of the Companies Ordinance so far as applicable. if an application is made in pursuance of it. Share registrar R24. 7. None of the experts named above is interested beneficially or non-beneficially in any shares in any member of the Group or has any right or option (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for any shares in any member of the Group. Each of the experts referred to above has given and has not withdrawn its written consent to the issue of this prospectus with the inclusion of its report and/or letter and/or valuation certificate and/or legal opinion (as the case may be) and the references to its name included in the form and context in which they are respectively included. Preliminary expenses STATUTORY AND GENERAL INFORMATION App1A(20)(1) The estimated preliminary expenses of the Company are approximately HK$40.

holders of Shares resulting from their subscription for. discounts. (c) Consultation with professional advisers Intending holders of Shares are recommended to consult their professional advisers if they are in any doubt as to the taxation implications of subscribing for. the Company has not issued nor agreed to issue any founder shares. transfers and other dispositions of Shares are exempt from Cayman Islands stamp duty. the Directors or the other parties involved in the Placing can accept responsibility for any tax effect on. brokerages or other special terms have been granted in connection with the issue or sale of any share or loan capital of the Company or any of its subsidiaries. It is emphasised that none of the Company.1% of the consideration or. or liabilities of. the fair value of the Shares being sold or transferred. management shares or deferred shares. holding or disposal of or dealing in Shares or exercising any rights attaching to them. the Directors confirm that there has been no material adverse change in the financial or trading position or prospects of the Group since 31 March 2010 (being the date to which the latest audited combined financial statements of the Group were made up). holding or disposing of or dealing in Shares or exercising any rights attaching to them. App1A(27) Third Schedule 25 (ii) (b) no share. the current rate charged on each of the purchaser and seller is 0. Miscellaneous Save as disclosed herein: (a) within two years immediately preceding the date of this prospectus: (i) no share or loan capital of the Company or any of its subsidiaries has been issued.APPENDIX V 8. (b) The Cayman Islands Under present Cayman Islands law. if higher. agreed to be issued or is proposed to be issued fully or partly paid either for cash or for a consideration other than cash. (c) App1A(24) Third Schedule 4 (d) — V-28 — . and no commissions. warrant or loan capital of the Company or any of its subsidiaries is under option or is agreed conditionally or unconditionally to be put under option. Profits from dealings in the Shares arising in or derived from Hong Kong may also be subject to Hong Kong profits tax. (a) Taxation of holders of Shares Hong Kong STATUTORY AND GENERAL INFORMATION Dealings in Shares registered on the Company’s Hong Kong register of members will be subject to Hong Kong stamp duty. purchase. purchasing. 9.

Third Schedule 5 Third Schedule 19 (g) — V-29 — . the Directors confirm that none of them shall be required to hold any shares by way of qualification and none of them has any interest in the promotion of the Company. and there has not been any interruption in the business of the Group which may have or have had a significant effect on the financial position of the Group in the 12 months immediately preceding the date of this prospectus.APPENDIX V (e) (f) STATUTORY AND GENERAL INFORMATION all necessary arrangements have been made enabling the Shares to be admitted into CCASS.

the text of which is set out in Appendix I to this prospectus. the audited financial statements of TYW and TY Civil for each of the two years ended 31 March 2010. the letter of advice prepared by Conyers Dill & Pearman summarising certain aspects of the Companies Law referred to in Appendix IV to this prospectus. the Accountants’ Report prepared by BDO Limited. the report on unaudited pro forma financial information of the Group prepared by BDO Limited. the texts of which are set out in Appendix III to this prospectus. the text of which is set out in Appendix II to this prospectus.APPENDIX VI DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES AND AVAILABLE FOR INSPECTION DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES IN HONG KONG The documents attached to the copy of this prospectus delivered to the Registrar of Companies in Hong Kong for registration were copies of the written consents of the experts referred to in the sub-paragraph headed “Consents and qualifications of experts” in the paragraph headed “Other information” of Appendix V to this prospectus. the legal opinion issued by the Company’s legal adviser as to Hong Kong laws in relation to all relevant permits/licences obtained by the Group for its operations and the Group’s compliance with all relevant regulatory requirements for operations and sufficiency of working capital as required by the ETWB’s Contractor Management Handbook (Revision B) July 2005 (承建商管理手冊 — 修訂版B). DOCUMENTS AVAILABLE FOR INSPECTION Copies of the following documents will be available for inspection at the offices of Michael Li & Co. summary of values and valuation certificate relating to the property interests of the Group prepared by Vigers Appraisal and Consulting Limited. Hong Kong during normal business hours up to and including the date which is 14 days from the date of this prospectus: (a) (b) the memorandum of association of the Company and the Articles of Association. at 14th Floor. 6 Duddell Street. the letter. App1A(52)(3) App1A(52)(1) S342 App1A(52)(5) (c) (d) (e) App1A(52)(3) (f) App1A(52)(3) (g) (h) (i) — VI-1 — . the Companies Law. and copies of the material contracts referred to in the sub-paragraph headed “Summary of material contracts” in the paragraph headed “Further information about the business” in Appendix V to this prospectus. Central. the legal opinion issued by the Company’s legal adviser as to Hong Kong laws in relation to whether there are litigations in respect of the Group committing any offences under Hong Kong environmental protection laws and regulations. Printing house.

management. the written consents referred to in the sub-paragraph headed “Consents and qualifications of experts” in the paragraph headed “Other information” in Appendix V to this prospectus. staff and experts ” in Appendix V to this prospectus. (k) App1A(52)(3) (l) App1A(52)(2) — VI-2 — . and the service contracts and letters of appointment referred to in the sub-paragraph headed “Particulars of Directors’ service contracts” in the paragraph headed “Further information about Directors.APPENDIX VI DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES AND AVAILABLE FOR INSPECTION App1A(52)(2) (j) the material contracts referred to in the sub-paragraph headed “Summary of material contracts” in the paragraph headed “Further information about the business” in Appendix V to this prospectus.