CHANGTIAN PLASTIC _amp; CHEMICAL LIMITED

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					CHANGTIAN PLASTIC & CHEMICAL LIMITED




                                                                              CHANGTIAN PLASTIC & CHEMICAL LIMITED
                                                                                       (Incorporated as an exempted company in Bermuda on 29 March 2007)
                                                                                                       (Company registration number: 39836)


                                                           Invitation in respect of 215,000,000 Invitation Shares of S$0.05 each comprising
                                                           160,000,000 New Shares and 55,000,000 Vendor Shares as follows:

                                                           (a)       5,000,000 Offer Shares at S$0.47 each by way of public offer; and
                                                           (b)       210,000,000 Placement Shares at S$0.47 each by way of placement,

                                                           payable in full on application.
                                                                                                                         Manager



                                                                                                        (Company registration number: 200404514G)


                                                                                                       Underwriter and Placement Agent



                                                                                                   (Company registration number: 197000447W)



                                                  PROPECTUS DATED 30 OCTOBER 2007
                                                  (REGISTERED BY THE MONETARY AUTHORITY OF SINGAPORE ON 30 OCTOBER 2007)
                                                  This document is important. If you are in any doubt as to the              not to be taken as an indication of the merits of the Invitation,
                                                  action you should take, you should consult your legal, financial,          our Company and our subsidiaries, our Shares, the New Shares, the
                                                  tax or other professional adviser.                                         Vendor Shares and the Option Shares.

                                                  We have made an application to the Singapore Exchange Securities           A copy of this Prospectus has been lodged with and registered by the
                                       ADHESIVE   Trading Limited (“SGX-ST”) for permission to deal in, and for quotation    Monetary Authority of Singapore (the ‘’Authority’’). The Authority
                                        TAPES     of, the ordinary shares of S$0.05 each (the “Shares”) in the capital of
                                                  the Company already issued (including the Vendor Shares, as defined
                                                                                                                             assumes no responsibility for the contents of the Prospectus.
                                                                                                                             Registration of the Prospectus by the Authority does not imply that
                                                  herein), the new Shares which are the subject of this Invitation (the      the Securities and Futures Act (Chapter 289) of Singapore, or any other
                                                  “New Shares”) and the new Shares which may be issued upon the              legal or regulatory requirements, have been complied with. The
                                                  exercise of the options to be granted under the Changtian Employee         Authority has not, in any way, considered the merits of the Shares
                                                  Share Option Scheme (the “Option Shares”). Such permission will be         (including the Vendor Shares), the New Shares or the Option
                                       RELEASE    granted when we have been admitted to the Official List of SGX-ST.         Shares, as the case may be, being offered for investment.
                                       PAPERS     The dealing in and quotation of the Shares will be in Singapore
                                                  dollars.                                                                   A copy of this Prospectus has been or will, as soon as reasonably
                                                                                                                             practicable, be filed with the Registrar of Companies in Bermuda. The
                                                  Acceptance of applications will be conditional upon, inter alia,           Bermuda Monetary Authority has given its consent to the issue of the
                                                  permission being granted by the SGX-ST, to deal in, and for quotation      New Shares and the sale of the Vendor Shares pursuant to the Invitation
                                                  of, all of the existing issued Shares (including the Vendor Shares), the   on the terms referred to in this Prospectus. In accepting this Prospectus
                                        BOPA      New Shares and the Option Shares. If completion of the Invitation          for filing and in granting such consent, the Registrar of Companies in
                                        FILM      does not occur because the SGX-ST’s permission is not granted or
                                                  for any other reasons, monies paid in respect of any application
                                                                                                                             Bermuda and the Bermuda Monetary Authority accept no responsibility
                                                                                                                             for the financial soundness of our Group (as defined herein) or any
                                                  accepted will be returned to you at your own risk, without interest        proposal or for the correctness of any of the statements made or
                                                  or any share of revenue or other benefit arising therefrom and you         opinions expressed herein or any of the other documents referred to
                                                  will not have any claims whatsoever against us, the Vendors, the           in this Prospectus.
                                                  Manager, the Underwriter or the Placement Agent.
                                       2-A2MPS                                                                               Investing in our Shares involves risks which are described in the
                                                  The SGX-ST assumes no responsibility for the correctness of any of         section “Risk Factors” in this Prospectus. No Shares will be allotted
                                                  the statements made or opinions expressed or reports contained in          on the basis of this Prospectus later than six months after the
                                                  this Prospectus. Admission to the Official List of the SGX-ST is           date of registration of this Prospectus by the Authority.
OVERVIEW
                                                                      FINANCIAL
                                                                                  HIGHLIGHTS                     Revenue (RMB million)
                                                                                               600
> We are principally engaged in the manufacture and sale of                                                                         540
                                                                                               500            CAGR
  adhesive tapes, release papers, biaxially-oriented polyamide                                                56%
  (BOPA) film and 2-Acrylamido-2-methyl propane sulfonic acid                                                         412
                                                                                               400
  (2-A2MPS).
                                                                                               300
> Our adhesive tapes, release papers and BOPA film are sold under
                                                                                                      223                                         30%
  our brand name           and our 2-A2MPS products are sold                                   200
                                                                                                                                                             151
  under our brand name            .                                                                                                            117
                                                                                               100
> Our Group’s manufacturing facilities are based in Xiamen City,
  Fujian Province.                                                                               0
                                                                                                     FY2004          FY2005        FY2006    3 months       3 months
                                                                                                                                             ended 31       ended 31
                                                                                                                                               March          March
                                                                                                                                               2006           2007

OUR BUSINESS
                                                                                                                Net Profit (RMB million)
                                                                                               160
Adhesive Tapes                                                                                                                      149
> We manufacture and sell a wide range of adhesive tapes for                                   140
                                                                                                              CAGR
   industrial, commercial and consumer uses. Our adhesive                                      120            84%
   tapes are sold mainly to customers in the packaging, food and                               100                    95
   beverage, electronics, construction and shoe making industries.                              80

                                                                                                60                                                 43%
Release Papers                                                                                         44                                                     44
                                                                                                40
                                                                                                                                                  31
> We manufacture and sell two types of release papers: glassine                                 20
   silicone coated release papers and CCK release papers. Our                                    0
                                                                                                     FY2004          FY2005       FY2006     3 months       3 months
   release papers are used as a protective backing on adhesive                                                                               ended 31       ended 31
                                                                                                                                               March          March
   tapes or other adhesive material to protect these materials from                                                                            2006           2007

   losing their adhesiveness.
                                                                                                            Revenue By Product Segments
BOPA film                                                                                                             2-A2MPS
> We manufacture and sell BOPA film, a film used widely for                                                                  7%
  packaging perishable food and odour-sensitive products, and                                          BOPA Film 19%
  which may be used under a wide range of temperatures for                                                                                  50%        Adhesive Tapes
  applications from refrigeration to vapour sterilisation. Our
                                                                                                                            24%
  BOPA film is mainly sold to customers in the food and beverage                                     Release Papers
  industry.
                                                                                                                                  FY2006
2-A2MPS                                                                                                               2-A2MPS
> We manufacture and sell 2-A2MPS in white crystal powder form,                                                                   7%
   mainly to customers in the oil industry and water treatment
                                                                                                       BOPA Film 27%
   industry. Our 2-A2MPS is one of the raw materials used in the                                                                            44%         Adhesive Tapes
   manufacture of water-soluble polymers, which are used in
   industrial processes, and also in the production of consumer                                                               22%
                                                                                                       Release Papers
   products such as acrylic fibre-based textiles, personal care
                                                                                                                3 months ended 31 March 2007
   products, adhesives, paper and packaging materials.
           COMPETITIVE
           STRENGTHS




           Strong brand recognition
           > Built up substantial brand goodwill and track
              record for       and          brand names over
              the years
           > Recognition is synonymous with our track record
              and market reputation in the industry, and
              associated with the quality and reliability of our
              products

           Wide range of products
           > Four main products targeted at different industries,
              each with a wide range of applications
           > BOPA film is widely used in various forms of
              packaging and 2-A2MPS is an important chemical
              product in many different industries

           Established track record and customer base
           > Built up customer base from approximately
              233 in FY2004 to approximately 286 in FY2006
           > Sales to repeat customers accounted for more
              than 98.7% of total revenue in FY2006
           > Reliability and long-term relationships with
              customers are testimony to our reputation and
              track record

           Competitive pricing
           > Developed own glue formula for adhesive tapes
             and release papers, thereby achieving cost
             efficiency which translates to competitive prices
           > We are one of a few 2-A2MPS producers in the
             PRC, and we believe we are able to provide more
             competitively priced quality 2-A2MPS

           Experienced management team
           > Yang Qingjin, our Chairman and Executive Director,
              has been in the adhesive tapes and release papers
              industry for more than 20 years
           > Each of our Executive Directors has more than 5
ADHESIVE      years of experience in the industries related to our
 TAPES        Group’s products



RELEASE
PAPERS


 BOPA
 FILM


2-A2MPS
               PROSPECTS
               Adhesive tapes
               > Sustained demand underpinned by the positive economic development in the PRC

               Release Papers
               > Opportunities to expand product range by adding a new release paper product offering – the UV PE
                  cured release film
               > Production process of UV PE cured release film is less expensive and incurs less wastage
               > Significant market potential for UV cured PE release film produced in the PRC, in view of lower cost
                  base with quality assurance as compared to the overseas manufacturers

               BOPA film
               > Rising affluence of the population and the increasing pace of lifestyle in the PRC will lead to a
                 rise in consumer preference for convenience foods
               > BOPA film is an ideal element in food packaging – better appearance, longer shelf life of products,
                 minimises loss of aroma and has better packaging strength
               > Currently, our BOPA film sales are limited by our production capacities
                 • Our Directors believe that there are opportunities for growth in our BOPA film segment and
                      we will seek to expand our production capacity

               2-A2MPS
               > More industries are adopting the use of 2-A2MPS as a raw material, including the textile
                  (spinning and dyeing), plastic, paper manufacturing, coating materials, waste water treatment
                  and oil and gas extraction industries
               > Currently only selling our 2-A2MPS product to customers in the oil industry and water treatment
                  industry as we are limited by our production capacity
               > Output of 2-A2MPS in the PRC is insufficient to meet the increasing demand
                  • Based on our Directors’ market understanding, the usage of 2-A2MPS by various industries in
                      the PRC will increase by 20% to 30% annually, thereby driving the growth in this segment



               Expansion of BOPA film production capacity
               > Install one additional BOPA film production line, to increase production capacity from 5,400 tonnes
                  to 10,800 tonnes per annum
                  • Production to commence in third quarter of 2008
  BUSINESS     Expansion of range of release papers
  STRATEGIES
               > Commission and install a UV cured release film production line, with a production capacity of 3,000
AND FUTURE        tonnes per annum
      PLANS       • Production to commence in fourth quarter of 2008

               Expansion of 2-A2MPS production capacity
               > Install one additional 2-A2MPS production line, to increase production capacity from 1,500 tonnes
                  to 3,000 tonnes per annum
                  • Production to commence in fourth quarter of 2008
                                                           CONTENTS

CORPORATE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  1

DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    4

GLOSSARY OF TECHNICAL TERMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                       11

PURCHASE BY OUR COMPANY OF OUR OWN SHARES . . . . . . . . . . . . . . . . . . . . . . . . .                                         12

ATTENDANCE AT GENERAL MEETINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                          13

TAKE-OVERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    14

SELLING RESTRICTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              15

DETAILS OF THE INVITATION
      LISTING ON THE SGX-ST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             16
      INDICATIVE TIMETABLE FOR LISTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                      20

CLEARANCE AND SETTLEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                      21

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS . . . . . . . . . . . . .                                                      22

EXCHANGE RATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          23

PROSPECTUS SUMMARY
      BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    24
      COMPETITIVE STRENGTHS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                 24
      PROSPECTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     25
      OUR STRATEGIES AND FUTURE PLANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                           25
      OUR FINANCIAL PERFORMANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                     26
      WHERE YOU CAN FIND US. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                26

THE INVITATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     27

PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            28

USE OF PROCEEDS AND LISTING EXPENSES
      USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           30
      LISTING EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          31

MANAGEMENT AND UNDERWRITING AND PLACEMENT ARRANGEMENTS . . . . . . . . . .                                                          32

RISK FACTORS
      RISKS RELATING TO OUR BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                        34
      RISKS RELATING TO THE PRC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                 39
      RISKS RELATING TO INVESTMENT IN OUR SHARES . . . . . . . . . . . . . . . . . . . . . . . .                                    40




                                                                     i
INVITATION STATISTICS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  44

DILUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       46

SELECTED GROUP COMBINED FINANCIAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . .                                                 47

REVIEW OF PAST OPERATING PERFORMANCE AND FINANCIAL POSITION
      BASIS OF PRESENTATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                      50
      OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           51
      REVIEW OF RESULTS OF OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                  55
      REVIEW OF PAST PERFORMANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                              56
      LIQUIDITY AND CAPITAL RESOURCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                              62
      MATERIAL CAPITAL EXPENDITURES AND DIVESTMENTS . . . . . . . . . . . . . . . . . . . .                                                67
      FOREIGN EXCHANGE EXPOSURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                              68

CAPITALISATION AND INDEBTEDNESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                69

EXCHANGE CONTROLS
      PRC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    71
      BERMUDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          72

DIVIDEND POLICY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              73

GENERAL INFORMATION ON OUR GROUP
      SHARE CAPITAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              74
      SHAREHOLDERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                77
      VENDORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          78

MORATORIUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             79

RESTRUCTURING EXERCISE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                         80

GROUP STRUCTURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  86

HISTORY AND BUSINESS
      HISTORY AND DEVELOPMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                          88
      BUSINESS OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                    90
      OUR PRODUCTION PROCESSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                             94
      ENVIRONMENTAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                        97
      PRODUCTION FACILITIES AND PRODUCTION CAPACITY . . . . . . . . . . . . . . . . . . . . .                                              97
      QUALITY CONTROL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                 98
      SAFETY CONTROLS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  99
      PRODUCT DEVELOPMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                       100
      INVENTORY MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                        101
      SALES AND MARKETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                     101


                                                                        ii
     MAJOR CUSTOMERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              102
     MAJOR SUPPLIERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           104
     COMPETITORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        105
     COMPETITIVE STRENGTHS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  106
     PROPERTIES AND FIXED ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                      108
     INSURANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     108
     STAFF TRAINING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       109
     INTELLECTUAL PROPERTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  110
     GOVERNMENT REGULATIONS, LICENCES AND PERMITS. . . . . . . . . . . . . . . . . . . . .                                          110
     PROSPECTS AND FUTURE PLANS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                        112
     ORDER BOOKS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        116

DIRECTORS, MANAGEMENT AND STAFF
     OUR MANAGEMENT STRUCTURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                         117
     DIRECTORS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     117
     MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         121
     EMPLOYEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      124
     REMUNERATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         125
     SERVICE AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               126

CHANGTIAN EMPLOYEE SHARE OPTION SCHEME. . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                     127

INTERESTED PERSON TRANSACTIONS
     PAST INTERESTED PERSONS TRANSACTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                  133
     PRESENT ONGOING INTERESTED PERSONS TRANSACTIONS . . . . . . . . . . . . . . . .                                                137
     REVIEW PROCEDURES FOR ONGOING AND FUTURE INTERESTED PERSON
     TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         138
     CONFLICTS OF INTEREST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                139
     INTERESTS OF EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               140
     INTERESTS OF UNDERWRITERS OR FINANCIAL ADVISERS. . . . . . . . . . . . . . . . . . .                                           140

CORPORATE GOVERNANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                   141

GENERAL AND STATUTORY INFORMATION
     INFORMATION ON DIRECTORS AND EXECUTIVE OFFICERS . . . . . . . . . . . . . . . . . .                                            143
     SHARE CAPITAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        144
     LITIGATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   145
     MATERIAL CONTRACTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               145
     MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          146
     CONSENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     147
     STATEMENT BY OUR DIRECTORS AND THE VENDORS . . . . . . . . . . . . . . . . . . . . . .                                         148
     DOCUMENTS AVAILABLE FOR INSPECTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                               148


                                                                    iii
APPENDIX A   —   REPORT FROM THE JOINT REPORTING ACCOUNTANTS ON THE
                 AUDITED COMBINED FINANCIAL INFORMATION OF THE GROUP
                 FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2004, 31
                 DECEMBER 2005 AND 31 DECEMBER 2006 . . . . . . . . . . . . . . . . . . .                               A-1

APPENDIX B —     REVIEW REPORT FROM THE JOINT REPORTING ACCOUNTANTS
                 ON THE UNAUDITED COMBINED FINANCIAL INFORMATION OF THE
                 GROUP FOR THE THREE MONTHS ENDED 31 MARCH 2007 . . . . . .                                             B-1

APPENDIX C —     TAXATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   C-1

APPENDIX D —     SUMMARY OF CONSTITUTION OF OUR COMPANY . . . . . . . . . . . . .                                       D-1

APPENDIX E   —   SUMMARY OF BERMUDA COMPANY LAW . . . . . . . . . . . . . . . . . . . .                                 E-1

APPENDIX F   —   SUMMARY OF RELEVANT PRC LAWS AND REGULATIONS . . . . . . .                                             F-1

APPENDIX G —     RULES OF THE CHANGTIAN EMPLOYEE SHARE OPTION SCHEME.                                                   G-1

APPENDIX H —     TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION AND
                 ACCEPTANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        H-1




                                                        iv
                                      CORPORATE INFORMATION

BOARD OF DIRECTORS                               :      Yang Qingjin          (Chairman and Executive
                                                          Director)
                                                        Chen Yongfu           (Deputy Chairman and
                                                          Executive Director)
                                                        Wong Chit Fu           (Executive Director)
                                                        Yan Yilin         (Executive Director)
                                                        Chan Yin David (Independent Director)
                                                        Lee Liang Ping (Independent Director)
                                                        Liao Quanwen            (Independent Director)

BERMUDA RESIDENT                                 :      Myles Flint1
REPRESENTATIVE

COMPANY SECRETARY                                :      Garland Ince1, RN (Pysch)

BERMUDA ASSISTANT RESIDENT                       :      Appleby Services (Bermuda) Ltd.1
REPRESENTATIVE AND                                      Canon’s Court
ASSISTANT COMPANY                                       22 Victoria Street
SECRETARY                                               Hamilton HM 12
                                                        Bermuda

REGISTERED OFFICE                                :      Canon’s Court
                                                        22 Victoria Street
                                                        Hamilton HM 12
                                                        Bermuda

PRINCIPAL PLACE OF BUSINESS                      :      18 Xinsheng Road
                                                        Xinyang Industrial Zone
                                                        Haicang District
                                                        Xiamen City, Fujian Province
                                                        People’s Republic of China 361026

BERMUDA PRINCIPAL                                :      The Bank of Bermuda Limited
REGISTRAR AND TRANSFER                                  Bank of Bermuda Building
AGENT                                                   6 Front Street
                                                        Hamilton HM 11
                                                        Bermuda

REGISTRAR FOR THE INVITATION                     :      Boardroom Corporate & Advisory Services Pte. Ltd.
AND SINGAPORE SHARE                                     (formerly known as Lim Associates (Pte) Ltd)
TRANSFER AGENT                                          3 Church Street
                                                        #08-01 Samsung Hub
                                                        Singapore 049483

MANAGER                                          :      Boulton Capital Asia Pte. Limited
                                                        20 Cecil Street
                                                        #19-03 Equity Plaza
                                                        Singapore 049705



1
    Myles Flint, Garland Ince and Appleby Services (Bermuda) Ltd will resign as Bermuda Resident Representative, Company
    Secretary and Bermuda Assistant Resident Representative and Assistant Company Secretary respectively upon the listing
    of the Shares on the SGX-ST, whereupon Appleby Services (Bermuda) Ltd will be appointed as the Bermuda Resident
    Representative and Chan Pak Kin Ken, CPA will be appointed as Company Secretary and Sin Kwok Chui Malon, CPA will
    be appointed as Assistant Company Secretary.

                                                           1
UNDERWRITER AND PLACEMENT      :   UOB Kay Hian Private Limited
AGENT                              80 Raffles Place #30-01
                                   UOB Plaza 1
                                   Singapore 048624

SOLICITORS TO THE INVITATION   :   Rajah & Tann
                                   4 Battery Road, #26-01
                                   Bank of China Building
                                   Singapore 049908

SOLICITORS TO THE MANAGER,     :   Shook Lin & Bok LLP
UNDERWRITER AND PLACEMENT          1 Robinson Road
AGENT                              #18-00 AIA Tower
                                   Singapore 048542

LEGAL ADVISER TO THE           :   Appleby
COMPANY ON BERMUDA LAW             5511 The Center
                                   99 Queen’s Road Central
                                   Hong Kong

LEGAL ADVISER TO THE           :   Jingtian & Gongcheng
COMPANY ON PRC LAW                 15th Floor, The Union Plaza
                                   20 Chaoyangmenwai Street
                                   Chaoyang District
                                   Beijing 100020
                                   People’s Republic of China

JOINT REPORTING                :   Grant Thornton
ACCOUNTANTS                        Certified Public Accountants
                                   13th Floor, Gloucester Tower
                                   The Landmark
                                   15 Queen’s Road Central
                                   Hong Kong
                                   Partner-in-charge: Lo Ngai Hang

                                   Foo Kon Tan Grant Thornton
                                   Certified Public Accountants
                                   47 Hill Street #05-01
                                   Singapore Chinese Chamber of Commerce &
                                   Industry Building
                                   Singapore 179365
                                   Partner-in-charge: Wong Kian Kok

AUDITORS                       :   Grant Thornton
                                   Certified Public Accountants
                                   13th Floor, Gloucester Tower
                                   The Landmark
                                   15 Queen’s Road Central
                                   Hong Kong
                                   Partner-in-charge: Lo Ngai Hang

RECEIVING BANK                 :   The Bank of East Asia Limited
                                   137 Market Street
                                   Bank of East Asia Building
                                   Singapore 048943


                                     2
PRINCIPAL BANKER   :   Industrial and Commercial Bank of China, Haicang
                       Branch
                       No. 95, Canghong Road
                       Haicang Living Area
                       Xiamen City
                       People’s Republic of China

VENDORS            :   CIM VIII Limited
                       P.O. Box 957
                       Offshore Incorporations Centre
                       Road Town Tortola
                       British Virgin Islands

                       Goodwise Investments Limited
                       2nd Floor Abbott Building
                       Road Town Tortola
                       British Virgin Islands

                       Hong Kong Investments Group Limited
                       2nd Floor Abbott Building
                       Road Town Tortola
                       British Virgin Islands

                       Longold Group Limited
                       2nd Floor Abbott Building
                       Road Town Tortola
                       British Virgin Islands




                         3
                                          DEFINITIONS

In this Prospectus and the accompanying Application Forms and, in relation to Electronic Applications,
the instructions appearing on the screens of the ATMs or the IB websites of the relevant Participating
Banks, the following definitions apply where the context so admits:


Our Group Companies

“Changtian Plastic & Chemical”       :    Changtian Plastic & Chemical Limited, incorporated in
or the “Company”                          Bermuda on 29 March 2007 as an exempted company with
                                          limited liability

“Changtian Enterprise”               :    Xiamen        Changtian     Enterprise      Co.,     Ltd.
                                                                , a wholly foreign-owned enterprise
                                          established in the PRC and wholly-owned by our Company

“Group”                              :    Our Company and our subsidiaries following the completion
                                          of the Restructuring Exercise

“Jumbo Glories”                      :    Jumbo Glories Limited, a company incorporated in the BVI
                                          and wholly-owned by our Company

Other Companies and Government and Regulatory Bodies

“Authority”                          :    The Monetary Authority of Singapore

“Boulton Capital” or “ Manager”      :    Boulton Capital Asia Pte. Limited

“CDP”                                :    The Central Depository (Pte) Limited

“CIM VIII”                           :    CIM VIII Limited, a company incorporated in the BVI

“East Fortune”                       :    East Fortune Development Limited, a company
                                          incorporated in the BVI and wholly-owned by Yip Man King

“Eastline Investments”               :    Eastline Investments Holding Limited, a company
                                          incorporated in the BVI and wholly-owned by Yang Qingjin,
                                          our Chairman and Executive Director

“Goodwise Investments”               :    Goodwise Investments Limited, a company incorporated in
                                          the BVI and wholly-owned by Chen Yongfu, our Deputy
                                          Chairman and Executive Director

“Hong Kong Investments”              :    Hong Kong Investments Group Limited, a company
                                          incorporated in the BVI and wholly-owned by Cheung Chi
                                          Mang

“ISO”                                :    International Organization for Standardization. A worldwide
                                          federation of national standards bodies from more than 140
                                          countries, whose mission is to develop industrial standards
                                          that facilitate international trade. The work of preparing
                                          International Standards is normally carried out through ISO
                                          technical committees

“Longold Group”                      :    Longold Group Limited, a company incorporated in the BVI
                                          and wholly-owned by Chuang Chin Fang




                                                  4
“Rowview”                   :   Rowview Limited, a company incorporated in the BVI and
                                equally owned by Chen Baohua, the wife of Yang Qingjin
                                (our Chairman and Executive Director) and the sister of
                                Chen Yongfu (our Deputy Chairman and Executive Director)

“SAFE”                      :   State Administration of Foreign Exchange of the PRC


“SCCS”                      :   Securities Clearing & Computer Services (Pte) Ltd

“SGX-ST”                    :   Singapore Exchange Securities Trading Limited

“Underwriter”, “Placement   :   UOB Kay Hian Private Limited
Agent” or “UOB Kay Hian”

“Xiamen Brightforever”      :   Xiamen     Brightforever Plastic Industrial Co., Ltd.
                                                       , a limited liability company with
                                foreign investment incorporated in the PRC

“Xiamen Changtian”          :   Xiamen                Plastic & Chemical Co., Ltd.
                                                Changtian
                                                      , a limited liability company
                                incorporated in the PRC

“Xiamen Xin Guan”           :   Xiamen Xin Guan Trading Co., Ltd.             ,
                                formerly known as Xiamen Xin Guan Group Limited


General

“Application Forms”         :   The official printed application forms to be used for the
                                purpose of the Invitation and which form part of this
                                Prospectus

“Application List”          :   The list of applications for subscription for the Invitation
                                Shares

“Associate”                 :   In relation to an entity, means:
                                (a)   in a case where the entity is a substantial shareholder,
                                      controlling shareholder, substantial interest-holder or
                                      controlling interest-holder, its related corporation,
                                      related entity, associated company or associated
                                      entity; or
                                (b)   in any other case:
                                      (i)       a director or an equivalent person;
                                      (ii)      where the entity is a corporation, a controlling
                                                shareholder of the entity;
                                      (iii)     where the entity is not a corporation, a controlling
                                                interest-holder of the entity;
                                      (iv) a subsidiary, a subsidiary entity, an associated
                                           company, or an associated entity; or
                                      (v)       a subsidiary, a subsidiary entity, an associated
                                                company, or an associated entity, of the
                                                controlling shareholder or controlling interest-
                                                holder, as the case may be, of the entity; and


                                            5
                                       In relation to an individual, means:
                                       (a)   his immediate family;
                                       (b)   trustee of any trust of which the individual or any
                                             member of the individual’s immediate family is:
                                             (i)       a beneficiary; or
                                             (ii)      where the trust is a discretionary trust, a
                                                       discretionary object,

                                             when the trustee acts in that capacity; or
                                             (iii)     any corporation in which he and his immediate
                                                       family (whether directly or indirectly) have
                                                       interests in voting shares of an aggregate of not
                                                       less than 15% of the total votes attached to all
                                                       voting shares

                                       The terms “associated company”, “associated entity”,
                                       “controlling interest holder”, “controlling shareholder”, “related
                                       corporation”, “related entity”, “subsidiary”, “subsidiary entity”
                                       and “substantial interest-holder” shall have the same
                                       meanings ascribed to them respectively in the Securities and
                                       Futures (Offers of Investments) (Shares and Debentures)
                                       Regulations 2005

“ATM”                              :   Automated teller machine of a Participating Bank

“Audit Committee”                  :   The audit committee of our Company as at the date of this
                                       Prospectus

“Bermuda Companies Act”            :   The Companies Act 1981 of Bermuda, as amended,
                                       supplemented or modified from time to time

“BVI”                              :   British Virgin Islands

“Bye-laws”                         :   The bye-laws of our Company, as amended, supplemented or
                                       modified from time to time

“Combined Financial Information”   :   The Reports from the Joint Reporting Accountants on the
                                       Audited Combined Financial Information of the Group for the
                                       Financial Years Ended 31 December 2004, 31 December
                                       2005 and 31 December 2006 and Unaudited Combined
                                       Financial Information of the Group for the Three Months
                                       Ended 31 March 2007 as set out in Appendix A and Appendix
                                       B respectively of this Prospectus

“Controlling Shareholder”          :   In relation to a corporation, means:
                                       (a)   a person who has an interest in the voting rights of the
                                             corporation and who exercises control over the
                                             corporation; or
                                       (b)   a person who has an interest in the voting shares of
                                             the corporation of an aggregate of not less than 30%
                                             of the total votes attached to all voting shares in the
                                             corporation, unless he does not exercise control over
                                             the corporation


                                                   6
“CPF”                       :   Central Provident Fund

“Directors”                 :   The directors of our Company as at the date of this
                                Prospectus

“Electronic Applications”   :   Applications for the Offer Shares made through an ATM or
                                the IB website of one of the relevant Participating Banks in
                                accordance with the terms and conditions of this
                                Prospectus

“entity”                    :   Has the meaning as set out in Section 2 of the SFA

“EPS”                       :   Earnings per share

“ESOS”                      :   The Changtian Employee Share Option Scheme, adopted
                                by our Company on 24 September 2007, the terms of which
                                are set out in Appendix G of this Prospectus

“Executive Directors”       :   The executive Directors of our Company as at the date of
                                this Prospectus

“Executive Officers”        :   The executive officers of our Company as at the date of this
                                Prospectus

“FY”                        :   Financial year ended or, as the case may be, ending 31
                                December

“Hong Kong”                 :   The Hong Kong Special Administrative Region of the PRC

“IB”                        :   Internet Banking

“Independent Directors”     :   The independent Directors of our Company as at the date of
                                this Prospectus

“Invitation”                :   The invitation by our Company and the Vendors to the
                                public to subscribe for and/or purchase the Invitation
                                Shares, subject to and on the terms and conditions of this
                                Prospectus

“Invitation Shares”         :   The 215,000,000 Shares which are the subject of the
                                Invitation, comprising 160,000,000 New Shares and
                                55,000,000 Vendor Shares

“ISO 9001:2000”             :   The third edition of ISO 9001 to cancel and replace the
                                second edition (ISO 9001:1994) together with ISO
                                9002:1994 and ISO 9003:1994

“Issue Price”               :   S$0.47 for each Invitation Share

“Latest Practicable Date”   :   14 September 2007, being the latest practicable date prior
                                to the lodgement of this Prospectus with the Authority

“Listing Manual”            :   Listing Manual of the SGX-ST, as amended, supplemented
                                or modified from time to time

“Market Day”                :   A day on which the SGX-ST is open for trading in securities

“NAV”                       :   Net asset value



                                       7
“New Shares”                 :   The 160,000,000 new Shares which our Company invites
                                 applications to subscribe for pursuant to the Invitation,
                                 subject to and on the terms and conditions of this
                                 Prospectus

“Nominating Committee”       :   The nominating committee of our Company as at the date of
                                 this Prospectus

“Non-executive Directors”    :   The non-executive Directors of our Company as at the date
                                 of this Prospectus

“NTA”                        :   Net tangible assets

“Offer”                      :   Offer by our Company and the Vendors to the public to
                                 subscribe for and/or purchase the Offer Shares at the Issue
                                 Price, subject to and on the terms and conditions of this
                                 Prospectus

“Offer Shares”               :   5,000,000 of the Invitation Shares which are the subject of
                                 the Offer

“Options”                    :   The options which may be granted pursuant to the ESOS

“Option Shares”              :   The new Shares (not exceeding 15% of the issued share
                                 capital of our Company on the date preceding the grant of
                                 an Option) which may be allotted and issued upon the
                                 exercise of the Options

“Participating Banks”        :   DBS Bank Ltd (including POSB) (“DBS”); Oversea-Chinese
                                 Banking Corporation Limited (“OCBC”); and United
                                 Overseas Bank Limited and its subsidiary, Far Eastern
                                 Bank Limited (the “UOB Group”)

“PAT”                        :   Profit after taxation

“PBT”                        :   Profit before taxation

“PER”                        :   Price earnings ratio

“Period Under Review”        :   The period which comprises FY2004, FY2005, FY2006 and
                                 the three months ended 31 March 2007

“Placement”                  :   The placement by the Placement Agent on behalf of our
                                 Company and the Vendors of the Placement Shares at the
                                 Issue Price, subject to and on the terms and conditions of
                                 this Prospectus

“Placement Shares”           :   210,000,000 of the Invitation Shares which are the subject
                                 of the Placement

“PRC” or “China”             :   People’s Republic of China, which for the purposes of this
                                 Prospectus, excludes Hong Kong and Macau Special
                                 Administrative Regions of the PRC, and Taiwan

“Pre-Invitation Investors”   :   CIM VIII, Longold Group, Hong Kong Investments and East
                                 Fortune




                                         8
“Remuneration Committee”           :   The remuneration committee of our Company as at the date
                                       of this Prospectus

“Restructuring Exercise”           :   The restructuring exercise of our Group undertaken in
                                       connection with the Invitation, as described in the section
                                       “Restructuring Exercise” of this Prospectus

“Securities Account”               :   Securities account maintained by a Depositor with CDP but
                                       does not include a securities sub-account

“SFA” or “Securities and Futures   :   Securities and Futures Act (Chapter 289) of Singapore, as
Act”                                   amended, supplemented or modified from time to time

“Shares”                           :   Ordinary shares of S$0.05 each in the capital of our
                                       Company

“Shareholders”                     :   Registered holders of our Shares

“Singapore Companies Act”          :   The Companies Act, Chapter 50 of Singapore, as amended,
                                       supplemented or modified from time to time

“Singapore Take-over and           :   Sections 138, 139 and 140 of the Securities and Futures Act
Merger Laws and Regulations”           and the Singapore Code on Take-overs and Mergers

“State” or “PRC Government”        :   The central government of the PRC, including all political
                                       subdivisions (including provincial, municipal and other
                                       regional or local government entities) and instrumentalities
                                       thereof

“Substantial Shareholder”          :   A person who has an interest or interests in one or more
                                       voting Shares in our Company; and the total votes attached
                                       to those share(s) represents not less than 5% of the total
                                       votes attached to all the voting shares in our Company

“USA”                              :   The United States of America

“Vendors”                          :   CIM VIII, Goodwise Investments, Hong Kong Investments
                                       and Longold Group and “Vendor” means each or any of
                                       them

“Vendor Shares”                    :   The 55,000,000 issued and fully paid-up Shares for which
                                       the Vendors invite applications to purchase in the Invitation,
                                       subject to and on the terms and conditions of this
                                       Prospectus

“WFOE”                             :   Wholly foreign-owned enterprise

Currencies

“HK$”                              :   Hong Kong dollar(s)

“RMB” and “RMB cents”              :   Renminbi and Renminbi cent(s) respectively

“S$” or “$” and “cents”            :   Singapore dollar(s) and Singapore cent(s) respectively

“US$”                              :   United States dollar(s)




                                              9
Units

“µm”                                   :    Micrometres

“mm”                                   :    Millimetres

“sq m”                                 :    Square metres

“tonnes”                               :    Metric tonnes

“%“ or “per cent”                      :    Per centum

Any reference in this Prospectus and the Application Forms and, in relation to Electronic Applications, the
instructions appearing on the screen of the ATMs of the Participating Banks, to any statute or enactment
is a reference to that statute or enactment for the time being amended or re-enacted. Any word defined
under the Singapore Companies Act, the Bermuda Companies Act, the SFA or any statutory modification
thereof and used in this Prospectus and the Application Forms and Electronic Applications shall have the
meaning assigned to it under the Singapore Companies Act, the Bermuda Companies Act, the SFA or such
statutory modification, as the case may be.

Any reference in this Prospectus and the Application Forms and, in relation to Electronic Applications, the
instructions appearing on the screen of the ATMs of the Participating Banks, to Shares being allotted to an
applicant includes allotment to CDP for the account of that applicant.

Any reference to a time of day in this Prospectus shall be a reference to Singapore time unless otherwise
stated.

The expressions “we”, “us”, “our”, “ourselves”, or other grammatical variations thereof shall, unless
otherwise stated, mean our Company and our subsidiaries.

The terms “Depositor”, “Depository Agent” and “Depository Register” shall have the meanings ascribed to
them respectively in Section 130A of the Singapore Companies Act.

Words importing the singular shall, where applicable, include the plural and vice versa and words importing
the masculine gender shall, where applicable, include the feminine and neuter genders and vice versa.
References to persons shall include corporations.

Certain names with Chinese characters have been translated into English names. Such translations are
provided solely for the convenience of investors and may not have been registered with the relevant PRC
authorities and should not be construed as representations that the English names actually represent the
Chinese names and/or characters.

Any discrepancies between the amounts listed and the totals thereof in the tables and the figures included
herein are due to rounding. Accordingly, figures shown as totals in certain tables may not be an arithmetic
aggregation of the figures that precede them.




                                                    10
                           GLOSSARY OF TECHNICAL TERMS

The glossary contains an explanation of certain terms used in this Prospectus in connection with our
Group and our business. The terms and their assigned meanings may not correspond to standard
industry or common meanings, as the case may be, or usage of these terms.


“2-A2MPS”                           :    2-Acrylamido-2-methyl propane sulfonic acid, a kind of vinyl
                                         monomer that contains sulfonic acid gene. Any reference in
                                         this Prospectus to “2-A2MPS” is a reference to such
                                         acronym and is not intended to refer to any specific or
                                         similar product

“acrylonitrile”                     :    A chemical compound with the formula CH2CHCN, which
                                         molecular structure consists of a vinyl group linked to a
                                         nitrile

“BOPA”                              :    Biaxially-oriented polyamide

“BOPET”                             :    Biaxially-oriented polyethylene terephthalate (polyester)

“BOPP”                              :    Biaxially-oriented polypropylene

“butyl acrylate”                    :    An acrylic acid ester for manufacturing polymers

“CCK paper”                         :    Clay coated kraft paper

“Corona treating”                   :    A process of increasing the surface tension of a material by
                                         exposing it to an electrical discharge

“CPP “                              :    Casting polypropylene

“glassine paper”                    :    Glazed, transparent paper that is grease proof and resistant
                                         to the passage of air

“isobutylene”                       :    A chemical compound with the formula C4H8, used as a raw
                                         material for the production of our 2-A2MPS

“monomer”                           :    A molecule or chemical compound composed of simple
                                         molecules from which polymers, synthetic resins or
                                         elastomers can be created

“PA6”                               :    A type of polyamide resin, commonly known as nylon 6,
                                         used as a raw material in the manufacture of our BOPA film

“PE”                                :    Polyethylene

“polymer”                           :    A chain of small molecules joined together in a repeated
                                         fashion to form a larger molecule of specific properties

“polyvinyl acetate”                 :    A vinyl polymer used in paints and adhesives

“silicone oil”                      :    Oil consisting of methyl silicone polymers, used primarily for
                                         lubrication and as insulating and hydraulic fluid

“UV cured release film”             :    UV-treated silicone coated release film




                                                11
              PURCHASE BY OUR COMPANY OF OUR OWN SHARES

Under the laws of Bermuda, a company may, if authorised by its memorandum of association
or bye-laws, purchase its own shares. Our Company has such power to purchase our own
Shares according to paragraph 7(iii) of our Memorandum of Association. Such power to
purchase our own Shares shall, subject to the Bermuda Companies Act and our Memorandum
of Association (and, if applicable, the rules and regulations of the SGX-ST and other regulatory
authorities) be exercisable by our Directors upon such terms and subject to such conditions as
they think fit, in accordance with Bye-law 7(B).

Under the laws of Bermuda, such purchases may be effected out of the capital paid-up on the
purchased Shares or out of the funds of our Company otherwise available for dividend or distribution
or out of proceeds of a fresh issue of Shares made for that purpose. Any premium payable on such a
purchase over the par value of the Shares to be purchased must be provided for out of the funds of our
Company otherwise available for dividend or distribution or out of our Company’s share premium
account before the Shares are purchased. Any amount due to a Shareholder on a purchase by our
Company of our own Shares may (i) be paid in cash, (ii) be satisfied by the transfer of any part of the
undertaking or property of our Company having the same value; or (iii) be satisfied partly under (i) and
partly under (ii). Further, such purchase may not be made if, on the date on which the purchase is to
be effected, there are reasonable grounds for believing that our Company is, or after the purchase
would be, unable to pay our liabilities as they become due. Shares purchased by our Company will be
treated as cancelled and our Company’s issued, but not our authorised, capital will be diminished
accordingly.

For further details of the power of our Company to purchase our own Shares, please see the section
“Purchase by the company of its own shares and warrants” in paragraph (d) of Appendix E —
“Summary of Bermuda company law” of this Prospectus.

Our Company presently has no intention of purchasing our own Shares after the listing. However, if we
decide to do so later, we will seek Shareholders’ approval in accordance with the laws of Bermuda, our
Bye-laws and the rules of the SGX-ST. Our Company will make prompt public announcement of any
such share purchase and has given an undertaking to the SGX-ST to comply with all requirements that
the SGX-ST may impose in the event of any such share purchase.




                                                  12
                        ATTENDANCE AT GENERAL MEETINGS

Under the Bermuda Companies Act, only persons who agree to become members of a company and
whose names are entered on the register of members of such company are considered members, with
rights to attend and vote at general meetings. Accordingly, Depositors holding Shares through the CDP
would not be recognised as members of our Company, and would not have a right to attend and to vote
at general meetings of our Company. In the event that Depositors wish to attend and vote at general
meetings of our Company, CDP will have to appoint them as proxies, pursuant to the Bye-laws and the
Bermuda Companies Act. The proxy form appointing Depositors as the proxies of CDP would be
enclosed with the Shareholders’ circular which would contain a notice convening the relevant general
meeting. The proxy form would need to be completed by CDP as Shareholder and deposited within the
specified time frame, to enable such Depositor to attend and vote as a proxy at the relevant general
meeting of our Company.




                                                 13
                                           TAKE-OVERS

There are presently no requirements under any Bermuda laws or regulations on take-over offers for our
Shares which would be applicable to us. However, pursuant to the Securities and Futures Act, sections
138, 139 and 140 of the Securities and Futures Act and the Singapore Code on Take-overs and
Mergers (collectively the “Singapore Take-over and Merger Laws and Regulations”) apply to take-over
offers of companies which are incorporated outside Singapore and all or any of the shares of which are
listed for quotation on a securities exchange (as defined in the Securities and Futures Act). Accordingly,
the Singapore Take-over and Merger Laws and Regulations will apply to take-over offers for our
Company for so long as our Shares are listed on a securities exchange, which includes the SGX-ST.




                                                   14
                                     SELLING RESTRICTIONS

This Prospectus does not constitute an offer, solicitation or invitation to subscribe for and/or purchase
the Invitation Shares in any jurisdiction in which such offer, solicitation or invitation is unlawful or is not
authorised or to any person to whom it is unlawful to make such offer, solicitation or invitation. No action
has been or will be taken under the requirements of the legislation or regulations of, or of the legal or
regulatory authorities of, any jurisdiction, except for the filing and/or registration of this Prospectus in
Singapore and Bermuda in order to permit a public offering of the Invitation Shares and the public
distribution of this Prospectus in Singapore. The distribution of this Prospectus and the offering of the
Invitation Shares in certain jurisdictions may be restricted by the relevant laws in such jurisdictions.
Persons who may come into possession of this Prospectus are required by us, the Vendors, the
Manager, the Underwriter and the Placement Agent to inform themselves about, and to observe and
comply with, any such restrictions.

Selling Restrictions in Hong Kong
This Prospectus does not constitute an offer to the public in Hong Kong to subscribe for the Invitation
Shares.

This Prospectus has not been and will not be registered with the Registrar of Companies in Hong Kong.
Accordingly, except as mentioned below, this Prospectus may not be issued, circulated or distributed
in Hong Kong.

A copy of this Prospectus may, however, be distributed by the Placement Agent or its designated
subplacement agents to a limited number of prospective applicants for the Placement Shares in Hong
Kong in a manner which does not constitute an offer of the Placement Shares to the public in Hong
Kong or an issue, circulation or distribution in Hong Kong of a prospectus for the purposes of the
Companies Ordinance (Chapter 32 of the Laws of Hong Kong). The offer of the Placement Shares is
personal to the person named in the accompanying Application Form, and application for the
Placement Shares will only be accepted from such person. An application for the Placement Shares is
not invited from any persons in Hong Kong other than a person to whom a copy of this Prospectus has
been issued by the Placement Agent or its designated sub-placement agents, and if made, will not be
accepted, unless the applicant satisfies the Placement Agent or its respective designated sub-
placement agents that he is a person whose ordinary business is to buy or sell shares, whether as
principal or agent.

No person to whom a copy of this Prospectus is issued may issue, circulate or distribute this Prospectus
in Hong Kong or make or give a copy of this Prospectus to any other person, other than their legal,
financial, tax or other appropriate advisers who are subject to a duty of confidentiality to such person.

The Placement Agent has agreed with our Company that it (and each of their respective designated
sub-placement agents, if any) has not offered or sold, and will not offer or sell, in Hong Kong, by means
of any document, any of our Shares other than to a person whose ordinary business is to buy or sell
shares, whether as principal or agent, or in circumstances which do not constitute an offer of the
Placement Shares to the public within the meaning of the Companies Ordinance (Chapter 32 of the
Laws of Hong Kong).

This Prospectus may not be issued in Hong Kong other than to a person whose ordinary business is
to buy or sell shares, whether as principal or agent.

Selling Restrictions in the PRC
This Prospectus does not constitute an offer, solicitation or invitation to subscribe for and/or purchase
the Invitation Shares or any other securities of our Company in the PRC. Under the laws of the PRC,
such offer, solicitation or invitation to PRC citizens is unlawful. The distribution of this Prospectus and
the offering of the Invitation Shares in the PRC are not permitted under the laws of the PRC.


                                                      15
                                 DETAILS OF THE INVITATION

LISTING ON THE SGX-ST
We have applied to the SGX-ST for permission to deal in, and for quotation of, all our Shares already
issued (including the Vendor Shares), the New Shares and the Option Shares on the Official List of the
SGX-ST. Such permission will be granted when our Company has been admitted to the Official List of
the SGX-ST. Acceptance of applications for the Invitation Shares will be conditional upon permission
being granted by the SGX-ST to deal in, and for the quotation of, all our issued Shares (including the
Vendor Shares), the New Shares and the Option Shares. If the said permission is not granted, monies
paid in respect of any application accepted will be returned to you at your own risk, without interest or
any share of revenue or other benefit arising therefrom, and you will not have any claim against us, the
Vendors, the Manager, the Underwriter or the Placement Agent.

The SGX-ST assumes no responsibility for the correctness of any of the statements made, reports
contained or opinions expressed in this Prospectus. Admission to the Official List of the SGX-ST is not
to be taken as an indication of the merits of the Invitation, our Company, our subsidiaries or our Shares
(including the Vendor Shares), the New Shares or the Option Shares.

No shares shall be allotted on the basis of this Prospectus later than six months after the date of
registration of this Prospectus by the Authority.

A copy of this Prospectus has been lodged with and registered by the Authority. The Authority assumes
no responsibility for the contents of the Prospectus. Registration of the Prospectus by the Authority
does not imply that the Securities and Futures Act, or any other legal or regulatory requirements, have
been complied with. The Authority has not, in any way, considered the merits of the Shares (including
the Vendor Shares), the New Shares or the Option Shares, as the case may be, being offered for
investment.

We are subject to the provisions of the Securities and Futures Act and the Listing Manual regarding
corporate disclosure. In particular, if after this Prospectus is registered but before the close of the
Invitation, we become aware of:
(a)   a false or misleading statement in this Prospectus;
(b)   an omission from this Prospectus of any information that should have been included in it under
      Section 243 of the Securities and Futures Act; or
(c)   a new circumstance that has arisen since this Prospectus was lodged with the Authority which
      would have been required by Section 243 of the Securities and Futures Act to be included in this
      Prospectus, if it had arisen before this Prospectus was lodged,

that is materially adverse from the point of view of an investor, we may lodge a supplementary or
replacement prospectus with the Authority pursuant to Section 241 of the Securities and Futures Act and
will file a copy of such prospectus with the Registrar of Companies in Bermuda.

Where prior to the lodgement of the supplementary or replacement prospectus, applications have been
made under this Prospectus to subscribe for and/or purchase the Invitation Shares and:
(a)   where the Invitation Shares have not been issued and/or transferred to the applicants, our
      Company (as well as on behalf of the Vendors) shall:
      (i)   within two days (excluding any Saturday, Sunday or public holiday) from the date of the
            lodgement of the supplementary or replacement prospectus, give the applicants notice in
            writing of how to obtain, or arrange to receive, a copy of the supplementary or replacement
            prospectus, as the case may be, and provide the applicants with an option to withdraw their
            applications; and take all reasonable steps to make available within a reasonable period, the
            supplementary or replacement prospectus, as the case may be, to the applicants who have

                                                   16
              indicated that they wish to obtain, or who have arranged to receive, a copy of the
              supplementary prospectus or replacement prospectus;
      (ii)    within seven days from the date of lodgement of the supplementary or replacement
              prospectus, give the applicants the supplementary or replacement prospectus, as the case
              may be, and provide the applicants with an option to withdraw their applications; or
      (iii)   treat the applications as withdrawn and cancelled, in which case the applications shall be
              deemed to have been withdrawn and cancelled, and within seven days from the date of
              lodgement of the supplementary or replacement prospectus, pay the applicants all monies
              the applicants have paid on account of their applications for the Invitation Shares; or
(b)   where the Invitation Shares have been issued to the applicants, our Company shall (as well as on
      behalf of the Vendors) either:
      (i)     within seven days from the date of lodgement of the supplementary or replacement
              prospectus, give the applicants the supplementary or replacement prospectus, as the case
              may be, and provide the applicants with an option to return to our Company the Invitation
              Shares, which they do not wish to retain title in; or
      (ii)    treat the issue of the Invitation Shares as void, in which case the issue shall be deemed void
              and our Company shall within seven days from the date of lodgement of the supplementary
              or replacement prospectus, return all monies paid in respect of any application, without
              interest or a share of revenue or benefit arising therefrom; or
(c)   where the Invitation Shares have been transferred to the applicants, our Company shall (as well
      as on behalf of the Vendors) either:
      (i)     within seven days from the date of lodgement of the supplementary or replacement
              prospectus, give the applicants the supplementary or replacement prospectus, as the case
              may be, and provide the applicants with an option to return to our Company the Invitation
              Shares, which they do not wish to retain title in; or
      (ii)    treat the sale of the Invitation Shares as void and if documents purporting to evidence title
              to the Invitation Shares have been issued to the applicants, our Company shall (as well as
              on behalf of the Vendors) within seven days from the date of lodgement of the
              supplementary or replacement prospectus inform the applicants to return such documents
              to our Company within 14 days from that date; and within seven days from the date of receipt
              of those documents (if applicable) or the date of lodgement of the supplementary or
              replacement prospectus, whichever is later, return to the applicants, all monies the
              applicants have paid for the Invitation Shares, without interest or share of revenue or benefit
              arising therefrom.

An applicant who wishes to exercise his option under paragraph (a)(ii) to withdraw his application shall,
within 14 days from the date of lodgement of the supplementary or replacement prospectus, notify our
Company of this, whereupon our Company (as well as on behalf of the Vendors) shall, within seven days
from the receipt of such notification, pay to him all monies paid by him on account of his application for
those Shares without interest or a share of revenue or benefit arising therefrom, at the applicant’s risk.

An applicant who wishes to exercise his option under paragraph (b)(i) and (c)(i) to return the Invitation
Shares issued and/or transferred to him shall, within 14 days from the date of lodgement of the
supplementary or replacement prospectus, notify our Company of this and return all documents, if any,
purporting to be evidence of title to those Invitation Shares, to our Company, whereupon our Company (as
well as on behalf of the Vendors) shall, subject to compliance with the Bermuda Companies Act, within
seven days from the receipt of such notification and documents, if any, pay to him all monies paid by him
for those Shares, without interest or a share of revenue or benefit arising therefrom, at the applicant’s risk
and the issue of those Shares shall be deemed to be void.




                                                      17
Under the Securities and Futures Act, the Authority may, in certain circumstances issue a stop order (the
“Stop Order”) to our Company, directing that no Shares or no further Shares to which this Prospectus
relates, be allotted, issued or sold. Such circumstances will include a situation where this Prospectus (i)
contains a statement, which in the opinion of the Authority is false or misleading, (ii) omits any information
that should be included in accordance with the Securities and Futures Act, (iii) does not, in the opinion of
the Authority comply with the requirements of the Securities and Futures Act or (iv) if the Authority is of the
opinion that it is in the public interest to do so.

Where applications to subscribe for and/or purchase the Invitation Shares to which this Prospectus relates
have been made prior to the Stop Order, and:
(a)   where the Invitation Shares have not been issued and/or transferred to the applicants, the
      applications shall be deemed to have been withdrawn and cancelled and our Company shall (as
      well as on behalf of the Vendors) within 14 days from the date of the Stop Order, pay to the
      applicants all monies the applicants have paid on account of their applications for the Invitation
      Shares; or
(b)   where the Invitation Shares have been issued to the applicants, the Securities and Futures Act
      provides that the issue of our Shares shall be deemed to be void and our Company (as well as
      on behalf of the Vendors) is required to, within 14 days from the date of the Stop Order, pay to the
      applicants all monies paid by them for the Invitation Shares; or
(c)   where the Invitation Shares have been transferred to the applicants, the sale of the Invitation
      Shares shall be deemed to be void and if documents purporting to evidence title have been issued
      to the applicants, our Company shall (as well as on behalf of the Vendors) within seven days from
      the date of the Stop Order, inform all applicants to return such documents to our Company within
      14 days from that date; and within seven days from the date of receipt of such documents (if
      applicable) or the date of the Stop Order, whichever is later, pay to the applicants, all monies the
      applicants have paid for the Invitation Shares.

If our Company is required by applicable Singapore laws to cancel issued Invitation Shares and repay
application monies to applicants (including instances where a stop order under the Securities and Futures
Act is issued), subject to compliance with the Bermuda Companies Act, our Company (as well as on behalf
of the Vendors) will purchase the Invitation Shares at the Issue Price. Information relating to the purchase
of Shares by our Company is set out in the section “Purchase by our Company of our own Shares” of this
Prospectus.

Where monies are to be returned to applicants for the Invitation Shares, it shall be paid to the applicants’
without interest or share of revenue or other benefit arising therefrom, and at the applicants’ own risk and
applicants will not have any claim against our Company, the Vendors, the Manager, the Underwriter or the
Placement Agent.

The Bermuda Monetary Authority has given its consent to the issue of the New Shares and the sale of the
Vendor Shares pursuant to the Invitation on the terms referred to in this Prospectus. A copy of this
Prospectus has been or will, as soon as reasonably practicable, be filed with the Registrar of Companies
in Bermuda. The Bermuda Monetary Authority in granting such permission and the Registrar of Companies
in Bermuda in accepting this Prospectus for filing accepts no responsibility for the financial soundness of
our Group or any proposal or for the correctness of any of the statements made or opinions expressed in
this Prospectus or any other documents.

This Prospectus has been seen and approved by our Directors and the Vendors, and they individually and
collectively accept full responsibility for the accuracy of the information given in this Prospectus and
confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, the facts
stated and the opinions expressed in this Prospectus are fair and accurate in all material respects as at the
date of this Prospectus and that there are no material facts the omission of which would make any
statements in the Prospectus misleading. This Prospectus constitutes full and true disclosure of all material



                                                      18
facts about the Invitation, our Company, our subsidiaries and our Shares (including the Vendor Shares, the
New Shares and the Option Shares).

The Invitation Shares are offered for subscription and/or purchase solely on the basis of the information
contained and the representations made in this Prospectus.

Neither our Company, our Directors, the Vendors, the Manager, the Underwriter and the Placement Agent,
nor any other parties involved in the Invitation is making any representation to any person regarding the
legality of an investment in our Shares by such person under any investment or other laws or regulations.
No information in this Prospectus should be considered as being business, legal or tax advice. Each
prospective investor should consult his own professional or other advisers for business, legal or tax advice
regarding an investment in our Shares.

No person has been or is authorized to give any information or to make any representation not contained
in this Prospectus in connection with the Invitation and, if given or made, such information or
representation must not be relied upon as having been authorized by us, the Vendors, the Manager, the
Underwriter or the Placement Agent. Neither the delivery of this Prospectus and the Application Forms nor
the Invitation shall, under any circumstances, constitute a continuing representation or create any
suggestion or implication that there has been no change in our affairs or in the statements of fact or
information contained in this Prospectus since the Latest Practicable Date. Where such changes occur, we
may make an announcement of the same to the SGX-ST and will comply with the requirements of the
Securities and Futures Act. All applicants should take note of any such announcement and, upon release
of such an announcement, shall be deemed to have notice of such changes. Save as expressly stated in
this Prospectus, nothing herein is, or may be relied upon as, a promise or representation as to our future
performance or policies.

This Prospectus has been prepared solely for the purpose of the Invitation and may not be relied upon by
any persons other than the applicants in connection with their application for the Invitation Shares for any
other purpose. This Prospectus does not constitute an offer, solicitation or invitation to subscribe
for and/or purchase, Invitation Shares in any jurisdiction in which such offer, solicitation or
invitation is unlawful or is not authorized or to any person to whom it is unlawful to make such
offer, solicitation or invitation.

Copies of this Prospectus and the Application Forms may be obtained on request, subject to availability,
during office hours from:

       Boulton Capital Asia Pte. Limited                        UOB Kay Hian Private Limited
                20 Cecil Street                                   80 Raffles Place #30-01
             #19-03 Equity Plaza                                        UOB Plaza 1
              Singapore 049705                                       Singapore 048624

and from members of the Association of Banks in Singapore, members of the SGX-ST and merchant
banks in Singapore. A copy of this Prospectus is also available on the SGX-ST website http://www.sgx.com
and the Authority’s OPERA website at http://masnet.mas.gov.sg/opera/sdrprosp.nsf.

The Application List will open at 10.00 a.m. on 6 November 2007 and will remain open until noon
on the same day or for such further period or periods as our Directors and the Vendors may, in
consultation with the Manager, in their absolute discretion decide, subject to any limitation under
all applicable laws. In the event a supplementary prospectus or replacement prospectus is lodged,
the Application List will remain open for at least 14 days after the lodgement of the supplementary
or replacement prospectus.




                                                    19
INDICATIVE TIMETABLE FOR LISTING
An indicative timetable is set out below for your reference:

INDICATIVE DATE/TIME                     EVENT

6 November 2007, 12.00 noon              Close of Application List

7 November 2007                          Balloting of applications, if necessary (in the event of over-
                                         subscription for the Offer Shares)

9 November 2007, 9.00 a.m.               Commence trading on a “ready” basis

14 November 2007                         Settlement date for all trades done on a “ready” basis on 9
                                         November 2007

The above timetable is only indicative as it assumes that the date of closing of the Application List is 6
November 2007, the date of admission of our Company to the Official List of the SGX-ST is 9 November
2007, the SGX-ST’s shareholding spread requirement will be complied with and the New Shares will be
issued and fully paid-up prior to 9 November 2007.

The above timetable and procedure may be subject to such modifications as the SGX-ST may in its
discretion decide, including the commencement date of trading on a “ready” basis.

In the event of any changes in the closure of the Application List or the time period during which the
Invitation is open, we will publicly announce the same:
(a)   through a SGXNET announcement to be posted on the Internet at the SGX-ST website
      http://www.sgx.com; and
(b)   in a local English newspaper, such as The Straits Times or the Business Times.

Investors should consult the SGX-ST announcement of the “ready” listing date on the Internet (at
the SGX-ST website http://www.sgx.com), INTV or newspapers, or check with their brokers on the
date on which trading on a “ready” basis will commence.

We will provide details of the results of the Invitation through the channels in (a) and (b) above as
soon as practicable after the closure of the Application List.




                                                   20
                              CLEARANCE AND SETTLEMENT

Upon listing and quotation on SGX-ST, our Shares will be traded under the book-entry settlement
system of CDP, and all dealings in and transactions of the Shares through SGX-ST will be effected in
accordance with the terms and conditions for the operation of Securities Accounts with CDP, as
amended, supplemented or modified from time to time.

Our Shares will be registered in the name of CDP or its nominee and held by CDP for and on behalf
of persons who maintain, either directly or through depository agents, Securities Accounts with CDP.
Persons named as direct securities account holders and depository agents in the depository register
maintained by CDP, will not be treated under our Bye-laws and the Bermuda Companies Act as
members of our Company in respect of the number of Shares credited to their respective Securities
Accounts of such persons and will hold their Shares and exercise their rights through CDP.

Persons holding the Shares in Securities Account(s) with CDP may withdraw the number of Shares
they own from the book-entry settlement system in the form of physical share certificates. Such share
certificates will, however, not be valid for delivery pursuant to trades transacted on SGX-ST, although
they will be prima facie evidence of title and may be transferred in accordance with our Bye-laws. A fee
of S$10.00 for each withdrawal of 1,000 Shares or less and a fee of S$25.00 for each withdrawal of
more than 1,000 Shares is payable upon withdrawing the Shares from the book-entry settlement
system and obtaining physical share certificates. In addition, a fee of S$2.00 or such other amount as
our Directors may decide, is payable to the share registrar for each share certificate issued and a stamp
duty of S$10.00 is also payable where our Shares are withdrawn in the name of the person withdrawing
our Shares or S$0.20 per S$100 or part thereof of the last-transacted price where it is withdrawn in the
name of a third party. Persons holding physical share certificates who wish to trade on SGX-ST must
deposit with CDP their share certificates together with the duly executed and stamped instruments of
transfer in favour of CDP, and have their respective Securities Accounts credited with the number of
Shares deposited before they can effect the desired trades. A fee of S$20.00 is payable upon the
deposit of each instrument of transfer with CDP.

Transactions in our Shares under the book-entry settlement system will be reflected by the seller’s
Securities Account being debited with the number of Shares sold and the buyer’s Securities Account
being credited with the number of Shares acquired. No stamp duty is currently payable for the Shares
that are settled on a book-entry basis.

A Singapore clearing fee for trades in our Shares on the SGX-ST is payable at the rate of 0.04 per cent
of the transaction value subject to a maximum of $600 per transaction. The clearing fee, instrument of
transfer deposit fee and share withdrawal fee may be subject to Singapore Goods and Services Tax of
7.0 per cent.

Dealings of our Shares will be carried out in Singapore dollars and will be effected for settlement on
CDP on a scripless basis. Settlement of trades on a normal “ready” basis on the SGX-ST generally
takes place on the third Market Day following the transaction date, and payment for the securities is
generally settled on the following business day. CDP holds securities on behalf of investors in
Securities Accounts. An investor may open a direct account with CDP or a sub-account with a CDP
agent. The CDP agent may be a member company of the SGX-ST, bank, merchant bank or trust
company.




                                                   21
      CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

All statements contained in this Prospectus, statements made in press releases and oral statements
that may be made by us or our officers, Directors or employees acting on our behalf, or the Vendors,
that are not statements of historical fact, constitute ‘forward-looking statements’. You can identify some
of these statements by forward-looking terms such as ‘expect’, ‘believe’, ‘plan’, ‘intend’, ‘estimate’,
‘forecast’, ‘project’, ‘future’, ‘probable’, ‘possible’, ‘anticipate’, ‘may’, ‘will’, ‘would’, and ‘could’ or similar
words. However, you should note that these words are not the exclusive means of identifying
forward-looking statements. All statements regarding our expected financial position, business
strategy, plans and prospects are forward-looking statements. These forward-looking statements,
including statements as to our revenue and profitability, cost measures, planned strategy and any other
matters discussed in this Prospectus regarding matters that are not historical facts are only predictions.
These forward-looking statements involve known and unknown risks, uncertainties and other factors
that may cause our actual results, performance or achievements to be materially different from any
future results, performance or achievements expressed or implied by such forward-looking statements.

Given the risks and uncertainties that may cause our actual future results, performance or
achievements to be materially different from that expected, expressed or implied by the forward-looking
statements in this Prospectus, undue reliance must not be placed on these statements.

Neither our Company, the Vendors, the Manager, the Underwriter and the Placement Agent nor any
other person represents or warrants that our Group’s actual future results, performance or
achievements will be as discussed in those statements. Our actual results may differ materially from
those anticipated in these forward-looking statements as a result of the risks faced by us.

Our Company, the Vendors, the Manager, the Underwriter and the Placement Agent disclaim any
responsibility to update any forward-looking statements or publicly announce any revisions to those
forward-looking statements to reflect future developments, events or circumstances for any reason,
even if new information becomes available or other events occur in the future. We are, however, subject
to the provisions of the Securities and Futures Act and the Listing Manual regarding corporate
disclosure, and may be required to lodge a supplementary or replacement document in respect of
future developments, events or circumstances that occur prior to the close of the Invitation and that are
required to be disclosed pursuant to law.




                                                         22
                                                EXCHANGE RATES

The exchange rate between RMB and S$ as at the Latest Practicable Date was RMB4.969 to S$1.00.

The table below sets out the high and low exchange rates between RMB and S$ for each of the past
six months prior to the Latest Practicable Date. The table below indicates how many RMB would take
to buy one S$.

Month                                                                                              RMB/S$ Rate
                                                                                           High                    Low
March 2007                                                                                 5.286                  5.034
April 2007                                                                                 5.128                  5.059
May 2007                                                                                   5.103                  4.989
June 2007                                                                                  5.006                  4.897
July 2007                                                                                  5.029                  4.972
August 2007                                                                                5.019                  4.924

The following table sets forth, for each of the financial years/periods indicated, the average and closing
exchange rates between RMB and S$. Where applicable, the exchange rates in this table are used for
our Group’s financial information disclosed elsewhere in this Prospectus.

                                                                                               RMB/S$ Rate
                                                                                         Average         Closing
FY2004                                                                                     4.898                  5.072
FY2005                                                                                     4.924                  4.853
FY2006                                                                                     5.019                  5.088
The three months ended 31 March 2006                                                       4.946                  4.960
The three months ended 31 March 2007                                                       5.068                  5.093

The above exchange rates have been obtained with reference to exchange rates quoted from
Bloomberg L.P. and should not be construed as representations that the RMB amounts actually
represent such S$ amounts or could be converted into S$ at the rate indicated or at any other rate and
vice versa(1).

Please refer to the section on “Exchange Control” of this Prospectus for a description of the exchange
controls that exist in the PRC and Bermuda.

Note:
(1)   We have not asked Bloomberg L.P. for their consent for the inclusion of the exchange rates quoted under this section and
      Bloomberg L.P. is thereby not liable for these statements under sections 253 and 254 of the SFA. Our Company has
      included the above exchange rates in their proper term and context in this Prospectus and has not verified the accuracy of
      these statements.




                                                              23
                                    PROSPECTUS SUMMARY

The information contained in this summary is derived from and should be read in conjunction with the
full text of this Prospectus. Prospective investors should carefully consider the information in this
Prospectus, particularly the matters set out in the section “Risk Factors” of this Prospectus before
buying our Shares. Terms defined elsewhere in this Prospectus have the same meanings when used
herein.


BUSINESS
We are principally engaged in the manufacture and sale of a range of products:
•    Adhesive tapes — Our adhesive tapes are for industrial, commercial and consumer uses. We
     have a wide range of adhesive tapes which includes BOPP adhesive tapes, masking tapes,
     double-sided adhesive tapes, kraft paper adhesive tapes and aluminium tapes;
•    Release papers — Our release papers are used as a protective backing on adhesive tapes or
     other adhesive materials to protect these materials from losing their adhesiveness. Our release
     papers include glassine silicone coated release papers and CCK release papers;
•    BOPA film — Our BOPA film is a packaging film used widely for packaging perishable food and
     odour-sensitive products and may be used under a wide range of temperatures for applications
     from refrigeration to vapour sterilisation. Our BOPA film is mainly sold to customers in the food and
     beverage industry; and
•    2-A2MPS — Our 2-A2MPS is one of the raw materials used in the manufacture of water-soluble
     polymers. Water soluble polymers are used in industrial processes, such as in oil and water
     treatment, and also in the production of consumer products such as acrylic fibre-based textiles,
     personal care products, adhesives, paper and packaging materials. Our 2-A2MPS products are
     mainly sold to customers in the oil industry and water treatment industry.

Our adhesive tapes, release papers and BOPA film products are sold under our brand name              and our
2-A2MPS product is sold under our brand name           .

Our manufacturing facilities are located in Xiamen City, Fujian Province, PRC. As at the Latest Practicable
Date, our production capacity per annum for our products is (i) adhesive tapes — 324 million sq m; (ii)
release papers — 120 million sq m; (iii) BOPA film — 5,400 tonnes; and (iv) 2-A2MPS — 1,500 tonnes.

For further details, please refer to the section “Our Business” of this Prospectus.


COMPETITIVE STRENGTHS
We believe our competitive strengths are as follows:
•    We have built up substantial brand goodwill and track record for our               and           brand
     names
•    We produce a wide range of products
•    We have an established track record and customer base
•    We offer competitive pricing for our products
•    We have an experienced management team

For further details of our competitive strengths, please refer to the section “Competitive Strengths” of this
Prospectus.




                                                     24
PROSPECTS
Our Directors expect that the PRC economy will continue to grow in the next few years. For the
foreseeable future, our Directors believe that there will be sustained growth in the market demand for
our products in the PRC due to the pace of growth and increasing industrialization within the PRC.
Increasing spending power of PRC consumers will lead to increasing demand for consumer goods and
services.

We have a wide range of adhesive tapes with different applications catering to the needs of a wide base
of customers. Our release papers also have a wide range of applications and are used in the hygiene,
medical, tapes, labels and fibre composites sectors. As such, our Directors believe that there will be
sustained demand for our adhesive tapes and release papers underpinned by the economic growth in
the PRC.

With respect to our BOPA film segment, our Directors believe that the current demand for BOPA film in
the PRC exceeds actual production capacity in the PRC. BOPA film is widely used as a packaging
material in many industries. In the PRC, with greater awareness for hygiene and food safety,
consumers will demonstrate a preference towards packaging materials that will ensure freshness and
preserve the quality of products. As such, our Directors believe that there are growth opportunities in
the BOPA film segment.

2-A2MPS is a raw material widely applied in various areas such as in the production of chemicals used
in water treatment, textile dyes, oil and gas industry, coating material and paper manufacturing.
Currently, as we are limited by our production capacity, we are only selling to customers in the oil
industry and water treatment industry. Our Directors believe that demand for our 2-A2MPS product will
grow, underpinned by continued growth in the oil and gas industry and our plans to broaden our reach
to customers in other industries.

For further details of our prospects, please refer to the section “Prospects and Future Plans” of this
Prospectus.


OUR STRATEGIES AND FUTURE PLANS
To capture the emerging business opportunities, we intend to adopt the strategy and future plans as set
out below:
•    expand our production capacity for BOPA film;
•    expand our range of release papers to include UV cured release film;
•    expand our production capacity for 2-A2MPS; and
•    construct additional storage facilities.

For further details of our strategies and future plans, please refer to the section on “Prospects and Future
Plans” of this Prospectus.




                                                    25
OUR FINANCIAL PERFORMANCE
The following tables present a summary of the financial highlights of our Group and should be read in
conjunction with the Combined Financial Information set out in Appendix A and Appendix B of this
Prospectus.


Selected items from the operating results of our Group

                                                          Audited                                 Unaudited
                                                                                      Three months       Three months
                                                                                          ended              ended
(RMB’000)                                    FY2004        FY2005       FY2006        31 March 2006      31 March 2007
Revenue                                      223,246       412,001      540,013          116,638             151,297
Gross profit                                  61,903       124,669      188,828              39,730            56,364
Gross profit margin                            27.7%         30.3%        35.0%               34.1%            37.3%
Profit before income tax                      52,047       112,221      175,098              36,089            51,654
Profit attributable to equity holders         44,199        95,141      148,942              30,756            43,901
                      (1)
EPS (RMB cents)                                  8.84        19.03         29.79               6.15              8.78
Adjusted EPS (RMB cents)(2)                      6.70        14.42         22.57               4.66              6.65

Notes:
(1)   For comparative purposes, the EPS for the Period Under Review has been computed based on the profit attributable to
      equity holders and our pre-Invitation share capital of 500,000,000 Shares.
(2)   The adjusted EPS for the Period Under Review has been computed based on the profit attributable to equity holders and
      our post-Invitation share capital of 660,000,000 Shares.


Selected items from the financial position of our Group(1)

                                                                             Audited as at            Unaudited as at
(RMB’000)                                                                  31 December 2006           31 March 2007
Non-current assets                                                                  33,812                   32,876
Current assets                                                                     194,740                 289,528
Current liabilities                                                                (71,102)               (121,030)
Net current assets                                                                 123,638                 168,498
Net assets                                                                         157,450                 201,374
                                (1)
NAV per Share (RMB cents)                                                            31.49                    40.27

Note:
(1)   For comparative purposes, our NAV per Share as at 31 December 2006 and as at 31 March 2007 have been computed
      based on our net assets and on our pre-Invitation share capital of 500,000,000 Shares.


WHERE YOU CAN FIND US
Our registered office is at Canon’s Court, 22 Victoria Street, Hamilton HM 12, Bermuda and our
business address is 18 Xinsheng Road, Xinyang Industrial Zone, Haicang District, Xiamen City, Fujian
Province, PRC 361026. Our telephone number is 86–592-6517000 and our facsimile number is
86–592-6519700. Our internet address is www.chang-tian.com.cn. Information contained in our
website does not constitute part of this Prospectus.




                                                            26
                                THE INVITATION

Size                        :   The 215,000,000 Invitation Shares comprising 160,000,000
                                New Shares and 55,000,000 Vendor Shares. The Invitation
                                Shares, upon allotment and issue, will rank pari passu in all
                                respects with our existing issued Shares.

Issue Price                 :   S$0.47 for each Invitation Share.

The Offer                   :   The Offer comprises an invitation by our Company and the
                                Vendors to the public in Singapore to subscribe for and/or
                                purchase the 5,000,000 Offer Shares at the Issue Price,
                                subject to and on the terms and conditions of this Prospectus.

The Placement               :   The Placement comprises a placement of 210,000,000
                                Placement Shares at the Issue Price, subject to and on the
                                terms and conditions of this Prospectus.

Purpose of the Invitation   :   Our Directors believe that the listing of our Company and the
                                quotation of our Shares on the SGX-ST will enhance our
                                Group’s public image and enable our Group to raise funds
                                from the capital markets to finance our business expansion.
                                The Invitation will also provide investors and members of the
                                public with an opportunity to participate in the equity of our
                                Company.

Listing Status              :   Prior to the Invitation, there had been no market for our
                                Shares. Our Shares will be quoted on the SGX-ST, subject to
                                admission of our Company to the Official List of the SGX-ST
                                and permission for dealing in, and for quotation of, our Shares
                                being granted by the SGX-ST.

Risk Factors                :   Investing in our Shares involves risks which are described in
                                the section “Risk Factors” of this Prospectus.

Trading Currency            :   Our Shares will be quoted and traded in Singapore dollars on
                                the Main Board of the SGX-ST and traded under the book-
                                entry settlement system of the CDP.




                                         27
                                   PLAN OF DISTRIBUTION

The Invitation is for the New Shares and the Vendor Shares offered in Singapore by way of public offer
and placement comprising 5,000,000 Offer Shares and 210,000,000 Placement Shares managed by
Boulton Capital and underwritten by UOB Kay Hian.

The Issue Price is determined by us and the Vendors in consultation with the Manager, the Underwriter
and the Placement Agent, based on market conditions and estimated market demand for our Shares
determined through a book building process. The Issue Price is S$0.47 for each Invitation Share and
is payable in full on application.


Offer Shares
The Offer Shares are made available to the members of the public in Singapore for subscription and/or
purchase at the Issue Price. The terms and conditions and procedures for application and acceptance
are described in Appendix H of this Prospectus.

In the event of an under-subscription for the Offer Shares as at the close of the Application List, that
number of Offer Shares not subscribed for and/or purchased shall be made available to satisfy excess
applications for the Placement Shares to the extent there is an over-subscription for the Placement
Shares as at the close of the Application List.

In the event of an over-subscription for the Offer Shares as at the close of the Application List and/or
the Placement Shares are fully subscribed for or over-subscribed as at the close of the Application List,
the successful applications for the Offer Shares will be determined by ballot or otherwise as determined
by our Directors and approved by the SGX-ST.

Pursuant to the terms and conditions contained in the Management and Underwriting Agreement
signed between our Company, the Vendors, the Manager and the Underwriter dated 30 October 2007
(the “Management and Underwriting Agreement”), our Company and the Vendors have appointed
Boulton Capital to manage the Invitation and UOB Kay Hian to underwrite the Offer Shares.


Placement Shares
The Placement Shares are made available for subscription by retail and institutional investors who may
apply by way of application form. The terms and conditions and procedures for application and
acceptance are described in Appendix H of this Prospectus.

Pursuant to the terms and conditions in the Placement Agreement signed between our Company, the
Vendors and the Placement Agent dated 30 October 2007 (the “Placement Agreement”), the Placement
Agent has agreed to subscribe for and/or procure subscribers and/or purchasers for the Placement
Shares at the Issue Price.

Subscribers and or purchasers of the Placement Shares may be required to pay a commission of up
to 1.0% of the Issue Price to the Placement Agent (subject to Singapore Goods and Services Tax of
7.0%, if applicable).

In the event of an under-subscription for the Placement Shares as at the close of the Application List,
that number of Placement Shares not subscribed for and/or purchased shall be made available to
satisfy excess applications for the Offer Shares to the extent that there is an over-subscription for the
Offer Shares as at the close of the Application List.




                                                   28
Subscription for and/or Purchase of the Invitation Shares
None of our existing Shareholders or Directors intends to subscribe for and/or purchase Shares in the
Invitation.

None of our Company’s management or employees intend to subscribe for and/or purchase Shares in
the Invitation amounting to 5% or more of the Invitation Shares.

To the best of our knowledge, we are not aware of any person who intends to subscribe for and/or
purchase Shares in the Invitation amounting to 5% or more of the Invitation Shares. However, through
a book-building process to assess market demand for our Shares, there may be person(s) who may
indicate an interest to subscribe for and/or purchase Shares amounting to 5% or more of the Invitation
Shares. If such person(s) were to make an application for Shares amounting to 5% or more of the
Invitation Shares and subsequently be allocated or allotted such number of Shares, we will make the
necessary announcements at an appropriate time. The final allocation of Shares will be in accordance
with the shareholding spread and distribution guidelines as set out in Rule 210 (1) of the Listing Manual.

Further, no Shares shall be allocated or allotted on the basis of this Prospectus later than six months
after the date of registration of this Prospectus by the Authority.




                                                   29
                            USE OF PROCEEDS AND LISTING EXPENSES

USE OF PROCEEDS
The aggregate net proceeds to be raised from the issue of the Invitation Shares (after deducting the
estimated listing expenses) are estimated to be S$94.4 million (equivalent to approximately RMB469.1
million).

The net proceeds to be raised from the issue of the New Shares (after deducting our share of the
estimated listing expenses) are estimated to be approximately S$69.3 million (equivalent to
approximately RMB344.5 million) which we intend to use in the following manner:
(a)    approximately S$26.0 million (equivalent to approximately RMB129.0 million(1)), for the
       installation of one additional production line for the production of BOPA film with an additional
       production capacity of 5,400 tonnes per annum, resulting in an aggregate of 10,800 tonnes per
       annum;
(b)    approximately S$12.7 million (equivalent to approximately RMB63.0 million(1)), for the installation
       of a new production line for the production of our new release paper, namely the UV cured release
       film, with a production capacity of approximately 3,000 tonnes per annum;
(c)    approximately S$6.0 million (equivalent to approximately RMB30.0 million(1)), for the installation
       of one additional production line for the production of 2-A2MPS with an additional production
       capacity of 1,500 tonnes per annum, resulting in an aggregate of 3,000 tonnes per annum;
(d)    approximately S$3.0 million (equivalent to approximately RMB15.0 million(1)), for the construction
       of additional storage facilities;
(e)    approximately S$4.0 million (equivalent to approximately RMB20.0 million(1)), for the repayment
       of a loan facility that was used for working capital purposes(2); and
(f)    the balance for general working capital.

For further details of the above, please refer to the section “Prospects and Future Plans” of this
Prospectus.

Pending the specific deployment of funds, the net proceeds may be placed as deposits with financial
institutions or added to our working capital or used for investment in short-term money market or debt
instruments as may be determined by our Directors in their absolute discretion.

In the opinion of our Directors, no minimum amount must be raised by our Company pursuant to the
Invitation. Although no minimum amount must be raised by our Company from the Invitation in order to
provide for the items above, such amount is proposed to be provided out of the issue of the New Shares
or in the event the Invitation is cancelled, out of funds generated from our operations, external borrowings
and other fund raising exercises. We may choose not to fully implement our plans.

Notes:
(1)   Based on the exchange rate of S$1.00 to RMB4.969 as at the Latest Practicable Date.
(2)   As at the Latest Practicable Date, we have an outstanding bank loan of RMB20.0 million with the Industrial Bank Co., Ltd.
                  , used for purposes of working capital. We intend to utilise approximately RMB20.0 million from the net proceeds
      of the Invitation to repay this loan in full. Please refer to the section “Capitalisation and Indebtedness” of this Prospectus for
      further details.




                                                                  30
LISTING EXPENSES
The estimated amount of expenses incurred in connection with the Invitation to be borne by us,
including listing fees payable to the SGX-ST and the Authority, professional fees comprising
management fees, audit fees and legal fees, underwriting commission, placement commission,
brokerage and all other incidental expenses in relation to the Invitation are approximately S$5.9 million.
The following table sets out the breakdown of the use of proceeds and the estimated expenses
incurred:

                                                                                       As a percentage of
                                                                                      gross proceeds from
                                                              Estimated amount        the issue of the New
                                                                   (S$’000)                Shares (%)
Use of proceeds
Installation of one additional production line for the
production of BOPA film                                             25,961                     34.5
Installation of a new production line for the production of
UV cured release film                                               12,679                     16.9
Installation of one additional production line for the
production of 2-A2MPS                                                6,037                      8.0
Construction of additional storage facilities                        3,019                      4.0
Repayment of a loan facility                                         4,025                      5.4
General working capital                                             17,613                     23.4

Total                                                               69,334                     92.2


Expenses to be borne by Company
Listing and processing fees                                             70                      0.1
Professional fees                                                    2,540                      3.4
Underwriting commission, placement commission and
brokerage                                                            2,256                      3.0
Miscellaneous expenses                                               1,000                      1.3

Total                                                                5,866                      7.8


The Vendors will bear a portion of the estimated listing expenses incurred in connection with the Invitation,
comprising the underwriting commission, placement commission and brokerage, in the proportion that the
Vendor Shares bears to the total number of Invitation Shares, amounting to approximately S$0.8 million.

In the event that the estimated expenses listed above are in excess of the actual expenses incurred in
connection with the Invitation, such excess will be applied towards our working capital purposes.




                                                         31
  MANAGEMENT AND UNDERWRITING AND PLACEMENT ARRANGEMENTS

Pursuant to the Management and Underwriting Agreement, our Company and the Vendors appointed
the Manager to manage the Invitation, and the Underwriter to underwrite the Offer Shares. The
Manager will receive management fees from our Company and the Vendors for its services rendered
in connection with the Invitation.

Pursuant to the Management and Underwriting Agreement, the Underwriter has agreed to underwrite
the Offer Shares for a commission of 2.75% of the Issue Price for each Offer Share, payable by our
Company and the Vendors, in the proportion in which the number of Invitation Shares offered by each
pursuant to the Invitation bears to the total number of Invitation Shares. The Underwriter may, at its
discretion, appoint one or more sub-underwriters for the Offer Shares. Brokerage will be paid by our
Company and the Vendors to the Underwriter, members of the SGX-ST, banks and merchant Banks in
Singapore in respect of accepted applications made on Application Forms bearing their respective
stamps, or to Participating Banks in respect of successful applications made through Electronic
Applications at the rate of 0.25% of the Issue Price for each Offer Share.

Pursuant to the Placement Agreement, the Placement Agent has agreed to subscribe for and/or
procure subscriptions for the Placement Shares for a placement commission of 3.00% of the Issue
Price for each Placement Share, payable by our Company and the Vendors, in the proportion in which
the number of Invitation Shares offered by each pursuant to the Invitation bears to the total number of
Invitation Shares. The Placement Agent may at its discretion, appoint one or more sub-placement
agents for the Placement Shares. Subscribers of Placement Shares may be required to pay a
brokerage of up to 1.0% of the Issue Price (subject to GST at the current rate of 7.0%, if applicable).

Save as aforesaid and under the section “Plan of Distribution” of this Prospectus, no commission,
discount or brokerage, has been paid or other special terms granted within the two years preceding the
date of this Prospectus or is payable to any Director, promoter, expert, proposed Director or any other
person for subscribing or agreeing to subscribe or procuring or agreeing to procure subscriptions for
any shares in or debentures of our Company.

The Management and Underwriting Agreement may be terminated by the Manager or the Underwriter
at any time on or prior to the close of the Application List on the occurrence of certain events including,
inter alia, any change, or any development involving a prospective change, in local, national or
international, financial (including stock market, foreign exchange market, international bank or interest
rates or money market), political, industrial, economic, legal or monetary conditions, taxations or
exchange controls, which events or events shall, in the reasonable opinion of the Manager or the
Underwriter, as the case may be (exercised in good faith):
(a)   result or be likely to result in a material adverse fluctuation or adverse conditions in the stock
      market in Singapore or elsewhere; or
(b)   be likely to materially prejudice the success of the offer or subscription and/or purchase of the
      Invitation Shares (whether in the primary market or in respect of dealings in the secondary
      market); or
(c)   make it materially impracticable, inadvisable, inexpedient or uncommercial to proceed with any of
      the transactions contemplated in the Management and Underwriting Agreement (as the case may
      be); or
(d)   be likely to have a material adverse effect on the business, trading position, operations or
      prospects of our Company or our Group as a whole; or
(e)   be such that no reasonable underwriter would have entered into the Management and
      Underwriting Agreement; or




                                                    32
(f)   make it uncommercial or otherwise contrary to or outside the usual commercial practices of
      underwriting in Singapore for the Underwriter to observe or perform or be obliged to observe or
      perform the terms of the Management and Underwriting Agreement.

Notwithstanding the above, the Management and Underwriting Agreement may be terminated by the
Manager or the Underwriter if, inter alia, at any time:
(a)   up to the date of commencement of trading of our Shares on the Official List of the SGX-ST, a stop
      order is issued by the Authority pursuant to Section 242 of the SFA; or
(b)   after the registration of this Prospectus with the Authority but before the close of the Application
      List, the Company fails and/or neglects to lodge a supplementary prospectus or replacement
      prospectus if required to do so pursuant to Section 243 of the SFA.

The Placement Agreement is conditional upon the Management and Underwriting Agreement not having
been terminated or rescinded pursuant to the provisions of the Management and Underwriting Agreement
and may be terminated on the occurrence of certain events, including those specified above.

In the event that the Management and Underwriting Agreement is terminated, our Company and the
Vendors reserve the right, at the absolute discretion of our Directors, to cancel the Invitation.

Pursuant to the Management and Underwriting Agreement, our Company shall not, for a period of 12
months from the date of listing of our Company on the SGX-ST, grant any Options under the ESOS or
issue any new Shares without the prior written consent of the Underwriter (such consent not to be
unreasonably withheld).

Save as disclosed in the section “Shareholders” of this Prospectus, we do not have any material
relationships with any of the Manager, Underwriter or Placement Agent.




                                                   33
                                            RISK FACTORS

Prospective investors should carefully consider and evaluate the following considerations and all other
information contained in this Prospectus before deciding to invest in our Shares. If any of the following
considerations and uncertainties develop into actual events, our business, results of operations,
financial condition and prospects could be materially and adversely affected. In such cases, the trading
price of our Shares could decline due to any of these considerations and uncertainties, and you may
lose all or part of your investment in our Shares.

To the best of the knowledge and belief of our Directors and the Vendors, all risk factors which are
material to investors in making an informed judgment in our Company have been set out below.

RISKS RELATING TO OUR BUSINESS

Our operations are exposed to risks in relation to the handling of dangerous raw materials
The production of our 2-A2MPS product involves the handling and storage of certain dangerous raw
materials such as acrylonitrile. Any improper handling or storage of these dangerous materials may
result in fire and/or explosion which could result in an interruption to, or delay of, or require us to curtail
our operations.

In February 2006, there was a minor explosion on our premises which resulted in a fire incident. This
fire incident occurred when a disused tank containing traces of acrylonitrile ignited while we were
removing certain disused piping and storage tank used for the storage of acrylonitrile. As the incident
occurred in a segregated area on the premises of our production plant, there was limited damage and
no personal injury caused. Please refer to the section “Safety Controls” of this Prospectus for further
details.

There can be no assurance that we will be able to comply fully with the laws, regulations and policies
that may be implemented by the relevant PRC authorities in relation to the handling of dangerous
articles, whether economically or at all. In addition, there can be no assurance that accidents arising
from the mishandling of dangerous articles will not occur in the future. Should we fail to comply with any
relevant laws, regulations or policies or should any accident occur, our business and results of
operations may be materially and adversely affected. We may also be subject to civil and/or criminal
liabilities.

We might not be able to obtain relevant licences and permits from PRC governmental
authorities to purchase, use and store acrylonitrile
We purchase acrylonitrile as a raw material used in the production of our 2-A2MPS product. In PRC,
purchases of acrylonitrile, being a poisonous material                 under the List of Poisonous
Materials                  , is governed by the Administrative Rules of the Poisonous Chemicals
Purchase and Transportation Permits                                              promulgated by the
Ministry of Public Security of the PRC                          on 1 August 2005. According to such
regulations, Changtian Enterprise is required to apply to the Xiamen Municipal Department of Public
Security             for a poisonous materials purchase permit each time that we purchase poisonous
materials.

On 21 September 2006, we were fined RMB10,000 by the Xiamen Municipal Department of Public
Security                 Haicang Branch for not possessing the relevant permits when purchasing
acrylonitrile. In addition, our employee Yang Junqing, the person-in-charge at the relevant time was
detained for 5 days. Subsequent to this incident, Xiamen Jiuan Safety Examination and Evaluation
Office Co., Ltd                                         issued a report which confirmed that we are in
compliance with the requirements to purchase, use and store poisonous chemicals. We have since
obtained such poisonous chemicals purchase permit and paid the RMB10,000 fine. Please refer to the
section “Government Regulations, Licences and Permits” of this Prospectus for further details.


                                                      34
Further, on 11 May 2007, we have obtained confirmation from Xiamen Municipal Department of Public
Security                that Changtian Enterprise is in compliance with the requirements and is qualified
to purchase, use and store acrylonitrile. In addition, we are required to obtain a permit from the Xiamen
Municipal Department of Public Security                  for each purchase of acrylonitrile that we make.
If we are not able to comply with the necessary requirements for the purchase and storage of
acrylonitrile, production of our 2-A2MPS will be adversely affected. This will have a material adverse
impact on our business, results of operations and financial condition.

We may not be able to obtain patent protection for our 2-A2MPS production process
On 6 June 2007, we submitted a patent application to the State Intellectual Property Office of the PRC
                              for our 2-A2MPS production process. Based on a report by our patent
agent and as far as we are aware, we believe that our 2-A2MPS production process does not violate
any existing registered patent right in the PRC. However, approvals for registration of patents are only
released to the public 18 months after the application and thus our Company cannot assure you that
we have not infringed any patent applications which have been submitted to the State Intellectual
Property Office of the PRC                                      but has yet to be granted patent approval.
In the event that a patent application for a similar process to our 2-A2MPS production process has been
submitted and is granted approval for registration for patent protection before us and/or an action is
brought against us for infringement of a third party’s patent or other intellectual property rights, the
production of our 2-A2MPS may be adversely affected. This will have a material adverse impact on our
business, results of operations and financial condition.

We are affected by the availability of and increases in prices of raw material
The raw materials used in the production of our products, including BOPP film, butyl acrylate, polyvinyl
acetate, CCK paper, glassine paper, PA6, acrylonitrile and isobutylene, as a percentage of our costs of
sales for FY2004, FY2005, FY2006 and three months ended 31 March 2007 is approximately 93.3%,
93.9%, 93.4% and 93.7% respectively. The price of these raw materials may fluctuate due to changes
in supply and demand conditions. We have not entered into any long term supply contracts of more
than one year with our suppliers, and any sudden decrease in availability of such raw materials may
adversely affect our operations or result in us having to pay a higher cost for these raw materials. If
there are significant increases in the costs of our major raw materials and we are unable to pass on
such price increases to our customers or we are unable to find alternative sources for such raw
materials at competitive prices and on a timely basis for our production, our financial performance may
be materially and adversely affected.

We operate in a competitive environment and if we are unable to maintain our competitiveness,
our results of operations may be adversely affected
We operate in a competitive environment and we are subject to competition from existing competitors
and new market entrants. Our competitors include both local and foreign companies which may have
access to greater financial and other resources than we do. There is no assurance that we will be able
to remain competitive. Should we be unable to compete successfully, this would have a material
adverse effect on our results of operations.

In order to maintain our customer base and market share, we must ensure that we are able to
continually manufacture products that meet our customers’ demands and changing needs. If our
competitors are able to develop better or cheaper products through technological changes and
improvements in the development and production of their products, we may not be able to maintain our
competitiveness or our market share, and our business and results of operations will be materially and
adversely affected. Further, if we do not develop and introduce new products or enhance existing
products in a timely manner in response to changing market conditions or customers’ requirements, or
if our new products do not achieve market acceptance, our business, results of operations and financial
condition may be materially and adversely affected.



                                                   35
Please refer to the sections “Competitors” and “Competitive Strengths” of this Prospectus for further
details.


Our intellectual property is important to our ability to succeed in our business but may be
difficult to protect
Our ability to compete successfully and achieve future growth in revenues depends, in part, on our
ability to protect our trade secrets and/or technical know-how relating to our manufacturing processes,
and also on our ability to protect our brand name and trademarks. In addition to the Service Agreements
entered into with our Executive Directors which include certain confidentiality undertakings, details of
which are set out under the section “Service Agreements” of this Prospectus, we have also entered into
confidentiality agreements with our key employees, such as our manufacturing and sales personnel,
who have access to trade and business sensitive information, to protect our trade secrets and
proprietary information. However, there can be no assurance that these agreements will not be
breached, or that we will have adequate remedies for any breach, or that other parties will not obtain
knowledge of our trade secrets and proprietary processes, technologies and systems, or infringe our
brand name and trademarks. Further, in the event of a departure of any of our management or technical
personnel, they may disclose such trade secrets and/or technical know-how to third parties.

We have not applied for any patents in respect of the adhesive glue formulae for the production of
adhesives tapes. In the event that other parties replicate our processes for the production of adhesive
glue, we will have no legal recourse to protect any proprietary rights that we may have. If our
competitors are able to do so at lower costs, we may lose our competitive edge and our business,
results of operations, financial condition and profitability will be materially and adversely affected.

If we decide to enforce our intellectual property rights through litigation, such litigation, whether
successful or unsuccessful, could result in substantial costs and diversions of resources, either of
which could have a material adverse effect on our business, financial condition and results of
operations.

Further, third parties may assert claims to the processes, technologies and systems used in the
production of our adhesive glue and 2-A2MPS or our brand names and trademarks. In such event, we
may need to acquire licences to, or to contest the validity of, issued or pending patents or claims of third
parties. There can be no assurance that any licence in relation to such trademarks and patents would
be made available to us on acceptable terms, if at all, or that we would prevail in any such contest. In
addition, we may incur substantial costs and time in contesting or defending such claims brought
against them. Our business, results of operations and financial condition may be materially and
adversely affected by such claims.


We may not be able to sustain our growth and this could adversely affect our future prospects
Between FY2004 and FY2006, our revenue grew at a compounded growth rate of approximately
55.5%, largely driven by the growth experienced in our BOPA film business which commenced in 2005.
Our future operating results will depend on our management’s ability to manage and grow our business,
including recruiting, training and retaining qualified employees, controlling costs, managing our
production capacity, introduction of new products, effectively implementing quality control and
expanding our existing markets and penetrating into new markets. Any unexpected decline in the
growth of our revenue without a corresponding decline in the growth of our operating costs or any
failure to successfully manage and grow our business could have a material adverse impact on our
business, results of operations and financial condition. In addition, our growth will also require us to
expand our production capacity and if such expansion is not undertaken successfully, our future growth
and prospects will be adversely affected. Please refer to the section “Prospects and Future Plans” of
this Prospectus for further details.




                                                    36
A low acceptance level of our UV cured release film will adversely affect our revenue and
profitability
As disclosed in the section “Prospects and Future Plans” of this Prospectus, we intend to use
approximately RMB63.0 million for commissioning and installation of a new production line for our new
product UV cured release film. Whilst we believe there are good prospects for UV cured release film,
there is no assurance that this new product will be accepted by our customers or our potential
customers. A low level of acceptance of UV cured release film may therefore not yield the financial
results that we expect. Our profitability will be affected by the costs incurred on the construction of the
production line and the production of such new products without a commensurate rise in revenue.


We are exposed to potential product quality liability
Under the Product Quality Law of the PRC                                    , if a product causes property
damage or personal injury, manufacturers and sellers of the product are liable for property damage or
personal injuries caused by the product. Although the laboratory tests conducted by us has not
indicated that our products are toxic or irritating, there can be no assurance that our products will not
cause irritation, health complications or any other allergic reactions on contact by users. Any successful
product liability claim against us will materially and adversely affect our business and reputation. Even
if we are able to successfully defend such claim, there can be no assurance that our customers will not
lose confidence in our products, which will adversely affect our business and the reputation of our
Group. A product liability claim, even one without merit, could result in us incurring significant expenses
and substantial time and efforts of our management in defending and proving such claim to be without
merit.


Failure to retain the services of our key management staff or to hire and retain experienced
executives and staff will adversely affect our operations and results
Our continued success is dependent, to a large extent, on our ability to retain the services of our key
management and operations personnel as they are responsible for the formulation of our business
strategies and overseeing our manufacturing operations. The loss of our key management and staff,
who have the experience and expertise in our business as well as established relationships with our
customers and suppliers, without suitable replacements, or the inability to attract and retain qualified
personnel will adversely affect our operations and hence, revenue and profits. In particular, the loss of
the services of our Executive Directors, Yang Qingjin, Chen Yongfu, Wong Chit Fu, Yan Yilin and our
senior management, will have an adverse impact on our business, results of operations and financial
condition.


We are exposed to credit risks of our customers
Our trade receivables of approximately RMB50.1 million, RMB88.4 million, RMB111.7 million and
RMB110.7 million accounted for approximately 37.6%, 43.6%, 57.4% and 38.2% of our current assets
and approximately 24.2%, 32.6%, 48.9% and 34.3% of our total assets as at 31 December 2004, 31
December 2005, 31 December 2006 and 31 March 2007 respectively. Therefore, our financial position,
profitability and cash flow are dependent to a large extent on the creditworthiness of our customers and
their ability to pay us on a timely basis. Further, as our customer base grows, we will be exposed to
credit risks from new customers. We are unable to assure you that the risk of default by our customers
will not occur or increase in the future. Please refer to the section “Credit Policy” of this Prospectus for
more details.


We are subject to the PRC’s environmental laws and regulations
Our manufacturing facilities in the PRC are subject to environmental laws and regulations imposed by
the PRC authorities. In the PRC, our business operations are subject to laws and regulations relating
to, inter alia, air protection, waste management and water protection. If stricter rules are imposed on
air protection, waste management and water protection by the PRC authorities which result in us having

                                                    37
to incur a higher production cost to comply with such stricter rules, our business and financial
performance in the PRC will be adversely affected.


Cessation of income tax exemption for Changtian Enterprise will have an adverse impact on our
net profit
In accordance with the applicable corporate income tax law of the PRC, Changtian Enterprise, our
wholly-owned subsidiary which was established as a WFOE in the PRC, is exempted from the
corporate income tax for its first two profitable calendar years of operations and is entitled to a 50%
relief from the state corporate income tax and exempted from the local corporate income tax for the
following three years. The two years’ tax exemption period for Changtian Enterprise is expected to
commence in the financial year ending 31 December 2007 and expire as at 31 December 2008 as
approved by the local tax authority. Upon expiry of the tax exemption period, Changtian Enterprise is
expected to be subject to a reduced tax rate of 50% for the three financial years from 1 January 2009
to 31 December 2011.

On 16 March 2007, a new PRC Enterprise Income Tax Law was passed by the People’s Congress
according to which the income tax rate applicable to all PRC enterprises (including foreign invested
enterprises) will be fixed at 25%, effective as of 1 January 2008.

However, under the new PRC Enterprise Income Tax Law, enterprises established before 16 March
2007 which currently enjoy the preferential tax treatment of a two-year tax exemption, followed by a
three-year 50% reduced tax rate, will be granted a five-year transition period during which they will still
enjoy such preferential tax treatment.

According to the Income Tax Law of the People’s Republic of China for Enterprises with Foreign
Investment and Foreign Enterprises, as an enterprise registered in Xiamen (which is a special
economic zone), apart from enjoying the aforesaid preferential tax treatment, we are also entitled to an
income tax rate of 15% from 1 January 2012 (in other words, we are entitled to a reduced income tax
rate of 15% after the expiry of the aforesaid five-year tax preferential period). According to the new PRC
Enterprise Income Tax Law, foreign investment enterprises registered in special economic zones may
continue to enjoy the 15% preferential tax treatment if so stipulated by the State Council of the PRC.
However, as the State Council of the PRC has not promulgated the relevant implemental rules, we
cannot assure you that we will enjoy the 15% preferential income tax treatment after the aforesaid
5-year preferential tax treatment.

Please refer to the section “Selected Group Combined Financial Information” of this Prospectus which
states the combined financial information of our Group for the past three financial years ended 31
December 2004, 2005 and 2006 for more details.


The outbreak, or threatened outbreak, of any severe communicable disease in the PRC, could
materially and adversely affect our Group’s business and results of operations
The outbreak, or threatened outbreak, of any severe communicable disease (such as severe acute
respiratory syndrome or avian influenza) in the PRC, could materially and adversely affect overall
business sentiments and environment in the PRC, particularly if such outbreak is inadequately
controlled. This in turn could materially and adversely affect domestic consumption, labour supply and,
possibly, the overall GDP growth of the PRC. Our revenue is currently derived entirely from our PRC
operations and any labour shortages on contraction or slowdown in the growth of domestic
consumption in the PRC could materially and adversely affect our business and results of operations.
In addition, if any of our employees is affected by any severe communicable disease, it could adversely
affect or disrupt our production and materially and adversely affect our results of operations as we may
be required to close our facilities to prevent the spread of the disease. The spread of any severe
communicable disease in the PRC may also affect the operations of our customers and suppliers,
which could materially and adversely affect our business and results of operations.


                                                    38
RISKS RELATING TO THE PRC

Our operations could be adversely affected by changes in the political, economic and social
conditions in the PRC
Since our manufacturing facilities are located in the PRC and our revenue is entirely derived from the
PRC, our business operations and financial position are subject to the political, economic and social
developments in the PRC.

The economy of the PRC has historically been a planned economy subject to a series of economic
plans adopted by the state. The PRC government has implemented economic reforms resulting in
significant economic and social advancement over the past 30 years. Many of these reforms however
are unprecedented or experimental and may be subject to change or reversal. There is no assurance
that the PRC government will continue to pursue a policy of economic reforms.

Changes in the political, economic and social conditions in the PRC or changes in government policies
such as changes in laws and regulations or their interpretation, the introduction of measures to control
inflation, changes in the rate and method of taxation and the imposition of additional restrictions on
currency conversion and overseas remittances, may affect our future performance and profitability.


Our operations are subject to changes and uncertainties in the PRC legal system
The PRC legal system is based on statutory law. Unlike the common law system, statutory law is based
on written statutes. Prior court decisions may be cited as persuasive authority but do not have binding
effect. Since 1979, the PRC government has been promulgating and amending the laws and,
regulations regarding economic matters, such as corporate organisation and governance, foreign
investment, commerce, taxation and trade. However, the PRC legal system is still not as well developed
as those western countries with a common law legal system and the interpretation and enforcement of
the PRC laws are still subject to uncertainties.

If any court decision or any interpretation or enforcement of the PRC laws in relation to our business
does not follow relevant precedents and are decided to our detriment, our business, results of operation
and financial position will be materially and adversely affected as a result of such uncertainty.


Our results of operations and financial condition may be adversely affected by the changes in
the PRC foreign exchange controls
Changtian Enterprise is subject to the rules and regulations imposed by the PRC government on
currency conversion. In the PRC, the conversion of RMB into foreign currencies is regulated by the
State Administration for Foreign Exchange (“SAFE”). Currently, foreign investment enterprises (“FIEs”)
are required to apply to SAFE for “Foreign Exchange Registration Certificates for FIEs”. Changtian
Enterprise is FIE. Such registration certificates are renewable annually and allow the FIEs to open
foreign currency accounts for the payment of:
(a)   recurring items, including the distribution of dividends and profits to foreign investors of FIEs upon
      presentation of board resolutions which authorise the distribution of profits or dividends (“Current
      Account”); and
(b)   capital items, such as repatriation of capital, repayment of loans and for securities investment
      (“Capital Account”).

Currency transactions within the scope of the Current Account can be effected without requiring the
approval of SAFE. However, the conversion of currency in the Capital Account still requires the approval
of SAFE.




                                                    39
We have obtained the Foreign Exchange Registration Certificate for FIEs which is renewable annually
upon application to SAFE. Although we do not presently anticipate any difficulty in meeting our foreign
exchange needs, there can be no assurance that the current foreign exchange rules with respect to
currency transactions within the scope of the Current Account will not be changed to our detriment. As
such, there can be no assurance that Changtian Enterprise will be able to continue obtaining sufficient
foreign exchange to pay dividends.

In order to regulate PRC domestic residents engaged in trans-territorial capital transactions involved in
investment and financing activities via overseas special purpose companies, on 21 October 2005, SAFE
promulgated the Notice of the State Administration of Foreign Exchange on Relevant Issues concerning
Foreign Exchange Administration for Domestic Residents to Engage in Financing and in Return
Investment via overseas Special Purpose Companies (the “Notice 75”). According to the Notice 75, a
domestic resident shall, before establishing or controlling an overseas special purpose company (the
“SPC”), being the prescriptive materials to the local branch of SAFE (the “SAFE Branch”) to apply for going
through the procedures for foreign exchange registration of overseas investments. SAFE Branch shall,
after examining and checking the materials to be inerrant, affix the special seal for foreign exchange
business for capital account transactions on the “Certificate of Foreign Exchange Registration of Overseas
Investments” or the “Form of Foreign Exchange Registration of Overseas Investments of the Domestic
Individual Resident”. Where a domestic resident contributes the assets or stock rights of a domestic
enterprise it owns into a SPC, or engages in stock right financing abroad after contributing assets or stock
rights into a SPC, it shall go through the procedures for modification of foreign exchange registration of
overseas investments with regard to the net asset equities of the SPC it holds. After an SPC accomplishes
overseas financing, the domestic resident may, according to the plan on use of funds as stated in the
business plans or the prospectus, transfer the funds which ought to be arranged for use inside PRC into
PRC. A domestic resident, may after accomplishing the procedures for foreign exchange registration of
overseas investments or for modification thereof in accordance with the legal provisions, pay the profits,
dividends, liquidation expenses, stock right assignment expenses, capital decrease expenses, etc. to the
SPC. Where an SPC meets with a major capital modification event such as capital increase or decrease,
stock rights or credits or provision of guarantee to a foreign party, and is not involved in return investment
(the “Major Events”), the PRC resident shall, within 30 days as of a Major Event, apply to the SAFE Branch
for going through the procedures for modification or filing of the foreign exchange registration of the
overseas investment. Notice 75 has been in effect as of 1 November 2005.

Chen Yongfu and Yang Qingjin, who are PRC domestic residents and directly or indirectly hold Shares in
our Company, have already complied with the registration requirements under Notice 75.

However, there can be no assurance the SAFE will not continue to issue new rules and regulations and/or
further interpretations of Notice 75 that will strengthen the foreign exchange control. As Changtian
Enterprise generates most of our sales and these sales are denominated mainly in RMB, its ability to pay
dividends or make other distributions to us may be restricted by PRC foreign exchange control restrictions.
There can be no assurance that the relevant regulations will not be amended to our detriment and that the
ability of Changtian Enterprise to distribute dividends to us will not be adversely affected.


RISKS RELATING TO INVESTMENT IN OUR SHARES

Future sale of our Shares could adversely affect our Share price
Any future sale or availability of our Shares can have a downward pressure on our Share price. The
sale of a significant amount of our Shares in the public market after the Invitation, or the perception that
such sales may occur, could materially adversely affect the market price of our Shares. These factors
also affect our ability to sell additional equity securities. Except as otherwise described in the section
“Moratorium” of this Prospectus, there will be no restriction on the ability of our Substantial
Shareholders to sell their Shares either on the SGX-ST or otherwise.




                                                     40
Investors in our Shares will face immediate and substantial dilution in the book value per Share
and may experience future dilution
The Issue Price of 47.00 cents is substantially higher than our NTA per Share of 15.19 cents (based on
the Adjusted NTA as referred to under the section “Invitation Statistics” of this Prospectus and as
adjusted for the net proceeds from the Invitation). Thus, there is an immediate and substantial dilution
in the book value per Share. Please refer to the section “Dilution” of this Prospectus. In addition, we
have implemented a share option scheme, details of which are set out in the section “Changtian
Enterprise Share Option Scheme” and Appendix G — “Rules of the Changtian Share Option Scheme”
of this Prospectus.

If the exercise price of any option to acquire new Shares under the ESOS is below the market price of
our Shares at the time of the exercise, our existing Shareholders may suffer dilution in the value of their
investments.

Further, we may need to raise additional funds in future to finance expansion of or new developments
relating to our existing operations or new acquisitions. If additional funds are raised through the
issuance of new equity or equity-linked securities of our Company other than on a pro rata basis to our
then existing Shareholders, the percentage ownership of our Shareholders may be reduced.


Our Share price may fluctuate following the Invitation
The market price of our Shares may fluctuate significantly and rapidly as a result of, among others, the
following factors, some of which are beyond our control:
•    variations of our operating results;
•    changes in securities analysts’ estimates of our financial performance;
•    announcements by us of significant acquisitions, strategic alliances or joint ventures;
•    additions or departures of key personnel;
•    fluctuations in stock market prices and volume;
•    involvement in litigation; and
•    general economic and stock market conditions.


Our Shares have never been publicly traded and the Invitation may not result in an active or
liquid market for our Shares
Prior to the Invitation, there has been no public market for our Shares. The Issue Price may not be
indicative of the market price for our Shares after the completion of the Invitation. However, no
assurance can be given that an active trading market for our Shares will develop or, if developed, will
be sustained following the Invitation, or that the market price of our Shares will not decline following the
Invitation. The price and trading volume of our Shares may be highly volatile. Factors such as variations
in our revenue, earnings and cash flows and announcements of new investments, strategic alliances
and/or acquisitions could cause the market price of our Shares to change substantially.


We are a Bermuda incorporated company and the rights and protection accorded to our
Shareholders may be different from those applicable to shareholders of a Singapore-
incorporated company
We are incorporated in Bermuda as an exempted company under the Bermuda Companies Act. The
Singapore Companies Act may provide shareholders of Singapore incorporated companies rights and
protection of which there may be no corresponding or similar provisions under Bermuda Companies
Act. As such, if you invest in our Shares, you may or may not be accorded the same level of
Shareholder rights and protection that a shareholder of a Singapore incorporated company may be
accorded under the Singapore Companies Act. We have set out in Appendix E of this Prospectus, a

                                                    41
summary of certain provisions under Bermuda company law and in Appendix D of this Prospectus a
summary of the Constitution of our Company. Each of the summaries and explanatory statements is not
intended to be and does not constitute legal advice and any person wishing to have advice on the
differences between the Bermuda Companies Act and the Singapore Companies Act and/or the laws
of any jurisdiction with which he is not familiar is recommended to seek independent legal advice.
Copies of our Memorandum of Association and Bye-laws are available for inspection at such place and
time as set out in the section “Documents available for inspection” of this Prospectus.


Control by existing Shareholders may limit your ability to influence the outcome of decisions
requiring the approval of Shareholders
After the Invitation, both Yang Qingjin and Chen Yongfu will together own approximately 55.8% of our
post-Invitation issued share capital. They may be able to significantly influence our corporate actions
such as mergers or take-over attempts in a manner that could conflict with the interests of our public
Shareholders. This concentration of ownership could have the effect of delaying or preventing a change
in control of our Company or otherwise discouraging a potential acquirer from attempting to obtain
control of us through corporate actions such as merger or take-over attempts (notwithstanding that the
same may be synergistic or beneficial to us) in a manner that could conflict with the interests of our
public Shareholders.


The purchase by our Company of our own Shares may lead to the diminishing of our issued
share capital
Under the Bermuda Companies Act, a company may, if authorised by its memorandum of association
or bye-laws, purchase its own shares. Our Company has such power to purchase our own Shares
pursuant to Clause 7(iii) of our Memorandum of Association. Such purchases may be effected out of
the capital paid-up on the purchased Shares or out of the funds of our Company otherwise available
for dividends or distribution or out of proceeds of a fresh issue of Shares made for that purpose. Any
premium payable on such a purchase over the par value of the Shares to be purchased must be
provided for out of the funds of our Company otherwise available for dividends or distribution or out of
our Company’s share premium account before the Shares are purchased. Further, such purchase may
not be made if, on the date on which the purchase is to be effected, there are reasonable grounds for
believing that our Company is, or after the purchase would be, unable to pay our liabilities as they
become due. Shares purchased by our Company will be treated as cancelled and our Company’s
issued, but not our authorised capital, will be diminished accordingly. For further details, please refer
to the section “Purchase by our Company of our own Shares” of this Prospectus.


Depositors holding our Shares through CDP will not be recognised as members of our
Company
Under the Bermuda Companies Act, only those persons who agree to become members of a company
and whose names are entered on the register of members of such a company are considered
members, with rights to attend and vote at general meetings and rights to dividends and other
distributions. Depositors holding Shares through CDP would not be recognised as members of our
Company, and would not have a right to attend and vote at general meetings of our Company. In the
event that Depositors wish to attend and vote at general meetings of our Company, CDP will have to
appoint them as proxies, pursuant to the Bye-laws and the Bermuda Companies Act. In the event of any
change in the Bermuda Companies Act, the rights of Depositors to attend and vote at general meetings
may be adversely affected. For further details, please refer to the section “Attendance at General
Meetings” of this Prospectus.




                                                   42
Exchange rate fluctuations may adversely affect the value of the Company’s dividends
Dividends, if any, in respect of our Shares will be declared in RMB and converted by our Company into
Singapore dollars for those investors whose Shares are held through CDP. For further details, please
refer to the section “Dividend Policy” of this Prospectus. Fluctuations in the exchange rate between the
Singapore dollar and the RMB will affect, among other things, the Singapore dollar value of our
Company’s dividends, if any, declared in RMB and paid in Singapore dollars.


Singapore taxes may differ from the tax laws of other jurisdictions
Prospective investors should consult their tax advisers concerning the overall tax consequences of
acquiring, owning or selling our Shares. Singapore tax law may differ from the tax laws of other
jurisdictions, including the PRC. Please refer to the section “Taxation” set out in the Appendix C of this
Prospectus for more information.


Our operations and significant assets are located in the PRC. It could be difficult to enforce a
Singapore judgement against us, our Executive Directors and our Executive Officers
Our subsidiary, Changtian Enterprise, is incorporated in the PRC, and our main operations and assets
are located in the PRC. In addition, all of our Executive Directors and our Executive Officers are
non-residents of Singapore, and substantially all the assets of these persons are located outside
Singapore. As a result, it could be difficult for investors to effect service of process in Singapore if they
wish to make a claim against our Company or our Executive Directors or our Executive Officers, or to
enforce a judgement obtained in Singapore against our Company or our Executive Directors or our
Executive Officers.




                                                     43
                                  INVITATION STATISTICS

Issue Price                                                                     47 cents


NTA

The adjusted NTA per Share based on the Audited Combined Financial
Information of our Group as at 31 December 2006 and after adjusting for the
Restructuring Exercise referred to in the section “Restructuring Exercise” of
this Prospectus (the “Adjusted NTA per Share”):

(a)   before adjusting for the estimated net proceeds of the New Shares and     6.19 cents
      based on our pre-Invitation share capital of 500,000,000 Shares

(b)   after adjusting for the estimated net proceeds of the New Shares and      15.19 cents
      based on our post-Invitation share capital of 660,000,000 Shares

Premium of Issue Price over the Adjusted NTA per Share:

(a)   before adjusting for the estimated net proceeds of the New Shares and     659.29%
      based on our pre-Invitation share capital of 500,000,000 Shares

(b)   after adjusting for the estimated net proceeds of the New Shares and      209.41%
      based on our post-Invitation share capital of 660,000,000 Shares


EPS

Historical net EPS of our Group for FY2006 based on our pre-Invitation share    5.94 cents
capital of 500,000,000 Shares

Historical net EPS of our Group for FY2006 based on our pre-Invitation share    5.81 cents
capital of 500,000,000 Shares, assuming that the Service Agreements (set out
in the section “Service Agreements” of this Prospectus) had been in place
since the beginning of FY2006


PER

Historical net PER based on the historical net EPS of our Group for FY2006      7.91 times

Historical net PER based on the historical net EPS of our Group for FY2006      8.09 times
assuming that the Service Agreements (set out in the section “Service
Agreements” of this Prospectus) had been in place since the beginning of
FY2006


Net Operating Cash Flow(1)

Historical net operating cash flow per Share of our Group for FY2006 based on   3.06 cents
our pre-Invitation share capital of 500,000,000 Shares

Historical net operating cash flow per Share of our Group for FY2006 based on   2.94 cents
our pre-Invitation share capital of 500,000,000 Shares, assuming that the
Service Agreements had been in place since the beginning of FY2006




                                                 44
Price to Net Operating Cash Flow

Ratio of Issue Price to historical net operating cash flow per Share for FY2006                          15.36 times

Ratio of Issue Price to historical net operating cash flow per Share for FY2006                          15.99 times
assuming that the Service Agreements had been in place since the beginning
of FY2006


Market Capitalisation

Our Company’s market capitalisation based on our post-Invitation share                                   S$310.20 million
capital of 660,000,000 Shares and the Issue Price


Note:
(1)   Net operating cash flow is defined as net cash generated from operating activities of our Group.




                                                              45
                                                        DILUTION

Dilution is the amount by which the Issue Price paid by subscribers of our Shares in the Invitation
exceeds our NAV per Share after the Invitation. The NAV of our Group as at 31 March 2007 after
adjusting for the Restructuring Exercise up to the date of registration of this Prospectus, but before
adjusting for the net proceeds from the issue of New Shares (the “Adjusted NAV”) was approximately
7.91 cents per Share based on our pre-Invitation share capital of 500,000,000 Shares.

Based on the issue of 160,000,000 New Shares at the Issue Price pursuant to the Invitation and after
deducting our share of the estimated issue expenses, the Adjusted NAV of our Group as at 31 March
2007 based on our post-Invitation share capital of 660,000,000 Shares would have been approximately
16.50 cents per Share. This represents an immediate increase in NAV of approximately 8.59 cents per
Share to our existing Shareholders and an immediate dilution in NAV of approximately 30.50 cents per
Share to our new investors.

The following table illustrates this per Share dilution:

                                                                                                                 Per Share
                                                                                                                  (cents)
Issue Price                                                                                                          47.00
Adjusted NAV                                                                                                          7.91
Increase in adjusted NAV attributable to the Invitation                                                               8.59
Adjusted NAV after the Invitation                                                                                    16.50
Dilution in adjusted NAV to new investors                                                                            30.50
Dilution in adjusted NAV to new investors as a percentage of the Issue Price                                       64.89%

The following table summarises the total number of Shares acquired by our Directors and/or Substantial
Shareholders and the Pre-Invitation Investors (after adjusting for the Restructuring Exercise, details of
which are set out in the section “Restructuring Exercise” of this Prospectus) during the period of three
years prior to the date of this Prospectus, the total consideration paid by them and the average price per
Share to our Directors and/or Substantial Shareholders, Pre-Invitation Investors and to the new investors
pursuant to the Invitation.

                                                              Number of               Total cash            Average price
                                                            Shares acquired          consideration            per Share
                                                                   (’000)              (S$’000)(2)               (cents)
                                                  (1)
Directors and/or Substantial Shareholders
Yang Qingjin                                                       169,800               14,000                    8.2
Chen Yongfu                                                        213,550               14,002                    6.6
Pre-Invitation Investors                                           116,650               27,991                   24.0
New Investors                                                      160,000               75,200                   47.0

Notes:
(1)   The amount paid by our Directors and/or Substantial Shareholders includes the subscription price paid by Rowview, a
      company wholly-owned by Chen Yongfu and Chen Baohua, the wife of Yang Qingjin (our Chairman and Executive Director)
      and the sister of Chen Yongfu (our Deputy Chairman and Executive Director), for the shares in Jumbo Glories. These shares
      were subsequently transferred to the Pre-Invitation Investors when they exchanged their exchangeable notes for the said
      Shares pursuant to the terms of the Exchangeable Notes, details of which are set out in the Restructuring Exercise.
(2)   Based on the exchange rate of US$1:S$1.513 as at the Latest Practicable Date.




                                                              46
                SELECTED GROUP COMBINED FINANCIAL INFORMATION

The following selected financial information of our Group should be read in conjunction with the full text
of this Prospectus, including the section “Review of Past Operating Performance and Financial
Position” of this Prospectus, the “Report from the Joint Reporting Accountants on the Audited
Combined Financial Information of the Group for the Financial Years Ended 31 December 2004, 31
December 2005 and 31 December 2006” and the “Review Report from the Joint Reporting Accountants
on the Unaudited Combined Financial Information of the Group for the Three Months Ended 31 March
2007” as set out respectively in Appendix A and Appendix B of this Prospectus.


OPERATING RESULTS OF OUR GROUP(1)

                                                          Audited                                     Unaudited
                                                                                       Three months          Three months
                                                                                           ended                 ended
(RMB’000)                                  FY2004         FY2005         FY2006        31 March 2006         31 March 2007
Revenue                                    223,246        412,001        540,013           116,638                151,297
Cost of sales                              (161,343)      (287,332)     (351,185)           (76,908)              (94,933)

Gross profit                                 61,903       124,669        188,828            39,730                 56,364
Other income                                    267          2,016          1,980               149                   139
Selling and distribution expenses            (4,765)        (8,233)        (9,836)           (2,251)               (3,468)
Administrative expenses                      (3,046)        (3,784)        (4,097)           (1,060)               (1,020)

Operating profit                             54,359        114,668       176,875            36,568                 52,015
Finance costs                                (2,312)        (2,447)        (1,777)             (479)                 (361)

Profit before income tax                     52,047        112,221       175,098(2)         36,089                 51,654
Income tax expense                           (7,848)       (17,080)       (26,156)           (5,333)               (7,753)

Profit attributable to equity
  holders                                    44,199         95,141       148,942(2)         30,756                 43,901

EPS (RMB cents)(3)                              8.84         19.03          29.79              6.15                  8.78
                                (4)
Adjusted EPS (RMB cents)                        6.70         14.42          22.57              4.66                  6.65

Notes:
(1)   The financial results of our Group for the Period Under Review have been prepared on the basis that our Group structure
      had been in place as set out in note 3 to the Combined Financial Information.
(2)   Had the Service Agreements (set out in the section “Service Agreements” of this Prospectus) been in place since 1 January
      2006, the profit before income tax and profit attributable to equity holders for FY2006 would have been approximately
      RMB171.5 million and RMB145.9 million respectively.
(3)   For comparative purposes, EPS for the Period Under Review have been computed based on the profit attributable to equity
      holders and our pre-Invitation share capital of 500,000,000 Shares.
(4)   The adjusted EPS for the Period Under Review has been computed based on the profit attributable to equity holders and
      our post-Invitation share capital of 660,000,000 Shares.




                                                              47
OPERATING RESULTS OF OUR GROUP(1)
(translated to Singapore Dollars)
For illustrative purposes, the operating results of our Group have been translated into S$ using the
average rates for each respective financial year/period set out in the section “Exchange Rates” of this
Prospectus.

                                                          Audited                                     Unaudited
                                                                                       Three months          Three months
                                                                                         ended 31              ended 31
(S$’000)                                   FY2004         FY2005         FY2006         March 2006            March 2007
Revenue                                     45,579         83,672        107,594            23,582                29,853
Cost of sales                              (32,941)       (58,353)       (69,971)          (15,550)               (18,732)

Gross profit                                12,638         25,319         37,623              8,032               11,121
Other income                                     55            409            394                30                    27
Selling and distribution expenses              (973)        (1,672)        (1,960)             (455)                 (684)
Administrative expenses                        (622)          (768)          (816)             (214)                 (201)

Operating profit                            11,098         23,288         35,241              7,393               10,263
Finance costs                                  (472)          (497)          (354)              (97)                  (71)

Profit before income tax                    10,626         22,791         34,887(2)           7,296               10,192
Income tax expense                           (1,602)        (3,469)        (5,211)           (1,078)               (1,530)

Profit attributable to equity
holders                                      9,024         19,322         29,676(2)           6,218                8,662

EPS (Singapore cents)(3)                       1.80           3.86           5.94              1.24                  1.73
Adjusted EPS (Singapore
cents)(4)                                      1.37           2.93           4.50              0.94                  1.31

Notes:
(1)   The financial results of our Group for the Period Under Review have been prepared on the basis that our Group structure
      had been in place as set out in note 3 to the Combined Financial Information.
(2)   Had the Service Agreements (set out in the section “Service Agreements” of this Prospectus) been in place since 1 January
      2006, the profit before income tax and profit attributable to equity holders for FY2006 would have been approximately
      S$34.2 million and S$29.1 million respectively.
(3)   For comparative purposes, EPS for the Period Under Review has been computed based on the profit attributable to equity
      holders and our pre-Invitation share capital of 500,000,000 Shares.
(4)   The adjusted EPS for the Period Under Review has been computed based on the profit attributable to equity holders and
      our post-Invitation share capital of 660,000,000 Shares.




                                                              48
FINANCIAL POSITION OF OUR GROUP(1)
For illustrative purposes, the financial position of our Group has been translated into S$ using the
closing exchange rate for each respective financial year/period set out in the section “Exchange Rates”
of this Prospectus.

                                         Audited                Unaudited              Audited                 Unaudited
                                          As at                   As at                 As at                    As at
                                    31 December 2006          31 March 2007       31 December 2006          31 March 2007
                                                                                   (Translated into           (Translated
                                        (RMB$’000)             (RMB$’000)              S$’000)               into S$’000)
Non-current assets
Property, plant and
equipment                                   32,866                 32,293                  6,459                  6,341
Deposits                                       946                     583                   186                     114

                                            33,812                 32,876                  6,645                  6,455

Current assets
Inventories                                 14,369                 14,653                  2,824                  2,877
Trade receivables                          111,745                110,651                 21,962                 21,726
Deposits and other
receivables                                    473                     179                     93                     35
Due from related parties                         39                18,922                       8                 3,715
Pledged bank deposits                        9,894                   7,533                 1,944                  1,479
Cash and bank balances                      58,220                137,590                 11,443                 27,016

                                           194,740                289,528                 38,274                 56,848

Current liabilities
Trade and bills payables                    47,727                 55,528                  9,380                 10,903
Accrued liabilities and other
payables                                     3,355                 15,548                    659                  3,053
Due to related parties                           20                22,201                       4                 4,359
Bank loans, secured                         20,000                 20,000                  3,931                  3,927
Provision for tax                                —                   7,753                     —                  1,522

                                            71,102                121,030                 13,974                 23,764

Net current assets                         123,638                168,498                 24,300                 33,084

Net assets                                 157,450                201,374                 30,945                 39,539

Represented by:
Equity attributable to equity
holders of our Company                     157,450                201,374                 30,945                 39,539
NTA per Share
(RMB cents)(2)                               31.49                   40.27                   n.a.                   n.a.
NTA per Share (Singapore
cents)(2)                                      n.a.                    n.a.                 6.19                    7.91

Notes:
(1)   The financial position of our Group has been prepared on the basis that our Group structure had been in place as set out
      in note 3 to the Combined Financial Information.
(2)   For comparative purposes, our NTA per Share as at 31 December 2006 and 31 March 2007 has been computed based on
      our net assets and on our pre-Invitation share capital of 500,000,000 Shares.



                                                             49
 REVIEW OF PAST OPERATING PERFORMANCE AND FINANCIAL POSITION

The following discussion of our results of operations and financial position should be read in
conjunction with the Combined Financial Information as set out in Appendix A and Appendix B of this
Prospectus. This discussion contains forward-looking statements that involve risks and uncertainties.
Our actual results may differ significantly from those projected in the forward-looking statements.
Factors that might cause our actual future results to differ significantly from those projected in the
forward-looking statements include, but are not limited to, those discussed below and elsewhere in this
Prospectus, particularly in the section “Risk Factors” of this Prospectus.


BASIS OF PRESENTATION
The combined income statements, combined statements of changes in equity and combined cash flow
statements of our Group for the Period Under Review and the combined balance sheets of our Group
as at 31 December 2004, 2005 and 2006 and 31 March 2007 which have been prepared in accordance
with International Financial Reporting Standards, have been based on the audited financial statements
of Xiamen Changtian for FY2004, FY2005 and FY2006 and, where appropriate, unaudited
management accounts of Xiamen Changtian and our subsidiaries now comprising our Group.

The operations of our Group were originally carried out by Xiamen Changtian. Pursuant to the asset
and business transfer agreement (as amended by a supplemental transfer agreement), details of which
are set out in the section “Restructuring Exercise” of this Prospectus, Jumbo Glories agreed to acquire
all of Xiamen Changtian’s business including its relevant product and sales activities, assets and
obligations, except for (i) the leasehold interest in leasehold buildings; (ii) the leasehold interest in land
use rights; (iii) the amounts due from the equity holders of Xiamen Changtian; and (iv) tax payable
balances due to the relevant tax authorities (the “Transferred Operations”). Items (i) to (iv) above are
retained by Xiamen Changtian and they are collectively referred to as the “Non-transferred Operations”.
Pursuant to the Restructuring Exercise, Changtian Enterprise entered into a trademark agreement to
transfer all of the trademarks already registered and being registered by Xiamen Changtian to our
Group. Currently, our Group also leases from Xiamen Changtian and Xiamen Brightforever land, office
buildings, staff quarters and factory premises. Please refer to the section “Restructuring Exercise” of
this Prospectus for details of the trademark agreement and lease agreements. For the Period Under
Review, Xiamen Changtian leased from Xiamen Brightforever the manufacturing facilities for the
production of Xiamen Changtian’s BOPA film since March 2005. On 21 May 2007, Changtian Enterprise
entered into a Machinery Acquisition Agreement with Xiamen Brightforever pursuant to which
Changtian Enterprise would acquire the plant and machinery from Xiamen Brightforever for the
production of BOPA film and certain office equipment and motor vehicles with effect from 1 April 2007.

Our Group is regarded as a continuing entity resulting from the Restructuring Exercise since the
Transferred Operations and Non-transferred Operations were under common control before and
immediately after the Restructuring Exercise. Consequently, immediately after the Restructuring
Exercise, there was a continuation of the risks and benefits to the ultimate shareholders that existed
prior to the Restructuring Exercise. The Restructuring Exercise has been accounted for as a
reorganisation under common control in a manner similar to pooling of interests. Accordingly, the
Combined Financial Information have been prepared on the basis of merger accounting, and comprise
the financial statements of the subsidiaries of our Group and, where appropriate, Xiamen Changtian,
which were under common control of the ultimate shareholders that existed prior to the Restructuring
Exercise.

Please refer to note 3 of the Combined Financial Information for further details.




                                                     50
We have prepared the Combined Financial Information of our Group on a merger accounting basis. The
Joint Reporting Accountants are of the view that the:
(a)   profit attributable to equity holders for FY2006;
(b)   net asset value as at 31 December 2006; and
(c)   net increase or decrease in cash and cash equivalents for FY2006
would not have been materially different whether the financial information of our Group was prepared on
a pro forma basis or on a merger accounting basis.


OVERVIEW
We are principally engaged in the manufacture and sale of (i) adhesive tapes, (ii) release papers, (iii)
BOPA film, and (iv) 2-A2MPS.

As at the Latest Practicable Date, we have production facilities, located at 16 and 18 Xinsheng Road,
Xinyang Industrial Zone, Haicang District, Xiamen City, Fujian Province, PRC 361026. As at the Latest
Practicable Date, our annual production capacity for our products is as follows:
•     Adhesive tapes     :     324 million sq m
•     Release papers     :     120 million sq m
•     BOPA film          :     5,400 tonnes
•     2-A2MPS            :     1,500 tonnes


Revenue
Our revenue is derived from the production and sales of products as classified above.

Our revenue increased from approximately RMB223.2 million in FY2004 to RMB540.0 million in
FY2006, representing a compounded annual growth rate of approximately 55.5%. For the three months
ended 31 March 2007, our revenue was approximately RMB151.3 million which was an increase of
approximately 29.8% as compared to the corresponding period in 2006. The increase in our revenue
for the Period Under Review was due mainly to the increase in the demand for our products as a result
of greater brand recognition, increasing customer base and increase in product offering.

Amongst our four product segments, adhesive tapes was continuously the key contributor to our total
revenue, contributing approximately 70.0%, 55.6%, 49.9% and 44.4% of our revenue or approximately
RMB156.2 million, RMB229.1 million, RMB269.2 million and RMB67.2 million to our revenue for
FY2004, FY2005, FY2006 and the three months ended 31 March 2007 respectively.

Release papers is our other major product segment contributing approximately 25.0%, 23.9%, 24.0%
and 21.7% of our revenue or approximately RMB55.8 million, RMB98.3 million, RMB129.5 million and
RMB32.9 million to our revenue for FY2004, FY2005, FY2006 and the three months ended 31 March
2007 respectively.

Even though the production and sale of BOPA film commenced only in April 2005, it has replaced
release papers as our second major product for revenue and gross profit margin contributions in the
first quarter of FY2007. BOPA film contributed approximately 15.7%, 19.0% and 27.0% of our revenue,
or approximately RMB64.6 million, RMB102.9 million and RMB40.9 million to our revenue for FY2005,
FY2006 and the three months ended 31 March 2007 respectively.

2-A2MPS contributed approximately 5.0%, 4.8%, 7.1% and 6.9% of our revenue or approximately
RMB11.3 million, RMB20.0 million, RMB38.5 million and RMB10.4 million to our revenue for FY2004,
FY2005, FY2006 and the three months ended 31 March 2007 respectively.



                                                   51
Revenue is recognised upon the delivery and acceptance of our products. For the last three financial
years ended 31 December 2006 and the three months ended 31 March 2007, all of our revenue is
denominated in RMB as all of our sales were made in the PRC.

The main factors that may affect our revenue are as follows:
(a)     Ability to retain our existing customers and secure new customers;
(b)     Ability to maintain and enhance our competitive strengths;
(c)     Ability to maintain and increase selling prices;
(d)     Continuous demand for our products;
(e)     Ability to increase production capacity;
(f)     Ability to compete successfully against new and existing competitors; and
(g)     Ability to pass on increases in the price of our raw materials to our customers.

Please refer to the section “Risk Factors” of this Prospectus for other factors which may affect our revenue.

Our customers do not enter into any long-term orders with us. Our orders are normally received from
customers either on a monthly basis or from customers who enter into yearly sale contracts with us where
they would at the end of each year provide us with an estimate of their requirements for the coming year
(“Pre-order Customers”). We would then confirm with these Pre-order Customers on a monthly basis the
actual orders and pricing for these orders for the forthcoming one to two months. We usually deliver our
products to our customers within 45 days from the date of the orders placed by our customers.


Cost of sales
Cost of sales represented approximately 72.3%, 69.7%, 65.0% and 62.7% of our revenue for FY2004,
FY2005, FY2006 and the three months ended 31 March 2007 respectively. Our cost of sales comprises
raw materials, direct labour and production overheads as follows:


Breakdown of costs of sales as a percentage of revenue

                                                                              Unaudited         Unaudited
                                                                            three months      three months
                                                                                ended             ended
                 Audited FY2004     Audited FY2005    Audited FY2006       31 March 2006     31 March 2007
                         As a %          As a %          As a %          As a %          As a %
                           of              of              of              of              of
                RMB’000 revenue RMB’000 revenue RMB’000 revenue RMB’000 revenue RMB’000 revenue
Raw materials    150,560   67.5    269,643    65.4    328,163      60.7   72,049    61.8    88,912    58.7
Direct labour      1,562    0.7      2,656     0.6         3,167    0.6     724      0.6       767      0.5
Production
overheads          9,221    4.1     15,033     3.7     19,855       3.7    4,135     3.5     5,254      3.5

Total            161,343   72.3    287,332    69.7    351,185      65.0   76,908    65.9    94,933    62.7




                                                     52
Breakdown of cost of sales

                                                                                           Unaudited             Unaudited
                                                                                         three months          three months
                                                                                             ended                 ended
                     Audited FY2004        Audited FY2005        Audited FY2006         31 March 2006         31 March 2007
                           As a %           As a %           As a %           As a %           As a %
                           of cost          of cost          of cost          of cost          of cost
                   RMB’000 of sales RMB’000 of sales RMB’000 of sales RMB’000 of sales RMB’000 of sales
Raw materials       150,560      93.3     269,643       93.9    328,163       93.4     72,049        93.7    88,912       93.7
Direct labour         1,562        1.0      2,656        0.9       3,167       0.9        724         0.9      767         0.8
Production
overheads             9,221        5.7     15,033        5.2     19,855        5.7      4,135         5.4     5,254        5.5

Total               161,343     100.0     287,332     100.0     351,185      100.0     76,908       100.0    94,933      100.0



The raw materials for the production of our products accounted for a significant proportion of our cost
of sales representing approximately 93.3%, 93.9%, 93.4% and 93.7% or RMB150.6 million, RMB269.6
million, RMB328.2 million and RMB88.9 million respectively for FY2004, FY2005, FY2006 and the
three months ended 31 March 2007.

The major raw materials include BOPP film, butyl acrylate and polyvinyl acetate for the production of
our adhesive tapes, CCK paper and glassine paper for the production of our release papers, PA6 for
the manufacture of our BOPA film and acrylonitrile and isobutylene for the production of our 2-A2MPS.
The following table shows each type of raw materials as a percentage of the total raw materials cost
for FY2004, FY2005, FY2006 and the three months ended 31 March 2007:

                                                                                As a % of total raw materials cost
                                                                                                              Three months
                                                                                                                  ended
Name of raw materials                       For the production of          FY2004    FY2005         FY2006    31 March 2007
BOPP film, butyl acrylate and
 polyvinyl acetate                          Adhesive tapes                  57.8%      48.0%         44.0%            37.1%
CCK paper and glassine paper                Release papers                  22.4%      20.3%         21.4%            20.8%
PA6                                         BOPA film                         n.a.     15.3%         19.1%            26.4%
Acrylonitrile and isobutylene               2-A2MPS                          4.0%       3.0%          4.2%            4.3%
Others(1)                                                                   15.8%      13.4%         11.3%            11.4%

Total                                                                      100.0%     100.0%        100.0%        100.0%


Note:
(1)     This represents over 100 types of minor raw materials for the production of our products.


Direct labour and production overheads, in aggregate, accounted for approximately 6.7%, 6.1%, 6.6% and
6.3% of our cost of sales for FY2004, FY2005, FY2006 and the three months ended 31 March 2007. Direct
labour includes wages and other staff-related costs for operators, technicians and those who are directly
involved in the manufacture of our products. Production overheads consist of depreciation of our plant and
machinery and equipment, fuel and utilities charges for our factories, consumables and supplies,
packaging materials and other factory-related costs.


Other income
Other income comprises interest income and other non-operating income which mainly included gain
on disposal of land use rights for approximately RMB1.4 million in FY2005 and grants from the
government of approximately RMB1.3 million for our development of 2-A2MPS. On 29 May 2006, 22
October 2006 and 30 September 2006, Xiamen Changtian received two grants of RMB0.2 million each

                                                                53
from the Xiamen Municipal Development and Reform Committee                                  and a grant
of RMB0.9 million from the Xiamen Municipal Science and Technology Bureau
respectively for the development and production of 2-A2MPS.


Operating expenses
Operating expenses comprise selling and distribution expenses and administrative expenses.

Selling and distribution expenses include mainly transportation costs, salaries of sales and marketing
personnel, and delivery charges. From FY2004 to FY2006 and the three months ended 31 March 2007,
selling and distribution expenses constituted approximately 61.0%, 68.5%, 70.6% and 77.3%
respectively of our total operating expenses.

Administrative expenses are mainly salaries of administrative personnel, depreciation of office
equipment and motor vehicles, travelling expenses, amortisation of land use rights, entertainment
expenses and sundry expenses. Administrative expenses accounted for approximately 39.0%, 31.5%,
29.4% and 22.7% of our total operating expenses incurred for FY2004 to FY2006 and the three months
ended 31 March 2007 respectively.


Finance costs
Finance costs comprise interest charges on our short-term and long-term bank loans which bear
interest rates ranging from 6.1% to 7.6% per annum for the Period Under Review.


Income tax expense
Income tax expense represents the tax charges provided in respect of the assessable profits derived
from our Group’s operations in the PRC.

For FY2004 to FY2006, our Group was subject to the applicable tax rate of 15%. Xiamen is one of the
special economics zone in the PRC which is subject to the applicable tax rate of 15%. The applicable
tax rate of non special economics zone, which includes our Shanghai branch, is 33%. Our Shanghai
branch office was closed in October 2006.

In accordance with the applicable corporate income tax law of the PRC, Changtian Enterprise, our
wholly-owned subsidiary which was established as a WFOE in the PRC on 6 December 2006, is
currently exempted from the corporate income tax under the newly revised tax law in PRC for its first
two profitable calendar years of operations (“Initial Exemption Period”) and is entitled to a 50% relief
from the state corporate income tax and exempted from the local corporate income tax for the following
three years after Initial Exemption Period. The Initial Exemption Period for Changtian Enterprise is
expected to commence in the financial year ending 31 December 2007 and expire as at 31 December
2008 as approved by the State tax authority. Upon expiry of the Initial Exemption Period, Changtian
Enterprise is expected to be entitled to 50% relief from the state corporate income tax for the three
financial years from 1 January 2009 to 31 December 2011. After 31 December 2011, a statutory income
tax rate of the PRC will be applicable to Changtian Enterprise.


Inflation
Our financial performance during the Period Under Review was not materially affected by inflation.


Seasonality
There is no apparent seasonality pattern in our sales during the Period Under Review.




                                                  54
REVIEW OF RESULTS OF OPERATIONS
All our products are sold in the PRC, therefore a segmentation of our revenue by geographical regions
may not be applicable. We categorised our products into product segments namely adhesive tapes,
release papers, BOPA film and 2-A2MPS. We have segmented our revenue, gross profit and gross
profit margin for each of our product segment for the Period Under Review as set out below.


Breakdown of revenue by product segments

                                                                                   Unaudited            Unaudited
                                                                                 three months         three months
                                                                                     ended                ended
                 Audited FY2004      Audited FY2005      Audited FY2006         31 March 2006        31 March 2007
             RMB’000        %       RMB’000     %       RMB000           %     RMB’000       %      RMB’000        %
Adhesive
tapes            156,179    70.0     229,107    55.6    269,168        49.9     59,480       51.0    67,160        44.4
Release
papers            55,771    25.0      98,301    23.9    129,454        24.0     27,726       23.8    32,870        21.7
BOPA film             —       —       64,596    15.7    102,850        19.0     22,183       19.0    40,867        27.0
2-A2MPS           11,296     5.0      19,997     4.8     38,541          7.1     7,249        6.2    10,400         6.9

                 223,246   100.0     412,001   100.0    540,013     100.0      116,638      100.0   151,297       100.0



Breakdown of gross profit by product segments

                                                                               Unaudited three      Unaudited three
                                                                               months ended 31      months ended 31
                 Audited FY2004      Audited FY2005      Audited FY2006          March 2006           March 2007
             RMB’000        %       RMB’000     %       RMB000           %     RMB’000       %      RMB’000        %
Adhesive
tapes            43,499     70.3      66,547    53.4     91,681        48.5    19,983        50.3   25,889         45.9
Release
papers           14,251     23.0      30,861    24.7     43,759        23.2     9,472        23.8   10,738         19.1
BOPA film            —        —       17,199    13.8     31,146        16.5     6,080        15.3    14,011        24.8
2-A2MPS           4,153      6.7      10,062     8.1     22,242        11.8     4,195        10.6    5,726         10.2

                 61,903    100.0     124,669   100.0    188,828     100.0      39,730       100.0   56,364        100.0



Breakdown of gross profit margin by product segments

                                                                                  Unaudited             Unaudited
                                                                                three months          three months
                                   Audited     Audited       Audited                ended                 ended
                                   FY2004      FY2005        FY2006            31 March 2006         31 March 2007
                                     %              %              %                    %                     %
Adhesive tapes                      27.9         29.0             34.1              33.6                  38.5
Release papers                      25.6         31.4             33.8              34.2                  32.7
BOPA film                             —          26.6             30.3              27.4                  34.3
2-A2MPS                             36.8         50.3             57.7              57.9                  55.1

Overall                             27.7         30.3             35.0              34.1                  37.3




                                                        55
REVIEW OF PAST PERFORMANCE

FY2004 VS FY2005

Revenue
Our revenue increased by approximately 84.6% or RMB188.8 million from approximately RMB223.2
million in FY2004 to approximately RMB412.0 million in FY2005. All of our existing products contributed
to the increase of our revenue, of which, revenue from the sale of our adhesive tapes was still a major
contributor to the increase of the revenue, recording an increase of approximately 46.7% or RMB72.9
million from approximately RMB156.2 million in FY2004 to approximately RMB229.1 million in FY2005.
BOPA film, which was launched in FY2005, contributed approximately RMB64.6 million to our revenue.
Revenue from the sale of our release papers recorded an increase of approximately 76.2% or RMB42.5
million from approximately RMB55.8 million in FY2004 to approximately RMB98.3 million in FY2005.
Revenue from the sale of our 2-A2MPS increased by approximately 77.0% or RMB8.7 million from
approximately RMB11.3 million in FY2004 to approximately RMB20.0 million in FY2005.

The increase in revenue was mainly attributable to the following:

(a)   Increase in sales volume, customer base and average turnover per customer
      We experienced a growth in sales volume for our three products, namely adhesive tapes by
      approximately 42.7%, release papers by approximately 74.7% and 2-A2MPS by approximately
      35.2%. This increase in sales volume was due to a net increase in the number of customers from
      233 in FY2004 to 282 in FY2005. Average turnover per customer has also increased by
      approximately 50.0% from RMB1.0 million to RMB1.5 million. Our gross 65 new customers
      contributed to approximately 80.4% of the increase in revenue. Sales to new customers in
      FY2005 accounted for approximately 19.0% for our adhesive tapes, 36.4% for our release papers,
      100% for our BOPA film and 38.6% for our 2-A2MPS.

(b)   Wider range of adhesive tapes products
      Our adhesive tapes are manufactured for mass market demand or in accordance to the
      requirements of our customers with variations in width, usage and colour. For FY2005, there has
      been an increase in our customers’ demand for a greater variety of tapes which resulted in a wider
      range of products being offered for sale. In FY2004, there was no change in the type of release
      papers sold, and we did not produce and sell any BOPA film for which production only
      commenced in FY2005.

(c)   Increase of average selling price
      Average selling price for our products have increased as a result of the increase in certain raw
      material costs which we have managed to pass on to the customers by increasing the price of our
      products. The price of our adhesive tapes, release papers and 2-A2MPS increased by 2.8%, 0.8%
      and 31.1% respectively. With respect to the increase in the selling price of our 2-A2MPS product
      by 31.1%, we had in FY2004 offered significant discounts to customers with a view to gaining
      market acceptance and customer base. In FY2005, such discounts were no longer offered as our
      2-A2MPS product had gained market recognition.

(d)   Sale of a new product
      We commenced production of our new BOPA film in April 2005 which has contributed
      approximately 15.7% or approximately RMB64.6 million of our total revenue for FY2005 in only
      nine months of operations.


Cost of sales and gross profit margin
Our cost of sales increased by approximately 78.1% or RMB126.0 million from approximately
RMB161.3 million in FY2004 to approximately RMB287.3 million in FY2005 which was approximately

                                                  56
in line with the increase of our revenue. The percentage increase in our cost of sales of approximately
78.1% was less than the percentage increase in revenue of approximately 84.6%. This was mainly
because:
(i)    the cost of the key raw material, BOPP film, used in the production of adhesive tapes increased
       by 8.7% and the cost of the key raw material, acrylonitrile, used in the production of 2-A2MPS
       increased by 4.6%;

and partially offset by:
(ii)   the decrease of 6.0% in the cost of the key raw material, butyl acrylate, used in the production of
       adhesive tapes and the decrease of 9.1% and 8.7% in the cost of the key raw materials, CCK
       paper and glassine paper, respectively, used in the production of release papers.

For each of our existing products, the gross profit margin for adhesive tapes has increased from 27.9% in
FY2004 to 29.0% in FY2005, release papers has increased from 25.6% in FY2004 to 31.4% in FY2005
and 2-A2MPS increased from 36.8% in FY2004 to 50.3% in FY2005 partly due to us ceasing to offer
discounts on this product as we had done in FY2004.

Due to the increase of our revenue and overall gross profit margin, total gross profit has therefore doubled
or increased approximately 101.5% or RMB62.8 million from approximately RMB61.9 million in FY2004 to
approximately RMB124.7 million in FY2005.

Our gross profit margin is mainly affected by raw materials costs as it accounted for approximately 93.3%
and 93.9% of our cost of sales in FY2004 and FY2005 respectively. The other factors that may affect our
gross profit margins are immaterial.


Other income
Other income increased from approximately RMB0.3 million in FY2004 to RMB2.0 million in FY2005
due mainly to the gain on disposal of land use rights of approximately RMB1.4 million in FY2005.


Operating expenses
With the expansion of our business operations in FY2005, our overall operating expenses increased by
approximately RMB4.2 million or 53.8% from approximately RMB7.8 million in FY2004 to
approximately RMB12.0 million in FY2005.

Our selling and distribution expenses increased by approximately 70.8% or RMB3.4 million from
approximately RMB4.8 million in FY2004 to approximately RMB8.2 million in FY2005 due mainly to an
increase in transportation costs and salaries. In FY2005, transportation costs and salaries increased by
approximately RMB2.4 million and RMB0.8 million respectively as we expand our customer base
throughout the PRC. Headcount for sales and marketing personnel increased from 31 in FY2004 to 47
in FY2005. The balance of the incremental selling and distribution expenses was mainly attributable to
an increase in courier and postage and entertainment expenses. Courier and postage expenses
increased from RMB0.1 million in FY2004 to RMB0.2 million in FY2005, while entertainment expenses
increased from RMB0.1 million in FY2004 to RMB0.2 million in FY2005. The increase in these
expenses was due to the increase in revenue by 84.6% from FY2004 to FY2005.

Our administrative expenses increased by approximately 26.7% or RMB0.8 million from approximately
RMB3.0 million in FY2004 to approximately RMB3.8 million in FY2005 due mainly to legal fees
incurred. Legal and professional fees increased by approximately RMB0.5 million attributable mainly to
legal fees incurred as a result of litigation with Agricultural Bank of China for the repayment of bank
loans. The balance of the incremental administrative expenses of RMB0.3 million was mainly
attributable to an increase in staff costs.




                                                    57
Finance costs
Our finance costs increased by approximately 4.3% or RMB0.1 million from RMB2.3 million to RMB2.4
million in FY2005. The increase in finance costs was mainly attributable to an increase in average
borrowing interest rate for the RMB20.0 million loan of approximately 6.9 % in FY2004 as compared to
approximately 7.3% in FY2005 which was partially offset by the decrease in interest expenses upon the
repayment of bank loans of RMB9.4 million in the fourth quarter of FY2005.


Profit before income tax
Our profit before income tax increased by approximately RMB60.2 million from approximately RMB52.0
million in FY2004 to approximately RMB112.2 million in FY2005 in line with the increase in revenue and
gross profit which was partially offset by an increase in our operating expenses. Our profit before
income tax margin increased by approximately 3.9 percentage points from approximately 23.3% in
FY2004 to 27.2% in FY2005.


Income tax expense
Our income tax expense increased by approximately 119.2% or RMB9.3 million from approximately
RMB7.8 million in FY2004 to approximately RMB17.1 million in FY2005. Our applicable tax rate was
unchanged at 15% in FY2005.


FY2005 VS FY2006

Revenue
In FY2006, our revenue increased by approximately 31.1% or RMB128.0 million from approximately
RMB412.0 million in FY2005 to approximately RMB540.0 million in FY2006. All of our products
continued to record an increase in sales during the year and contributed to the increase of our revenue.
The increase of revenue from the sale of our adhesive tapes continued to be a major contributor to the
increase of our turnover, recording an increase of approximately 17.5% or RMB40.1 million from
approximately RMB229.1 million in FY2005 to approximately RMB269.2 million in FY2006. The
contribution from BOPA film continued to be strong, with a recorded turnover of approximately
RMB102.9 million, or an increase of approximately RMB38.3 million or 59.3% from RMB64.6 million in
FY2005. Revenue from the sale of our release papers increased by approximately 31.7% or RMB31.2
million from approximately RMB98.3 million in FY2005 to approximately RMB129.5 million in FY2006.
Revenue from the sale of our 2-A2MPS increased by approximately 92.5% or RMB18.5 million from
approximately RMB20.0 million in FY2005 to approximately RMB38.5 million in FY2006.

The increase in revenue was mainly attributable to the following:

(a)   Increase in sales volume, customer base and average turnover per customer
      We continued to experience a growth in sales volume for all of our products, namely adhesive
      tapes by approximately 15.6%, release papers by approximately 27.5%, BOPA film by
      approximately 58.8% and 2-A2MPS by approximately 90.2%. This growth in sales volume was
      due to a net increase in the number of customers from 282 in FY2005 to 286 in FY2006. Average
      turnover per customer has also increased by approximately 26.7% from RMB1.5 million to
      RMB1.9 million. Our gross 29 new customers contributed to approximately 40.9% of the increase
      in revenue. Sales to new customers in FY2006 contributed approximately 4.8% for our adhesive
      tapes, 6.6% for our release papers, 22.3% for our BOPA film and 20.6% for our 2-A2MPS.

(b)   Increase in average selling prices
      Average selling prices for adhesive tapes, release papers, BOPA film and 2-A2MPS have also
      recorded slight increases of 1.6%, 3.5%, 0.3% and 1.4% respectively in FY2006 as compared to
      FY2005. The increase in average selling prices for (i) adhesive tapes is due to the larger


                                                  58
      proportion of higher priced adhesive tapes being sold; (ii) release papers is due to the larger
      proportion of higher priced CCK release papers being sold which is three times the price of
      glassine coated release papers; (iii) BOPA film and 2-A2MPS is due to greater demand for these
      products.

(c)   Full year contribution from BOPA film sales
      Revenue attributable to BOPA film increased from approximately RMB64.6 million in FY2005 to
      approximately RMB102.9 million in FY2006 or approximately 59.3% as a result of full year
      contribution in FY2006 as compared to only nine months contribution in FY2005.


Cost of sales and gross profit margin
Our cost of sales increased by approximately 22.2% or RMB63.9 million from approximately RMB287.3
million in FY2005 to approximately RMB351.2 million in FY2006. As compared with the increase of
31.1% in revenue during the corresponding period, our cost of sales percentage increase was lower as
a result of a decrease in average prices of butyl acrylate, CCK paper, glassine paper, PA6 and
acrylonitrile of 12.5%, 2.9%, 0.6%, 7.1% and 9.6% respectively which were used in the production of
our products. This was partially offset by an increase in the average prices of BOPP film of 4.2% used
in the production of adhesive tapes.

Hence, our overall gross profit margin increased from approximately 30.3% in FY2005 to approximately
35.0% in FY2006. In particular, the gross profit margin of adhesive tapes increased from 29.0% in
FY2005 to 34.1% in FY2006 as we have managed to improve efficiency by reducing wastage on the
amount of butyl acrylate. Our gross profit margin for BOPA film also increased from 26.6% in FY2005
to 30.3% in FY2006 due mainly to higher selling prices, lower raw materials cost together with greater
economies of scale achieved as a result of a full year contribution of BOPA film as compared to the
previous year from 2,100 tonnes in FY2005 to 3,100 tonnes in FY2006. Our gross profit margin for
release papers and 2-A2MPS increased relatively less percentage points in FY2006 as compared to
the previous year’s increase due mainly to more stable pricing in the raw materials of release papers
as well as the average selling price of 2-A2MPS.

Our total gross profit has increased by approximately RMB64.1 million or approximately 51.4% from
approximately RMB124.7 million in FY2005 to approximately RMB188.8 million in FY2006.


Other income
Other income was about the same level of FY2005 at approximately RMB2.0 million comprising two
grants of RMB0.2 million each from the Xiamen Municipal Development and Reform Committee
                         and a grant of RMB0.9 million from the Xiamen Municipal Science and
Technology Bureau                      in relation to our efforts in developing the 2-A2MPS products
and interest income of RMB0.7 million in FY2006.


Operating expenses
Our operating expenses increased by approximately 15.8% or RMB1.9 million from approximately
RMB12.0 million in FY2005 to approximately RMB13.9 million in FY2006. The increase of RMB1.9
million was mainly attributable to the increase of RMB1.6 million in selling and distribution expenses
and RMB0.3 million in administrative expenses.

Our selling and distribution expenses increased by approximately 19.5% or RMB1.6 million from
approximately RMB8.2 million in FY2005 to approximately RMB9.8 million in FY2006. The increase
was mainly attributable to the increase of RMB0.6 million from transportation costs arising from the
increase in revenue and RMB0.5 million from the increase of salaries as total headcount for sales and
marketing personnel increased from 47 in FY2005 to 54 in FY2006. The balance of the incremental



                                                    59
selling and distribution expenses of RMB0.5 million was mainly attributable to an increase in
consumable tools and travelling expenses.

Our administrative expenses increased by approximately 7.9% or RMB0.3 million from approximately
RMB3.8 million in FY2005 to approximately RMB4.1 million in FY2006 due mainly to increase in real
estate tax and sundry expenses. Real estate tax comprised property tax and land use tax. In FY2006,
property tax is charged at 0.9% on the cost of relevant buildings owned by Xiamen Changtian while land
use tax is charged at RMB5 per sq m on the land then owned by Xiamen Changtian.


Finance costs
Our finance costs decreased by approximately 25.0% or RMB0.6 million from RMB2.4 million to
RMB1.8 million in FY2006. The decline was mainly attributable to repayments of bank loans of RMB7.9
million by instalments from the second to fourth quarters of FY2006.


Profit before income tax
Our profit before income tax increased by approximately 55.9% or RMB62.8 million from approximately
RMB112.3 million in FY2005 to approximately RMB175.1 million in FY2006 due mainly to the significant
increase in revenue and gross profit margins for all of our product types, in particular BOPA film, and
relatively stable operating expenses. Our profit before income tax margin increased by approximately
5.2 percentage points from approximately 27.2% in FY2005 to 32.4% in FY2006.


Income tax expense
Our income tax expense increased by approximately 53.2% or RMB9.1 million from approximately
RMB17.1 million in FY2005 to approximately RMB26.2 million in FY2006. Our applicable tax rate was
unchanged at 15% in FY2006.


THREE MONTHS ENDED 31 MARCH 2006 VS THREE MONTHS ENDED 31 MARCH 2007

Revenue
Our revenue increased by approximately 29.8% or RMB34.7 million from approximately RMB116.6
million for the three months ended 31 March 2006 to approximately RMB151.3 million for the three
months ended 31 March 2007. All of our products have recorded an increase in sales during the period
but the increase in BOPA flim has outpaced the other products as the major contributor to the increase
of turnover during the period. Revenue from the sale of our BOPA film increased by approximately
84.2% or RMB18.7 million from approximately RMB22.2 million for the three months ended 31 March
2006 to approximately RMB40.9 million for the three months ended 31 March 2007. Revenue from the
sale of our adhesive tapes continued to contribute significantly to our turnover but such products have
only recorded an increase of approximately 12.9% or RMB7.7 million from approximately RMB59.5
million for the three months ended 31 March 2006 to approximately RMB67.2 million for the three
months ended 31 March 2007. Revenue from the sale of our release papers increased by
approximately 18.8% or RMB5.2 million from approximately RMB27.7 million for the three months
ended 31 March 2006 to approximately RMB32.9 million for the three months ended 31 March 2007.
Revenue from the sale of our 2-A2MPS increased by approximately 44.4% or RMB3.2 million from
approximately RMB7.2 million for the three months ended 31 March 2006 to approximately RMB10.4
million for the three months ended 31 March 2007.

The increase in revenue was mainly attributable to the following:

(a)   Increase in sales volume and customer base
      We had experienced increase in sales volume of approximately 1.1% for our adhesive tapes,
      approximately 15.8% for our release papers, approximately 87.2% for our BOPA film and
      approximately 45.5% for our 2-A2MPS and this was mainly attributable to the increase in the

                                                  60
      number of customers from 249 for the three months ended 31 March 2006 to 284 for the three
      months ended 31 March 2007. The average turnover per customer was approximately at the
      same level of RMB0.5 million for both periods.

(b)   Increase of selling price
      During the three months ended 31 March 2007, our two major products, namely adhesive tapes
      and release papers, recorded an increase of average selling prices of 11.7% and 2.3%
      respectively as compared to the corresponding period of 2006. The increases in selling prices
      were driven by market demand. However, the increases have been partially offset by marginal
      decreases of selling prices of BOPA film and 2-A2MPS by 1.6% and 1.4% respectively.


Cost of sales and gross profit margin
Our cost of sales increased by approximately 23.4%, or RMB18.0 million from approximately RMB76.9
million for the three months ended 31 March 2006 to approximately RMB94.9 million for the three
months ended 31 March 2007. The increase of our cost of sales was less than in the increase of our
turnover as a result of our continued efforts in improving our efficiency and reducing the wastage ratio.

Our overall gross profit margin increased from approximately 34.1% for the three months ended 31
March 2006 to approximately 37.3% for the three months ended 31 March 2007. In particular, the gross
profit margin of BOPA film posted an increase from 27.4% for the three months ended 2006 to 34.3%
for the three months ended 2007 as the price of the raw material, PA6, has decreased by approximately
8.7% but the selling price has only recorded a decrease of only 1.7%. In the corresponding period, our
gross profit margin for adhesive tapes increased from 33.6% for the three months ended 31 March
2006 to 38.5% for the three months ended 31 March 2007 due mainly to higher average selling prices
of approximately 11.7% which has been offset by an increase of the major raw materials of
approximately 6.5%. However, the increase of gross profit margin from our BOPA film and adhesive
tapes was offset by the decrease in profit margins from our 2-A2MPS products and release papers due
to increase of raw material price. Our gross profit margin for 2-A2MPS decreased from 57.9% for the
three months ended 2006 to 55.1% for the three months ended 2007 and the gross profit margin for
release papers decreased from 34.2% for the three months ended 31 March 2006 to 32.7% for the
three months ended 31 March 2007. The prices for the main raw materials for the production of release
papers, being CCK papers and glassine papers increased by approximately 2.0% and 5.3%
respectively. The price for the main raw material for the production of 2-A2MPS, being acrylonitrile,
increased by 7.0%.

As a result, our total gross profit recorded an increase of approximately RMB16.7 million or
approximately 42.1% from RMB39.7 million for the three months ended 31 March 2006 to RMB56.4
million for the same period in 2007.


Other income
Other income is approximately RMB0.1 million and comprised only interest income for the three months
ended 31 March 2007.


Operating expenses
Our operating expenses increased by approximately 36.4% or RMB1.2 million from approximately
RMB3.3 million for the three months ended 31 March 2006 to approximately RMB4.5 million for the
three months ended 31 March 2007.

Our selling and distribution expenses increased by approximately 52.2% or RMB1.2 million from
approximately RMB2.3 million for the three months ended 31 March 2006 to approximately RMB3.5
million for the three months ended 31 March 2007 which was attributable to the increase of
transportation costs as result of increase in revenue.


                                                   61
Our administrative expenses for the three months ended 31 March 2007 were stable as compared with
the same period in 2006.


Profit before income tax
Our profit before income tax increased by approximately 43.2% or RMB15.6 million from approximately
RMB36.1 million for the three months ended 31 March 2006 to approximately RMB51.7 million for the
three months ended 31 March 2007 due mainly to the increase in our gross profit. Our profit before
income tax margin increased by approximately 3.2 percentage points from approximately 30.9% for the
three months ended 31 March 2006 to 34.1% for the three months ended 31 March 2007.


Income tax expense
Our income tax expense increased by approximately 47.2% or RMB2.5 million from approximately
RMB5.3 million for the three months ended 31 March 2006 to approximately RMB7.8 million for the
three months ended 31 March 2007 due mainly to the increase in profit before income tax.


LIQUIDITY AND CAPITAL RESOURCES
Since our establishment, our capital expenditure and operating requirements have been financed
through a combination of shareholders’ equity, cash generated from operations and bank borrowings.
As at the Latest Practicable Date, our cash and cash equivalents amounted to approximately
RMB213.6 million. Please refer to the section “Capitalisation and Indebtedness” of this Prospectus for
further details of the banking facilities.

A summary of our cash flow statement for the Period Under Review is set out in the table below:

                                                                         Unaudited       Unaudited
                                                                       three months    three months
                                   Audited     Audited     Audited         ended           ended
                                   FY2004      FY2005      FY2006     31 March 2006   31 March 2007
                                  (RMB’000)   (RMB’000)   (RMB’000)    (RMB’000)        (RMB’000)
Net cash generated from
 operating activities              34,791      77,203      76,914        32,503            55,819
Net cash (used in)/generated
 from investing activities          (3,280)     (2,787)     (8,758)       (1,850)           2,272
Net cash (used in)/generated
 from financing activities         (12,312)    (51,847)    (82,177)       (7,479)          21,279

Net increase/(decrease) in cash
 and cash equivalents              19,199      22,569      (14,021)      23,174            79,370
Cash and cash equivalents at
 beginning of financial year/
 period                            30,473      49,672      72,241        72,241            58,220

Cash and cash equivalents at
 end of financial year/period      49,672      72,241      58,220        95,415           137,590


In FY2004, we recorded net cash generated from operating activities of approximately RMB34.8 million.
This comprised operating profit before changes in working capital of approximately RMB58.9 million
adjusted for net working capital outflows of approximately RMB17.0 million, income taxes paid of
approximately RMB7.4 million and interest received of approximately RMB0.3 million. The net working
capital outflows were the result of:
(a)   an increase in inventories of approximately RMB11.9 million in line with the increase in our
      business activities;



                                                   62
(b)   an increase in trade receivables of approximately RMB26.0 million in line with the increase in our
      business activities; and
(c)   a decrease in accrued liabilities and other payables of approximately RMB1.1 million for partial
      settlement of renovation fees in FY2004. The renovation fees were costs incurred for the
      renovation of our Group’s office and factory premises, warehouses and workers’ quarters at 18
      Xinsheng Road, Xinyang Industrial Zone, Haicang District, Xiamen City, Fujian Province, PRC.

The above working capital outflows were partially mitigated by the cash inflows from an increase in trade
and bills payables of approximately RMB22.0 million in line with the increase in our business activities.

We recorded net cash used in investing activities of approximately RMB3.3 million in FY2004. This was
due mainly to the payment for the acquisition of property, plant and equipment during FY2004 amounting
to approximately RMB1.8 million (being net of an amount of RMB471,000 paid in FY2003 as deposit for
such acquisition) and an increase in pledged bank deposits amounting to approximately RMB1.7 million.
These cash outflows were partially mitigated by cash inflows arising from proceeds on disposal of motor
vehicles amounting to approximately RMB0.2 million.

Net cash used in financing activities amounted to approximately RMB12.3 million in FY2004 was a result
of repayments of bank loans of approximately RMB29.4 million, interest paid of approximately RMB2.3
million and dividend payments of RMB10.0 million to equity holders of Xiamen Changtian. The cash
outflows were partially mitigated by cash inflows arising from the drawdown of bank loans of approximately
RMB29.4 million.

In FY2005, we recorded net cash generated from operating activities of approximately RMB77.2 million.
This comprised operating profit before changes in working capital of approximately RMB117.5 million
adjusted for net working capital outflows of approximately RMB24.6 million, income taxes paid of
approximately RMB16.3 million and interest received of approximately RMB0.6 million. The net working
capital outflows were the result of:
(a)   an increase in inventories of approximately RMB2.8 million in line with the increase in our
      business activities;
(b)   an increase in trade receivables of approximately RMB38.3 million in line with the increase in our
      business activities; and
(c)   a decrease in accrued liabilities and other payables of approximately RMB1.8 million for partial
      settlement of renovation fee in FY2005. The renovation fees relate to the renovation costs
      incurred in FY2004.

The above working capital outflows were partially mitigated by the cash inflows from an increase in trade
and bills payables of approximately RMB18.3 million in line with the increase in our business activities.

We recorded net cash used in investing activities of approximately RMB2.8 million in FY2005. This was
due mainly to the acquisition of property, plant and equipment in FY2005 amounting to approximately
RMB1.2 million (which included the amount of RMB0.8 million of construction in progress set out in the
section “Material Capital Expenditures and Divestments” of this Prospectus), deposits paid for purchases
of property, plant and equipment amounting to approximately RMB0.1 million, purchases of two public
investment funds in the PRC, namely Bank of Communication — Schroders Select
in September 2005 and Xing Ye Qu Shi Tou Zi                     in October 2005 (the “Investment Funds”),
for trading purposes amounting to approximately RMB0.8 million and an increase in pledged bank deposits
amounting to approximately RMB4.4 million. These cash outflows were partially mitigated by cash inflows
arising from the proceeds on disposal of land use rights of approximately RMB3.0 million and proceeds on
disposal of one of the Investment Funds of approximately RMB0.7 million at a nominal gain in December
2005.




                                                   63
Net cash used in financing activities amounted to approximately RMB51.8 million in FY2005 as a result of
repayments of bank loans of approximately RMB29.4 million, interest paid of approximately RMB2.4
million and dividend payments of approximately RMB40.0 million to equity holders of Xiamen Changtian.
The cash outflows were partially mitigated by cash inflows arising from the drawdown of bank loan of
approximately RMB20.0 million.

In FY2006, we recorded net cash generated from operating activities of approximately RMB76.9 million.
This comprised operating profit before working capital changes of approximately RMB181.2 million
adjusted for net working capital outflows of approximately RMB85.5 million, income taxes paid of
approximately RMB19.5 million and interest received of approximately RMB0.7 million. The net working
capital outflows were the result of:
(a)   an increase in trade receivables of approximately RMB23.4 million in line with the increase in our
      business activities;
(b)   an increase in deposits and other receivables of approximately RMB0.4 million in line with the
      increase in our business activities;
(c)   a decrease in trade and bills payables of approximately RMB17.1 million, as a result of
      improvements in our raw material procurement planning and production management, we were
      able to reduce the average stock level of raw materials to meet production requirments. We were
      therefore able to reduce purchases of raw materials to maintain our raw materials adequacy, and
      correspondingly trade and bills payable outstanding at any point in time; and
(d)   an advance to equity holders of Xiamen Changtian of RMB72.5 million of which the balance was
      not transferred to our Group.

The above working capital outflows were partially mitigated by the cash inflows from:
(a)   a decrease in inventories of approximately RMB20.3 million to minimise our stock level; and
(b)   an increase in accrued liabilities and other payables of approximately RMB7.6 million in line with
      the increase in our business activities.

Accrued liabilities and other payables included the value added tax payables. Due to the increase of sales
over the years from FY2004 to FY2006, the relevant value added tax payables as at the end of the
respective financial years also increased.

We recorded net cash used in investing activities of approximately RMB8.8 million in FY2006. This was
due mainly to the acquisition of property, plant and equipment during FY2006 of approximately RMB5.1
million (which included the amount of RMB3.2 million of construction in progress set out in the section
“Material Capital Expenditures and Divestments” of this Prospectus), deposits paid for purchases of
property, plant and equipment amounting to approximately RMB0.9 million and an increase in pledged
bank deposits of approximately RMB3.9 million. These cash outflows were partially mitigated by cash
inflows arising from receiving the balance payment from disposal of land use rights of approximately
RMB1.0 million and proceeds on disposal of the other Investment Fund of approximately RMB0.1 million
at a nominal gain.

Net cash used in financing activities amounted to approximately RMB82.2 million in FY2006 as a result of
repayments of bank loans of approximately RMB27.9 million, interest paid of approximately RMB1.8
million and dividend payments of approximately RMB72.5 million to equity holders of Xiamen Changtian.
The cash outflows were partially mitigated by cash inflows arising from the drawdown of bank loan of
approximately RMB20.0 million.




                                                   64
For the three months ended 31 March 2006, we recorded net cash generated from operating activities of
approximately RMB32.5 million. This comprised operating profit before working capital changes of
approximately RMB37.6 million adjusted for net working capital outflows of approximately RMB3.5 million,
income tax paid of approximately RMB1.7 million and interest received of approximately RMB0.1 million.
The net working capital outflows were the result of:
(a)   an increase in inventories of approximately RMB6.7 million in line with the increase in our
      business activities;
(b)   an increase in trade receivables of approximately RMB11.4 million in line with the increase in our
      business activities; and
(c)   a decrease in accrued liabilities and other payables of approximately RMB0.1 million.

The above working capital outflows were partially mitigated by the cash inflows from:
(a)   a decrease in an amount due from a related party by approximately RMB1.0 million due mainly
      to the final payment for disposal of land use rights receivable from Xiamen Brightforever;
(b)   an increase in an amount due to a related party by RMB0.2 million resulting from rental payable
      to Xiamen Brightforever; and
(c)   an increase in trade and bills payables of approximately RMB13.5 million.

We recorded net cash used in investing activities of approximately RMB1.9 million for the three months
ended 31 March 2006. This was due mainly to an increase in deposits paid for purchases of property, plant
and equipment of approximately RMB0.6 million, increase in pledged bank deposits of approximately
RMB1.3 million and purchases of property, plant and equipment of approximately RMB0.1 million. These
cash outflows were partially mitigated by cash inflows arising from the proceeds on disposal of the rest of
the Investment Funds of approximately RMB0.1 million at a nominal gain.

Net cash used in financing activities amounted to approximately RMB7.5 million for the three months
ended 31 March 2006 as a result of repayments of bank loans of approximately RMB22.0 million and
interest paid of approximately RMB0.5 million. The cash outflows were partially mitigated by cash inflows
arising from the drawdown of bank loans of approximately RMB15.0 million.

For the three months ended 31 March 2007, we recorded net cash generated from operating activities of
approximately RMB55.8 million. This comprised operating profit before working capital changes of
approximately RMB52.9 million adjusted for net working capital inflows of approximately RMB2.8 million
and interest received of approximately RMB0.1 million. The net working capital inflows were the result of:
(a)   a decrease in trade receivables of approximately RMB1.1 million due to better improvement in
      debt collection procedures;
(b)   a decrease in deposits and other receivables of approximately RMB0.3 million due to lower in
      deposits on purchases of consumable tools;
(c)   an increase in amounts due to related parties by approximately RMB0.6 million as a result of
      rental payable to Xiamen Brightforever of approximately RMB0.5 million and certain expenses of
      our Group in relation to the Invitation paid by Yang Qingjin on our behalf of approximately RMB0.1
      million;
(d)   an increase in trade and bills payables of approximately RMB7.8 million; and
(e)   an increase in accrued liabilities and other payables of approximately RMB12.2 million in line with
      the increase in our business activities.

Accrued liabilities and other payables include the value added tax payables. Due to the increase of sales
over the years from FY2004 to FY2006, the relevant value added tax payables as at the end of the
respective financial years also increased.



                                                    65
The above working capital inflows were partially offset by the cash outflows from:
(a)   an increase in inventories of approximately RMB0.3 million in line with the increase in our
      business activities; and
(b)   an increase in amounts due from related parties of approximately RMB18.9 million as a result of
      tax (comprising mainly enterprise taxes and value added tax incurred) paid on behalf of Xiamen
      Changtian (for further details, please refer to the section “Past Interested Persons Transactions”
      of this Prospectus).

We recorded net cash generated from investing activities of approximately RMB2.3 million for the three
months ended 31 March 2007. This was due mainly to a decrease in pledged bank deposits of
approximately RMB2.4 million. The cash inflows were partially offset by purchases of property, plant and
equipment of approximately RMB0.1 million.

Net cash generated from financing activities amounted to approximately RMB21.3 million for the three
months ended 31 March 2007 as a result of partial capital injection due to the Restructuring Exercise of
approximately RMB21.7 million and drawdown of bank loans of approximately RMB20.0 million. The cash
inflows were partially offset by cash outflows arising from repayments of bank loans of approximately
RMB20.0 million and interest paid of approximately RMB0.4 million.

Our Directors are of the opinion that, after taking into account the cash flows generated from operations,
banking facilities and cash and cash equivalents as at the Latest Practicable Date, we have adequate
working capital for our present requirements.




                                                   66
MATERIAL CAPITAL EXPENDITURES AND DIVESTMENTS
Our material capital expenditures and divestments for FY2004, FY2005, FY2006, the three months
ended 31 March 2007 and up to the Latest Practicable Date were as follows:

                                                       Audited                                  Unaudited
                                                                                                          Up to the
                                                                                   Three months            Latest
                                                                                       ended             Practicable
                                         FY2004        FY2005         FY2006       31 March 2007            Date
                                       (RMB’000)     (RMB’000)      (RMB’000)        (RMB’000)           (RMB’000)
Acquisitions
— Leasehold buildings                         26            —              —               —                     —
— Land use rights                             —             —              —               —                     —
— Plant and machinery                       251            153          1,755            451                80,138
— Furniture, fixtures and office
  equipment                                   83           223             49               6                  560
— Motor vehicles                               2            —             277              —                   470
— Construction in progress(1)             1,947            846          3,119              —                     —

                                          2,309          1,222          5,200            457                81,168

Divestments
— Leasehold buildings                         —             —         31,558               —                     —
— Land use rights                             —          1,843          3,924              —                     —
— Plant and machinery                         —             —              —               —                     —
— Furniture, fixtures and office
  equipment                                   —             —              —               —                     —
— Motor vehicles                            236             —              —               36                    36
— Construction in progress(1)                 —             —             200              —                     —

                                            236          1,843        35,682               36                    36


Note:
(1)   Construction in progress comprises buildings under construction and plant and machinery pending installation at our
      production premises.


Acquisitions
The acquisition of plant and machinery in FY2004 mainly comprised the purchase of an aluminum
cutting machine and some other machinery improvements for the existing adhesive tape production
line. The acquisition did not result in an increase in total production capacity of our adhesive tapes.
Construction in progress in FY2004 included 2-A2MPS plant and machinery improvement, electricity
transformer, elevator and computer system for our office.

The acquisition of plant and machinery in FY2005 was in relation to the purchase of some minor
machinery and parts for the existing adhesive tape production line and 2-A2MPS production line. The
acquisition did not result in an increase in total production capacity of our adhesive tapes and
2-A2MPS. Construction in progress in FY2005 included 2-A2MPS plant and machinery improvement,
safety renovation and computer system for our office.

The acquisition of plant and machinery in FY2006 mainly comprised the purchase of a centrifuge and
certain machinery improvements for the existing 2-A2MPS production line and adhesive tape




                                                           67
production line respectively. The acquisition resulted in an increase in total production capacity for
2-A2MPS from 900 tonnes to 1,500 tonnes. Construction in progress in FY2006 was solely for
2-A2MPS production.

The acquisition of plant and machinery for the three months ended FY2007 was in relation to machinery
improvement of the existing adhesive tape production line. Up to the Latest Practicable Date, the
acquisition of plant and machinery was mainly in relation to the purchase of a BOPA film production line
from Xiamen Brightforever. Please refer to the section “Restructuring Exercise” of this Prospectus for
details.


Divestments
Pursuant to the Asset and Business Transfer Agreement entered into between Xiamen Changtian and
Changtian Enterprise, some of the assets and liabilities were not transferred to our Group. The
divestments in FY2006 represented mainly leasehold interest in the leasehold building and the
leasehold interest in land use rights which were not transferred to our Group and were treated as a
deemed distribution to Xiamen Changtian. For details, please refer to the section “Review of Past
Operating Performance and Financial Position”. The divestment in FY2004 was in relation to the
disposal of a motor vehicle. The divestment in FY2005 was the disposal of part of the land use rights
to Xiamen Brightforever. Please refer to the section “Interested Person Transactions” of this
Prospectus.


FOREIGN EXCHANGE EXPOSURE
The reporting currency of our Group is in RMB. Our operating subsidiary, Changtian Enterprise, carries
out its operations in the PRC. Accordingly, the functional currency of our Group and our books and
records are in RMB. Transactions in currencies other than the functional currency during the relevant
period are translated into the functional currency at exchange rates prevailing at the time of the
transactions. Monetary assets and liabilities denominated in currencies other than the functional
currency at the balance sheet date are translated into the functional currency at exchange rates ruling
at the balance sheet date.

Exchange gains and losses are dealt with in the income statement of our Group. For the last three
financial years ended 31 December 2006, all of our purchases and sales were denominated in RMB.
However, to the extent that we may enter into transactions in currencies other than RMB in the future,
particularly, as we expand our sales to overseas markets, our financial results may be subject to
fluctuations between such foreign currencies and RMB.

Currently, we do not have any hedging policy with respect to our foreign exchange exposure. We will
monitor our foreign currency exposure closely in the future and will consider hedging any material
foreign exchange exposure should the need arise. We will, prior to entering into any hedging
transactions, seek the approval of our board of Directors on the policy for entering into such
transactions, and submit such policy and/or transaction to our Audit Committee for review and approval.




                                                  68
                           CAPITALISATION AND INDEBTEDNESS

The following table shows the cash and cash equivalents, capitalisation and indebtedness of our
Group:
(a)   as at 31 December 2006, based on our audited combined balance sheet as adjusted for the
      Restructuring Exercise;
(b)   as at 31 March 2007, based on our unaudited management accounts as adjusted for the
      Restructuring Exercise;
(c)   as at the Latest Practicable Date, based on our unaudited management accounts as adjusted for
      the Restructuring Exercise; and
(d)   as at the Latest Practicable Date, adjusted to give effect to the proceeds from the issuance of the
      New Shares pursuant to the Invitation, after deducting our share of the estimated expenses
      related to the Invitation and taking into account the application of the proceeds from the issue of
      the New Shares as well as the Restructuring Exercise.

                                                                                       Unaudited as at
                                                                                           the Latest
                                                                                       Practicable Date,
                              Audited as at                      Unaudited as at       adjusted for the
                              31 December     Unaudited as at       the Latest        net proceeds from
                             2006, adjusted   31 March 2007,     Practicable Date,      the issuance of
                                 for the      adjusted for the   adjusted for the      New Shares, and
                             Restructuring     Restructuring      Restructuring       the Restructuring
(RMB’000)                       Exercise         Exercise            Exercise               Exercise
Cash and bank balances            58,220           137,590            213,572              558,093
Pledged bank deposits              9,894             7,533                  —                   —

Indebtedness
Short term
Bills payable, secured            19,789            15,065                  —                   —
Bank loans, secured               20,000            20,000                  —                   —
Bank loans, unsecured                 —                 —              20,000               20,000

Total indebtedness                39,789            35,065             20,000               20,000

Total equity                    157,450            201,374            293,825              638,346

Total capitalisation and
indebtedness                    197,239            236,439            313,825              658,346


As at 31 December 2006, our bills payable of RMB19.8 million were secured by cash deposits of RMB9.9
million. Our bank loans of RMB20.0 million were secured by a mortgage of the underlying land use rights
at Area 02–7 of Xinyang Industrial Area, Haicang District Xiamen City, Fujian Province, PRC 361026 and
the entire leasehold buildings on the land. As at 31 December 2006, the entire leasehold buildings on the
land and the land use rights were deemed distributed to Xiamen Changtian pursuant to the Restructuring
Exercise. As at 31 December 2006, the bank loans bear interest rate of 7.254% per annum.

As at 31 March 2007, our bills payable of RMB15.1 million were secured by cash deposits of RMB7.5
million. Our bank loans of RMB20.0 million was secured by a mortgage of the underlying land use rights
at Area 02–7 of Xinyang Industrial Area, Haicang District Xiamen City, Fujian Province, PRC 361026 and
the entire leasehold buildings on the land, which have been deemed distributed to Xiamen Changtian
pursuant to the Restructuring Exercise as at 31 December 2006. As at 31 March 2007, the bank loans bear
interest rate of 7.344% per annum.


                                                   69
As at the Latest Practicable Date, our bank loans of RMB20.0 million were not secured and are repayable
by 6 February 2008. As at the Latest Practicable Date, the bank loans bear interest rate of 7.344% per
annum. As at the Latest Practicable Date, we had repaid RMB15.1 million in full short-term secured bills
payable in full. This RMB15.1 million short-term secured bills payable related to purchases of raw materials
in the ordinary course of business and had been fully repaid in August 2007.

The loans were extended to us by the Industrial Bank Co., Ltd.             for purposes of working capital.
As disclosed in the section “Use of Proceeds and Listing Expenses” of this Prospectus, we intend to utilise
RMB20 million from the net proceeds of the Invitation to repay this loan in full.

As at the Latest Practicable Date, based on the unaudited management accounts of our Group, there were
no material changes in our capitalisation and indebtedness as disclosed above, save for:
(a)   the decrease in our borrowings by approximately RMB15.1 million from approximately RMB35.1
      million as at 31 March 2007 to RMB20 million;
(b)   the increase in our cash and cash equivalents by approximately RMB76.0 million from
      approximately RMB137.6 million as at 31 March 2007 to approximately RMB213.6 million; and
(c)   changes in our retained earnings arising from our day-to-day operations in the ordinary course of
      our business.


Capital and Operating Lease Commitments
As at 31 December 2006 and as at the Latest Practicable Date, we have no capital commitments. For
further details, please refer to the section “Material Capital Expenditure and Divestments” of this
Prospectus.

We have operating lease commitments relating to our total future minimum lease payments under
non-cancellable operating leases for property, plant and machinery as follows:

                                                               As at                       As at the
                                                         31 December 2006          Latest Practicable Date
                                                             (RMB’000)                    (RMB’000)
Within one year                                                 6,000                       3,500
In the second to fifth years                                   24,000                       4,831
After five years                                               13,500                          —

                                                               43,500                       8,331


As at 31 December 2006, the operating lease commitments relate to the lease of factory premises, plant
and equipment from Xiamen Brightforever. As at the Latest Practicable Date, the operating lease
commitments relate to the lease of factory premises from Xiamen Brightforever and Xiamen Changtian.
Please refer to the section “Interested Person Transactions” of this Prospectus for more details.


Contingent Liabilities
As at the Latest Practicable Date, we do not have any outstanding contingent liabilities.

Save for the foregoing, as at the Latest Practicable Date, our Group has no other borrowings or
indebtedness and liabilities under acceptances (other than normal trading bills) or acceptance credits,
mortgages, charges, obligations under finance leases, guarantees or other material contingent
liabilities.




                                                    70
                                    EXCHANGE CONTROLS

The following is a description of the exchange controls that exist in the jurisdiction which our Group
operates in.


PRC
Major reforms have been introduced to the foreign exchange control system of the PRC since 1993.

On 28 December 1993, the People’s Bank of China (“PBOC”), with the authorisation of the State
Council issued the Notice on Further Reform of the Foreign Exchange Control System which came into
effect on 1 January 1994. Other new regulations and implementation measures include the Regulations
on the Foreign Exchange Settlement, Sale and Payments which were promulgated on 20 June 1996
and took effect on 1 July 1996 and which contain detailed provisions regulating the settlement, sale and
payment of foreign exchange by enterprises, individuals, foreign organisations and visitors in the PRC
and the regulations of the PRC on Foreign Exchange Control which were promulgated on 1 January
1996 and took effect on 1 April 1996 and which contain detailed provisions in relation to foreign
exchange control.

On 21 July 2005, the People’s Bank of China issued Public Announcement of the PBOC on Reforming
the RMB Exchange Rate Regime, which stated that from 21 July 2005, PRC will reform the exchange
rate regime by moving into a managed floating exchange rate regime based on market supply and
demand with reference to a basket of currencies. RMB will no longer be pegged to the US$ and the
RMB exchange rate regime will be improved with greater flexibility.

Under these new regulations, the previous dual exchange rate system for RMB was abolished and a
unified floating exchange rate system based largely on supply and demand was introduced. The PBOC
publishes the RMB exchange rate against the US$ daily and other major foreign currencies daily. Such
rate is to be set by reference to the RMB/US$ and other major foreign currencies trading price on the
previous day on the inter bank foreign exchange market.

The foreign exchange earnings of all PRC enterprises, other than those foreign investment enterprises
(“FIE”), who are allowed to retain a part of their regular foreign exchange earnings or specifically
exempted under the relevant regulations, are to be sold to designated banks. Foreign exchange
earnings obtained from borrowings from foreign institutions or issues of shares or bonds denominated
in foreign currency need not be sold to designated banks, but must be kept in foreign exchange bank
accounts of designated banks unless specifically approved otherwise.

At present, control of the purchase of foreign exchange is relaxed. Enterprises within the PRC which
require foreign exchange for their ordinary trading and non-trading activities, import activities and
repayment of foreign debts may purchase foreign exchange from designated banks if the application
is supported by the relevant documents. Furthermore, FIEs may distribute profit to their foreign
investors with funds in their foreign exchange bank accounts kept with designated banks. Should such
foreign exchange be insufficient, enterprises may purchase foreign exchange from designated banks
upon the presentation of the resolutions of the directors on the profit distribution plan of the particular
enterprise.

When conducting foreign exchange transactions, the designated banks may, based on the exchange
rate published by the PBOC and subject to certain limits, freely determine the applicable exchange rate.

The China Foreign Exchange Trading Centre (“CFETC”) was formally established and came into
operation on 1 April 1994. CFETC has set up a computerised network with sub-centres in several major
cities, thereby forming an interbank market in which designated PRC banks can trade and settle their
foreign currencies. Prior to 1 December 1998, FIE may upon their own choice enter into exchange
transactions through a swap centre or through designated PRC banks. On 25 October 1998, PBOC and

                                                    71
the State Administration of Foreign Exchange issued a joint announcement on the abolishment of
foreign exchange swap business which stated that from 1 December 1998, foreign exchange
transactions will have to be conducted through designated banks. In addition, some swap centres
would be abolished while others which are already linked up with CFETC by the computerised network
will be merged with CFETC and sub-centres to the CFETC.

On 14 January 1997, the Regulations of the People’s Republic of China on Foreign Exchange Control
was amended such that the payment in and transfer of foreign exchange for current international
transactions will no longer be subject to the PRC government control or restrictions.

In   addition,   on   21    October 2005, the State Administration for Foreign Exchange
                                 of the PRC promulgated Notice Concerning the Foreign Exchange
Administration in the Financing and Round-trip Investment Conducted by PRC Residents via Special
Purpose Vehicle Companies
                    (the “SAFE Notice No. 75”). Under the SAFE Notice No. 75, PRC residents have to
register their foreign investments with the local SAFE prior to the incorporation or taking control of
special purpose companies (the “SPV”) and prior to the alteration registration through which such SPV
acquires the PRC residents’ assets for the financing of foreign investments.

Other than the above-mentioned registration requirement, the SAFE Notice No. 75 also requires PRC
residents who are majority shareholders in the overseas invested companies to register, modify or
record with the local foreign exchange authority within 30 days from the date of any increase/decrease
of capital, share transfer, mergers/demergers, change in long-term equity or debts investments and
outward guarantees in the SPV. Moreover, profits, dividends and foreign exchange relating to capital
changes received by PRC residents from the SPV shall be repatriated to the PRC within 180 days of
receiving such amounts. For SPV which were incorporated or restructured prior to the issue of the new
rules, the SAFE Notice No. 75 requires the domestic residents to complete the supplemental
registration before 31 March 2006.

When a PRC resident violates the provisions in SAFE Notice No. 75 and it constitutes an evasion of
any foreign exchange regulations, SAFE will penalize the PRC resident in accordance with the relevant
foreign exchange rules and regulations.


BERMUDA
Please refer to Appendix E — “Summary of Bermuda company law” of this Prospectus for details on
exchange controls in Bermuda.

Save as disclosed above, there are no restrictions on the ability of our PRC subsidiaries to transfer
funds to our Company in the form of dividends or for the repayment of loans or advances.




                                                 72
                                         DIVIDEND POLICY

Subject to the Bermuda Companies Act, shareholders in general meeting may from time to time declare
a dividend or other distribution but no dividend or distribution shall be declared in excess of the amount
recommended by our Directors. Subject to the Bermuda Companies Act, our Directors may also from
time to time declare a dividend or other distribution.

Our Company has not distributed any cash dividend on our Shares since our incorporation on 29 March
2007. Xiamen Changtian, from which our subsidiary, Changtian Enterprise, acquired its business under
the Asset and Business Transfer Agreement (details of which are set out in the section “Restructuring
Exercise” of this Prospectus), declared and paid dividends to its then equity holders for the past three
financial years as follows:

                                                              FY2004            FY2005           FY2006
                                                             (RMB’000)         (RMB’000)        (RMB’000)
Dividends                                                      10,000            40,000           72,500

Investors should note that the amount of dividends declared and distributed by Xiamen Changtian in the
past is not to be taken as an indication of dividends to be declared and paid by us in the future.

Our Group currently does not have any formal dividend policy. The declaration and payment of dividends
in the future will depend upon our operating results, financial conditions, other cash requirements including
capital expenditure, restrictions under the terms of our credit facilities (if any), and other factors deemed
relevant by our Directors.

Subject to the above, our Directors intend to recommend and distribute dividends of not less than 20% of
our net profits attributable to our Shareholders for FY2007 and FY2008 (the “Proposed Dividend”).
However, investors should note that all the foregoing statements, including the statements on the
Proposed Dividend, are merely statements of our present intention and shall not constitute legally binding
statements in respect of our future dividends which may be subject to modification (including reduction or
non-declaration thereof) in our Directors’ sole and absolute discretion. Investors should not treat the
Proposed Dividend as an indication of our Group’s future dividend policy. No inference should or can be
made from any of the foregoing statements as to our actual future profitability or ability to pay dividends
in any of the periods discussed.

Our Company will declare dividends if any, and make payment of the dividends in S$. Information relating
to taxes payable on dividends is set out in Appendix C — “Taxation” to this Prospectus.




                                                     73
                        GENERAL INFORMATION ON OUR GROUP

SHARE CAPITAL
Our Company (Registration No. 39836) was incorporated in Bermuda on 29 March 2007 under the
Bermuda Companies Act as an exempted company under the name of Changtian Plastic & Chemical
Limited. As at the date of incorporation, the authorised share capital of the Company was US$12,000
divided into 120,000 ordinary shares of US$0.10 each.

On 30 March 2007, 1 ordinary share of US$0.10 each in the capital of our Company was allotted and
issued nil-paid to Eastline Investments.

Pursuant to the written resolutions dated 6 July 2007 in lieu of a special general meeting, 99 ordinary
shares of US$0.10 each in the capital of our Company was allotted and issued nil-paid to Eastline
Investments (the “Share Subscription”).

Further, pursuant to written resolutions dated 6 July 2007 in lieu of a special general meeting, our then
sole Shareholder approved, inter alia, the following:
(a)   the change of denomination of every 120,000 ordinary shares of US$0.10 each into 120,000
      ordinary shares of S$0.154 each (the “Share Redenomination”);
(b)   the sub-division of every one ordinary share of S$0.154 each after the Share Redenomination into
      154 ordinary shares of S$0.001 each (the “Share Subdivision”); and
(c)   the consolidation of every 50 ordinary share of S$0.001 each after the Share Subdivision into one
      ordinary share of S$0.05 each (the “Share Consolidation”).

Pursuant to written resolutions dated 24 September 2007 in lieu of a special general meeting, our then sole
Shareholder approved, inter alia, the following:
(a)   the increase in the authorised share capital of our Company from S$18,480 divided into 369,600
      ordinary Shares of S$0.05 each to S$75 million divided into 1,500,000,000 ordinary Shares of
      S$0.05 each;
(b)   crediting as fully paid the 308 nil-paid shares registered in the name of Eastline Investments and
      the allotment and issue of 499,999,692 new Shares to the Shareholders of Jumbo Glories (as part
      of our Restructuring Exercise (details of which are set out under the section “Restructuring
      Exercise” of this Prospectus));
(c)   the adoption of a new set of Bye-laws of our Company;
(d)   the adoption of the ESOS;
(e)   the offer, allotment and issue of the 160,000,000 New Shares, which when issued and fully
      paid-up, shall rank pari passu in all respects with our existing issued and paid-up Shares;
(f)   the offer for sale of 55,000,000 Vendor Shares held by CIM VIII, Goodwise Investments, Hong
      Kong Investments and Longold Group in connection with the Invitation, such Vendor Shares to
      rank pari passu in all respects with the existing issued and fully paid-up Shares; and
(h)   that authority be given to our Directors, to:
      (i)   issue Shares whether by way of rights, bonus or otherwise (including Shares as may be
            issued pursuant to any Instrument (as defined below) made or granted by our Directors while
            this Resolution is in force notwithstanding that the authority conferred by this Resolution may
            have ceased to be in force at the time of issue of such Shares); and/or




                                                      74
     (ii)   make or grant offers, agreements or options (collectively, “Instruments”) that might or would
            require Shares to be issued, including but not limited to the creation and issue of warrants,
            debentures or other instruments convertible into Shares, at any time and upon such terms
            and conditions and for such purposes and to such persons as our Directors may in their
            absolute discretion deem fit,
     provided that the aggregate number of Shares issued pursuant to such authority (including
     Shares issued pursuant to any Instrument), shall not exceed 50% of the Post-Invitation Issued
     Share Capital, and provided further that the aggregate number of such Shares to be offered other
     than on a pro rata basis in pursuance to such authority (including Shares issued pursuant to any
     Instrument) to the existing Shareholders shall not exceed 20% of the Post-Invitation Issued Share
     Capital, and, unless revoked or varied by our Company in general meeting, such authority shall
     continue in force until the conclusion of the next Annual General Meeting of our Company or the
     date by which the next Annual General Meeting of our Company is required by law to be held,
     whichever is the earlier.

     For the purposes of this resolution, the “Post-Invitation Issued Share Capital” shall mean the
     enlarged issued share capital of our Company immediately after the Invitation, after adjusting for:
     (i) new shares arising from the conversion or exercise of any convertible securities; (ii) new shares
     arising from exercising share options or vesting of share awards outstanding or subsisting at the
     time such authority is given, provided the options or awards were granted in compliance with the
     Listing Manual; and (iii) any subsequent consolidation or sub-division of shares.

Approval for crediting as fully paid the 308 nil-paid shares and the allotment and issue of 499,999,692 New
Shares was received from the Bermuda Monetary Authority on 30 August 2007.

As at the Latest Practicable Date, we have only one class of shares, being ordinary shares of S$0.05 each.
The rights and privileges of our Shares are stated in our Bye-laws. Save for the Option Shares, there are
no founder, management, deferred or unissued shares reserved for the issuance for any purpose. Save
for the Options that may be granted under the ESOS, no person has been, or is entitled to be, given an
option to subscribe for or purchase any securities of our Company or any of our subsidiaries. As at the
Latest Practicable Date, no option to subscribe for our Shares has been granted to, or was exercised by
any of our Directors. There are no Shares held by or on behalf of our Company or by our subsidiaries.

Our present issued and paid-up capital is S$25,000,000 divided into 500,000,000 Shares. Upon the
allotment and issue of the New Shares, the resultant issued and paid-up share capital of our Company will
be increased to S$33,000,000 divided into 660,000,000 Shares.

Details of the changes in our issued and paid-up share capital since incorporation and the issued and
paid-up share capital immediately after the Invitation are as follows:
                                                                                               Resultant
                                                                               Number of      issued and
                                              Issue price/                      resultant       paid up
                                             Consideration     Number of         issued      share capital
Purpose                            Par Value      (S$)         new Shares        Shares           (S$)
Issued ordinary share of US$0.10
each nil-paid as at
31 March 2007                      US$0.10          —                1               1             —
Issued ordinary shares of
US$0.10 each nil-paid as at
6 July 2007                        US$0.10          —               99            100              —
Redenomination of par value of
each ordinary share from
US$0.10 to S$0.154                 S$0.154          —              100            100              —




                                                    75
                                                                                                                    Resultant
                                                                                                Number of          issued and
                                                     Issue price/                                resultant           paid up
                                                    Consideration            Number of            issued          share capital
Purpose                                   Par Value      (S$)                new Shares           Shares               (S$)
Subdivision of every one ordinary
share of S$0.154 into S$0.001              S$0.001                     —                —             15,400                 —
Consolidation of 50 ordinary
shares of S$0.001 each into one
ordinary share of S$0.05                    S$0.05                     —                —                  308               —
Credited as fully paid the 308
ordinary Shares of S$0.05 each
that were issued nil-paid                   S$0.05                   15.40              —                  308           15.40
Issued and fully paid-up Shares
allotted and issued pursuant to
the Restructuring Exercise                  S$0.05         24,999,984.60     499,999,692        500,000,000        25,000,000

Pre-Invitation share capital                S$0.05                     —                —       500,000,000        25,000,000
New Shares to be issued
pursuant to the Invitation                  S$0.05                    0.47   160,000,000        660,000,000        33,000,000

Post-Invitation share capital               S$0.05                     —                —       660,000,000        33,000,000


The authorised share capital and the Shareholders’ equity of our Company as at the date of incorporation,
after the Restructuring Exercise and after the issue of the New Shares pursuant to the Invitation are set
forth below. These statements should be read in conjunction with the Report from the Joint Reporting
Accountants on the Audited Combined Financial Information of the Group for the Financial Years Ended
31 December 2004, 31 December 2005 and 31 December 2006 set out in Appendix A of this Prospectus.

                                                                 After the Share
                                                                  Subscription,            Immediately
                                                                      Share                   after the
                                                                  Redomination,             increase in
                                                                      Share              authorised share
                                                                 Subdivision and            capital and           Immediately
                                                 As at              the Share             Restructuring             after the
                                             incorporation        Consolidation              Exercise              Invitation
                                                 (US$)                 (S$)                     (S$)                  (S$)
AUTHORISED SHARE CAPITAL
Ordinary shares of US$0.10 each                  12,000                      —                         —                     —
Ordinary shares of S$0.05 each                        —                 18,480               75,000,000            75,000,000

SHAREHOLDERS’ EQUITY
Issued nil-paid share capital                       0.10                15.40(1)                       —                     —
Issued and fully paid-up share
  capital                                             —                      —               25,000,000            33,000,000
Share premium(3)                                      —                      —                         —           64,077,600
                      (2), (3)
Contributed surplus                                   —                      —                6,686,456              6,686,456

Total Shareholders’ equity                          0.10                 15.40               31,686,456           103,764,056


Notes:
(1)   This includes the 99 ordinary shares of US$0.10 each issued nil-paid to Eastline Investments on 6 July 2007, or 308 ordinary
      shares of S$0.05 each nil-paid after the Share Redenomination, Share Subdivision and the Share Consolidation.




                                                                76
(2)   Contributed surplus arose as a result of the Restructuring Exercise and represents the difference between the then
      consolidated net assets value of the Changtian Assets and Business acquired, over the nominal value of our Company’s
      Shares. For the purpose of preparation of the above disclosure, the combined NAV of Jumbo Glories and the Changtian
      Assets and Business acquired were calculated based on the audited accounts as at 31 December 2006. The final amount
      of the contributed surplus will be adjusted by reference to the combined NAV of Jumbo Glories and the Changtian Assets
      and Business acquired as at 24 September 2007.
(3)   For illustrative purposes, the share premium and contribution surplus amounts have been calculated using the exchange
      rate of RMB:S$ is at 4.969:1.


SHAREHOLDERS
The Shareholders of our Company and their respective shareholdings immediately before the Invitation
(as at the Latest Practicable Date) and immediately after the Invitation are set out as follows:

                                <               Before the Invitation            >   <                After the Invitation            >
                                     Direct Interest         Deemed Interest              Direct Interest          Deemed Interest
                                    Number of               Number of                    Number of                Number of
                                     Shares          %       Shares          %            Shares          %        Shares         %
Directors
Yang Qingjin(1)                             —          —    169,800,000     33.96                —          —    169,800,000     25.73
                 (2)
Chen Yongfu                                 —          —    213,550,000     42.71                —          —    198,550,000     30.08
Wong Chit Fu                                —          —                —      —                 —          —                —       —
Yan Yilin                                   —          —                —      —                 —          —                —       —
Chan Yin David                              —          —                —      —                 —          —                —       —
Lee Liang Ping                              —          —                —      —                 —          —                —       —
Liao Quanwen                                —          —                —      —                 —          —                —       —
Substantial Shareholders (5% or more)
Eastline Investments(1)         169,800,000        33.96                —      —     169,800,000        25.73                —       —
Goodwise Investments(2)         213,550,000        42.71                —      —     198,550,000        30.08                —       —
Others
CIM VIII(3)(4)                      66,650,000     13.33                —      —         32,650,000       4.95               —       —
                   (5)
Longold Group                       20,000,000      4.00                —      —         17,000,000       2.57               —       —
                          (6)
Hong Kong Investments               20,000,000      4.00                —      —         17,000,000       2.57               —       —
East Fortune(7)                     10,000,000      2.00                —      —         10,000,000       1.52               —       —
Public                                      —          —                —      —     215,000,000        32.58                —       —

TOTAL                           500,000,000       100.00                             660,000,000       100.00



Notes:
(1)   Eastline Investments is wholly-owned by Yang Qingjin, our Chairman and Executive Director. Yang Qingjin is deemed to
      have an interest in all the Shares held by Eastline Investments.
(2)   Goodwise Investments is wholly-owned by Chen Yongfu, our Deputy Chairman and Executive Director. Chen Yongfu is
      deemed to have an interest in all the Shares held by Goodwise Investments.
(3)   CIM VIII is an investment holding company incorporated in the BVI on 3 January 2007. Centurion Investment Management
      Holdings (BVI) Limited, an investment holding company incorporated in the BVI on 11 January 2005 was appointed by CIM
      VIII as the investment manager responsible for managing its investment on a discretionary basis. CIM VIII has two classes
      of shares, namely voting ordinary shares and non-voting preference shares. The one issued voting ordinary share is held
      by Centurion Investment Management Holdings (BVI) Limited as the investment manager for CIM VIII and the non-voting
      preference shares are held as to 28.6% by Han Seng Juan, 21.6% by Loh Kim Kang David, 14.2% by Tan Chin Chai, 11.5%
      by Cheung Yick Chung, 4.7% by Boey Shook Fan Caroline, 4.7% by Chia Soon Loi, 4.7% by Henry Quek Peng Hock, 2.8%
      by Loh Kim Guan, 2.4% by Mak Bang Mui, 2.4% by Tang Kay Hwa and 2.4% by Tang Boo Teck.
(4)   Centurion Investment Management Holdings (BVI) Limited is the wholly-owned subsidiary of Centurion Holdings (BVI)
      Limited, which is equally owned by Loh Kim Kang David and Han Seng Juan. Loh Kim Kang David and Han Seng Juan are
      deemed to be interested in the shares held by CIM VIII. Loh Kim Kang David and Han Seng Juan are trading representatives
      of UOB Kay Hian Private Limited, our Underwriter and Placement Agent. They are maternal cousins. Loh Kim Kang David
      and Han Seng Juan are not related to our Directors, Executive Officers or Controlling Shareholders.


                                                                  77
(5)   Longold Group is wholly-owned by Chuang Chin Fang, who is deemed to have an interest in all the Shares held by Longold
      Group.
(6)   Hong Kong Investments is wholly-owned by Cheung Chi Mang, who is deemed to have an interest in all the Shares held
      by Hong Kong Investments.
(7)   East Fortune is wholly-owned by Yip Man King, who is deemed to have an interest in all the Shares held by East Fortune.

Our Shares held by our Directors and Substantial Shareholders do not carry different voting rights from the
New Shares which are the subject of the Invitation. To the best of their knowledge, our Directors are not
aware of any arrangement, the operation of which may at a subsequent date result in a change in control
of our Company.

Save for the Shares issued by our Company as disclosed above, we are not directly or indirectly owned
or controlled by another corporation, any government or other natural or legal person severally or jointly.

Save as disclosed under the section “Restructuring Exercise” of this Prospectus, there has been no
significant change in the percentage of ownership of our Shares since our incorporation.

No option to subscribe for shares in, or debentures of, our Company or our subsidiaries has been granted
to, or was exercised by, any Director or Executive Officer within the two financial years preceding the date
of this Prospectus.

There has not been any public take-over offer by a third party in respect of our Shares or by our
Company in respect of shares of another corporation or units of a business trust which has occurred
between 1 January 2006 and the Latest Practicable Date.


VENDORS
The name of the Vendors and the number of Vendor Shares which the Vendors will offer pursuant to
the Invitation are set out below:
                                    Shares held
                              immediately before the
                                Invitation as at the       Vendor Shares offered pursuant to         Shares held after the
                              Latest Practicable Date               the Invitation                        Invitation
                                            % of pre-                   % of pre-     % of post-                 % of post-
                                            Invitation                  Invitation    Invitation                 Invitation
                              Number of       share       Number of       share         share      Number of       share
Name/Address                   Shares         capital      Shares         capital       capital     Shares         capital
CIM VIII                      66,650,000       13.33      34,000,000       6.80          5.15       32,650,000       4.95
P.O. Box 957
Offshore Incorporations
Centre
Road Town Tortola
British Virgin Islands
Goodwise Investments         213,550,000       42.71      15,000,000       3.00          2.27      198,550,000      30.08
2nd Floor Abbott Building
Road Town Tortola
British Virgin Islands
Hong Kong Investments         20,000,000        4.00       3,000,000       0.60          0.45       17,000,000       2.57
2nd Floor Abbott Building
Road Town Tortola
British Virgin Islands
Longold Group                 20,000,000        4.00       3,000,000       0.60          0.45       17,000,000       2.57
2nd Floor Abbott Building
Road Town Tortola
British Virgin Islands


Save as disclosed in this Prospectus, none of our Directors or Substantial Shareholders have a direct
or indirect interest in the Vendor Shares, and none of the Vendors have had any position, office or other
material relationship with our Group within the period of 3 years before the date of lodgement of this
Prospectus.

                                                             78
                                           MORATORIUM

To demonstrate their commitment to our Group, each of Eastline Investments and Goodwise
Investments which holds approximately 25.73% and 30.08% of our Company’s post-Invitation share
capital respectively, has undertaken not to dispose of or transfer or enter into any agreement that will
directly or indirectly constitute or will be deemed as a disposal of any part of their respective
shareholding in our Company for a period of six months commencing from the date of admission of our
Company to the Official List of the SGX-ST, and each of them will not dispose of or transfer any of their
shareholdings in our Company to below 50% of the above mentioned shareholdings in our Company
in the six months thereafter.

Yang Qingjin and Chen Yongfu, who holds the entire issued and paid-up share capital of Eastline
Investments and Goodwise Investments respectively, has undertaken not to dispose of or transfer or
enter into any agreement that will directly or indirectly constitute or will be deemed as a disposal of any
part of their respective shareholding in Eastline Investments and Goodwise Investments respectively
for a period of twelve months commencing from the date of admission of our Company to the Official
List of the SGX-ST.

The Pre-Invitation Investors, CIM VIII, Longold Group, Hong Kong Investments and East Fortune,
which hold 32,650,000, 17,000,000, 17,000,000 and 10,000,000 Shares respectively representing
approximately 4.95%, 2.57%, 2.57% and 1.52% respectively of our Company’s post-Invitation share
capital, have each undertaken not to dispose of or transfer or enter into any agreement that will directly
or indirectly constitute or will be deemed as a disposal of any part of their respective shareholding in
our Company for a period of six months commencing from the date of admission of our Company to the
Official List of the SGX-ST.

Each of (i) Centurion Investment Management Holdings (BVI) Limited which holds the one voting
ordinary share in CIM VIII; (ii) Chuang Chin Fang who holds the entire issued and paid-up share capital
of Longold Group; (iii) Cheung Chi Mang who holds the entire issued and paid-up share capital of Hong
Kong Investments; and (iv) Yip Man King who holds the entire issued and paid-up share capital of East
Fortune has given their respective undertaking that each of them will not dispose of or transfer or enter
into any agreement that will directly or indirectly constitute or will be deemed as a disposal of any part
of each of their respective interest in the respective companies for a period of six months commencing
from the date of admission of our Company to the Official List of the SGX-ST.




                                                    79
                                RESTRUCTURING EXERCISE

To streamline and rationalise our corporate structure and shareholding structure in preparation for our
listing on the SGX-ST, we implemented a restructuring exercise prior to the Invitation (the
“Restructuring Exercise”), resulting in our Company becoming the investment holding company of our
Group.

The following steps were taken in the Restructuring Exercise:

(a)   Incorporation of Jumbo Glories
      Jumbo Glories was incorporated on 1 April 2005 in the BVI as an investment holding company
      with an authorised share capital of US$50,000 divided into 50,000 ordinary shares of US$1.00
      each. On 3 January 2006, Chen Baohua (the wife of Yang Qingjin (our Chairman and Executive
      Director) and the sister of Chen Yongfu (our Deputy Chairman and Executive Director)) and Chen
      Yongfu subscribed for and was allotted and issued 2,215 and 2,785 shares of Jumbo Glories,
      representing 44.3% and 55.7% of the total issued share capital of Jumbo Glories, respectively.

      On 8 March 2007, Chen Yongfu transferred his entire interest in Jumbo Glories to Goodwise
      Investments for the issue of 1 share in Goodwise Investments, a company wholly and beneficially
      owned by Chen Yongfu.

      On 8 March 2007, Chen Baohua transferred her entire interest in Jumbo Glories to Eastline
      Investments for the issue of 1 share in Eastline Investments, a company wholly and beneficially
      owned by Chen Baohua. On the same date, Chen Baohua transferred her entire interest in
      Eastline Investments to Yang Qingjin, her spouse, who is our Chairman and Executive Director.

      Thereafter, Eastline Investments, Goodwise Investments and Rowview, a company equally
      owned by Chen Baohua and Chen Yongfu, subscribed for and were allotted 1,181, 1,486 and
      2,333 shares of Jumbo Glories for a subscription consideration of US$1,181, US$1,486 and
      US$18.5 million, respectively.

      Upon completion of the transfers and subscription, Eastline Investments, Goodwise Investments
      and Rowview, respectively held 3,396, 4,271 and 2,333 shares in Jumbo Glories, representing
      33.96%, 42.71% and 23.33% of the total issued share capital of Jumbo Glories. The consideration
      of US$1,181 and US$1,486 was based on the aggregate par value of the number of shares of
      Jumbo Glories of US$1.00 each being transferred. The consideration of US$18.5 million was
      arrived at based on the amount that the Pre-Invitation Investors intended to invest in the Company
      through the subscription of exchangeable notes. Please refer to the sub-section “Subscription and
      Issuance of Exchangeable Notes” for further details.


(b)   Incorporation of Changtian Enterprise
      On 21 July 2006, the Xiamen Foreign Investment Bureau                                 granted the
      certificate of approval for the incorporation by Jumbo Glories of Changtian Enterprise as a wholly
      foreign-owned enterprise in the PRC. Changtian Enterprise was incorporated on 6 December
      2006 with a registered capital of US$18.0 million and with a business term of 30 years from 6
      December 2006 to 5 December 2036. Pursuant to a capital verification report on Changtian
      Enterprise’s registered capital dated 13 June 2007, the registered capital of Changtian Enterprise
      of US$18.0 million was fully paid by Jumbo Glories by 11 June 2007.




                                                  80
(c)   Acquisition of certain assets and business as well as liabilities of Xiamen Changtian and
      lease of premises
      On 14 April 2006, Jumbo Glories as purchaser, and Xiamen Changtian as seller, entered into an
      asset and business transfer agreement (the “Initial Asset and Business Transfer Agreement”) (as
      amended by a supplemental transfer agreement dated 21 May 2007) (the “Supplemental Transfer
      Agreement”) pursuant to which Jumbo Glories agreed to acquire all of Xiamen Changtian’s
      business together with certain of its assets and liabilities (excluding its land use rights, buildings,
      amounts due from equity holders, tax payables balances and certain reserves balances) (the
      “Changtian Assets and Business”). The total consideration for the acquisition was US$18.5
      million, which is approximately RMB143.48 million, arrived at based on the NAV (as at 31
      December 2005) of the Changtian Assets and Business, as valued by an independent valuer,
      Xiamen Dacheng Valuation Office                                 in its report dated 30 March 2006, to
      be satisfied in full by cash payment. The Initial Asset and Business Transfer Agreement was
      approved by the Xiamen Foreign Investment Bureau                               on 21 July 2006.

      Due to the amendments to certain applicable PRC rules and regulations, the Certificate of
      Approval for Establishment of Enterprise with Foreign Investment in the PRC
                                       of Changtian Enterprise was obtained only on 6 December
      2006.

      Pursuant to the Supplemental Transfer Agreement, the parties agreed that the consideration
      payable under the Initial Asset and Business Transfer Agreement would remain at US$18.5 million
      (or approximately RMB143.48 million), being the NAV of the Changtian Assets and Business as
      at 31 December 2005 as valued by an independent valuer, Xiamen Dacheng Valuation Office in
      its report dated 30 March 2006. The parties also agreed that profits arising from Changtian Assets
      and Business prior to 1 January 2007 shall belong to the shareholders of Xiamen Changtian and
      profits for the period from 1 January 2007 shall belong to Changtian Enterprise. In arriving at this
      agreement, the parties have considered the valuation of the Changtian Assets and Business as
      at 31 January 2007 of RMB155.14 million by Xiamen Dacheng Valuation Office in its valuation
      report dated 10 March 2007, and that after deducting the profits generated by Xiamen Changtian
      for the period from 1 January 2007 to 31 January 2007 amounting to RMB10.93 million from the
      valuation of RMB155.14 million, the NAV of the Changtian Assets and Business as at 31
      December 2006 was RMB144.21 million.

      The valuation of the Changtian Assets and Business as at 31 January 2007 included the entire
      assets and liabilities of Xiamen Changtian but excluded (i) the land and buildings owned by
      Xiamen Changtian which will be leased back to Changtian Enterprise, (ii) an amount of RMB72.5
      million advanced to shareholders by Xiamen Changtian not transferred to Changtian Enterprise
      and (iii) tax payable balances due to the relevant tax authorities not transferred to Changtian
      Enterprise.

      As agreed in the Supplemental Agreement, the effective date of the transfer was changed to 1
      April 2007 and Changtian Enterprise assumed all rights, obligations and benefits in respect of the
      Changtian Assets and Business acquired from Xiamen Changtian with effect from 1 January
      2007.

      The transfer of the Changtian Assets and Business by Xiamen Changtian was approved by its
      shareholders in general meetings held on 10 April 2006 and 22 May 2007. Completion of the
      acquisition of the Changtian Assets and Business took place on 11 June 2007 and Changtian
      Enterprise has made full payment of the consideration of US$18.5 million.

      The Initial Asset and Business Transfer Agreement and the Supplemental Transfer Agreement
      have been ratified and approved by Xiamen Foreign Investment Bureau                  on 21
      July 2006 and 24 May 2007 respectively.



                                                     81
In connection with the Initial Asset and Business Transfer Agreement, as amended by the
Supplemental Transfer Agreement, the following agreements were entered into:

(i)    Property lease agreement with Xiamen Changtian
       On 21 May 2007, Changtian Enterprise entered into a lease agreement with Xiamen
       Changtian (the “Changtian Lease Agreement”) (as amended by a supplemental lease
       agreement (the “Supplemental Lease Agreement”) dated 6 July 2007) to lease from Xiamen
       Changtian the premises and the underlying land use rights, at 18 Xinsheng Road, Xinyang
       Industrial Zone, Haicang District, Xiamen City, Fujian Province, PRC 361026 where our
       production facilities for the production of adhesive tapes, release papers and 2-A2MPS are
       situated. The leased premises has an aggregate building floor area of approximately 20,960
       sq m comprising factory premises, warehouses and staff quarters.

       The lease is for a term of 20 years commencing from 1 January 2007 to 31 December 2026,
       with a rent-free period from 1 January 2007 to 31 March 2007 (as amended by the
       Supplemental Lease Agreement), at an annual rent of RMB2.3 million, as determined by a
       valuation report dated 5 March 2007 prepared by an independent valuer, LCH (Asia-Pacific)
       Surveyors Limited. The annual rental is payable on a quarterly basis. However, pursuant to
       the Supplemental Lease Agreement, the parties agreed that no rent shall be payable for the
       period from 1 January 2007 to 31 March 2007.

       Under the Changtian Lease Agreement, upon the expiry of the initial three year term, the
       lease may be terminated at the option of Changtian Enterprise by giving at least three
       months’ notice to Xiamen Changtian. The annual rental payable after the first three years of
       the lease is subject to review once every three years and may be adjusted based on an
       independent valuers’ valuation to ascertain prevailing market price.

       Further, under the Changtian Lease Agreement, Changtian Enterprise has the option to
       acquire the leased premises from Xiamen Changtian at the prevailing market price to be
       determined by independent valuers.

       The Changtian Lease Agreement was filed with the Xiamen Municipal Land Resources and
       Housing Administrative Bureau                            on 4 June 2007.


(ii)   Property lease agreement with Xiamen Brightforever
       On 21 May 2007, Changtian Enterprise entered into a lease agreement with Xiamen
       Brightforever (the “Brightforever Lease Agreement”) to lease from Xiamen Brightforever the
       premises and the underlying land use rights, at 16 Xinsheng Road, Xinyang Industrial Zone,
       Haicang District, Xiamen City, Fujian Province, PRC 361026 where our production facilities
       for BOPA film are situated. The leased premises has an aggregate building floor area of
       approximately 11,270 sq m.

       The lease is for a term of 20 years commencing from 1 April 2007 at an annual rent of
       RMB1.2 million, as determined by a valuation report dated 5 March 2007 prepared by an
       independent valuer, LCH (Asia-Pacific) Surveyors Limited. The annual rental is payable on
       a quarterly basis.

       Under the Brightforever Lease Agreement, upon the expiry of the initial three year term, the
       lease may be terminated at the option of Changtian Enterprise by giving at least three
       months’ notice to Xiamen Brightforever. The annual rental payable after the first three years
       of the lease is subject to review once every three years and may be adjusted based on an
       independent valuers’ valuation to ascertain prevailing market price.




                                              82
        Further, under the Brightforever Lease Agreement, Changtian Enterprise has the option to
        acquire the leased premises from Xiamen Brightforever at the prevailing market price to be
        determined by independent valuers.

        The Brightforever Lease Agreement was filed with the Xiamen Municipal Land Resources
        and Housing Administrative Bureau                             on 4 June 2007.


(iii)   Non-Competition Undertaking
        On 21 May 2007, Xiamen Changtian, the then shareholders of Xiamen Changtian, namely
        Chen Baohua and Chen Yongfu and the directors, namely Chen Yongfu, and Wong Chit Fu,
        and in addition Yang Qingjin, the husband of Chen Baohua (collectively, the “Xiamen
        Changtian Covenantors”) executed a non-competition undertaking (the “Non-Competition
        Undertaking”) in favour of our subsidiary Changtian Enterprise.

        Under the Non-Competition Undertaking, Xiamen Changtian and the Xiamen Changtian
        Covenantors respectively undertook to Changtian Enterprise, inter alia, with effect from 1
        April 2007:
        (a)   not to carry out or participate in any business which is similar to our Group’s current
              business including, without limitation, the production, distribution and sale of adhesive
              tapes, release papers, BOPA film and 2-A2MPS;
        (b)   not to carry out any business which is in competition or may be in competition, whether
              directly or indirectly, with our Group and not to in any way solicit any employee,
              customer or distributor of our Group; and
        (c)   not to use the name, trademark or logo of our Group including but not limited to the
              words “Changtian” or any of its trademarks, and not to use any name, trademark or
              logo that are capable of being or likely to be confused with our “Changtian” name.
        On 12 June 2007, Xiamen Changtian changed its scope of business to engage only in the
        lease of properties.


(iv) Trademark Transfer Agreement
        On 21 May 2007, Changtian Enterprise and Xiamen Changtian entered into a trademark
        transfer agreement for the purpose of effecting the transfer of the registered trademarks and
        trademarks pending registration under Xiamen Changtian’s name (the “Trademark Transfer
        Agreement”), which we have acquired pursuant to the Initial Asset and Business Transfer
        Agreement, as amended by the Supplemental Transfer Agreement. Pursuant to the
        Trademark Transfer Agreement, the parties agreed to jointly make an application to the
        Trademark Bureau of the State Administration for Industry and Commerce
                                       and to take the necessary steps to effect the transfer of the
        trademarks to Changtian Enterprise (details of the trademarks are set out in the section
        “Intellectual Property” of this Prospectus (the “Trademarks”)). Notwithstanding that Xiamen
        Changtian would still be the registered owner of the Trademarks prior to the date of the
        effective transfer of the respective Trademarks, the parties agreed that Changtian Enterprise
        shall have the exclusive rights to use the Trademarks until the registration of the transfers
        has been effected, following which Changtian Enterprise would be the registered owner of
        the Trademarks.




                                                83
(d)   Machinery Acquisition Agreement between Xiamen Brightforever and Changtian
      Enterprise
      On 21 May 2007, Changtian Enterprise entered into an acquisition agreement with Xiamen
      Brightforever (the “Machinery Acquisition Agreement”) to acquire from Xiamen Brightforever the
      plant and machinery used in the manufacture of BOPA film and certain office equipment and motor
      vehicles for a consideration of approximately RMB79.85 million. The consideration was
      determined based on the valuation report dated 8 March 2007 of the plant and machinery as at
      31 December 2006, conducted by an independent valuer, LCH (Asia-Pacific) Surveyors Limited.

      In accordance with the Machinery Acquisition Agreement, an initial payment of 30% of the
      consideration has been paid to Xiamen Brightforever on 27 June 2007 with the balance to be
      settled in full within one year of the effective date of the Machinery Acquisition Agreement, being
      1 April 2007. We intend to settle the balance from our internal resources.


(e)   Subscription and Issuance of Exchangeable Notes
      On 9 March 2007, Eastline Investments, Goodwise Investments, Chen Baohua, Chen Yongfu and
      Yang Qingjin (as guarantors), Rowview, Jumbo Glories and the Pre-Invitation Investors entered
      into a subscription agreement (the “Subscription Agreement”) for the issuance of exchangeable
      notes amounting in aggregate to US$18.5 million (the “Exchangeable Notes”) by Rowview to the
      Pre-Invitation Investors.

      Under the Subscription Agreement, the parties agreed, inter alia, that:
      (i)     the Exchangeable Notes were exchangeable into 2,333 shares of Jumbo Glories held by
              Rowview in the event of the listing of our Company on the SGX-ST, on the terms and
              conditions of the Subscription Agreement and the exchangeable note instrument dated 7
              June 2007 entered into by the parties to the Subscription Agreement; and
      (ii)    Eastline Investments, Goodwise Investments, Chen Baohua, Chen Yongfu and Yang Qingjin
              would guarantee, inter alia, the due payment by Rowview of the principal amount and
              interest accruing on the Exchangeable Notes (if any), as and when the same should become
              due and payable.

      On 7 June 2007, Rowview issued the Exchangeable Notes to the Pre-Invitation Investors and the
      aggregate consideration of US$18.5 million was satisfied in full by the Pre-Invitation Investors in
      cash.

      On 18 September 2007, the Pre-Invitation Investors exchanged their Exchangeable Notes for an
      aggregate of 2,333 shares of Jumbo Glories held by Rowview (the “Exchange”). Details of the
      amount of Exchangeable Notes held and the shareholding of the Pre-Invitation Investors in Jumbo
      Glories shares after the Exchange are set out below:

                                             Before the Exchange     <       After the Exchange        >
                                                                       Number of
                                                                     ordinary shares          %
                                             Exchangeable Notes         of Jumbo        Shareholding in
      Pre-Invitation Investor                      (US$)             Glories shares     Jumbo Glories
      CIM VIII                                    10,570,000              1,333               13.33
      Longold Group                                3,172,000                400                4.00
      Hong Kong Investments                        3,172,000                400                4.00
      East Fortune                                 1,586,000                200                2.00

      Total                                       18,500,000              2,333               23.33




                                                   84
(f)   Acquisition of Jumbo Glories and Share Swap
      On 24 September 2007, we, as purchaser, and the shareholders of Jumbo Glories, comprising
      Eastline Investments, Goodwise Investments and the Pre-Invitation Investors, as vendors,
      entered into a share swap agreement (the “Share Swap Agreement”). Pursuant to the Share
      Swap Agreement, we acquired the entire issued and paid-up share capital of Jumbo Glories
      comprising 10,000 shares of Jumbo Glories from the shareholders of Jumbo Glories for a
      consideration of S$25 million which was arrived at based on the aggregate par value of
      500,000,000 new ordinary shares of S$0.05 each to be issued prior to the Invitation. The
      consideration for the said acquisition was satisfied by (i) the crediting as fully paid, at par, 308
      nil-paid ordinary share of S$0.05 each in our Company held by Eastline Investments; and (ii) the
      allotment and issue of an aggregate of 499,999,692 new ordinary shares of S$0.05 each in the
      capital of our Company, credited as fully paid.

      Upon completion of the Share Swap Agreement on 24 September 2007, the resultant
      shareholding of our Company was as follows:

                                                                                                    % of the issued and
                                                                         Number of Shares           paid capital of our
      Name of Allottee                                                   allotted and issued             Company
      Goodwise Investments                                                   213,550,000                   42.71
                              (1)
      Eastline Investments                                                   169,800,000                   33.96
      CIM VIII                                                                 66,650,000                  13.33
      Longold Group                                                            20,000,000                   4.00
      Hong Kong Investments                                                    20,000,000                   4.00
      East Fortune                                                             10,000,000                   2.00

      Total                                                                  500,000,000                  100.00


      Note:
      (1)   Includes crediting as fully paid, 308 shares issued nil-paid to Eastline Investments.


      All relevant filings and approvals required under PRC laws and regulations in relation to the
      Restructuring Exercise have been obtained by our Group. Upon completion of the various steps
      in the Restructuring Exercise as set out above, our Group structure and shareholding structure
      are as set in the section “Group Structure” of this Prospectus.




                                                               85
                                                                      GROUP STRUCTURE

     Our shareholding structure and Group structure immediately following the Restructuring Exercise and before the Invitation is set out below:



                    Yang Qingjin           Chen Yongfu


                          100%                    100%


                      Eastline               Goodwise                                          Hong Kong
                    Investments            Investments              CIM VIII                   Investments     Longold Group           East Fortune


                          33.96%                  42.71%                 13.33%                       4.0%             4.0%                   2.0%


                                                                      Changtian Plastic & Chemical
                                                                                Limited
86




                                                                              (Bermuda)
                                                                                        100%

                                                                               Jumbo Glories
                                                                                  (BVI)

                                                                                        100%

                                                                          Changtian Enterprise
                                                                                (PRC)
     Our shareholding structure and Group structure immediately following the Restructuring Exercise and after the Invitation is set out below:


                                                                                                Hong Kong
                              Yang Qingjin             Chen Yongfu                             Investments              East Fortune


                                     100%                       100%                                  2.57%                    1.52%

                                 Eastline                 Goodwise                                            Longold                      Public
                                                                                    CIM VIII
                               Investments              Investments                                           Group


                                     25.73%                     30.08%                    4.95%                   2.57%                        32.58%



                                                               Changtian Plastic & Chemical Limited
                                                                           (Bermuda)

                                                                                  100%
87




                                                                          Jumbo Glories
                                                                             (BVI)

                                                                                 100%

                                                                       Changtian Enterprise
                                                                             (PRC)



     The details of our subsidiaries are set out as follows:
     Name of company               Place of incorporation        Principal Business/Principal place of business                        Equity held by our Company/Group
     Jumbo Glories                            BVI                Investment holding/BVI                                                             100%
     Changtian Enterprise                     PRC                Production, manufacture and sale of bi-directional stretch                         100%
                                                                 polypropylene film, pressure sensitive adhesive products,
                                                                 paper class product and plastic product/PRC

     None of our subsidiaries is listed on a stock exchange. We do not have any associated company.
                                   HISTORY AND BUSINESS

HISTORY AND DEVELOPMENT
Our Company was incorporated on 29 March 2007 under the Bermuda Companies Act as an exempted
company. On 24 September 2007, we completed our Restructuring Exercise, the details of which are
set out in the section “Restructuring Exercise” of this Prospectus. Pursuant to the completion of the
Restructuring Exercise, we became the holding company of Jumbo Glories, a company incorporated
in the BVI. Jumbo Glories holds the entire registered capital of Changtian Enterprise, a WFOE
established in the PRC engaged in the manufacture and sale of adhesive tapes, release papers, BOPA
film and 2-A2MPS.

Our business was founded in 1999 when Chen Yongfu and Xiamen Xin Guan established Xiamen Xin
Guan Plastic & Chemical Co., Ltd.                             (“Xin Guan Plastic”). The initial registered
capital of Xin Guan Plastic was RMB1.0 million, of which Chen Yongfu contributed 95% and Xiamen Xin
Guan contributed 5%. Xin Guan Plastic was at that time principally engaged in the manufacture and
sale of adhesive tapes and release papers. In August 1999, Xin Guan Plastic obtained land approval
for the construction of manufacturing facilities located at 18 Xinsheng Road, Xinyang Industrial Zone,
Haicang District, Xiamen City, Fujian Province, PRC 361026 for the production of adhesive tapes and
release papers.

Yang Qingjin, our Chairman and Executive Director, was the initial legal representative of Xiamen Xin
Guan. He held indirect interests in Xiamen Xin Guan through (i) Xiamen Xin Hua Adhesive Products
Co., Ltd                             (“Xiamen Xin Hua”), which held 31.59% interest in Xiamen Xin
Guan and (ii) Xiamen Yong Guan Chemicals Co., Ltd                                      (“Xiamen Yong
Guan”), which held 30.74% interest in Xiamen Xin Guan.

The other initial shareholders of Xiamen Xin Guan which in aggregate held 37.67% interest in Xiamen
Xin Guan were independent third parties. These other shareholders were Fuzhou Xin Yi Adhesives Co.,
Ltd                                (“Fuzhou Xin Yi”), Xian Ju County Yong Zheng Adhesive Products Co.,
Ltd                                    (“Xian Ju”), Xiamen Yong Cheng Xing Adhesives Co., Ltd
                                  (“Xiamen Yong Cheng”) and Xiamen Xin Long Di Trading Co., Ltd
                             (“Xiamen Xin Long”). Currently, Xiamen Xin Guan is owned by Liu Guojin and
Ye Meili, who are the brother-in-law and mother-in-law of Yang Qingjin, our Chairman and Executive
Director. Ye Meili is also the mother of Chen Yongfu, our Deputy Chairman and Executive Director. Both
of them have confirmed that Xiamen Xin Guan has ceased operations and have undertaken not to
compete with our Group’s business.

In February 2000, Xiamen Xin Guan sold its 5% interest in Xin Guan Plastic to Xiamen Shun Jia Xiang
Trading Co., Ltd.                         (“Xiamen Shunjiaxiang”) for a consideration of RMB50,000.
Further, in contemplation of the expansion of its business, the registered capital of Xin Guan Plastic
was increased from RMB1.0 million to RMB11.0 million. The additional capital of RMB10.0 million was
contributed by Chen Yongfu and Xiamen Shunjiaxiang in the amount of RMB9.5 million and RMB0.5
million respectively. The shareholders of Xiamen Shunjiaxiang were Yang Jianhong                , the
nephew of Yang Qingjin, and Yang Junqing             , one of our Executive Officers.

In August 2000, Xin Guan Plastic further increased its registered capital from RMB11.0 million to
RMB34.0 million through capital contribution from Chen Yongfu of RMB17.4 million and Chen Baohua,
the wife of Yang Qingjin (our Chairman and Executive Director) and the sister of Chen Yongfu (our
Deputy Chairman and Executive Director), of RMB5.6 million. After this capital contribution, Chen
Yongfu, Chen Baohua and Xiamen Shunjiaxiang respectively held 81.9%, 16.5% and 1.6% in Xin Guan
Plastic. Xin Guan Plastic changed its name to Xiamen Changtian                         on 5 August
2000. This change of name was approved by the relevant authorities on 27 August 2000.




                                                   88
In March 2001, Chen Baohua acquired Xiamen Shunjiaxiang’s interests in Xiamen Changtian for a
consideration of RMB0.55 million. For the purposes of further expansion, Xiamen Changtian increased
its registered capital from RMB34.0 million to RMB50.0 million through a RMB16.0 million capital
injection by Chen Baohua. Xiamen Changtian also obtained approval to increase its license period from
10 years to 50 years expiring in February 2049.

Prior to completion of the construction of our manufacturing facilities, we commenced the sale of
adhesive tapes in July 2001, by purchasing jumbo rolls of BOPP adhesive tapes and cutting and selling
them to our customers. In January 2002, we began developing the production process for adhesives
glue used in the manufacture of adhesive tapes and since May 2002, we have used our self-developed
glue formula for the production of adhesive tapes. In February 2002, we completed the installation of
a release paper production line with a production capacity of 120 million sq m per annum. In July 2002,
we completed the installation of an adhesive tape production line with a production capacity of 64
million sq m per annum. This adhesive tape production line can also be used for the production of
release papers. Up to the Latest Practicable Date, we have used this line solely for the production of
adhesive tapes. In the same year, we also collaborated with Xiamen University to improve on our
formulation and production process for adhesive glue.

We also collaborated with Xiamen University in May 2002 to study the production of our 2-A2MPS.
Subsequently, in January 2003, we began production and sale of 2-A2MPS on a small scale.

In July 2002, Xiamen Changtian was awarded a “High Technology Enterprise” Certificate
                   by Xiamen Municipal Science and Technology Bureau             .

In October 2002, Xiamen Changtian, Fujian Changcheng Freezing Co., Ltd
(“Fujian Chang Cheng”) and Wong Chit Fu established Xiamen Brightforever to explore opportunities
for the manufacture and sale of BOPA film. Upon establishment, Xiamen Brightforever was held as to
33.3% by Xiamen Changtian, 20.0% by Fujian Chang Cheng and 46.7% by Wong Chit Fu. Prior to the
capital injection from the original investors in Xiamen Brightforever, Xiamen Changtian decided to focus
its financial and other resources on the production of 2-A2MPS. Therefore, Xiamen Changtian
transferred its entire shareholding of 33.3% in Xiamen Brightforever to Pucheng County Anhua Real
Estate Development Co., Ltd.                                     , Sunwin International Limited and Wong
Chit Fu. The said transfer was approved by the relevant PRC authorities on 6 March 2003.

In January 2003, to meet increasing demand, we expanded our production capacity for adhesive tapes
from 64 million sq m per annum to 174 million sq m per annum by adding one adhesive tapes
production line. Further, we commenced production of our 2-A2MPS product with an annual capacity
of 600 tonnes per annum.

In April 2003, Xiamen Changtian set up a branch office in Shanghai to handle and expand our sales in
that region. This branch office was later closed in October 2006 as we felt that the same functions could
be performed with equal efficiency from our head office in Xiamen.

In August 2003, a further adhesive tapes production line was installed in order to capture the market
demand for adhesive tapes. Our annual production capacity was, as a result of the additional
production line, increased to approximately 324 million sq m per annum.

On 27 January 2004, Xiamen Changtian obtained ISO 9001:2000 certification for our manufacture of
adhesive tapes.

In early 2004, through technical improvement on the production process, we increased our 2-A2MPS
production capacity from 600 tonnes to 900 tonnes per annum.




                                                   89
As we have established a distribution network, and as part of our efforts to expand and diversify our
product offering, we decided to reconsider the feasibility of the manufacture and sale of BOPA film. On
20 March 2005, we entered into a lease agreement with Xiamen Brightforever to lease its BOPA film
production line and production premises to us. Apart from the ownership of these assets, Xiamen
Brightforever did not have any other business operations. Pursuant to the lease agreement, Xiamen
Changtian leased from Xiamen Brightforever its BOPA film production line and the production premises
for a monthly fee of RMB0.4 million for the first year and a monthly fee of RMB0.5 million from the
second year onwards. In April 2005, we commenced the manufacture and sale of BOPA film.

In January 2006, due to the demand for our 2-A2MPS product, we made further technical
improvements to our 2-A2MPS production process and increased our annual production capacity for
2-A2MPS from 900 tonnes to 1,500 tonnes per year.

With our successful launch of 2-A2MPS, on 29 May 2006 and 22 October 2006, Xiamen Changtian
received two grants of RMB0.2 million each from the Xiamen Municipal Development and Reform
Committee                           for the development of our 2-A2MPS product. Subsequently on
30 September 2006, Xiamen Municipal Science and Technology Bureau                           awarded
Xiamen Changtian a grant of RMB0.9 million for the development and production of 2-A2MPS, as part
of its programme to encourage entrepreneurial activities and raise science and technology standards.

In preparation for our listing on the SGX-ST, we commenced our Restructuring Exercise, details of
which are set out in the section “Restructuring Exercise” of this Prospectus. The Restructuring Exercise
was completed on 24 September 2007.


BUSINESS OVERVIEW
We are principally engaged in the manufacture and sale of the following products:
(a)   Adhesive tapes;
(b)   Release papers;
(c)   BOPA film; and
(d)   2-A2MPS.

Our adhesive tapes, release papers and BOPA film are sold under our brand name                 and our
2-A2MPS products are sold under our brand name        .

Our manufacturing facilities are located at 16 and 18 Xinsheng Road, Xinyang Industrial Zone, Haicang
District, Xiamen City, Fujian Province, PRC 361026.


(a)   Adhesive tapes
      We manufacture and sell a wide range of adhesive tapes for industrial, commercial and consumer
      uses. We manufacture our range of adhesive tapes by using different types of raw materials, such
      as BOPP film, crepe paper and kraft paper which exhibit various tensile strength as base material.
      By using different glue formulations, we are able to produce adhesive tapes with varying degrees
      of bonding strength and adhesiveness to suit our customers’ requirements. We have a wide range
      of adhesive tapes which includes BOPP adhesive tapes and more specialized tapes such as
      double-sided oil based tapes.

      Our adhesive tapes are sold mainly to customers in the packaging, food and beverage,
      electronics, construction and shoe making industries.




                                                  90
The types of adhesive tapes that we produce are set out below:

 Type of adhesive
 tapes                   Description                                  Our products
 BOPP adhesive tapes     Our BOPP adhesive tapes are                  Packaging    adhesive   tapes    —
                         manufactured using BOPP film and             transparent BOPP adhesive tapes.
                         coating the BOPP film with acrylic
                                                                      Printed adhesive tapes — BOPP
                         based adhesives in different coating
                                                                      adhesive     tapes     printed with
                         thickness for different types of
                                                                      trademarks, logos, wordings and
                         adhesive tapes.
                                                                      designs in up to 4 colours.
                         BOPP adhesive tapes are used for:
                                                                      Colour adhesive tapes — BOPP
                         −     sealing carton boxes; and              adhesive tapes in bright and rich
                                                                      colours for labelling.
                         −     stationery   in        offices   and
                               homes.                                 Stationery    adhesive    tapes    —
                         If required by customers, we are able        transparent adhesive tapes for general
                         to print trademarks, logos, names and        stationery use.
                         specified wordings or designs on the
                         BOPP adhesive tapes. We are also
                         able to provide BOPP adhesive tapes
                         in various colours.
 Masking Tapes           Our masking tapes are manufactured           Crepe paper masking tapes for
                         using crepe paper.                           sealing, packaging and spray painting
                                                                      purposes.
                         Masking tapes are used for sealing
                         and masking light to medium paper
                         carton packaging. Masking tapes are
                         also used during spray-painting of
                         vehicles and home renovations to
                         cover areas that should not be
                         painted.
 Double-sided Adhesive   Our double-sided adhesive tapes are          Double-sided water based adhesive
 Tapes                   manufactured using cotton paper with         tapes — for general adhesive
                         adhesive on both sides of the cotton         purpose.
                         paper.
                                                                      Double-sided oil-based and yellow oil-
                         Double-sided tapes are used for              based adhesive tapes — for securing
                         holding and securing lightweight items       cloth and fabrics, such as in shoe-
                         back-to-back and are used in home,           making.
                         office and commercial applications.
                                                                      Double-sided embroidery adhesive
                                                                      tapes — for use in computerised
                                                                      machine embroidery and which can be
                                                                      reused repeatedly.
 Kraft Paper Adhesive    Our kraft paper adhesive tapes are           General purpose kraft paper adhesive
 Tapes                   manufactured using kraft paper.              tapes.

                         Kraft paper adhesive tapes are non-
                         toxic, odour-free adhesive tapes used
                         in packaging, especially in conditions
                         of     strong   sunlight   and     low
                         temperatures due to their strong
                         adhesiveness




                                                 91
       Type of adhesive
       tapes                   Description                               Our products
       Aluminium Tapes         Aluminium adhesive tapes are used         Commercial tapes used mainly in
                               widely for food packaging, especially     frozen food packaging.
                               in frozen food packaging due to its
                               ability to maintain its adhesiveness at
                               low temperatures.




(b)   Release Papers
      We manufacture and sell release papers which are used as a protective backing on adhesive
      tapes or other adhesive material to protect the adhesive tapes or adhesive material from losing
      their adhesiveness. An example of release paper is the backing on paper label sheets. When the
      paper label is to be used, the paper label is peeled off from the release paper and the release
      paper is discarded.

      We manufacture and sell two types of release papers:

       Type                    Description
       Glassine silicone       Our glassine silicone coated release papers are manufactured using glassine
       coated release papers   paper and silicone adhesive coating. Glassine paper is a very smooth and
                               grease resistant paper.
                               Our glassine silicone coated release papers are used as backing for products
                               such as double-sided tapes, labels and anti-fake-labels.




       CCK release papers      Our CCK release papers are manufactured using kraft paper which is a high
                               quality, pure wood paper with the ability to withstand temperatures of up to
                               170°C.
                               Our CCK release papers are used in high quality packaging and printing, as
                               backing for the manufacture of carbon fibre products such as golf shafts,
                               fishing rods and grips for sporting goods.



(c)   BOPA film
      We manufacture and sell BOPA film which is a type of clear film used as packaging in many
      industries, such as food and beverage, pharmaceutical and medical industries and in electrical
      industrial materials.




                                                    92
      BOPA film is widely used as a packaging material in the food and beverage, pharmaceutical and
      medical industries due to the following characteristics that BOPA film possesses:

       Characteristics                                     Effects
       Good barrier to oxygen                              Longer shelf life of products
       Good barrier to aroma                               Minimise loss of aroma
       Good gloss and high transparency                    Better appearance, sight and security of the
                                                           packaged goods
       Good tensile strength, resistance to puncture and   Better package strength
       good tear resistance
       Good temperature resistance                         Suitable for sterilization processes

      With such characteristics, BOPA film are used widely for packaging perishable food and
      odour-sensitive products and may be used under a wide range of temperatures for applications
      from refrigeration to vapour sterilization.

      Our BOPA film customers are mainly in the food and beverage industry.


(d)   2-A2MPS — 2-Acrylamido 2-Methyl propane sulfonic acid
      We manufacture and sell 2-A2MPS in white crystal powder form.




      2-A2MPS is one of the raw materials used in the manufacture of water-soluble polymers.
      Water-soluble polymers are used in industrial processes, such as in oil and water treatment and
      also in the production of consumer products such as acrylic fibre-based textiles, personal care
      products, adhesives, paper and packaging materials.

      Currently, our 2-A2MPS product is mainly sold to customers in the oil industry and water treatment
      industry.

      2-A2MPS works well in conditions of high temperature, pressure and salinity, which are conditions
      commonly found in the oil reservoirs. 2-A2MPS may be used as a raw material to produce
      polymers used in chemical flooding. Chemical flooding is a process used in the tertiary oil
      recovery process whereby chemicals, such as alkali and polymer, are injected into the oil reservoir
      to increase the pressure in the oil reservoir to facilitate extraction of oil.

      2-A2MPS is used in water treatment processes to separate the waste particles from the water to
      be treated. The low molecular weight of the 2-A2MPS monomer is used to inhibit calcium,
      magnesium and silica scale developing in cooling towers, boilers, air washers and gas scrubbers
      in many industrial manufacturing facilities. Scale inhibition enables production processes to
      operate more efficiently and also reduces maintenance down-time.

      In future, we may expand our 2-A2MPS product offering to applications and customers in other
      industries such as the acrylic fibre industry, personal care products and medical care products.




                                                     93
OUR PRODUCTION PROCESSES
Our manufacturing facilities are located at 16 and 18 Xinsheng Road, Xinyang Industrial Zone, Haicang
District, Xiamen City, Fujian Province, PRC 361026.


(a)   Production process for our adhesive tapes
      We currently have four production lines for the production of adhesive tapes and release papers.
      Two lines are for the production of adhesive tapes, one for production of release papers and one
      line that can be alternatively used to produce either adhesive tapes or release papers. Up to the
      Latest Practicable Date, this line has been used solely for the production of adhesive tapes.


         Preparation of              Adhesive
                                                                 Coating                   Drying
         adhesive glue                 glue




                                      Base
                                     materials                                             Rolling




                                    Storage and               Cutting of semi           Semi finished
            Delivery
                                    packaging                  finished rolls             products


      Adhesive glue
      We manufacture the adhesive glue used in the production of our adhesive tapes and release
      papers.

      In the production process for adhesive glue, the initial mixture of butyl compound and other raw
      materials are mixed (based on our own formula) in the emulsification container in such proportion
      as is required for the specific type of adhesive tapes. Pure water is then added to the mixture and
      the temperature of the mixture is increased to 90oC for 80 minutes. Emulsifying materials are then
      added and the mixture is left to emulsify for approximately 4 hours. After emulsification, the
      mixture is stirred and kept warm at a stable temperature of 90oC for 2 hours. The temperature of
      the mixture is then reduced to 48oC to form the final adhesive glue.

      A sample of the adhesive glue is tested to ensure that it conforms to the specifications for the
      specific types of adhesive tapes. The mixture is then loaded into the adhesive tape machine to be
      applied onto the appropriate base material for the manufacture of the adhesive tapes.

      Base material

      The surface tension of the base material for the adhesive tapes, such as BOPP film, crepe paper
      and kraft paper, will be checked to ensure that the roll is wound precisely before use. Where the
      base material is BOPP film, the BOPP film may be pre-printed to include graphics and/or
      trademarks, names or logos according to the specifications of our customers.




                                                   94
      Coating

      The machines involved in the coating process are first set to the required temperatures suitable
      for the coating process. The thickness and number of coatings of adhesive glue is then applied
      to the base material according to the specifications for the specific types of adhesive tapes. For
      instance, one-layer adhesive tapes such as masking tapes go through only one layer of coating,
      while double-sided tapes undergo two layers of coating processes.

      Drying and Rolling

      Once the adhesive glue has been applied to the base material, the base material with the
      adhesive glue passes through a drying system to ensure quality and stability of the adhesive
      tapes. The temperature for drying will also depend on the specifications for the specific type of
      adhesive tapes. After drying, the adhesive tapes are allowed to cool before being loaded onto the
      main roll, where the adhesive tapes are wound up into semi finished jumbo rolls. This winding
      process is done by adjusting the winding tension and using different winding methods such as
      centre winding or surface winding according to types of adhesive tapes being produced. Upon
      completion of rolling of each semi finished jumbo roll, quality checks are carried out by way of
      infrared devices measuring the thickness of the tapes. These semi finished rolls may be sold as
      semi finished jumbo rolls or further processed as described below.

      Semi-finished products and packaging and storage

      The semi-finished jumbo rolls of adhesive tapes are passed to storage or the cutting section
      where it is re-rolled and cut according to the specifications for each type of adhesive tapes. The
      final finished products are then packed, labelled and stored at specific areas for delivery to
      customers.


(b)   Production process for release papers
      The process for the production of release papers is similar to the process for the production of our
      adhesive tapes.


          Preparation                     Coating                   Drying                  Rolling and
            of raw                                                                           cooling
           materials



           Base
          materials



                                                                                        Semi-finished
          Storage/Delivery                          Packaging                             products



      Silicone oil, gasoline and the main raw material, toluene             are mixed evenly to form a
      concentrated solution, which is poured into the feeder and put onto the surface of the base paper
      with the silicon wheel. The coating on the base paper is made even with a steel wire scraping rod
      in a continuous rolling process. The silicone coated base paper is put through an oven and is
      heated at a high temperature to evaporate water from the solvent. After evaporation, the silicone
      oil becomes solid and a non-stick surface is formed on the paper creating the release effect. The
      release papers are then cooled off with a cold roller. In the rolling machine, the finished release
      papers are rolled, packaged, labelled and stored at specific areas for delivery to customers.




                                                    95
(c)   Production process for BOPA film
      The main raw material used in the production of our BOPA film is PA6 purchased from PRC
      suppliers who import the PA6 from manufacturers in Germany and the Netherlands. We believe
      that imported PA6 produces better and higher quality BOPA film. We currently have one
      production line for the production of BOPA film.




                                      Extrusion                                           Heating and
         Raw materials                                           Casting
                                                                                           stretching




          Recycling of
                                                                 Winding                     Corona
          torn film into
                                                                                           treatment
          resin pellets
         to be reused




                                                               Storage and                  Delivery
                                                               packaging




      First, the PA6 pellets are transferred to a holding container. Once the PA6 pellets are checked to
      ensure that they contain the correct moisture content, they are passed on to the extruding
      machine where the materials are fused at a temperature of approximately 243oC. The fused
      mixture then flows onto a cooling drum where the liquid mixture is cooled from 243oC to 23oC to
      solidify into the initial BOPA film. The BOPA film after this stage is approximately 1,500 mm wide
      and 120 µm thick.

      The BOPA film is then passed through a machine direction orienter (MDO) to be preheated,
      stretched and annealed to approximately 1,400 mm wide and 46 µm thick. The BOPA film then
      enters a further stretching machine to undergo a four stage preheating and stretching process,
      where it is biaxially orientated. The BOPA film is automatically measured to ensure that it complies
      with the product specifications, which is usually approximately 4,400 mm wide and 15 µm thick.

      The BOPA film then undergoes corona treating process which ionizes the air next to the film so
      that the film surface tension is increased to improve its adhesive properties. This allows the final
      BOPA film to be applied to many other materials for use in various forms of packaging.

      As a quality control measure, the production of our BOPA film is carried out in a clean and
      dust-free environment.

      The final BOPA film is then rolled and stored, ready to be cut according to each customer’s
      requirements. After cutting, the BOPA film is packed, labelled and put into storage ready to be
      delivered to our customers.

      BOPA film may tear during the production process. Such torn BOPA film is melted and
      re-processed at our premises to produce new PA6 pellets which can be used in the production of
      BOPA film.




                                                   96
(d)   Production process for 2-A2MPS
      The main raw materials used in the production of our 2-A2MPS are acrylonitrile and isobutylene.
      We currently have one production line for the production of our 2-A2MPS.



            Raw materials                        Emulsification                          Centrifuge




             Storage and
                                                   Packaging                              Drying
               delivery



      Acrylonitrile is first added to a reactor and the temperature in the emulsifier/reactor is lowered to
      −4oC. Sulphuric acid            is added to the mixture gradually.

      When mixing is complete, the temperature of the mixture is controlled to approximately 39oC and
      isobutylene is added for further reaction. When the reaction is completed, the temperature of the
      mixture is lowered to between 10oC to 11oC and put through a centrifuge machine to undergo a
      separation process to produce the initial, coarse 2-A2MPS. Residue from the centrifuge process
      will be collected and reprocessed and reused for producing 2-A2MPS.

      The initial coarse and damp 2-A2MPS is then transferred to a drying machine for drying and
      thereafter transferred to the feeding chamber for measurement and packaging before being put
      into storage to be delivered to our customers.


ENVIRONMENTAL MATTERS
Industrial waste generated by our production processes is first processed internally at our premises
using our waste treatment facilities to reduce the amount of industrial waste. The treated industrial
waste is then set aside for collection by authorised governmental authorities for safe disposal in
accordance with regulations. As our industrial waste has been treated to reduce it to a smaller amount,
we pay only a minimal sum to the authorities for such safe removal. Please refer to the section
“Government Regulations” for details of the relevant environmental regulations applicable to us.


PRODUCTION FACILITIES AND PRODUCTION CAPACITY
Our production facilities are located at 16 and 18 Xinsheng Road, Xinyang Industrial Zone, Haicang
District, Xiamen City, Fujian Province, PRC 361026. Our production facilities occupy an aggregate land
area of approximately 58,500 sq m and an aggregate built-up area of approximately 32,300 sq m as at
the Latest Practicable Date. Our production facilities comply with all applicable local and national laws
and regulations in the PRC. To the best of our Directors’ knowledge, there are no regulatory
requirements or environmental issues that may materially affect our utilisation of tangible fixed assets.




                                                    97
     Based on our management’s estimate, the annual production capacity and utilisation rates for the production of each of our products for the last three financial years
     ended 31 December 2006 and the three months ended 31 March 2007 are set out below:


     Production capacity and utilization rates based on our production lines

                                              FY2004                                          FY2005                                          FY2006                        Three months ending 31 March 2007
                               Annual                                          Annual                                          Annual                                      Three months
                             Production         Annual         Utilisation   Production         Annual         Utilisation   Production         Annual         Utilisation  Production     Three months Utilisation
                              Capacity        Production          Rate        Capacity        Production          Rate        Capacity        Production          Rate       Capacity       Production     Rate
                             (sq m million)   (sq m million)       %         (sq m million)   (sq m million)       %         (sq m million)   (sq m million)      %       (sq m million)   (sq m million)    %

     Adhesive tapes(1)              324            217.4          67.1              324            298.2          92.0              324            311.2         96.0             81             78.7       97.2

     Release papers(2)              120             53.1          44.3              120             87.8          73.2              120             98.9         82.4             30             29.0       96.7

                                (tonnes)         (tonnes)           %           (tonnes)         (tonnes)           %           (tonnes)         (tonnes)          %         (tonnes)         (tonnes)        %

     BOPA film(2)                    —                 —            —             5,400            2,100          38.9            5,400            3,100         57.4          1,350            1,200       88.9

     2-A2MPS(2)                     900              575          63.9              900              718          79.8            1,500            1,200         80.0            375              333       88.9


     Notes:
98




     (1)   We have 3 production lines for adhesive tapes with a total production capacity of 324 million sq m per year. Currently, 2 production lines are used exclusively for BOPP tapes with a total annual
           production capacity of 260 million sq m per year. The third production line may be used for adhesive tapes and release papers with a total production capacity of 64 million sq m per year. Up to
           the Latest Practicable Date, we have used this line solely for the production of adhesive tapes.
     (2)   We currently have 1 production line each for release papers, BOPA film and 2-A2MPS respectively.


     Our production lines as at the Latest Practicable Date are operating based on 3 operating shifts a day for a total of 22 hours for 350 days. As at the Latest Practicable
     Date, the annual production capacities for each of our products remained unchanged from our annual production capacity as at FY2006.


     QUALITY CONTROL
     We are committed to providing our customers with reliable and competitively priced products of high quality. As such, we place emphasis on the quality of all our
     products. We have a team of quality control personnel of approximately 20 staff with the relevant technical expertise to supervise and inspect our production
     process and to conduct testing of our products. This ensures that our quality control procedures are strictly adhered to for all our products. As testament to our
     quality control, in January 2004, we obtained ISO 9001:2000 certification for our production of adhesive tapes.

     Our maintenance engineers carry out scheduled maintenance works and repairs on all our machinery and equipment regularly to ensure that they are in good
     order and are functioning properly. Due to stringent maintenance, we have not faced any major disruptions in our production due to a breakdown or malfunction
     of our machinery and equipment.
Our quality control procedures are carried out in the following four main stages to ensure that our raw
materials, adhesive glue and tapes, release papers, BOPA film and 2-A2MPS meet our own quality
standards as well as the requirements of our customers.


(a)   Approved suppliers
      As our manufacturing processes are automated, the quality of our finished products would depend
      largely on the quality of our raw materials. In order to maintain a consistent standard of quality of
      our raw materials, we have a pre-approved list of suppliers for our raw materials and other
      supplies, who are selected based on the quality of raw materials that they supply as well as their
      background, such as their experience, management and reputation in the market. Our quality
      control team constantly monitors the quality and prices of the raw materials supplied and
      performance of our suppliers and reviews our list of pre-approved suppliers regularly. Currently,
      we have a total of approximately 67 pre-approved suppliers.


(b)   Inspection of raw materials
      Upon receiving our raw materials, we will conduct a sample check of each batch of raw materials.
      Our checks include visual inspection and random laboratory testing of samples of all raw materials
      to ensure that the standards set out in our quality evaluation report, which are pegged to industry
      standards, have been complied with. If defects are found, we will require the supplier to replace
      the raw materials.


(c)   Inspection during production process
      We have established standard operational procedures and rules for each stage of the production
      process. To ensure that our products meet quality standards, only employees who have
      undergone and completed our in-house staff training are allowed to work on our production lines.
      Throughout our production processes, we conduct visual inspection of our semi-finished products
      to ensure that there are no visible defects.


(d)   Inspection of final products
      Samples of each finished product are taken and tested in our laboratories for compliance with
      customer specifications. After our products are packaged and labelled, our quality control team
      continues to monitor and ensure that they are properly handled and stored in our warehouses.
      Prior to delivery, checks are also made to ensure that our products are not damaged before they
      are delivered to customers.


SAFETY CONTROLS
In the production of our 2-A2MPS, we handle and store acrylonitrile and isobutylene, which are highly
flammable materials. Currently, we have in place policies which prescribe rules and regulations that all
employees must follow in the course of performing their duties to ensure that our production operations
are carried out in a safe environment. We have drawn up a Fire Safety Management System
                     for our Group and have taken concrete steps to ensure that our various
departments and all our employees comply with it.

To familiarise our employees with the relevant safety policies, rules, regulations and procedures, we
provide them with comprehensive training in safety and environmental related matters. Our emergency
response team also conducts safety drills to test and improve the planning, coordination and execution
of our emergency response procedures.

In February 2006, there was a minor explosion on our premises which resulted in a fire incident. This
fire incident occurred when a disused tank containing traces of acrylonitrile ignited while we were
removing certain disused piping and storage tank used for the storage of acrylonitrile. As the incident

                                                    99
occurred in a segregated area on the premises of our production plant, there was limited damage
caused and there was no personal injury caused. The loss incurred for damage to property, plant and
equipment as a result of the fire was approximately RMB0.2 million. In addition, Xiamen Changtian, and
the supervising employees, Zhang Anmin                  and Chen Guoying                 , were fined
RMB10,000, RMB2,000 and RMB2,000 respectively by the authorities. These fines have since been
duly paid.

Subsequent to this incident, we undertook our own internal investigations and analysis and appointed
an external safety consultant, namely Xiamen Jiuan Safety Examination & Evaluation Office Co., Ltd.
                                       , to review and make recommendations to improve our safety
standards.

According to the report by Xiamen Jiuan Safety Examination & Evaluation Office Co., Ltd
                                         , our safety procedures are adequate and meet the required
safety standards. In addition, such report was submitted to the relevant government authority, Haicang
District Safety and Production Supervisory Bureau                              , which has issued to us
a confirmation dated 9 May 2007 confirming our compliance with safety standards.

Save as disclosed above, for the last three financial years ended 31 December 2006 and up to the
Latest Practicable Date, we did not experience any major accidents which have resulted in serious
injury or death.


PRODUCT DEVELOPMENT
We do not have a research and development team. Certain members of our production team are
responsible for product development and improvements to our products. In 2001, we developed the
various formulation and production processes for adhesive glue which is one of the key raw materials
that we use in the manufacture of our adhesive tapes and release papers. Since then, we have
continued to focus on improving the quality of our adhesive glue and on the selection of different types
of raw material to enhance cost effectiveness.

From 2002, Xiamen Changtian has worked with Xiamen University to further improve on the formulation
and production process for our adhesive glue and 2-A2MPS. In March 2007, Xiamen Changtian
entered into two separate agreements with Xiamen University to formalize their collaboration in
adhesive glue and 2-A2MPS production, pursuant to which Xiamen Changtian agreed to pay to Xiamen
University an amount of RMB46,000 and RMB130,000 as research and development fees for their
collaboration in adhesive glue and 2-A2MPS respectively. Subsequently, in June 2007, Xiamen
Changtian and Xiamen University entered into two supplemental agreements to transfer Xiamen
Changtian’s rights and obligations under the earlier agreements to Changtian Enterprise. The
supplemental agreements further provide that Xiamen Changtian shall have the right to apply for
patents in respect of any intellectual property arising pursuant to the collaboration.

The Xiamen Municipal Science and Technology Bureau                       , offers grants to selected
companies as part of a programme to encourage entrepreneurial activities and raise science and
technology standards. In 2006, Xiamen Changtian received a total of three grants, namely a grant of
RMB0.9 million from Xiamen Municipal Science and Technology Bureau                          and two
grants of RMB0.2 million each from the Xiamen Municipal Development and Reform Committee
                         . All three grants were awarded to Xiamen Changtian for the purposes of
development and production of 2-A2MPS.

As our product development is conducted by members of our production department, the allocation of
costs related to product development cannot be calculated with reasonable accuracy. Hence, we are
unable to provide a meaningful estimation of total product development expenses.




                                                  100
INVENTORY MANAGEMENT
Our inventory comprises raw materials which include acrylonitrile, PA6, BOPP film and butyl acrylate,
packaging materials and finished goods.

Our purchase of raw materials and packaging materials is based on our management’s year end
analysis and our target sales and production plan for the next year. Although we manufacture our
products only upon the receipt of confirmed orders from customers, we usually place orders for our raw
materials and packaging materials 45 to 60 days in advance based on the anticipated demand for our
products.

We store our inventory at our production facilities. We manage our inventories on a “first-in, first-out”
basis such that raw materials first received will be used first for our production.

The adequacy of inventory provision is reviewed by our management on a half-yearly basis. Our
provision policy on obsolete or damaged inventory is to write off such inventory when our management
considers obsolete or damaged inventory to have no residual value. In addition, specific provisions are
made on the diminution in the market value of the inventory should our management decide that the
current level of provision is inadequate.

We have not made any provision nor written off any inventory for damage or obsolescence in the last
three financial years ended 31 December 2006 and the three months ended 31 March 2007, as we
have not experienced any significant damage or loss in respect of our inventory.

Our inventory turnover days for FY2004, FY2005 and FY2006 and the three months ended 31 March
2007 were approximately as follows:

                                                                                                 Three months ended
                                                      FY2004         FY2005        FY2006           31 March 2007
Average inventory turnover days(1)(2)                    59             42            25                   14

Notes:
(1)   Average inventory turnover days for FY2004 to FY2006 are computed based on (the average of the beginning and closing
      inventories balance in the respective financial year/cost of sales) x 365 days.
(2)   Average inventory turnover days for the three months ended 31 March 2007 are computed based on (the average of the
      beginning and closing inventories balance in the respective financial year/cost of sales) x 90 days.

The decrease in our inventory turnover during the Period Under Review was due to better raw material
procurement planning and production management, together with improvements in coordination with our
sales and marketing department. As such, our inventory can be reduced to the minimum level, as the
improvements resulted in our Group receiving delivery of raw materials shortly before production and
minimising the amount of finished goods to be stored as inventory. We will continue in our efforts to
improve our raw material procurement planning and production management. As such, we do not believe
that our average inventory turnover days will be materially and adversely affected by increases in our
production. Further, we do not expect the additional storage facilities to have any significant impact on our
inventory turnover days.

SALES AND MARKETING
Our sales and marketing department is headed by our Executive Officer, Zhang Anmin, who is
responsible for overseeing and supervising our sales and marketing activities. As at the Latest
Practicable Date, our sales and marketing department comprised 53 staff.

Our sales and marketing department is responsible for market penetration, namely cultivating new
customers and businesses, and market development such as developing existing accounts through
provision of better service support and establishing better supplier-customer relationships. Our sales
and marketing staff will call on existing and visit new potential customers to market and promote our


                                                           101
products. For marketing to prospective customers, our sales and marketing staff will first introduce our
range of products and prices to them. If these new customers express interest in our products, we will
arrange for visits at their premises or invite them to visit our production premises to further promote our
products and gain a better understanding of our products and production facilities.

Our sales and marketing staff personnel are responsible for coordinating and providing after-sales
services which include following through with our customers’ orders, maintaining relationships with our
customers, handling complaints effectively and ensuring that our customers’ needs are met. They keep
in touch with our customers by maintaining regular contact and paying visits to our customers from time
to time to understand their needs, and to obtain their feedback and suggestions. Our customer base
has increased from 233 customers in FY2004 to approximately 286 customers in FY2006. As at the
Latest Practicable Date, we have a total of 294 customers.

We receive orders from customers on a monthly basis or from customers who enter into yearly sale
contracts with us and will provide us with an estimate of their requirement for the coming year
(“Pre-order Customers”). For Pre-Order Customers, we would confirm with them on a monthly basis the
actual orders and pricing for these orders for the forthcoming one to two months. For FY2004 to
FY2006 and the three months ended 31 March 2007, sales to customers who place orders on a
monthly basis accounted for approximately 73.6%, 79.7%, 75.8% and 67.7%, and sales to Pre-Order
Customers accounted for approximately 26.4%, 20.3%, 24.2% and 32.3% of our total sales
respectively.

Our customers are from a broad range of industries. Our adhesive tapes are sold to customers in the
packaging, food and beverage, electronics, construction and shoemaking industries. Our BOPA film is
sold to customers in the food and beverage, pharmaceutical and medical industries while our 2-A2MPS
product is sold to customers in the oil industry and water treatment industry, mainly located in Shanghai
City, Fujian Province, Jiangsu Province, Zhejiang Province and Guangdong Province. The average
duration of our relationship with our customers is approximately 3 years.


MAJOR CUSTOMERS
We do not have any long term agreements or arrangements for a period of more than one year with any
of our major customers. None of our customers accounted for 5% or more of our revenue for the past
three financial years ended 31 December 2006 and the three months ended 31 March 2007 and we are
not dependent on any of our customers.

We set out below our top ten customers in FY2006 and their contribution to our total turnover for the
last three financial years ended 31 December 2006 and the three months ended 31 March 2007.
                                                                   Percentage of total
                                                                      turnover (%)
                                                                                                Three
                                                                                                months
                                                Type(s) of                                     ended 31
                                                 Product       FY2004   FY2005    FY2006      March 2007
Changshu Shidai Adhesive Tape Co., Ltd           Adhesive
                                                  tapes          2.6       1.2       2.0          1.8
Xiamen Seashine Trade Co., Ltd
                                                 BOPA film        —        1.5       1.8          2.6
Jiangyin Jinzhou Adhesive Products Co., Ltd      Adhesive
                                                  tapes          1.7       1.2       1.8          0.8
Shandong Tiantai New Material Stock Co., Ltd      Release
                                                  papers         2.2       1.5       1.7          2.1




                                                   102
                                                                   Percentage of total
                                                                      turnover (%)
                                                                                                Three
                                                                                                months
                                                Type(s) of                                     ended 31
                                                 Product       FY2004   FY2005    FY2006      March 2007
Haining Lianlida Industrial Co., Ltd
                                                 BOPA film         —        1.4      1.7          2.4
Wuxi Beimei Adhesive Products Co., Ltd           Adhesive
                                                  tapes           3.1       1.4      1.7          1.2
Zhejiang Quanwei Adhesive Products Co., Ltd      Adhesive
                                                  tapes           2.8       1.3      1.4          1.0
Jiangyin Yongda Composite Packaging Co., Ltd
                                                 BOPA film         —        1.5      1.4          2.1
Quanzhou Licheng Xinchun Packaging Co., Ltd      Adhesive
                                                  tapes           1.7       0.9      1.3          0.9
Yantai Longtai Plastic Products Co., Ltd
                                                 BOPA film         —        0.8      1.3          2.6

Total                                                            14.1     12.7      16.1         17.5


None of our Directors or Substantial Shareholders has any interest, direct or indirect, in any of the above
customers.


Credit Policy
Our sales to our customers are normally on terms of 30 to 90 days credit, with a small portion of sales
to customers on cash terms. All credit terms and limits for each customer must be reviewed and are
generally approved by our Sales and Marketing Manager, Zhang Anmin.

The credit terms and limit for each customer is based on factors such as our assessment of the
customer’s financial position, past collection history, volume of sales and its business performance.

We monitor and follow up on the payment status of each customer through the combined efforts of our
sales and accounts departments. Our sales department will, with feedback from the accounts
department, assess each customer’s payment record, their financial strength, as well as the size of the
transaction. In addition, our sales personnel will visit our customers regularly to better understand the
customer’s financial health, profitability and creditworthiness and report any significant changes to both
our sales and accounts departments. We also actively monitor our customers’ payments such that they
do not exceed the credit period extended to them.

Our credit management procedure requires a debt to be provided as a doubtful debt if it has been
overdue for payment by more than 90 days without good reason. Specific allowances for bad debts will
be made if we fail to successfully collect overdue debts despite efforts to do so or when we are of the
opinion that our customers are unable to meet their financial obligations or when we consider the
amounts to be unrecoverable.

In FY2004, FY2005, FY2006 and the three months ended 31 March 2007, we did not make any
provision for doubtful debts and we did not have any bad debts written off.




                                                   103
Our average debtors turnover days for FY2004, FY2005, FY2006 and the three months ended 31
March 2007 are as follows:
                                                                                               Three months ended
                                                     FY2004         FY2005        FY2006          31 March 2007
Average debtors turnover days(1),    (2)
                                                        61            61            68                    66

Notes:
(1)   Average debtors turnover days for FY2004 to FY2006 are computed based on (the average of the beginning and closing
      trade receivables balance in the respective financial year/revenue) x 365 days.
(2)   Average debtors turnover days for the three months ended 31 March 2007 are computed based on (the average of the
      beginning and closing trade receivables balance in the respective financial year/revenue) x 90 days.


The aging schedule for our trade receivables from our customers of approximately RMB112 million and
RMB111 million as at 31 December 2006 and as at 31 March 2007 respectively are as follows:

                                                                                 As at                    As at
                                                                           31 December 2006           31 March 2007
Aging schedule of trade receivables                                            (RMB’000)                (RMB’000)
Less than 30 days                                            :                    82,128                  84,805
Between 31 and 60 days                                       :                    23,938                  23,898
Between 61 and 90 days                                       :                     5,639                   1,579
Over 90 days                                                 :                        40                       369

As at the Latest Practicable Date, all of the outstanding trade receivables balance as at 31 December 2006
and as at 31 March 2007 have been collected, save for an amount of trade receivables due from a
customer outstanding as at 31 March 2007 of approximately RMB60,000 which represents less than 1%
of the total trade receivables balance as at 31 March 2007 and was provided for subsequently.


MAJOR SUPPLIERS
We have a pre-approved list of suppliers who are selected based on the quality of raw materials that
they supply as well as their background, such as their experience, management and reputation in the
market. We do not have any long-term agreements or arrangements for a period of more than one year
with any of our major suppliers and we are not dependent on any of our major suppliers.

Our suppliers who each accounted for 5% or more of our purchases in FY2004, FY2005, FY2006 and
the three months ended 31 March 2007 are as follows:

                                                                             Percentage of total
                                                                               purchases (%)
                                                        Type(s) of                                      Three Months
                                                           raw                                            ended 31
Supplier                                                material(s)     FY2004 FY2005 FY2006             March 2007
Xiamen Xiangyu Group Corporation
                                                             PA6             —       9.6        9.5            12.1
Xinhui Meida DSM Nylon Chips Co., Ltd
                                                             PA6             —       6.6        9.5            11.6
Xiamen C&D Inc                                         CCK/Glassine
                                                          paper            10.0      1.0        1.2             2.3
Shanghai Xinjiangnan Paper Co., Ltd                    CCK/Glassine
                                                          paper             7.2      4.2        4.1             2.9




                                                          104
                                                                             Percentage of total
                                                                               purchases (%)
                                                         Type(s) of                                      Three Months
                                                            raw                                            ended 31
Supplier                                                 material(s)     FY2004 FY2005 FY2006             March 2007
Ningbo Yasu Science and Technology Co., Ltd
                                                         BOPP film           7.2       3.5       2.7             2.3
Wenzhou Xinfeng Composite Material Co. Ltd.            CCK/Glassine
                                                          paper              6.0       3.3       3.3             2.5

Total                                                                       30.4     28.2       30.3            33.7


None of our Directors or Substantial Shareholders has any interest, direct or indirect, in any of the
above major suppliers.


Credit Policy from Our Suppliers
The usual credit terms extended to us by our suppliers are generally between 30 to 60 days depending
on the types of raw materials supplied.

The average payable turnover days for FY2004, FY2005, FY2006 and the three months ended 31
March 2007 are as follows:
                                                                                                Three Months ended
                                                      FY2004        FY2005         FY2006          31 March 2007
Average payables turnover days(1),     (2)
                                                         80            71            58                    49

Notes:
(1)   Average payables turnover days for FY2004 to FY2006 are computed based on (the average of the beginning and closing
      trade and bills payables balance in the respective financial year/cost of sales) x 365 days.
(2)   Average payables turnover days for the three months ended 31 March 2007 are computed based on (the average of the
      beginning and closing trade and bills payables balance in the respective financial year/cost of sales) x 90 days.


COMPETITORS
We face competition from existing producers and new market entrants in the adhesive tapes and
release papers industry in the PRC. There are currently many adhesive tapes and release papers
producers in the Fujian Province.

Competition in the production of BOPA film and 2-A2MPS is not as intense as adhesive tapes and
release papers, as we believe that these are relatively new and highly skilled industries in the PRC.

We believe that our competitors for each of our products are the following:


Product                   Competitors

Adhesive tapes            − Fuqing City Youyi Adhesive Products Co., Ltd
                          − Huian Youda Adhesive Products Co., Ltd
                          − Luxking Group Holdings Limited

Release papers            − Loparex (Guangzhou) Paper Products Ltd.
                          − Linhai City Xiecheng Paper Products Co., Ltd
                          − Xiamen Taizhong Paper Invest Co., Ltd



                                                          105
Product               Competitors

BOPA film             − Foshan Plastics Group Limited
                      − Tianjin Yuncheng Plastic Co., Ltd
                      − Xiaoxing Films (Jiaxing) Co., Ltd

2-A2MPS               − Shouguang City Lianmeng Petrochemical Co., Ltd


                      − Lubrizol Corporation
                      − Toagosei Co. Ltd.


COMPETITIVE STRENGTHS
We believe that our competitive strengths are as follows:
•     strong brand recognition
•     wide range of products
•     established track record and customer base
•     competitive pricing
•     experienced management team


(a)   We have strong brand recognition
      We have built up substantial brand goodwill and track record for our brand names over the years.
      We have been using the           brand name for our adhesive tapes and release papers since 2001
      and 2003 respectively, and the            brand name for our 2-A2MPS since 2003. We believe that
      our brand names are widely recognised among our customers. We believe that such recognition
      is synonymous with our track record and market reputation in the industry and is associated with
      the quality and reliability of our products, which are the primary factors of our success thus far.

      Over the years, we have maintained steady growth and established a good market reputation and
      track record for our adhesive tapes and release papers in the PRC. We believe that this is the
      result of our years of experience and development in adhesive glue production used in the
      manufacture of our adhesive tapes and release papers. We have also developed extensive skill
      and expertise in the production of adhesive tapes and release papers.


(b)   We produce a wide range of products
      We produce a wide range of adhesive tapes for different uses, which allows us to cater to a wide
      range of users of adhesive tapes. Our release papers are used as backing for a range of adhesive
      tapes and adhesive materials and as backing for the manufacture of carbon fibre products such
      as golf shafts, fishing rods and grips for sporting goods. In addition, we produce BOPA film which
      is widely used in various forms of packaging and also 2-A2MPS which is an important chemical
      product in many different industries. Our four main products are targeted at different industries,
      and each of them has a wide range of applications. This allows us to establish a wide customer
      base.




                                                  106
(c)   We have an established track record and customer base
      Over the years, we have established good working relationships with our wide base of customers.
      To date, we have built up our customer base from approximately 233 customers in FY2004 to
      approximately 286 customers in FY2006. Over these years, we have consistently fulfilled the
      stringent quality and cost requirements of these customers and thus enjoy good working
      relationships with them. Sales to repeat customers accounted for more than 98.7% of our total
      revenue in FY2006. We believe that our reliability and long-term relationships with our customers
      are testimony to our reputation and track record.


(d)   We offer competitive pricing

      Adhesive Tapes

      We have developed our own glue formula for use in the manufacture of our adhesive tapes and
      release papers. We are therefore able to achieve cost efficiency by sourcing for raw materials
      used for the production of our adhesive glue. As such, we are able to offer our customers
      competitive prices for our adhesive tapes.

      2-A2MPS

      As far as we are aware, most existing producers of 2-Acrylamido-2-methyl propane sulfonic acid
      and similar products are located in Europe, the United States and Japan, where costs of
      production are relatively higher than in the PRC. We believe that we are one of a few
      2-Acrylamido-2-methyl propane sulfonic acid manufacturers in the PRC. Other suppliers of
      2-Acrylamido-2-methyl propane sulfonic acid products in the PRC are generally importers of such
      products. As such, we believe that we are able to provide more competitively priced quality
      2-A2MPS to our customers. In addition, we believe that it will be difficult for new PRC
      manufacturers to effectively enter the BOPA film and 2-Acrylamido-2-methyl propane sulfonic acid
      industry as they may not have the range of products and services, sales network, technical
      expertise and knowledge, manufacturing capabilities, operating track record and resources to
      produce products of similar quality and quantity which we are capable of nor are they able to
      secure, in the short term, the type of customers which we have.

(e)   We have an experienced management team
      Our business is led by a management team with a wealth of experience. Yang Qingjin, our
      Chairman and Executive Director, has been in the adhesive tapes and release papers industry for
      more than 20 years. Each of our Executive Directors has more than 5 years of experience in the
      industries related to our Group’s products. As our Executive Directors are actively involved in our
      day-to-day operations, management decisions can be made on a timely basis. Our
      management’s extensive network, experience and market knowledge has enabled us to obtain
      consistently high quality supplies of raw materials at lower prices and maintain and develop our
      customer base. In addition, we believe that our management’s business acumen and
      understanding of market trends have helped us identify and grasp new business opportunities,
      and will continue to help us develop our business.




                                                  107
PROPERTIES AND FIXED ASSETS
Properties

As at the Latest Practicable Date, we lease the following properties from Xiamen Changtian and
Xiamen Brightforever:

                              Built-up area                                                  Annual
                              (Approximate                                                   rental
Description/Location             sq m)            Use of property          Lessor            (RMB)         Tenure
No. 18 Xinsheng Road,             20,960          Factory                  Xiamen           2,300,000      1 January 2007 to
Xinyang Industrial Zone,                          premises,                Changtian                       31 December 2026
Haicang District, Xiamen                          warehouses and                                           (20 years)
City, Fujian Province,                            staff quarters
PRC 361026(1)
No. 16 Xinsheng Road,             11,270          Factory premises         Xiamen        1,200,000         1 April 2007 to
Xinyang Industrial Zone,                                                   Brightforever                   31 March 2027
Haicang District, Xiamen                                                                                   (20 years)
City, Fujian Province,
PRC 361026(2)

Note:
(1)   Xiamen Changtian has the land use rights for the land and has obtained all relevant certificates, approvals and permits in
      respect of the construction of the building on the land. As at the Latest Practicable Date, Xiamen Changtian has not obtained
      the building ownership certificate in respect of the building. We have been advised by our PRC legal counsels that the
      consequence of not having a building ownership certificate is that Xiamen Changtian, our landlord, will not be able to sell
      and transfer ownership of the building but is able to lease the property to us pursuant to the Changtian Lease Agreement.
      Our PRC legal counsels further advised that there should not be any legal obstacle to our landlord obtaining such building
      ownership certificate and that the Changtian Lease Agreement and the rights of our Company as a tenant would not be
      affected in any manner by our landlord’s lack of a building ownership certificate.
(2)   Xiamen Brightforever has the land use rights for the land and the building ownership certificate for the building on the land.


Please refer to the section “Restructuring Exercise” of this Prospectus for further details of the above
leases.


Fixed Assets
As at the Latest Practicable Date, we had fixed assets with net book values as follows:

                                                                                                                       RMB’000
Plant and machinery                                                                                                     105,759
Furniture, fixtures and office equipment                                                                                   1,307
Motor vehicles                                                                                                               917

There are no regulatory requirements that may materially affect our Group’s utilisation of a tangible fixed
asset.


INSURANCE
As at the Latest Practicable Date, we have obtained property insurance in respect of our assets such
as the machinery and equipment, raw materials, semi-finished products and inventory. Our Directors
believe that our existing insurance policies are sufficient to cover the risks which we may be exposed
to with regard to loss or damage whether caused by fire and/or other causes to our above mentioned
assets and claims from our employees.




                                                               108
Our PRC subsidiary, Changtian Enterprise, is required to maintain mandatory social insurance for its
employees. Currently, we have obtained the necessary social insurance plans (which include pension
insurance, unemployment insurance, work-related injury insurance, medical insurance and maternity
insurance) for our employees as required by the local social insurance administrative agency.


STAFF TRAINING
We provide in-house training of between one week and one month for all new employees. There is
usually an orientation programme to familiarise them with our Group’s background, culture and policies.
Further training in employees’ discipline, safety and environmental awareness and quality assurance
measures will also be conducted. To ensure that employees possess the requisite skills and expertise
for our operations before they start work in their respective jobs, our training programmes will also focus
on specific areas such as safety, sales and marketing, quality control and production training depending
on their positions. We may also conduct on-the-job supervised training to ensure that new employees
are equipped with the relevant skills to operate our automated processes.

Our Group’s training expenditure for FY2004, FY2005 and FY2006 and the three months ended 31
March 2007 has been insignificant, as it is mainly conducted in-house.




                                                   109
INTELLECTUAL PROPERTY

Trademarks
Pursuant to the Trademark Transfer Agreement with Xiamen Changtian, all the necessary applications
and registration to transfer all of Xiamen Changtian’s trademarks to us have been made.

As at the Latest Practicable Date, we have registered the following trademark in the PRC:

                               Country of                    Registration Number/
       Trademark              Registration         Class     Application Number          Validity Period
                                  China              1              3199896            7 February 2004 to
                                                                                        6 February 2014




We had also filed applications for the following trademarks to be registered in the PRC, and as at the Latest
Practicable Date, the registration of these trademarks is still pending:

                              Country of                      Registration Number/
       Trademark              Registration         Class      Application Number       Date of Application
                                  China              1              5490576                20 July 2006
                                                    16              5490575                20 July 2006
                                                    17              5490574                20 July 2006
                                  China             16              5434215               22 June 2006



                                                    17              5434214               22 June 2006



        2-A2MPS                   China              1              5440466               26 June 2006

We have also applied for patent protection in respect of our technical know-how for our 2-A2MPS on 6
June 2007 with the State Intellectual Property Office of the PRC                              .


GOVERNMENT REGULATIONS, LICENCES AND PERMITS
Save as disclosed below, as at the Latest Practicable Date, our business of manufacture and sale of
adhesive tapes, release papers, BOPA film and 2-A2MPS in the PRC is not a special or regulated
industry, and we do not require special governmental or regulatory approvals, licences or permits to
operate our business, other than those generally applicable to all companies and businesses.


Environmental Protection Regulations
In accordance with the Environmental Protection Law of the PRC adopted by the Standing Committee
of the National People’s Congress on 26 December 1989, the State Environment Protection
Administration of the PRC sets the national guidelines for the discharge of pollutants. The provincial
and municipal governments of provinces, autonomous regions and municipalities may also set their
own guidelines for the discharge of pollutants within their own provinces or districts in the event that the
national guidelines are inadequate.

A company or enterprise, which causes environmental pollution and discharges other polluting
materials, which endanger the public, should implement environmental protection methods and

                                                    110
procedures into their business operations. This may be achieved by setting up a system of
accountability within the company’s business structure for environmental protection; adopting effective
procedures to prevent environmental hazards such as waste gases, water and residues, dust powder,
radioactive materials and noise arising from production, construction and other activities from polluting
and endangering the environment. The environmental protection system and procedures should be
implemented simultaneously with the commencement of and during the operation of construction,
production and other activities undertaken by the company. Any company or enterprise which
discharges environmental pollutants should report and register such discharge with the Administration
Supervisory Department of Environmental Protection and pay any fines imposed for the discharge. A
fee may also be imposed on the company for the cost of any work required to restore the environment
to its original state. Companies, which have caused severe pollution to the environment, are required
to restore the environment or remedy the effects of the pollution within a prescribed time limit.

If a company fails to report and/or register the environmental pollution caused by it, it will receive a
warning or be penalised. Companies that fail to restore the environment or remedy the effects of the
pollution within the prescribed time will be penalised or have their business licences terminated.
Companies or enterprises which have polluted and endangered the environment must bear the
responsibility for remedying the danger and effects of the pollution, as well as to compensate any
losses or damages suffered as a result of such environmental pollution.

On 7 June 2007, the Xiamen Municipal Environment Protection Bureau, Haicang Branch
                             issued a Provisional Pollutant Discharge Permit, valid from 7 June 2007 to
7 June 2008 to Changtian Enterprise. The Xiamen Municipal Environment Protection Bureau, Haicang
Branch has also issued a confirmation on 7 June 2007, confirming that Changtian Enterprise was not
found to be in breach of any applicable environmental protection laws and regulations of the PRC since
its establishment.


Regulation on the mergers and acquisition of domestic enterprises by foreign investors
On 8 August 2006, six PRC regulatory agencies, including the Ministry of Commerce and the China
Securities Regulatory Commission (“CSRC”), promulgated a new regulation with respect to the
mergers and acquisitions of domestic enterprises by foreign investors (the “M&A Regulation”) that
became effective on 8 September 2006. Article 40 of the M&A Regulation (“Article 40”) requires that an
offshore special purpose vehicle (“SPV”) formed for listing purposes and controlled directly or indirectly
by PRC companies or individuals, such as the Company, shall obtain the approval of the CSRC prior
to the listing and trading of such SPV’s securities on an overseas stock exchange. On 21 September
2006, the CSRC published on its official website procedures specifying documents and materials
required to be submitted to it by SPVs seeking CSRC approval of their overseas listings.

Based on its understanding of current PRC laws, regulations and rules, the procedures announced on
21 September 2006 and its consultation with the CSRC, our Group’s PRC legal counsel, Jingtian &
Gongcheng, has advised us that the Invitation and the Listing do not require CSRC approval because
our Company has obtained all necessary approvals from the relevant PRC foreign trade and economic
cooperative regulatory authorities for the Restructuring Exercise before 8 September 2006, the
effective date of the M&A Regulation.


Regulations on the purchase and storage of poisonous materials
For the production of our 2-A2MPS product, we are required to purchase acrylonitrile as part of our raw
materials. According to the Administrative Rules of the Poisonous Chemicals Purchase and
Transportation Permits                                                  promulgated by the Ministry of
Public Security of the PRC                              in August 2005. According to such regulations,
Changtian Enterprise is required to apply to the Xiamen Municipal Department of Public Security
             for a poisonous materials purchase permit each time that we purchase poisonous
materials. Our raw material, acrylonitrile, is on the List of Poisonous Materials                .


                                                   111
On 21 September 2006, we were fined RMB10,000 by the Xiamen Municipal Department of Public
Security                Haicang Branch for not possessing the relevant permits when purchasing
acrylonitrile. As a result, our employee Yang Junqing, the person-in-charge at the relevant time was
detained for 5 days. Subsequent to this incident, Xiamen Jiuan Safety Examination and Evaluation
Office Co., Ltd.                                        issued a report which confirmed that we are in
compliance with the requirements to purchase, use and store poisonous chemicals, and we have since
obtained such Poisonous Chemicals Purchase Permit and paid the RMB10,000 fine.

Further, on 11 May 2007, we have obtained the confirmation from Xiamen Municipal Department of
Public Security             that Changtian Enterprise is in compliance with the requirements and is
qualified to purchase and store acrylonitrile. In addition, we are required to obtain a permit from the
Xiamen Municipal Department of Public Security                 for each purchase of acrylonitrile that we
make.

We are not aware of any incident of suspension or revocations of any of our licences, permits or
approvals on any fact or circumstances which will cause our licences, permits or approvals to be
suspended or revoked. To the best of our knowledge and save as disclosed above, we have all
necessary licences, permits and approvals for our business operations in the PRC and have complied
with all applicable laws and regulations of the PRC as at the Latest Practicable Date.


PROSPECTS AND FUTURE PLANS
Our Prospects

Our Directors expect that the PRC economy will continue to grow in the next few years. For the
foreseeable future, our Directors believe that there will be sustained growth in the market demand for
our products in the PRC due to the pace of growth and increasing industrialization within the PRC.
Increasing spending power of PRC consumers will lead to increasing demand for consumer goods and
services.


(a)   Adhesive tapes
      Adhesive tapes are used widely across many sectors, such as the automotive, packaging,
      printing, electronics and electrical goods industries. We have a wide range of adhesive tapes with
      different applications catering to the needs of a wide base of customers. As such, our Directors
      believe that there will be sustained demand for our adhesive tapes underpinned by the positive
      economic development in the PRC.


(b)   Release Papers
      The release papers that we produce comprise:
      •    glassine silicone coated release papers — smooth grease resistant release papers which
           are widely used in the sticker and labelling industry and in the production of commercial
           adhesive tapes;
      •    CCK release papers — strong release papers which can withstand high temperature and do
           not disintegrate easily and are suitable for use in many industries. Our CCK release papers
           are targeted for the manufacture of carbon fibre products such as golf shafts, fishing rods,
           and grips for sporting goods.

      These release papers have a wide range of applications, including in the hygiene, medical, tapes,
      labels and fibre composites sectors. As such, our Directors believe that there will be sustained
      demand for our glassine silicone coated and CCK release papers.




                                                  112
      Our Directors believe that there are opportunities to expand our release paper product range by
      installing and commissioning a new production line for the production of a new release paper
      product offering, the UV cured release film.


      UV cured release film


      UV cured release film is produced using UV curing silicones to create the release effect, instead
      of using the traditional high temperature curing silicones method used in the production of
      glassine and CCK release papers.
      By using UV curing silicones, the production process of UV cured release film is less expensive
      and incurs less wastage. UV curing is less time-consuming, friendly to the environment and saves
      energy. UV cured release film can be produced using BOPP film, CPP film, PET film, PE film and
      non-woven fabric.

      We intend to expand into the manufacture of UV cured release film, in particular UV cured PE
      release film which we target to sell mainly to manufacturers of personal hygiene products such as
      sanitary napkins. As far as our Directors are aware, UV cured PE release film in the PRC are
      mainly imported from overseas. Accordingly, our Directors believe that there is significant market
      potential for UV cured PE release film produced in the PRC, as PRC manufacturers generally are
      able to operate with a lower cost base with quality assurance as compared to the overseas
      manufacturers.


(c)   BOPA film
      Our Directors believe that annual world consumption of BOPA film is about 110,000 to 130,000
      tonnes, of which Europe, Japan and other countries in Asia consume about 40,000 tonnes, 40,000
      tonnes and 50,000 tonnes respectively. Annual world demand is expected to increase at 10%.
      Further, our Directors estimate that whilst there are about 12 manufacturers of BOPA film in China,
      actual production capacity is still only about 30,000 tonnes per annum, while demand for BOPA
      film in the PRC is about 50,000 tonnes. The shortfall is being met by imported BOPA film from
      Japan, Korea and Italy.

      BOPA film is a clear film widely used as a packaging material in many industries, such as food and
      beverage, pharmaceutical and medical industries. In particular, BOPA film is an ideal element in
      food packaging as BOPA film packaging provides better appearance, longer shelf life of products,
      minimises loss of aroma and has better packaging strength.

      Our Directors believe that the outlook for the food and beverage packaging industry is favourable.
      Rising affluence of the population and the increasing pace of lifestyle in the PRC will lead to a rise
      in consumer preference for convenience foods. With greater awareness for hygiene and food
      safety, consumers will demonstrate a preference towards packaging materials that will ensure
      freshness and preserve the quality of food products.

      Prior to 2005, most of the BOPA film used in the PRC was imported. We commenced production
      of BOPA film in 2005. Our BOPA film has gained recognition among the soft packaging
      manufacturers, and we have enjoyed strong and stable sales volume. Currently, our BOPA film
      sales are limited by our production capacities. Our Directors are of the view that there are
      opportunities for growth in our BOPA film segment and will seek to expand our production capacity
      for BOPA film.




                                                    113
(d)   2-A2MPS
      2-A2MPS is a raw material widely applied in various areas, such as in the production of chemicals
      used in water treatment, textile dyes, oil and gas industry, coating material and paper
      manufacturing. Increasingly, more industries are adopting the use of 2-A2MPS as a raw material,
      including the textile (spinning and dyeing), plastic, paper manufacturing, coating materials, waste
      water treatment and oil and gas extraction industries.

      Currently, as we are limited by our production capacity, we are only selling our 2-A2MPS product
      to customers in the oil industry and water treatment industry. Our Directors believe that demand
      for our 2-A2MPS product will grow, underpinned by continued growth in the oil industry,
      particularly in the production and exploration of oil reserves in the PRC and our plan to broaden
      our customer reach to customers in other industries.

      At this point, our Directors believe that the output of 2-A2MPS in the PRC is insufficient to meet
      the increasing demand, and the demand will have to be met by imports. Fuelled by the PRC
      economic growth, demand for 2-A2MPS will continue to increase. Based on our Directors’
      understanding of the market, the usage of 2-A2MPS by various industries in the PRC will increase
      by 20% to 30% annually in the next few years, thereby driving the growth in our 2-A2MPS
      segment.


Trends
In general, for the last three financial years ended 31 December 2006 and the three months ended 31
March 2006 compared with the corresponding three months period ended 31 March 2007, revenue
from our adhesive tapes has shown a decreasing percentage contribution to our Group’s total revenue.
This is due largely to the introduction of our new product BOPA film in April 2005 (which contributed
RMB64.6 million to our Group’s total revenue for FY2005) and with a full year contribution in FY2006
(contributing RMB102.9 million to our Group’s total revenue for FY2006). For the current financial year
ending 31 December 2007, we expect that the percentage contribution of each of the products
segments will not change significantly from that for the three months ended 31 March 2007. This is due
largely to the fact that our production facilities are operating at close to full utilisation rates (please refer
to the section “Production Facilities and Production Capacity” of this Prospectus for further details). We
expect that upon full implementation of our expansion plans as set out in the section “Prospects and
Future Plans” of this Prospectus, the percentage contribution of adhesive tapes will likely contribute a
smaller proportion of our Group’s total revenue.

Save as disclosed above and in the sections “Risk Factors”, “Review of Past Operating Performance
and Financial Position” and “Prospects and Future Plans” of this Prospectus and barring any
unforeseen circumstances, our Directors believe that there are no other known recent trends in
production, sales and inventory, the costs and selling prices of our products and services or other
known trends, uncertainties, demands, commitments or events in the current financial year that are
reasonably likely to have a material and adverse effect on our revenues, profitability, liquidity or capital
resources, or that would cause financial information disclosed in this Prospectus to be not necessarily
indicative of our future operating results or financial condition. Please also refer to the section
“Cautionary Note Regarding Forward-Looking Statements” of this Prospectus.




                                                      114
Our strategies and future plans
We intend to leverage on our scale of operation and market position to capture the growth opportunities
presented by the UV cured release paper, BOPA film and 2-A2MPS products. Our future plans are as
follows:


(a)   Expand our production capacity for BOPA film
      We intend to increase our production capacity to meet the increasing demand for BOPA film and
      plan to install one more BOPA film production line. We intend to commence the construction of this
      new BOPA film production line in late November 2007. Construction and installation is expected
      to be completed around June 2008. We expect to commence production with this new line in the
      third quarter of 2008 and we expect that this will increase our production capacity from 5,400
      tonnes to 10,800 tonnes per annum.

      The estimated costs for the commissioning and installation of the BOPA film production line is
      approximately S$26.0 million or RMB129.0 million, which includes the costs for the plant and
      equipment and auxillary facility and equipment and the costs of renovation and fittings. The
      estimated costs for the commissioning and installation of the BOPA film production line will be
      financed fully out of the net proceeds from the Invitation.


(b)   Expand our range of release papers to include UV cured release film
      We will leverage on our expertise in the production of release papers and the opportunities for UV
      cured release film, and will commission and install a production line for UV cured release film with
      a production capacity of 3,000 tonnes. We intend to commence the construction of this new
      production line for UV cured release film around January 2008. Construction is expected to be
      completed around May 2008 and installation will commence thereafter. We expect that the
      production line will be installed by September 2008. We expect to commence production of UV
      cured release film in the fourth quarter of 2008.

      The estimated costs for the commissioning and installation of the UV cured release film
      production line is approximately S$12.7 million or RMB63.0 million, which includes the costs for
      plant and equipment and auxillary facility and equipment and the costs of renovation and fittings.
      The estimated costs for the commissioning and installation of the UV cured release film
      production line will be financed fully out of the net proceeds from the Invitation.

(c)   Expand our production capacity for 2-A2MPS
      In view of our expectation of increasing demand for 2-A2MPS, we intend to install a new 2-A2MPS
      production line to increase our production capacity for our 2-A2MPS product. We intend to
      commence construction of our new 2-A2MPS production line around January 2008, with
      construction to be completed around May 2008. Installation of the new 2-A2MPS line will be
      completed around September 2008. We expect to commence production with this new line in the
      fourth quarter of 2008 and we expect that this will increase our 2-A2MPS production capacity from
      1,500 tonnes to 3,000 tonnes per annum.

      The estimated costs for the commissioning and installation of the 2-A2MPS production line is
      approximately S$6.0 million or RMB30.0 million, which includes the costs for plant and equipment
      and auxillary facility and equipment and the costs of renovation and fittings. The commissioning
      and installation of the 2-A2MPS production line will be financed fully out of the net proceeds from
      the Invitation.




                                                   115
(d)   Construction of additional storage facilities
      With the expected increase in production following expansion of our production capacity as set out
      above, we intend to construct additional storage facilities with an area of approximately 3,000
      sq.m. at our production facilities at 18 Xinsheng Road, Xinyang Industrial Zone, Haicang District,
      Xiamen City, Fujian Province, PRC 361026. We expect to begin construction of our additional
      storage facilities in February 2008, with construction to be completed around June 2008. We
      expect construction costs to be approximately S$3.0 million or RMB15.0 million, which will be
      financed fully out of the net proceeds from the Invitation.


ORDER BOOKS
In general, our customers do not place long-term orders with us. Instead, our orders are received from
customers either on a monthly basis or from customers who enter into yearly sale contracts with us.
Such customers, will, at the end of each year provide us with an estimate of their requirement for the
coming year (“Pre-order Customers”). We confirm with our Pre-order Customers on a monthly basis,
their actual orders and pricing for these orders for the forthcoming one to two months. We usually
deliver our products to our customers according to the orders placed by our customers within 45 days.

As at the Latest Practicable Date, our orders on hand amounted to approximately RMB93.7 million for
which we have received confirmed purchase orders. These orders are generally scheduled for delivery
within 45 days. These confirmed purchase orders are however subject to cancellation, deferral or
rescheduling by our customers. Accordingly, our order book as at any particular date may not be
indicative of our revenue for any succeeding period.




                                                  116
                        DIRECTORS, MANAGEMENT AND STAFF

OUR MANAGEMENT STRUCTURE


                                           Board of Directors



                                               Chairman
                                              Yang Qingjin



                                            Deputy Chairman
                                              Chen Yongfu




        Director and General                General Manager                     Finance Director
              Manager                    (Adhesive tapes, release                   Yan Yilin
             (BOPA film)                    papers, 2-A2MPS)
            Wong Chit Fu                        Ke Youmi




                                                                              Financial Controller
                                                                               Chan Pak Kin Ken
      Purchasing           Deputy General          Deputy General
       Manager              Manager and             Manager and
     Yang Junqing         Sales & Marketing          Production
                              Manager                 Manager
                            Zhang Anmin             Zhang Kunshu
                                                                           Deputy Financial Controller
                                                                              Sin Kwok Chui Malon




DIRECTORS
Our Board of Directors is entrusted with the responsibility for the overall management of our Group. Our
Directors’ particulars are listed below:


Name                           Age    Residential Address                      Principal occupation

Yang Qingjin                   42     Room 205, 197 Bing Lang Dong Li,         Chairman and
                                      Si Ming District, Xiamen City, Fujian    Executive Director
                                      Province, PRC

Chen Yongfu                    43     Room 504, 15 He Guang Li, Si Ming        Deputy Chairman and
                                      District, Xiamen City, Fujian            Executive Director
                                      Province, PRC

Wong Chit Fu                   63     Room 4–701, 325 He Xiang Xi Lu,          Executive Director
                                      Xiamen City, Fujian Province, PRC


                                                  117
Name                         Age     Residential Address                      Principal occupation

Yan Yilin                    29      Room 502, 83 Jin Shan Xi Er Li, Hu       Finance Director and
                                     Li District, Xiamen City, Fujian         Executive Director
                                     Province, PRC

Chan Yin David               47      15 Dalkeith Road, Singapore 299634       Investment Advisor

Lee Liang Ping               51      257 Arcadia Road, #06-04,                Corporate Consultant
                                     Singapore 289851

Liao Quanwen                 60      Room 202, 4 Hai Bin Dong District,       Professor
                                     Xiamen University, Xiamen City,
                                     Fujian Province, PRC

Information on the business and working experience of our Directors is set out below:


Yang Qingjin
Mr Yang was appointed as our Chairman and Executive Director on 24 April 2007. He is responsible
for the business direction and development of our Group. Mr Yang entered the adhesive tapes business
in 1990 when he and his wife set up Xiamen Xinhua Industry & Trading Co., Ltd
a company engaged in the sale and production of adhesive tapes. Since then, Mr Yang has acquired
more than 17 years of experience in the adhesive tapes and chemicals industry. In February 1999, Mr
Yang joined Xiamen Changtian where he was the general manager responsible for its business
direction and development. Mr Yang graduated from Hui An County Wang Chuan Secondary School,
Quanzhou City, Fujian Province                                in 1982.


Chen Yongfu
Mr Chen was appointed as our Deputy Chairman and Executive Director on 24 April 2007. Together
with Mr Yang, Mr Chen is responsible for the business planning and corporate development of the
Group. Mr Chen entered the adhesive tapes industry when he joined Xiamen Xinhua Industry & Trading
Co., Ltd                        , a company engaged in the manufacture and sales of adhesive tapes,
as a purchasing manager from 1991 to 1996. He has over 16 years of experience in the adhesive tapes
and chemicals industry. In February 1999, Mr Chen together with Xiamen Xin Guan established Xiamen
Changtian where he remained as an executive director prior to our Group’s reorganisation and was
responsible for general direction of the company. Mr Chen graduated from Lian Ban Primary School,
Xiamen City, Fujian Province                         in 1977.


Wong Chit Fu
Mr Wong was appointed as our Executive Director on 24 September 2007. He is in charge of
overseeing all matters relating to BOPA film production for our Group. Between 1969 and 1985, Mr
Wong worked as a lecturer and eventually with Xiamen Import & Export Commodities Inspection and
Quarantine Bureau                             , a government authority in Xiamen City, as an electrical
machinery inspector. From 1986 to 1993, Mr Wong worked in state-owned companies involved in the
trading of BOPP and chemicals. Subsequently, from 1994 to 2002, Mr Wong started his own business
for the trading of BOPP and chemicals. In October 2002, Mr Wong became a director and general
manager of Xiamen Brightforever. In 2005, Mr Wong was appointed director of Xiamen Changtian. Mr
Wong graduated with a degree in engineering from Fuzhou University in 1969.




                                                 118
Yan Yilin
Mr Yan was appointed as our Finance Director and Executive Director on 24 September 2007. He is
responsible for overseeing the finance and administration of our Group. Mr Yan started his career in
1999 at Xiamen Xin Guan as an accounts executive. Mr Yan joined Xiamen Changtian in July 2001 as
Head of the Finance Department till June 2002. Mr Yan was appointed as the Assistant to the Chairman
of Xiamen Changtian in July 2002 until March 2007, responsible for assisting the chairman in business
matters and overseeing daily operations. Mr Yan was appointed a member of the supervisory board of
Xiamen Changkai Investment Co., Ltd                          from December 2003 to April 2007, with
the responsibility of ensuring the proper management of the company. He has also been a member of
the supervisory board of Xiamen Changtian since April 2005 and Changtian Enterprise since December
2006. Mr Yan graduated from Xi’an Institute of Statistic                   in 1999 with a degree in
Accounting.


Chan Yin David
Mr Chan was appointed as our Independent Director on 24 September 2007. He is our lead
Independent Director. Mr Chan has twenty years of experience analysing and carrying out business
diligence on Asian companies, specifically those listed or about to be listed on the Hong Kong and the
PRC stock exchanges including companies in the food and beverage industries. Mr Chan first began
his investment management career, upon graduation, at Overseas Union Bank as a fund management
officer, from October 1986 to April 1988. Thereafter, he became a manager (institutional sales) of
Standard Chartered Securities, a stockbroking company, from April 1988 to April 1990. From April 1990
to February 1996, he was an associate director (investment) at Nomura Capital Management
(Singapore) Ltd. during which time he was a member of the Nomura Investment Management Co.’s
international allocation committee and the Pacific Basin stock selection committee. Subsequently, from
March 1996 to January 2005, he became the managing director of AGF Asset Management Asia Ltd
and his duties included overseeing investments in the Asia ex-Japan equity markets. He is currently the
Managing Partner of Swiss-Asia Financial Services Pte. Ltd., an investment advisory company. Mr
Chan graduated with a Bachelor in Business degree from Simon Fraser University, Canada in 1984 and
holds a Master in Business from Simon Fraser University, Canada.


Lee Liang Ping
Mr Lee was appointed as our Independent Director on 24 September 2007. Upon admission as an
Advocate and Solicitor of the Supreme Court of Singapore, Mr Lee began his career as a corporate
lawyer in Allen & Gledhill until March 1982, advising clients on various types of corporate transactions
including mergers and acquisitions and joint venture transactions. Thereafter, from April 1982 to
February 1984, he was a corporate finance executive at Morgan Grenfell (Asia) Limited, now part of
Deutsche Bank Group, providing corporate finance advisory services to both public listed as well as
private corporations. Between 1985 to 1999, Mr Lee moved into corporate management where he held
senior management positions in public listed as well as private corporations in Singapore and
Indonesia, namely, Kongsberg (Asia) Pte Ltd, DMT Investments Pte Ltd, Amcol Holdings Limited and
P T Agis Tbk, which had extensive regional business interests in the oil and gas, consumer electronics
distribution, property investments, resort development, commodity trading and manufacturing sectors.
Mr Lee has, since 2000, been a corporate consultant providing corporate advisory services to
corporations in mergers and acquisitions, corporate restructuring, investor relations and seeking
investment partners and opportunities in Asian markets including China, Indonesia and Singapore. Mr
Lee graduated with a Bachelor of Laws (Honours) degree from the University of Singapore in 1980.


Liao Quanwen
Ms Liao was appointed as our Independent Director on 24 September 2007. Ms Liao started her career
as a lecturer in Xiamen University, School of Economics in 1982. She is currently the Principal of the
Research Institute of Human Resource of Xiamen University. Ms Liao sits on various committees in the
PRC, such as the China Human Resource Development Research Association (Executive Director).

                                                  119
She has also received numerous awards for her research and papers at both the provincial and national
levels. Ms Liao is currently also an independent director of Fujian Minnan (Zhangzhou) Economic
Development Co., Ltd.                                         . Ms Liao graduated from Xiamen
University in 1968 with a degree in Mathematics. In 1982, she obtained a Master degree in
Mathematics from Xiamen University.

The list of present and past directorships of each Director over the last five years excluding those held
in our Company, is set out below:
Name                    Present Directorships                     Past Directorships

Yang Qingjin            Group Companies                           Group Companies

                        Jumbo Glories                               Nil
                        Changtian Enterprise

                        Other Companies                           Other Companies

                        Eastline Investments                      Xiamen Changkai Investment Co.,
                                                                    Ltd
                                                                  Sunwin International Limited

Chen Yongfu             Group Companies                           Group Companies

                        Jumbo Glories                             Nil
                        Changtian Enterprise

                        Other Companies                           Other Companies

                        Goodwise Investments                      Xiamen Brightforever
                        Xiamen Changtian

Wong Chit Fu            Group Companies                           Group Companies

                        Jumbo Glories                             Nil
                        Changtian Enterprise

                        Other Companies                           Other Companies

                        Fujian Triumph Forever Plastic            Rich Hope International Limited
                          Industrial Co., Ltd                     Xing Ming Group Limited
                                                                  Sunning Group Limited
                        Multi Ace International
                        Sunwin International Limited
                        Xiamen Brightforever
                        Xiamen Changtian

Yan Yilin               Group Companies                           Group Companies

                        Nil                                       Nil

                        Other Companies                           Other Companies

                        Nil                                       Nil




                                                  120
Name                    Present Directorships                     Past Directorships

Chan Yin David          Group Companies                           Group Companies

                        Nil                                       Nil

                        Other Companies                           Other Companies

                        Ace Asset Holding Corporation             AGF Asset Management Asia Ltd.
                        Synear Food Holdings Limited

Lee Liang Ping          Group Companies                           Group Companies

                        Nil                                       Nil

                        Other Companies                           Other Companies

                        Synear Food Holdings Limited              M2B Game World Pte. Ltd.
                        AIMT Pte Ltd
                        Corporate Advisory International Ltd
                        Sino Hua-An International Berhad
                        Killam Management Limited

Liao Quanwen            Group Companies                           Group Companies

                        Nil                                       Nil

                        Other Companies                           Other Companies

                        Fujian Minnan (Zhangzhou)                 Nil
                        Economic Development Co., Ltd.


None of our Directors, except Yang Qingjin and Chen Yongfu, are related to one another, to any of our
Executive Officers or Substantial Shareholders, or are related by blood or marriage to one another. Yang
Qingjin is Chen Yongfu’s brother-in-law. Yang Qingjin’s spouse, Chen Baohua, is the sister of Chen Yongfu.


MANAGEMENT
Our day to day operations are entrusted to the Executive Officers of our Group. The particulars of our
Executive Officers are set out below:


Name                          Age     Residential Address                       Principal occupation

Ke Youmi                      40      Room 407, 42 Jin Tai Li, Jin Shang        General Manager
                                      Xiao Sub-District, Shi Hu Li District,
                                      Xiamen City, Fujian Province, PRC

Zhang Kunshu                  41      Room 201, 17 Xi Chun Dong Li,             Deputy General
                                      Si Ming District, Xiamen City,            Manager and
                                      Fujian Province, PRC                      Production Manager

Zhang Anmin                   49      Room 304, 19 Yu Qing Lu,                  Deputy General
                                      Si Ming District,                         Manager and Sales
                                      Xiamen City, Fujian Province, PRC         and Marketing Manager

Yang Junqing                  31      Room 402, 43 Hong Wen Yi Li,              Purchasing Manager
                                      Si Ming District,
                                      Xiamen City, Fujian Province, PRC


                                                   121
Name                         Age     Residential Address                      Principal occupation

Chan Pak Kin Ken             35      Flat D, 46/F, Block 6, Sky Tower,        Financial Controller
                                     38 Sung Wong Toi Road,
                                     To Kwa Wan, Hong Kong

Sin Kwok Chui Malon          39      22C Tower 2, Bayshore Towers,            Deputy Financial
                                     Ma On Shan, Hong Kong                    Controller


Ke Youmi
Mr Ke Youmi is our General Manager and is responsible for the overall management and business
operations of our Group. Mr Ke started his career in 1990 at Xiamen Cankun Electric Appliances Co.,
Ltd                          as an assistant to the deputy general manager. Thereafter, from 1996 to
1998, he joined Xiamen C&D Inc.                               as an operations supervisor. In 1998, Mr
Ke then joined Xiamen Xin Guan, a company engaged in the manufacture and sale of adhesive tapes,
as the assistant to general manager and was responsible for assisting in the company’s overall internal
management. Subsequently, Mr Ke was appointed as the head of export department of Dongguan
Longde Electric Appliances Co., Ltd                        . Since January 2003, Mr Ke was appointed
as general manager of Xiamen Changtian responsible for its overall management and operations. Mr
Ke graduated from Dalian University of Technology                      with a degree in 1987 and a
Master’s Degree in 1990 majoring in Electrical Machinery and Electrical Appliance Manufacturing. Mr
Ke also received an Engineering Certification from Personnel Bureau of Fujian Province
in 1994.


Zhang Kunshu
Mr Zhang is our Deputy General Manager and Production Manager and is responsible for overseeing
our daily operations and overall production activities. Mr Zhang was appointed the production
supervisor of Xiamen Cankun Electric Appliances Co., Ltd                      from 1992 to 1998.
Subsequently, Mr Zhang joined Xiamen Xin Guan, a company engaged in manufacture and sale of
products such as adhesive tapes, as the production manager from 1998 to 2001. In November 2002,
Mr Zhang was appointed as deputy general manager of Xiamen Changtian and production manager.
Mr Zhang graduated from Fujian Zhangzhou Normal College                       with a Certificate in
Mathematics in 1988.


Zhang Anmin
Mr Zhang is our Deputy General Manager and Sales and Marketing Manager and is in charge of our
sales and marketing activities. Mr Zhang started his career in 1985 at Xiamen Youlian Adhesive Tape
Co., Ltd                         as the sales and marketing manager and deputy general manager till
1998. From 1998 to 2002, Mr Zhang was employed as the sales and marketing manager of Xiamen Xin
Guan, a company engaged in the manufacture and sale of adhesive tapes. During that period, he was
also responsible for overseeing the operations at various branch offices of Xiamen Xin Guan. In August
2002, Mr Zhang was appointed as the deputy general manager and sales and marketing manager of
Xiamen Changtian being responsible for sales and marketing. Mr Zhang graduated from Beijing Social
University                     in 1987 with a degree in Financial Accounting.


Yang Junqing
Mr Yang is our Purchasing Manager and is responsible for the procurement of raw materials of our
Group. Mr Yang started his career in 1996 at Xiamen Xin Guan, a company engaged in the manufacture
and sale of adhesive tapes, as its trading department manager till 2001. In July 2001, Mr Yang joined
Xiamen Changtian and was responsible for overseeing Xiamen Changtian’s purchasing operations. Mr
Yang graduated from Fujian Economic School                    in Financial Accounting in 1996.


                                                 122
Chan Pak Kin Ken
Mr Chan is the Financial Controller of our Group. He was appointed in July 2007 and assists in the
management of the overall finance and accounting operations of the Group. In addition, he is
responsible for implementing internal controls and corporate governance and practices, as well as
liaising with external parties and regulatory bodies in respect of our Group’s financial matters. He has
more than 10 years of experience in the field of auditing and business advisory, and acted as audit
manager in two international firms of certified public accountants (BDO McCabe Lo & Company and
Grant Thornton). Prior to joining our Group, Mr Chan was the Financial Controller of Hong Kong Cuilong
Copper Industry International Company Limited, a company engaged in the manufacturing and sales
of copper coils, and was in charge of its daily finance and accounting matters. Mr Chan holds a
Bachelor of Business degree from Monash University, Australia. He is an associate member of the
Association of Chartered Certified Accountants and the Hong Kong Institute of Certified Public
Accountants.


Sin Kwok Chui Malon
Mr Sin is our Deputy Financial Controller of our Group. He was appointed in February 2007 and assists
in the management of finance and our accounting operations. In addition, he is also responsible for
implementing internal controls and corporate governance practices as well as liaising with external
parties and regulatory bodies in respect of our Group’s financial matters. He joined Campbell Soup Asia
Limited as an accountant in 1995 and subsequently as an accountant in King Power Duty Free
Company Ltd in 2000. From 2000 to 2002, Mr Sin was regional accountant of Nu Skin Enterprises, a
company engaged in direct selling of health products. From December 2002 to November 2003, Mr Sin
was appointed assistant manager of Citibank N.A. Subsequently, he joined Zebra Strategic Outsource
Solution Ltd, a company engaged in human resources, as an accounting manager from March 2004 to
August 2005. Mr Sin was appointed chief accountant of Emerson Network Power Hong Kong Ltd, a
company engaged in power supply, from September 2005 to February 2006. Mr Sin graduated from
Hong Kong Polytechnic University in 1997 with a Higher Certificate in Accountancy. Mr Sin became an
Associate Member of the Hong Kong Institute of Certified Public Accountants and the Association of
International Accountants in 2005.

The list of present and past directorships of each Executive Officer over the last five years preceding
the date of this Prospectus is set out below:


Name                               Present Directorships         Past Directorships

Ke Youmi                           Group Companies               Group Companies

                                   Nil                           Nil

                                   Other Companies               Other Companies

                                   Nil                           Nil

Zhang Kunshu                       Group Companies               Group Companies

                                   Nil                           Nil

                                   Other Companies               Other Companies

                                   Nil                           Xiamen Tongkun Industry & Trading
                                                                 Co., Ltd




                                                  123
Name                               Present Directorships        Past Directorships

Zhang Anmin                        Group Companies              Group Companies

                                   Nil                          Nil

                                   Other Companies              Other Companies

                                   Nil                          Nil

Yang Junqing                       Group Companies              Group Companies

                                   Nil                          Xiamen Shun Jia Xiang Trading Co.,
                                                                Ltd

                                   Other Companies              Other Companies

                                   Xiamen Hongyang              Nil
                                   Trading Co., Ltd


Chan Pak Kin Ken                   Group Companies              Group Companies

                                   Nil                          Nil

                                   Other Companies              Other Companies

                                   Nil                          Nil

Sin Kwok Chui Malon                Group Companies              Group Companies

                                   Nil                          Nil

                                   Other Companies              Other Companies

                                   Nil                          Nil

None of our Executive Officers are related to one another, to any of our Directors or Substantial
Shareholders, or are related by blood or marriage to one another.

To the best of our knowledge and belief, there are no arrangements or undertakings with any Substantial
Shareholders, customers, suppliers or others, pursuant to which any of our Directors and Executive
Officers was appointed.


EMPLOYEES
The functional distribution of our full-time employees as at 31 December 2004, 2005 and 2006 and as
at the Latest Practicable Date were as follows:

                                                        As at 31 December             As at the Latest
                                                 2004         2005          2006      Practicable Date
By function
Production                                       111           160          168              176
Administration and Finance                        37            40           37               47
Sales and Marketing                               31            47           54               53

Number of employees                              179           247          259              276




                                                 124
All our employees are located in the PRC. We do not have any part-time employees. Our employees
are not unionised. The relationship and co-operation between the management and staff has been
good and is expected to continue to remain good in the future.

There has not been any incidence of work stoppages or labour disputes that affected our operations.

On 24 December 2004, one of our former employees was injured in an industrial accident while carrying
out his duties on our premises and was hospitalised for 28 days. The former employee claimed for (i)
food subsidies during hospitalisation; (ii) once-off medical subsidies; and (iii) workmen injuries
compensation. This matter was referred to the Xiamen Haicang District Labour Dispute Arbitration
Committee (the “Arbitration Committee”). On 14 February 2006, the Arbitration Committee ordered that
a compensation of approximately RMB22,000 be paid to the employee. Such compensation has
already been made.


REMUNERATION
The compensation paid to our Directors and our Executive Officers for services rendered to us on an
individual basis and in remuneration bands during FY2005, FY2006 and the estimated remuneration for
the current FY2007 are as follows:

                                                                                                       Estimated for
Names                                                          FY2005              FY2006             current FY2007

Directors

Yang Qingjin                                                   Band A              Band A                   Band A

Chen Yongfu                                                    Band A              Band A                   Band A

Wong Chit Fu                                                   Nil                 Nil                      Band A

Yan Yilin                                                      Band A              Band A                   Band A

Chan Yin David                                                 N/A                 N/A                      Band A

Lee Liang Ping                                                 N/A                 N/A                      Band A

Liao Quanwen                                                   N/A                 N/A                      Band A

Management

Ke Youmi                                                       Band A              Band A                   Band A

Zhang Kunshu                                                   Band A              Band A                   Band A

Zhang Anmin                                                    Band A              Band A                   Band A

Yang Junqing                                                   Band A              Band A                   Band A

Chan Pak Kin Ken                                               N/A                 N/A                      Band A

Sin Kwok Chui Malon                                            N/A                 N/A                      Band A

Notes:
(1)   Band A means up to S$250,000.
(2)   To determine the remuneration band for each of our Directors and Executive Officers, we have used the year-end S$:RMB
      exchange rate for FY2005 and FY2006 and the S$:RMB exchange rate as at the Latest Practicable Date for the current
      FY2007.




                                                           125
We have not set aside or accrued any amounts for our Directors and Executive Officers to provide for
pension, retirement or similar benefits.


SERVICE AGREEMENTS
On 24 September 2007, we entered into separate service agreements (the “Service Agreements”) with
our Executive Directors, Yang Qingjin, Chen Yongfu, Wong Chit Fu and Yan Yilin for a period of three
years (the “Initial Term”) with effect from the date of our listing on the SGX-ST, and thereafter renewable
from year to year, unless otherwise terminated by either party giving not less than three months’ notice
to the other. We may also terminate their respective Service Agreements if any of these Executive
Directors are guilty of dishonesty, gross misconduct, wilful neglect of duty, continued material breach
of the terms of the Service Agreement, becomes bankrupt, is convicted of any criminal offence, refuses
to carry out any reasonable lawful order or otherwise acts to the prejudice of our Company and/or our
Group. None of these Executive Directors will be entitled to any benefits upon termination of their
respective Service Agreements.

Pursuant to the terms of their respective Service Agreements, each of Yang Qingjin, Chen Yongfu,
Wong Chit Fu and Yan Yilin is entitled to an annual salary of RMB960,000, RMB840,000, RMB840,000
and RMB720,000 respectively. In addition, there will be in place a performance bonus scheme
(“Performance Bonus”) for each of the Executive Directors. Details of the Performance Bonus are set
out below:
(a)   The Performance Bonus in respect of each financial year commencing from FY2007 (the
      “Relevant FY”), will be calculated based on the consolidated net profit after tax and extraordinary
      items before deducting for such Performance Bonus paid to the Executive Directors (“NPAT”). For
      every RMB10 million increase in NPAT from the previous FY, a collective bonus of RMB100,000
      will be paid out to the Executive Directors in the following proportions:


      Yang Qingjin                                   30%

      Chen Yongfu                                    25%

      Wong Chit Fu                                   25%

      Yan Yilin                                      20%

(b)   If the increase in NPAT from the previous financial year is less than RMB10 million, the Executive
      Directors shall not be entitled to receive Performance Bonus for the Relevant FY.

The Performance Bonus will only be payable to the Executive Directors provided that the Group shall not
have recorded a net consolidated loss after tax and extraordinary items (before deducting for such
Performance Bonus paid to the Executive Directors and all other executives and directors of the Company)
for the previous financial year.

All travelling and travel related expenses, entertainment expenses and other out-of-pocket expenses
reasonably incurred by the Executive Directors in the process of discharging their duties on behalf of our
Group will be borne by us.

Had the Service Agreements been in place since the beginning of FY2006, the aggregate remuneration
payable to our Executive Directors (including annual salary, Performance Bonus and benefits-in-kind)
would have been approximately RMB3.9 million instead of RMB0.3 million and our profit before income tax
would have been approximately RMB171.5 million instead of approximately RMB175.1 million.

Save as disclosed above, there are no existing or proposed service agreements between us, our
subsidiaries and any of our Directors. There are no existing service agreements entered into or proposed
service agreements to be entered into by us or any of our subsidiaries which provide for benefits upon
termination of employment.

                                                   126
                     CHANGTIAN EMPLOYEE SHARE OPTION SCHEME

On 24 September 2007, our Shareholders approved an employee share option scheme known as the
Changtian Employee Share Option Scheme (the “ESOS’’), the rules of which are set out in Appendix
G — “Rules of the Changtian Employee Share Option Scheme” of this Prospectus. The ESOS complies
with the relevant rules of the SGX-ST as set out in Chapter 8 of the Listing Manual. The ESOS will
provide eligible participants with an opportunity to participate in our equity and to motivate them
towards better performance through increased dedication and loyalty. The ESOS, which forms an
integral and important component of our employee compensation plan, is designed to primarily reward
and retain executive directors, non-executive directors and employees of our Group whose services are
vital to our well being and success.

As at the Latest Practicable Date, there are 276 employees in our Group and no Options have been
granted under the ESOS.


Objectives of the ESOS
The objectives of the ESOS are as follows:
(a)   to motivate participants to optimise their performance standards and efficiency and to maintain a
      high level of contribution to our Group;
(b)   to retain key employees and directors whose contributions are essential to the long-term growth
      and profitability of our Group;
(c)   to instill loyalty to and a stronger identification by participants with the long-term prosperity of our
      Group;
(d)   to attract potential employees with the relevant skill sets to contribute to our Group and to create
      value for our Shareholders; and
(e)   to align the interest of participants with the interests of our Shareholders.


Summary of ESOS
A summary of the rules of the ESOS is set out as follows:

(1)   Participants
      Under the rules of the ESOS, executive and non-executive directors (including our Independent
      Directors) and employees of our Group, who are not Controlling Shareholders or their Associates,
      are eligible to participate in the ESOS.


(2)   Administration
      The ESOS shall be administered by the Remuneration Committee with powers to determine, inter
      alia, the following:
      (a)   persons to be granted Options;
      (b)   number of Options to be granted; and
      (c)   recommendations for modifications to the ESOS.

      As at the date of this Prospectus, our Remuneration Committee comprises Yang Qingjin, our
      Chairman and Executive Director, Chan Yin David, Lee Liang Ping and Liao Quanwen, our
      Independent Directors. The Remuneration Committee will consist of Directors (including Directors
      or persons who may be participants of the ESOS). A member of the Remuneration Committee
      who is also a participant of the ESOS must not be involved in its deliberation in respect of Options
      granted or to be granted to him.


                                                     127
(3)   Size of the ESOS
      The aggregate number of Shares over which the Remuneration Committee may grant Options on
      any date, when added to the nominal amount of Shares issued and issuable in respect of all
      Options granted under the ESOS shall not exceed 15 per cent of our issued share capital on the
      day immediately preceding the date of the relevant grant.

      We believe that this 15 per cent limit set by the SGX-ST gives us sufficient flexibility to decide the
      number of Option Shares to offer to our existing and new employees. 15 per cent of our
      post-Invitation share capital constitutes approximately 99 million Shares. As it is intended that the
      ESOS shall last for ten years, assuming that there is no change in our total issued share capital,
      the number of Options that may be granted in a year will average approximately 9.9 million
      Shares. The number of eligible participants is expected to grow over the years. We, in line with
      its goal of ensuring sustainable growth, are constantly reviewing its position and considering the
      expansion of its talent pool which may involve employing new employees. The employee base,
      and thus the number of eligible participants will increase as a result. If the number of Options
      available under the ESOS is limited, we may only be able to grant a small number of Options to
      each eligible participant which may not be a sufficiently attractive incentive. We are of the opinion
      that we should have sufficient number of Options to offer to new employees as well as to existing
      ones. The number of Options offered must also be significant to serve as a meaningful reward for
      contributions to our Group. However, it does not necessarily mean that the Remuneration
      Committee will definitely issue Option Shares up to the prescribed limit. The Remuneration
      Committee shall exercise its discretion in deciding the number of Option Shares to be granted to
      each employee which will depend on the performance and value of the employee to our Group.


(4)   Maximum entitlements
      The aggregate number of Shares comprised in any Option to be offered to a participant under the
      ESOS shall be determined at the absolute discretion of the Remuneration Committee, which shall
      take into account (where applicable) criteria such as rank, past performance, years of service,
      potential for future development of that participant.


(5)   Options, exercise period and exercise price
      The Options that are granted under the ESOS may have exercise prices that are, at the discretion
      of the Remuneration Committee, set at a price (the “Market Price”) equal to the average of the last
      dealt prices for the Shares on the Official List of the SGX-ST for the five consecutive Market Days
      immediately preceding the relevant date of grant of the relevant Option; or at a discount to the
      Market Price (subject to a maximum discount of 20 per cent). Options which are fixed at the
      Market Price (“Market Price Option”) may be exercised after the first anniversary of the date of
      grant of that Option while Options exercisable at a discount to the Market Price (“Discounted
      Option”) may only be exercised after the second anniversary from the date of grant of the Option.
      Options granted under the ESOS will have a life span of ten years. Under no circumstances shall
      the exercise price be less than the nominal value of a Share.


(6)   Grant of options
      Under the rules of the ESOS, there are no fixed periods for the grant of Options. As such, offers
      for the grant of Options may be made at any time from time to time at the discretion of the
      Remuneration Committee. However, no Option shall be granted during the period of 30 days
      immediately preceding the date of announcement of our interim or final results (as the case may
      be).

      In addition, in the event that an announcement on any matter of an exceptional nature involving
      unpublished price sensitive information is imminent, offers may only be made after the second
      Market Day from the date on which the aforesaid announcement is made.

                                                    128
(7)   Termination of Options
      Special provisions in the rules of the ESOS deal with the lapse or earlier exercise of Options in
      circumstances which include the termination of the participant’s employment in our Group, the
      bankruptcy of the participant, the death of the participant, a take-over of our Company and the
      winding-up of our Company.


(8)   Acceptance of Options
      The grant of Options shall be accepted within 30 days from the date of offer. Offers of Options
      made to grantees, if not accepted before the closing date, will lapse. Upon acceptance of the offer,
      the grantee must pay us a consideration of S$1.00.


(9)   Rights of Shares arising
      Shares arising from the exercise of Options are subject to the provisions of the Memorandum of
      Association of our Company and the Bye-laws. The Shares so allotted will upon issue rank pari
      passu in all respects with the then existing issued Shares, save for any dividend, rights, allotments
      or distributions, the record date (“Record Date”) for which is prior to the relevant exercise date of
      the Option. “Record Date’’ means the date as at the close of business on which Shareholders
      must be registered in order to participate in any dividends, rights, allotments or other distributions
      (as the case may be).


(10) Duration of the ESOS
      The ESOS shall continue in operation for a maximum duration of ten years and may be continued
      for any further period thereafter with the approval of our Shareholders by ordinary resolution in
      general meeting and of any relevant authorities which may then be required.


(11) Abstention from voting
      Shareholders who are eligible to participate in the ESOS are to abstain from voting on any
      resolution of Shareholders relating to the ESOS.


Grant of Discounted Options
The ability to offer Options to participants of the ESOS with exercise prices set at a discount to the
prevailing market prices of the Shares will operate as a means to recognise the performance of
participants as well as to motivate them to continue to excel while encouraging them to focus more on
improving the profitability and return of our Group above a certain level which will benefit our
Shareholders when these are eventually reflected through share price appreciation. The ESOS will also
serve to recruit new employees whose contributions are important to the long-term growth and
profitability of our Group. Discounted Options would be perceived in a more positive light by the
participants, inspiring them to work hard and produce results in order to be offered Discounted Options
as only employees who have made significant contributions to the success and development of our
Group would be granted Discounted Options.

The flexibility to grant Discounted Options is also intended to cater to situations where the stock market
performance has overrun the general market conditions. In such events, the Remuneration Committee
will have absolute discretion to:
(a)   grant Options set at a discount to the Market Price of a Share (subject to a maximum discount of
      20 per cent of the Market Price); and
(b)   determine the participants to whom, and the Options to which, such reduction in exercise prices
      will apply.



                                                    129
In determining whether to give a discount and the quantum of the discount, the Remuneration Committee
shall be at liberty to take into consideration factors including the performance of our Group, the
performance of the participant concerned, the contribution of the participant to the success and
development of our Group and the prevailing market conditions.

At present, we foresee that Discounted Options may be granted principally in the following circumstances:
(a)   Firstly, where it is considered more effective to reward and retain talented employees by way of
      a Discounted Option rather than a Market Price Option. This is to reward the outstanding
      performers who have contributed significantly to our Group’s performance and the Discounted
      Option serves as additional incentives to such Group employees. Options granted by us on the
      basis of market price may not be attractive and realistic in the event of an overly buoyant market
      and inflated share prices. Hence during such period the ability to offer Discounted Options would
      allow us to grant Options on a more realistic and economically feasible basis. Furthermore,
      Discounted Options will give an opportunity to our Group’s employees to realise some tangible
      benefits even if external events cause the Share price to remain largely static.
(b)   Secondly, where it is more meaningful and attractive to acknowledge a participant’s achievements
      through a Discounted Option rather than paying him a cash bonus. For example, Discounted
      Options may be used to compensate employees and to motivate them during economic
      downturns when wages (including cash bonuses and annual wage supplements) are frozen or
      cut, or they could be used to supplement cash rewards in lieu of larger cash bonuses or annual
      wage supplements. Accordingly, it is possible that merit-based cash bonuses or rewards may be
      combined with grants of Market Price Options or Discounted Options, as part of eligible
      employees’ compensation packages. The ESOS will provide our Group’s employees with an
      incentive to focus more on improving the profitability of our Group thereby enhancing shareholder
      value when these are eventually reflected through the price appreciation of our Shares after the
      vesting period.
(c)   Thirdly, where due to speculative forces and having regard to the historical performance of the
      Share price, the Market Price of our Shares at the time of the grant of the Options may not be
      reflective of financial performance indicators such as return on equity and/or earnings growth.

The Remuneration Committee will have the absolute discretion to grant Discounted Options, to determine
the level of discount (subject to a maximum discount of 20 per cent of the Market Price) and the grantees
to whom, and the Options to which, such discount in the exercise price will apply provided that our
Shareholders in general meeting shall have authorised, in a separate resolution, the making of offers and
grants of Options under the ESOS at a discount not exceeding the maximum discount as aforesaid.

We may also grant Options without any discount to the Market Price. Additionally, we may, if we deem fit,
impose conditions on the exercise of the Options (whether such Options are granted at the market price
or at a discount to the Market Price), such as restricting the number of Shares for which the Option may
be exercised during the initial years following its vesting.


Rationale for participation of directors (including our Independent Directors) and employees of
our Group
The extension of the ESOS to the executive and non-executive directors (including our Independent
Directors but excluding Controlling Shareholders or their Associates) and employees of our Group
allows our Group to have a fair and equitable system to reward directors and employees who have
made and who continue to make significant contributions to the long-term growth of our Group.

Non-executive directors bring to our Group their wealth of knowledge, business expertise and contacts
in the business community. It is desirable that non-executive directors of our Group be allowed to
participate in the ESOS to incentivise and retain them and to further align their interests with that of our
Group.



                                                   130
Granting eligibility to the non-executive directors of our Group gives us the ability to supplement the
current cash-based remuneration by way of director’s fees to the non-executive directors of our Group
for their services and will help us remain competitive in the remuneration of the non-executive directors
of our Group when other listed companies offer share options to their non-executive directors.

We are of the view that including the non-executive directors of our Group in the ESOS will show our
appreciation for, and further motivate them in their contribution towards our success. However, as we
recognise that the services and contributions of the non-executive directors of our Group cannot be
measured in the same way as those of our full time employees, we envisage that the bulk of the Options
will be given to our employees. Our non-executive directors will be granted Options at the discretion of
our Remuneration Committee.

Our Remuneration Committee, when deciding on the selection of the non-executive directors of our
Group to participate in the ESOS and the number of Options to be offered, will take into consideration
the nature and extent of their input, the assistance and expertise rendered by them to the board of
Directors and the impact thereof on the growth, success and development of our Group, as well as their
involvement and commitment to the boards of directors on which they sit. Our Remuneration
Committee may, where it considers relevant, take into account other factors such as the economic
conditions and our Group’s performance.

Although our non-executive directors may be appointed as members of our Remuneration Committee,
the rules of the ESOS provide that a member is not to be involved in its deliberations in respect of the
grant of Options to him. We will ensure that the number of Options granted to the non-executive
directors of our Group will be such that any conflict of interests that may potentially arise is kept minimal
and that the independence of the non-executive directors of our Group are not compromised.

It is our intention that all our employees whether key employees or not should be treated equally for the
purposes of the ESOS. The main purpose of the ESOS is to align the interests of our directors and all
employees who are involved in our business and prosperity with those of our own. The extension of the
ESOS to all our employees allows us a fair and equitable system to reward employees who have made
and will continue to make important contributions to our long-term growth, be they key employees or
otherwise.

We believe that the ESOS will be an essential part of our strategy for recruiting and retaining capable
employees. The ESOS will provide an incentive to our employees to achieve and maintain a high level
of performance as well as to encourage greater dedication and loyalty by enabling us to give
recognition to past contributions and services as well as to further encourage participants generally to
contribute towards our long term prosperity. To this end, we will determine the number of Options to be
granted to an employee by taking into account the appointment, responsibilities, length of service,
potential and performance. The level of performance of each employee will be assessed on the basis
of an annual appraisal process for all employees.


Cost of Options granted under the ESOS to our Company
The grant of Options under the ESOS will result in an increase in our issued share capital to the extent
that Options are exercised and new Shares are issued. This will in turn depend on, inter alia, the
number of Shares comprised in the Options granted, the vesting schedules and the prevailing Market
Price of the Shares on the SGX-ST.

The issue of new Shares upon the exercise of Options granted under the ESOS will have the effect of
increasing our consolidated NTA by the aggregate exercise price of the new Shares issued. On a per
Share basis, the effect would be accretive if the exercise price is above the NTA per Share but dilutive
otherwise.




                                                    131
Based on the International Financial Reporting Standards, no cash outlays would be expended by us
at the time Options are granted by it (as compared with cash bonuses). However, whenever the Options
are granted to subscribe for new Shares, such Options have a fair value attached to them at the time
of grant. This fair value is the estimated value of the Option on its date of grant and may be derived by
applying a variety of valuation techniques or pricing models developed for valuing traded options.

Under the ESOS, each participant to whom an Option is offered pays a nominal consideration of S$1.00
to us on his acceptance of the offer of the Option. Insofar as such Options are granted at a
consideration that is less than their fair value at the time of grant, there will be a cost to us (in that we
will receive from the participant upon the grant of the Option to him, a consideration that is less than
the fair value of the Option).

The cost to us in granting an Option would vary depending on the number of Options granted pursuant
to the ESOS, whether these Options are granted at Market Price or at a discount and the validity period
of the Options. Generally a greater discount and a longer validity period for an Option will result in a
higher potential cost to us. If such costs were to be recognised, it would have to be charged to our profit
and loss account at the time the Options are granted.

The issuance of new Shares under the ESOS will have a dilutive impact on our consolidated EPS.
However, the impact is not expected to be material in any given financial year as the Options are likely
to be exercised over several years in accordance with the predetermined vesting schedules.




                                                    132
                          INTERESTED PERSON TRANSACTIONS

In general, transactions between our Group and any of our interested persons (namely, our Directors,
Executive Officers or Controlling Shareholders and their Associates) are known as interested person
transactions. The following discussion on material interested person transactions for the last three
financial years ended 31 December 2006 and up to the Latest Practicable Date, is based on our Group
and the term “interested persons” is construed accordingly.

Save for the interested person transactions discussed below and as set out under the section
“Restructuring Exercise” of this Prospectus, there are no other interested person transactions
undertaken by our Group within the last three financial years and up to the Latest Practicable Date.

The following transactions between our subsidiaries and Xiamen Changtian are considered interested
persons transactions because Chen Yongfu, our Deputy Chairman and Executive Director, and Chen
Baohua (an associate of our Directors, being the wife of Yang Qingjin (our Chairman and Executive
Director) and the sister of Chen Yongfu (our Deputy Chairman and Executive Director)), were the
shareholders of Xiamen Changtian at the relevant times.

The following transactions between our subsidiaries and Xiamen Brightforever are considered
interested persons transactions because Wong Chit Fu, our Executive Director, was a shareholder of
Xiamen Brightforever at the relevant times.


PAST INTERESTED PERSONS TRANSACTIONS

(1)   Sale of land use rights to Xiamen Brightforever
      On 22 June 2005, Xiamen Changtian and Xiamen Brightforever entered into a contract for the
      sale of Xiamen Changtian’s land use rights in respect of the property situated at 16 Xinsheng
      Road, Xinyang Industrial Zone, Haicang District, Xiamen City, Fujian Province, PRC 361026
      which is adjacent to the plant of Xiamen Changtian for a consideration of approximately RMB4.63
      million. The consideration was arrived after arm’s length negotiations, and based on Xiamen
      Changtian’s enquiries with real estate agents and its understanding of the property market at that
      time.

      Our Executive Director, Wong Chit Fu, is a director and shareholder of Xiamen Brightforever, with
      a 9.56% direct interest in Xiamen Brightforever. The other shareholders of Xiamen Brightforever
      are Xiamen Changkai with a 69.33% interest and Sunwin International Limited with a 21.11%
      interest. Wong Chit Fu holds 90% of the shares in Sunwin International Limited. None of our
      Controlling Shareholders or Directors has any interest in Xiamen Changkai.

      We believe that the sale and purchase agreement was carried out on an arm’s length basis and
      on normal commercial terms as Xiamen Changtian recorded a gain of RMB1.4 million.

      Our Company does not expect to enter into any future transactions of the above nature.


(2)   Lease of factory premises, plant and equipment from Xiamen Brightforever
      On 20 March 2005, Xiamen Changtian entered into a lease agreement with Xiamen Brightforever
      whereby Xiamen Changtian agreed to lease from Xiamen Brightforever the manufacturing
      facilities for the production of BOPA film (including the factory premises, and plant and equipment)
      situated at 16 Xinsheng Road, Xinyang Industrial Zone, Haicang District, Xiamen City, Fujian
      Province, PRC 361026.

      The lease was for a period of 9 years commencing 1 April 2005 and ending 31 March 2014. The
      monthly rent payable under the lease agreement is RMB0.4 million per month for the first year,


                                                   133
      and RMB0.5 million per month from the second year onwards. We had leased the manufacturing
      facilities from Xiamen Brightforever as we did not want to incur substantial capital expenditure
      associated with an acqusition of the manufacturing facilities at that time.

      We believe that the lease agreement was carried out on an arm’s length basis and on normal
      commercial terms.

      Following the Initial Asset and Business Transfer Agreement and the acquisition of the BOPA film
      plant and equipment used in the manufacture of BOPA film (described further below), the lease
      agreement between Xiamen Changtian and Xiamen Brightforever dated 20 March 2005 was
      terminated. On 21 May 2007, Changtian Enterprise entered into a lease agreement with Xiamen
      Brightforever for the lease of the premises and the corresponding land use rights (described
      further below).


(3)   Acquisition of the business and assets of Xiamen Changtian

      (a)   Initial Asset and Business Transfer Agreement
            On 14 April 2006, our subsidiary, Jumbo Glories, entered into the Initial Asset and Business
            Transfer Agreement (as amended by the Supplemental Transfer Agreement dated 21 May
            2007) pursuant to which Jumbo Glories agreed to acquire all of Xiamen Changtian’s
            business (including its relevant product and sales activities, assets and obligations excluding
            its land use rights and building ownership) (the “Changtian Assets and Business”). At the
            time the Initial Asset and Business Transfer Agreement was entered into, the directors of
            Xiamen Changtian were Chen Yongfu (our Deputy Chairman and Executive Director), Chen
            Baohua and Wong Chit Fu. The shareholders of Xiamen Changtian were Chen Yongfu (our
            Deputy Chairman and Executive Director), with a 55.7% interest and Chen Baohua with a
            44.3% interest.

            The total purchase consideration was US$18.5 million, which is approximately RMB143.48
            million, arrived at based on the NAV of the Changtian Assets and Business as at 31
            December 2005, as determined by an independent valuer, Xiamen Dacheng Valuation
            Office                         in its assets valuation report dated 30 March 2006. The total
            purchase consideration was to be satisfied in full by cash payment.


      (b)   Supplemental Transfer Agreement
            On 21 May 2007, our subsidiaries, Jumbo Glories and Changtian Enterprise, entered into
            the Supplemental Transfer Agreement with Xiamen Changtian to amend the Initial Asset and
            Business Transfer Agreement.

            Under the Supplemental Transfer Agreement, the parties agreed that the total purchase
            consideration shall remain at US$18.5 million (approximately RMB143.48 million). The
            parties also agreed that Changtian Enterprise would assume and be liable for all rights,
            obligations and benefits of the assets and business acquired from Xiamen Changtian with
            effect from 1 January 2007 and all the profits generated by Xiamen Changtian for the period
            from 1 January 2007 shall belong to Changtian Enterprise.

            In arriving at this agreement, the parties have considered the valuation of the Changtian
            Assets and Business as at 31 January 2007 of RMB155.14 million by Xiamen Dacheng
            Valuation Office in its valuation report dated 10 March 2007, and that after deducting the
            profits generated by Xiamen Changtian for the period from 1 January 2007 to 31 January
            2007 amounting to RMB10.93 million from the valuation of RMB155.14 million, the NAV of
            the Changtian Assets and Business as at 31 December 2006 was RMB144.21 million.




                                                   134
            The acquisition as contemplated by the Initial Asset and Business Transfer Agreement (and
            as amended by the Supplemental Transfer Agreement) was completed on 11 June 2007. We
            believe that the transactions pursuant to the Initial Asset and Business Transfer Agreement
            and the Supplemental Transfer Agreement were carried out on an arm’s length basis and on
            normal commercial terms as the consideration payable under the agreements was
            determined by independent valuation reports.


      (c)   Trademark Transfer Agreement
            On 21 May 2007, pursuant to the Supplemental Transfer Agreement, Changtian Enterprise
            entered into a trademark transfer agreement (the “Trademark Transfer Agreement”) with
            Xiamen Changtian to transfer all of the trademarks already registered and being registered
            by Xiamen Changtian to our subsidiary, Changtian Enterprise. As the trademarks were part
            of the assets transferred under the Initial Business and Assets Transfer Agreement, there
            was no further consideration payable under the Trademark Transfer Agreement.

            Please refer to the section “Restructuring Exercise” of this Prospectus for more details of the
            Trademark Transfer Agreement.


(4)   Acquisition of plant and machinery from Xiamen Brightforever
      On 21 May 2007, Changtian Enterprise entered into a Machinery Acquisition Agreement with
      Xiamen Brightforever to acquire from Xiamen Brightforever plant and machinery used in the
      manufacture of BOPA film and certain office equipment and motor vehicles for a consideration of
      approximately RMB79.85 million, with effect from 1 April 2007. The consideration was determined
      based on the valuation report dated 8 March 2007 of the plant and machinery as at 31 December
      2006, conducted by an independent valuer, LCH (Asia-Pacific) Surveyors Limited.

      In accordance with the Machinery Acquisition Agreement, an initial payment of 30% of the
      acquisition price of approximately RMB79.85 million was paid to Xiamen Brightforever within 90
      days from 1 April 2007, with the balance to be settled in full within one year from 1 April 2007.

      We believe that the transactions pursuant to the Machinery Acquisition Agreement was carried out
      on an arm’s length basis and on normal commercial terms as the consideration payable was
      determined based on an independent valuation report.


(5)   Payments made by Yang Qingjin on our behalf
      Yang Qingjin is our Chairman and Executive Director and substantial shareholder. In 2006, Yang
      Qingjin paid for certain expenses relating to the Invitation. As at 31 March 2007, the amount owing
      to Yang Qingjin was approximately RMB84,000. The advance from Yang Qingjin was unsecured,
      interest-free and repayable on demand. The Company repaid Yang Qingjin in full on 13 July 2007.

      Our Company does not expect to enter into any future transactions of the above nature.


(6)   Payments made by our Company on behalf of Xiamen Changtian
      In January 2007, Changtian Enterprise paid an aggregate amount of approximately RMB18.9
      million in respect of mainly enterprise taxes and value added tax incurred, due and payable by
      Xiamen Changtian. Xiamen Changtian has repaid the full amount owing to us on 31 July 2007.

      Our Company does not expect to enter into any future transactions of the above nature.




                                                   135
(7)   Guarantees given by Xiamen Changtian

      (a)    In respect of the borrowings of Xiamen Brightforever
             Xiamen Changtian had provided a guarantee to the Industrial and Commercial Bank of
             China for a bank loan extended to Xiamen Brightforever. The guarantee provided was for a
             period of 2 years from the day following the first repayment date during the loan period from
             25 September 2003 to 24 September 2006 for up to a maximum amount of RMB130 million.
             The interest rate on the loan was 6.138% per annum. The largest aggregate outstanding
             amount under the guarantee given by Xiamen Changtian from the beginning of the
             guarantee period and up to 30 September 2006 was approximately RMB25 million.

             Xiamen Changtian did not receive any form of consideration for the provision of the
             guarantee. Xiamen Brightforever had made full repayment of the RMB25 million loan in
             September 2006 and accordingly, the guarantee has been discharged and is no longer
             subsisting.


(b)   In respect of the borrowings of Xiamen Xin Guan
      Xiamen Changtian had provided guarantees with respect to certain bank loans to Xiamen Xin
      Guan by the Industrial and Commercial Bank of China, details of which are set out below. The
      largest aggregate outstanding amount under the guarantees given by Xiamen Changtian from the
      beginning of the guarantee period and up to 31 December 2006 was approximately RMB13
      million.

                                            Amount of loan
                                            drawn down for                            Interest rate on the
                                          which the guarantee                           loan per annum
      Bank                                  is given (RMB)       Guarantee Period              (%)
      Industrial and Commercial Bank of        4,500,000          21 March 2003 to           6.831
        China                                                    20 December 2005
      Industrial and Commercial Bank of        4,500,000           26 May 2004 to            6.935
        China                                                       25 May 2006
      Industrial and Commercial Bank of        2,000,000         11 January 2004 to          6.903
        China                                                     10 January 2006
      Industrial and Commercial Bank of        2,000,000        11 February 2004 to          6.903
        China                                                    10 February 2006

      Xiamen Xin Guan is a company whose shareholders are Liu Guojin and Ye Meili, who are the
      brother-in-law and mother-in-law of Yang Qingjin, our Chairman and Executive Director,
      respectively. Ye Meili is also the mother of Chen Yongfu, our Deputy Chairman and Executive
      Director. Liu Guojin and Ye Meili have been the shareholders of Xiamen Xin Guan since the date
      of the guarantee period. Please see the section “History and Development” of this Prospectus for
      further details of the ownership of Xiamen Xin Guan.

      Chen Yongfu had also undertaken to bear any liability that Xiamen Changtian may incur arising
      from the guarantee. Xiamen Changtian did not receive any form of consideration for the provision
      of the guarantee. The remaining loan has been fully settled at RMB9 million by Xiamen Changtian
      pursuant to the guarantee indirectly. This payment was in turn reimbursed fully by Chen Yongfu
      out of dividends declared by Xiamen Changtian. As at 31 December 2006, none of the above
      guarantees are still subsisting.

      Our Company does not expect to enter into any future transactions of the above nature.




                                                    136
(8)   Personal guarantees given by our Executive Directors, Yang Qingjin and Chen Yongfu
      Our Chairman and Executive Director, Yang Qingjin, our Deputy Chairman and Executive
      Director, Chen Yongfu, and Chen Baohua provided personal guarantees to the Agricultural Bank
      of China as security for a RMB7.9 million loan extended to Xiamen Changtian. The largest
      aggregate outstanding amount guaranteed by Yang Qingjin, Chen Yongfu and Chen Baohua from
      the beginning of the guarantee period and up to 31 December 2006 was approximately RMB7.9
      million. The personal guarantees had been given for no consideration. The said loan had been
      repaid in full and none of the personal guarantees are subsisting as at 31 December 2006.

      Our Company does not expect to enter into any future transactions of the above nature.


PRESENT ONGOING INTERESTED PERSONS TRANSACTIONS

(1)   Lease of factory premises from Xiamen Changtian
      On 21 May 2007, our subsidiary, Changtian Enterprise, entered into the Changtian Lease
      Agreement (as amended by the Supplemental Lease Agreement dated 6 July 2007) with Xiamen
      Changtian whereby Changtian Enterprise agreed to lease from Xiamen Changtian the premises
      and the underlying land use rights, at 18 Xinsheng Road, Xinyang Industrial Zone, Haicang
      District, Xiamen City, Fujian Province, PRC 361026 where our production facilities for the
      production of adhesive tapes, release papers and 2-A2MPS are situated. The leased premises
      has an aggregate building floor area of approximately 20,960 sq m comprising factory premises,
      warehouses and staff quarters.

      The lease is for a period of 20 years commencing 1 January 2007 to 31 December 2026, as
      amended by the Supplemental Lease Agreement, at an annual rent of RMB2.3 million as
      determined by a valuation report dated 5 March 2007 prepared by an independent valuer, LCH
      (Asia-Pacific) Surveyors Limited. The annual rental is payable on a quarterly basis. However,
      pursuant to the Supplemental Lease Agreement, the parties agreed that no rent shall be payable
      for the period from 1 January 2007 to 31 March 2007. Under the Changtian Lease Agreement,
      upon the expiry of the initial three year term, the lease may be terminated at the option of
      Changtian Enterprise by giving at least three months’ notice to Xiamen Changtian. The annual
      rental payable after the first three years of the lease is subject to review every three years and
      may be adjusted based on an independent valuers’ valuation to ascertain prevailing market price.

      Further, under the Changtian Lease Agreement, Changtian Enterprise has the option to acquire
      the leased premises from Xiamen Changtian at the prevailing market price to be determined by
      independent valuers. We are leasing the premises from Xiamen Changtian as we currently do not
      want to incur a substantial capital expenditure associated with an acquisition of the premises.

      We believe that the lease agreement was carried out on an arm’s length basis and on normal
      commercial terms as the annual rental was determined by reference to an independent valuation
      report.

      We will comply with the provisions of Chapter 9 of the Listing Manual in respect of this interested
      person transaction and if required, seek shareholders’ approval for this lease.


(2)   Lease of factory premises from Xiamen Brightforever
      On 21 May 2007, our subsidiary, Changtian Enterprise, entered into the Brightforever Lease
      Agreement with Xiamen Brightforever whereby Changtian Enterprise agreed to lease from
      Xiamen Brightforever the premises and corresponding land use rights, situated at 16 Xinsheng
      Road, Xinyang Industrial Zone, Haicang District, Xiamen City, Fujian Province, PRC 361026
      where our production facilities for BOPA film are situated. The leased premises has an aggregate
      building floor area of approximately 11,270.00 sq m.


                                                  137
      The lease is for a period of 20 years commencing from 1 April 2007, at an annual rent of RMB1.2
      million determined by a valuation report dated 5 March 2007 prepared by an independent valuer,
      LCH (Asia-Pacific) Surveyors Limited. Under the Brightforever Lease Agreement, upon the expiry
      of the initial three year term, the lease may be terminated at the option of Changtian Enterprise
      by giving at least three months’ notice to Xiamen Brightforever.

      The annual rental payable after the first three years of the lease is subject to review once every
      three years and may be adjusted based on an independent valuers’ valuation to ascertain
      prevailing market price.

      Further, under the Brightforever Lease Agreement, Changtian Enterprise has the option to acquire
      the leased premises from Xiamen Brightforever at the prevailing market price to be determined by
      independent valuers. We are leasing the premises from Xiamen Brightforever as we currently do
      not want to incur a substantial capital expenditure associated with an acquisition of the premises.

      We believe that this lease agreement was carried out on an arm’s length basis as the annual
      rental was determined by an independent valuation report.

      We will comply with the provisions of Chapter 9 of the Listing Manual in respect of this interested
      person transaction and if required, seek shareholders’ approval for this lease.


REVIEW PROCEDURES FOR ONGOING AND FUTURE INTERESTED PERSON TRANSACTIONS
Our Audit Committee will review and approve all interested person transactions to ensure that they are
on normal commercial terms and arm’s length basis, that is, the transactions are transacted on terms
and prices not more favourable to the interested persons than if they were transacted with a third party
and are not prejudicial to the interests of our Shareholders in any way.

During its periodic review or such other review deemed necessary by it, our Audit Committee will carry
out a review of records of all interested person transactions to ensure that they are carried out in
accordance with the following internal control procedures:
(a)   All interested person transactions above S$100,000 are to be approved by a Director who shall
      not be an interested person in respect of that particular transaction. Interested person
      transactions below S$100,000 do not require such approval. Any sale or purchase contracts to be
      made with an interested person shall not be approved unless the pricing is:
      (i)     determined in accordance with our usual business practices and policies;
      (ii)    consistent with the usual margin given or price received by us for the same or substantially
              similar type of transactions between us and unrelated parties; and
      (iii)   the terms are no more favourable to the interested person than those extended to or
              received from unrelated third parties.
      For the purpose of the above, contracts for the same or substantially similar type of transactions
      entered into between us and unrelated third parties, if any, will be used as a basis for comparison
      to determine whether the price and terms offered to or received from the interested person are no
      more favourable than those extended to unrelated third parties.
(b)   In addition, we shall monitor all interested person transactions entered into by us and categorise
      these transactions as follows:
      (i)     a Category 1 interested person transaction is one where the value thereof is in excess of 3.0
              per cent of the NTA of the Group; and
      (ii)    a Category 2 interested person transaction is one where the value thereof is below or equal
              to 3.0 per cent of the NTA of the Group.




                                                     138
All Category 1 interested person transactions must be approved by our Audit Committee prior to entry
whereas Category 2 interested person transactions need not be approved by our Audit Committee prior to
entry but shall be reviewed on a quarterly basis by our Audit Committee.

Before any agreement or arrangement that is not in the ordinary course of business of our Group is
transacted, prior approval must be obtained from our Audit Committee. In the event that a member of our
Audit Committee is interested in any of the interested person transactions, he will abstain from reviewing
that particular transaction. Any decision to proceed with such an agreement or arrangement would be
recorded for review by our Audit Committee.

Our Audit Committee will also review all interested person transactions to ensure that the prevailing rules
and regulations of the SGX-ST (in particular Chapter 9 of the Listing Manual) are complied with.

We will also comply with the provisions in Chapter 9 of the Listing Manual in respect of all future interested
person transactions, and if required under the Listing Manual or the Act, we will seek our Shareholders’
approval (where necessary) for such transactions. We will also endeavour to comply with the Code of
Corporate Governance 2005 and Chapter 12 of the Listing Manual.

All the Independent Directors, who are members of our Audit Committee, are of the view that the review
procedures and systematic monitoring mechanism of all interested person transactions as mentioned
above, are adequate in ensuring that such transactions will be on normal commercial terms and will not
be prejudicial to the interests of our Shareholders in any way.


CONFLICTS OF INTEREST
Save as disclosed in the section “Interested Person Transactions” of this Prospectus respectively, none
of our Directors, Controlling Shareholders and Executive Officers or their Associates has any material
interest, direct or indirect in:
(a)   any company carrying out the same business or a similar trade as our Group, directly or indirectly;
(b)   any enterprise or company that is our Group’s customer or supplier of goods or services; and
(c)   any transaction to which we were or are a party.

Notwithstanding the absence of any conflict that would materially affect our business and operations, each
of our Executive Directors, Yang Qingjin, Chen Yongfu, Wong Chit Fu and Yan Yilin has entered into a deed
of undertaking (the “Deed of Undertaking”). Pursuant to the Deed of Undertaking, each of them has
undertaken to the Company that he will not be interested (directly or indirectly), either on his own account
or in conjunction with or on behalf of any person, firm, or company, directly or indirectly and whether or not
for gain, carry on or be interested in (i) the sale and manufacture of adhesive tapes, release papers, BOPA
film and 2-A2MPS in the PRC; (ii) any other business in the PRC similar to any business carried on by any
member of our Group; or (iii) be engaged or interested in or concerned with any business in the PRC which
is in any respect in competition with or similar to any business of our Group, and shall procure that each
of their associates (as defined in the Listing Manual) will comply with the terms of the Deed of Undertaking.
Each of the Executive Directors is bound by the terms of Deed of Undertaking for as long as our Company
is listed on the SGX-ST.

Our Chairman and Executive Director, Yang Qingjin, owns 100% of the Eastline Investments Holding
Limited, our Company’s Controlling Shareholder with a post-Invitation shareholding of 25.73%. Chen
Baohua, the wife of Yang Qingjin (our Chairman and Executive Director) and the sister of Chen Yongfu (our
Deputy Chairman and Executive Director), owns 44.3% of Xiamen Changtian. Our Deputy Chairman and
Executive Director, Chen Yongfu, owns 100% of Goodwise Investments Limited, the Controlling
Shareholder of our Company with a post-Invitation shareholding of 30.08%. Chen Yongfu also owns 55.7%
of Xiamen Changtian. The principal activity of Xiamen Changtian is the lease of properties. As disclosed
in the section “Present Ongoing Interested Persons Transaction” of this Prospectus, Xiamen Changtian
currently leases its premises and certain land use rights to our subsidiary, Changtian Enterprise. Ye Meili


                                                    139
(mother of Chen Yongfu and mother-in-law of Yang Qingjin) owns 26.56% interest in Xiamen Xin Guan. Ye
Meili has confirmed that Xiamen Xin Guan is no longer carrying on any business operations.


INTERESTS OF EXPERTS
None of the experts named in this Prospectus:
(a)   is employed on a contingent basis by our Company or any of our subsidiaries; or
(b)   has a material interest, whether direct or indirect, in our Shares or in the shares of our
      subsidiaries; or
(c)   has a material economic interest, whether direct or indirect, in our Company, including an interest
      in the success of the Invitation.


INTERESTS OF UNDERWRITERS OR FINANCIAL ADVISERS
Save as disclosed in the section “Management, Underwriting and Placement Arrangements” of this
Prospectus, none of the underwriters or financial advisers in relation to the Invitation has a material
relationship with our Company in the reasonable opinion of our Directors.




                                                  140
                                  CORPORATE GOVERNANCE

Our Memorandum of Association and Bye-laws provide that our board of Directors will consist of not
less than two Directors. None of our Directors are appointed for any fixed terms, but one-third of our
Directors are required to retire at every annual general meeting of our Company. Hence, the maximum
term for each Director is three years. Directors who retire are eligible to stand for re-election.

Yang Qingjin is our Chairman and Executive Director. Yang Qingjin plays a key role in our Company
being responsible for the business direction and development of our Group. With his years of business
experience, our Company is of the view that he is capable of carrying out both roles concurrently.

In view of Yang Qingjin’s concurrent appointment as our Chairman and Executive Director, we have
appointed Chan Yin David as our lead Independent Director, pursuant to the recommendations in
Commentary 3.3 of the Code of Corporate Governance 2005. In accordance with the recommendations
in the said Commentary 3.3, the lead independent director will be available to shareholders where they
have concerns which contact through the normal channels of our Chairman and Executive Director has
failed to resolve or for which such contact is inappropriate.

The Directors recognise the importance of corporate governance and the offering of high standards of
accountability to the Shareholders of our Company. We have therefore, set up the following
committees:


Audit Committee
Our Audit Committee comprises Chan Yin David, Lee Liang Ping, and Liao Quanwen. The Chairman
of our Audit Committee is Lee Liang Ping. Our Directors recognise the importance of corporate
governance and the offering of high standards of accountability to the Shareholders of our Company.
Our Audit Committee shall meet periodically to perform the following functions:
(a)   review the audit plans of our Company’s external auditors, and (where applicable) our internal
      auditors, including the results of our auditors’ review and evaluation of our system of internal
      controls;
(b)   review the external auditors’ reports;
(c)   review the co-operation given by our Company’s officers to the external auditors;
(d)   review the financial statements of our Company and our Group before their submission to the
      board of Directors;
(e)   consider the appointment and/or reappointment of external auditors;
(f)   review interested person transactions, falling within the scope of Chapter 9 of the Listing Manual,
      if any;
(g)   review and discuss with auditors any suspected fraud, irregularity or infringement of any relevant
      laws, rules or regulations, which has or is likely to have a material impact on our Group’s operating
      results or financial position and our management’s response;
(h)   review any potential conflicts of interest;
(i)   undertake such other reviews and projects as may be requested by our board of Directors and
      report to our board of Directors its findings from time to time on matters arising and requiring the
      attention of our Audit Committee; and
(j)   undertake generally such other functions and duties as may be required by law or the Listing
      Manual, as may be applicable from time to time.




                                                    141
Apart from the above functions, our Audit Committee will also commission and review the findings of
internal investigations into matters where there is any suspected fraud or irregularity, or failure of internal
controls or infringement of any law, rule or regulation which has or is likely to have a material impact on
our Company’s operating results and/or financial position.

In addition, all future transactions with related parties shall comply with the requirements of the Listing
Manual. Each member of the Audit Committee shall abstain from voting any resolutions in respect of
matters in which he is interested.


Nominating Committee
Our Nominating Committee comprises Yang Qingjin, our Chairman and Executive Director, Chan Yin
David, Lee Liang Ping and Liao Quanwen our Independent Directors. The Chairman of the Nominating
Committee is Liao Quanwen. Our Nominating Committee will be responsible for (i) re-nomination of our
Directors having regard to the Director’s contribution and performance, (ii) determining annually
whether or not a Director is independent and (iii) deciding whether or not a Director is able to and has
been adequately carrying out his duties as a Director. The Nominating Committee will decide how the
board’s performance is to be evaluated and propose objective performance criteria, subject to the
approval of the board, which address how the board has enhanced long-term Shareholders’ value. The
performance evaluation will also include consideration of the company’s share price performance over
                        `
a five-year period vis-a-vis the Singapore Straits Times Index and a benchmark index of its industry
peers. The board will also implement a process to be carried out by the Nominating Committee for
assessing the effectiveness of the board as a whole and for assessing the contribution by each
individual Director to the effectiveness of the board. Each member of the Nominating Committee shall
abstain from voting any resolutions in respect of the assessment of his performance or re-nomination
as Director.


Remuneration Committee
Our Remuneration Committee comprises Yang Qingjin, our Chairman and Executive Director, Lee
Liang Ping, Chan Yin David and Liao Quanwen, our Independent Directors. The Chairman of the
Remuneration Committee is Chan Yin David. Our Remuneration Committee will recommend to our
board of Directors a framework of remuneration for the Directors and key executives officers, determine
specific remuneration packages for each Executive Director and administer the ESOS. The
recommendations of our Remuneration Committee on remuneration of Directors and Chairman should
be submitted for endorsement by the entire board. All aspects of remuneration, including but not limited
to Directors’ fees, salaries, allowances, bonuses, options and benefits in kind shall be covered by our
Remuneration Committee. Each member of the Remuneration Committee shall abstain from voting any
resolutions in respect of his remuneration package.




                                                     142
                       GENERAL AND STATUTORY INFORMATION

INFORMATION ON DIRECTORS AND EXECUTIVE OFFICERS

1.   The name, address, age and principal occupation of each of our Directors and Executive Officers
     are set out under the section “Directors, Management and Staff” of this Prospectus.

2.   Information on the business and working experience of each of our Directors and Executive
     Officers is set out under the section “Directors, Management and Staff” of this Prospectus.

3.   Save as disclosed below, none of our Directors or Executive Officers or Controlling Shareholders
     is or was involved in any of the following events:
     (a)   during the last 10 years, an application or a petition under any bankruptcy laws of any
           jurisdiction filed against him or against a partnership of which he was a partner at the time
           when he was a partner or at any time within 2 years from the date he ceased to be a partner;
     (b)   during the last 10 years, an application or a petition under any law of any jurisdiction filed
           against an entity (not being a partnership) of which he was a director or an equivalent person
           or a key executive, at the time when he was a director or an equivalent person or a key
           executive of that entity or at any time within 2 years from the date he ceased to be a director
           or an equivalent person or a key executive of that entity, for the winding up or dissolution of
           that entity or, where that entity is the trustee of a business trust, that business trust, on the
           ground of insolvency;
     (c)   any unsatisfied judgements against him;
     (d)   a conviction of any offence, in Singapore or elsewhere, involving fraud or dishonesty which
           is punishable with imprisonment, or has been the subject of any criminal proceedings
           (including any pending criminal proceedings which he is aware) for such purpose;
     (e)   a conviction of any offence, in Singapore or elsewhere, involving a breach of any law or
           regulatory requirement that relates to the securities or futures industry in Singapore or
           elsewhere, or has been the subject of any criminal proceedings (including pending criminal
           proceedings which he is aware) for such breach;
     (f)   during the last 10 years, judgement entered against him in any civil proceedings in
           Singapore or elsewhere involving a breach of any law or regulatory requirement that relates
           to the securities or futures industry in Singapore or elsewhere, or a finding of fraud,
           misrepresentation or dishonesty on his part, or he has been the subject of any civil
           proceedings (including any pending civil proceedings which he is aware) involving an
           allegation of fraud, misrepresentation or dishonesty on his part;
     (g)   a conviction in Singapore or elsewhere of any offence in connection with the formation or
           management of any entity or business trust;
     (h)   disqualification from acting as a director or an equivalent person of any entity (including the
           trustee of a business trust), or from taking part directly or indirectly in the management of any
           entity or business trust;
     (i)   the subject of any order, judgement or ruling of any court, tribunal or governmental body
           permanently or temporarily enjoining him from engaging in any type of business practice or
           activity;
     (j)   to his knowledge, been concerned with the management or conduct, in Singapore or
           elsewhere, of affairs of:
           (i)   any corporation which has been investigated for a breach of any law or regulatory
                 requirement governing corporations in Singapore or elsewhere;



                                                   143
            (ii)    any entity (not being a corporation) which has been investigated for a breach of any law
                    or regulatory requirement governing such entities in Singapore or elsewhere;
            (iii)   any business trust which has been investigated for a breach of any law or regulatory
                    requirement governing business trusts in Singapore or elsewhere; or
            (iv) any entity or business trust which has been investigated for a breach of any law or
                 regulatory requirement that relates to the securities or futures industry in Singapore or
                 elsewhere,
            in connection with any matter occurring or arising during the period when he was so
            concerned with the entity or business trust; and
     (k)    the subject of any current or past investigation or disciplinary proceedings, or has been
            reprimanded or issued any warning, by the Authority or any other regulatory authority,
            exchange, professional body or government agency, whether in Singapore or elsewhere.

4.   On 3 August 2005 and 11 April 2006, the Hong Kong Commissioner of Inland Revenue (the “CIR”)
     issued two writs of summons against our Director, Wong Chit Fu, claiming HK$8,127 as tax for
     profits made in the years of assessment 2003/2004, and HK$20,160 as tax for profits made in the
     years of assessment 2004/2005 and 2005/2006. Wong Chit Fu, has since clarified the matter with
     the CIR and two Notices of Discontinuance were filed by the CIR on 3 May 2006 and 9 May 2006.
     The CIR has also confirmed in a letter to Wong Chit Fu dated 12 June 2007 that the matter had
     been settled and regarded as closed.

5.   In August 2007, our Independent Director, Lee Liang Ping, was involved in investigations by the
     Authority in relation to his trading in shares in a listed company. After considering Lee Liang Ping’s
     written explanation as well as all the facts and circumstances, the Authority has in a letter dated
     8 October 2007 informed Lee Liang Ping that the Authority has decided not to take any further
     action against him at this juncture.


SHARE CAPITAL

6.   Save as disclosed below and set out under the section “Share Capital” of this Prospectus, there
     were no changes in the issued and paid-up capital of our Company and our subsidiaries within the
     three years preceding the date of lodgement of this Prospectus.

                                                                                                 Resultant
                                                                                 Number of     Issued Share
     Date                Purpose                   Par Value       Amount         Shares          Capital
     30 March 2007 Incorporation                   US$0.10          Nil-paid         1          1 (nil-paid)
                         Issue of new shares to
     6 July 2007         Eastline Investments      US$0.10          Nil-paid         99        100 (nil-paid)
                         Crediting as fully paid
                         the existing 308 nil
                         paid Shares pursuant
     24 September        to the Restructuring
       2007              Exercise                   S$0.05         S$15.40          308             308
                         Issue of New Shares
     24 September        pursuant to the
       2007              Restructuring Exercise     S$0.05     S$24,999,984.60   499,999,692   500,000,000

7.   Save as disclosed above, no shares or debentures of our Company or any of our subsidiaries
     have been issued, as fully or partly paid for in cash or for a consideration other than cash, within
     the three years preceding the date of this Prospectus.




                                                     144
8.   Save for options that may be granted pursuant to our ESOS, no person has been, or is entitled
     to be, granted an option to subscribe for shares in, or debentures of, our Company or any of our
     subsidiaries.

LITIGATION

9.   On 14 March 2003, Xiamen Changtian entered into a loan agreement with the Agriculture Bank
     of China, Xiamen Branch, Feikuang Sub-branch (“Agriculture Bank of China”), under which the
     Agriculture Bank of China agreed to extend a loan of RMB7.9 million to Xiamen Changtian,
     payable within 4 years. However, before the maturity date of the loan, the Agriculture Bank of
     China started an action against Xiamen Changtian in the Xiamen Intermediate People’s Court to
     get us to repay the loan in full. When this action was dismissed by the Xiamen Intermediate
     People’s Court, the Agriculture Bank of China took the case to the Fujian Province High Level
     People’s Court.

     Consequently, on 30 November 2005, the Fujian Province High Level People’s Court issued a
     judgment numbered (2005) Min Min Zhong Zi No. 401 which held that Xiamen Changtian had to
     pay the Agriculture Bank of China the entire loan amount of RMB7.9 million plus applicable
     interest. On 25 April 2006, Xiamen Changtian entered into a settlement agreement with the
     Agriculture Bank of China, according to which the Agriculture Bank of China agreed that Xiamen
     Changtian could pay the RMB7.9 million in 10 equal monthly instalments starting from April 2006.
     According to the confirmation given by the Agriculture Bank of China dated 11 May 2007 and
     receipts provided by Xiamen Changtian, Xiamen Changtian has repaid the entire loan amount of
     RMB7.9 million plus all applicable interest.

     Save as disclosed above, neither our Company nor any of our subsidiaries is engaged in any
     arbitration proceedings or litigation as plaintiff or defendant in respect of any claims or amounts
     which are material in the context of the Invitation and to the best of our Directors’ knowledge and
     belief, having made all reasonable enquiries, there are no legal or arbitration proceedings,
     including those which are pending or known to be contemplated, which may have or have had in
     the last 12 months before the date of lodgement of the Prospectus with the Authority, a material
     effect on our financial position or profitability.

MATERIAL CONTRACTS

10. The following contracts not being contracts entered into in the ordinary course of business have
    been entered into by our Company and our subsidiaries within the two years preceding the date
    of lodgement of this Prospectus and are or may be material:
     (a)   Initial Asset and Business Transfer Agreement dated 14 April 2006 as amended by the
           Supplemental Agreement dated 21 May 2007, between Jumbo Glories and Xiamen
           Changtian for the acquisition of the business and assets of Xiamen Changtian for an
           aggregate consideration of US$18.5 million, which is approximately RMB143.48 million.
           Please refer to the section “Restructuring Exercise” of this Prospectus for further details;
     (b)   the Subscription Agreement dated 9 March 2007 between Eastline Investments, Goodwise
           Investments, Chen Baohua, Chen Yongfu and Yang Qingjin as guarantors and the
           Pre-Invitation Investors for the issuance of exchangeable notes amounting in aggregate up
           to US$18.5 million by Rowview to the Pre-IPO Investors;
     (c)   the Exchangeable Notes Agreement dated 7 June 2007 between Eastline Investments,
           Goodwise Investments, Chen Baohua, Chen Yongfu and Yang Qingjin as guarantors and the
           Pre-Invitation Investors for the issuance of exchangeable notes amounting in aggregate up
           to US$18.5 million by Rowview to the Pre-IPO Investors;
     (d)   the Machinery Acquisition Agreement dated 21 May 2007 between Changtian Enterprise
           and Xiamen Brightforever for the acquisition of plant and equipment for the manufacture of
           BOPA film for an aggregate consideration of approximately RMB79.85 million;


                                                 145
      (e)   the Changtian Lease Agreement dated 21 May 2007 (as amended by the Supplemental
            Lease Agreement dated 6 July 2007) between our Company and Xiamen Changtian for the
            lease of premises and underlying land use rights for the production of adhesive tapes,
            release papers and 2-A2MPS at an annual rent of RMB2.3 million;
      (f)   the Brightforever Lease Agreement dated 21 May 2007 between our Company and Xiamen
            Brightforever for the lease of premises and underlying land use rights for the production of
            BOPA film at an annual rent of RMB1.2 million;
      (g)   the Trademark Transfer Agreement dated 21 May 2007 between our Company and Xiamen
            Changtian for the transfer of registered and pending registration trademarks under Xiamen
            Changtian’s name pursuant to the Asset and Business Transfer Agreement, as amended by
            the Supplemental Transfer Agreement;
      (h)   the Share Swap Agreement dated 24 September 2007 entered into between our Company,
            as purchaser, and the shareholders of Jumbo Glories (Eastline Investments, Goodwise
            Investments and the Pre-Invitation Investors), as vendors, for the acquisition of the entire
            issued and paid-up share capital of Jumbo Glories for a consideration of S$25,000,000 (for
            further details, please refer to the section “Restructuring Exercise’’ of this Prospectus);
      (i)   the Management and Underwriting Agreement dated 30 October 2007 between our
            Company, the Manager and the Underwriter for the management of the Invitation and the
            underwriting of the Invitation Shares; and
      (j)   the Placement Agreement dated 30 October 2007 between our Company and the Placement
            Agent for the placement of the Placement Shares.


MISCELLANEOUS

11.   There has not been any public take-over offer by a third party in respect of our Shares Company
      or by our Company in respect of shares of another corporation or units of a business trust which
      has occurred between 1 January 2006 and the Latest Practicable Date.

12. No expert is employed on a contingent basis by our Group, has a material interest, whether direct
    or indirect, in the Shares of our Group, or has a material economic interest, whether direct or
    indirect, in our Company, including an interest in the success of the Invitation.

13. Save as disclosed in this Prospectus, our Directors are not aware of any event which has occurred
    since 31 March 2007 up to the Latest Practicable Date, which may have a material effect on the
    financial information provided in the Combined Financial Information.

14. Save as disclosed in the sections “Risks relating to our business” and “Licences, Permits and
    Approvals” of this Prospectus, our business and/or profitability is not materially dependent on any
    patent, licence, industrial, commercial or financial contract (including a contract with a customer
    or supplier) or new manufacturing process.

15. Save as disclosed under the sections “Interested Person Transactions” and “Restructuring
    Exercise” of this Prospectus, none of our Directors is interested, directly or indirectly, in the
    promotion of, or in any property or assets which have, within the three years preceding the date
    of this Prospectus, been acquired or disposed of by or leased to, our Company or any of our
    subsidiaries, or are proposed to be acquired or disposed of by or leased to our Company or any
    of our subsidiaries.

16. No sum or benefit has been paid or is agreed to be paid to any Director or expert, or to any firm
    in which such Director or expert is a partner or any corporation in which such Director or expert
    holds shares or debentures, in cash or shares or otherwise, by any person to induce him to
    become, or to qualify him as, a Director, otherwise for services rendered by him or by such firm
    or corporation in connection with the promotion or formation of our Company.

                                                  146
CONSENTS

17. Each of the Joint Reporting Accountants has given and has not withdrawn their respective written
    consents to the issue of this Prospectus with the inclusion herein of the Report from the Joint
    Reporting Accountants on the Audited Combined Financial Information of the Group for the
    Financial Years Ended 31 December 2004, 31 December 2005 and 31 December 2006 and the
    Review Report from the Joint Reporting Accountants on the Unaudited Combined Financial
    Information of the Group for the Three Months Ended 31 March 2007 in the form and context in
    which they appear in this Prospectus and to act in such capacity in relation to this Prospectus.

     Details of the Joint Reporting Accountants are as follows:

                                                                         Partner-in-charge/
     Name, Membership and Address              Professional Body         Professional Qualification

     Foo Kon Tan Grant Thornton                Institute of Certified    Wong Kian Kok
     Certified Public Accountants              Public Accountants of     (Certified Public Accountant)
     47 Hill Street #05-01                     Singapore
     Singapore Chinese Chamber of
     Commerce & Industry Building
     Singapore 179365

     Grant Thornton                            Hong Kong Institute of    Lo Ngai Hang
     Certified Public Accountants              Certified Public          Certified Public Accountant
     13th Floor, Gloucester Tower              Accountants               (Practising)
     The Landmark
     15 Queen’s Road Central
     Hong Kong

18. We currently have no intention of changing the auditors of our Company after the listing of our
    Company on the SGX-ST, details of which are set out below:

                                                                         Partner-in-charge/
     Name, Membership and Address              Professional Body         Professional Qualification

     Grant Thornton                            Hong Kong Institute of    Lo Ngai Hang
     Certified Public Accountants              Certified Public          Certified Public Accountant
     13th Floor, Gloucester Tower              Accountants               (Practising)
     The Landmark
     15 Queen’s Road Central
     Hong Kong

19. The Manager and the Underwriter have given and have not withdrawn their written consent to the
    issue of this Prospectus with the inclusion herein of their names in the form and context in which
    they appear in this Prospectus and to act in such capacity in relation to this Prospectus.

20. Jingtian & Gongcheng, the Legal Advisers to the Company on PRC Laws, has given and has not
    withdrawn its written consent to the issue of this Prospectus with the inclusion herein of its name
    and the references to its name and its opinion in the sections “Government Regulation, Licences
    and Permits — Regulation on the mergers and acquisitions of domestic enterprises by foreign
    investors” and “Appendix F — Summary of Relevant PRC Laws and Regulations — (a) Income
    tax on foreign investment enterprises” which was prepared for the purposes of this Prospectus in
    the form and context in which they appear in this Prospectus and to act in such capacity in relation
    to this Prospectus.




                                                  147
21. Xiamen Dacheng Valuation Office                                , an independent valuer, has given
    and has not withdrawn its written consent to the issue of this Prospectus with the inclusion herein
    of its name and references to its valuation reports dated 30 March 2006 and 10 March 2007
    (which were prepared for the purposes of valuing the Changtian Assets and Business as at 31
    December 2005 and as at 31 December 2006 respectively) in the form and context in which it
    appears in this Prospectus and to act in such capacity in relation to this Prospectus.

22. LCH (Asia-Pacific) Surveyors Limited, an independent valuer, has given and has not withdrawn
    its written consent to the issue of this Prospectus with the inclusion herein of its name and
    references to its valuation reports dated 5 March 2007 and 8 March 2007 (which were prepared
    for the purposes of determining rent payable under the Changtian Lease Agreement and the
    Brightforever Lease Agreement and consideration payable under the Machinery Acquisition
    Agreement respectively) in the form and context in which it appears in this Prospectus and to act
    in such capacity in relation to this Prospectus.

23. Each of the Manager, the Underwriter, the Placement Agent, the Solicitors to the Invitation, the
    Legal Adviser to our Company on Bermuda Law, the Solicitors to the Manager, the Underwriter
    and the Placement Agent, the Bermuda Share Registrar, the Registrar for the Invitation and the
    Singapore Share Transfer Agent, the Receiving Bank and the Principal Banker do not make, or
    purport to make, any statement in this Prospectus or any statement upon which a statement in this
    Prospectus is based and, to the maximum extent permitted by law, expressly disclaim and take
    no responsibility for any liability to any person which is based on, or arises out of, the statements,
    information or opinions in this Prospectus.


STATEMENT BY OUR DIRECTORS AND THE VENDORS

24. This Prospectus has been seen and approved by our Directors and the Vendors and they
    collectively and individually accept the full responsibility for the accuracy of the information given
    in this Prospectus and confirm, having made all reasonable enquires, that to the best of their
    knowledge and belief, that the facts stated and the opinions expressed herein are fair and
    accurate in all material respects as of the date of this Prospectus and there are no other material
    facts the omission of which would make any statements herein misleading, and that this
    Prospectus constitutes full and true disclosure of all material facts about the Invitation and our
    Group.


DOCUMENTS AVAILABLE FOR INSPECTION

25. Copies of the following documents may be inspected at Messrs Rajah and Tann, at 4 Battery
    Road, #26-01, Bank of China Building, Singapore 049908 during normal business hours for a
    period of six months from the date of registration of the Prospectus by the Authority:
     (a)   the Memorandum of Association and Bye-laws of our Company;
     (b)   the Report from the Joint Reporting Accountants on the Audited Combined Financial
           Information of the Group for the Financial Years Ended 31 December 2004, 31 December
           2005 and 31 December 2006 as set out in Appendix A of this Prospectus;
     (c)   the Review Report from the Joint Reporting Accountants on the Unaudited Combined
           Financial Information of the Group for the Three Months Ended 31 March 2007 as set out in
           Appendix B of this Prospectus;
     (d)   the material contracts referred to in paragraph 9 under “General and Statutory Information”
           of this Prospectus;
     (e)   the letters of consent referred to in paragraphs 16 to 21 under “General and Statutory
           Information” of this Prospectus; and
     (f)   the Service Agreements referred to in the section “Service Agreements” of this Prospectus.

                                                   148
                                                                                          APPENDIX A

          REPORT FROM THE JOINT REPORTING ACCOUNTANTS
   ON THE AUDITED COMBINED FINANCIAL INFORMATION OF THE GROUP
         FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2004,
              31 DECEMBER 2005 AND 31 DECEMBER 2006

Date: 30 October 2007

The Board of Directors
Changtian Plastic & Chemical Limited
Canon’s Court
22 Victoria Street
Hamilton HM 12
Bermuda

Dear Sirs

This report has been prepared for inclusion in the prospectus dated 30 October 2007 (“Prospectus”) in
connection with the invitation in respect of offer of shares of Changtian Plastic & Chemical Limited (the
“Company”).

We have audited the accompanying combined financial statements of the Company and its subsidiaries
(collectively the “Group”), as set out in Appendix A on pages A-3 to A-42. The combined financial
statements comprise the combined balance sheets of the Group as at 31 December 2004, 2005 and 2006,
the combined income statements, combined statements of changes in equity and combined cash flow
statements of the Group for each of the years ended 31 December 2004, 2005 and 2006 (the “Relevant
Periods”) and a summary of significant accounting policies and other explanatory notes (the “Combined
Financial Information”).


Directors’ responsibility for the Combined Financial Information
The Company’s directors are responsible for the preparation and fair presentation of these Combined
Financial Information in accordance with International Financial Reporting Standards (“IFRS”). This
responsibility includes: designing, implementing and maintaining internal control relevant to the
preparation and fair presentation of the Combined Financial Information that are free from material
misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies;
and making accounting estimates that are reasonable in the circumstances.


Joint Reporting Accountants’ responsibility
Our responsibility is to express an opinion on the Combined Financial Information based on our audit.
We conducted our audit in accordance with International Standards on Auditing. Those standards
require that we comply with ethical requirements and plan and perform the audit to obtain reasonable
assurance as to whether the Combined Financial Information are free from material misstatement.




                                                  A-1
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the Combined Financial Information. The procedures selected depend on the auditors’ judgement,
including the assessment of the risk of material misstatement of the Combined Financial Information,
whether due to fraud or error. In making those risk assessments, the auditors consider internal control
relevant to the entity’s preparation and fair presentation of the Combined Financial Information in order
to design audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of accounting
estimates made by directors, as well as evaluating the overall presentation of the Combined Financial
Information.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.


Opinion
In our opinion, the Combined Financial Information, for the purpose of this report and prepared on the
basis set out in note 3 of the Combined Financial Information, present fairly, in all material respects, the
Group’s combined results, combined statements of changes in equity and combined cash flows for
each of the Relevant Periods, and the Group’s combined financial positions as at 31 December 2004,
2005 and 2006 and have been properly prepared in accordance with IFRS.

Yours faithfully




Foo Kon Tan Grant Thornton                             Grant Thornton
Certified Public Accountants                           Certified Public Accountants
Singapore                                              Hong Kong

Partner: Wong Kian Kok                                 Partner: Lo Ngai Hang




                                                    A-2
Combined income statements
For the three years ended 31 December 2004, 2005 and 2006

                                                               Year ended 31 December
                                         Notes       2004               2005           2006
                                                    RMB’000           RMB’000         RMB’000
Revenue                                    5         223,246           412,001        540,013
Cost of sales                                       (161,343)         (287,332)      (351,185)

Gross profit                                          61,903           124,669        188,828
Other income                               5            267              2,016          1,980
Selling and distribution expenses                     (4,765)           (8,233)        (9,836)
Administrative expenses                               (3,046)           (3,784)        (4,097)

Operating profit                           7          54,359           114,668        176,875
Finance costs                              8          (2,312)           (2,447)        (1,777)

Profit before income tax                              52,047           112,221        175,098
Income tax expense                         9          (7,848)          (17,080)       (26,156)

Profit attributable to equity holders                 44,199            95,141        148,942

Dividends                                 10          10,000            40,000         72,500

Earnings per share — basic (RMB cents)     11           8.84             19.03          29.79




                                           A-3
Combined balance sheets
As at 31 December 2004, 2005 and 2006

                                                                     As at 31 December
                                                   Notes    2004           2005           2006
                                                           RMB’000       RMB’000         RMB’000
ASSETS AND LIABILITIES
Non-current assets
Property, plant and equipment                       12      67,871         64,355         32,866
Land use rights                                     13       5,972          4,016             —
Deposits                                            14         11            101            946

                                                            73,854         68,472         33,812

Current assets
Inventories                                         15      31,916         34,664         14,369
Trade receivables                                   14      50,110         88,355        111,745
Financial assets at fair value through profit or
  loss                                              16          —            100              —
Deposits and other receivables                      14         19             88            473
Due from related parties                            17         39           1,069            39
Pledged bank deposits                               18       1,667          6,044          9,894
Cash and bank balances                              18      49,672         72,241         58,220

                                                           133,423        202,561        194,740

Current liabilities
Trade and bills payables                            19      46,487         64,828         47,727
Accrued liabilities and other payables              20       6,665          5,572          3,355
Due to a related party                              17          —              —             20
Bank loans, secured                                 21      29,400         27,900         20,000
Provision for tax                                             985           1,752             —

                                                            83,537        100,052         71,102

Net current assets                                          49,886        102,509        123,638

Total assets less current liabilities                      123,740        170,981        157,450
Non-current liabilities
Bank loans, secured                                 21       7,900             —              —

Net assets                                                 115,840        170,981        157,450

EQUITY
Equity attributable to equity holders of the
  Company
Share capital                                       22         39             39             39
Reserves                                                   115,801        170,942        157,411

Total equity                                               115,840        170,981        157,450




                                                     A-4
Combined statements of changes in equity
For the three years ended 31 December 2004, 2005 and 2006

                                           Share        Merger         Statutory     Retained      Total
                                           capital      reserve        reserves       profits     equity
                                          RMB’000      RMB’000         RMB’000       RMB’000     RMB’000
                                                      (note 23(a))    (note 23(b))
At 1 January 2004                           39             50,000         5,484        26,118     81,641
Profit for the year                          —                  —            —        44,199      44,199

Total recognised income and expense for
  the year                                   —                  —            —        44,199      44,199
Dividends (note 10)                          —                  —            —        (10,000)   (10,000)
Transfer to statutory reserves               —                  —         6,609        (6,609)        —

At 31 December 2004 and 1 January
  2005                                      39             50,000       12,093        53,708     115,840
Profit for the year                          —                  —            —        95,141      95,141

Total recognised income and expense for
  the year                                   —                  —            —        95,141      95,141
Dividends (note 10)                          —                  —            —        (40,000)   (40,000)
Transfer to statutory reserves               —                  —       14,472        (14,472)        —

At 31 December 2005 and 1 January
  2006                                      39             50,000       26,565        94,377     170,981
Profit for the year                          —                  —            —       148,942     148,942

Total recognised income and expense for
  the year                                   —                  —            —       148,942     148,942
Dividends (note 10)                          —                  —            —        (72,500)   (72,500)
Transfer to statutory reserves               —                  —       22,232        (22,232)        —
Deemed distribution to equity owners
  (note 23(c))                               —             (89,973)          —             —     (89,973)
Transfers arising on reorganisation          —         197,384          (48,797)     (148,587)        —

At 31 December 2006                         39             157,411           —             —     157,450




                                                     A-5
Combined cash flow statements
For the three years ended 31 December 2004, 2005 and 2006
                                                                      Year ended 31 December
                                                   Notes    2004               2005             2006
                                                           RMB’000           RMB’000           RMB’000
Cash flows from operating activities
Profit before income tax                                    52,047           112,221           175,098
Adjustments for:
  Interest income                                   5         (266)             (574)             (665)
  Gain on disposal of land use rights               5           —              (1,431)              —
  Fair value gains on financial assets at fair
    value through profit or loss                    5           —                  (8)              (7)
  Depreciation                                      7        4,645             4,738             4,931
  Amortisation of land use rights                   7         134                113               92
  Interest expenses                                 8        2,312             2,447             1,777

Operating profit before working capital changes             58,872           117,506           181,226
  (Increase)/decrease in inventories                       (11,857)            (2,748)          20,295
  Increase in trade receivables                            (26,026)           (38,245)         (23,390)
  Decrease/(increase) in deposits and other
    receivables                                                42                 (69)            (385)
  Increase/(decrease) in trade and bills
    payables                                                21,996            18,341           (17,101)
  (Decrease)/increase in accrued liabilities and
    other payables                                          (1,120)            (1,843)           7,580
  Increase in amount due to a related party                     —                  —               20
  Advances to related parties and deemed to
    be distributed                                 23(c)        —                  —           (72,500)

Cash generated from operations                              41,907            92,942            95,745
  Interest received                                           266                574              665
  Income taxes paid                                         (7,382)           (16,313)         (19,496)

Net cash generated from operating activities                34,791            77,203            76,914

Cash flows from investing activities
Purchases of property, plant and equipment          29      (1,838)            (1,211)          (5,099)
Deposits paid for purchases of property, plant
  and equipment                                                (11)             (101)             (946)
Proceeds from disposal of property, plant and
  equipment                                                   236                  —                —
Proceeds from disposal of land use rights                       —              2,994             1,030
Purchases of financial assets at fair value
  through profit or loss                                        —               (806)               —
Proceeds from disposal of financial assets at
  fair value through profit or loss                             —                714              107
Increase in pledged bank deposits                           (1,667)            (4,377)          (3,850)

Net cash used in investing activities                       (3,280)            (2,787)          (8,758)




                                                     A-6
Combined cash flow statements (Continued)
For the three years ended 31 December 2004, 2005 and 2006

                                                               Year ended 31 December
                                           Notes     2004              2005              2006
                                                    RMB’000           RMB’000           RMB’000
Cash flows from financing activities
Drawdown of bank loans                               29,400            20,000            20,000
Repayments of bank loans                            (29,400)          (29,400)          (27,900)
Interest paid                                        (2,312)           (2,447)           (1,777)
Dividends paid                                      (10,000)          (40,000)          (72,500)

Net cash used in financing activities               (12,312)          (51,847)          (82,177)

Net increase/(decrease) in cash and cash
  equivalents                                        19,199            22,569           (14,021)
Cash and cash equivalents at 1 January               30,473            49,672            72,241

Cash and cash equivalents at 31 December             49,672            72,241            58,220

Analysis of balances of cash and cash
 equivalents
Cash and bank balances                               49,672            72,241            58,220




                                             A-7
Notes to the combined financial statements


1.   INTRODUCTION
     The combined financial statements of Changtian Plastic & Chemical Limited (the “Company”) and
     its subsidiaries (collectively the “Group”), which comprise the combined balance sheets of the
     Group as at 31 December 2004, 2005 and 2006, the combined income statements, combined
     statements of changes in equity and combined cash flow statements of the Group for the years
     ended 31 December 2004, 2005 and 2006 (the “Relevant Periods”) and a summary of significant
     accounting policies and other explanatory notes (the “Combined Financial Information”), have
     been prepared for inclusion in the Prospectus of the Company issued for the invitation (the
     “Invitation”) by the Company in respect of the issue of ordinary shares of S$0.05 each comprising
     160,000,000 new shares and 55,000,000 vendor shares at S$0.47 per share in the Company for
     cash.


2.   THE COMPANY
     The Company was incorporated in Bermuda on 29 March 2007 under the Bermuda Companies
     Act as an exempted company with limited liability under the name of Changtian Plastic &
     Chemical Limited.

     As at the date of incorporation, the authorised share capital of the Company was US$12,000
     divided into 120,000 ordinary shares of US$0.10 each. On 30 March 2007, 1 ordinary share of
     US$0.10 each in the capital of the Company was allotted and issued nil-paid to Eastline
     Investments Holding Limited (“Eastline Investments”), a company incorporated in the British
     Virgin Islands (the “BVI”) and wholly-owned by Mr. Yang Qingjin, a director of the Company.
     Pursuant to the written resolution dated 6 July 2007 in lieu of a special general meeting, 99
     ordinary shares of US$0.10 each in the capital of the Company was allotted and issued nil-paid
     to Eastline Investments.

     The registered office of the Company is located at Canon’s Court, 22 Victoria Street, Hamilton HM
     12, Bermuda. The principal place of business of the Company is located at 18 Xinsheng Road,
     Xinyang Industrial Zone, Haicang District, Xiamen City, Fujian Province, the People’s Republic of
     China (the “PRC”). The Company does not have a place of business in Singapore as at the date
     of these combined financial statements.

     The principal activities of the Company is investment holding. The principal activities of the
     Company’s subsidiaries are set out in note 3 to the combined financial statements.

     Pursuant to written resolutions dated 6 July 2007 in lieu of a special general meeting, the then sole
     shareholder of the Company approved, inter alia, the following:
     (a)   the change of denomination of every 120,000 ordinary shares of US$0.10 each into 120,000
           ordinary shares of S$0.154 each (the “Share Redenomination”);
     (b)   the sub-division of every one ordinary share of S$0.154 each after the Share
           Redenomination into 154 ordinary shares of S$0.001 each (the “Share Subdivision”); and
     (c)   the consolidation of every 50 ordinary share of S$0.001 each after the Share Subdivision
           into one ordinary share of S$0.05 each (the “Share Consolidation”).
     Pursuant to written resolutions dated 24 September 2007 in lieu of a special general meeting, the
     then sole shareholder of the Company approved, inter alia, the following:
     (a)   the adoption of a new set of Bye-laws and an employee share option scheme of the
           Company;




                                                  A-8
Notes to the combined financial statements (Continued)


2.   THE COMPANY (Continued)
     (b)   the increase in the authorised share capital of the Company from S$18,480 divided into
           369,600 ordinary shares of S$0.05 each to S$75 million divided into 1,500,000,000 ordinary
           shares of S$0.05 each;
     (c)   crediting as fully paid the 308 nil-paid shares registered in the name of Eastline Investments
           and the allotment and issue of 499,999,692 new shares to the shareholders of Jumbo
           Glories Limited (“Jumbo Glories”), as part of the Company’s restructuring exercise;
     (d)   the offer, allotment and issue of the 160,000,000 new shares, which when issued and fully
           paid-up, shall rank pari passu in all respects with the existing issued and paid-up shares of
           the Company;
     (e)   the offer for sale of up to 55,000,000 shares held by Goodwise Investments Limited
           (“Goodwise Investments”), CIM VIII Limited (“CIM VIII”), Longold Group Limited (“Longold
           Group”) and Hong Kong Investments Group Limited (“Hong Kong Investments”) in
           connection with the Invitation, such shares to rank pari passu in all respects with the existing
           issued and fully paid-up shares; and
     (f)   that authority be given to the directors of the Company, to:
           (i)    issue shares whether by ways of rights, bonus or otherwise (including shares as may
                  be issued pursuant to any Instrument (as defined below) made or granted by the
                  directors of the Company while this resolution is in force notwithstanding that the
                  authority conferred by this resolution may have ceased to be in force at the time of
                  issue of such shares); and/or
           (ii)   make or grant offers, agreements or options (collectively, “Instruments”) that might or
                  would require shares to be issued, including but not limited to the creation and issue
                  of warrants, debentures or other instruments convertible into shares of the Company,
                  at any time and upon such terms and conditions and for such purposes and to such
                  persons as the directors of the Company may in their absolute discretion deem fit,

           provided that the aggregate number of shares issued pursuant to such authority (including
           shares issued pursuant to any Instrument), shall not exceed 50% of the post-Invitation
           issued share capital, and provided further that the aggregate number of such shares to be
           offered other than on a pro rata basis in pursuance to such authority (including shares issued
           pursuant to any instrument) to the existing shareholders shall not exceed 20% of the
           post-Invitation issued share capital, and, unless revoked or varied by the Company in
           general meeting, such authority shall continue in force until the conclusion of the next annual
           general meeting of the Company or the date by which the next annual general meeting of the
           Company is required by law to be held, whichever is the earlier.

           For the purpose of this resolution and pursuant to Rules 806(3) and 806(4) of the Singapore
           Exchange Securities Trading Limited (the “SGX-ST”) Listing Manual (the “Listing Manual”),
           the “post-Invitation issued share capital” shall mean the enlarged issued share capital of the
           Company immediately after the Invitation, after adjusting for: (i) new shares arising from the
           conversion or exercise of any convertible securities; (ii) new shares arising from exercising
           share options or vesting of share awards outstanding or subsisting at the time such authority
           is given, provided the options or awards were granted in compliance with the Listing Manual;
           and (iii) any subsequent consolidation or sub-division of shares.




                                                   A-9
Notes to the combined financial statements (Continued)


2.   THE COMPANY (Continued) (Continued)

     Approval for crediting as fully paid the 308 nil-paid shares and the allotment and issue of
     499,999,692 new shares was received from the Bermuda Monetary Authority on 30 August 2007.

     As at the date of this report, the authorised share capital of the Company is S$75,000,000 divided
     into 1,500,000,000 ordinary shares of S$0.05 each. The issued and paid-up share capital of the
     Company is S$25,000,000 divided into 500,000,000 ordinary shares of S$0.05 each.


3.   THE REORGANISATION AND BASIS OF PRESENTATION
     A reorganisation exercise was undertaken by the Group to rationalise the corporate structure for
     the Invitation (the “Reorganisation”). The following steps were taken in the Reorganisation:

     3.1 Incorporation of Jumbo Glories
          Jumbo Glories was incorporated on 1 April 2005 in the BVI as an investment holding
          company with an authorised share capital of US$50,000 divided into 50,000 ordinary shares
          of US$1.00 each. On 3 January 2006, Ms. Chen Baohua, the spouse of Mr. Yang Qingjin and
          the sister of Mr. Chen Yongfu, a director of the Company, and Mr. Chen Yongfu subscribed
          for and was allotted and issued 2,215 and 2,785 shares of Jumbo Glories, representing
          44.3% and 55.7% of the total issued shares capital of Jumbo Glories, respectively.

          On 8 March 2007, Mr. Chen Yongfu transferred his entire interest in Jumbo Glories to
          Goodwise Investments, a company incorporated in the BVI and wholly-owned by Mr. Chen
          Yongfu, for the issue of 1 share in Goodwise Investments.

          On 8 March 2007, Ms. Chen Baohua transferred her entire interest in Jumbo Glories to
          Eastline Investments for the issue of 1 share in Eastline Investments. On the same date, Ms.
          Chen Baohua transferred her entire interest in Eastline Investments to Mr. Yang Qingjin.

          Thereafter, Eastline Investments, Goodwise Investments and Rowview Limited (“Rowview”),
          a company incorporated in the BVI and equally owned by Ms. Chen Baohua and Mr. Chen
          Yongfu, subscribed for and were allotted 1,181, 1,486 and 2,333 shares of Jumbo Glories for
          a subscription consideration of US$1,181, US$1,486 and US$18.5 million, respectively.

          Upon completion of the transfers and subscription, Eastline Investments, Goodwise
          Investments and Rowview respectively held 3,396, 4,271 and 2,333 shares in Jumbo
          Glories, representing 33.96%, 42.71% and 23.33% of the total issued share capital of Jumbo
          Glories.

     3.2 Incorporation of Xiamen Changtian Enterprise Co., Ltd.
         (“Changtian Enterprise”)
          On 21 July 2006, the Xiamen Foreign Investment Bureau                          granted the
          certificate of approval for the establishment by Jumbo Glories of Changtian Enterprise as a
          wholly foreign-owned enterprise in the PRC. Changtian Enterprise was established on 6
          December 2006 with a registered capital of US$18.0 million and with a business term of 30
          years from 6 December 2006 to 5 December 2036. Pursuant to a capital verification report
          on Changtian Enterprise’s registered capital dated 13 June 2007, the registered capital of
          Changtian Enterprise of US$18.0 million was fully paid by Jumbo Glories on 11 June 2007.




                                                A-10
Notes to the combined financial statements (Continued)


3.   THE REORGANISATION AND BASIS OF PRESENTATION (Continued)

     3.3 Acquisition of certain assets and business as well as liabilities of Xiamen Changtian
         Plastic & Chemical Co., Ltd.                      (“Xiamen Changtian”) and lease of
         premises
         On 14 April 2006, Jumbo Glories as purchaser, and Xiamen Changtian, a company
         established in the PRC and beneficially owned by Ms. Chen Baohua and Mr. Chen Yongfu,
         as seller, entered into an asset and business transfer agreement (the “Initial Asset and
         Business Transfer Agreement”) (as amended by a supplemental transfer agreement (the
         “Supplemental Transfer Agreement”) dated 21 May 2007) pursuant to which Jumbo Glories
         agreed to acquire all Xiamen Changtian’s business together with certain of its assets and
         liabilities, as further mentioned below (the “Changtian Assets and Business”). The total
         consideration for the acquisition was US$18.5 million, which is approximately RMB143.48
         million, arrived at based on the net asset value (as at 31 December 2005) of the Changtian
         Assets and Business, as valued by an independent valuer, Xiamen Dacheng Valuation
         Office (“Xiamen Dacheng”), in its report dated 30 March 2006, to be satisfied in full by cash
         payment. The Initial Asset and Business Transfer Agreement was approved by the Xiamen
         Foreign Investment Bureau on 21 July 2006.

         Due to the amendments to certain applicable PRC rules and regulations, the Certificate of
         Approval for Establishment of Enterprise with Foreign Investment in the PRC
                                             of Changtian Enterprise was obtained only on 6
         December 2006.

         Pursuant to the Supplemental Transfer Agreement, the parties agreed that the consideration
         payable under the Initial Asset and Business Transfer Agreement would remain at US$18.5
         million (or approximately RMB143.48 million), being the net asset value of the Changtian
         Assets and Business at 31 December 2005 as valued by Xiamen Dacheng. The parties also
         agreed that all profits generated by Xiamen Changtian for the period from 1 January 2007
         shall belong to Changtian Enterprise. In arriving at this agreement, the parties have
         considered the valuation of the Changtian Assets and Business as at 31 January 2007 of
         RMB155.14 million by Xiamen Dacheng in its valuation report dated 10 March 2007, and
         that after deducting the profits generated by Xiamen Changtian for the period from 1 January
         2007 to 31 January 2007 amounting to RMB10.93 million from the valuation of RMB155.14
         million, the net asset value of the Changtian Assets and Business as at 31 December 2006
         was RMB144.21 million.

         The valuation of the Changtian Assets and Business as at 31 January 2007 included the
         entire assets and liabilities of Xiamen Changtian but excluding the land and buildings owned
         by Xiamen Changtian which will be leased back to Changtian Enterprise, tax payable
         balances due to the relevant tax authorities and an amount of RMB72.5 million advanced to
         shareholders by Xiamen Changtian which will not be transferred to Changtian Enterprise.

         As agreed in the Supplemental Agreement, the effective date of the transfer was changed
         to 1 April 2007 and Changtian Enterprise assumed all rights, obligations and benefits in
         respect of the Changtian Assets and Business acquired from Xiamen Changtian with effect
         retroactively from 1 January 2007.

         The transfer of the Changtian Assets and Business by Xiamen Changtian was approved by
         its shareholders in general meetings held on 10 April 2006 and 22 May 2007. Completion of
         the acquisition of the Changtian Assets and Business took place on 11 June 2007 and
         Changtian Enterprise has made full payment of the consideration of US$18.5 million.


                                               A-11
Notes to the combined financial statements (Continued)


3.   THE REORGANISATION AND BASIS OF PRESENTATION (Continued)

     3.3 Acquisition of certain assets and business as well as liabilities of Xiamen Changtian
         Plastic & Chemical Co., Ltd.                      (“Xiamen Changtian”) and lease of
         premises (Continued)

         The Initial Asset and Business Transfer Agreement and the Supplemental Transfer
         Agreement have been ratified and approved by Xiamen Foreign Investment Bureau
                           on 21 July 2006 and 24 May 2007 respectively.

         In connection with the Initial Asset and Business Transfer Agreement, as amended by the
         Supplemental Transfer Agreement, the following agreements were entered into:

         (i)   Property lease agreement with Xiamen Changtian
               On 21 May 2007, Changtian Enterprise entered into a lease agreement with Xiamen
               Changtian (the “Changtian Lease Agreement”) (as amended by a supplemental lease
               agreement (the “Supplemental Lease Agreement”) dated 6 July 2007) to lease from
               Xiamen Changtian the premises and the underlying land use rights, at 18 Xinsheng
               Road, Xinyang Industrial Zone, Haicang District, Xiamen City, Fujian Province, the
               PRC where the Group’s production facilities for the production of adhesive tapes,
               release papers and 2-Acrylamido-2-methyl propane sulfonic acid (“2-A2MPS”) are
               situated.

               The lease is for a term of 20 years commencing from 1 January 2007 to 31 December
               2026, with a rent free period from 1 January 2007 to 31 March 2007 (as amended by
               the Supplemental Lease Agreement), at an annual rent of RMB2.3 million, as
               determined by a valuation report dated 5 March 2007 prepared by an independent
               valuer, LCH (Asia-Pacific) Surveyors Limited (“LCH Surveyors”). The annual rental is
               payable on a quarterly basis. However, pursuant to the Supplemental Lease
               Agreement, the parties agreed that no rent shall be payable for the period from 1
               January 2007 to 31 March 2007.

               Under the Changtian Lease Agreement, upon the expiry of the initial three year term,
               the lease may be terminated at the option of Changtian Enterprise by giving at least
               three months’ notice to Xiamen Changtian. The annual rental payable after the first
               three years of the lease is subject to review once every three years and may be
               adjusted based on an independent valuers’ valuation to ascertain prevailing market
               price.

               Further, under the Changtian Lease Agreement, Changtian Enterprise has the option
               to acquire the leased premises from Xiamen Changtian at the prevailing market price
               to be determined by independent valuers.

               The Changtian Lease Agreement was filed with the Xiamen Municipal Land Resources
               and Housing Administrative Bureau                              on 4 June 2007.




                                              A-12
Notes to the combined financial statements (Continued)


3.   THE REORGANISATION AND BASIS OF PRESENTATION (Continued)

     3.3 Acquisition of certain assets and business as well as liabilities of Xiamen Changtian
         Plastic & Chemical Co., Ltd.                      (“Xiamen Changtian”) and lease of
         premises (Continued)

         (ii)    Property lease agreement with Xiamen Brightforever Plastic Industrial Co., Ltd.
                                      (“Xiamen Brightforever”)
                 On 21 May 2007, Changtian Enterprise entered into a lease agreement with Xiamen
                 Brightforever (the “Brightforever Lease Agreement”) to lease from Xiamen
                 Brightforever, a company established in the PRC and Mr. Wong Chit Fu, a director of
                 the Company, has beneficial interest, the premises and the underlying land use rights,
                 at 16 Xinsheng Road, Xinyang Industrial Zone, Haicang District, Xiamen City, Fujian
                 Province, the PRC where the production facilities for biaxially-oriented polyamide
                 (“BOPA”) film are situated.

                 The lease is for a term of 20 years commencing from 1 April 2007 at an annual rent of
                 RMB1.2 million, as determined by a valuation report dated 5 March 2007 prepared by
                 LCH Surveyors. The annual rental is payable on a quarterly basis.

                 Under the Brightforever Lease Agreement, upon the expiry of the initial three year term,
                 the lease may be terminated at the option of Changtian Enterprise by giving at least
                 three months’ notice to Xiamen Brightforever. The annual rental payable after the first
                 three years of the lease is subject to review once every three years and may be
                 adjusted based on an independent valuers’ valuation to ascertain prevailing market
                 price.

                 Further, under the Brightforever Lease Agreement, Changtian Enterprise has the
                 option to acquire the leased premises from Xiamen Brightforever at the prevailing
                 market price to be determined by independent valuers.

                 The Brightforever Lease Agreement was filed with the Xiamen Municipal Land
                 Resources and Housing Administrative Bureau on 4 June 2007.

         (iii)   Non-competition undertaking
                 On 21 May 2007, Xiamen Changtian, the then shareholders of Xiamen Changtian,
                 namely Ms. Chen Baohua and Mr. Chen Yongfu and the directors, namely Mr. Chen
                 Yongfu, and Mr. Wong Chit Fu, and in addition Mr. Yang Qingjin, the husband of Ms.
                 Chen Baohua (collectively, the “Xiamen Changtian Covenantors”) executed a non-
                 competition undertaking (the “Non-Competition Undertaking”) in favour of Changtian
                 Enterprise.

                 Under the Non-Competition Undertaking, Xiamen Changtian and the Xiamen
                 Changtian Covenantors respectively undertook to Changtian Enterprise, inter alia, with
                 effect from 1 April 2007:
                 (a)   not to carry out or participate in any business which is similar to the Group’s
                       current business including, without limitation, the production, distribution and sale
                       of adhesive tapes, release papers, BOPA film and 2-A2MPS;
                 (b)   not to carry out any business which is in competition or may be in competition,
                       whether directly or indirectly, with the Group and not to in any way solicit any
                       employee, customer or distributor of the Group; and



                                                   A-13
Notes to the combined financial statements (Continued)


3.   THE REORGANISATION AND BASIS OF PRESENTATION (Continued)

     3.3 Acquisition of certain assets and business as well as liabilities of Xiamen Changtian
         Plastic & Chemical Co., Ltd.                      (“Xiamen Changtian”) and lease of
         premises (Continued)

         (iii)   Non-competition undertaking (Continued)
                 (c)   not to use the name, trademark or logo of the Group including but not limited to
                       the words “Changtian” or any of its trademarks, and not to use any name,
                       trademark or logo that are capable of being or likely to be confused with our
                       “Changtian” name.
                 On 12 June 2007, Xiamen Changtian changed its scope of business to engage only in
                 the lease of properties.


         (iv) Trademark transfer agreement
                 On 21 May 2007, Changtian Enterprise and Xiamen Changtian entered into a
                 trademark transfer agreement for the purpose of effecting the transfer of the registered
                 and trademarks pending registration under Xiamen Changtian’s name (the “Trademark
                 Transfer Agreement”), which Changtian Enterprise has acquired pursuant to the Initial
                 Asset and Business Transfer Agreement, as amended by the Supplemental Transfer
                 Agreement. Pursuant to the Trademark Transfer Agreement, the parties agreed to
                 jointly make an application to the Trademark Bureau of the State Administration for
                 Industry and Commerce                                  and to take the necessary steps
                 to effect the transfer of the trademarks to Changtian Enterprise (details of the
                 trademarks are set out in the section “Intellectual Property” of the Prospectus (the
                 “Trademarks”)). Notwithstanding that Xiamen Changtian would still be the registered
                 owner of the Trademarks prior to the date of the effective transfer of the respective
                 Trademarks, the parties agreed that Changtian Enterprise shall have the exclusive
                 rights to use the Trademarks until the registration of the transfers has been effected,
                 following which Changtian Enterprise would be the registered owner of the
                 Trademarks.

     3.4 Machinery acquisition agreement between Xiamen Brightforever and Changtian
         Enterprise
         On 21 May 2007, Changtian Enterprise entered into an acquisition agreement with Xiamen
         Brightforever (the “Machinery Acquisition Agreement”) to acquire from Xiamen Brightforever
         the plant and machinery used in the manufacture of BOPA film and certain office equipment
         and motor vehicles for a consideration of approximately RMB79.85 million. The
         consideration was determined based on the valuation report dated 8 March 2007 of the plant
         and machinery as at 31 December 2006, conducted by LCH Surveyors.

         In accordance with the Machinery Acquisition Agreement, an initial payment of 30% of the
         consideration has been paid to Xiamen Brightforever on 27 June 2007 with the balance to
         be settled in full within one year of the effective date of the Machinery Acquisition Agreement,
         being 1 April 2007.




                                                  A-14
Notes to the combined financial statements (Continued)


3.   THE REORGANISATION AND BASIS OF PRESENTATION (Continued)

     3.5 Subscription and issuance of exchangeable notes
         On 9 March 2007, Eastline Investments, Goodwise Investments, Ms. Chen Baohua, Mr.
         Chen Yongfu and Mr. Yang Qingjin (as guarantors), Rowview, Jumbo Glories and the
         pre-invitation investors, namely CIM VIII, Longold Group, Hong Kong Investments and East
         Fortune Development Limited (“East Fortune”), a company incorporated in the BVI and
         wholly owned by Mr. Yip Man King, an independent third party before this subscription
         (collectively, the “Pre-Invitation Investors”), entered into a subscription agreement (the
         “Subscription Agreement”) for the issuance of exchangeable notes amounting to US$18.5
         million (the “Exchangeable Notes”) by Rowview to the Pre-Invitation Investors.

         Under the Subscription Agreement, the parties agreed, inter alia that:
         (i)    the Exchangeable Notes were exchangeable into 2,333 shares of Jumbo Glories held
                by Rowview in the event of the listing of the Company on the SGX-ST, on the terms and
                conditions of the Subscription Agreement and the exchangeable note instrument dated
                7 June 2007 entered into by the parties to the Subscription Agreement; and
         (ii)   Eastline Investments, Goodwise Investments, Ms. Chen Baohua, Mr. Chen Yongfu and
                Mr. Yang Qingjin would guarantee, inter alia, the due payment by Rowview of the
                principal amount and interest accruing on the Exchangeable Notes (if any), as and
                when the same should become due and payable.

         On 7 June 2007, Rowview issued the Exchangeable Notes to the Pre-Invitation Investors
         and the aggregate consideration of US$18.5 million was satisfied in full by the Pre-Invitation
         Investors in cash.

         On 18 September 2007, the Pre-Invitation Investors exchanged their Exchangeable Notes
         for an aggregate of 2,333 shares of Jumbo Glories held by Rowview (the “Exchange”).

         Upon completion of the Exchange, Eastline Investments, Goodwise Investments, CIM VIII,
         Longold Group, Hong Kong Investments and East Fortune held respectively 33.96%,
         42.71%, 13.33%, 4.00%, 4.00% and 2.00% of the issued share capital of Jumbo Glories.

     3.6 Acquisition of Jumbo Glories and share swap
         On 24 September 2007, the Company, as purchaser, and the shareholders of Jumbo
         Glories, comprising Eastline Investments, Goodwise Investments and the Pre-Invitation
         Investors, as vendors, entered into a share swap agreement (the “Share Swap Agreement”).
         Pursuant to the Share Swap Agreement, the Company acquired the entire issued and
         paid-up share capital of Jumbo Glories comprising 10,000 shares of Jumbo Glories from the
         shareholders of Jumbo Glories for a consideration of S$25 million. The consideration for the
         said acquisition was satisfied by (i) the crediting as fully paid, at par, 308 nil-paid ordinary
         shares of S$0.05 each in the Company held by Eastline Investments; and (ii) the allotment
         and issue of an aggregate of 499,999,692 new ordinary shares of S$0.05 each in the capital
         of the Company, credited as fully paid.

         Upon completion of the Share Swap Agreement on 24 September 2007, Eastline
         Investments, Goodwise Investments, CIM VIII, Longold Group, Hong Kong Investments and
         East Fortune held respectively 33.96%, 42.71%, 13.33%, 4.00%, 4.00% and 2.00% of the
         issued share capital of the Company.




                                                A-15
Notes to the combined financial statements (Continued)


3.   THE REORGANISATION AND BASIS OF PRESENTATION (Continued)

     As at the date of this report, the Company has direct and indirect interests in the following
     subsidiaries, each of which is a limited liability company:
                                                                             Issued and
                                 Date and                                      paid-up
                                 place of          Principal activities         share/          Equity
                              incorporation/          and place of            registered       interest
     Name                     establishment            operations               capital          held

     Directly held:

     Jumbo Glories             1 April 2005,       Investment holding,        US$10,000         100%
                                  the BVI                the BVI

     Indirectly held:

     Changtian                21 July 2006,       Manufacture and sale US$18,000,000            100%
      Enterprise                the PRC             of adhesive tapes,
                                                 release papers, BOPA
                                                 film and 2-A2MPS, the
                                                          PRC

     The operations of the Group were originally carried out by Xiamen Changtian which was
     established with limited liability in the PRC on 2 February 1999.

     In accordance with the Asset and Business Transfer Agreement and the Supplemental Transfer
     Agreement, certain assets and liabilities of Xiamen Changtian were not transferred to the Group
     including (i) the leasehold interest in leasehold buildings; (ii) the leasehold interest in land use
     rights; (iii) the amounts due from the equity holders of Xiamen Changtian; and (iv) tax payable
     balances due to the relevant tax authorities. Items (i) to (iv) described above are retained by
     Xiamen Changtian and they are collectively referred to as the “Non-transferred Operations”.

     The Non-transferred Operations were not managed separately from the rest of Xiamen Changtian
     operations and no separate accounting records were maintained for their operations. Accordingly,
     they were recorded and reflected in the Combined Financial Information during the Relevant
     Periods up to the date immediately before the agreed effective date of the transfer of the
     Changtian Assets and Business, i.e., 31 December 2006. Pursuant to the Asset and Business
     Transfer Agreement and the Supplemental Transfer Agreement, the Non-transferred Operations
     retained by Xiamen Changtian are reflected in the Combined Financial Information as a
     distribution made to Xiamen Changtian on 31 December 2006.

     The Group is regarded as a continuing entity resulting from the Reorganisation since the assets
     and liabilities of Xiamen Changtian except for the Non-transferred Operations (collectively, the
     “Transferred Operations”) and the Non-transferred Operations were under common control before
     and immediately after the Reorganisation. Consequently, immediately after the Reorganisation,
     there was a continuation of the risks and benefits to the ultimate shareholders that existed prior
     to the Reorganisation. The Reorganisation has been accounted for as a reorganisation under
     common control in a manner similar to pooling of interests. Accordingly, the Combined Financial
     Information have been prepared on the basis of merger accounting, and comprise the financial
     statements of the subsidiaries and Xiamen Changtian which were under common control of the
     ultimate shareholders that existed prior to the Reorganisation.



                                                 A-16
Notes to the combined financial statements (Continued)


3.   THE REORGANISATION AND BASIS OF PRESENTATION (Continued)

     The Combined Financial Information have been prepared based on the audited financial
     statements of Xiamen Changtian for the Relevant Periods, and where appropriate, unaudited
     management accounts of the subsidiaries now comprising the Group. The directors of the
     respective companies of the Group, who are also the management of Xiamen Changtian, are
     responsible for preparing financial statements of Xiamen Changtian and the unaudited
     management accounts of the subsidiaries now comprising the Group for the Relevant Periods,
     which give a true and fair view.


4.   SIGNIFICANT ACCOUNTING POLICIES

     Statement of compliance
     The Combined Financial Information have been prepared in accordance with the Standards and
     Interpretations of the International Financial Reporting Standards (herein collectively referred to
     as “IFRS”) issued or adopted by the International Accounting Standards Board (the “IASB”) and
     the International Financial Reporting Interpretations Committee (“IFRIC”) of the IASB, and have
     been consistently applied throughout the Relevant Periods.


     Basis of preparation of the Combined Financial Information
     IFRS 1, First-time Adoption of International Financial Reporting Standards, has been applied in
     preparing these Combined Financial Information. These Combined Financial Information are the
     first set of financial statements prepared by the Group in accordance with IFRS.

     The accounting policies set out below have been applied consistently to all periods presented in
     these Combined Financial Information and in preparing an opening IFRS balance sheet at 1
     January 2004 for the purpose of the first set of IFRS financial statements. The accounting policies
     have been applied consistently by the Group.

     The Group has not early adopted the following IFRS that have been issued but are not yet
     effective. The directors of the Company anticipate that the adoption of such IFRS will not result
     in material financial impact to the Group’s Combined Financial Information.
     IAS 1 (Amendment)                     Capital Disclosures5
     IAS 23 (Revised)                      Borrowing Costs8
     IFRS 7                                Financial Instruments: Disclosures5
     IFRS 8                                Operating Segments8
     IFRIC 7                               Applying the Restatement Approach under IAS 29 Financial
                                            Reporting in Hyperinflationary Economies1
     IFRIC 8                               Scope of IFRS 22
     IFRIC 9                               Reassessment of Embedded Derivatives3
                                                                                        4
     IFRIC 10                              Interim Financial Reporting and Impairment
     IFRIC 11                              Group and Treasury Share Transactions6
     IFRIC 12                              Service Concession Arrangements7
     IFRIC 13                              Customer Loyalty Programmes9
     IFRIC 14                              IAS 19 — The Limit on a Defined Benefit Asset, Minimum
                                            Funding Requirements, and their Interaction7




                                                 A-17
Notes to the combined financial statements (Continued)


4.   SIGNIFICANT ACCOUNTING POLICIES (Continued)

     Basis of preparation of the Combined Financial Information (Continued)

     Notes:
     1   Effective for annual periods beginning on or after 1 March 2006
     2   Effective for annual periods beginning on or after 1 May 2006
     3   Effective for annual periods beginning on or after 1 June 2006
     4   Effective for annual periods beginning on or after 1 November 2006
     5   Effective for annual periods beginning on or after 1 January 2007
     6   Effective for annual periods beginning on or after 1 March 2007
     7   Effective for annual periods beginning on or after 1 January 2008
     8   Effective for annual periods beginning on or after 1 January 2009
     9   Effective for annual periods beginning on or after 1 July 2008

     The Combined Financial Information have been prepared in accordance with the significant
     accounting policies set out below and these accounting policies are in accordance with IFRS. The
     Combined Financial Information have been prepared under the historical cost convention except
     for the financial assets at fair value through profit or loss which are stated at their fair values. The
     measurement bases are fully described in the accounting policies below. The preparation of the
     Combined Financial Information in conformity with IFRS requires the use of certain critical
     accounting estimates. It also requires management to exercise its judgment in the process of
     applying the Group’s accounting policies. The areas involving higher degree of judgment or
     complexity, or areas where assumptions and estimates are significant to the Combined Financial
     Information, are disclosed in note 27. The principal accounting policies adopted are as follows:

     4.1 Subsidiaries
              Subsidiaries are entities (including special purpose entities) over which the Group has the
              power to control the financial and operating policies. The existence and effect of potential
              voting rights that are currently exercisable or convertible are considered when assessing
              whether the Group controls another entity. Subsidiaries are fully consolidated from the date
              on which control is transferred to the Group. They are excluded from consolidation from the
              date that control ceases.

              Except for the Reorganisation refer to in note 3 above which has been accounted for by
              regarding the Company as being the holding company of the subsidiaries from the beginning
              of the earliest period presented, or since the date when the combining companies first came
              under the control of the controlling shareholders, where it is a shorter period, the purchase
              method of accounting is used to account for the acquisition of subsidiaries by the Group. The
              cost of an acquisition is measured as the fair value of the assets given, equity instruments
              issued and liabilities incurred or assumed at the date of exchange, plus costs directly
              attributable to the acquisition. Identifiable assets acquired and liabilities and contingent
              liabilities assumed in a business combination are measured initially at their fair values at the
              acquisition date, irrespective of the extent of any minority interests. The excess of the cost
              of acquisition over the fair value of the Group’s share of the identifiable net assets acquired
              is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets
              of the subsidiary acquired, the difference is recognised directly in the income statement.

              Inter-group transactions, balances and unrealised gains on transactions between group
              companies are eliminated in preparing the Combined Financial Information. Unrealised
              losses are also eliminated unless the transaction provides evidence of an impairment of the
              asset transferred.


                                                         A-18
Notes to the combined financial statements (Continued)


4.   SIGNIFICANT ACCOUNTING POLICIES (Continued)


     4.2 Revenue recognition
         Revenue is measured at the fair value of the consideration received or receivable. Provided
         it is probable that the economic benefits will flow to the Group and the revenue and costs,
         if applicable, can be measured reliably, revenue is recognised as follows:

         Sales of goods are recognised upon transfer of the significant risks and rewards of
         ownership to the customer. This is usually taken as the time when the goods are delivered
         and the customer has accepted the goods.

         Interest income is recognised on a time-proportion basis using the effective interest method.


     4.3 Property, plant and equipment
         Property, plant and equipment, other than construction in progress, are stated at cost less
         accumulated depreciation and impairment losses. The cost of an asset comprises its
         purchase price and any directly attributable costs of bringing the asset to its working
         condition and location for its intended use. Subsequent costs are included in the asset’s
         carrying amount or recognised as a separate asset, as appropriate, 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. All other costs, such as repairs and maintenance are
         charged to the income statement during the financial period in which they are incurred.

         Depreciation is provided to write off the cost of the property, plant and equipment, less their
         estimated residual values, over their estimated useful lives, using the straight-line method,
         at the following rate per annum:

         Leasehold buildings                             The shorter of the lease terms and 30 years
         Plant and machinery                             5 to 12 years
         Furniture, fixtures and office equipment        5 to 12 years
         Motor vehicles                                  12 years

         The assets’ residual values and useful lives are reviewed and adjusted if appropriate, at
         each balance sheet date.

         The gain or loss arising on retirement or disposal is determined as the difference between
         the sales proceeds and the carrying amount of the asset and is recognised in the combined
         income statements.

         Construction in progress, which represents buildings under construction, and plant and
         machinery pending installation, is stated at cost less impairment losses. Cost comprises
         direct costs incurred during the periods of construction, installation and testing. No
         depreciation is provided on construction in progress. Construction in progress is reclassified
         to the appropriate category of property, plant and equipment and depreciation commences
         when the construction work is completed and the asset is ready for use.


     4.4 Land use rights
         Land use rights represent up-front payments to acquire long term interests in the usage of
         land. The payments are stated at cost less accumulated amortisation and accumulated
         impairment losses. Amortisation is calculated on straight-line basis over the lease terms.

                                                A-19
Notes to the combined financial statements (Continued)


4.   SIGNIFICANT ACCOUNTING POLICIES (Continued)


     4.5 Impairment on assets
         Property, plant and equipment and land use rights are subject to impairment testing.

         An impairment loss is recognised as an expense immediately for the amount by which the
         asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the
         higher of fair value, reflecting market conditions less costs to sell, and value in use. In
         assessing value in use, the estimated future cash flows are discounted to their present value
         using a pre-tax discount rate that reflects current market assessment of time value of money
         and the risk specific to the asset.

         For the purposes of assessing impairment, where an asset does not generate cash inflows
         largely independent from those from other assets, the recoverable amount is determined for
         the smallest group of assets that generate cash inflows independently (i.e. a cash-
         generating unit). As a result, some assets are tested individually for impairment and some
         are tested at cash-generating unit level.

         Impairment loss recognised for cash-generating units are charged on a pro rata basis to the
         assets in the cash generating unit, except that the carrying value of an asset will not be
         reduced below its individual fair value less cost to sell, or value in use, if determinable.

         An impairment loss is reversed if there has been a favourable change in the estimates used
         to determine the asset’s recoverable amount and only to the extent that the asset’s carrying
         amount does not exceed the carrying amount that would have been determined, net of
         depreciation or amortisation, if no impairment loss had been recognised.


     4.6 Leases
         Leases where substantially all the rewards and risks of ownership of assets remain with the
         lessor are accounted for as operating leases. Where the Group has the use of asset’s held
         under operating leases, payments made under the leases are charged to the combined
         income statements on a straight line basis over the lease terms except where an alternative
         basis is more representative of the pattern of benefits to be derived from the leased assets.

     4.7 Financial assets
         The Group’s accounting policies for financial assets are set out below.

         The Group’s financial assets include loans and receivables and financial assets at fair value
         through profit or loss. They are included in the combined balance sheets under the line items
         such as “Trade receivables”, “Deposits and other receivables” and “Financial assets at fair
         value through profit or loss”.

         Management determines the classification of its financial assets at initial recognition
         depending on the purpose for which the financial assets were acquired and where allowed
         and appropriate, re-evaluates this designation at every reporting date.

         All financial assets are recognised when, and only when, the Group becomes a party to the
         contractual provisions of the instrument. When financial assets are recognised initially, they
         are measured at fair value, plus, in the case of investments not at fair value through profit
         or loss, directly attributable transaction costs.



                                               A-20
Notes to the combined financial statements (Continued)


4.   SIGNIFICANT ACCOUNTING POLICIES (Continued)

     4.7 Financial assets (Continued)

         Derecognition of financial assets occurs when the rights to receive cash flows from the
         investments expire or are transferred and substantially all of the risks and rewards of
         ownership have been transferred. At each balance sheet date, financial assets are reviewed
         to assess whether there is objective evidence of impairment. If any such evidence exists,
         impairment loss is determined and recognised based on the classification of the financial
         asset.

         (i)    Loans and receivables
                Loans and receivables are non-derivative financial assets with fixed or determinable
                payments that are not quoted in an active market. Loans and receivables are
                subsequently measured at amortised cost using the effective interest method, less any
                impairment losses. Amortised cost is calculated taking into account any discount or
                premium on acquisition and includes fees that are an integral part of the effective
                interest rate and transaction cost.

         (ii)   Financial assets at fair value through profit or loss
                Financial assets at fair value through profit or loss includes financial assets held for
                trading and financial assets designated upon initial recognition as at fair value through
                profit or loss.

                Financial assets are classified as held for trading if they are acquired for the purpose
                of selling in the near term. Derivatives, including separated embedded derivatives are
                also classified as held for trading unless they are designated as effective hedging
                instruments or financial guarantee contracts.

                Subsequent to initial recognition, the financial assets included in this category are
                measured at fair value with changes in fair value recognised in the combined income
                statements.

         Impairment of financial assets
         At each balance sheet date, financial assets other than at fair value through profit or loss are
         reviewed to determine whether there is any objective evidence of impairment. If there is
         objective evidence that an impairment loss on loans and receivables carried at amortised
         cost has been incurred, the amount of the loss is measured as the difference between the
         asset’s carrying amount and the present value of estimated future cash flows (excluding
         future credit losses that have not been incurred) discounted at the financial asset’s original
         effective interest rate (i.e. the effective interest rate computed at initial recognition). The
         amount of the loss is recognised in profit or loss of the period in which the impairment
         occurs.

         If, in subsequent period, the amount of the impairment loss decreases and the decrease can
         be related objectively to an event occurring after the impairment was recognised, the
         previously recognised impairment loss is reversed to the extent that it does not result in a
         carrying amount of the financial asset exceeding what the amortised cost would have been
         had the impairment not been recognised at the date the impairment is reversed. The amount
         of the reversal is recognised in profit or loss of the period in which the reversal occurs.




                                                 A-21
Notes to the combined financial statements (Continued)


4.   SIGNIFICANT ACCOUNTING POLICIES (Continued)


     4.8 Inventories
         Inventories are carried at the lower of cost and net realisable value. Cost is determined using
         the weighted average basis, and in the case of work in progress and finished goods,
         comprise direct materials, direct labour and an appropriate proportion of overheads. Net
         realisable value is the estimated selling price in the ordinary course of business less the
         estimated cost of completion and applicable selling expenses.


     4.9 Accounting for income tax
         Income tax comprises current and deferred tax.

         Current income tax assets and/or liabilities comprise those obligations to, or claims from,
         fiscal authorities relating to the current or prior reporting period, that are unpaid at the
         balance sheet date. They are calculated according to the tax rates and tax laws applicable
         to the fiscal periods to which they relate, based on the taxable profit for the year. All changes
         to current tax assets or liabilities are recognised as a component of tax expense in the
         combined income statements.

         Deferred tax is calculated using the liability method on temporary differences at the balance
         sheet date between the carrying amounts of assets and liabilities in the financial statements
         and their respective tax bases. Deferred tax liabilities are generally recognised for all taxable
         temporary differences. Deferred tax assets are recognised for all deductible temporary
         differences, tax losses available to be carried forward as well as other unused tax credits,
         to the extent that it is probable that taxable profit will be available against which the
         deductible temporary differences, unused tax losses and unused tax credits can be utilised.

         Deferred tax is calculated, without discounting, at tax rates that are expected to apply in the
         period the liability is settled or the asset realised, provided they are enacted or substantively
         enacted at the balance sheet date.


     4.10 Cash and cash equivalents
         For the purpose of the combined cash flow statements, cash and cash equivalents comprise
         cash on hand and in banks and time deposit with original maturity of three months or less,
         less bank overdrafts which are repayable in demand and form an integral part of the Group’s
         cash management.

         For the purpose of the combined balance sheets classification, cash and bank balances
         comprise cash on hand and at banks including term deposits which are not restricted as to
         use.


     4.11 Share capital
         Ordinary shares are classified as equity. Share capital is determined using the nominal value
         of shares that have been issued.

         Any transaction costs associated with the issuing of shares deducted from equity (net of any
         related income tax benefits) to the extent they are incremental costs directly attributable to
         the equity transaction.



                                                 A-22
Notes to the combined financial statements (Continued)


4.   SIGNIFICANT ACCOUNTING POLICIES (Continued)


     4.12 Retirement benefits scheme
          Pursuant to the relevant regulations of the PRC government, the Group participates in a
          local municipal government retirement benefits scheme (the “Scheme”), whereby the
          subsidiary of the Company in the PRC is required to contribute a certain percentage of the
          basic salaries of its employees to the Scheme to fund their retirement benefits. The local
          municipal government undertakes to assume the retirement benefits obligations of all
          existing and future retired employees of the subsidiary of the Company. The only obligation
          of the Group with respect to the Scheme is to pay the ongoing required contributions under
          the Scheme mentioned above. Contributions under the Scheme are charged to the
          combined income statements as incurred. There are no provisions under the Scheme
          whereby forfeited contributions may be used to reduce future contributions.

     4.13 Financial liabilities
          The Group’s financial liabilities include bank loans and trade, bills and other payables. They
          are included in balance sheet line items as bank loans, secured under current or non-current
          liabilities or trade and bills payables and other payables.

          Financial liabilities are recognised when the Group becomes a party to the contractual
          provisions of the instrument. All interest related charges are recognised as an expense in
          finance costs in the combined income statements.

          A financial liability is derecognised when the obligation under the liability is discharged or
          cancelled or expires.

          Borrowings
          Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings
          are subsequently stated at amortised cost; any difference between the proceeds (net of
          transaction costs) and the redemption value is recognised in the combined income
          statements over the period of the borrowings using the effective interest method.

          Borrowings are classified as current liabilities unless the Group has an unconditional right to
          defer settlement of the liability for at least 12 months after the balance sheet date.

          Trade payables
          Trade payables are recognised initially at their fair value and subsequently measured at
          amortised cost, using the effective interest method.


     4.14 Provisions and contingent liabilities
          Provisions are recognised when the Group has a present obligation (legal or constructive)
          as a result of a past event, and it is probable that an outflow of economic benefits will be
          required to settle the obligation and a reliable estimate can be made. Where the time value
          of money is material, provisions are stated at the present value of the expenditure expected
          to settle the obligation.

          All provisions are reviewed at each balance sheet date and adjusted to reflect the current
          best estimate.




                                                 A-23
Notes to the combined financial statements (Continued)


4.   SIGNIFICANT ACCOUNTING POLICIES (Continued)

     4.14 Provisions and contingent liabilities (Continued)

          Where it is not probable that an outflow of economic benefits will be required, or the amount
          cannot be estimated reliably, the obligation is disclosed as a contingent liability, unless the
          probability of outflow of economic benefits is remote. Possible obligations, whose existence
          will only be confirmed by the occurrence or non-occurrence of one or more uncertain future
          events not wholly within the control of the Group are also disclosed as contingent liabilities
          unless the probability of outflow of economic benefits is remote.

          Contingent liabilities are recognised in the course of the allocation of purchase price to the
          assets and liabilities acquired in a business combination. They are initially measured at fair
          value at the date of acquisition and subsequently measured at the higher of the amount that
          would be recognised in a comparable provision as described above and the amount initially
          recognised less any accumulated amortisaton, if appropriate.


     4.15 Financial guarantee issued
          A financial guarantee contract is a contract that requires the issuer (or guarantor) to make
          specified payments to reimburse the holder for a loss it incurs because a specified debtor
          fails to make payment when due in accordance with the terms of a debt instrument.

          Where the Group issues a financial guarantee, the fair value of the guarantee is initially
          recognised as deferred income within other payables. Where consideration is received or
          receivable for the issuance of the guarantee, the consideration is recognised in accordance
          with the Group’s policies applicable to that category of asset. Where no such consideration
          is received or receivable, an immediate expense is recognised in profit or loss on initial
          recognition of any deferred income.

          The amount of the guarantee initially recognised as deferred income is amortised in profit or
          loss over the term of the guarantee as income from financial guarantees issued. In addition,
          provisions are recognised if and when it becomes probable that the holder of the guarantee
          will call upon the Group under the guarantee and the amount of that claim on the Group is
          expected to exceed the current carrying amount i.e. the amount initially recognised less
          accumulated amortisation, where appropriate.


     4.16 Government grants
          Grants from the government are recognised at their fair value where there is a reasonable
          assurance that the grants will be received and the Group will comply with all attached
          conditions. Government grants relating to costs are deferred and recognised as other
          income in the combined income statements over the period necessary to match them with
          the costs that they are intended to compensate. Government grants relating to the
          purchasing of property, plant and equipment are included in non-current liabilities as
          deferred government grants and are recognised in the income statement on a straight-line
          basis over the expected lives of the related assets.




                                                 A-24
Notes to the combined financial statements (Continued)


4.   SIGNIFICANT ACCOUNTING POLICIES (Continued)

     4.17 Segment report
         In accordance with the Group’s internal financial reporting the Group has determined that
         business segments be presented as the primary reporting format.

         In respect of business segment reporting, unallocated costs represent corporate expenses.
         Segment assets consist primarily of property, plant and equipment, land use rights,
         inventories, receivables and operating cash. Segment liabilities comprise operating liabilities
         and exclude items such as taxation and corporate borrowings.

         Capital expenditure comprises additions to property, plant and equipment and land use
         rights.

         In respect of geographical segment reporting, revenue is based on the country in which the
         customer is located and total assets and capital expenditure are where the assets are
         located.


     4.18 Related parties
         A party is considered to be related to the Group if:
         (i)     directly, or indirectly through one or more intermediaries, the party (1) controls, is
                 controlled, or is under common control with, the Company/Group; (2) has an interest
                 in the Company that gives it significant influence over the Company/Group; or (3) has
                 joint control over the Company/Group;
         (ii)    the party is an associate;
         (iii)   the party is a jointly-controlled entity;
         (iv) the party is a member of the key management personnel of the Company or its parent;
         (v)     the party is a close member of the family of any individual referred to in (i) or (iv);
         (vi) the party is an entity that is controlled, jointly-controlled or significantly influenced by or
              for which significant voting power in such entity resides with, directly or indirectly, any
              individual referred to in (iv) or (v); or
         (vii) the party is a post-employment benefit plan for the benefit of employees of the
               Company/Group, or of any entity that is a related party of the Company/Group.

     4.19 Foreign currencies

         (i)     Functional and presentation currency
                 Items included in the Combined Financial Information of each of the Group’s entities
                 are measured using the currency of the primary economic environment in which the
                 entity operates (the “functional currency”). The Combined Financial Information are
                 presented in Renminbi (RMB), which is the Company’s functional and presentation
                 currency.




                                                    A-25
Notes to the combined financial statements (Continued)


4.   SIGNIFICANT ACCOUNTING POLICIES (Continued)

     4.19 Foreign currencies (Continued)

         (ii)    Transactions and balances
                 Foreign currency transactions are translated into the functional currency using the
                 exchange rates prevailing at the dates of the transactions. Foreign exchange gains and
                 losses resulting from the settlement of such transactions and from the transaction at
                 year-end exchange rates of monetary assets and liabilities denominated in foreign
                 currencies are recognised in the combined income statements.

         (iii)   Group companies
                 The results and financial positions of all the group entities (none of which has the
                 currency of a hyperinflationary economy) that have presentation currencies different
                 from the presentation currency of the Company are translated into the Company’s
                 presentation currency as follows:
                 (a)   assets and liabilities for each combined balance sheet presented are translated
                       at the closing rate at the date of that combined balance sheet;
                 (b)   income and expenses for each combined income statement are translated at
                       average exchange rates (unless this average is not a reasonable approximation
                       of the cumulative effect of the rates prevailing on the transaction dates, in which
                       case income and expenses are translated at the dates of transaction); and
                 (c)   all resulting exchange differences are recognised as a separate component of
                       equity.


     4.20 Borrowing costs
         All borrowing costs are expensed as incurred.




                                                  A-26
Notes to the combined financial statements (Continued)


5.   REVENUE AND OTHER INCOME
     Revenue represents total invoiced value of goods supplied, net of value added taxes, allowances
     for returns and trade discounts. Revenue and other income recognised during the year are as
     follows:

                                                                           Year ended 31 December
                                                               2004                 2005                     2006
                                                              RMB’000             RMB’000                   RMB’000
     Revenue
     Sale of goods                                             223,246                412,001                540,013

     Other income
     Interest income                                               266                     574                    665
     Government grants *                                             —                      —                   1,300
     Gain on disposal of land use rights **                          —                   1,431                      —
     Fair value gains on financial assets at fair
       value through profit or loss                                  —                       8                       7
     Others                                                           1                      3                       8

                                                                   267                   2,016                  1,980

     *    The amount represents grants received from the PRC government in relation to the Group’s efforts in developing the
          2-A2MPS products.
     **   The amount comprises a deduction of land appreciation tax of approximately RMB750,000 which is included in
          accrued liabilities and other payables in the combined balance sheets.


6.   SEGMENT INFORMATION
     The Group is organised into four main business segments:

     Adhesive tapes — manufacture and sale of adhesive tapes such as biaxially-oriented
     polypropylene tape, stationary tape, masking tape, double-sided tape and kraft paper tape for
     industrial, commercial and customer uses.

     Release papers — manufacture and sale of release papers such as glassine silicon coated paper
     and clay coat kraft release paper for use as a protective backing on adhesive paper.

     BOPA film — manufacture and sale of BOPA film for packaging in many industries, such as food,
     pharmaceutical and medical industries and in electrical industrial materials.

     2-A2MPS — manufacture and sale of 2-A2MPS for oil industry and water treatment industry.

     The Group’s revenue and assets are principally attributable to a single geographical region, which
     is the PRC, excluding Hong Kong and Macau.

     There are no intersegment sales between the respective segments.




                                                          A-27
Notes to the combined financial statements (Continued)


6.   SEGMENT INFORMATION (Continued)

                                                           Year ended 31 December 2004
                                           Adhesive     Release
                                            tapes        papers     BOPA film   2-A2MPS     Total
                                           RMB’000      RMB’000      RMB’000    RMB’000    RMB’000
     Revenue
     Net sales to external customers       156,179       55,771        —         11,296    223,246

     Segment results                        38,880       12,490        —          3,806     55,176

     Unallocated income                                                                       267
     Unallocated expenses                                                                   (1,084)

     Operating profit                                                                       54,359
     Finance costs                                                                          (2,312)

     Profit before income tax                                                               52,047
     Income tax expense                                                                     (7,848)

     Profit for the year                                                                    44,199

     Capital expenditure                       219            —        —            48        267
     Unallocated                                                                             2,042

     Total capital expenditure                                                               2,309

     Depreciation and amortisation           2,647           418       —           943       4,008
     Unallocated                                                                              771

     Total depreciation and amortisation                                                     4,779

     Other non-cash expense                     —             —        —             —          —


                                                             As at 31 December 2004
                                           Adhesive     Release
                                            tapes        papers     BOPA film   2-A2MPS     Total
                                           RMB’000      RMB’000      RMB’000     RMB’000   RMB’000
     Segment assets                         93,139       27,409        —         15,072    135,620
     Unallocated assets                                                                     71,657

     Total assets                                                                          207,277

     Segment liabilities                    28,995       15,165        —          2,328     46,488
     Unallocated liabilities                                                                44,949

     Total liabilities                                                                      91,437




                                                      A-28
Notes to the combined financial statements (Continued)


6.   SEGMENT INFORMATION (Continued)

                                                           Year ended 31 December 2005
                                           Adhesive     Release
                                            tapes        papers     BOPA film   2-A2MPS     Total
                                           RMB’000      RMB’000      RMB’000    RMB’000    RMB’000
     Revenue
     Net sales to external customers       229,107       98,301      64,596      19,997    412,001

     Segment results                        61,293       27,706      16,019       9,248    114,266

     Unallocated income                                                                      2,016
     Unallocated expenses                                                                   (1,614)

     Operating profit                                                                      114,668
     Finance costs                                                                          (2,447)

     Profit before income tax                                                              112,221
     Income tax expense                                                                    (17,080)

     Profit for the year                                                                    95,141

     Capital expenditure                        82            —          —         746        828
     Unallocated                                                                              394

     Total capital expenditure                                                               1,222

     Depreciation and amortisation           2,661           419         —         943       4,023
     Unallocated                                                                              828

     Total depreciation and amortisation                                                     4,851

     Other non-cash expense                     —             —          —           —          —


                                                             As at 31 December 2005
                                           Adhesive     Release
                                            tapes        papers     BOPA film   2-A2MPS     Total
                                           RMB’000      RMB’000      RMB’000     RMB’000   RMB’000
     Segment assets                        106,032       34,693      20,215      17,878    178,818
     Unallocated assets                                                                     92,215

     Total assets                                                                          271,033

     Segment liabilities                    38,779       13,586      11,483       1,729     65,577
     Unallocated liabilities                                                                34,475

     Total liabilities                                                                     100,052




                                                      A-29
Notes to the combined financial statements (Continued)


6.   SEGMENT INFORMATION (Continued)

                                                           Year ended 31 December 2006
                                           Adhesive     Release
                                            tapes        papers     BOPA film   2-A2MPS     Total
                                           RMB’000      RMB’000      RMB’000    RMB’000    RMB’000
     Revenue
     Net sales to external customers       269,168       129,454      102,850    38,541    540,013

     Segment results                        86,413           39,891    29,277    20,936    176,517

     Unallocated income                                                                      1,980
     Unallocated expenses                                                                   (1,622)

     Operating profit                                                                      176,875
     Finance costs                                                                          (1,777)

     Profit before income tax                                                              175,098
     Income tax expense                                                                    (26,156)

     Profit for the year                                                                   148,942

     Capital expenditure                        70               —         —      4,771      4,841
     Unallocated                                                                              359

     Total capital expenditure                                                               5,200

     Depreciation and amortisation           2,738             418         —       985       4,141
     Unallocated                                                                              882

     Total depreciation and amortisation                                                     5,023

     Other non-cash expense                     —                —         —         —          —


                                                             As at 31 December 2006
                                           Adhesive     Release
                                            tapes        papers     BOPA film   2-A2MPS     Total
                                           RMB’000      RMB’000      RMB’000     RMB’000   RMB’000
     Segment assets                         87,574       33,685       25,654     19,900    166,813
     Unallocated assets                                                                     61,739

     Total assets                                                                          228,552

     Segment liabilities                    32,123           6,048     8,634      1,692     48,497
     Unallocated liabilities                                                                22,605

     Total liabilities                                                                      71,102




                                                      A-30
Notes to the combined financial statements (Continued)


7.   OPERATING PROFIT
     The Group’s operating profit is arrived at after charging:
                                                                     Year ended 31 December
                                                               2004           2005          2006
                                                              RMB’000       RMB’000        RMB’000
     Operating lease charges: property, plant and
      equipment                                                    —          3,600         5,700
     Cost of inventories recognised as expense                161,343       287,332       351,185
     Depreciation                                               4,645         4,738         4,931
     Amortisation of land use rights *                            134           113            92
     Directors’ remuneration:
         Fees                                                      —             —             —
         Other emoluments                                         234           244           329
     Staff costs (excluding directors’ remuneration)            3,819         6,068         7,124
     Retirement scheme contribution                               280           415           471

     Total staff costs                                          4,333         6,727         7,924

     Cost of inventories recognised as expense includes the
      following expenses which are also included in the
      respective total amounts separately disclosed above
      for each of these expenses:
           Depreciation                                         4,004         4,016         4,137
           Staff costs                                          1,939         3,297         3,713

     *     Included in administrative expenses.


8.   FINANCE COSTS
                                                                     Year ended 31 December
                                                               2004           2005          2006
                                                              RMB’000       RMB’000        RMB’000
     Interest charges on:
         Bank loans wholly repayable within five years         2,312         2,447         1,777



9.   INCOME TAX EXPENSE
                                                                     Year ended 31 December
                                                               2004           2005          2006
                                                              RMB’000       RMB’000        RMB’000
     Current tax:
         PRC income tax                                        7,848         17,080        26,156




                                                       A-31
Notes to the combined financial statements (Continued)


9.    INCOME TAX EXPENSE (Continued)

      The provision for PRC income tax is calculated based on the statutory income tax rate of 15% of
      the assessable income of Xiamen Changtian as determined in accordance with the relevant PRC
      income tax rules and regulations for the Relevant Periods. Xiamen Changtian’s branch operated
      in Shanghai, the PRC was subject to the statutory income tax rate of 33% of its assessable
      income.

      No deferred tax has been provided as the Group did not have any significant temporary
      differences which gave rise to a deferred tax asset or liability at 31 December 2004, 2005 and
      2006.

      Reconciliation between tax expense and accounting profit at applicable tax rates is as follows:
                                                                        Year ended 31 December
                                                               2004             2005              2006
                                                              RMB’000          RMB’000       RMB’000
      Profit before income tax                                 52,047          112,221           175,098

      Tax at the applicable tax rate at 15%                     7,807           16,833            26,265
      Tax effect of non-deductible expenses                        2                —                 —
      Effect on different tax rates of branch operating in
        other jurisdictions                                       39                30                —
      Tax effect of unused tax losses not recognised               —                —                    5
      Others                                                       —               217              (114)

      Income tax expense                                        7,848           17,080            26,156



10. DIVIDENDS
      Dividends disclosed during the Relevant Periods represented dividends declared and paid by
      Xiamen Changtian to its then equity owners. The rates of dividend and the number of shares
      ranking for dividends are not presented as such information are not meaningful.

                                                                     Year ended 31 December
                                                               2004           2005          2006
                                                              RMB’000       RMB’000        RMB’000
      Interim dividends                                        10,000           40,000           72,500



11.   EARNINGS PER SHARE
      Basic earnings per share is calculated based on profit attributable to equity holders of the
      Company for the respective years and the pre-Invitation share capital of the Company. The
      Company’s pre-Invitation share capital of 500,000,000 shares were assumed to be in issue
      throughout the entire period presented.

      As there are no dilutive potential ordinary shares during each of the years covered in the
      Combined Financial Information, no diluted earnings per share is presented.




                                                       A-32
Notes to the combined financial statements (Continued)


12. PROPERTY, PLANT AND EQUIPMENT
                                                            Furniture,
                                                             fixtures
                                    Leasehold   Plant and   and office    Motor     Construction
                                    buildings   machinery   equipment    vehicles   in progress     Total
                                     RMB’000    RMB’000      RMB’000     RMB’000      RMB’000      RMB’000
    At 1 January 2004
    Cost                              30,834      42,514        561        714           324        74,947
    Accumulated depreciation            (894)     (3,439)       (78)       (93)           —         (4,504)

    Net book amount                   29,940      39,075        483        621           324        70,443

    Year ended 31 December
      2004
    Opening net book amount           29,940      39,075        483         621           324       70,443
    Additions                             26         251         83           2         1,947        2,309
    Transfer in/(out)                  1,218         412         —           —         (1,630)          —
    Disposal                              —           —          —         (236)           —          (236)
    Depreciation charge               (1,039)     (3,456)       (92)        (58)           —        (4,645)

    Closing net book amount           30,145      36,282        474        329           641        67,871

    At 31 December 2004 and
      1 January 2005
    Cost                              32,078      43,177        644        393           641        76,933
    Accumulated depreciation          (1,933)     (6,895)      (170)       (64)           —         (9,062)

    Net book amount                   30,145      36,282        474        329           641        67,871

    Year ended 31 December
      2005
    Opening net book amount           30,145      36,282        474        329           641        67,871
    Additions                             —          153        223         —            846         1,222
    Depreciation charge               (1,098)     (3,499)      (109)       (32)           —         (4,738)

    Closing net book amount           29,047      32,936        588        297         1,487        64,355

    At 31 December 2005 and
      1 January 2006
    Cost                              32,078      43,330        867        393         1,487        78,155
    Accumulated depreciation          (3,031)    (10,394)      (279)       (96)           —        (13,800)

    Net book amount                   29,047      32,936        588        297         1,487        64,355

    Year ended 31 December
      2006
    Opening net book amount           29,047      32,936        588        297          1,487       64,355
    Additions                             —        1,755         49        277          3,119        5,200
    Transfer in/(out)                  3,610         288        508         —          (4,406)          —
    Depreciation charge               (1,099)     (3,619)      (171)       (42)            —        (4,931)
    Deemed distribution to equity
      owners (note 23(c))            (31,558)         —          —           —          (200)      (31,758)

    Closing net book amount               —       31,360        974        532             —        32,866

    At 31 December 2006
    Cost                                  —       45,373      1,424         670            —        47,467
    Accumulated depreciation              —      (14,013)      (450)       (138)           —       (14,601)

    Net book amount                       —       31,360        974        532             —        32,866




                                                    A-33
Notes to the combined financial statements (Continued)


12. PROPERTY, PLANT AND EQUIPMENT (Continued)

    All property, plant and equipment held by the Group are located in the PRC.

    At 31 December 2004 and 2005, the Group’s entire leasehold buildings and certain plant and
    machinery with an aggregate carrying value of approximately RMB45,165,000 and
    RMB32,447,000 respectively were pledged against bank loans of the Group (note 21).

    At 31 December 2004 and 2005, the Group was still in the process of obtaining the building
    ownership certificates of the entire leasehold buildings. These buildings were erected on land for
    which the relevant land use rights certificates have been obtained by the Group. As confirmed by
    the Group’s legal advisors, the Group has obtained the right to use these buildings.

    At 31 December 2006, the entire leasehold buildings of approximately RMB31,558,000 which
    were pledged against bank loans of the Group (note 21) were distributed to Xiamen Changtian
    upon the Reorganisation.

    All leasehold buildings and construction in progress were distributed to Xiamen Changtian upon
    the Reorganisation (note 23(c)).


13. LAND USE RIGHTS
                                                            2004            2005            2006
                                                          RMB’000         RMB’000         RMB’000
    At beginning of the year
    Cost                                                   6,698            6,698           4,607
    Accumulated amortisation                                (592)            (726)           (591)

    Net book amount                                        6,106            5,972           4,016

    For the year
    Opening net book amount                                6,106            5,972           4,016
    Disposal                                                  —            (1,843)              —
    Amortisation                                            (134)            (113)             (92)
    Deemed distribution to equity owners (note 23(c))         —                —            (3,924)

    Closing net book amount                                5,972            4,016               —

    At end of the year
    Cost                                                   6,698            4,607               —
    Accumulated amortisation                                (726)            (591)              —

    Net book amount                                        5,972            4,016               —


    Land use rights represented leasehold interests in land located in the PRC with lease terms
    expiring in 2049.

    At 31 December 2004 and 2005, the entire land use rights were pledged to secure bank loans of
    the Group (note 21).




                                                  A-34
Notes to the combined financial statements (Continued)


13. LAND USE RIGHTS (Continued)

    At 31 December 2006, the entire land use rights of approximately RMB3,924,000 which were
    pledged against bank loans of the Group (note 21) were distributed to Xiamen Changtian upon the
    Reorganisation.

    All land use rights were distributed to Xiamen Changtian upon the Reorganisation (note 23(c)).


14. TRADE RECEIVABLES, DEPOSITS AND OTHER RECEIVABLES
    Trade receivables generally have 30 to 90 days’ credit terms. All trade and other receivables are
    denominated in RMB.
                                                                        As at 31 December
                                                               2004            2005           2006
                                                              RMB’000        RMB’000         RMB’000
    Deposits                                                    23             177             1,127
    Other receivables                                            7              12               292

    Total deposits and other receivables                        30             189             1,419
    Less: Deposits paid in respect of purchase of property,
           plant and equipment — non-current portion            (11)          (101)             (946)

    Current portion                                             19              88               473



15. INVENTORIES, AT COST
                                                                        As at 31 December
                                                               2004            2005           2006
                                                              RMB’000        RMB’000         RMB’000
    Raw materials                                              6,775           5,114           8,963
    Work-in-progress                                           2,243          4,355            1,750
    Finished goods                                            22,898         25,195            3,656

                                                              31,916         34,664           14,369



16. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

                                                                        As at 31 December
                                                               2004            2005           2006
                                                              RMB’000        RMB’000         RMB’000
    Public investment fund in the PRC held for trading, at
      fair value                                                —              100              —


    Changes in fair values of financial assets at fair value through profit or loss are recorded in other
    income in the combined income statements for the years ended 31 December 2005 and 2006.




                                                   A-35
Notes to the combined financial statements (Continued)


17. BALANCES WITH RELATED PARTIES

                                                                    As at 31 December
                                                         2004              2005           2006
                                                        RMB’000          RMB’000         RMB’000
    Due from related parties
      Xiamen Brightforever                                  —             1,030             —
      Ms. Chen Baohua                                       17               17             17
      Mr. Chen Yongfu                                       22               22             22

                                                            39            1,069             39

    Due to a related party
      Xiamen Brightforever                                  —                —              20


    The balances with related parties are unsecured, interest free and repayable on demand.


18. PLEDGED BANK DEPOSITS, CASH AND BANK BALANCES
    As at 31 December 2004, 2005 and 2006, the bank deposits of RMB1,667,000, RMB6,044,000
    and RMB9,894,000 respectively were pledged to secure the bills payables of the Group (note 19).

    The Group’s entire pledged bank deposits and cash and bank balances in the PRC, excluding
    Hong Kong and Macau, are denominated in RMB. RMB is not freely convertible into foreign
    currencies. Under the PRC Foreign Exchange Control Regulations and Administration of
    Settlement, Sales and Payment of Foreign Exchange Regulations, the Group is permitted to
    exchange RMB for foreign currencies through banks that are authorised to conduct foreign
    exchange business.


19. TRADE AND BILLS PAYABLES

                                                                    As at 31 December
                                                         2004              2005           2006
                                                        RMB’000          RMB’000         RMB’000
    Trade payables                                        42,319          53,978          27,938
    Bills payables                                         4,168          10,850          19,789

                                                          46,487          64,828          47,727


    Trade and bills payables are normally settled on 30 to 60 days’ credit term. All trade and bills
    payables are denominated in RMB.




                                              A-36
Notes to the combined financial statements (Continued)


20. ACCRUED LIABILITIES AND OTHER PAYABLES

                                                                                   As at 31 December
                                                                      2004                2005                2006
                                                                     RMB’000            RMB’000              RMB’000
    Accrued liabilities                                                2,255               4,926               2,207
    Other payables                                                     4,410                 646               1,148

                                                                       6,665               5,572               3,355



21. BANK LOANS, SECURED

                                                                                   As at 31 December
                                                                      2004                2005                2006
                                                                     RMB’000            RMB’000              RMB’000
    Within one year                                                   29,400              27,900              20,000
    In the second to fifth years, inclusive *                           7,900                  —                   —

                                                                      37,300              27,900              20,000


    As at 31 December 2004 and 2005, the Group’s interest bearing bank loans were secured by the
    pledge of the entire leasehold buildings, certain plant and machinery (note 12) and the entire land
    use rights (note 13) of the Group and bear interests ranging from 6.11% to 7.56% and 6.44% to
    7.25% per annum as at 31 December 2004 and 2005 respectively.

    As at 31 December 2004 and 2005, certain of the Group’s interest bearing bank loans in the
    amount of RMB7,900,000 were also guaranteed by Ms. Chen Baohua, Mr. Chen Yongfu and Mr.
    Yang Qingjin which were subsequently repaid in full during the year ended 31 December 2006.

    As at 31 December 2006, the Group’s interest bearing bank loans are secured by the pledge of
    the entire leasehold buildings (note 12) and land use rights (note 13) which were distributed to
    Xiamen Changtian upon the Reorganisation and bear interests at 7.25% per annum as at 31
    December 2006.

    The Group’s bank loans are denominated in RMB.
    *   The bank loan of RMB7,900,000 was borrowed in 2003 and was repayable within four years. However, before the
        maturity date of the loan, the Agriculture Bank of China (the “ABOC”) started an action against Xiamen Changtian in
        the Xiamen Intermediate People’s Court for repayment of the loans in full. When this action was dismissed by the
        Xiamen Intermediate People’s Court, the ABOC took the case to the Fujian Province High Level People’s Court. On
        30 November 2005, the Fujian Province High Level People’s Court issued a judgement numbered (2005) Min Min
        Zhong Zi No. 401 which held that Xiamen Changtian had to repay the ABOC the entire loan amount of RMB7,900,000
        plus applicable interest. On 25 April 2006, Xiamen Changtian entered into a settlement agreement with the ABOC that
        Xiamen Changtian could pay the RMB7,900,000 in 10 equal monthly instalments starting from April 2006. As at 31
        December 2005, the entire bank loan of RMB7,900,000 was included in current liabilities which was subsequently
        repaid in full during the year ended 31 December 2006.




                                                        A-37
Notes to the combined financial statements (Continued)


22. SHARE CAPITAL
    The Company was incorporated in Bermuda on 29 March 2007. At the date of incorporation, the
    authorised share capital of the Company was US$12,000 divided into 120,000 ordinary shares of
    US$0.10 each. On 30 March 2007, 1 ordinary share of US$0.10 each was allotted and issued
    nil-paid to Eastline Investments.

    The share capital balances as at 31 December 2004, 2005 and 2006 represent the issued and
    paid-up share capital of Jumbo Glories as if it was the holding company of the Group for the
    Relevant Periods since 1 January 2004.


23. RESERVES

    (a)   Merger reserve
          The merger reserve of the Group represents (i) the difference between the nominal value of
          combined capital of the Group and the nominal value of the issued share capital of Jumbo
          Glories; and (ii) the nominal value of the Transferred Operations as pursuant to the
          Reorganisation.

    (b)   Statutory reserves
          In accordance with the relevant laws and regulations of the PRC, the Group is required to
          transfer 10% of its profit after taxation prepared in accordance with the accounting regulation
          in the PRC to the statutory reserve until the reserve balance reaches 50% of the respective
          registered capital. Such reserve may be used to reduce any losses incurred or for
          capitalisation as paid-up capital.

          In addition, the Group is required to transfer 5% of its profit after taxation prepared in
          accordance with the accounting regulations in the PRC to the statutory public welfare
          reserve. The use of the statutory public welfare reserve is restricted to capital expenditure
          for employees’ facilities. This statutory public welfare reserve is non-distributable except
          upon liquidation.

    (c)   Deemed distribution to equity owners
          This represents the following net book value of Non-transferred Operations as at 31
          December 2006:
                                                                                                           RMB’000
          Leasehold buildings (note 12)                                                                     31,558
          Construction in progress (note 12)                                                                    200
          Land use rights (note 13)                                                                           3,924
          Amount due from equity holders of Xiamen Changtian                                                72,500
          Accrued liabilities and other payables *                                                           (9,797)
          Provision for tax                                                                                  (8,412)

          Deemed distribution to equity owners                                                              89,973

          *   The balance represents other tax payables of the Non-transferred Operations included in accrued liabilities
              and other payables.




                                                       A-38
Notes to the combined financial statements (Continued)


24. COMMITMENTS
    Capital commitments

    The Group had the following outstanding capital commitments:
                                                                       As at 31 December
                                                              2004            2005          2006
                                                             RMB’000        RMB’000        RMB’000
    Contracted, but not provided for, in respect of
      construction of leasehold buildings                      80            3,022           —


    Operating lease commitments

    The total future minimum lease payments of the Group under non-cancellable operating leases for
    property, plant and equipment are as follows:
                                                                       As at 31 December
                                                              2004            2005          2006
                                                             RMB’000        RMB’000        RMB’000
    Within one year                                            —             5,700          6,000
    In the second to fifth years                               —            24,000         24,000
    After five years                                           —            19,500         13,500

                                                               —            49,200         43,500



25. FINANCIAL GUARANTEE CONTRACTS
    Xiamen Changtian had executed a guarantee with respect to a bank loan to Xiamen Brightforever.
    The guarantee provided was for the period of two years from the day following the first repayment
    date during the loan period from 25 September 2003 to 24 September 2006 for up to a maximum
    amount of RMB130,000,000. The largest aggregate outstanding amount under the guarantee
    given by Xiamen Changtian from the beginning of the guarantee period and up to September
    2006 was approximately RMB25,000,000. Xiamen Brightforever had made full repayment of the
    bank loan in September 2006. Under such guarantee, the Group would be liable to pay the banks
    if the banks are unable to recover the loans. At the balance sheet dates, no provision for this
    guarantee contract had been made as the bank loan has been fully repaid before the guarantee
    period commenced.

    In addition, Xiamen Changtian had executed guarantees with respect to certain bank loans of
    aggregate drawn down amounts of RMB13,000,000 to a company in which the relatives of Mr.
    Yang Qingjin and Mr. Chen Yongfu have beneficial interest. As at 31 December 2004 and 2005,
    the aggregate bank loans granted to this company in relation to the guarantee executed by
    Xiamen Changtian approximating RMB9,500,000 and RMB8,500,000 respectively. Under this
    guarantee, the Group would be liable to pay the banks if the banks are unable to recover the
    loans. At 31 December 2004 and 2005, no provision for Xiamen Changtian’s obligation under this
    guarantee contract had been made as the directors considered that it was not probable that
    Xiamen Changtian would suffer significant losses and/or damages in case the repayment of the
    loans would be in default since Mr. Chen Yongfu had undertaken to bear any liability that Xiamen
    Changtian may incur arising from the guarantee. The guarantees had been released during the
    year ended 31 December 2006.




                                                      A-39
Notes to the combined financial statements (Continued)


26. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
    The Group does not have written risk management policies and guidelines. However, the board
    of directors meets periodically to analyse and formulate measures to manage the Group’s
    exposure to market risk, including principally changes in interest rates and currency exchange
    rates. As the Group’s exposure to market risk is kept at a minimum level, the Group has not used
    any derivatives or other instruments for hedging purposes. The Group does not hold or issue
    derivative financial instruments for trading purposes.

    As at 31 December 2004, 2005 and 2006, the Group’s financial instruments mainly consisted of
    cash and bank balances, trade receivables, financial assets at fair value through profit or loss,
    deposits and other receivables, pledged bank deposits, balances with related parties, trade and
    bills payables, accrued liabilities and other payables and bank loans.

    (a)   Interest rate risk
          The Group’s interest rate risk mainly arises from bank loans. The interest rates and terms of
          repayment of the bank loans are disclosed in note 21.


    (b)   Foreign currency risk
          The Group’s exposure to risk resulting from changes in foreign currency exchange rates is
          minimal.


    (c)   Credit risk
          The carrying amounts of trade and other receivables and amounts due from related parties
          represent the Group’s maximum exposure to credit risk in relation to its financial assets. The
          Group has no other significant concentration of credit risk. No other financial assets carry a
          significant exposure to credit risk.


    (d)   Fair value
          The fair value of the Group’s financial assets and liabilities are not materially different from
          their carrying amounts because of the immediate or short term maturity of these financial
          instruments. The fair value of borrowings is not disclosed because the carrying value is not
          materially different from the fair value.




                                                 A-40
Notes to the combined financial statements (Continued)


27. CRITICAL ACCOUNTING ESTIMATES
    Estimates are continually evaluated and are based on historical experiences and other factors,
    including expectations of future events that are believed to be reasonable under the
    circumstances.

    The Group makes estimates and assumptions concerning the future. The resulting accounting
    estimates will, by definition, seldom equal the related actual results. The estimates and
    assumptions that have a significant risk of causing a material adjustment to the carrying amounts
    of assets and liabilities within the next financial year are discussed below.

    (a)   Net realisable value of inventories
          Net realisable value of inventories is the estimated selling price in the ordinary course of
          business, less estimated costs of completion and selling expenses. These estimates are
          based on the current market condition and the historical experience of selling products of
          similar nature. It could change significantly as a result of competitor actions in response to
          severe industry cycles. Management will reassess the estimations at the balance sheet
          date.

    (b)   Impairment of trade receivables
          The Group’s management assess the collectibility of trade receivables. This estimate is
          based on the credit history of the Group’s customers and the current market condition.
          Management reassess the impairment loss at the balance sheet date.


28. RELATED PARTY TRANSACTIONS
    (a)   In addition to the transactions arising from the Reorganisation and transactions and
          balances detailed in notes 17, 21 and 25 in these Combined Financial Information, the
          Group had the following transactions with a related party at agreed terms.
                                                                  Year ended 31 December
                                                            2004           2005          2006
                                                           RMB’000       RMB’000        RMB’000
          Disposal of land use rights to Xiamen
            Brightforever                                     —              4,630               —
          Rental paid/payable to Xiamen Brightforever         —              3,600            5,700


    (b)   Included in staff costs are compensation of key management personnel of the Group and
          comprises the following categories:
                                                                  Year ended 31 December
                                                            2004           2005          2006
                                                           RMB’000       RMB’000        RMB’000
          Short term employee benefits                       446              494              612
          Post employment benefits                             69              72               83

                                                             515              566              695




                                                  A-41
                                      Notes to the combined financial statements (Continued)


29. NOTES TO THE COMBINED CASH FLOW STATEMENT
   Major non-cash transactions

   During the years ended 31 December 2003, 2004 and 2005, the Group paid deposits of
   approximately RMB471,000, RMB11,000 and RMB101,000 respectively for the acquisition of
   certain property, plant and equipment. The deposits paid of RMB471,000, RMB11,000 and
   RMB101,000 were transferred to property, plant and equipment during the years ended 31
   December 2004, 2005 and 2006 respectively upon the delivery of the respectively property, plant
   and equipment.


30. SUBSEQUENT EVENTS
   In addition to those disclosed elsewhere in the Combined Financial Information, the Group had
   the following significant event took place subsequent to 31 December 2006:

   On 29 May 2007, Changtian Enterprise has received confirmations issued by Fujian Province
   Xiamen City Haicang District National Tax Bureau that it is qualified to apply for the two-year
   exemption and three-year half reduction of income tax with relevant taxation authorities when it
   starts to make profit.




                                             A-42
                                                                                          APPENDIX B

    REVIEW REPORT FROM THE JOINT REPORTING ACCOUNTANTS
ON THE UNAUDITED COMBINED FINANCIAL INFORMATION OF THE GROUP
          FOR THE THREE MONTHS ENDED 31 MARCH 2007

Date: 30 October 2007


The Board of Directors
Changtian Plastic & Chemical Limited
Canon’s Court
22 Victoria Street
Hamilton HM 12
Bermuda

Dear Sirs


Introduction
This report has been prepared for inclusion in the prospectus dated 30 October 2007 (“Prospectus”) in
connection with the invitation in respect of offer of shares of Changtian Plastic & Chemical Limited (the
“Company”).

We have reviewed the unaudited combined financial statements of the Company and its subsidiaries
(collectively the “Group”), as set out in Appendix B on pages B-3 to B-40 which comprise the unaudited
combined income statement, unaudited combined statement of changes in equity and unaudited
combined cash flow statement of the Group for the three months ended 31 March 2007 and the
unaudited combined balance sheet of the Group as at 31 March 2007, and a summary of significant
accounting policies and other explanatory notes (the “Unaudited Combined Financial Information”). The
directors of the Company are responsible for the preparation and fair presentation of these Unaudited
Combined Financial Information in accordance with International Financial Reporting Standards
(“IFRS”). Our responsibility is to express a conclusion on the Unaudited Combined Financial
Information based on our review.

For the purpose of this report, the comparative figures for the corresponding three months ended 31
March 2006 were extracted from the unaudited combined management financial information and we
have not carried out a review of those financial information. The unaudited combined management
financial information of the Group for the period ended 31 March 2006 are the responsibility of the
directors of the Company.


Scope of Review
We conducted our review in accordance with International Standards on Review Engagements 2410,
“Review of Interim Financial Information Performed by the Independent Auditor of the Entity”. A review
of the Unaudited Combined Financial Information consists of making inquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and other review procedures.
A review of substantially less in scope than an audit conducted in accordance with International
Standards on Auditing and consequently does not enable us to obtain assurance that we would become
aware of all significant matters that might be identified in an audit. Accordingly, we do not express an
audit opinion.




                                                  B-1
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the Unaudited
Combined Financial Information do not present fairly, in all material respects, the unaudited combined
financial position of the Group as at 31 March 2007, and of its unaudited combined results, unaudited
combined statement of changes in equity and unaudited combined cash flows for the three months
ended 31 March 2007 in accordance with IFRS.

Yours faithfully




Foo Kon Tan Grant Thornton                          Grant Thornton
Certified Public Accountants                        Certified Public Accountants
Singapore                                           Hong Kong

Partner: Wong Kian Kok                              Partner: Lo Ngai Hang




                                                 B-2
Unaudited combined income statement

                                                       Three months ended 31 March
                                               Notes      2006             2007
                                                        RMB’000          RMB’000
                                                       (Unaudited)      (Unaudited)
Revenue                                          5      116,638           151,297
Cost of sales                                            (76,908)         (94,933)

Gross profit                                             39,730            56,364
Other income                                     5          149               139
Selling and distribution expenses                         (2,251)          (3,468)
Administrative expenses                                   (1,060)          (1,020)

Operating profit                                 7       36,568            52,015
Finance costs                                    8         (479)             (361)

Profit before income tax                                 36,089            51,654
Income tax expense                               9        (5,333)          (7,753)

Profit attributable to equity holders                    30,756            43,901

Dividends                                       10       40,000                —

Earnings per share — basic (RMB cents)          11          6.15             8.78




                                         B-3
Unaudited combined balance sheet

                                                                As at 31
                                                               December      As at 31
                                                       Notes     2006      March 2007
                                                               RMB’000      RMB’000
                                                               (Audited)   (Unaudited)
ASSETS AND LIABILITIES
Non-current assets
Property, plant and equipment                           12       32,866       32,293
Deposits                                                14         946          583

                                                                 33,812       32,876

Current assets
Inventories                                             15       14,369       14,653
Trade receivables                                       14      111,745      110,651
Deposits and other receivables                          14         473          179
Due from related parties                                16          39        18,922
Pledged bank deposits                                   17        9,894        7,533
Cash and bank balances                                  17       58,220     137,590

                                                                194,740     289,528

Current liabilities
Trade and bills payables                                18       47,727       55,528
Accrued liabilities and other payables                  19        3,355       15,548
Due to related parties                                  16          20        22,201
Bank loans, secured                                     20       20,000       20,000
Provision for tax                                                    —         7,753

                                                                 71,102     121,030

Net current assets                                              123,638     168,498

Net assets                                                      157,450     201,374

EQUITY
Equity attributable to equity holders of the Company
Share capital                                           21          39            —
Reserves                                                        157,411     201,374

Total equity                                                    157,450     201,374




                                                 B-4
Unaudited combined statement of changes in equity

                               Share       Merger         Proposed      Statutory     Retained     Total
                               capital     reserve        dividend      reserves       profits    equity
                              RMB’000     RMB’000         RMB’000       RMB’000       RMB’000    RMB’000
                                         (note 22(a))                  (note 22(b))
At 31 December 2005
  (Audited)                      39         50,000                —      26,565        94,377    170,981
Profit for the period            —              —                 —           —        30,756     30,756

Total recognised income
  and expense for the
  period                         —              —                 —           —        30,756     30,756
Dividends (note 10)              —              —             40,000          —       (40,000)        —

At 31 March 2006
  (Unaudited)                    39         50,000            40,000     26,565        85,133    201,737

At 31 December 2006
  (Audited)                      39        157,411                —           —            —     157,450
Profit for the period            —              —                 —           —        43,901     43,901

Total recognised income
  and expenses for the
  period                         —              —                 —           —        43,901     43,901
Arising on reorganisation        39            (16)               —           —            —         23
Transfer upon incorporation
  of the Company                (78)            78                —           —            —          —

At 31 March 2007
  (Unaudited)                    —        157,473                 —           —        43,901    201,374




                                                        B-5
Unaudited combined cash flow statement

                                                                       Three months ended 31 March
                                                               Notes      2006             2007
                                                                        RMB’000          RMB’000
                                                                       (Unaudited)      (Unaudited)
Cash flows from operating activities
Profit before income tax                                                 36,089            51,654
Adjustments for:
  Interest income                                                5         (134)             (139)
  Fair value gains on financial assets at fair value through
    profit or loss                                               5            (7)              —
  Loss on disposal of property, plant and equipment              7            —               31
  Depreciation                                                   7        1,191              994
  Amortisation of land use rights                                7           23                —
  Interest expenses                                              8          479              361

Operating profit before working capital changes                          37,641            52,901
  Increase in inventories                                                 (6,661)            (284)
  (Increase)/decrease in trade receivables                               (11,389)           1,094
  (Increase)/decrease in deposits and other receivables                      (20)            294
  Decrease/(increase) in amounts due from related parties                 1,030           (18,883)
  Increase in trade and bills payables                                   13,493             7,801
  (Decrease)/increase in accrued liabilities and other
    payables                                                               (143)           12,193
  Increase in amounts due to related parties                                170              564

Cash generated from operations                                           34,121            55,680
  Interest received                                                         134              139
  Income taxes paid                                                       (1,752)              —

Net cash generated from operating activities                             32,503            55,819

Cash flows from investing activities
Purchases of property, plant and equipment                      28           (77)             (94)
Deposits paid for purchases of property, plant and equipment               (577)               —
Proceeds from disposal of property, plant and equipment                       —                 5
Proceeds from disposal of financial assets at fair value
  through profit or loss                                                    107                —
(Increase)/decrease in pledged bank deposits                              (1,303)           2,361

Net cash (used in)/generated from investing activities                    (1,850)           2,272




                                                         B-6
Unaudited combined cash flow statement (Continued)

                                                                       Three months ended 31 March
                                                               Notes      2006             2007
                                                                        RMB’000          RMB’000
                                                                       (Unaudited)      (Unaudited)
Cash flows from financing activities
Drawdown of bank loans                                                   15,000            20,000
Repayments of bank loans                                                 (22,000)         (20,000)
Proceeds from issuance of share capital of a subsidiary
  arising on reorganisation                                                   —            21,640
Interest paid                                                              (479)             (361)

Net cash (used in)/generated from financing activities                    (7,479)          21,279

Net increase in cash and cash equivalents                                23,174            79,370
Cash and cash equivalents at beginning of financial
 period                                                                  72,241            58,220

Cash and cash equivalents at end of financial period                     95,415           137,590

Analysis of balances of cash and cash equivalents
Cash and bank balances                                                   95,415           137,590




                                                         B-7
Notes to the unaudited combined financial statements


1.   INTRODUCTION
     The unaudited combined financial statements of Changtian Plastic & Chemical Limited (the
     “Company”) and its subsidiaries (collectively the “Group”), which comprise the unaudited
     combined balance sheet of the Group as at 31 March 2007, the unaudited combined income
     statement, unaudited combined statement of changes in equity and unaudited combined cash
     flow statement of the Group for the three months ended 31 March 2007 and a summary of
     significant accounting policies and other explanatory notes (the “Unaudited Combined Financial
     Information”), have been prepared for inclusion in the Prospectus of the Company issued for the
     invitation (the “Invitation”) by the Company in respect of the issue of ordinary shares of S$0.05
     each comprising 160,000,000 new shares and 55,000,000 vendor shares at S$0.47 per share in
     the Company for cash.


2.   THE COMPANY
     The Company was incorporated in Bermuda on 29 March 2007 under the Bermuda Companies
     Act as an exempted company with limited liability under the name of Changtian Plastic &
     Chemical Limited.

     As at the date of incorporation, the authorised share capital of the Company was US$12,000
     divided into 120,000 ordinary shares of US$0.10 each. On 30 March 2007, 1 ordinary share of
     US$0.10 each in the capital of the Company was allotted and issued nil-paid to Eastline
     Investments Holding Limited (“Eastline Investments”), a company incorporated in the British
     Virgin Islands (the “BVI”) and wholly-owned by Mr. Yang Qingjin, a director of the Company.
     Pursuant to the written resolution dated 6 July 2007 in lieu of a special general meeting, 99
     ordinary shares of US$0.10 each in the capital of the Company was allotted and issued nil-paid
     to Eastline Investments.

     The registered office of the Company is located at Canon’s Court, 22 Victoria Street, Hamilton HM
     12, Bermuda. The principal place of business of the Company is located at 18 Xinsheng Road,
     Xinyang Industrial Zone, Haicang District, Xiamen City, Fujian Province, the People’s Republic of
     China (the “PRC”). The Company does not have a place of business in Singapore as at the date
     of these unaudited combined financial statements.

     The principal activities of the Company is investment holding. The principal activities of the
     Company’s subsidiaries are set out in note 3 to the unaudited combined financial statements.

     Pursuant to written resolutions dated 6 July 2007 in lieu of a special general meeting, the then sole
     shareholder of the Company approved, inter alia, the following:
     (a)   the change of denomination of every 120,000 ordinary shares of US$0.10 each into 120,000
           ordinary shares of S$0.154 each (the “Share Redenomination”);
     (b)   the sub-division of every one ordinary share of S$0.154 each after the Share
           Redenomination into 154 ordinary shares of S$0.001 each (the “Share Subdivision”); and
     (c)   the consolidation of every 50 ordinary share of S$0.001 each after the Share Subdivision
           into one ordinary share of S$0.05 each (the “Share Consolidation”).




                                                  B-8
Notes to the unaudited combined financial statements (Continued)


2.   THE COMPANY (Continued)
     Pursuant to written resolutions dated 24 September 2007 in lieu of a special general meeting, the
     then sole shareholder of the Company approved, inter alia, the following:
     (a)   the adoption of a new set of Bye-laws and an employee share option scheme of the
           Company;
     (b)   the increase in the authorised share capital of the Company from S$18,480 divided into
           369,600 ordinary shares of S$0.05 each to S$75 million divided into 1,500,000,000 ordinary
           shares of S$0.05 each;
     (c)   crediting as fully paid the 308 nil-paid shares registered in the name of Eastline Investments
           and the allotment and issue of 499,999,692 new shares to the shareholders of Jumbo
           Glories Limited (“Jumbo Glories”), as part of the Company’s restructuring exercise;
     (d)   the offer, allotment and issue of the 160,000,000 new shares, which when issued and fully
           paid-up, shall rank pari passu in all respects with the existing issued and paid-up shares of
           the Company;
     (e)   the offer for sale of up to 55,000,000 shares held by Goodwise Investments Limited
           (“Goodwise Investments”), CIM VIII Limited (“CIM VIII”), Longold Group Limited (“Longold
           Group”) and Hong Kong Investments Group Limited (“Hong Kong Investments”) in
           connection with the Invitation, such shares to rank pari passu in all respects with the existing
           issued and fully paid-up shares; and
     (f)   that authority be given to the directors of the Company, to:
           (i)    issue shares whether by ways of rights, bonus or otherwise (including shares as may
                  be issued pursuant to any Instrument (as defined below) made or granted by the
                  directors of the Company while this resolution is in force notwithstanding that the
                  authority conferred by this resolution may have ceased to be in force at the time of
                  issue of such shares); and/or
           (ii)   make or grant offers, agreements or options (collectively, “Instruments”) that might or
                  would require shares to be issued, including but not limited to the creation and issue
                  of warrants, debentures or other instruments convertible into shares of the Company,
                  at any time and upon such terms and conditions and for such purposes and to such
                  persons as the directors of the Company may in their absolute discretion deem fit,

           provided that the aggregate number of shares issued pursuant to such authority (including
           shares issued pursuant to any Instrument), shall not exceed 50% of the post-Invitation
           issued share capital, and provided further that the aggregate number of such shares to be
           offered other than on a pro rata basis in pursuance to such authority (including shares issued
           pursuant to any instrument) to the existing shareholders shall not exceed 20% of the
           post-Invitation issued share capital, and, unless revoked or varied by the Company in
           general meeting, such authority shall continue in force until the conclusion of the next annual
           general meeting of the Company or the date by which the next annual general meeting of the
           Company is required by law to be held, whichever is the earlier.




                                                   B-9
Notes to the unaudited combined financial statements (Continued)


2.   THE COMPANY (Continued)
          For the purpose of this resolution and pursuant to Rules 806(3) and 806(4) of the Singapore
          Exchange Securities Trading Limited (the “SGX-ST”) Listing Manual (the “Listing Manual”),
          the “post-Invitation issued share capital” shall mean the enlarged issued share capital of the
          Company immediately after the Invitation, after adjusting for: (i) new shares arising from the
          conversion or exercise of any convertible securities; (ii) new shares arising from exercising
          share options or vesting of share awards outstanding or subsisting at the time such authority
          is given, provided the options or awards were granted in compliance with the Listing Manual;
          and (iii) any subsequent consolidation or sub-division of shares.

     Approval for crediting as fully paid the 308 nil-paid shares and the allotment and issue of
     499,999,692 new shares was received from the Bermuda Monetary Authority on 30 August 2007.

     As at the date of this report, the authorised share capital of the Company is S$75,000,000 divided
     into 1,500,000,000 ordinary shares of S$0.05 each. The issued and paid-up share capital of the
     Company is S$25,000,000 divided into 500,000,000 ordinary shares of S$0.05 each.


3.   THE REORGANISATION AND BASIS OF PRESENTATION
     A reorganisation exercise was undertaken by the Group to rationalise the corporate structure for
     the Invitation (the “Reorganisation”). The following steps were taken in the Reorganisation:

     3.1 Incorporation of Jumbo Glories
          Jumbo Glories was incorporated on 1 April 2005 in the BVI as an investment holding
          company with an authorised share capital of US$50,000 divided into 50,000 ordinary shares
          of US$1.00 each. On 3 January 2006, Ms. Chen Baohua, the spouse of Mr. Yang Qingjin and
          the sister of Mr. Chen Yongfu, a director of the Company, and Mr. Chen Yongfu subscribed
          for and was allotted and issued 2,215 and 2,785 shares of Jumbo Glories, representing
          44.3% and 55.7% of the total issued shares capital of Jumbo Glories, respectively.

          On 8 March 2007, Mr. Chen Yongfu transferred his entire interest in Jumbo Glories to
          Goodwise Investments, a company incorporated in the BVI and wholly-owned by Mr. Chen
          Yongfu, for the issue of 1 share in Goodwise Investments.

          On 8 March 2007, Ms. Chen Baohua transferred her entire interest in Jumbo Glories to
          Eastline Investments for the issue of 1 share in Eastline Investments. On the same date, Ms.
          Chen Baohua transferred her entire interest in Eastline Investments to Mr. Yang Qingjin.

          Thereafter, Eastline Investments, Goodwise Investments and Rowview Limited (“Rowview”),
          a company incorporated in the BVI and equally owned by Ms. Chen Baohua and Mr. Chen
          Yongfu, subscribed for and were allotted 1,181, 1,486 and 2,333 shares of Jumbo Glories for
          a subscription consideration of US$1,181, US$1,486 and US$18.5 million, respectively.

          Upon completion of the transfers and subscription, Eastline Investments, Goodwise
          Investments and Rowview respectively held 3,396, 4,271 and 2,333 shares in Jumbo
          Glories, representing 33.96%, 42.71% and 23.33% of the total issued share capital of Jumbo
          Glories.




                                                B-10
Notes to the unaudited combined financial statements (Continued)


3.   THE REORGANISATION AND BASIS OF PRESENTATION (Continued)

     3.2 Incorporation of Xiamen Changtian Enterprise Co., Ltd.
         (“Changtian Enterprise”)
         On 21 July 2006, the Xiamen Foreign Investment Bureau                          granted the
         certificate of approval for the establishment by Jumbo Glories of Changtian Enterprise as a
         wholly foreign-owned enterprise in the PRC. Changtian Enterprise was established on 6
         December 2006 with a registered capital of US$18.0 million and with a business term of 30
         years from 6 December 2006 to 5 December 2036. Pursuant to a capital verification report
         on Changtian Enterprise’s registered capital dated 13 June 2007, the registered capital of
         Changtian Enterprise of US$18.0 million was fully paid by Jumbo Glories on 11 June 2007.

     3.3 Acquisition of certain assets and business as well as liabilities of Xiamen Changtian
         Plastic & Chemical Co., Ltd.                      (“Xiamen Changtian”) and lease of
         premises
         On 14 April 2006, Jumbo Glories as purchaser, and Xiamen Changtian, a company
         established in the PRC and beneficially owned by Ms. Chen Baohua and Mr. Chen Yongfu,
         as seller, entered into an asset and business transfer agreement (the “Initial Asset and
         Business Transfer Agreement”) (as amended by a supplemental transfer agreement (the
         “Supplemental Transfer Agreement”) dated 21 May 2007) pursuant to which Jumbo Glories
         agreed to acquire all Xiamen Changtian’s business together with certain of its assets and
         liabilities, as further mentioned below (the “Changtian Assets and Business”). The total
         consideration for the acquisition was US$18.5 million, which is approximately RMB143.48
         million, arrived at based on the net asset value (as at 31 December 2005) of the Changtian
         Assets and Business, as valued by an independent valuer, Xiamen Dacheng Valuation
         Office (“Xiamen Dacheng”), in its report dated 30 March 2006, to be satisfied in full by cash
         payment. The Initial Asset and Business Transfer Agreement was approved by the Xiamen
         Foreign Investment Bureau on 21 July 2006.

         Due to the amendments to certain applicable PRC rules and regulations, the Certificate of
         Approval for Establishment of Enterprise with Foreign Investment in the PRC
                                             of Changtian Enterprise was obtained only on 6
         December 2006.

         Pursuant to the Supplemental Transfer Agreement, the parties agreed that the consideration
         payable under the Initial Asset and Business Transfer Agreement would remain at US$18.5
         million (or approximately RMB143.48 million), being the net asset value of the Changtian
         Assets and Business at 31 December 2005 as valued by Xiamen Dacheng. The parties also
         agreed that all profits generated by Xiamen Changtian for the period from 1 January 2007
         shall belong to Changtian Enterprise. In arriving at this agreement, the parties have
         considered the valuation of the Changtian Assets and Business as at 31 January 2007 of
         RMB155.14 million by Xiamen Dacheng in its valuation report dated 10 March 2007, and
         that after deducting the profits generated by Xiamen Changtian for the period from 1 January
         2007 to 31 January 2007 amounting to RMB10.93 million from the valuation of RMB155.14
         million, the net asset value of the Changtian Assets and Business as at 31 December 2006
         was RMB144.21 million.




                                               B-11
Notes to the unaudited combined financial statements (Continued)


3.   THE REORGANISATION AND BASIS OF PRESENTATION (Continued)

     3.3 Acquisition of certain assets and business as well as liabilities of Xiamen Changtian
         Plastic & Chemical Co., Ltd.                      (“Xiamen Changtian”) and lease of
         premises (Continued)

         The valuation of the Changtian Assets and Business as at 31 January 2007 included the
         entire assets and liabilities of Xiamen Changtian but excluding the land and buildings owned
         by Xiamen Changtian which will be leased back to Changtian Enterprise, tax payable
         balances due to the relevant tax authorities and an amount of RMB72.5 million advanced to
         shareholders by Xiamen Changtian which will not be transferred to Changtian Enterprise.

         As agreed in the Supplemental Agreement, the effective date of the transfer was changed
         to 1 April 2007 and Changtian Enterprise assumed all rights, obligations and benefits in
         respect of the Changtian Assets and Business acquired from Xiamen Changtian with effect
         retroactively from 1 January 2007.

         The transfer of the Changtian Assets and Business by Xiamen Changtian was approved by
         its shareholders in general meetings held on 10 April 2006 and 22 May 2007. Completion of
         the acquisition of the Changtian Assets and Business took place on 11 June 2007 and
         Changtian Enterprise has made full payment of the consideration of US$18.5 million.

         The Initial Asset and Business Transfer Agreement and the Supplemental Transfer
         Agreement have been ratified and approved by Xiamen Foreign Investment Bureau
                           on 21 July 2006 and 24 May 2007 respectively.

         In connection with the Initial Asset and Business Transfer Agreement, as amended by the
         Supplemental Transfer Agreement, the following agreements were entered into:

         (i)   Property lease agreement with Xiamen Changtian
               On 21 May 2007, Changtian Enterprise entered into a lease agreement with Xiamen
               Changtian (the “Changtian Lease Agreement”) (as amended by a supplemental lease
               agreement (the “Supplemental Lease Agreement”) dated 6 July 2007) to lease from
               Xiamen Changtian the premises and the underlying land use rights, at 18 Xinsheng
               Road, Xinyang Industrial Zone, Haicang District, Xiamen City, Fujian Province, the
               PRC where the Group’s production facilities for the production of adhesive tapes,
               release papers and 2-Acrylamido-2-methyl propane sulfonic acid (“2-A2MPS”) are
               situated.

               The lease is for a term of 20 years commencing from 1 January 2007 to 31 December
               2026, with a rent free period from 1 January 2007 to 31 March 2007 (as amended by
               the Supplemental Lease Agreement), at an annual rent of RMB2.3 million, as
               determined by a valuation report dated 5 March 2007 prepared by an independent
               valuer, LCH (Asia-Pacific) Surveyors Limited (“LCH Surveyors”). The annual rental is
               payable on a quarterly basis. However, pursuant to the Supplemental Lease
               Agreement, the parties agreed that no rent shall be payable for the period from 1
               January 2007 to 31 March 2007.




                                               B-12
Notes to the unaudited combined financial statements (Continued)


3.   THE REORGANISATION AND BASIS OF PRESENTATION (Continued)

     3.3 Acquisition of certain assets and business as well as liabilities of Xiamen Changtian
         Plastic & Chemical Co., Ltd.                      (“Xiamen Changtian”) and lease of
         premises (Continued)

         (i)    Property lease agreement with Xiamen Changtian (Continued)
                Under the Changtian Lease Agreement, upon the expiry of the initial three year term,
                the lease may be terminated at the option of Changtian Enterprise by giving at least
                three months’ notice to Xiamen Changtian. The annual rental payable after the first
                three years of the lease is subject to review once every three years and may be
                adjusted based on an independent valuers’ valuation to ascertain prevailing market
                price.

                Further, under the Changtian Lease Agreement, Changtian Enterprise has the option
                to acquire the leased premises from Xiamen Changtian at the prevailing market price
                to be determined by independent valuers.

                The Changtian Lease Agreement was filed with the Xiamen Municipal Land Resources
                and Housing Administrative Bureau                              on 4 June 2007.

         (ii)   Property lease agreement with Xiamen Brightforever Plastic Industrial Co., Ltd.
                                     (“Xiamen Brightforever”)
                On 21 May 2007, Changtian Enterprise entered into a lease agreement with Xiamen
                Brightforever (the “Brightforever Lease Agreement”) to lease from Xiamen
                Brightforever, a company established in the PRC and Mr. Wong Chit Fu, a director of
                the Company, has beneficial interest, the premises and the underlying land use rights,
                at 16 Xinsheng Road, Xinyang Industrial Zone, Haicang District, Xiamen City, Fujian
                Province, the PRC where the production facilities for biaxially-oriented polyamide
                (“BOPA”) film are situated.

                The lease is for a term of 20 years commencing from 1 April 2007 at an annual rent of
                RMB1.2 million, as determined by a valuation report dated 5 March 2007 prepared by
                LCH Surveyors. The annual rental is payable on a quarterly basis.

                Under the Brightforever Lease Agreement, upon the expiry of the initial three year term,
                the lease may be terminated at the option of Changtian Enterprise by giving at least
                three months’ notice to Xiamen Brightforever. The annual rental payable after the first
                three years of the lease is subject to review once every three years and may be
                adjusted based on an independent valuers’ valuation to ascertain prevailing market
                price.

                Further, under the Brightforever Lease Agreement, Changtian Enterprise has the
                option to acquire the leased premises from Xiamen Brightforever at the prevailing
                market price to be determined by independent valuers.

                The Brightforever Lease Agreement was filed with the Xiamen Municipal Land
                Resources and Housing Administrative Bureau on 4 June 2007.




                                                 B-13
Notes to the unaudited combined financial statements (Continued)


3.   THE REORGANISATION AND BASIS OF PRESENTATION (Continued)

     3.3 Acquisition of certain assets and business as well as liabilities of Xiamen Changtian
         Plastic & Chemical Co., Ltd.                      (“Xiamen Changtian”) and lease of
         premises (Continued)

         (iii)   Non-competition undertaking
                 On 21 May 2007, Xiamen Changtian, the then shareholders of Xiamen Changtian,
                 namely Ms. Chen Baohua and Mr. Chen Yongfu and the directors, namely Mr. Chen
                 Yongfu, and Mr. Wong Chit Fu, and in addition Mr. Yang Qingjin, the husband of Ms.
                 Chen Baohua (collectively, the “Xiamen Changtian Covenantors”) executed a non-
                 competition undertaking (the “Non-Competition Undertaking”) in favour of Changtian
                 Enterprise.

                 Under the Non-Competition Undertaking, Xiamen Changtian and the Xiamen
                 Changtian Covenantors respectively undertook to Changtian Enterprise, inter alia, with
                 effect from 1 April 2007:
                 (a)   not to carry out or participate in any business which is similar to the Group’s
                       current business including, without limitation, the production, distribution and sale
                       of adhesive tapes, release papers, BOPA film and 2-A2MPS;
                 (b)   not to carry out any business which is in competition or may be in competition,
                       whether directly or indirectly, with the Group and not to in any way solicit any
                       employee, customer or distributor of the Group; and
                 (c)   not to use the name, trademark or logo of the Group including but not limited to
                       the words “Changtian” or any of its trademarks, and not to use any name,
                       trademark or logo that are capable of being or likely to be confused with our
                       “Changtian” name.
                 On 12 June 2007, Xiamen Changtian changed its scope of business to engage only in
                 the lease of properties.

         (iv) Trademark transfer agreement
                 On 21 May 2007, Changtian Enterprise and Xiamen Changtian entered into a
                 trademark transfer agreement for the purpose of effecting the transfer of the registered
                 and trademarks pending registration under Xiamen Changtian’s name (the “Trademark
                 Transfer Agreement”), which Changtian Enterprise has acquired pursuant to the Initial
                 Asset and Business Transfer Agreement, as amended by the Supplemental Transfer
                 Agreement. Pursuant to the Trademark Transfer Agreement, the parties agreed to
                 jointly make an application to the Trademark Bureau of the State Administration for
                 Industry and Commerce                                  and to take the necessary steps
                 to effect the transfer of the trademarks to Changtian Enterprise (details of the
                 trademarks are set out in the section “Intellectual Property” of the Prospectus (the
                 “Trademarks”)). Notwithstanding that Xiamen Changtian would still be the registered
                 owner of the Trademarks prior to the date of the effective transfer of the respective
                 Trademarks, the parties agreed that Changtian Enterprise shall have the exclusive
                 rights to use the Trademarks until the registration of the transfers has been effected,
                 following which Changtian Enterprise would be the registered owner of the
                 Trademarks.




                                                   B-14
Notes to the unaudited combined financial statements (Continued)


3.   THE REORGANISATION AND BASIS OF PRESENTATION (Continued)

     3.4 Machinery acquisition agreement between Xiamen Brightforever and Changtian
         Enterprise
         On 21 May 2007, Changtian Enterprise entered into an acquisition agreement with Xiamen
         Brightforever (the “Machinery Acquisition Agreement”) to acquire from Xiamen Brightforever
         the plant and machinery used in the manufacture of BOPA film and certain office equipment
         and motor vehicles for a consideration of approximately RMB79.85 million. The
         consideration was determined based on the valuation report dated 8 March 2007 of the plant
         and machinery as at 31 December 2006, conducted by LCH Surveyors.

         In accordance with the Machinery Acquisition Agreement, an initial payment of 30% of the
         consideration has been paid to Xiamen Brightforever on 27 June 2007 with the balance to
         be settled in full within one year of the effective date of the Machinery Acquisition Agreement,
         being 1 April 2007.

     3.5 Subscription and issuance of exchangeable notes
         On 9 March 2007, Eastline Investments, Goodwise Investments, Ms. Chen Baohua, Mr.
         Chen Yongfu and Mr. Yang Qingjin (as guarantors), Rowview, Jumbo Glories and the
         pre-invitation investors, namely CIM VIII, Longold Group, Hong Kong Investments and East
         Fortune Development Limited (“East Fortune”), a company incorporated in the BVI and
         wholly owned by Mr. Yip Man King, an independent third party before this subscription
         (collectively, the “Pre-Invitation Investors”), entered into a subscription agreement (the
         “Subscription Agreement”) for the issuance of exchangeable notes amounting to US$18.5
         million (the “Exchangeable Notes”) by Rowview to the Pre-Invitation Investors.

         Under the Subscription Agreement, the parties agreed, inter alia that:
         (i)    the Exchangeable Notes were exchangeable into 2,333 shares of Jumbo Glories held
                by Rowview in the event of the listing of the Company on the SGX-ST, on the terms and
                conditions of the Subscription Agreement and the exchangeable note instrument dated
                7 June 2007 entered into by the parties to the Subscription Agreement; and
         (ii)   Eastline Investments, Goodwise Investments, Ms. Chen Baohua, Mr. Chen Yongfu and
                Mr. Yang Qingjin would guarantee, inter alia, the due payment by Rowview of the
                principal amount and interest accruing on the Exchangeable Notes (if any), as and
                when the same should become due and payable.

         On 7 June 2007, Rowview issued the Exchangeable Notes to the Pre-Invitation Investors
         and the aggregate consideration of US$18.5 million was satisfied in full by the Pre-Invitation
         Investors in cash.

         On 18 September 2007, the Pre-Invitation Investors exchanged their Exchangeable Notes
         for an aggregate of 2,333 shares of Jumbo Glories held by Rowview (the “Exchange”).

         Upon completion of the Exchange, Eastline Investments, Goodwise Investments, CIM VIII,
         Longold Group, Hong Kong Investments and East Fortune held respectively 33.96%,
         42.71%, 13.33%, 4.00%, 4.00% and 2.00% of the issued share capital of Jumbo Glories.




                                                B-15
Notes to the unaudited combined financial statements (Continued)


3.   THE REORGANISATION AND BASIS OF PRESENTATION (Continued)

     3.6 Acquisition of Jumbo Glories and share swap
          On 24 September 2007, the Company, as purchaser, and the shareholders of Jumbo
          Glories, comprising Eastline Investments, Goodwise Investments and the Pre-Invitation
          Investors, as vendors, entered into a share swap agreement (the “Share Swap Agreement”).
          Pursuant to the Share Swap Agreement, the Company acquired the entire issued and
          paid-up share capital of Jumbo Glories comprising 10,000 shares of Jumbo Glories from the
          shareholders of Jumbo Glories for a consideration of S$25 million. The consideration for the
          said acquisition was satisfied by (i) the crediting as fully paid, at par, 308 nil-paid ordinary
          shares of S$0.05 each in the Company held by Eastline Investments; and (ii) the allotment
          and issue of an aggregate of 499,999,692 new ordinary shares of S$0.05 each in the capital
          of the Company, credited as fully paid.

          Upon completion of the Share Swap Agreement on 24 September 2007, Eastline
          Investments, Goodwise Investments, CIM VIII, Longold Group, Hong Kong Investments and
          East Fortune held respectively 33.96%, 42.71%, 13.33%, 4.00%, 4.00% and 2.00% of the
          issued share capital of the Company.

     As at the date of this report, the Company has direct and indirect interests in the following
     subsidiaries, each of which is a limited liability company:
                                                                              Issued and
                                 Date and                                       paid-up
                                 place of          Principal activities          share/         Equity
                              incorporation/          and place of             registered      interest
     Name                     establishment            operations                capital         held

     Directly held:

     Jumbo Glories             1 April 2005,       Investment holding,        US$10,000          100%
                                  the BVI                the BVI

     Indirectly held:

     Changtian                21 July 2006,       Manufacture and sale US$18,000,000             100%
      Enterprise                the PRC             of adhesive tapes,
                                                 release papers, BOPA
                                                 film and 2-A2MPS, the
                                                          PRC

     The operations of the Group were originally carried out by Xiamen Changtian which was
     established with limited liability in the PRC on 2 February 1999.

     In accordance with the Asset and Business Transfer Agreement and the Supplemental Transfer
     Agreement, certain assets and liabilities of Xiamen Changtian were not transferred to the Group
     including (i) the leasehold interest in leasehold buildings; (ii) the leasehold interest in land use
     rights; (iii) the amounts due from the equity holders of Xiamen Changtian; and (iv) tax payable
     balances due to the relevant tax authorities. Items (i) to (iv) described above are retained by
     Xiamen Changtian and they are collectively referred to as the “Non-transferred Operations”.




                                                 B-16
Notes to the unaudited combined financial statements (Continued)


3.   THE REORGANISATION AND BASIS OF PRESENTATION (Continued)

     The Non-transferred Operations were not managed separately from the rest of Xiamen Changtian
     operations and no separate accounting records were maintained for their operations. Accordingly,
     they were recorded and reflected in the Unaudited Combined Financial Information during the
     three months ended 31 March 2006. Pursuant to the Asset and Business Transfer Agreement and
     the Supplemental Transfer Agreement, the Non-transferred Operations retained by Xiamen
     Changtian are reflected in the Unaudited Combined Financial Information as a distribution made
     to Xiamen Changtian on 31 December 2006.

     The Group is regarded as a continuing entity resulting from the Reorganisation since the assets
     and liabilities of Xiamen Changtian except for the Non-transferred Operations (collectively, the
     “Transferred Operations”) and the Non-transferred Operations were under common control before
     and immediately after the Reorganisation. Consequently, immediately after the Reorganisation,
     there was a continuation of the risks and benefits to the ultimate shareholders that existed prior
     to the Reorganisation. The Reorganisation has been accounted for as a reorganisation under
     common control in a manner similar to pooling of interests. Accordingly, the Unaudited Combined
     Financial Information have been prepared on the basis of merger accounting, and comprise the
     financial statements of the subsidiaries and, where appropriate, Xiamen Changtian which were
     under common control of the ultimate shareholders that existed prior to the Reorganisation.

     The Unaudited Combined Financial Information have been prepared based on the unaudited
     management accounts of Xiamen Changtian for the three months ended 31 March 2007, and
     where appropriate, unaudited management accounts of the subsidiaries now comprising the
     Group. The directors of the respective companies of the Group, who are also the management of
     Xiamen Changtian, are responsible for preparing financial statements of Xiamen Changtian and
     the unaudited management accounts of the subsidiaries now comprising the Group for the three
     months ended 31 March 2007, which give a true and fair view.


4.   SIGNIFICANT ACCOUNTING POLICIES

     Statement of compliance
     The Unaudited Combined Financial Information have been prepared in accordance with the
     Standards and Interpretations of the International Financial Reporting Standards (herein
     collectively referred to as “IFRS”) issued or adopted by the International Accounting Standards
     Board (the “IASB”) and the International Financial Reporting Interpretations Committee (“IFRIC”)
     of the IASB, and have been consistently applied throughout the three months ended 31 March
     2006 and 2007.


     Basis of preparation of the Unaudited Combined Financial Information
     From 1 January 2007, the Group has adopted all of the new and amended IFRS issued by the
     IASB which are first effective on 1 January 2007 and relevant to the Group.

     The adoption of these new and amended IFRS did not result in significant changes to the Group’s
     accounting policies but gave rise to additional disclosures. The specific transitional provisions
     contained in some of these new or amended IFRS have been considered.




                                                B-17
Notes to the unaudited combined financial statements (Continued)


4.   SIGNIFICANT ACCOUNTING POLICIES (Continued)

     Basis of preparation of combined financial statements (Continued)
     The Group has not early adopted the following IFRS that have been issued but are not yet
     effective. The directors of the Company anticipate that the adoption of such IFRS will not result
     in material financial impact to the Group’s Unaudited Combined Financial Information.
     IAS 23 (Revised)                             Borrowing Costs3
     IFRS 8                                       Operating Segments3
     IFRIC 11                                     Group and Treasury Share Transactions1
     IFRIC 12                                     Service Concession Arrangements2
     IFRIC 13                                     Customer Loyalty Programmes4
     IFRIC 14                                     IAS 19 — The Limit on a Defined Benefit Asset, Minimum
                                                    Funding Requirements, and their Interaction2

     Notes:
     1   Effective for annual periods beginning on or after 1 March 2007
     2   Effective for annual periods beginning on or after 1 January 2008
     3   Effective for annual periods beginning on or after 1 January 2009
     4   Effective for annual periods beginning on or after 1 July 2008


     The Unaudited Combined Financial Information have been prepared in accordance with the
     significant accounting policies set out below and these accounting policies are in accordance with
     IFRS. The Unaudited Combined Financial Information have been prepared under the historical
     cost convention except for the financial assets at fair value through profit or loss which are stated
     at their fair values. The measurement bases are fully described in the accounting policies below.
     The preparation of the Unaudited Combined Financial Information in conformity with IFRS
     requires the use of certain critical accounting estimates. It also requires management to exercise
     its judgment in the process of applying the Group’s accounting policies. The areas involving
     higher degree of judgment or complexity, or areas where assumptions and estimates are
     significant to the Unaudited Combined Financial Information, are disclosed in note 25. The
     principal accounting policies adopted are as follows:


     4.1 Subsidiaries
              Subsidiaries are entities (including special purpose entities) over which the Group has the
              power to control the financial and operating policies. The existence and effect of potential
              voting rights that are currently exercisable or convertible are considered when assessing
              whether the Group controls another entity. Subsidiaries are fully consolidated from the date
              on which control is transferred to the Group. They are excluded from consolidation from the
              date that control ceases.




                                                         B-18
Notes to the unaudited combined financial statements (Continued)


4.   SIGNIFICANT ACCOUNTING POLICIES (Continued)

     4.1 Subsidiaries (Continued)

         Except for the Reorganisation refer to in note 3 above which has been accounted for by
         regarding the Company as being the holding company of the subsidiaries from the beginning
         of the earliest period presented, or since the date when the combining companies first came
         under the control of the controlling shareholders, where it is a shorter period, the purchase
         method of accounting is used to account for the acquisition of subsidiaries by the Group. The
         cost of an acquisition is measured as the fair value of the assets given, equity instruments
         issued and liabilities incurred or assumed at the date of exchange, plus costs directly
         attributable to the acquisition. Identifiable assets acquired and liabilities and contingent
         liabilities assumed in a business combination are measured initially at their fair values at the
         acquisition date, irrespective of the extent of any minority interests. The excess of the cost
         of acquisition over the fair value of the Group’s share of the identifiable net assets acquired
         is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets
         of the subsidiary acquired, the difference is recognised directly in the income statement.

         Inter-group   transactions, balances and unrealised gains on transactions between group
         companies     are eliminated in preparing the Unaudited Combined Financial Information.
         Unrealised    losses are also eliminated unless the transaction provides evidence of an
         impairment    of the asset transferred.

     4.2 Revenue recognition
         Revenue is measured at the fair value of the consideration received or receivable. Provided
         it is probable that the economic benefits will flow to the Group and the revenue and costs,
         if applicable, can be measured reliably, revenue is recognised as follows:

         Sales of goods are recognised upon transfer of the significant risks and rewards of
         ownership to the customer. This is usually taken as the time when the goods are delivered
         and the customer has accepted the goods.

         Interest income is recognised on a time-proportion basis using the effective interest method.


     4.3 Property, plant and equipment
         Property, plant and equipment, other than construction in progress, are stated at cost less
         accumulated depreciation and impairment losses. The cost of an asset comprises its
         purchase price and any directly attributable costs of bringing the asset to its working
         condition and location for its intended use. Subsequent costs are included in the asset’s
         carrying amount or recognised as a separate asset, as appropriate, 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. All other costs, such as repairs and maintenance are
         charged to the income statement during the financial period in which they are incurred.




                                                 B-19
Notes to the unaudited combined financial statements (Continued)


4.   SIGNIFICANT ACCOUNTING POLICIES (Continued)

     4.3 Property, plant and equipment (Continued)

         Depreciation is provided to write off the cost of the property, plant and equipment, less their
         estimated residual values, over their estimated useful lives, using the straight-line method,
         at the following rate per annum:

         Leasehold buildings                             The shorter of the lease terms and 30 years
         Plant and machinery                             5 to 12 years
         Furniture, fixtures and office equipment        5 to 12 years
         Motor vehicles                                  12 years

         The assets’ residual values and useful lives are reviewed and adjusted if appropriate, at
         each balance sheet date.

         The gain or loss arising on retirement or disposal is determined as the difference between
         the sales proceeds and the carrying amount of the asset and is recognised in the unaudited
         combined income statement.

         Construction in progress, which represents buildings under construction, and plant and
         machinery pending installation, is stated at cost less impairment losses. Cost comprises
         direct costs incurred during the periods of construction, installation and testing. No
         depreciation is provided on construction in progress. Construction in progress is reclassified
         to the appropriate category of property, plant and equipment and depreciation commences
         when the construction work is completed and the asset is ready for use.

     4.4 Land use rights
         Land use rights represented up-front payments to acquire long term interests in the usage
         of land. The payments were stated at cost less accumulated amortisation and accumulated
         impairment losses. Amortisation was calculated on straight-line basis over the lease terms.


     4.5 Impairment on assets
         Property, plant and equipment are subject to impairment testing.

         An impairment loss is recognised as an expense immediately for the amount by which the
         asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the
         higher of fair value, reflecting market conditions less costs to sell, and value in use. In
         assessing value in use, the estimated future cash flows are discounted to their present value
         using a pre-tax discount rate that reflects current market assessment of time value of money
         and the risk specific to the asset.

         For the purposes of assessing impairment, where an asset does not generate cash inflows
         largely independent from those from other assets, the recoverable amount is determined for
         the smallest group of assets that generate cash inflows independently (i.e. a cash-
         generating unit). As a result, some assets are tested individually for impairment and some
         are tested at cash-generating unit level.

         Impairment loss recognised for cash-generating units are charged on a pro rata basis to the
         assets in the cash generating unit, except that the carrying value of an asset will not be
         reduced below its individual fair value less cost to sell, or value in use, if determinable.


                                                B-20
Notes to the unaudited combined financial statements (Continued)


4.   SIGNIFICANT ACCOUNTING POLICIES (Continued)

     4.5 Impairment on assets (Continued)

         An impairment loss is reversed if there has been a favourable change in the estimates used
         to determine the asset’s recoverable amount and only to the extent that the asset’s carrying
         amount does not exceed the carrying amount that would have been determined, net of
         depreciation or amortisation, if no impairment loss had been recognised.

     4.6 Leases
         Leases where substantially all the rewards and risks of ownership of assets remain with the
         lessor are accounted for as operating leases. Where the Group has the use of assets held
         under operating leases, payments made under the leases are charged to the unaudited
         combined income statement on a straight line basis over the lease terms except where an
         alternative basis is more representative of the pattern of benefits to be derived from the
         leased assets.


     4.7 Financial assets
         The Group’s accounting policies for financial assets are set out below.

         The Group’s financial assets include loans and receivables and financial assets at fair value
         through profit or loss. They are included in the unaudited combined balance sheet under the
         line items such as “Trade receivables”, “Deposits and other receivables” and “Financial
         assets at fair value through profit or loss”.

         Management determines the classification of its financial assets at initial recognition
         depending on the purpose for which the financial assets were acquired and where allowed
         and appropriate, re-evaluates this designation at every reporting date.

         All financial assets are recognised when, and only when, the Group becomes a party to the
         contractual provisions of the instrument. When financial assets are recognised initially, they
         are measured at fair value, plus, in the case of investments not at fair value through profit
         or loss, directly attributable transaction costs.

         Derecognition of financial assets occurs when the rights to receive cash flows from the
         investments expire or are transferred and substantially all of the risks and rewards of
         ownership have been transferred. At each balance sheet date, financial assets are reviewed
         to assess whether there is objective evidence of impairment. If any such evidence exists,
         impairment loss is determined and recognised based on the classification of the financial
         asset.

         (i)   Loans and receivables
               Loans and receivables are non-derivative financial assets with fixed or determinable
               payments that are not quoted in an active market. Loans and receivables are
               subsequently measured at amortised cost using the effective interest method, less any
               impairment losses. Amortised cost is calculated taking into account any discount or
               premium on acquisition and includes fees that are an integral part of the effective
               interest rate and transaction cost.




                                               B-21
Notes to the unaudited combined financial statements (Continued)


4.   SIGNIFICANT ACCOUNTING POLICIES (Continued)

     4.7 Financial assets (Continued)


         (ii)   Financial assets at fair value through profit or loss
                Financial assets at fair value through profit or loss includes financial assets held for
                trading and financial assets designated upon initial recognition as at fair value through
                profit or loss.

                Financial assets are classified as held for trading if they are acquired for the purpose
                of selling in the near term. Derivatives, including separated embedded derivatives are
                also classified as held for trading unless they are designated as effective hedging
                instruments or financial guarantee contracts.

                Subsequent to initial recognition, the financial assets included in this category are
                measured at fair value with changes in fair value recognised in the unaudited combined
                income statement.

         Impairment of financial assets
         At each balance sheet date, financial assets other than at fair value through profit or loss are
         reviewed to determine whether there is any objective evidence of impairment. If there is
         objective evidence that an impairment loss on loans and receivables carried at amortised
         cost has been incurred, the amount of the loss is measured as the difference between the
         asset’s carrying amount and the present value of estimated future cash flows (excluding
         future credit losses that have not been incurred) discounted at the financial asset’s original
         effective interest rate (i.e. the effective interest rate computed at initial recognition). The
         amount of the loss is recognised in profit or loss of the period in which the impairment
         occurs.

         If, in subsequent period, the amount of the impairment loss decreases and the decrease can
         be related objectively to an event occurring after the impairment was recognised, the
         previously recognised impairment loss is reversed to the extent that it does not result in a
         carrying amount of the financial asset exceeding what the amortised cost would have been
         had the impairment not been recognised at the date the impairment is reversed. The amount
         of the reversal is recognised in profit or loss of the period in which the reversal occurs.

     4.8 Inventories
         Inventories are carried at the lower of cost and net realisable value. Cost is determined using
         the weighted average basis, and in the case of work in progress and finished goods,
         comprise direct materials, direct labour and an appropriate proportion of overheads. Net
         realisable value is the estimated selling price in the ordinary course of business less the
         estimated cost of completion and applicable selling expenses.




                                                 B-22
Notes to the unaudited combined financial statements (Continued)


4.   SIGNIFICANT ACCOUNTING POLICIES (Continued)


     4.9 Accounting for income tax
         Income tax comprises current and deferred tax.

         Current income tax assets and/or liabilities comprise those obligations to, or claims from,
         fiscal authorities relating to the current or prior reporting period, that are unpaid at the
         balance sheet date. They are calculated according to the tax rates and tax laws applicable
         to the fiscal periods to which they relate, based on the taxable profit for the year. All changes
         to current tax assets or liabilities are recognised as a component of tax expense in the
         unaudited combined income statement.

         Deferred tax is calculated using the liability method on temporary differences at the balance
         sheet date between the carrying amounts of assets and liabilities in the financial statements
         and their respective tax bases. Deferred tax liabilities are generally recognised for all taxable
         temporary differences. Deferred tax assets are recognised for all deductible temporary
         differences, tax losses available to be carried forward as well as other unused tax credits,
         to the extent that it is probable that taxable profit will be available against which the
         deductible temporary differences, unused tax losses and unused tax credits can be utilised.

         Deferred tax is calculated, without discounting, at tax rates that are expected to apply in the
         period the liability is settled or the asset realised, provided they are enacted or substantively
         enacted at the balance sheet date.

     4.10 Cash and cash equivalents
         For the purpose of the unaudited combined cash flow statement, cash and cash equivalents
         comprise cash on hand and in banks and time deposit with original maturity of three months
         or less, less bank overdrafts which are repayable in demand and form an integral part of the
         Group’s cash management.

         For the purpose of the unaudited combined balance sheet classification, cash and bank
         balances comprise cash on hand and at banks including term deposits which are not
         restricted as to use.

     4.11 Share capital
         Ordinary shares are classified as equity. Share capital is determined using the nominal value
         of shares that have been issued.

         Any transaction costs associated with the issuing of shares deducted from equity (net of any
         related income tax benefits) to the extent they are incremental costs directly attributable to
         the equity transaction.




                                                 B-23
Notes to the unaudited combined financial statements (Continued)


4.   SIGNIFICANT ACCOUNTING POLICIES (Continued)


     4.12 Retirement benefits scheme
          Pursuant to the relevant regulations of the PRC government, the Group participates in a
          local municipal government retirement benefits scheme (the “Scheme”), whereby the
          subsidiary of the Company in the PRC is required to contribute a certain percentage of the
          basic salaries of its employees to the Scheme to fund their retirement benefits. The local
          municipal government undertakes to assume the retirement benefits obligations of all
          existing and future retired employees of the subsidiary of the Company. The only obligation
          of the Group with respect to the Scheme is to pay the ongoing required contributions under
          the Scheme mentioned above. Contributions under the Scheme are charged to the
          unaudited combined income statement as incurred. There are no provisions under the
          Scheme whereby forfeited contributions may be used to reduce future contributions.


     4.13 Financial liabilities
          The Group’s financial liabilities include bank loans and trade, bills and other payables. They
          are included in balance sheet line items as bank loans, secured under current liabilities or
          trade and bills payables and other payables.

          Financial liabilities are recognised when the Group becomes a party to the contractual
          provisions of the instrument. All interest related charges are recognised as an expense in
          finance costs in the unaudited combined income statement.

          A financial liability is derecognised when the obligation under the liability is discharged or
          cancelled or expires.

          Borrowings
          Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings
          are subsequently stated at amortised cost; any difference between the proceeds (net of
          transaction costs) and the redemption value is recognised in the unaudited combined
          income statement over the period of the borrowings using the effective interest method.

          Borrowings are classified as current liabilities unless the Group has an unconditional right to
          defer settlement of the liability for at least 12 months after the balance sheet date.

          Trade payables
          Trade payables are recognised initially at their fair value and subsequently measured at
          amortised cost, using the effective interest method.


     4.14 Provisions and contingent liabilities
          Provisions are recognised when the Group has a present obligation (legal or constructive)
          as a result of a past event, and it is probable that an outflow of economic benefits will be
          required to settle the obligation and a reliable estimate can be made. Where the time value
          of money is material, provisions are stated at the present value of the expenditure expected
          to settle the obligation.

          All provisions are reviewed at each balance sheet date and adjusted to reflect the current
          best estimate.




                                                 B-24
Notes to the unaudited combined financial statements (Continued)


4.   SIGNIFICANT ACCOUNTING POLICIES (Continued)

     4.14 Provisions and contingent liabilities (Continued)

          Where it is not probable that an outflow of economic benefits will be required, or the amount
          cannot be estimated reliably, the obligation is disclosed as a contingent liability, unless the
          probability of outflow of economic benefits is remote. Possible obligations, whose existence
          will only be confirmed by the occurrence or non-occurrence of one or more uncertain future
          events not wholly within the control of the Group are also disclosed as contingent liabilities
          unless the probability of outflow of economic benefits is remote.

          Contingent liabilities are recognised in the course of the allocation of purchase price to the
          assets and liabilities acquired in a business combination. They are initially measured at fair
          value at the date of acquisition and subsequently measured at the higher of the amount that
          would be recognised in a comparable provision as described above and the amount initially
          recognised less any accumulated amortisation, if appropriate.

     4.15 Financial guarantee issued
          A financial guarantee contract is a contract that requires the issuer (or guarantor) to make
          specified payments to reimburse the holder for a loss it incurs because a specified debtor
          fails to make payment when due in accordance with the terms of a debt instrument.

          Where the Group issues a financial guarantee, the fair value of the guarantee is initially
          recognised as deferred income within other payables. Where consideration is received or
          receivable for the issuance of the guarantee, the consideration is recognised in accordance
          with the Group’s policies applicable to that category of asset. Where no such consideration
          is received or receivable, an immediate expense is recognised in profit or loss on initial
          recognition of any deferred income.

          The amount of the guarantee initially recognised as deferred income is amortised in profit or
          loss over the term of the guarantee as income from financial guarantees issued. In addition,
          provisions are recognised if and when it becomes probable that the holder of the guarantee
          will call upon the Group under the guarantee and the amount of that claim on the Group is
          expected to exceed the current carrying amount i.e. the amount initially recognised less
          accumulated amortisation, where appropriate.


     4.16 Segment report
          In accordance with the Group’s internal financial reporting the Group has determined that
          business segments be presented as the primary reporting format.

          In respect of business segment reporting, unallocated costs represent corporate expenses.
          Segment assets consist primarily of property, plant and equipment, inventories, receivables
          and operating cash. Segment liabilities comprise operating liabilities and exclude items such
          as taxation and corporate borrowings.

          Capital expenditure comprises additions to property, plant and equipment and land use
          rights.

          In respect of geographical segment reporting, revenue is based on the country in which the
          customer is located and total assets and capital expenditure are where the assets are
          located.



                                                 B-25
Notes to the unaudited combined financial statements (Continued)


4.   SIGNIFICANT ACCOUNTING POLICIES (Continued)

     4.17 Related parties
         A party is considered to be related to the Group if:
         (i)     directly, or indirectly through one or more intermediaries, the party (1) controls, is
                 controlled, or is under common control with, the Company/Group; (2) has an interest
                 in the Company that gives it significant influence over the Company/Group; or (3) has
                 joint control over the Company/Group;
         (ii)    the party is an associate;
         (iii)   the party is a jointly-controlled entity;
         (iv) the party is a member of the key management personnel of the Company or its parent;
         (v)     the party is a close member of the family of any individual referred to in (i) or (iv);
         (vi) the party is an entity that is controlled, jointly-controlled or significantly influenced by or
              for which significant voting power in such entity resides with, directly or indirectly, any
              individual referred to in (iv) or (v); or
         (vii) the party is a post-employment benefit plan for the benefit of employees of the
               Company/Group, or of any entity that is a related party of the Company/Group.

     4.18 Foreign currencies

         (i)     Functional and presentation currency
                 Items included in the Unaudited Combined Financial Information of each of the Group’s
                 entities are measured using the currency of the primary economic environment in
                 which the entity operates (the “functional currency”). The Unaudited Combined
                 Financial Information are presented in Renminbi (RMB), which is the Company’s
                 functional and presentation currency.


         (ii)    Transactions and balances
                 Foreign currency transactions are translated into the functional currency using the
                 exchange rates prevailing at the dates of the transactions. Foreign exchange gains and
                 losses resulting from the settlement of such transactions and from the transaction at
                 period-end exchange rates of monetary assets and liabilities denominated in foreign
                 currencies are recognised in the unaudited combined income statement.


         (iii)   Group companies
                 The results and financial positions of all the group entities (none of which has the
                 currency of a hyperinflationary economy) that have presentation currencies different
                 from the presentation currency of the Company are translated into the Company’s
                 presentation currency as follows:
                 (a)   assets and liabilities for each unaudited combined balance sheet presented are
                       translated at the closing rate at the date of that unaudited combined balance
                       sheet;




                                                    B-26
Notes to the unaudited combined financial statements (Continued)


4.   SIGNIFICANT ACCOUNTING POLICIES (Continued)

     4.18 Foreign currencies (Continued)
           (iii)   Group companies (Continued)
                   (b)   income and expenses for each unaudited combined income statement are
                         translated at average exchange rates (unless this average is not a reasonable
                         approximation of the cumulative effect of the rates prevailing on the transaction
                         dates, in which case income and expenses are translated at the dates of
                         transaction); and
                   (c)   all resulting exchange differences are recognised as a separate component of
                         equity.


     4.19 Borrowing costs
           All borrowing costs are expensed as incurred.


5.   REVENUE AND OTHER INCOME
     Revenue represents total invoiced value of goods supplied, net of value added taxes, allowances
     for returns and trade discounts. Revenue and other income recognised during the period are as
     follows:

                                                                            Three months ended 31 March
                                                                               2006             2007
                                                                             RMB’000          RMB’000
                                                                            (Unaudited)      (Unaudited)
     Revenue
     Sale of goods                                                           116,638           151,297

     Other income
     Interest income                                                             134               139
     Fair value gains on financial assets at fair value through profit or
       loss                                                                        7                —
     Others                                                                        8                —

                                                                                 149               139




                                                      B-27
Notes to the unaudited combined financial statements (Continued)


6.   SEGMENT INFORMATION
     The Group is organised into four main business segments:
     Adhesive tapes — manufacture and sale of adhesive tapes such as biaxially-oriented
     polypropylene tape, stationary tape, masking tape, double-sided tape and kraft paper tape for
     industrial, commercial and customer uses.

     Release papers — manufacture and sale of release papers such as glassine silicon coated paper
     and clay coat kraft release paper for use as a protective backing on adhesive paper.

     BOPA film — manufacture and sale of BOPA film for packaging in many industries, such as food,
     pharmaceutical and medical industries and in electrical industrial materials.

     2-A2MPS — manufacture and sale of 2-A2MPS for oil industry and water treatment industry.

     The Group’s revenue and assets are principally attributable to a single geographical region, which
     is the PRC, excluding Hong Kong and Macau.

     There are no intersegment sales between the respective segments.

                                                     Three months ended 31 March 2006 (Unaudited)
                                           Adhesive       Release
                                            tapes         papers      BOPA film    2-A2MPS          Total
                                           RMB’000        RMB’000     RMB’000      RMB’000      RMB’000
     Revenue
     Net sales to external customers        59,480         27,726       22,183       7,249      116,638

     Segment results                        18,698            8,499      5,655       3,900          36,752

     Unallocated income                                                                               149
     Unallocated expenses                                                                             (333)

     Operating profit                                                                               36,568
     Finance costs                                                                                    (479)

     Profit before income tax                                                                       36,089
     Income tax expense                                                                             (5,333)

     Profit for the period                                                                          30,756

     Capital expenditure                        6                —          —          81              87
     Unallocated                                                                                       95

     Total capital expenditure                                                                        182

     Depreciation and amortisation            668              105          —         238            1,011
     Unallocated                                                                                      203

     Total depreciation and amortisation                                                             1,214

     Other non-cash expense                     —                —          —           —               —




                                                       B-28
Notes to the unaudited combined financial statements (Continued)


6.   SEGMENT INFORMATION (Continued)

                                                       As at 31 December 2006 (Audited)
                                       Adhesive       Release
                                        tapes          papers     BOPA film    2-A2MPS       Total
                                       RMB’000        RMB’000      RMB’000     RMB’000      RMB’000
     Segment assets                     87,574         33,685       25,654      19,900      166,813
     Unallocated assets                                                                         61,739

     Total assets                                                                           228,552

     Segment liabilities                32,123            6,048      8,634       1,692          48,497
     Unallocated liabilities                                                                    22,605

     Total liabilities                                                                          71,102


                                                 Three months ended 31 March 2007 (Unaudited)
                                       Adhesive       Release
                                        tapes         papers      BOPA film    2-A2MPS          Total
                                       RMB’000        RMB’000     RMB’000      RMB’000      RMB’000
     Revenue
     Net sales to external customers    67,160         32,870       40,867      10,400      151,297

     Segment results                    24,475            9,335     13,160       5,368          52,338

     Unallocated income                                                                           139
     Unallocated expenses                                                                         (462)

     Operating profit                                                                           52,015
     Finance costs                                                                                (361)

     Profit before income tax                                                                   51,654
     Income tax expense                                                                         (7,753)

     Profit for the period                                                                      43,901

     Capital expenditure                   76                —          —          377            453
     Unallocated                                                                                        4

     Total capital expenditure                                                                    457

     Depreciation                         537              105          —          272            914
     Unallocated                                                                                   80

     Total depreciation                                                                           994

     Other non-cash expense                 —                —          —           —              31




                                                   B-29
Notes to the unaudited combined financial statements (Continued)


6.   SEGMENT INFORMATION (Continued)
                                                              As at 31 March 2007 (Unaudited)
                                             Adhesive       Release
                                              tapes          papers     BOPA film     2-A2MPS        Total
                                             RMB’000        RMB’000      RMB’000      RMB’000       RMB’000
     Segment assets                              72,812      34,423      36,137           20,608     163,980
     Unallocated assets                                                                              158,424

     Total assets                                                                                    322,404

     Segment liabilities                         40,593      12,210       1,856            2,119      56,778
     Unallocated liabilities                                                                          64,252

     Total liabilities                                                                               121,030



7.   OPERATING PROFIT
     The Group’s operating profit is arrived at after charging:
                                                                            Three months ended 31 March
                                                                               2006             2007
                                                                             RMB’000          RMB’000
                                                                            (Unaudited)      (Unaudited)
     Operating lease charges: property, plant and equipment                       1,200             1,500
     Operating lease charges: land and buildings                                     —               327
     Cost of inventories recognised as expense                                76,908               94,933
     Depreciation                                                                 1,191              994
     Amortisation of land use rights *                                              23                 —
     Loss on disposal of property, plant and equipment                               —                31
     Directors’ remuneration:
         Fees                                                                        —                 —
         Other emoluments                                                           81                84
     Staff costs (excluding directors’ remuneration)                              1,551             1,601
     Retirement scheme contribution                                                 84               132

     Total staff costs                                                            1,716             1,817

     Cost of inventories recognised as expense includes the following
      expenses which are also included in the respective total
      amounts separately disclosed above for each of these expenses:
          Depreciation                                                            1,007              809
          Staff costs                                                              884               973

     *    Included in administrative expenses.




                                                          B-30
Notes to the unaudited combined financial statements (Continued)


8.   FINANCE COSTS
                                                                    Three months ended 31 March
                                                                       2006             2007
                                                                     RMB’000          RMB’000
                                                                    (Unaudited)      (Unaudited)
     Interest charges on:
       Bank loans wholly repayable within five years                    479                361



9.   INCOME TAX EXPENSE
                                                                    Three months ended 31 March
                                                                       2006             2007
                                                                     RMB’000          RMB’000
                                                                    (Unaudited)      (Unaudited)
     Current tax:
       PRC income tax                                                  5,333              7,753


     The provision for PRC income tax is calculated based on the statutory income tax rate of 15% of
     the assessable income of Xiamen Changtian as determined in accordance with the relevant PRC
     income tax rules and regulations for the three months ended 31 March 2006 and 2007. Xiamen
     Changtian’s branch operated in Shanghai, the PRC was subject to the statutory income tax rate
     of 33% of its assessable income.

     No deferred tax has been provided as the Group did not have any significant temporary
     differences which gave rise to a deferred tax asset or liability at 31 March 2006 and 2007.

     Reconciliation between tax expense and accounting profit at applicable tax rates is as follows:
                                                                    Three months ended 31 March
                                                                       2006               2007
                                                                     RMB’000            RMB’000
                                                                    (Unaudited)        (Unaudited)
     Profit before income tax                                          36,089            51,654

     Tax at the applicable tax rate at 15%                              5,413             7,748
     Effect on different tax rates of branch operating in other
       jurisdictions                                                       —                 15
     Tax effect of unused tax losses not recognised                           5               —
     Others                                                               (85)               (10)

     Income tax expense                                                 5,333             7,753




                                                      B-31
Notes to the unaudited combined financial statements (Continued)


10. DIVIDENDS
      Dividends disclosed during the three months ended 31 March 2006 represented dividends
      declared by Xiamen Changtian to its then equity owners. The rates of dividend and the number
      of shares ranking for dividends are not presented as such information are not meaningful.
                                                                   Three months ended 31 March
                                                                      2006              2007
                                                                    RMB’000           RMB’000
                                                                  (Unaudited)       (Unaudited)
      Interim dividends                                              40,000              —



11.   EARNINGS PER SHARE
      Basic earnings per share is calculated based on profit attributable to equity holders of the
      Company for the respective periods and the pre-Invitation share capital of the Company. The
      Company’s pre-Invitation share capital of 500,000,000 shares were assumed to be in issue
      throughout the entire period presented.

      As there are no dilutive potential ordinary shares during each of the periods covered in the
      Unaudited Combined Financial Information, no diluted earnings per share is presented.




                                               B-32
Notes to the unaudited combined financial statements (Continued)


12. PROPERTY, PLANT AND EQUIPMENT
                                                            Furniture,
                                                             fixtures
                                    Leasehold   Plant and   and office    Motor     Construction
                                    buildings   machinery   equipment    vehicles   in progress     Total
                                     RMB’000    RMB’000      RMB’000     RMB’000      RMB’000      RMB’000
    At 1 January 2006 (Audited)
    Cost                              32,078      43,330        867        393         1,487        78,155
    Accumulated depreciation          (3,031)    (10,394)      (279)       (96)           —        (13,800)
    Net book amount                   29,047      32,936        588        297         1,487        64,355

    Year ended 31 December
      2006 (Audited)
    Opening net book amount           29,047      32,936        588        297          1,487       64,355
    Additions                             —        1,755         49        277          3,119        5,200
    Transfer in/(out)                  3,610         288        508         —          (4,406)          —
    Depreciation charge               (1,099)     (3,619)      (171)       (42)            —        (4,931)
    Deemed distribution to equity
      owners                         (31,558)         —          —           —          (200)      (31,758)
    Closing net book amount               —       31,360        974        532             —        32,866

    At 31 December 2006 and 1
      January 2006 (Audited)
    Cost                                  —       45,373      1,424         670            —        47,467
    Accumulated depreciation              —      (14,013)      (450)       (138)           —       (14,601)
    Net book amount                       —       31,360        974        532             —        32,866

    Period ended 31 March 2007
      (Unaudited)
    Opening net book amount               —       31,360        974        532             —        32,866
    Additions                             —          451          6         —              —           457
    Disposal                              —           —          —         (36)            —           (36)
    Depreciation charge                   —         (919)       (62)       (13)            —          (994)
    Closing net book amount               —       30,892        918        483             —        32,293

    At 31 March 2007
      (Unaudited)
    Cost                                  —       45,824      1,430         617            —        47,871
    Accumulated depreciation              —      (14,932)      (512)       (134)           —       (15,578)
    Net book amount                       —       30,892        918        483             —        32,293



    All property, plant and equipment held by the Group are located in the PRC.

    At 31 December 2006, all leasehold buildings and construction in progress were distributed to
    Xiamen Changtian upon the Reorganisation.




                                                    B-33
Notes to the unaudited combined financial statements (Continued)


13. LAND USE RIGHTS
                                                                                            RMB’000
    At 1 January 2006 (Audited)
    Cost                                                                                     4,607
    Accumulated amortisation                                                                  (591)

    Net book amount                                                                          4,016

    Year ended 31 December 2006 (Audited)
    Opening net book amount                                                                  4,016
    Amortisation                                                                                  (92)
    Deemed distribution to equity owners                                                     (3,924)

    Closing net book amount                                                                        —

    At 31 December 2006 and 1 January 2007 (Audited) and 31 March 2007 (Unaudited)
    Cost                                                                                           —
    Accumulated amortisation                                                                       —

    Net book amount                                                                                —


    At 31 December 2006, the entire land use rights of approximately RMB3,924,000 which were
    pledged against bank loans of the Group (note 20) were distributed to Xiamen Changtian upon the
    Reorganisation.


14. TRADE RECEIVABLES, DEPOSITS AND OTHER RECEIVABLES
    Trade receivables generally have 30 to 90 days’ credit terms. All trade and other receivables are
    denominated in RMB.
                                                                          As at            As at
                                                                    31 December 2006   31 March 2007
                                                                        RMB’000           RMB’000
                                                                        (Audited)       (Unaudited)
    Deposits                                                             1,127              583
    Other receivables                                                      292              179

    Total deposits and other receivables                                 1,419              762
    Less: Deposits paid in respect of purchase of property, plant
           and equipment — non-current portion                            (946)            (583)

    Current portion                                                        473              179




                                                   B-34
Notes to the unaudited combined financial statements (Continued)


15. INVENTORIES, AT COST
                                                                As at               As at
                                                          31 December 2006      31 March 2007
                                                              RMB’000              RMB’000
                                                              (Audited)          (Unaudited)
    Raw materials                                                8,963               9,933
    Work-in-progress                                             1,750               1,807
    Finished goods                                               3,656               2,913

                                                               14,369               14,653



16. BALANCES WITH RELATED PARTIES
                                                                As at               As at
                                                          31 December 2006      31 March 2007
                                                              RMB’000              RMB’000
                                                              (Audited)          (Unaudited)
    Due from related parties
      Ms. Chen Baohua                                            17                     —
      Mr. Chen Yongfu                                            22                     33
      Xiamen Changtian                                            —                 18,889

                                                                 39                 18,922

    Due to related parties
      Xiamen Brightforever                                       20                    500
      Mr. Yang Qingjin                                            —                     84
      Ultimate shareholders                                       —                 21,617

                                                                 20                 22,201


    The balances with related parties are unsecured, interest free and repayable on demand.


17. PLEDGED BANK DEPOSITS, CASH AND BANK BALANCES
    As at 31 December 2006 and 31 March 2007, the bank deposits of RMB9,894,000 and
    RMB7,533,000 respectively were pledged to secure the bills payables of the Group (note 18).

    The Group’s entire pledged bank deposits and certain cash and bank balances in the PRC,
    excluding Hong Kong and Macau, amounting to approximately RMB137,564,000 (31 December
    2006: RMB58,220,000) are denominated in RMB. RMB is not freely convertible into foreign
    currencies. Under the PRC Foreign Exchange Control Regulations and Administration of
    Settlement, Sales and Payment of Foreign Exchange Regulations, the Group is permitted to
    exchange RMB for foreign currencies through banks that are authorised to conduct foreign
    exchange business.




                                             B-35
Notes to the unaudited combined financial statements (Continued)


18. TRADE AND BILLS PAYABLES
                                                                  As at                As at
                                                            31 December 2006       31 March 2007
                                                                RMB’000               RMB’000
                                                                (Audited)           (Unaudited)
    Trade payables                                                27,938               40,463
    Bills payables                                                19,789               15,065

                                                                  47,727               55,528


    Trade and bills payables are normally settled on 30 to 60 days’ credit term. All trade and bills
    payables are denominated in RMB.

19. ACCRUED LIABILITIES AND OTHER PAYABLES
                                                                  As at                As at
                                                            31 December 2006       31 March 2007
                                                                RMB’000               RMB’000
                                                                (Audited)           (Unaudited)
    Accrued liabilities                                           2,207                12,980
    Other payables                                                1,148                 2,568

                                                                  3,355                15,548



20. BANK LOANS, SECURED
                                                                  As at                As at
                                                            31 December 2006       31 March 2007
                                                                RMB’000               RMB’000
                                                                (Audited)           (Unaudited)
    Within one year                                               20,000               20,000


    The Group’s interest bearing bank loans are secured by the pledge of the entire leasehold
    buildings and land use rights which were distributed to Xiamen Changtian upon the
    Reorganisation and bear interests at 7.25% and 7.34% as at 31 December 2006 and 31 March
    2007 respectively.

    The Group’s bank loans are denominated in RMB.

21. SHARE CAPITAL
    The Company was incorporated in Bermuda on 29 March 2007. At the date of incorporation, the
    authorised share capital of the Company was US$12,000 divided into 120,000 ordinary shares of
    US$0.10 each. On 30 March 2007, 1 ordinary share of US$0.10 each were allotted and issued
    nil-paid to Eastline Investments.

    The share capital balances as at 31 December 2006 and 31 March 2007 represent the issued and
    paid-up share capital of Jumbo Glories and the Company respectively.




                                              B-36
Notes to the unaudited combined financial statements (Continued)


22. RESERVES

    (a)   Merger reserve
          The merger reserve of the Group represents the nominal value of the Transferred
          Operations as pursuant to the Reorganisation.

    (b)   Statutory reserves
          In accordance with the relevant laws and regulations of the PRC, the Group is required to
          transfer 10% of its profit after taxation prepared in accordance with the accounting regulation
          in the PRC to the statutory reserve until the reserve balance reaches 50% of the respective
          registered capital. Such reserve may be used to reduce any losses incurred or for
          capitalisation as paid-up capital.

          In addition, the Group is required to transfer 5% of its profit after taxation prepared in
          accordance with the accounting regulations in the PRC to the statutory public welfare
          reserve. The use of the statutory public welfare reserve is restricted to capital expenditure
          for employees’ facilities. This statutory public welfare reserve is non-distributable except
          upon liquidation.


23. OPERATING LEASE COMMITMENTS
    The total future minimum lease payments of the Group under non-cancellable operating leases for
    property, plant and equipment are as follows:
                                                                     As at                 As at
                                                               31 December 2006        31 March 2007
                                                                   RMB’000                RMB’000
                                                                   (Audited)            (Unaudited)
    Within one year                                                   6,000                  6,000
    In the second to fifth years                                     24,000                24,000
    After five years                                                 13,500                12,000

                                                                     43,500                42,000



24. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
    The Group does not have written risk management policies and guidelines. However, the board
    of directors meets periodically to analyse and formulate measures to manage the Group’s
    exposure to market risk, including principally changes in interest rates and currency exchange
    rates. As the Group’s exposure to market risk is kept at a minimum level, the Group has not used
    any derivatives or other instruments for hedging purposes. The Group does not hold or issue
    derivative financial instruments for trading purposes.

    As at 31 December 2006 and 31 March 2007, the Group’s financial instruments mainly consisted
    of cash and bank balances, trade receivables, deposits and other receivables, pledged bank
    deposits, balances with related parties, trade and bills payables, accrued liabilities and other
    payables and bank loans.




                                                 B-37
Notes to the unaudited combined financial statements (Continued)


24. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Continued)

    (a)   Interest rate risk
          The Group’s interest rate risk mainly arises from bank loans. The interest rates and terms of
          repayment of the bank loans are disclosed in note 20.

    (b)   Foreign currency risk
          The Group’s exposure to risk resulting from changes in foreign currency exchange rates is
          minimal.

    (c)   Credit risk
          The carrying amounts of trade and other receivables and amounts due from related parties
          represent the Group’s maximum exposure to credit risk in relation to its financial assets. As
          at 31 March 2007, the Group has a certain concentration of credit risk as approximately
          RMB18,889,000 (31 December 2006: Nil) was due from Xiamen Changtian (note 16). The
          Group intends to collect this outstanding amounts in full prior to the Invitation. No other
          financial assets carry a significant exposure to credit risk.

    (d)   Fair value
          The fair value of the Group’s financial assets and liabilities are not materially different from
          their carrying amounts because of the immediate or short term maturity of these financial
          instruments. The fair value of borrowings is not disclosed because the carrying value is not
          materially different from the fair value.


25. CRITICAL ACCOUNTING ESTIMATES
    Estimates are continually evaluated and are based on historical experiences and other factors,
    including expectations of future events that are believed to be reasonable under the
    circumstances.

    The Group makes estimates and assumptions concerning the future. The resulting accounting
    estimates will, by definition, seldom equal the related actual results. The estimates and
    assumptions that have a significant risk of causing a material adjustment to the carrying amounts
    of assets and liabilities within the next financial year are discussed below.

    (a)   Net realisable value of inventories
          Net realisable value of inventories is the estimated selling price in the ordinary course of
          business, less estimated costs of completion and selling expenses. These estimates are
          based on the current market condition and the historical experience of selling products of
          similar nature. It could change significantly as a result of competitor actions in response to
          severe industry cycles. Management will reassess the estimations at the balance sheet
          date.


    (b)   Impairment of trade receivables
          The Group’s management assess the collectibility of trade receivables. This estimate is
          based on the credit history of the Group’s customers and the current market condition.
          Management reassess the impairment loss at the balance sheet date.




                                                 B-38
Notes to the unaudited combined financial statements (Continued)


26. CAPITAL MANAGEMENT
    The Group’s objectives when managing capital are:
    (a)   To safeguard the Group’s ability to continue as a going concern, so that it continues to
          provide returns for shareholders and benefits for other stakeholders;
    (b)   To support the Group’s stability and growth; and
    (c)   To provide capital for the purpose of strengthening the Group’s risk management capability.

    The Group actively and regularly reviews and manages its capital structure to ensure optimal
    capital structure and shareholder returns, taking into consideration the future capital requirements
    of the Group and capital efficiency, prevailing and projected profitability, projected operating cash
    flows, projected capital expenditures and projected strategic investment opportunities. The Group
    currently does not adopt any formal dividend policy.

    Management regards total equity as capital, for capital management purpose. The amount of
    capital as at 31 December 2006 and 31 March 2007 amounted to approximately
    RMB157,450,000 and RMB201,374,000 respectively, which the management considers as
    optimal having considered the projected capital expenditures and the projected strategic
    investment opportunities.


27. RELATED PARTY TRANSACTIONS

    (a)   In addition to the transactions arising from the Reorganisation and transactions and
          balances detailed in notes 16 and 20 in these Unaudited Combined Financial Information,
          the Group had the following transactions with related party at agreed terms.
                                                                    Three months ended 31 March
                                                                      2006               2007
                                                                    RMB’000            RMB’000
                                                                   (Unaudited)           (Unaudited)
          Rental paid/payable to Xiamen Brightforever                   1,200                  1,500
          Rental payable to Xiamen Changtian                                —                    327



    (b)   Included in staff costs are compensation of key management personnel of the Group and
          comprises the following categories:
                                                                    Three months ended 31 March
                                                                      2006               2007
                                                                    RMB’000            RMB’000
                                                                   (Unaudited)           (Unaudited)
          Short term employee benefits                                    149                    161
          Post employment benefits                                         19                     22

                                                                          168                    183




                                                  B-39
Notes to the unaudited combined financial statements (Continued)


28. NOTES TO THE COMBINED CASH FLOW STATEMENT
    Major non-cash transactions

    During the three months ended 31 March 2007, the deposits paid in prior periods of RMB363,000
    were transferred to property, plant and equipment upon the delivery of the respectively property,
    plant and equipment.


29. SUBSEQUENT EVENTS
    In addition to those disclosed elsewhere in the Unaudited Combined Financial Information, the
    Group had the following significant event took place subsequent to 31 March 2007:

    On 29 May 2007, Changtian Enterprise has received confirmations issued by Fujian Province
    Xiamen City Haicang District National Tax Bureau that it is qualified to apply for the two-year
    exemption and three-year half reduction of income tax with relevant taxation authorities when it
    starts to make profit.




                                               B-40
                                                                                           APPENDIX C

                                              TAXATION

The following is a discussion of certain tax matters arising under the current tax laws in Singapore and
Bermuda and is not intended to be and does not constitute legal or tax advice. The discussion is based on
laws, regulations and interpretations now in effect and available as of the date of this Prospectus. These
laws and regulations are subject to changes, which may be retrospective to the date of issuance of our
Shares. These laws and regulations are also subject to various interpretations and the relevant tax
authorities or the courts of Singapore could later disagree with the explanations or conclusions set out
below.

The discussion is limited to a general description of certain tax consequences in Singapore and Bermuda
with respect to purchase, ownership and disposal of our Shares, and does not purport to be a
comprehensive nor exhaustive description of all tax considerations that may be relevant to a decision to
purchase, hold or dispose of our Shares. Prospective investors should consult their own tax advisors
concerning the tax consequences of owning and disposing our Shares. Neither the Company, the
Directors, the Vendors nor any other persons involved in the Invitation accepts responsibility for
any tax effects or liabilities resulting from the subscription for, purchase, holding or disposal of
our Shares.


SINGAPORE TAXATION
INCOME TAX

General

Singapore resident and non-resident corporate taxpayers are subject to Singapore income tax on:
(a)   income accruing in or derived from Singapore; and
(b)   foreign income received or deemed received in Singapore.

However, foreign income in the form of branch profits, dividends and service income received or deemed
received in Singapore by a resident corporate taxpayer shall be tax exempt provided the following
conditions are met:
(a)   such income is subject to tax of a similar character to income tax under the law of the jurisdiction
      from which such income is received;
(b)   at the time the income is received in Singapore, the highest rate of tax of a similar character to
      income tax in the jurisdiction from which the income is received is at least 15%; and
(c)   the Comptroller of Income Tax is satisfied that the tax exemption would be beneficial to the
      recipient of the foreign income.

Foreign-sourced personal income received or deemed received in Singapore by a Singapore tax resident
individual (except where such income is received through a partnership) on or after 1 January 2004 will be
exempt from tax in Singapore. Certain investment income derived from Singapore sources by individuals
will also be exempt from tax.

Non-Singapore resident corporate taxpayers, subject to certain exceptions, are subject to Singapore
income tax on:
(a)   income that is accrued in or derived from Singapore; and
(b)   foreign income received or deemed received in Singapore.




                                                   C-1
Non-Singapore resident individuals who derive certain types of income from Singapore are subject to the
withholding tax currently at 20% or generally 15% in case of interest, royalty and rental of movable
property, unless reduced or exempted by any applicable tax incentive or double tax treaty.

A company is regarded as a tax resident in Singapore if the control and management of its business is
exercised in Singapore. An individual is a tax resident in Singapore if, in the calendar year preceding the
year of assessment, he was physically present in Singapore or exercised employment in Singapore (other
than as a director of a company) for 183 days or more, or if he ordinarily resides in Singapore.

The corporate tax rate in Singapore is 18% from the Year of Assessment 2008 (i.e. financial year ended
2007). In addition, three-quarters of up to the first $10,000 of a company’s normal chargeable income, and
one-half of up to the next $290,000 of the company’s normal chargeable income are exempt from tax. The
remaining chargeable income (after the partial tax exemption) will be taxed at the applicable corporate tax
rate. The partial tax exemption does not apply to Singapore dividends received by companies.

A tax exemption scheme for qualifying newly incorporated Singapore companies is applicable for Years of
Assessment 2005 to 2009. Under this exemption scheme, the first $100,000 of their normal chargeable
income (excluding Singapore dividends) for each of their first three consecutive years of assessment that
falls within Years of Assessment 2005 to 2009 would be exempt from tax.

Singapore tax resident individuals are subject to tax based on a progressive scale. The maximum rate of
tax is 20% with effect from the Year of Assessment 2007 (i.e. calendar year 2006). The top individual
marginal tax rate will be reduced to 20% with effect from Year of Assessment 2007.

Non-Singapore resident individuals are generally subject to tax at a rate equivalent to the prevailing
corporate tax rate.

There are no reciprocal tax treatment between Bermuda and Singapore.


Dividend Distributions
Dividend Distributions — One Tier Corporate Taxation System (“One-Tier System”)

The previous Imputation System was replaced by a One-Tier Corporate Taxation System (“One-Tier
System”) on 1 January 2003. Under the One-Tier System, the tax paid by a company is a final tax and
the after-tax profits of the company can be distributed to shareholders as Tax Exempt (One-Tier)
dividends.

As our Company is a Bermuda company, non-resident in Singapore, dividends paid by our Company
would be exempt from tax in the hands of individual Shareholders regardless of whether these
individual shareholders are Singapore tax resident, the exemption will not apply to partnership in
Singapore. However, corporate shareholders resident in Singapore or having a permanent
establishment in Singapore or carrying on business activities in Singapore will be subject to tax on the
receipt of these dividends.

There is no withholding tax on dividends paid to non-Singapore tax resident shareholders.


Gains on disposal of the Shares
Singapore does not impose tax on capital gains. However, gains arising from the disposal of our Shares
may be construed to be of an income nature and subject to tax if they arise from activities which the
IRAS regards as the carrying on of a trade or business in Singapore.

Any profits from the disposal of our Shares are not taxable in Singapore unless the seller is regarded
as carrying on a trade or business of dealing in shares in Singapore. In which case, such gains would
be taxable as trading profits and not treated as non-taxable capital gains.

                                                   C-2
STAMP DUTY
No stamp duty is payable on the allotment or holding of our Shares.

Stamp duty is payable on an instrument of transfer of our Shares at the rate of $0.20 for every $100
or any part thereof of the consideration for our Shares. The purchaser is liable for stamp duty, unless
otherwise agreed. However, no stamp duty is payable if no instrument of transfer is executed (such as
in the case of scripless shares, the transfer of shares are through the Central Depository System which
does not require instruments of transfer to be executed) or if the instrument of transfer is executed
outside Singapore. However, stamp duty may be payable if the instrument of transfer which is executed
outside Singapore is subsequently received in Singapore.


ESTATE DUTY
Singapore estate duty is imposed on the value of immovable property situated in Singapore and on
movable property, wherever it may be, owned by individuals who are domiciled in Singapore, subject
to specific exemption limits.

Singapore estate duty is imposed on the value of immovable property situated in Singapore and owned
by individuals who are not domiciled in Singapore, subject to specific exemption limits.

Our Shares are considered movable property situated outside Singapore as our Company is
incorporated in Bermuda and the register of the shares is kept in Bermuda. Accordingly, our Shares
held by an individual are subject to Singapore estate duty upon the individual’s death, if the individual
is domiciled in Singapore. Singapore estate duty is payable to the extent that the value of the shares
aggregated with any other assets subject to Singapore estate duty exceeds $600,000. Any excess
beyond $600,000 will be taxed at 5% on the first $12,000,000 of the individual’s Singapore dutiable
assets and any excess over $12,000,000 will be taxed at 10%. It should be noted that certain assets,
although dutiable, are not included in this aggregation. For example, dwelling houses are assessed
separately and subject to a different exemption limit.

Individuals, whether or not domicile in Singapore, should consult their own tax advisors regarding the
Singapore estate duty consequences of their ownership of our Shares.


GOODS AND SERVICES TAX (“GST”)
The sale of the Shares by an investor belonging in Singapore through a SGX-ST member or to another
person belonging in Singapore is an exempt supply not subject to GST. Where the Shares are sold by
the investor to a person belonging outside Singapore, the sale is generally a taxable supply subject to
GST at zero-rate. Any GST incurred by a GST-registered investor in the making of this supply in the
course of furtherance of a business may be recovered from the Comptroller of GST. Services such as
brokerage, handling and clearing services rendered by a GST-registered person to an investor
belonging in Singapore in connection with the investor’s purchase, sale or holding of the Shares will be
subject to GST at the current rate of seven percent. Similar services rendered to an investor belonging
outside Singapore would generally be zero-rated i.e. subject to GST at zero percent.


BERMUDA TAXATION
Our Company is incorporated in Bermuda. Dividends remitted to shareholders resident outside
Bermuda will not be subject to withholding tax in Bermuda. Further details are set out in Appendix E —
“Summary of Bermuda Company Law” of this Prospectus.




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                                                                                           APPENDIX D

                  SUMMARY OF CONSTITUTION OF OUR COMPANY

This appendix provides information about certain provisions of our Memorandum of Association and
Bye-laws and Bermuda company law. The description below is only a summary and is qualified in its
entirety by reference to our Memorandum of Association and Bye-laws and the Bermuda Companies
Act.
The instruments that constitute and define our Company are the Memorandum of Association and the
Bye-laws of our Company.


1.   MEMORANDUM OF ASSOCIATION AND REGISTRATION NUMBER
     The registration number with which our Company was incorporated is 39836. Our Memorandum
     of Association states that the liability of shareholders of our Company is limited to the amount, if
     any, for the time being unpaid on the shares respectively held by them and that our Company is
     an exempted company as defined in the Bermuda Companies Act. Our Memorandum of
     Association also sets out the objects for which our Company was formed, including acting as a
     holding and investment company, and the powers of our Company, including the powers set out
     in the First Schedule to the Bermuda Companies Act. As an exempted company, our Company will
     be carrying on business outside Bermuda from a place of business within Bermuda.


2.   DIRECTORS

     (a)   Ability of interested directors to vote
           Subject to the Bermuda Companies Act and any further disclosure required thereby, if a
           general notice to our board of Directors is given by a Director or officer declaring that he is
           a director or officer or has an interest in a person and is to be regarded as interested in any
           transaction or arrangement made with that person, it shall be a sufficient declaration of
           interest in relation to any transaction or arrangement so made. Our Directors shall not vote
           in respect of any contract, proposed contract or arrangement in which he has a personal
           material interest, although he may be counted in the quorum present at the meeting.


     (b)   Remuneration
           Fees payable to non-executive Directors shall be a fixed sum (not being a commission on
           or a percentage of profits or turnover of our Company) as shall from time to time be
           determined by our Company in general meeting. Fees payable to Directors shall not be
           increased except at a general meeting convened by a notice specifying the intention to
           propose such increase.

           The board of Directors may grant special remuneration to any Director who, being called
           upon, shall perform any special or extra services to or at the request of the Company. Such
           special remuneration may be made payable to such Director in addition to or in substitution
           for his ordinary remuneration as a Director, as the board of Directors may determine.

           The remuneration of a Managing Director, Joint Managing Director, Deputy Managing
           Director or an Executive Director of our Company or a Director appointed to any other office
           in the management of our Company may from time to time be fixed by our board of Directors
           and with such other benefits (including pension and/or gratuity and/or other benefits on
           retirement) and allowances as our board of Directors may from time to time decide. Such
           remuneration shall be in addition to his ordinary remuneration as a Director of our Company.




                                                  D-1
           We are required to obtain shareholders’ approval for any payments to our Directors 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 our Directors are contractually
           entitled).


     (c)   Borrowing
           Our board of Directors may, at its discretion, exercise all the powers of our Company to raise
           or borrow or to secure the payment of any sum or sums of money for the purposes of our
           Company and to mortgage or charge our undertaking, property and uncalled capital or any
           part thereof.

           These powers conferred on our Board of Directors may be varied by amending the relevant
           Bye-laws of our Company.


     (d)   Retirement age limit
           There is no retirement age limit for Directors.


     (e)   Shareholding qualification
           There are no shareholding qualifications for Directors in the Bye-laws of the Company.


3.   SHARE RIGHTS AND RESTRICTIONS
     Our Company currently has one class of shares, namely, ordinary shares. Under the Bermuda
     Companies Act, only persons who are registered on our register of members are recognised as
     our Shareholders. Shareholders who are named as depositors in the depository register
     maintained by CDP will not be recognised as Shareholders under Bermuda law and will hold their
     shares and exercise their rights through CDP.


     (a)   Dividends and distribution
           We may, by ordinary resolution, declare dividends at a general meeting, but we may not pay
           dividends in excess of the amount recommended by our board of Directors. All dividends we
           declare must be paid out of our profits, which would generally comprise retained earnings,
           or pursuant to Section 40(2)(a) of the Bermuda Companies Act, which permits the
           application of the share premium attributable to our issued shares to the payment of
           dividends in the form of shares. Our Board of Directors may also declare an interim dividend
           without the approval of our shareholders. All dividends are paid pro rata among the
           shareholders in proportion to the amount paid up on each shareholder’s ordinary shares,
           unless the rights attaching to an issue of any share provide otherwise. All dividends or
           bonuses unclaimed for one year after having been declared may be invested or otherwise
           made use of by our Board of Directors for the benefit of our Company until claimed and our
           Company shall not be constituted a trustee in respect thereof. All dividends or bonuses
           unclaimed for six years after having been declared may be forfeited by our Board of
           Directors and shall revert to our Company.

           Our Board of Directors may retain any dividends or other monies payable on or in respect
           of a share upon which our Company has a lien, and may apply the same in or towards
           satisfaction of the debts, liabilities or engagements in respect of which the lien exists. Our
           Board of Directors may also deduct from any dividend or bonus payable to any shareholder
           all sums of money (if any) presently payable by him to our Company on account of calls,
           instalments or otherwise.




                                                  D-2
     (b)   Voting rights
           A Shareholder is entitled to attend, speak and vote at any general meeting in person and a
           Shareholder who is the holder of two or more shares may appoint not more than two proxies
           to attend on the same occasion. Notwithstanding the foregoing provision, CDP may appoint
           more than two proxies or a corporate representative to attend and vote at the same general
           meeting. A proxy need not be a Shareholder.

           Our Bye-laws do not provide for cumulative voting for entire shareholders and directors.


4.   CHANGE IN CAPITAL
     Under the Bermuda Companies Act, changes in the capital structure of our Company (for
     example, an increase, a consolidation or a sub-division of our share capital) require shareholder
     approval at general meetings which requires a minimum period of 14 days with resolutions being
     passed by a simple majority. However, we are required to obtain our Shareholders’ consent by
     way of a special resolution for any reduction of our share capital, redemption reserve, fund or any
     share premium account or other undistributable reserve, subject to the conditions prescribed by
     law.

     Our Bye-laws provide a distinction between an “ordinary resolution” and a “special resolution”, a
     distinction which is not made in the Bermuda Companies Act. A resolution shall be an “ordinary
     resolution” when it has been passed by a simple majority of the votes cast by our shareholders
     at a general meeting held in accordance with these presents and of which not less than 14 days’
     notice has been duly given. A resolution shall be a “special resolution” when it has been passed
     by a majority of 3/4 of the votes cast by our Shareholders at a general meeting of which not less
     than 21 days’ notice, specifying (without prejudice to the power contained in these presents to
     amend the same) the intention to propose the resolution as a Special Resolution, has been duly
     given.


5.   VARIATION OF RIGHTS OF EXISTING SHARES OR CLASSES OF SHARES
     Subject to the Bermuda Companies Act, if at any time our share capital is divided into different
     classes of shares, all or any of the special rights attached to any class (unless otherwise provided
     for by the terms of issue of the shares of that class) may, subject to the provisions of the Bermuda
     Companies Act, be varied 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 these Bye-laws relating to general
     meetings shall mutatis mutandis apply, but so that the necessary quorum shall be not less than
     two persons holding or representing by proxy or by corporate representative one-third in nominal
     value of the issued shares of that class, and that any holder of shares of the class present in
     person or by proxy or by duly authorised corporate representative may demand a poll. This
     provisions will also apply to the variation or abrogation of the special rights attached to the shares
     of any class as if each group of shares of the class differently treated formed a separate class the
     rights whereof are to be varied or abrogated.

     The relevant Bye-law does not impose more significant conditions than the Bermuda Companies
     Act in this regard.


6.   LIMITATIONS ON SHAREHOLDERS REGARDED AS NON-RESIDENTS OF BERMUDA
     There are no limitations on the rights of our Shareholders who are regarded as non-residents of
     Bermuda to hold or vote their shares. As our Company has been designated by the Bermuda
     Monetary Authority as non-resident of Bermuda for exchange control purposes, our Company is
     free to acquire, hold and sell foreign currency and securities without restriction.


                                                   D-3
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                                                                                             APPENDIX E

                         SUMMARY OF BERMUDA COMPANY LAW

The Company is incorporated in Bermuda and therefore, operates subject to Bermuda law. Set out
below is a summary of certain provisions of Bermuda company law. This summary does not purport to
contain all applicable qualifications and exemptions and does not purport to be a complete review of all
matters of Bermuda company law or a comparison of provisions that may differ from the laws of other
jurisdictions, with which interested parties may be more familiar.

(a)   Share capital
      The Bermuda Companies Act provides for the giving of financial assistance by a company for the
      acquisition of its own or its holding company’s shares in specific circumstances.

      The Bermuda Companies Act provides that where a company issues shares at a premium
      whether for cash or otherwise, a sum equal to the aggregate amount or value of the premium on
      those shares shall be transferred to an account, to be called “the share premium account” and the
      provisions of the Bermuda Companies Act relating to a reduction of share capital shall, except as
      provided in section 40 of the Bermuda Companies Act, apply as if the share premium account
      were paid up share capital of the company. An exception is made to this rule in the case of an
      exchange of shares where the excess value of the shares acquired over the nominal value of the
      shares being issued may be credited to a contributed surplus account of the issuing company.
      Contributed surplus is a North American concept recognised under the generally accepted
      accounting principles of the Canadian Institute of Chartered Accountants which accounting
      principles are applied in Bermuda.

      The Bermuda Companies Act permits a company to issue preference shares and under certain
      circumstances to convert those preference shares into redeemable shares.


(b)   Alteration of share capital
      A company may if authorised by a general meeting of the shareholders of the company and by its
      bye-laws, alter the conditions of its memorandum of association to increase its share capital,
      divide its shares into several classes and attach thereto respectively any preferential, deferred,
      qualified or special rights, privileges or conditions, consolidate and divide all or any of its share
      capital into shares of a larger amount than is fixed by the memorandum of association, make
      provision for the issue and allotment of shares which do not carry any voting rights, cancel shares
      which have not been taken or agreed to be taken by any person, diminish the amount of its share
      capital by the amount of the shares so cancelled and change the currency denomination of its
      share capital. With the exception of an increase in capital, cancellation of shares and
      redenomination of currency of capital, there are no filing requirements for any of the above-
      mentioned alterations.

      Furthermore, a company may, if authorised by a general meeting of the shareholders, reduce its
      share capital. There are certain requirements, including a requirement prior to the reduction to
      publish a notice in an appointed newspaper stating the amount of the share capital as last
      determined by the company, the amount to which the share capital is to be reduced and the date
      on which the reduction is to have effect.

      The Bermuda Companies Act provides that a company shall not reduce the amount of its share
      capital if on the date the reduction is to be effected there are reasonable grounds for believing that
      the company is, and after the reduction would be, unable to pay its liabilities as they become due.

      The Bermuda Companies Act includes certain protections for holders of special classes of shares,
      requiring their consent to be obtained before their rights may be varied.

                                                    E-1
      The Bermuda Companies Act requires that as soon as practicable after the allotment of any of its
      shares a company must complete and have ready for delivery share certificates in relation to
      those shares allotted unless the conditions of issue of the shares otherwise provide. A certificate
      under the common seal of the company shall be prima facie evidence of the title of the
      shareholder to the shares. The Bermuda Companies Act prohibits bearer shares.


(c)   Financial assistance to purchase shares of a company or its holding company
      A company is prohibited from providing financial assistance for the purpose of an acquisition of its
      own or its holding company’s shares. However, in certain circumstances, the prohibition from
      giving financial assistance may be excluded such as where the company’s principal purpose in
      giving that assistance is not to give it for the purpose of any such acquisition, or the giving of the
      assistance for that purpose is but an incidental part of some larger purpose of the company, and
      the assistance is given in good faith in the interests of the company. In addition, a company is only
      prohibited from granting financial assistance if on the date from which the financial assistance is
      to be given, there are reasonable grounds for believing that the company is, or after the giving of
      such financial assistance would be, unable to pay its liabilities as they become due.


(d)   Purchase by the company of its own shares and warrants
      The Bermuda Companies Act permits the company, if authorised to do so by its memorandum of
      association or by its bye-laws, to purchase its own shares. It should be noted that the company
      is authorised by its bye-laws, subject to certain approvals, to purchase its own shares. Such
      purchases may only be effected out of the capital paid up on the purchased shares, profits
      otherwise available for dividend or distribution (see “Dividends and distributions” below) or out of
      the proceeds of a new issue of shares made for the purpose. Any premium payable on a
      repurchase over the par value of the shares to be repurchased must be provided for out of the
      profits otherwise available for dividends, out of the company’s share premium account, or out of
      contributed surplus. A purchase by the company of its own shares may be authorised by its board
      of directors or otherwise by or in accordance with the provisions of its bye-laws. The Bermuda
      Companies Act provides that no purchase by the company of its own shares may be effected if,
      on the date on which the purchase is to be effected, there are reasonable grounds for believing
      that the company is, or after the purchase would be, unable to pay its liabilities as they become
      due. The shares purchased pursuant to the Bermuda Companies Act shall be treated as cancelled
      and the amount of the company’s issued capital shall be diminished by the nominal amount of
      those shares accordingly. It shall not be taken as reducing the amount of the company’s
      authorised share capital.

      The company is not prevented from purchasing and may purchase its own warrants. There is no
      requirement of Bermuda Law that the company’s memorandum of association or its bye-laws
      contain a specific enabling provision authorising any such purchase and the directors may rely
      upon the general power contained in its memorandum of association to buy and sell and deal in
      personal property of all kinds.

      A company has power to hold and purchase shares of its holding company. A distinction must be
      drawn between the purchase of shares in the holding company by the holding company itself and
      the purchase by a subsidiary. A holding company can only purchase its own shares in accordance
      with the provisions referred to above. When a subsidiary acquires shares in its holding company,
      the shares, once purchased, may be voted by the subsidiary for its own benefit.




                                                    E-2
(e)   Transfer of securities
      Title to securities of companies whose securities are traded or listed on an appointed stock
      exchange may, where permitted by regulations made by the Minister or where such transfer is
      effected through the mechanism required or permitted by an appointed stock exchange, be
      evidenced and transferred without a written instrument.


(f)   Dividends and distributions
      The Bermuda Companies Act provides that a company shall not declare or pay a dividend or
      make a distribution out of contributed surplus, if there are reasonable grounds for believing that
      (a) the company is, or would after the payment be, unable to pay its liabilities as they become due;
      or (b) the realisable value of the company’s assets would thereby be less than the aggregate of
      its liabilities and its issued share capital and share premium accounts.

      Contributed surplus for these purposes is defined as including proceeds arising from donated
      shares, credits resulting from the redemption or conversion of shares at less than the amount set
      up as nominal capital, the excess value of shares acquired over those issued in a share exchange
      should the Board elect to treat it as such and donations of cash and other assets to the company.


(g)   Charges on the assets of the company
      The Bermuda Companies Act established a register of charges at the office of the Registrar of
      Companies permitting any charges on the assets of a company to be registered. Registration is
      not mandatory but does govern priority in Bermuda, giving a registered charge priority over any
      subsequently registered charge and over all unregistered charges save those in effect prior to the
      coming into effect of the Bermuda Companies Act in July 1983. The register of charges is
      available for inspection by members of the public. The Bermuda Companies Act also makes
      provision for the registration of a series of debentures.


(h)   Management and administration
      The management and administration of a Bermuda company is essentially governed by Part VI
      of the Bermuda Companies Act and provides that the management and administration of a
      Bermuda company shall be vested in the hands of not less than two (2) directors duly elected by
      the shareholders. The Bermuda Companies Act requires that a Bermuda company maintain either
      (a) a Bermuda resident secretary and a Bermuda resident representative; or (b) a Bermuda
      resident secretary and a Bermuda resident director; or (c) two (2) Bermuda resident directors, all
      of whom must be individuals. Exempted companies, the shares of which are listed on an
      appointed stock exchange, may appoint a resident representative in Bermuda in place of the other
      Bermuda resident officers, who or which may be either an individual or a corporate entity, whose
      statutory right, duties and obligations are established by the Bermuda Companies Act.

      The Bermuda Companies Act contains no specific restrictions on the power of the directors to
      resolve to dispose of assets of a company although it specifically requires that every officer (which
      includes a director and managing director and secretary) of a company, in exercising his powers
      and discharging his duties, shall act honestly and in good faith with a view to the best interests of
      the company and exercise the care, diligence and skill that a reasonably prudent person would
      exercise in comparable circumstances. Furthermore, it requires that every officer should comply
      with the Bermuda Companies Act, regulations passed pursuant to the Bermuda Companies Act
      and the bye-laws of the company.




                                                   E-3
(i)   Accounting requirements under the Bermuda Companies Act
      The Bermuda Companies Act requires that a company shall cause to be kept proper records of
      account 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 take place;
      (ii)    all sales and purchases of goods by the company; and
      (iii)   the assets and liabilities of the company.

      It further requires that the records of account shall be kept at the registered office of the company
      or at such other place as the Board thinks fit and shall at all times be open to inspection by the
      directors. The Bermuda Companies Act also requires that, these records of account also be
      maintained at the office of the resident representative where the company is listed on an
      appointed stock exchange and the company has appointed a resident representative. There is a
      proviso in the Bermuda Companies Act to the effect that if the records of account are kept at some
      place outside Bermuda, there shall be kept at an office of the company in Bermuda such records
      as will enable the Board to ascertain with reasonable accuracy the financial position of the
      company at the end of each three (3) month period. Power is vested in the courts of Bermuda to
      order the company to make available the records of account to any of the directors of the company
      should the company for some reason refuse to do so. Furthermore, the Bermuda Companies Act
      imposes a fine in the event of failure to comply with the aforementioned requirements which fine
      is limited to the sum of BD$500.00 (approximately equivalent in value to US$500.00), for the time
      being.


(j)   Auditing requirements
      The Bermuda Companies Act requires that the board of every company shall, at least once in
      every year, lay before the company in general meeting:
      (i)     financial statements for the period, which shall include:
              (a)   a statement of the results of operations for such period;
              (b)   a statement of retained earnings or deficits;
              (c)   a balance sheet at the end of such period;
              (d)   a statement of changes in the financial position for the period;
              (e)   notes to the financial statements; and
              (f)   such further information as required by the Bermuda Companies Act and the
                    company’s memorandum of association and its bye-laws;
      (ii)    the report of the auditor in respect of the financial statements described above based upon
              the results of the audit made in accordance with generally accepted accounting principles;
              and
      (iii)   the notes referred to in paragraph (a) above shall include a description of the generally
              accepted accounting principles used in the preparation of the financial statements and
              where the accounting principles used are those of a country or jurisdiction other than
              Bermuda the notes shall disclose this fact and shall name the country or jurisdiction.

      Financial statements to be laid before the shareholders in general meeting shall be signed on the
      balance sheet by two (2) of the directors of the company.




                                                     E-4
      If for some reason it becomes impossible, for reasons beyond the reasonable control of the
      directors, to lay the financial statements before the shareholders, it shall be lawful for the meeting
      to adjourn the meeting for a period of up to ninety (90) days or such longer period as the
      shareholders may agree.

      All shareholders of a company are entitled to receive a copy of the financial statements prepared
      in accordance with the aforementioned requirements, at least seven (7) days before the general
      meeting of the company at which the financial statements would be tabled. The Bermuda
      Companies Act also provides that companies listed on an appointed stock exchange (including
      the SGX-ST) may send summarized financial statements instead of the unabridged financial
      statements mentioned above. Each shareholder can elect to receive unabridged financial
      statements for that period and/or any subsequent period. The summarized financial statements
      together with auditors report and notice to elect to receive the unabridged financial statements
      must be sent to shareholders twenty-one days before the general meeting. A company shall send
      the full financial statements to a member within seven days of receipt of the member’s election to
      receive the full financial statements.

      The summarized financial statements must be derived from the company’s financial statements
      and shall include:
      (i)     a summarized report of the unabridged financial statements;
      (ii)    such further information extracted from the financial statements as the board of directors
              considers appropriate; and
      (iii)   a statement that it is only a summarized version of the company’s financial statements and
              does not contain sufficient information to allow as full an understanding of the financial
              position, results of operations or changes in financial position or cash flows of the company
              as would be provided by unabridged financial statements.

      There are certain exceptions in the case of shareholders not entitled to receive notices of general
      meetings, joint holders of shares or where the address of a person is not known to the company.

      The Bermuda Companies Act also makes provision vesting power in the shareholders in general
      meeting to waive the laying of the financial statements and auditors’ report and to waive the
      appointment of an auditor. In order to do so, it is required that all shareholders and directors of the
      company agree either in writing or at a general meeting, that in respect of a particular interval no
      financial statement or auditors’ report thereon need be laid before a general meeting.

      The Bermuda Companies Act contains specific requirements in section 89 in relation to the
      appointment and disqualification of an auditor.

      By way of general reference, the provisions of sections 83, 84, 87, 88, 89 and 90 govern the
      preparation and maintenance of accounting records and audited financial statements.


(k)   Exchange control
      Although incorporated in Bermuda, the company has been classified as non-resident in Bermuda
      for exchange control purposes by the Bermuda Monetary Authority. Accordingly, the company
      may convert currency (other than Bermudian currency) held for its account to any other currency
      without restriction.

      Persons, firms or companies regarded as residents of Bermuda for exchange control purposes
      require specific consent under the Exchange Control Act 1972 of Bermuda, and regulations
      thereunder, to purchase or sell shares or warrants of the company which are regarded as foreign
      currency securities by the Bermuda Monetary Authority. Under the terms of the consent given to
      the company by the Bermuda Monetary Authority, the issue of shares pursuant to this document


                                                     E-5
      and any transactions in issued shares between persons, firms or companies regarded as
      non-resident in Bermuda for exchange control purposes may be effected without further
      permission from that Authority. Before the company can issue any further shares beyond the
      consent given from the Bermuda Monetary Authority, the company must first obtain the prior
      written consent of that Authority.

      In granting such permission, the Bermuda Monetary Authority accepts no responsibility for the
      financial soundness of any proposals or for the correctness of any statements made or opinions
      expressed in this document with regard to them.


(l)   Taxation
      In Bermuda, there are no taxes on profits, income or dividends, nor is there any capital gains tax,
      estate duty or death duty. Profits can be accumulated and it is not obligatory for a company to pay
      dividends. The company is required to pay an annual government fee (the “Government Fee”),
      which is determined on a sliding scale by reference to a company’s authorised share capital and
      share premium account, with the minimum fee being BD$1,780 and the maximum BD$27,825
      (the BD$ is treated at par with the US$). The Government Fee is payable at the end of January
      in every year and is based on the authorised share capital and share premium account as they
      stood at 31 August in the preceding year.

      The Bermuda Government has enacted legislation under which the Minister of Finance is
      authorised to give an assurance to an exempted company or a partnership that, in the event of
      there being enacted in Bermuda any legislation imposing tax computed on profits or income or
      computed on any capital asset, gain or appreciation, then the imposition of any such tax shall not
      be applicable to such entities or any of their operations. In addition, there may be included an
      assurance that any such tax or any tax in the nature of estate duty or inheritance tax, shall not be
      applicable to the shares, debentures or other obligations of such entities. This assurance has
      been obtained by the company for a period ending 28 March 2016.


(m) Stamp duty
      The law relating to stamp duties has been fundamentally changed as a result of the enactment of
      certain legislation that came into force on 1 April 1990. Stamp duty is no longer chargeable in
      respect of the incorporation, registration or licensing of an exempted company, nor, subject to
      certain minor exceptions, on their transactions. Accordingly, no stamp duty will be payable on the
      increase in or the issue or transfer of the share capital of the company.


(n)   Loans to directors
      The Bermuda Companies Act prohibits the making of loans by the company to any of its directors
      or to their families or companies in which they hold a 20 per cent interest, without the consent of
      shareholders of the company holding in the aggregate not less than nine-tenths (9/10) of the total
      voting rights of all shareholders having the right to vote at any meeting of the shareholders of the
      company. These prohibitions do not apply to anything done to provide a director with funds to
      meet expenditure incurred or to be incurred by him for the purposes of the company, provided that
      the company gives its prior approval at a general meeting or, if not, the loan is made on condition
      that it shall be repaid within six (6) months of the next annual general meeting if the loan is not
      approved at such meeting. If the approval of the company is not given for a loan, the directors who
      authorised it will be jointly and severally liable for any loss arising.

      However, under the Bermuda Companies Act, a company may advance monies to an officer or
      auditor for the costs, charges and expenses incurred by the officer or auditor in defending any civil
      or criminal proceedings against them, on condition that the officer or auditor shall repay the
      advance if any allegation of fraud or dishonesty is proved against them.


                                                   E-6
(o)   The investigation of the affairs of a company and the protection of minorities
      The Bermuda Companies Act makes specific provision with regard to the foregoing and provides
      that the Minister of Finance may, at any time of his own volition, appoint one or more inspectors
      to investigate the affairs of an exempted company and to report thereon in such manner as he
      may direct. The Bermuda Companies Act requires that such an investigation be conducted in
      private unless the company requests that it be held in public. Furthermore, any shareholder of a
      company who complains that the affairs of the company are being conducted or have been
      conducted in a manner oppressive or prejudicial to the interests of some part of the shareholders,
      including himself, or where a report has been made to the Minister of Finance under the foregoing,
      the Registrar on behalf of the Minister, may make an application to the court by petition for an
      order that the company’s affairs are being conducted or have been conducted in a manner
      oppressive or prejudicial to the interests of some part of the shareholders and that to wind up the
      company would unfairly prejudice that part of the shareholders but otherwise the facts would
      justify the making of a winding up order on the ground that it would be just and equitable that the
      company should be wound up. If the court is of this opinion, then it may, with a view to bringing
      to an end the matters complained of, make such order as it thinks fit whether for regulating the
      conduct of the company’s affairs in future or for the purchase of shares of any shareholders of the
      company by other shareholders of the company or by the company and in the case of a purchase
      by the company, for the reduction accordingly of the company’s capital, or otherwise.

      Class actions and derivative actions are generally not available to shareholders under the laws of
      Bermuda; however, the Bermuda courts ordinarily would expect to follow English case law
      precedent which would permit a shareholder to commence an action in the name of the company
      to remedy a wrong done to the company where the act complained of is alleged to be beyond the
      corporate power of the company or is illegal or would result in the violation of a company’s
      memorandum of association and bye-laws. Furthermore, consideration would be given by the
      court to acts that are alleged to constitute a fraud against the minority shareholders or, for
      instance, where an act requires the approval of a greater percentage of the company’s
      shareholders than that which actually approved it.

      In addition to the above, the shareholders may be able to bring claims against a company; such
      claims must, however, be based on the general laws of contract or tort applicable in Bermuda.

      A statutory right of action is conferred on subscribers to shares of a company against persons
      (including directors and officers) responsible for the issue of a prospectus in respect of damage
      suffered by reason of an untrue statement therein (see above) but this confers no right of action
      against the company itself. In addition, the company itself (as opposed to its shareholders) may
      take action against the officers (including directors) for breach of their statutory and fiduciary duty
      to act honestly and in good faith with a view to the best interests of the company (as mentioned
      above).


(p)   Inspection of corporate records
      Members of the general public have the right to inspect the public documents of the company
      available at the office of the Registrar of Companies in Bermuda which will include the company’s
      certificate of incorporation, its memorandum of association (including its objects and powers) and
      any alteration to the company’s memorandum of association and documents relating to an
      increase or reduction of authorised capital. The shareholders have the additional right to inspect
      the bye-laws of the company, minutes of general (i.e. shareholders) meetings and audited
      financial statements of the company, which must be presented to the annual general meeting of
      shareholders. The register of shareholders of the company is also open to inspection by
      shareholders and to members of the general public without charge. The company is required to
      maintain its share register in Bermuda but may establish a branch register outside Bermuda. The
      company is required to keep at its registered office a register of its directors and officers which is
      open for inspection by members of the public without charge.

                                                    E-7
(q)   Winding up and liquidation provisions of Bermuda legislation

      (i)    Introduction
             The winding up of Bermuda companies is governed by the provisions of the Bermuda
             Companies Act and by the Companies (Winding Up) Rules 1982 (the “Rules”) and may be
             divided into the following two types:
             (a)   Voluntary winding up which commences with the shareholders’ resolution or upon the
                   happening of a specified event (fixed or limited life company) and which itself can be
                   sub-divided into a shareholders’ voluntary winding up and a creditors’ voluntary
                   winding up; and
             (b)   Compulsory winding up, by petition presented to the courts of Bermuda followed by
                   winding up order.

      (ii)   Voluntary winding up

             (a)   Shareholders’ voluntary winding up
                   A shareholders’ voluntary winding up is only possible if a company is solvent. A
                   Statutory Declaration of Solvency to the effect that a company is able to meet its debts
                   within twelve (12) months from the date of the commencement of its winding up is
                   sworn by a majority of the company’s directors and filed with the Registrar of
                   Companies.

                   A general meeting of shareholders is then convened which resolves that the company
                   be wound up voluntarily and that a liquidator (responsible for collecting in the assets of
                   the company, determining its liabilities and distributing its assets amongst its creditors
                   and the surplus to the shareholders) be appointed.

                   Once the affairs of the company are fully wound up, the liquidator prepares a full
                   account of the liquidation which he then presents to the company’s shareholders at a
                   general meeting called for that purpose. This special general meeting must be
                   advertised in an appointed newspaper in Bermuda at least one (1) month before it is
                   held and within one (1) week after it is held, the liquidator notifies the Registrar of
                   Companies that the company has been dissolved.

             (b)   Creditors’ voluntary winding up
                   A creditors’ voluntary winding up may occur where a company is insolvent and a
                   Declaration of Solvency cannot be sworn.

                   A board meeting is convened which resolves to recommend to the shareholders of the
                   company that the company be placed into a creditors’ voluntary winding up. This
                   recommendation is then considered and, if thought fit, approved at a special general
                   meeting of the company’s shareholders and, subsequently, at a meeting of the
                   company’s creditors.

                   Notice of the creditors’ meeting must appear in an appointed newspaper on at least two
                   (2) occasions and the directors must provide this meeting with a list of the company’s
                   creditors and a full report of the position of the company’s affairs.

                   At their respective meetings, the creditors and shareholders are entitled to nominate a
                   person or persons to serve as liquidator(s) and whose responsibilities include
                   collecting in the assets of the company, ascertaining its liabilities and distributing its
                   assets rateably amongst its creditors in accordance with their proofs of debt. In addition
                   to the liquidator, the creditors are entitled to appoint a Committee of Inspection which,
                   under Bermuda Law, is a representative body of creditors who assist the liquidator
                   during the liquidation.

                                                     E-8
          As soon as the affairs of the company are fully wound up, the liquidator prepares his
          final account explaining the liquidation of the company and the distribution of its assets
          which he then presents to the company’s shareholders in a special general meeting
          and to the company’s creditors in a meeting. Within one (1) week after the last of these
          meetings, the liquidator sends a copy of the account to the Registrar of Companies in
          Bermuda who proceeds to register it in the appropriate public records and the company
          is deemed dissolved three (3) months after the registration of this account.


(iii) Compulsory winding up
    The courts of Bermuda may wind up a Bermuda company on a petition presented by
    persons specified in the Bermuda Companies Act and which include the company, itself and
    any creditor or creditors of the company (including contingent or prospective creditors) and
    any shareholder or shareholders of the company.

    Any such petition must state the grounds upon which the Bermuda court has been asked to
    wind up the company and may include either one of the following:
    (a)   that the company has by resolution resolved that it be wound up by the Bermuda court;
    (b)   that the company is unable to pay its debts; or
    (c)   that the Bermuda court is of the opinion that it is just and equitable that the company
          be wound up.

    The winding up petition seeks a winding up order and may include a request for the
    appointment of a provisional liquidator.

    Prior to a winding up order being granted and the appointment of the provisional liquidator,
    (who under Bermuda Law, may or may not be the Official Receiver — a Government
    appointed officer) an interim provisional liquidator may be appointed to administer the affairs
    of the company with a view to its winding up until he is relieved of these duties by the
    appointment of the provisional liquidator. (Often, the interim provisional liquidator is
    appointed the provisional liquidator).

    As soon as a winding up order has been made, the provisional liquidator summons separate
    meetings of the company’s creditors and shareholders in order to determine whether or not
    he should serve as the permanent liquidator or be replaced by some other person who will
    serve as the permanent liquidator and also to determine whether or not a Committee of
    Inspection should be appointed and, if appointed, the shareholders of that Committee. The
    provisional liquidator notifies the Court of the decisions made at these meetings and the
    Court makes the appropriate orders.

    A permanent liquidator’s powers are prescribed by the Act and include the power to bring or
    defend actions or other legal proceedings in the name and on behalf of the company and the
    power to carry on the business so far as may be necessary for the beneficial winding up of
    the company. His primary role and duties are the same as a liquidator in a creditors’
    voluntary winding up i.e. to distribute the company’s assets rateably amongst its creditors
    whose debts have been admitted.

    As soon as the affairs have been completely wound up, the liquidator applies to the courts
    of Bermuda for an order that the company be dissolved and the company is deemed
    dissolved from the date of this order being made.

Any person wishing to have a detailed summary of Bermuda 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.


                                            E-9
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                                                                                           APPENDIX F

            SUMMARY OF RELEVANT PRC LAWS AND REGULATIONS

1.   PRC legal system
     The PRC legal system is based on the PRC Constitution and is made up of written laws,
     regulations and directives. Decided court cases do not constitute binding precedents.

     The National People’s Congress of the PRC (“NPC”) and the Standing Committee of the NPC are
     empowered by the PRC Constitution to exercise the legislative power of the state. The NPC has
     the power to amend the PRC Constitution and to enact and amend primary laws governing the
     state organs, civil affairs and criminal offences and other matters. The Standing Committee of the
     NPC is empowered to interpret, enact and amend laws other than those required to be enacted
     by the NPC.

     The State Council of the PRC is the highest organ of state administration and has the power to
     enact administrative rules and regulations. Ministries and commissions under the State Council of
     the PRC are also vested with the power to issue orders, directives and regulations within the
     jurisdiction of their respective departments. Administrative rules, regulations, directives and
     orders promulgated by the State Council and its ministries and commissions must not be in
     conflict with the PRC Constitution or the national laws and, in the event that any conflict arises,
     the Standing Committee of the NPC has the power to annul such administrative rules and
     regulations enacted by the State Council and the State Council has the power to annul such
     directives, orders and regulations issued by its ministries and commissions.

     At the regional level, the people’s congresses of provinces and municipalities and their standing
     committees may enact local rules and regulations and the people’s government may promulgate
     administrative rules and directives applicable to their own administrative area. These local rules
     and regulations may not be in conflict with the PRC Constitution, any national laws or any
     administrative rules and regulations promulgated by the State Council.

     Rules, regulations or directives may be enacted or issued at the provincial or municipal level or
     by the State Council of the PRC or its ministries and commissions in the first instance for
     experimental purposes. After sufficient experience has been gained, the State Council may
     submit legislative proposals to be considered by the NPC or the Standing Committee of the NPC
     for enactment at the national level.

     The power to interpret laws is vested by the PRC Constitution in the Standing Committee of the
     NPC. According to the Decision of the Standing Committee of the NPC Regarding the
     Strengthening of Interpretation of Laws passed on 10 June 1981, the Supreme People’s Court
     has the power to give general interpretation on the application of laws in judicial proceedings apart
     from its power to issue specific interpretation in specific cases. The State Council and its
     ministries and commissions are also vested with the power to give interpretation of the rules and
     regulations which they promulgated. At the regional level, the power to give interpretation of
     regional laws is vested in the regional legislative and administration organs which promulgate
     such laws. All such interpretations carry legal effect.


2.   Judicial system
     The People’s Courts are the judicial organs of the PRC. Under the PRC Constitution and the Law
     of Organization of the People’s Courts of the People’s Republic of China, the People’s Courts
     comprise the Supreme People’s Court, the local people’s courts, military courts and other special
     courts. The local people’s courts are divided into three levels, namely, the basic people’s courts,
     intermediate people’s courts and higher people’s courts. The basic people’s courts are divided


                                                  F-1
     into civil, criminal and administrative divisions. The intermediate people’s courts have divisions
     similar to those of the basic people’s courts and, where the circumstances so warrant, may have
     other special divisions (such as intellectual property divisions). The judicial functions of people’s
     courts at lower levels are subject to supervision of people’s courts at higher levels. The people’s
     procuratorates also have the right to exercise legal supervision over the proceedings of people’s
     courts of the same and lower levels. The Supreme People’s Court is the highest judicial organ of
     the PRC. It supervises the administration of justice by the people’s courts of all levels.

     The people’s courts adopt a two-tier final appeal system. A party may before the taking effect of
     a judgment or order appeal against the judgment or order of the first instance of a local people’s
     court to the people’s court at the next higher level. Judgments or orders of the second instance
     at the next higher level are final and binding. Judgments or orders of the first instance of the
     Supreme People’s Court are also final and binding. If, however, the Supreme People’s Court or
     a people’s court at a higher level finds an error in a final and binding judgment which has taken
     effect in any people’s court at a lower level, a retrial of the case may be conducted according to
     the judicial supervision procedures. Or if the president of a people’s court at any level finds a
     definite error in a legally effective judgment or written order of his court and deems it necessary
     to have the case retried, he shall refer it to the judicial committee for discussion and decision.

     The PRC civil procedures are governed by the Civil Procedure Law of the People’s Republic of
     China (the “Civil Procedure Law”) adopted on 9 April 1991. The Civil Procedure Law contains
     regulations on the institution of a civil action, the jurisdiction of the people’s courts, the procedures
     in conducting a civil action, trial procedures and procedures for the enforcement of a civil
     judgment or order. All parties to a civil action conducted within the territory of the PRC must
     comply with the Civil Procedure Law. A civil case is generally heard by a court located in the
     defendant’s place of domicile. The jurisdiction may also be selected by express agreement by the
     parties to a contract provided that the jurisdiction of the people’s court selected has some actual
     connection with the dispute, that is to say, the plaintiff or the defendant is located or domiciled, or
     the contract was executed or implemented in the jurisdiction selected, or the subject-matter of the
     proceedings is located in the jurisdiction selected. A foreign national or foreign enterprise is
     accorded the same litigation rights and obligations as a citizen or legal person of the PRC. If any
     party to a civil action refuses to comply with a judgment or order made by a people’s court or an
     award made by an arbitration body in the PRC, the aggrieved party may apply to the people’s
     court to enforce the judgment, order or award. There are time limits on the right to apply for such
     enforcement. Where at least one of the parties to the dispute is an individual, the time limit is one
     year. If both parties to the dispute are legal persons or other entities, the time limit is six months.

     A party seeking to enforce a judgment or order of a people’s court against a party who or whose
     property is not within the PRC may apply to a foreign court with jurisdiction over the case for
     recognition and enforcement of such judgment or order. A foreign judgment or ruling may also be
     recognised and enforced according to PRC enforcement procedures by the people’s courts in
     accordance with the principle of reciprocity or if there exists an international or bilateral treaty with
     or acceded to by the foreign country that provides for such recognition and enforcement, unless
     the people’s court considers that the recognition or enforcement of the judgment or ruling will
     violate fundamental legal principles of the PRC or its sovereignty, security or social or public
     interest.


3.   Arbitration and enforcement of arbitral awards
     The Arbitration Law of the PRC (the “Arbitration Law”) was promulgated by the Standing
     Committee of the NPC on 31 August 1994 and came into effect on 1 September 1995. It is
     applicable to, among other matters, trade disputes involving foreign parties where the parties
     have entered into a written agreement to refer the matter to arbitration before an arbitration
     committee constituted in accordance with the Arbitration Law. Under the Arbitration Law, an
     arbitration committee may, before the promulgation by the PRC Arbitration Association of


                                                    F-2
     arbitration regulations, formulate interim arbitration rules in accordance with the Arbitration Law
     and the PRC Civil Procedure Law. Where the parties have by an agreement provided arbitration
     as a method for dispute resolution, the parties are not permitted to institute legal proceedings in
     a people’s court.

     Under the Arbitration Law, an arbitral award is final and binding on the parties and if a party fails
     to comply with an award, the other party to the award may apply to the people’s court for
     enforcement. A people’s court may refuse to enforce an arbitral award made by an arbitration
     committee if there were mistakes, an absence of material evidence or irregularities over the
     arbitration proceedings, or the jurisdiction or constitution of the arbitration committee.

     A party seeking to enforce an arbitral award of a foreign affairs arbitration body of the PRC against
     a party who or whose property is not within the PRC may apply to a foreign court with jurisdiction
     over the case for enforcement. Similarly, an arbitral award made by a foreign arbitration body may
     be recognised and enforced by the PRC courts in accordance with the principles of reciprocity or
     any international treaty concluded or acceded to by the PRC.

     In respect of contractual and non-contractual commercial law related disputes which are
     recognised as such for the purposes of PRC law, the PRC has acceded to the Convention on the
     Recognition and Enforcement of Foreign Arbitral Award (“New York Convention”) adopted on 10
     June 1958 pursuant to a resolution of the Standing Committee of the NPC passed on 2 December
     1986. The New York Convention provides that all arbitral awards made by a state which is a party
     to the New York Convention shall be recognised and enforced by other parties to the New York
     Convention subject to their right to refuse enforcement under certain circumstances including
     where the enforcement of the arbitral award is against the public policy of the state to which the
     application for enforcement is made. It was declared by the Standing Committee of the NPC at the
     time of the accession of the PRC that (1) the PRC would only recognise and enforce foreign
     arbitral awards on the principle of reciprocity and (2) the PRC would only apply the New York
     Convention in disputes considered under PRC laws to be arising from contractual and non-
     contractual mercantile legal relations.


4.   Taxation
     The applicable income tax laws, regulations, notices and decisions (collectively referred to as
     “Applicable Foreign Enterprises Tax Law”) related to foreign investment enterprises and their
     investors include the follows:
     (a)   Income Tax Law of the PRC on Foreign Investment Enterprises and Foreign Enterprises
           adopted by the NPC on 9 April 1991;
     (b)   Implementing Rules of the Income Tax Law of the PRC on Foreign Investment Enterprises
           and Foreign Enterprises promulgated by the State Council, which came into effect on 1 July
           1991;
     (c)   Notice Relating to taxes Applicable to Foreign Investment Enterprises/Foreign Enterprises
           and Foreign Nationals in Relation to Dividends and Gains obtained from Holding and
           Transferring of Shares promulgated by State Tax Bureau on 2 July 1993;
     (d)   Notice on Some Policy Questions Concerning Individual Income Tax issued by Ministry of
           Finance and the State Tax Bureau on 13 May 1994;
     (e)   Notice on Relevant Policies Concerning the Reduction of Income Tax on Interest and Other
           Income of Foreign Enterprises Derived from Sources in China issued by the State Council,
           which came into effect on 1 January 2000;
     (f)   The third amendments to the Income Tax Law Applicable to Individuals of the PRC
           promulgated by Standing Committee of NPC on 27 October 2005;



                                                  F-3
(g)   the NPC promulgated the PRC Corporate Income Tax Law                       on 16 March
      2007, which stipulates that corporate income tax will be standardised to 25% for all PRC
      resident enterprises, such law coming into effect on 1 January 2008.

(a)   Income tax on foreign investment enterprises
      According to the Applicable Foreign Enterprises Tax Law, foreign investment enterprises
      (including sino-foreign equity joint ventures, sino-foreign co-operative joint ventures and
      wholly foreign owned enterprises established in the territory of the PRC) are required to pay
      a national income tax at a rate of 30% of their taxable income and a local income tax at a
      rate of 3% of their taxable income.

      A foreign investment enterprise engaged in production having a period of operation of not
      less than ten years shall be exempted from income tax for the first two profit-making years
      and a 50% reduction in the income tax payable for the next three years.

      Foreign investment enterprises established in special economic zones, foreign enterprises
      having an establishment in special economic zones engaged in production or business
      operations and foreign investment enterprises engaged in production in economic and
      technological zones may pay income tax at a reduced rate of 15%. Foreign investment
      enterprises engaged in production established in coastal economic open zones or in the old
      urban districts of cities where the special economic zones or the economic and technological
      development zones are located may pay income taxes at a reduced rate of 24%. A reduced
      income tax rate of 15% may apply to an enterprise located in such regions which is engaged
      in energy, communication, harbour, wharf or other projects encouraged by the State.

      Losses incurred in a tax year may be carried forward for not more than five years.

      The people’s governments of provinces, autonomous regions and municipalities directly
      under the central government may grant exemptions from or reduced local income tax for a
      foreign investment enterprise engaged in an industry or a project encouraged by the State.

      On 16 March 2007, a new PRC Enterprise Income Tax Law was passed by the People’s
      Congress according to which the income tax rate applicable to all PRC enterprises (including
      foreign invested enterprises) will be fixed at 25%, effective as of 1 January 2008.

      However, under the new PRC Enterprise Income Tax Law, enterprises established before 16
      March 2007 which currently enjoy the preferential tax treatment of a two-year tax exemption,
      followed by a three-year 50% reduced tax rate, will be granted a five-year transition period
      during which they will still enjoy such preferential tax treatment.


(b)   Value added tax
      The Provisional Regulations of the People’s Republic of China Concerning Value Added Tax
      promulgated by the State Council came into effect on 1 January 1994. Under these
      regulations and the Implementing Rules of the Provisional Regulations of the People’s
      Republic of China Concerning Value Added Tax, value added tax is imposed on goods sold
      in or imported into the PRC and on processing, repair and replacement services provided
      within the PRC.

      Value added tax payable in the PRC is charged on an aggregated basis at a rate of 13% or
      17% (depending on the type of goods involved) on the full price collected for the goods sold
      or, in the case of taxable services provided, at a rate of 17% on the charges for the taxable
      services provided but excluding, in respect of both goods and services, any amount paid in




                                             F-4
           respect of value added tax included in the price or charges, and less any deductible value
           added tax already paid by the taxpayer on purchases of goods and services in the same
           financial year.


     (c)   Business tax
           With effect from 1 January 1994, businesses that provide services (except entertainment
           businesses), assign intangible assets or sell immovable property became liable to business
           tax at a rate ranging from 3% to 5% of the charges for the services provided, intangible
           assets assigned or immovable property sold, as the case may be.


     (d)   Tax on dividends from PRC enterprise with foreign investment
           According to the Applicable Foreign Enterprises Tax Law, income such as rental, interest
           and royalty from the PRC derived by a foreign enterprise which has no establishment in the
           PRC or has establishment but the income has no relationship with such establishment is
           subject to a 10% withholding tax, subject to reduction as provided by any applicable double
           taxation treaty, unless the relevant income is specifically exempted from tax under the
           Applicable Foreign Enterprises Tax Law. The dividends derived by a foreign investor from a
           PRC enterprise with foreign investment are exempted from PRC withholding tax according
           to the Applicable Foreign Enterprises Tax Law. With the effectiveness of New Tax Law since
           1 January 2008, dividends derived by a foreign enterprise, which has no establishment in the
           PRC or has establishment but the dividends have no relationship with such establishment,
           from a PRC enterprise with foreign investment shall pay income tax at the rate of 20%,
           subject to possible preferential treatment provided by the State Council of the PRC.


5.   Wholly foreign-owned enterprise
     Wholly foreign-owned enterprises are governed by the Law of the People’s Republic of China on
     Foreign-Capital Enterprises and its amendment, which were promulgated on 12 April 1986 and 31
     October 2000 respectively, and its Implementation Regulations promulgated on 12 December
     1990 and 12 April 2001 (together the “Foreign Enterprises Law”).

     (a)   Procedures for establishment of a wholly foreign-owned enterprise
           The establishment of a wholly foreign-owned enterprise will have to be approved by Ministry
           of Commerce of the PRC (or its delegated authorities). If two or more foreign investors jointly
           apply for the establishment of a wholly foreign-owned enterprise, a copy of the contract
           between the parties must also be submitted to Ministry of Commerce of the PRC (or its
           delegated authorities) for its record. A wholly foreign-owned enterprise must also obtain a
           business licence from the Administration for Industry and Commerce Authority before it can
           commence business.


     (b)   Nature
           A wholly foreign-owned enterprise is a limited liability company under the Foreign Enterprise
           Law. It is a legal person which may independently assume civil obligations, enjoy civil rights
           and has the right to own, use and dispose of property. It is required to have a registered
           capital contributed by the foreign investor(s). The liability of the foreign investor(s) is limited
           to the amount of registered capital contributed. A foreign investor may make its contributions
           by instalments and the registered capital must be contributed within the period as approved
           by Ministry of Commerce of the PRC (or its delegated authorities) in accordance with
           relevant regulations.




                                                    F-5
(c)   Profit distribution
      The Foreign Enterprise Law provides that after payment of taxes, a wholly foreign-owned
      enterprise must make contributions to a reserve fund and an employee bonus and welfare
      fund. The allocation ratio for the employee bonus and welfare fund may be determined by
      the enterprise. However, at least 10% of the after tax profits must be allocated to the reserve
      fund. If the cumulative total of allocated reserve funds reaches 50% of an enterprise’s
      registered capital, the enterprise will not be required to make any additional contribution. The
      enterprise is prohibited from distributing dividends unless the losses (if any) of previous
      years have been made up.




                                              F-6
                                                                                      APPENDIX G

      RULES OF THE CHANGTIAN EMPLOYEE SHARE OPTION SCHEME

1.   NAME OF THE ESOS
     The ESOS shall be called the “Changtian Employee Share Option Scheme’’.


2.   DEFINITIONS

2.1 In the ESOS, unless the context otherwise requires, the following words and expressions shall
    have the following meanings:


     “Act”                                   The Companies Act, Chapter 50 of Singapore as
                                             amended, modified or supplemented from time to
                                             time.

     “Auditors”                              The auditors of the Company for the time being.

     “Bermuda Companies Act”                 The Companies Act 1981 of Bermuda, as amended,
                                             supplemented or modified from time to time.

     “Board”                                 The board of directors of the Company.

     “Bye-Laws”                              The Bye-Laws of the Company, as amended from time
                                             to time.

     “CDP”                                   The Central Depository (Pte) Limited.

     “CPF”                                   Central Provident Fund.

     “Committee”                             The remuneration committee of the Company, or such
                                             other committee comprising directors of the Company
                                             duly authorised and appointed by the Board to
                                             administer this ESOS.

     “Company”                               Changtian Plastic & Chemical Limited.

     “control”                               The capacity to dominate decision making, directly or
                                             indirectly, in relation to the financial and operating
                                             policies of the Company.

     “Controlling Shareholder”               A shareholder exercising control over the Company
                                             and unless rebutted, a person who controls directly or
                                             indirectly fifteen (15) per cent or more of the
                                             Company’s issued share capital shall be presumed to
                                             be a Controlling Shareholder of the Company.

     “Date of Grant”                         In relation to an Option, the date on which the Option
                                             is granted to a Participant pursuant to Rule 7.

     “Director”                              A person holding office as a director for the time being
                                             of the Company and/or its Subsidiaries, as the case
                                             may be.




                                              G-1
“ESOS”                     The Changtian Employee Share Option Scheme, as
                           the same may be modified or altered from time to time.

“Executive Director”       A director of the Company and/or its Subsidiaries, as
                           the case may be, who performs an executive function
                           within the Company or the relevant Subsidiary, as the
                           case may be.

“Exercise Price”           The price at which a Participant shall subscribe for
                           each Share upon the exercise of an Option which shall
                           be the price as determined in accordance with Rule 9,
                           as adjusted in accordance with Rule 10.

“Grantee”                  A person to whom an offer of an Option is made.

“Group”                    The Company and its Subsidiaries.

“Group Employee”           Any confirmed employee of the Group (including any
                           Executive Director) selected by the Committee to
                           participate in the ESOS in accordance with Rule 4.

“Market Day”               A day on which the SGX-ST is open for trading in
                           securities.

“Market Price”             A price equal to the average of the last dealt prices for
                           the Shares on the SGX-ST over the five consecutive
                           Trading Days immediately preceding the Date of Grant
                           of that Option, as determined by the Committee by
                           reference to the daily official list or any other
                           publication published by the SGX-ST, rounded to the
                           nearest whole cent in the event of fractional prices.

“Non-Executive Director”   A director of the Company and/or its Subsidiaries, as
                           the case may be, other than an Executive Director but
                           including the independent Directors of the Company.

“Offer Date”               The date on which an offer to grant an Option is made
                           pursuant to the ESOS.

“Offeree”                  The person to whom an offer of an Option is made.

“Option”                   The right to subscribe for Shares granted or to be
                           granted to a Group Employee pursuant to the ESOS
                           and for the time being subsisting.

“Option Period”            The period for the exercise of an Option being:
                           (a)    in the case of an Option granted at Market Price
                                  to a Group Employee, a period commencing
                                  after the first anniversary of the Date of Grant
                                  and expiring on the tenth anniversary of such
                                  Date of Grant, subject as provided in Rules 11
                                  and 15 and any other conditions as may be
                                  introduced by the Committee from time to time;




                            G-2
                       (b)    in the case of an Option granted at Market Price to
                              a Non-Executive Director, a period commencing
                              after the first anniversary of the Date of Grant and
                              expiring on the fifth anniversary of such Date of
                              Grant, subject as provided in Rules 11 and 15 and
                              any other conditions as may be introduced by the
                              Committee from time to time;
                       (c)    in the case of an Option granted at a discount to
                              Market Price to a Group Employee, a period
                              commencing after the second anniversary of the
                              Date of Grant and expiring on the tenth
                              anniversary of such Date of Grant, subject as
                              provided in Rules 11 and 15 and any other
                              conditions as may be introduced by the
                              Committee from time to time;
                       (d)    in the case of an Option granted at a discount to
                              Market Price to a Non-Executive Director, a
                              period commencing after the second anniversary
                              of the Date of Grant and expiring on the fifth
                              anniversary of such Date of Grant, subject as
                              provided in Rules 11 and 15 and any other
                              conditions as may be introduced by the
                              Committee from time to time.

“Participant”          The holder of an Option.

“Record Date”          The date as at the close of business on which the
                       Shareholders must be registered in order to
                       participate in any dividends, rights, allotments or other
                       distributions.

“Rules”                Rules of the Changtian Employee Share Option
                       Scheme.

“S$”                   Singapore Dollars.

“Securities Account”   The securities account maintained by a Depositor with
                       CDP.

“Shareholders”         Registered holders of Shares, except where the
                       registered holder is CDP, the term “Shareholders”
                       shall, in relation to such Shares, mean the Depositors
                       whose Securities Accounts are credited with Shares.

“Shares”               Ordinary shares of par value S$0.05 each in the
                       capital of the Company.

“Subsidiaries”         Companies which are for the time being subsidiaries
                       of the Company as defined by Section 5 of the Act;
                       and “Subsidiary” means each of them.

“SGX-ST”               Singapore Exchange Securities Trading Limited.

“Trading Day”          A day on which the Shares are traded on the SGX-ST.

“US$”                  United States Dollars.


                        G-3
2.2 The term “Depositor”, “Depository Register” and “Depository Agent” shall have the meanings
    ascribed to it by Section 130A of the Act and the term “associate” shall have the meaning ascribed
    to it by the SGX-ST Listing Manual or any other publication prescribing rules or regulations for
    corporations admitted to the Official List of the SGX-ST (as modified, supplemented or amended
    from time to time).

2.3 Words importing the singular number shall, where applicable, include the plural number and vice
    versa. Words importing the masculine gender shall, where applicable, include the feminine and
    neuter gender.

2.4 Any reference to a time of a day in the ESOS is a reference to Singapore time.

2.5 Any reference in the ESOS to any enactment is a reference to that enactment as for the time being
    amended or re-enacted. Any word defined under the Bermuda Companies Act or any statutory
    modification thereof and used in the ESOS shall have the meaning assigned to it under the
    Bermuda Companies Act.


3.   OBJECTIVES OF THE ESOS
     The ESOS will provide an opportunity for Group Employees who have contributed significantly to
     the growth and performance of the Group (including Executive and Non-Executive Directors) and
     who satisfy the eligibility criteria as set out in Rule 4 of the ESOS, to participate in the equity of
     the Company.

     The ESOS is primarily a share incentive scheme. It recognises the fact that the services of such
     Group Employees are important to the success and continued well-being of the Group.
     Implementation of the ESOS will enable the Company to give recognition to the contributions
     made by such Group Employees. At the same time, it will give such Group Employees an
     opportunity to have a direct interest in the Company at no direct cost to its profitability and will also
     help to achieve the following positive objectives:
     (a)   the motivation of each Participant to optimise his performance standards and efficiency and
           to maintain a high level of contribution to the Group;
     (b)   the retention of key employees and Executive Directors of the Group whose contributions
           are essential to the long-term growth and profitability of the Group;
     (c)   to instil loyalty to, and a stronger identification by the Participants with the long-term
           prosperity of, the Company;
     (d)   to attract potential employees with relevant skills to contribute to the Group and to create
           value for the Shareholders; and
     (e)   to align the interests of the Participants with the interests of the Shareholders.


4.   ELIGIBILITY

4.1 Confirmed Group Employees (including Executive and Non-Executive Directors) who have
    attained the age of twenty-one (21) years on or prior to the relevant Offer Date and are not
    undischarged bankrupts and have not entered into a composition with their respective creditors,
    shall be eligible to participate in the ESOS at the absolute discretion of the Committee.

4.2 Controlling Shareholders and their associates shall not be eligible to participate in the ESOS.

4.3 There will be no restriction on the eligibility of any Participant to participate in any other share
    option or share incentive schemes implemented by any other companies within the Group.




                                                    G-4
4.4 Subject to the Act, Bermuda Companies Act and any requirement of the SGX-ST, the terms of
    eligibility for participation in the ESOS may be amended from time to time at the absolute
    discretion of the Committee, which would be exercised judiciously.


5.   MAXIMUM ENTITLEMENT
     Subject to RuIe 4 and Rule 10, the aggregate number of Shares in respect of which Options may
     be offered to a Grantee for subscription in accordance with the ESOS shall be determined at the
     discretion of the Committee who shall take into account criteria such as rank, past performance,
     years of service and potential development of the Participant.


6.   LIMITATION ON SIZE OF THE ESOS
     The aggregate nominal amount of Shares over which the Committee may grant Options on any
     date, when added to the nominal amount of Shares issued and issuable in respect of all Options
     granted under the ESOS shall not exceed fifteen (15) per cent of the issued share capital of the
     Company on the day immediately preceding the Offer Date of the Option.


7.   OFFER DATE

7.1 The Committee may, save as provided in Rule 4, Rule 5 and Rule 6, offer to grant Options to such
    Grantees as it may select in its absolute discretion at any time during the period when the ESOS
    is in force, except that no Option shall be granted during the period of thirty (30) days immediately
    preceding the date of announcement of the Company’s interim and/or final results (whichever the
    case may be). In addition, in the event that an announcement on any matter of an exceptional
    nature involving unpublished price sensitive information is made, offers to grant Options may only
    be made on or after the second Market Day on which such announcement is released.

7.2 An offer to grant the Option to a Grantee shall be made by way of a letter (the “Letter of Offer’’)
    in the form or substantially in the form set out in Schedule A, subject to such amendments as the
    Committee may determine from time to time.


8.   ACCEPTANCE OF OFFER

8.1 An Option offered to a Grantee pursuant to Rule 7 may only be accepted by the Grantee within
    thirty (30) days after the relevant Offer Date and not later than 5.00 p.m. on the thirtieth (30th) day
    from such Offer Date (a) by completing, signing and returning to the Company the Acceptance
    Form in or substantially in the form set out in Schedule B, subject to such modification as the
    Committee may from time to time determine, accompanied by payment of S$1.00 as
    consideration and (b) if, at the date on which the Company receives from the Grantee the
    Acceptance Form in respect of the Option as aforesaid, he remains eligible to participate in the
    ESOS in accordance with these Rules.

8.2 If a grant of an Option is not accepted strictly in the manner as provided in this Rule 8, such offer
    shall, upon the expiry of the thirty (30) days period, automatically lapse and shall forthwith be
    deemed to be null and void and be of no effect.

8.3 The Company shall be entitled to reject any purported acceptance of a grant of an Option made
    pursuant to this Rule 8 or Exercise Notice given pursuant to Rule 12 which does not strictly comply
    with the terms of the ESOS.




                                                   G-5
8.4 Options are personal to the Grantees to whom they are granted and shall not be sold, mortgaged,
    transferred, charged, assigned, pledged or otherwise disposed of or encumbered in whole or in
    part or in any way whatsoever without the Committee’s prior written approval, but may be
    exercised by the Grantee’s duly appointed personal representative as provided in Rule 11.6 in the
    event of the death of such Grantee.

8.5 The Grantee may accept or refuse the whole or part of the offer. If only part of the offer is
    accepted, the Grantee shall accept the offer in multiples of 1,000 Shares.

8.6 In the event that a grant of an Option results in a contravention of any applicable law or regulation,
    such grant shall be null and void and be of no effect and the relevant Participant shall have no
    claim whatsoever against the Company.

8.7 Unless the Committee determines otherwise, an Option shall automatically lapse and become
    null, void and of no effect and shall not be capable of acceptance if:
     (a)   it is not accepted in the manner as provided in Rule 8.1 within the thirty (30) day period; or
     (b)   the Grantee dies prior to his acceptance of the Option; or
     (c)   the Grantee is adjudicated a bankrupt or enters into composition with his creditors prior to
           his acceptance of the Option; or
     (d)   the Grantee being a Group Employee ceases to be in the employment of the Group or (being
           a Director) ceases to be a Director of the Company, in each case, for any reason whatsoever
           prior to his acceptance of the Option; or
     (e)   the Company is liquidated or wound-up prior to the Grantee’s acceptance of the Option.


9.   EXERCISE PRICE

9.1 Subject to any adjustment pursuant to Rule 10, the Exercise Price for each Share in respect of
    which an Option is exercisable shall be determined by the Committee, in its absolute discretion,
    on the Date of Grant, at:
     (a)   a price equal to the Market Price; or
     (b)   a price which is set at a discount to the Market Price, provided that:
           (i)    the maximum discount shall not exceed twenty (20) per cent of the Market Price (or
                  such other percentage or amount as may be determined by the Committee and
                  permitted by the SGX-ST); and
           (ii)   the Shareholders in general meeting shall have authorised, in a separate resolution,
                  the making of offers and grants of Options under the ESOS at a discount not exceeding
                  the maximum discount as aforesaid.

9.2 In making any determination under Rule 9.1(b) on whether to give a discount and the quantum of
    such discount, the Committee shall be at liberty to take into consideration such criteria as the
    Committee may, at its absolute discretion, deem appropriate, including but not limited to:
     (a)   the performance of the Company and/or its Subsidiaries, as the case may be;
     (b)   the years of service and individual performance of the eligible Group Employee or Director;
     (c)   the contribution of the eligible Group Employee or Director to the success and development
           of the Company and/or the Group; and
     (d)   the prevailing market conditions.




                                                   G-6
10. ALTERATION OF CAPITAL

10.1 If a variation in the issued share capital of the Company (whether by way of a capitalisation of
     profits or reserves or rights issue or reduction (including any reduction arising by reason of the
     Company purchasing or acquiring its issued Shares), subdivision, consolidation or distribution, or
     otherwise howsoever) should take place, then:
      (a)   the Exercise Price in respect of the Shares and class and/or number of Shares comprised
            in the Options to the extent unexercised and the rights attached thereto; and/or
      (b)   the class and/or number of Shares in respect of which additional Options may be granted to
            Participants, may, be adjusted in such manner as the Committee may determine to be
            appropriate including retrospective adjustments where such variation occurs after the date
            of exercise of an Option but the Record Date relating to such variation precedes such date
            of exercise and, except in relation to a capitalisation issue, upon the written confirmation of
            the Auditors (acting only as experts and not as arbitrators), that in their opinion, such
            adjustment is fair and reasonable.

10.2 Notwithstanding the provisions of Rule 10.1 above, no such adjustment shall be made (a) if as a
     result, the Participant receives a benefit that a Shareholder does not receive; and (b) unless the
     Committee after considering all relevant circumstances considers it equitable to do so.

10.3 Unless the Committee considers an adjustment to be appropriate, the issue of securities as
     consideration for an acquisition of any assets by the Company or a private placement of securities
     for cash, or the cancellation of issued Shares purchased or acquired by the Company by way of
     a market purchase of such Shares undertaken by the Company on the SGX-ST during the period
     when a share purchase granted by the Shareholders of the Company (including any renewal of
     such mandate) is in force, will not be regarded as a circumstance requiring adjustment under the
     provisions of this Rule 10.

10.4 The restriction on the number of Shares to be offered to any Grantee under Rule 5 above, shall
     not apply to the number of additional Shares or Options over additional Shares issued by virtue
     of any adjustment to the number of Shares and/or Options pursuant to this Rule 10.

10.5 Upon any adjustment required to be made, the Company shall notify each Participant (or his duly
     appointed personal representative(s)) in writing and deliver to him (or, where applicable, his duly
     appointed personal representative(s)) a statement setting forth the new Exercise Price thereafter
     in effect and the class and/or number of Shares thereafter comprised in the Option so far as
     unexercised. Any adjustment shall take effect upon such written notification being given.

11.   OPTION PERIOD

11.1 Options granted with the Exercise Price set at Market Price shall only be exercisable, in whole or
     in part (provided that an Option may be exercised in part only in respect of 1,000 Shares or any
     multiple thereof), at any time, by a Participant after the first anniversary of the Date of Grant of that
     Option, Provided Always that the Options shall be exercised before the expiry of the relevant
     Option Period, or such earlier date as may be determined by the Committee, failing which all
     unexercised Options shall immediately lapse and become null and void and a Participant shall
     have no claim against the Company.

11.2 Options granted with the Exercise Price set at a discount to Market Price shall only be exercisable,
     in whole or in part (provided that an Option may be exercised in part only in respect of 1,000
     Shares or any multiple thereof), at any time, by a Participant after the second anniversary from the
     Date of Grant of that Option, Provided always that the Options shall be exercised before the expiry
     of the relevant Option Period, or such earlier date as may be determined by the Committee, failing
     which all unexercised Options shall immediately lapse and become null and void and a Participant
     shall have no claim against the Company.

                                                    G-7
11.3 An Option shall, to the extent unexercised, immediately lapse and become null and void and a
     Participant shall have no claim against the Company:
     (a)   subject to Rules 11.4, 11.5 and 11.6, upon the Participant ceasing to be in the employment
           of the Company or any of the companies within the Group for any reason whatsoever; or
     (b)   upon the bankruptcy of the Participant or the happening of any other event which results in
           his being deprived of the legal or beneficial ownership of such Option; or
     (c)   in the event of misconduct on the part of the Participant, as determined by the Committee
           in its absolute discretion.
     For the purpose of Rule 11.4(a), a Participant shall be deemed to have ceased to be so employed
     as of the date the notice of termination of employment is tendered by or is given to him, unless
     such notice shall be withdrawn prior to its effective date.

11.4 If a Participant ceases to be employed by the Group by reason of his:
     (a)   ill health, injury or disability, in each case, as certified by a medical practitioner approved by
           the Committee;
     (b)   redundancy;
     (c)   retirement at or after a normal retirement age; or
     (d)   retirement before that age with the consent of the Committee,
     or for any other reason approved in writing by the Committee, he may, at the absolute discretion
     of the Committee exercise any unexercised Option within the relevant Option Period and upon the
     expiry of such period, the Option shall immediately lapse and become null and void.

11.5 If a Participant ceases to be employed by a Subsidiary:
     (a)   by reason of the Subsidiary, by which he is principally employed ceasing to be a company
           within the Group or the undertaking or part of the undertaking of such Subsidiary, being
           transferred otherwise than to another company within the Group; or
     (b)   for any other reason, provided the Committee gives its consent in writing, he may, at the
           absolute discretion of the Committee, exercise any unexercised Options within the relevant
           Option Period and upon the expiry of such period, the Option shall immediately lapse and
           become null and void.

11.6 If a Participant dies and at the date of his death holds any unexercised Option, such Option may,
     at the absolute discretion of the Committee, be exercised by the duly appointed legal personal
     representatives of the Participant within the relevant Option Period and upon the expiry of such
     period, the Option shall immediately lapse and become null and void.

11.7 If a Participant, who is also an Executive Director, ceases to be a Director for any reason
     whatsoever, he may, at the absolute discretion of the Committee, exercise any unexercised
     Option within the relevant Option Period and upon the expiry of such period, the Option shall
     immediately lapse and become null and void.




                                                    G-8
12. EXERCISE OF OPTIONS, ALLOTMENT AND LISTING OF SHARES

12.1 An Option may be exercised, in whole or in part (provided that an Option may be exercised in part
     only in respect of 1,000 Shares or any multiple thereof), by a Participant giving notice in writing
     to the Company in or substantially in the form set out in Schedule C (the “Exercise Notice”),
     subject to such amendments as the Committee may from time to time determine. Every Exercise
     Notice must be accompanied by a remittance for the full amount of the aggregate Exercise Price
     in respect of the Shares which have been exercised under the Option, the relevant CDP charges
     (if any) and any other documentation the Committee may require. All payments shall be made by
     cheque, cashier’s order, bank draft or postal order made out in favour of the Company. An Option
     shall be deemed to be exercised upon the receipt by the Company of the abovementioned Notice
     duly completed and the receipt by the Company of the full amount of the aggregate Exercise Price
     in respect of the Shares which have been exercised under the Option.

12.2 Subject to:
     (a)   such consents or other actions required by any competent authority under any regulations
           or enactments for the time being in force as may be necessary (including any approvals
           required from the SGX-ST); and
     (b)   compliance with the Rules, the Bermuda Companies Act, the Memorandum of Association
           and Bye-Laws of the Company, the Company shall, as soon as practicable after the exercise
           of an Option by a Participant but in any event within ten (10) Market Days after the date of
           the exercise of the Option in accordance with Rule 12.1, allot the Shares in respect of which
           such Option has been exercised by the Participant and within five (5) Market Days from the
           date of such allotment, despatch the relevant share certificates to CDP for the credit of the
           securities account of that Participant by ordinary post or such other mode of delivery as the
           Committee may deem fit.

12.3 The Company shall, if necessary, as soon as practicable after the exercise of an Option, apply to
     the SGX-ST or any other stock exchange on which the Shares are quoted or listed for permission
     to deal in and for quotation of the Shares which may be issued upon exercise of the Option and
     the Shares (if any) which may be issued to the Participant pursuant to any adjustments made in
     accordance with Rule 10.

12.4 Shares which are all allotted on the exercise of an Option by a Participant shall be issued, as the
     Participant may elect, in the name of CDP to the credit of the securities account of the Participant
     maintained with CDP or the Participant’s securities sub-account with a CDP Depository Agent.

12.5 Shares allotted and issued upon the exercise of an Option shall be subject to all provisions of the
     Memorandum of Association and Bye-Laws of the Company and shall rank pari passu in all
     respects with the then existing issued Shares in the capital of the Company except for any
     dividends, rights, allotments or other distributions, the Record Date for which is prior to the date
     such Option is exercised.

12.6 The Company shall keep available sufficient unissued Shares to satisfy the full exercise of all
     Options for the time being remaining capable of being exercised.


13. MODIFICATIONS TO THE ESOS

13.1 Any or all the provisions of the ESOS may be modified and/or altered at any time and from time
     to time by resolution of the Committee, except that:
     (a)   any modification or alteration which shall alter adversely the rights attaching to any Option
           granted prior to such modification or alteration and which in the opinion of the Committee,
           materially alters the rights attaching to any Option granted prior to such modification or
           alteration may only be made with the consent in writing of such number of Participants who,

                                                  G-9
           if they exercised their Options in full, would thereby become entitled to not less than
           three-quarters (3/4) in nominal amount of all the Shares which would fall to be allotted upon
           exercise in full of all outstanding Options;
     (b)   any modification or alteration which would be to the advantage of Participants under the
           ESOS shall be subject to the prior approval of the Shareholders in general meeting; and
     (c)   no modification or alteration shall be made without the prior approval of the SGX-ST or (if
           required) any other stock exchange on which the Shares are quoted and listed, and such
           other regulatory authorities as may be necessary.
     For the purposes of Rule 13.1(a), the opinion of the Committee as to whether any modification or
     alteration would alter adversely the rights attaching to any Option shall be final and conclusive.

13.2 Notwithstanding anything to the contrary contained in Rule 13.1, the Committee may at any time
     by resolution (and without other formality, save for the prior approval of the SGX-ST) amend or
     alter the ESOS in any way to the extent necessary to cause the ESOS to comply with any
     statutory provision or the provision or the regulations of any regulatory or other relevant authority
     or body (including the SGX-ST).

13.3 Written notice of any modification or alteration made in accordance with this Rule 13 shall be
     given to all Participants.


14. DURATION OF THE ESOS

14.1 The ESOS shall continue to be in force at the discretion of the Committee, subject to a maximum
     period of ten (10) years, commencing on the date on which the ESOS is adopted by Shareholders.
     Subject to compliance with any applicable laws and regulations in Singapore, the ESOS may be
     continued beyond the above stipulated period with the approval of the Shareholders by ordinary
     resolution at a general meeting and of any relevant authorities which may then be required.

14.2 The ESOS may be terminated at any time by the Committee or by resolution of the Shareholders
     at a general meeting subject to all other relevant approvals which may be required and if the
     ESOS is so terminated, no further Options shall be offered by the Company hereunder.

14.3 The termination, discontinuance or expiry of the ESOS shall be without prejudice to the rights
     accrued to Options which have been granted and accepted as provided in Rule 8, whether such
     Options have been exercised (whether fully or partially) or not.


15. TAKE-OVER AND WINDING UP OF THE COMPANY

15.1 In the event of a take-over offer being made for the Company, Participants (including Participants
     holding Options which are then not exercisable pursuant to the provisions of Rules 11.1 and 11.2)
     holding Options as yet unexercised shall, notwithstanding Rules 11 and 12 but subject to Rule
     15.5, be entitled to exercise such Options in full or in part in the period commencing on the date
     on which such offer is made or, if such offer is conditional, the date on which the offer becomes
     or is declared unconditional, as the case may be, and ending on the earlier of:
     (a)   the expiry of six (6) months thereafter, unless prior to the expiry of such six (6) month period,
           at the recommendation of the offeror and with the approvals of the Committee and the
           SGX-ST, such expiry date is extended to a later date (being a date falling not later than the
           date of expiry of the Option Period relating thereto); or
     (b)   the date of the expiry of the Option Period relating thereto,

     whereupon any Option then remaining unexercised shall immediately lapse and become null and
     void.


                                                   G-10
     Provided Always that if during such period the offeror becomes entitled or bound to exercise the
     rights of compulsory acquisition of the Shares under the provisions of the Act or the Bermuda
     Companies Act and, being entitled to do so, gives notice to the Participants that it intends to
     exercise such rights on a specified date, the Option shall remain exercisable by the Participants
     until such specified date or the expiry of the Option Period relating thereto, whichever is earlier.
     Any Option not so exercised by the said specified date shall lapse and become null and void.

     Provided that the rights of acquisition or obligation to acquire stated in the notice shall have been
     exercised or performed, as the case may be. If such rights of acquisition or obligations have not
     been exercised or performed, all Options shall, subject to Rule 11.3, remain exercisable until the
     expiry of the Option Period.

15.2 If, under any applicable laws, the court sanctions a compromise or arrangement proposed for the
     purposes of, or in connection with, a scheme for the reconstruction of the Company or its
     amalgamation with another company or companies, Participants (including Participants holding
     Options which are then not exercisable pursuant to the provisions of Rule 11.1 and 11.2) shall
     notwithstanding Rules 11 and 12 but subject to Rule 15.5, be entitled to exercise any Option then
     held by them during the period commencing on the date upon which the compromise or
     arrangement is sanctioned by the court and ending either on the expiry of sixty (60) days
     thereafter or the date upon which the compromise or arrangement becomes effective, whichever
     is later (but not after the expiry of the Option Period relating thereto), whereupon any unexercised
     Option shall lapse and become null and void, Provided always that the date of exercise of any
     Option shall be before the tenth anniversary of the Offer Date.

15.3 If an order or an effective resolution is passed for the winding up of the Company on the basis of
     its insolvency, all Options, to the extent unexercised, shall lapse and become null and void.

15.4 In the event a notice is given by the Company to its members to convene a general meeting for
     the purposes of considering and, if thought fit, approving a resolution to voluntarily wind-up the
     Company, the Company shall on the same date as or soon after it dispatches such notice to each
     member of the Company give notice thereof to all Grantees (together with a notice of the
     existence of the provision of this Rule 15.4) and thereupon, each Grantee (or his personal
     representative) shall be entitled to exercise all or any of his Options at any time not later than two
     business days prior to the proposed general meeting of the Company by giving notice in writing
     to the Company, accompanied by a remittance for the aggregate Exercise Price for the shares in
     respect of which the notice is given whereupon the Company shall as soon as possible and in any
     event, no later than the business day immediately prior to the date of the proposed general
     meeting referred to above, allot the relevant Shares to the Grantee credited as fully paid.

15.5 If in connection with the making of a general offer referred to in Rule 15.1 above or the scheme
     referred to in Rule 15.2 above or the winding up referred to in Rule 15.4 above, arrangements are
     made (which are confirmed in writing by the Auditors, acting only as experts and not as arbitrators,
     to be fair and reasonable) for the compensation of Participants, whether by the continuation of
     their Options or the payment of cash or the grant of other options or otherwise, a Participant
     holding an Option, which is not then exercisable, may not, at the discretion of the Committee, be
     permitted to exercise that Option as provided for in this Rule 15.

15.6 To the extent that an Option is not exercised within the periods referred to in this Rule 15, it shall
     lapse and become null and void.


16. ADMINISTRATION OF THE ESOS

16.1 The ESOS shall be administered by the Committee in its absolute discretion with such powers and
     duties as are conferred on it by the Board.



                                                  G-11
16.2 The Committee shall have the power, from time to time, to make or vary such regulations (not
     being inconsistent with the ESOS) for the implementation and administration of the ESOS as it
     thinks fit.

16.3 Any decision of the Committee, made pursuant to any provision of the ESOS (other than a matter
     to be certified by the Auditors), shall be final and binding (including any decisions pertaining to
     disputes as to the interpretation of the ESOS or any rule, regulation, or procedure thereunder or
     as to any rights under the ESOS).

16.4 A Director who is a member of the Committee shall not be involved in its deliberation in respect
     of Options to be granted to him.

17. NOTICES

17.1 Any notice given by a Participant to the Company shall be sent by post or delivered to the
     registered office of the Company or such other address as may be notified by the Company to the
     Participant in writing.

17.2 Any notice or documents given by the Company to a Participant shall be sent to the Participant
     by hand or sent to him at his home address stated in the records of the Company or the last known
     address of the Participant, and if sent by post shall be deemed to have been given on the day
     immediately following the date of posting.

18. TERMS OF EMPLOYMENT UNAFFECTED

18.1 The ESOS or any Option shall not form part of any contract of employment between the Company
     or any Subsidiary (as the case may be) and any Participant and the rights and obligations of any
     individual under the terms of the office or employment with such company within the Group shall
     not be affected by his participation in the ESOS or any right which he may have to participate in
     it or any Option which he may hold and the ESOS or any Option shall afford such an individual
     no additional rights to compensation or damages in consequence of the termination of such office
     or employment for any reason whatsoever.

18.2 The ESOS shall not confer on any person any legal or equitable rights (other than those
     constituting the Options themselves) against the Company and/or any Subsidiary directly or
     indirectly or give rise to any cause of action at law or in equity against the Company or any
     Subsidiary.

19. TAXES
     All taxes (including income tax) arising from the exercise of any Option granted to any Participant
     under the ESOS shall be borne by that Participant.

20. COSTS AND EXPENSES OF THE ESOS

20.1 Each Participant shall be responsible for all fees of CDP relating to or in connection with the issue
     and allotment of any Shares pursuant to the exercise of any Option in CDP’s name, the deposit
     of share certificate(s) with CDP, the Participant’s securities account with CDP, or the Participant’s
     securities sub-account with a Depository Agent or CPF investment account with a CPF agent
     bank and all taxes referred to in Rule 19 which shall be payable by the relevant Participant.

20.2 Save for such costs and expenses expressly provided in the ESOS to be payable by the
     Participants, all fees, costs and expenses incurred by the Company in relation to the ESOS
     including but not limited to the fees, costs and expenses relating to the allotment and issue of
     Shares pursuant to the exercise of any Option shall be borne by the Company.


                                                  G-12
21. CONDITION OF OPTION
    Every Option shall be subject to the condition that no Shares shall be issued pursuant to the
    exercise of an Option if such issue would be contrary to any law or enactment, or any rules or
    regulations of any legislative or non-legislative governing body for the time being in force in
    Singapore or any other relevant country.


22. DISCLAIMER OF LIABILITY
    Notwithstanding any provisions herein contained and subject to the Act, the Board, the Committee
    and the Company shall not under any circumstances be held liable for any costs, losses,
    expenses and damages whatsoever and howsoever arising in respect of any matter under or in
    connection with the ESOS, including but not limited to the Company’s delay in allotting and issuing
    the Shares or in applying for or procuring the listing of the Shares on the SGX-ST.


23. DISCLOSURE IN ANNUAL REPORT
    The Company shall make the following disclosure in its annual report:
    (a)   The names of the members of the Committee;
    (b)   The information required in the table below for the following Participants (which for the
          avoidance of doubt, shall include Participants who have exercised all their Options in any
          particular financial year):
          (i)    participants who are Directors of the Company; and
          (ii)   participants, other than those in (i) who receive five (5) per cent or more of the total
                 number of Options available under the ESOS.

                  Name of       Options granted      Aggregate Options      Aggregate Options     Aggregate Options
                 Participant     during financial       granted since         exercised since     outstanding as at
                               year under review     commencement of        commencement of        end of financial
                                (including terms)   the ESOS to end of     the ESOS to end of     year under review
                                                    financial year under   financial year under
                                                           review                 review

    (c)   The number and proportion of Options granted at the following discounts to average market
          value of the Shares in the financial year under review:
          (i)    Options granted at up to 10 per cent discount; and
          (ii)   Options granted at between 10 per cent but not more than 20 per cent discount.


24. ABSTENTION FROM VOTING
    Grantees who are Shareholders are to abstain from voting on any Shareholders’ resolution
    relating to the ESOS.


25. DISPUTES
    Any disputes or differences of any nature arising hereunder shall be referred to the Committee
    and its decision shall be final and binding in all respects.


26. GOVERNING LAW
    The ESOS shall be governed by, and construed in accordance with, the laws of the Republic of
    Singapore. The Participants, by accepting Options in accordance with the ESOS, and the
    Company submit to the exclusive jurisdiction of the courts of the Republic of Singapore.




                                                      G-13
                                              Schedule A

                       CHANGTIAN EMPLOYEE SHARE OPTION SCHEME

                                         LETTER OF OFFER

                                                                       Serial No:

                                                                            Date:

To: Name
    Designation
    Address

Private and Confidential

Dear Sir/Madam,
1.   We have the pleasure of informing you that, pursuant to the Changtian Employee Share Option
     Scheme (“ESOS”), you have been nominated to participate in the ESOS by the Committee (the
     “Committee”) appointed by the Board of Directors of Changtian Plastic & Chemical Limited (the
     “Company”) to administer the ESOS. Terms as defined in the ESOS shall have the same meaning
     when used in this letter.
2.   Accordingly, in consideration of the payment of a sum of S$1.00, an offer is hereby made to grant
     you an option (the “Option”), to subscribe for and be allotted                 Shares at the price
     of S$                    for each Share.
3.   The Option is personal, to you and shall not be transferred, charged, pledged, assigned or
     otherwise disposed of by you, in whole or in part, except with the prior approval of the Committee.
4.   The Option shall be subject to the terms of the ESOS, a copy of which is available for inspection
     at the business address of the Company.
5.   If you wish to accept the offer of the Option on the terms of this letter, please sign and return the
     enclosed Acceptance Form with a sum of S$1.00 not later than 5.00 p.m. on
     failing which this offer will lapse.


Yours faithfully,
For and on behalf of
Changtian Plastic & Chemical Limited




Name:




                                                  G-14
                                             Schedule B

                           CHANGTIAN EMPLOYEE SHARE OPTION SCHEME

                                        ACCEPTANCE FORM
                                                                     Serial No:

                                                                          Date:

To:     The Committee,
        Changtian Employee Share Option Scheme

    Closing Date for Acceptance of Offer:

    Number of Shares Offered:

    Exercise Price for each Share: S$

    Total Amount Payable: S$

I have read your Letter of Offer dated                       and agree to be bound by the terms of the
Letter of Offer and ESOS referred to therein. Terms defined in your Letter of Offer shall have the same
meanings when used in this Acceptance Form.

I hereby accept the Option to subscribe for                     Shares at S$
for each Share. I enclose cash for S$1.00 in payment for the purchase of the Option/I authorise my
employer to deduct the sum of S$1.00 from my salary in payment for the purchase of the Option.

I understand that I am not obliged to exercise the Option.

I confirm that my acceptance of the Option will not result in the contravention of any applicable law or
regulation in relation to the ownership of shares in the Company or options to subscribe for such
shares.

I agree to keep all information pertaining to the grant of the Option to me confidential.

I further acknowledge that you have not made any representation to induce me to accept the offer and
that the terms of the Letter of Offer and this Acceptance Form constitute the entire agreement between
us relating to the offer.

Please print in block letters


Name in full               :

Designation                :

Address                    :

Nationality                :

*NRIC/Passport No.         :

Signature
Date

Note:
*     Delete accordingly


                                                 G-15
                                               Schedule C

                         CHANGTIAN EMPLOYEE SHARE OPTION SCHEME

                                   FORM OF EXERCISE OF OPTION


     Total number of ordinary shares of S$0.05 each (the “Shares”) :
     offered at S$                   for each Share (the “Exercise
     Price”) under the ESOS on                     (Date of Grant)

     Number of Shares previously allotted thereunder                    :

     Outstanding balance of Shares to be allotted thereunder            :

     Number of Shares now to be subscribed                              :


To:    The Committee,
       Changtian Employee Share Option Scheme
1.     Pursuant to your Letter of Offer dated                               and my acceptance thereof, I
       hereby exercise the Option to subscribe for                            Shares in Changtian Plastic &
       Chemical Limited (the “Company”) at S$                               for each Share.
2.     I enclose a *cheque/cashiers order/banker’s draft/postal order no.                               for
       S$                   by way of subscription for the total number of the said Shares.
3.     I agree to subscribe for the said Shares subject to the terms of the Letter of Offer, the Changtian
       Employee Share Option Scheme and the Memorandum of Association and the Bye-Laws of the
       Company.
4.     I declare that I am subscribing for the said Shares for myself and not as a nominee for any other
       person.
5.     I request the Company to allot and issue the Shares in the name of The Central Depository (Pte)
       Limited (“CDP”) for credit of my *Securities Account with CDP/Sub-Account with the Depository
       Agent/CPF investment account with my Agent Bank specified below and I hereby agree to bear
       such fees or other charges as may be imposed by CDP in respect thereof.




                                                     G-16
Please print in block letters


Name in full              :

Designation               :

Address                   :

Nationality               :

*NRIC/Passport No         :

*Direct Securities        :
  Account No.

OR

*Sub Account No.          :

Name of Depository        :
 Agent

OR

*CPF Investment           :
  Account No.

Name of Agent Bank        :

Signature                 :

Date                      :

Note:
*    Delete accordingly




                                G-17
This page has been intentionally left blank.
                                                                                           APPENDIX H

                       TERMS, CONDITIONS AND PROCEDURES
                        FOR APPLICATION AND ACCEPTANCE

You are invited to apply and subscribe for and/or purchase the Invitation Shares at the Issue Price for
each Invitation Share, subject to the following terms and conditions:

1.   YOUR APPLICATION MUST BE MADE IN LOTS OF 1,000 INVITATION SHARES OR
     INTEGRAL MULTIPLES THEREOF. YOUR APPLICATION FOR ANY OTHER NUMBER OF
     INVITATION SHARES WILL BE REJECTED.

2.   Your application for the Offer Shares may be made by way of the printed Offer Shares Application
     Forms or by way of electronic applications through ATMs (“ATM Electronic Applications”) or
     through the IB websites of the relevant Participating Banks (“Internet Electronic Applications”
     which, together with ATM Electronic Applications, shall be referred to as “Electronic Applications”).

     Your application for the Placement Shares may only be made by way of the Placement Shares
     Application Forms.

     YOU MAY NOT USE CPF FUNDS TO APPLY FOR THE INVITATION SHARES.

3.   You are allowed to submit only one application in your own name for the Offer Shares.

     If you submit an application for the Offer Shares by way of an Application Form, you may
     not submit another application for the Offer Shares by way of an Electronic Application and
     vice versa. Such separate applications shall be deemed to be multiple applications and will
     be liable to be rejected at the discretion of the Company, the Vendors, the Manager or the
     Underwriter and Placement Agent.

     If you submit an application for the Offer Shares by way of an Internet Electronic
     Application, you may not submit another application for the Offer Shares by way of an ATM
     Electronic Application and vice versa. Such separate applications shall be deemed to be
     multiple applications and shall be rejected.

     If you (not being an approved nominee company) have submitted an application for the
     Offer Shares in your own name, you should not submit any other application for the Offer
     Shares, whether by way of an Application Form or by way of an Electronic Application, for
     any other person. Such separate applications shall be deemed to be multiple applications
     and will be liable to be rejected at the discretion of the Company, the Vendors, the Manager
     or the Underwriter and Placement Agent.

     You are allowed to submit only one application in your own name for the Placement
     Shares. Any separate applications by you for the Placement Shares shall be deemed to be
     multiple applications and the Company, the Vendors, the Manager or the Underwriter and
     Placement Agent have the discretion whether to accept or reject such multiple
     applications.

     If you, being other than an approved nominee company, have submitted an application for
     Placement Shares in your own name, you should not submit any other application for
     Placement Shares for any other person. Such separate applications shall be deemed to be
     multiple applications and will be liable to be rejected at the discretion of the Company, the
     Vendors, the Manager or the Underwriter and Placement Agent.




                                                  H-1
     If you have made an application for Placement Shares, and you have also made a separate
     application for Offer Shares either by way of an Application Form or through an Electronic
     Application, the Company, the Vendors, the Manager or the Underwriter and Placement
     Agent shall have the discretion to either (i) reject both of such separate applications or (ii)
     accept any one (but not the other) out of such separate applications.

     Conversely, if you have made an application for Offer Shares either by way of an
     Application Form or through an Electronic Application, and you have also made a separate
     application for Placement Shares, the Company, the Vendors, the Manager or the
     Underwriter and Placement Agent shall have the discretion to either (i) reject both of such
     separate applications or (ii) accept any one (but not the other) out of such separate
     applications.

     Joint applications shall be rejected. Multiple applications for Invitation Shares will be liable
     to be rejected at the discretion of the Company, the Vendors, the Manager or the
     Underwriter and Placement Agent. If you submit or procure submissions of multiple share
     applications for Offer Shares, Placement Shares or both Offer Shares and Placement
     Shares, you may be deemed to have committed an offence under the Penal Code (Chapter
     224) of Singapore and the Securities and Futures Act (Chapter 289) of Singapore, and your
     applications may be referred to the relevant authorities for investigation. Multiple
     applications or those appearing to be or suspected of being multiple applications may be
     liable to be rejected at the discretion of our Company, the Vendors, the Manager or the
     Underwriter and Placement Agent.

4.   We will not accept applications from any person under the age of 21 years, undischarged
     bankrupts, sole-proprietorships, partnerships, chops or non-corporate bodies, joint Securities
     Account holders of CDP and from applicants whose addresses (furnished in their printed
     Application Forms or, in the case of Electronic Applications, contained in the records of the
     relevant Participating Banks, as the case may be) bear post office box numbers. No person acting
     or purporting to act on behalf of a deceased person is allowed to apply under the Securities
     Account with CDP in the deceased name at the time of application.

5.   We will not recognise the existence of a trust. Any application by a trustee or trustees must be
     made in his/their own name(s) and without qualification or, where the application is made by way
     of an Application Form, in the name(s) of an approved nominee company or approved nominee
     companies after complying with paragraph 6 below.

6.   WE WILL ONLY ACCEPT APPLICATIONS FROM APPROVED NOMINEE COMPANIES.
     Approved nominee companies are defined as banks, merchant banks, finance companies,
     insurance companies, licensed securities dealers in Singapore and nominee companies
     controlled by them. Applications made by persons acting as nominees other than approved
     nominee companies shall be rejected.

7.   IF YOU ARE NOT AN APPROVED NOMINEE COMPANY, YOU MUST MAINTAIN A
     SECURITIES ACCOUNT WITH CDP IN YOUR OWN NAME AT THE TIME OF YOUR
     APPLICATION. If you do not have an existing Securities Account with CDP in your own name at
     the time of your application, your application will be rejected (if you apply by way of an Application
     Form), or you will not be able to complete your Electronic Application (if you apply by way of an
     Electronic Application). If you have an existing Securities Account but fail to provide your
     Securities Account number or provide an incorrect Securities Account number in Section B of the
     Application Form or in your Electronic Application, as the case may be, your application is liable
     to be rejected. Subject to paragraph 8 below, your application shall be rejected if your particulars,
     such as name, NRIC/passport number, nationality and permanent residence status and CDP
     Securities Account number provided in your Application Form or in the records of the relevant
     Participating Bank at the time of your Electronic Application, as the case may be, differ from those


                                                   H-2
      particulars in your Securities Account as maintained with CDP. If you possess more than one
      individual direct Securities Account with CDP, your application shall be rejected.

8.    If your address as stated in the Application Form or, in the case of an Electronic
      Application, contained in the records of the relevant Participating Bank, as the case may
      be, is different from the address registered with CDP, you must inform CDP of your updated
      address promptly, failing which the notification letter on successful allotment will be sent
      to your address last registered with CDP.

9.    We reserve the right to reject any application which does not conform strictly to the
      instructions set out in the Application Form or the instructions for Electronic Applications
      and in this Prospectus or with the terms and conditions of this Prospectus, which is
      illegible, incomplete, incorrectly completed or which is accompanied by an improperly
      drawn up or improper form of remittance. Our Company and the Vendors further reserve
      the right to treat as valid any applications not completed or submitted or effected in all
      respects in accordance with the instructions set out in the Application Forms or the
      instructions for Electronic Applications or the terms and conditions of this Prospectus,
      and also to present for payment or other processes all remittances at any time after receipt
      and to have full access to all information relating to, or deriving from, such remittances or
      the processing thereof.

10. Our Company and the Vendors reserve the right to reject or to accept, in whole or in part, or to
    scale down or to ballot any application, without assigning any reason therefore, and our Company
    and the Vendors will not entertain any enquiry and/or correspondence on our decision. This right
    applies to applications made by way of Application Forms and by way of Electronic Applications.
    In deciding the basis of allotment, our Company and the Vendors will give due consideration to the
    desirability of allotting the Invitation Shares to a reasonable number of applicants with a view to
    establishing an adequate market for the Shares.

11.   Share certificates will be registered in the name of CDP and will be forwarded only to CDP. It is
      expected that CDP will send to you, at your own risk, within 15 Market Days after the close of the
      Application List, a statement of account stating that your Securities Account has been credited
      with the number of Invitation Shares allotted to you. This will be the only acknowledgement of
      application monies received and is not an acknowledgement by our Company and the Vendors.
      You irrevocably authorise CDP to complete and sign on your behalf as transferee or renouncee
      any instrument of transfer and/or other documents required for the issue or transfer of the
      Invitation Shares allotted to you. This authorisation applies to applications made by way of
      Application Forms and by way of Electronic Applications.

      You hereby consent to the disclosure of your name, NRIC/passport number, address, nationality,
      permanent resident status, CDP securities account number, CDP Investment Account number (if
      applicable) and share application amount from your account with the relevant Participating Bank
      to the Share Registrar, SCCS, SGX-ST, CDP, CPF, our Company and the Manager.

      You irrevocably authorise CDP to disclose the outcome of your application, including the number
      of Invitation Shares allotted to you pursuant to your application, to our Company, the Vendors, the
      Manager, the Underwriter, Placement Agent and any other parties so authorised by CDP, the
      Company, the Vendors, the Manager, the Underwriter and/or the Placement Agent.

12. In the event that our Company lodges a supplementary or replacement prospectus pursuant to the
    SFA or any applicable legislation in force from time to time prior to the close of the Invitation, and
    the Invitation Shares have not been issued, we are required at our sole and absolute discretion
    to either:




                                                   H-3
     (a)   within seven days of the lodgement of the supplementary or replacement prospectus, give
           you a copy of the supplementary or replacement prospectus, as the case may be, and
           provide you with an option to withdraw your application; or
     (b)   deem your application as withdrawn and cancelled and refund your application monies
           (without interest or any share of revenue or other benefit arising therefrom) to you within
           seven days from the lodgement of the supplementary or replacement prospectus.
     In the event that at any time of the lodgement, the Invitation Shares have already been issued but
     trading has not yet commenced, we will (as required by law) at our sole and absolute discretion
     either:
     (a)   within seven days of the lodgement of the supplementary or replacement prospectus, give
           you a copy of the supplementary or replacement prospectus, as the case may be, and
           provide you with an option to return the Invitation Shares; or
     (b)   deem the issue of the Invitation Shares as void and, subject to compliance with the Bermuda
           Companies Act, refund your payment for the Invitation Shares (without interest or any share
           of revenue or other benefit arising therefrom) to you within seven days from the lodgement
           of the supplementary or replacement prospectus.

     Additional terms and instructions applicable upon the lodgement of the supplementary or
     replacement instructions, including instructions on how you can exercise the option to withdraw
     your application or return the Invitation Shares allotted to you, may be found in such
     supplementary or replacement prospectus.

     Where an applicant has notified us within 14 days from the date of lodgement of the
     supplementary or replacement prospectus of his wish to exercise his option under the SFA to
     withdraw his application or return the Invitation Shares allotted to him, we shall, subject to
     compliance with the Bermuda Companies Act, pay him all monies paid by him on account of his
     application for the Invitation Shares without interest or any share of revenue or other benefit
     arising therefrom and at his own risk, within seven days from the receipt of such notification.

13. In the event of an under-subscription for the Offer Shares as at the close of the Application List,
    we will make available that number of the Offer Shares under-subscribed to satisfy applications
    for the Placement Shares to the extent that there is an over-subscription for the Placement Shares
    as at the close of the Application List.

     In the event of an under-subscription for the Placement Shares as at the close of the Application
     List, we will make available that number of the Placement Shares under-subscribed to satisfy
     applications for the Offer Shares to the extent that there is an over-subscription for the Offer
     Shares as at the close of the Application List.

     In the event of an over-subscription for the Offer Shares as at the close of the Application List and
     the Placement Shares are fully subscribed or over-subscribed as at the close of the Application
     List, the successful applications for the Offer Shares will be determined by ballot or otherwise as
     determined by our Directors and the Vendors and approved by the SGX-ST.

     In the event of an under-subscription for the Offer Shares and/or Placement Shares as at the
     close of the Application List, the number of Offer Shares and/or Placement Shares under-
     subscribed shall be subscribed by the Underwriter and/or the Placement Agent respectively.

14. Any reference to the “you” in this section shall include an individual, a corporation, an approved
    nominee and trustee applying for the Offer Shares by way of an Offer Shares Application Form or
    by way of an Electronic Application and a person applying for the Placement Shares through the
    Placement Agent by way of a Placement Shares Application Form.



                                                  H-4
15. By completing and delivering an Application Form or by making and completing an Electronic
    Application by (in the case of an ATM Electronic Application) pressing the “Enter” or “Ok” or
    “Confirm” or “Yes” key or any other relevant key on the ATM (as the case may be) or by (in the
    case of an Internet Electronic Application) clicking “Submit” or “Continue” or “Yes” or “Confirm” or
    any other button on the IB website screen (as the case may be) in accordance with the provisions
    of this Prospectus, you:
     (a)   irrevocably offer to subscribe for and/or purchase the number of Invitation Shares specified
           in your application (or such smaller number for which the application is accepted) at the
           Issue Price and agree that you will accept such Invitation Shares as may be allotted to you,
           in each case on the terms of, and subject to the conditions set out in, this Prospectus and
           the Memorandum of Association and Bye-Laws of our Company;
     (b)   agree that in the event of any inconsistency between the terms and conditions for application
           and acceptance set out in this Prospectus and those set out in the IB websites or ATMs of
           the relevant Participating Banks, the terms and conditions set out in this Prospectus shall
           prevail;
     (c)   agree that the aggregate Issue Price for the Invitation Shares applied for is due and payable
           to our Company and the Vendors upon application;
     (d)   warrant the truth and accuracy of the information contained, and representations and
           declarations made, in your application, and acknowledge and agree that such information,
           representations and declarations will be relied on by our Company and the Vendors in
           determining whether to accept your application and/or whether to allot any Invitation Shares
           to you; and
     (e)   agree and warrant that if the laws of any jurisdictions outside Singapore are applicable to
           your application, you have complied with all such laws and none of our Company, the
           Vendors, the Manager, the Underwriter and/or the Placement Agent will infringe any such
           laws as a result of the acceptance of your application.

16. Our acceptance of applications will be conditional upon, inter alia, our Company and the Vendors
    being satisfied that:
     (a)   permission has been granted by the SGX-ST to deal in, and for quotation of, all our existing
           Shares (including the Vendor Shares), the New Shares and the Option Shares on a
           “when-issued” basis on the SGX-ST;
     (b)   the Management and Underwriting Agreement and the Placement Agreement referred to
           under the heading “Management and Underwriting and Placement Arrangements” of this
           Prospectus have become unconditional and have not been terminated or cancelled prior to
           such date as our Company and the Vendors may determine; and
     (c)   the Authority has not served a stop order which directs that no further shares to which this
           Prospectus relates be allotted.

17. In the event that a stop order in respect of the Invitation Shares is served by the Authority or other
    competent authority; and
     (a)   the Invitation Shares have not been issued and/or sold, we will (as required by law) deem
           all applications withdrawn and cancelled and our Company (for itself as well as on behalf of
           the Vendors) shall refund the application monies (without interest or any share of revenue
           or other benefit arising therefrom) to you within 14 days of the date of the stop order; or
     (b)   if the Invitation Shares have already been issued, the issue is required to be deemed void,
           and our Company (for itself as well as on behalf of the Vendors) shall refund the application
           monies (without interest or any share of revenue or other benefit arising therefrom) to you
           within 14 days of the date of the stop order; or



                                                   H-5
     (c)   if the Invitation Shares have been transferred to the applicants, the sale of the Invitation
           Shares shall be deemed void and if documents purporting to evidence title had been issued
           to you, our Company (for itself as well as on behalf of the Vendors) shall within seven days
           from the date of the Stop Order inform you to return such documents to our Company within
           14 days from that date; and subject to compliance with the Bermuda Companies Act, we (for
           ourselves as well as on behalf of the Vendors) will refund the application monies (without
           interest or any share of revenue or other benefit arising therefrom) to you within seven days
           from the date of receipt of such documents (if applicable) or the date of the Stop Order,
           whichever is later.
     This shall not apply where only an interim Stop Order has been served.

18. In the event that an interim Stop Order in respect of the Invitation Shares is served by the Authority
    or other competent authority, no Shares shall be issued to you until the Authority revokes the
    interim Stop Order.

19. We will not hold any applications in reserve.

20. We will not allot Shares on the basis of this Prospectus later than six months after the date of
    registration of this Prospectus.

21. Additional terms and conditions for application and acceptance using printed Application Forms
    are set out on pages H-6 to H-9 of Appendix H of this Prospectus.

22. Additional terms and conditions for Electronic Applications are set out on pages H-9 to H-14 of
    Appendix H of this Prospectus.


ADDITIONAL TERMS AND CONDITIONS FOR APPLICATIONS AND ACCEPTANCE USING
PRINTED APPLICATION FORMS
You shall make an application by way of Application Forms made on and subject to the terms and
conditions of this Prospectus including but not limited to the terms and conditions appearing below as
well as those set out under the section on “TERMS, CONDITIONS AND PROCEDURES FOR
APPLICATION AND ACCEPTANCE” on pages H-1 to H-6 of Appendix H of this Prospectus, as well as
the Memorandum of Association and Bye-Laws of our Company.

1.   Your application for the Offer Shares must be made using the WHITE Offer Shares Application
     Forms and WHITE official envelopes “A” or “B” accompanying and forming part of this Prospectus.

     Your application for the Placement Shares must be made using the BLUE Placement Shares
     Application Forms accompanying and forming part of this Prospectus.

     We draw your attention to the detailed instructions contained in the respective Application Forms
     and this Prospectus for the completion of the Application Forms which must be carefully followed.
     We reserve the right to reject applications which do not conform strictly to the instructions
     set out in the Application Forms and this Prospectus or to the terms and conditions of this
     Prospectus or which are illegible, incomplete, incorrectly completed or which are
     accompanied by improperly drawn remittances or improper form of remittances.

2.   Your Application Forms must be completed in English. Please type or write clearly in ink using
     BLOCK LETTERS.

3.   All spaces in the Application Forms except those under the heading “FOR OFFICIAL USE ONLY”
     must be completed and the words “NOT APPLICABLE” or “N.A.” should be written in any space
     that is not applicable.



                                                   H-6
4.   Individuals, corporations, approved nominee companies and trustees must give their names in
     full. If you are an individual, you must make your application using your full name appearing in
     your identity card (if you have such identification document) or in your passport and, in the case
     of corporations, in your full names as registered with a competent authority. If you are a
     non-individual completing the Application Form under the hand of an official, you must state the
     name and capacity in which that official signs. If you are a corporation completing the Application
     Form, you are required to affix your Common Seal (if any) in accordance with your memorandum
     and articles of association or equivalent constitutive documents. If you are a corporate applicant
     and your application is successful, a copy of your memorandum and articles of Association or
     equivalent constitutive documents must be lodged with our Company’s Share Registrar and
     Share Transfer Office. Our Company and the Vendors reserve the right to require you to produce
     documentary proof of identification for verification purposes.
5.   (a)   You must complete Sections A and B and sign page 1 of the Application Form.
     (b)   You are required to delete either paragraph 7(a) or 7(b) on page 1 of the Application Form.
           Where paragraph 7(a) is deleted, you must also complete Section C of the Application Form
           with particulars of the beneficial owner(s).
     (c)   If you fail to make the required declaration in paragraph 7(a) or 7(b), as the case may be,
           on page 1 of the Application Form, your application is liable to be rejected.

6.   You (whether you are an individual and corporate applicant, whether incorporated or
     unincorporated and wherever incorporated or constituted), will be required to declare whether you
     are a citizen or permanent resident of Singapore or a corporation in which citizens or permanent
     residents of Singapore or any body corporate constituted under any statute of Singapore have an
     interest in the aggregate of more than 50 per cent of the issued share capital of or interests in such
     corporations. If you are an approved nominee company, you are required to declare whether the
     beneficial owner of the Invitation Shares is a citizen or permanent resident of Singapore or a
     corporation, whether incorporated or unincorporated and wherever incorporated or constituted, in
     which citizens or permanent residents of Singapore or any body corporate whether incorporated
     or unincorporated and wherever incorporated or constituted under any statute of Singapore have
     an interest in the aggregate of more than 50 per cent of the issued share capital of or interests in
     such corporation.

7.   Your application must be accompanied by a cash remittance in Singapore currency for the full
     amount payable, in respect of the number of Invitation Shares applied for, in the form of a
     BANKER’S DRAFT or CASHIER’S ORDER drawn on a bank in Singapore, made out in favour
     of “CHANGTIAN SHARE ISSUE ACCOUNT” crossed “A/C PAYEE ONLY”, with your name and
     address written clearly on the reverse side.

     WE WILL NOT ACCEPT APPLICATIONS NOT ACCOMPANIED BY ANY PAYMENT OR
     ACCOMPANIED BY ANY OTHER FORM OF PAYMENT. WE WILL REJECT REMITTANCES
     BEARING “NOT TRANSFERABLE” OR “NON TRANSFERABLE” CROSSINGS. No
     acknowledgement or receipt will be issued by our Company, the Vendors or the Manager for
     applications and application monies received.

8.   Monies paid in respect of unsuccessful applications are expected to be returned (without interest
     or any share of revenue or other benefit arising therefrom) to you by ordinary post within 24 hours
     of the balloting at your own risk. Where your application is rejected or accepted in part only, the
     full amount or the balance of the application monies, as the case may be, will be refunded (without
     interest or any share of revenue or other benefit arising therefrom) to you by ordinary post at your
     own risk within 14 Market Days after the close of the Application List, provided that the remittance
     accompanying such application which has been presented for payment or other processes has
     been honoured and the application monies have been received in the designated share issue
     account.


                                                   H-7
9.   Capitalised terms used in the Application Forms and defined in this Prospectus shall bear the
     meanings assigned to them in this Prospectus.

10. By completing and delivering the Application Form in accordance with the provisions of this
    Prospectus, you agree that:
     (a)   in consideration of us and the Vendors having distributed the Application Form to you and
           agreeing to close the Application List at 12.00 noon on 6 November 2007 or such other
           time or date as our Company and the Vendors may, in consultation with the Manager,
           decide and by completing and delivering the Application Form, you agree that:
           (i)    your application is irrevocable; and
           (ii)   your remittance will be honoured on first presentation and that any monies returnable
                  may be held pending clearance of your payment without interest or any share of
                  revenue or other benefit arising therefrom;
     (b)   all applications, acceptances and contracts resulting therefrom under the Invitation shall be
           governed by and construed in accordance with the laws of Singapore and that you
           irrevocably submit to the non-exclusive jurisdiction of the Singapore courts;
     (c)   in respect of the Invitation Shares for which your application has been received and not
           rejected, acceptance of your application shall be constituted by written notification and not
           otherwise, notwithstanding any remittance being presented for payment by or on behalf of
           our Company and the Vendors;
     (d)   you will not be entitled to exercise any remedy of rescission for misrepresentation at any
           time after acceptance of your application;
     (e)   in making your application, reliance is placed solely on the information contained in this
           Prospectus and none of our Company, the Vendors, the Manager, the Underwriter, the
           Placement Agent or any other person involved in the Invitation shall have any liability for any
           information not so contained;
     (f)   you consent to the disclosure of your name, NRIC/passport number, address, nationality,
           permanent resident status, CDP Securities Account number and share application amount
           from your Bank A/C(s) with the relevant Participating Bank to our Share Registrar, SGX-ST,
           CDP, SCCS, CPF, our Company, the Vendors, the Manager, the Underwriter and the
           Placement Agent;
     (g)   you irrevocably agree and undertake to subscribe for the number of Invitation Shares
           applied for as stated in the Application Form or any smaller number of such Invitation Shares
           that may be allotted to you in respect of your application. In the event that we decide to allot
           a smaller number of Invitation Shares or not to allot any Invitation Shares to you, you agree
           to accept such decision as final; and
     (h)   you irrevocably authorise CDP to complete and sign on your behalf as transferee or
           renouncee any instrument of transfer and/or other documents required for the issue or
           transfer of the Invitation Shares that may be allotted to you.


Applications for Offer Shares

1.   Your application for Offer Shares MUST be made using the WHITE Offer Shares Application
     Forms and WHITE official envelopes “A” and “B”.

2.   You must:
     (a)   enclose the WHITE Offer Shares Application Form, duly completed and signed, together
           with your correct remittance in accordance with the terms and conditions of this Prospectus
           in the WHITE official envelope “A” provided;


                                                   H-8
     (b)   in the appropriate spaces on WHITE official envelope “A”:
           (i)     write your name and address;
           (ii)    state the number of Offer Shares applied for;
           (iii)   tick the relevant box to indicate the form of payment; and
           (iv) affix adequate Singapore postage;
     (c)   SEAL THE WHITE OFFICIAL ENVELOPE “A”;
     (d)   write, in the appropriate box provided on the larger WHITE official envelope “B” addressed
           to Boardroom Corporate & Advisory Services Pte. Ltd., 3 Church Street, #08-01
           Samsung Hub, Singapore 049483, the number of Offer Shares you have applied for; and
     (e)   insert WHITE official envelope “A” into WHITE official envelope “B”, seal WHITE official
           envelope “B”, affix adequate Singapore postage on WHITE official envelope “B” (if
           despatched by ordinary post) and thereafter DESPATCH BY ORDINARY POST OR
           DELIVER BY HAND the documents at your own risk to Boardroom Corporate & Advisory
           Services Pte. Ltd., 3 Church Street, #08-01 Samsung Hub, Singapore 049483, so as to
           arrive by 12.00 noon on 6 November 2007 or such other time or date as our Company
           and the Vendors may, in consultation with the Manager, decide. Local Urgent Mail or
           Registered Post must NOT be used. No acknowledgement of receipt will be issued for any
           application or remittance received.

3.   Applications that are illegible, incomplete or incorrectly completed or accompanied by improperly
     drawn remittances or which are not honoured upon their first presentation are liable to be rejected.

4.   ONLY ONE APPLICATION should be enclosed in each envelope. No acknowledgement of
     receipt will be issued for any application or remittance received.


Applications for Placement Shares

1.   Your application for Placement Shares MUST be made using the BLUE Placement Shares
     Application Forms.

2.   The completed and signed BLUE Placement Shares Application Form and your remittance in
     accordance with the terms and conditions of this Prospectus, for the full amount payable in
     respect of the number of Placement Shares you have applied for, with your name, CDP Account
     number and address written clearly on the reverse side, must be enclosed and sealed in an
     envelope to be provided by you. You must affix adequate Singapore postage on the envelope (if
     despatching by ordinary post). The sealed envelope must be DESPATCHED BY ORDINARY
     POST OR DELIVERED BY HAND at your own risk to Boardroom Corporate & Advisory
     Services Pte. Ltd., 3 Church Street, #08-01 Samsung Hub, Singapore 049483, so as to arrive
     by 12.00 noon on 6 November 2007 or such other time or date as our Company and the
     Vendors may, in consultation with the Manager, decide. Local Urgent Mail or Registered
     Post must NOT be used. No acknowledgement of receipt will be issued for any application or
     remittance received.

3.   Applications which are illegible, incomplete or incorrectly completed or accompanied by
     improperly drawn remittances or which are not honoured upon their first presentation are liable to
     be rejected.

4.   ONLY ONE APPLICATION should be enclosed in each envelope. No acknowledgement of receipt
     will be issued for any application or remittance received.




                                                   H-9
ADDITIONAL TERMS AND CONDITIONS FOR ELECTRONIC APPLICATIONS
The procedures for Electronic Applications at ATMs are set out on the ATM screens (in the case of ATM
Electronic Applications) and the IB website screens (in the case of Internet Electronic Applications) of
the relevant Participating Banks. Currently, DBS and the UOB Group are the only Participating Banks
through which Internet Electronic Applications can be made. For illustration purposes, the procedures
for Electronic Applications through ATMs and the IB website of DBS are set out respectively in the
“Steps for Electronic Applications through ATMs of DBS (including its POSB ATMs)” and “Steps for
Internet Electronic Applications through the IB website of DBS” (collectively, the “Steps”) appearing on
pages H-15 and H-17 of Appendix H of this Prospectus.

The Steps set out the actions that you must take at an ATM or the IB website of DBS to complete an
Electronic Application. The actions that you must take at the ATMs or the IB websites of the other
Participating Banks are set out on the ATM screens or the IB website screens of the relevant
Participating Banks.

Please read carefully the terms of this Prospectus, the Steps and the terms and conditions for
Electronic Applications set out below before making an Electronic Application.

Any reference to “you” in the Additional Terms and Conditions for Electronic Applications and the Steps
shall refer to you making an application for the Offer Shares through an ATM or the IB website of a
relevant Participating Bank.

You must have an existing bank account with and be an ATM cardholder of one of the Participating
Banks before you can make an Electronic Application at the ATMs of that Participating Bank. An ATM
card issued by one Participating Bank cannot be used to apply for the Offer Shares at an ATM
belonging to other Participating Banks. Upon the completion of your ATM Electronic Application
transaction, you will receive an ATM transaction slip (“Transaction Record”), confirming the details of
your ATM Electronic Application. The Transaction Record is for your retention and should not be
submitted with any Application Form.

You must ensure that you enter your own Securities Account number when using the ATM card issued
to you in your own name. If you operate a joint bank account with any of the Participating Banks, you
must ensure that you enter your own Securities Account number when using the ATM card issued to
you in your own name. Using your own Securities Account number with an ATM card which is not issued
to you in your own name will render your Electronic Application liable to be rejected.

For an Internet Electronic Application, you must have an existing bank account with and an IB User
Identification (“User ID”) and a Personal Identification Number/Password (“PIN”) given by the relevant
Participating Bank. Upon completion of your Internet Electronic Application, there will be an on-screen
confirmation (“Confirmation Screen”) of the application which you can print out for your record. This
printed record of the Confirmation Screen is for your retention and should not be submitted with any
Application Form.

Further, you must ensure, when making an Internet Electronic Application that:
(a)     you are currently in Singapore at the time of making of such application;
(b)     your mailing address for IB with the relevant Participating Bank is in Singapore;
(c)     you are not a US person(1) (as such term is defined in Regulation S under the United States
        Securities Act of 1933, as amended from time to time),
and you will be asked to declare the above accordingly. Otherwise, your application is liable to be
rejected.

Note:
(1)   For details, please refer to definition of “US person” on the IB websites.


                                                              H-10
Your Electronic Application shall be made on the terms and subject to the conditions of this Prospectus,
including but not limited to the terms and conditions appearing below and those set out under the section
on “TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION AND ACCEPTANCE” on pages
H-1 to H-6 of this Prospectus as well as the Memorandum Of Association and Bye-Laws of our Company.

1.   In connection with your Electronic Application for Invitation Shares, you are required to confirm
     statements to the following effect in the course of activating the Electronic Application:
     (a)   that you have received a copy of this Prospectus and have read, understood and
           agreed to all the terms and conditions of application for the Invitation Shares and this
           Prospectus prior to effecting the Electronic Application and agree to be bound by the
           same;
     (b)   that you consent to the disclosure of your name, NRIC/passport number, address,
           nationality, permanent resident status, CDP Securities Account number, CPF
           Investment Account Number (if applicable) and share application amount (the
           “Relevant Particulars”) from your account with that Participating Bank to the Share
           Registrar, CPF, SGX-ST, CDP, SCCS, our Company and the Manager (the “Relevant
           Parties”); and
     (c)   that this is your only application and it is made in your own name and at your own
           risk.
     Your application will not be successfully completed and cannot be recorded as a completed
     transaction in the ATM unless you press the “enter” or “ok” or “confirm” or “yes” key or any other
     relevant key in the ATM or click “confirm” or “OK” or “Submit” or “Continue” or “Yes” or any other
     relevant button on the Internet screen. By doing so, you shall be treated as signifying your
     confirmation of each of the above three statements. In respect of statement 1(b) above, your
     confirmation, by pressing the “enter” or “ok” or “confirm” or “yes” or any other relevant key or by
     clicking “confirm” or “OK” or “Submit” or “Continue” or “Yes” or any other relevant button on the
     Internet screen, shall signify and shall be treated as your written permission, given in accordance
     with the relevant laws of Singapore including Section 47(2) of the Banking Act (Chapter 19) of
     Singapore to the disclosure by that Participating Bank of your Relevant Particulars to the Relevant
     Parties.

2.   BY MAKING AN ELECTRONIC APPLICATION, YOU CONFIRM THAT YOU ARE NOT
     APPLYING FOR THE OFFER SHARES AS A NOMINEE OF ANY OTHER PERSON AND THAT
     ANY ELECTRONIC APPLICATION THAT YOU MAKE IS THE ONLY APPLICATION MADE BY
     YOU AS BENEFICIAL OWNER.

     YOU SHOULD MAKE ONLY ONE ELECTRONIC APPLICATION FOR THE OFFER SHARES
     AND SHOULD NOT MAKE ANY OTHER APPLICATION FOR OFFER SHARES, WHETHER AT
     THE ATMs OR THE IB WEBSITES (IF ANY) OF ANY PARTICIPATING BANK OR ON THE
     APPLICATION FORMS. IF YOU HAVE MADE AN APPLICATION FOR THE OFFER SHARES
     OR PLACEMENT SHARES ON AN APPLICATION FORM, YOU SHALL NOT MAKE AN
     ELECTRONIC APPLICATION FOR THE OFFER SHARES AND VICE VERSA.

3.   You must have sufficient funds in your bank account with your Participating Bank at the time you
     make your Electronic Application, failing which your Electronic Application will not be completed.
     Any Electronic Application which does not conform strictly to the instructions set out in
     this Prospectus or on the screens of the ATM or IB website through which your Electronic
     Application is being made shall be rejected.

     For Offer Shares, you may make an ATM Electronic Application at the ATM of any
     Participating Bank or an Internet Electronic Application at the IB websites of the relevant
     Participating Banks, using only cash by authorising such Participating Bank to deduct the
     full amount payable from your account with such Participating Bank.


                                                  H-11
4.   You irrevocably agree and undertake to subscribe for and/or purchase and to accept the number
     of Offer Shares applied for as stated on the Transaction Record or Confirmation Screen or any
     lesser number of such Offer Shares that may be allotted to you in respect of your Electronic
     Application. In the event that we decide to allot any lesser number of such Offer Shares or not to
     allot any Offer Shares to you, you agree to accept such decision as final.

     If your Electronic Application is successful, your confirmation (by your action of pressing the
     “Enter” or “OK” or “Confirm” or “Yes” or any other relevant key on the ATM or clicking “Confirm”
     or “OK” or “Submit” or “Continue” or “Yes” or any other relevant button on the IB website screen)
     of the number of Offer Shares applied for shall signify and shall be treated as your acceptance of
     the number of Offer Shares that may be allotted to you and your agreement to be bound by the
     Memorandum of Association and Bye-Laws of our Company. You also irrevocably authorise CDP
     to complete and sign on your behalf as transferee or renouncee any instrument of transfer and/or
     other documents required for the issue or transfer of the Invitation Shares that may be allotted to
     you.

5.   We will not keep any applications in reserve. Where your Electronic Application is
     unsuccessful, the full amount of the application monies will be refunded (without interest or any
     share of revenue or other benefit arising therefrom) in Singapore currency to you by being
     automatically credited to your account with your Participating Bank at your own risk within 24
     hours after balloting provided that the remittance in respect of such application which has been
     presented for payment or other processes has been honoured and the application monies
     received in the designated share issue account. Trading on a “WHEN ISSUED” basis, if
     applicable, is expected to commence after such refund has been made.

     Where your Electronic Application is rejected or accepted in part only, the full amount or the
     balance of the application monies, as the case may be, will be refunded (without interest or any
     share of revenue or other benefit arising therefrom) in Singapore currency to you by being
     automatically credited to your account with your Participating Bank, at your own risk within 14
     Market Days after the close of the Application List provided that the remittance in respect of such
     application which has been presented for payment or other processes has been honoured and the
     application monies received in the designated share issue account.

     Responsibility for timely refund of application monies arising from unsuccessful or partially
     successful Electronic Applications lies solely with the respective Participating Banks. Therefore,
     you are strongly advised to consult your Participating Bank as to the status of your Electronic
     Application and/or the refund of any monies to you from unsuccessful or partially successful
     Electronic Application, to determine the exact number of Invitation Shares allotted to you before
     trading the Invitation Shares on the SGX-ST. Neither the SGX-ST, the CDP, the SCCS, the
     Participating Banks, our Company, the Vendors, the Manager, the Underwriter and the Placement
     Agent assume any responsibility for any loss that may be incurred as a result of you having to
     cover any net sell positions or from buy-in procedures activated by the SGX-ST.

6.   If your Electronic Application is made through the ATMs of one of the Participating Banks, and is
     unsuccessful, no notification will be sent by such Participating Bank.

     If your Internet Electronic Application made through the IB website of DBS or UOB Group is
     unsuccessful, no notification will be sent by such Participating Bank.




                                                 H-12
     If you make Electronic Applications through the ATMs of the following banks, you may check the
     results of your Electronic Applications as follows:

                                                                                                          Service
                                                                                                          expected
      Bank             Telephone               Available at                       Operating Hours         from
      DBS              1800 339 6666           Internet Banking                   24 hours                Evening of the
                       (for POSB account       http://www.dbs.com(1)                                      balloting day
                       holders)

                       1800 111 1111
                       (for DBS Bank
                       account holders)
      UOB Group        1800 222 2121           ATM (Other Transactions —          ATM/Phone Banking Evening of the
                                               “IPO Enquiry”)                     24 hours          balloting day

                                               http://www.uobgroup.com(1)(2) Internet Banking
                                                                             24 hours
      OCBC             1800 363 3333           ATM/Phone Banking/                 24 hours                Evening of the
                                               Internet Banking/                                          balloting day
                                               http://www.ocbc.com(3)

     Notes:
     (1)   If you make your Internet Electronic Applications through the IB website of DBS or UOB Group, you may check the
           result through the same channels listed in the table above in relation to ATM Electronic Applications made at ATMs
           of DBS or the UOB Group.
     (2)   If you make your Electronic Application through the ATMs or IB website of the UOB Group, you may check the results
           of your application through UOB Personal Internet Banking, UOB Group’s ATMs or UOB Phone Banking Services.
     (3)   If you make your Electronic Application through the ATMs of OCBC Bank, you may check the results of your
           application through the same channels listed in the table above.


7.   Electronic Applications shall close at 12.00 noon on 6 November 2007 or such other time or date
     as our Company and the Vendors may, in consultation with the Manager, decide. Subject to
     paragraph 9 below, your Internet Electronic Application is deemed to be received when it enters
     the designated information system of the relevant Participating Bank.

8.   You are deemed to have irrevocably requested and authorised us and the Vendors to:
     (a)    register the Offer Shares or Placement Shares, as the case may be, allotted to you in the
            name of CDP for deposit into your Securities Account;
     (b)    send the relevant Share certificate(s) to CDP;
     (c)    return or refund (without interest or any share of revenue earned or other benefit arising
            therefrom) the application monies in Singapore currency, should your Electronic Application
            be unsuccessful, by automatically crediting your bank account with your Participating Bank
            with the relevant amount at your risk, within 24 hours of the balloting; and
     (d)    return or refund (without interest or any share of revenue or other benefit arising therefrom)
            the balance of the application monies in Singapore currency, should your Electronic
            Application be accepted in part only, by automatically crediting your bank account with your
            Participating Bank with the relevant amount at your risk, within 14 Market Days after the
            close of the Application List.

9.   You irrevocably agree and acknowledge that your Electronic Application is subject to risks of
     electrical, electronic, technical and computer-related faults and breakdowns, fires, acts of God
     and other events beyond the control of the Participating Banks, our Company, the Vendors, the
     Manager, the Underwriter, the Placement Agent, CDP, and if, in any such event, our Company, the

                                                           H-13
      Vendors, the Manager, the relevant Participating Bank and/or CDP do not record or receive your
      Electronic Application, or data relating to your Electronic Application or the tape or any other
      devices containing such data is lost, corrupted or not otherwise accessible, whether wholly or
      partially for whatever reason, you shall be deemed not to have made an Electronic Application and
      you shall have no claim whatsoever against our Company, the Vendors, the Manager, the
      Underwriter, the Placement Manager, the relevant Participating Bank and/or CDP for the Invitation
      Shares applied for or for any compensation, loss or damage.

10. We do not recognise the existence of a trust. Any Electronic Application by a trustee must be
    made in your own name and without qualification. Our Company and the Vendors will reject any
    application by any person acting as nominee (other than approved nominee companies).

11.   All your particulars in the records of your Participating Bank at the time you make your Electronic
      Application shall be deemed to be true and correct and your Participating Bank and the Relevant
      Parties shall be entitled to rely on the accuracy thereof. If there has been any change in your
      particulars after making your Electronic Application, you shall promptly notify your Participating
      Bank.

12. You should ensure that your personal particulars as recorded by both CDP and the
    relevant Participating Bank are correct and identical, otherwise, your Electronic
    Application is liable to be rejected. You should promptly inform CDP of any change in address,
    failing which the notification letter on successful allotment will be sent to your address last
    registered with CDP.

13. By making and completing an Electronic Application, you are deemed to have agreed that:
      (a)   in consideration of our Company and the Vendors making available the Electronic
            Application facility, through the Participating Banks acting as agents of our Company and the
            Vendors, at the ATMs and the IB websites of the relevant Participating Banks (if any):
            (i)    your Electronic Application is irrevocable; and
            (ii)   your Electronic Application, the acceptance of our Company, the Vendors and the
                   contract resulting therefrom under the Invitation shall be governed by and construed in
                   accordance with the laws of Singapore and you irrevocably submit to the non-exclusive
                   jurisdiction of the Singapore courts;
      (b)   none of our Company, the Vendors, the Manager, the Underwriter, the Placement Agent, the
            Participating Banks or CDP shall be liable for any delays, failures or inaccuracies in the
            recording, storage or in the transmission or delivery of data relating to your Electronic
            Application to us or CDP due to breakdowns or failure of transmission, delivery or
            communication facilities or any risks referred to in paragraph 9 above or to any cause
            beyond their respective controls;
      (c)   in respect of the Offer Shares for which your Electronic Application has been successfully
            completed and not rejected, acceptance of your Electronic Application shall be constituted
            by written notification by or on behalf of our Company and the Vendors and not otherwise,
            notwithstanding any payment received by or on behalf of our Company and the Vendors;
      (d)   you will not be entitled to exercise any remedy of rescission for misrepresentation at any
            time after acceptance of your application; and
      (e)   reliance is placed solely on information contained in this Prospectus and that none of our
            Company, the Vendors, the Manager, the Underwriter, the Placement Agent nor any other
            person involved in the Invitation shall have any liability for any information not so contained.




                                                   H-14
Steps for Electronic Applications through ATMs of DBS (including its POSB ATMs)
Instructions for ATM Electronic Applications will appear on the ATM screens of the respective
Participating Bank. For illustration purposes, the steps for making an ATM Electronic Application
through a DBS or POSB ATM are shown below. Certain words appearing on the screen are in
abbreviated form (“A/c”, “amt”, “appln”, “&”, “I/C” “SGX”, “No.” and “Max” refer to “Account”, “amount”,
“application”, “and”, “NRIC” “SGX-ST”, “Number” and “Maximum” respectively. Instructions for ATM
Electronic Applications on the ATM screens of Participating Banks (other than DBS (including POSB
ATMs)), may differ slightly from those represented below.

Step 1     :   Insert your personal DBS or POSB ATM Card

     2     :   Enter your Personal Identification Number

     3     :   Select “MORE SERVICES”

     4     :   Select “ESA-IPO SHARE”

     5     :   Select “ELECTRONIC SECURITY APPLN (IPOS/BOND/ST-NOTES/SECURITIES)”

     6     :   Read and understand the following statements which will appear on the screen:
               •    THE OFFER OF SECURITIES (OR UNITS OF SECURITIES) WILL BE MADE IN,
                    OR ACCOMPANIED BY, A COPY OF THE PROSPECTUS/DOCUMENT OR
                    PROFILE STATEMENT (AND IF APPLICABLE, A COPY OF THE
                    REPLACEMENT OR SUPPLEMENTARY PROSPECTUS/DOCUMENT OR
                    PROFILE STATEMENT) WHICH CAN BE OBTAINED FROM ANY DBS/POSB
                    BRANCH IN SINGAPORE AND, WHERE APPLICABLE, THE VARIOUS
                    PARTICIPATING BANKS DURING BANKING HOURS, SUBJECT TO
                    AVAILABILITY.
               •    (IN THE CASE OF SECURITIES OFFERING THAT IS SUBJECT TO A
                    PROSPECTUS/OFFER        INFORMATION     STATEMENT/DOCUMENT
                    REGISTERED WITH THE MONETARY AUTHORITY OF SINGAPORE) ANYONE
                    WISHING TO ACQUIRE THESE SECURITIES (OR UNITS OF SECURITIES)
                    SHOULD READ THE PROSPECTUS/DOCUMENT OR PROFILE STATEMENT
                    (AS SUPPLEMENTED OR REPLACED, IF APPLICABLE) BEFORE
                    SUBMITTING HIS APPLICATION WHICH WILL NEED TO BE MADE IN THE
                    MANNER SET OUT IN THE PROSPECTUS/DOCUMENT OR PROFILE
                    STATEMENT (AS SUPPLEMENTED OR REPLACED, IF APPLICABLE). A COPY
                    OF THE PROSPECTUS/DOCUMENT OR PROFILE STATEMENT, AND IF
                    APPLICABLE, A COPY OF THE REPLACEMENT OR SUPPLEMENTARY
                    PROSPECTUS/DOCUMENT OR PROFILE STATEMENT HAS BEEN LODGED
                    WITH AND REGISTERED BY THE MONETARY AUTHORITY OF SINGAPORE
                    WHO ASSUMES NO RESPONSIBILITY FOR ITS OR THEIR CONTENTS.
               •    PRESS THE “ENTER” KEY TO CONFIRM THAT YOU HAVE READ AND
                    UNDERSTOOD.

     7     :   Select “CHANGTIAN” to display details.




                                                 H-15
 8    :   Press the “ENTER” key to acknowledge:
          -    YOU HAVE READ, UNDERSTOOD AND AGREED TO ALL TERMS OF THE
               APPLICATION AND PROSPECTUS/DOCUMENT OR PROFILE STATEMENT,
               AND IF APPLICABLE, THE REPLACEMENT OR SUPPLEMENTARY
               PROSPECTUS/DOCUMENT OR PROFILE STATEMENT.
          -    YOU CONSENT TO DISCLOSE YOUR NAME, NRIC/PASSPORT NO.,
               ADDRESS, NATIONALITY, CDP SECURITIES A/C NO., CPF INVESTMENT A/C
               NO. AND SECURITY APPLICATION AMOUNT FROM YOUR BANK A/C(S) TO
               SHARE REGISTRARS, SGX, SCCS, CDP, CPF AND THE ISSUER/VENDOR(S).
          -    FOR FIXED AND MAX PRICE SECURITY APPLICATION, THIS IS YOUR ONLY
               APPLICATION AND IT IS MADE IN YOUR OWN NAME AND AT YOUR OWN
               RISK.
          -    THE MAXIMUM PRICE FOR EACH SHARE IS PAYABLE IN FULL ON
               APPLICATION AND SUBJECT TO REFUND IF THE FINAL PRICE IS LOWER.
          -    FOR TENDER SECURITY APPLICATIONS, THIS IS YOUR ONLY
               APPLICATION AT THE SELECTED TENDER PRICE AND IT IS MADE IN YOUR
               OWN NAME AND AT YOUR OWN RISK.
          -    YOU ARE NOT A US PERSON AS REFERRED TO IN THE PROSPECTUS/
               DOCUMENT OR PROFILE STATEMENT AND IF APPLICABLE, THE
               REPLACEMENT OR SUPPLEMENTARY PROSPECTUS/DOCUMENT OR
               PROFILE STATEMENT.
          -    THERE MAY BE A LIMIT ON THE MAXIMUM NUMBER OF SECURITIES THAT
               YOU CAN APPLY FOR SUBJECT TO AVAILABILITY, YOU MAY BE ALLOCATED
               A SMALLER NUMBER OF SECURITIES THAN YOU APPLIED FOR OR (IN THE
               CASE OF AN EARLIER CLOSURE UPON FULL SUBSCRIPTION) YOUR
               APPLICATION MAY BE REJECTED IF ALL THE AVAILABLE SECURITIES HAVE
               BEEN FULLY ALLOCATED TO EARLIER APPLICANTS.

 9    :   Select your nationality.

10.   :   Select your payment method (i.e. by cash, CPF Funds, or a combination of cash and
          CPF Funds).

11    :   Select the DBS Bank account (Autosave/Current/Savings/Savings Plus) or the POSB
          account (Current/Savings) from which to debit your application monies.

12    :   Enter the number of securities you wish to apply for using cash

13    :   Enter the number of securities you wish to apply for using CPF Funds (if applicable).

14    :   Enter or confirm (if your CDP Securities Account number has already been stored in
          DBS Bank’s records) your own 12-digit CDP Securities Account number (Note: This
          step will be omitted automatically if your Securities Account number has already been
          stored in DBS’s records).

15    :   Check the details of your securities application, your NRIC or passport number and
          CDP Securities Account number and number of securities on the screen and press the
          “ENTER” key to confirm application.

16    :   Remove the Transaction Record for your reference and retention only.




                                          H-16
Steps for Internet Electronic Applications through the IB website of DBS
For illustrative purposes, the steps for making an Internet Electronic Application through the IB website
of DBS is shown below. Certain words appearing on the screen are in abbreviated form (“A/C”, “amt”,
“&”, “I/C”, “SGX” and “No.” refer to “Account”, “amount”, “and”, “NRIC”, “SGX-ST” and “Number”
respectively).

Step 1     :   Click on to DBS website (http://www.dbs.com)

      2    :   Login to Internet Banking.

      3    :   Enter your User ID and PIN.

      4    :   Select “Electronic Security Application (ESA)”.

      5    :   Click “Yes” to proceed and to warrant, among others, that you are currently in
               Singapore, you have observed and complied with all applicable laws and regulations
               and that your mailing address for DBS Internet Banking is in Singapore and that you are
               not a US person (as such term is defined in Regulation S under the United Securities
               Act of 1933, amended).

      6    :   Select your country of residence and click “I Confirm”.

      7    :   Click on “CHANGTIAN” and click the “Submit” button.

      8    :   Click on “Confirm” to confirm, among others:
               (1)   You have read, understood and agreed to all terms of this application and the
                     Prospectus/Document or Profile Statement and if applicable, the Supplementary
                     or Replacement Prospectus/Document or Profile Statement.
               (2)   You consent to disclose your name, NRIC or Passport No., address, nationality,
                     CDP Securities A/C No., CPF Investment A/C No. (if applicable) and securities
                     application amount from your DBS/POSB Accounts(s) to registrars of securities,
                     SGX, SCCS, CDP, CPF Board and issuer/vendor(s).
               (3)   You are not a U.S. person (as such term is defined in Regulation S under the
                     United States Securities Act of 1933, as amended).
               (4)   You understand that the securities mentioned herein have not been and will not be
                     registered under the United States Securities Act of 1933 as amended (the “US
                     Securities Act”) or the securities laws of any state of the United States and may not
                     be offered or sold in the United States or to, or for the account or benefit of any “US
                     person” (as defined in Regulation S under the US Securities Act) except pursuant
                     to an exemption from or in a transaction subject to, the registration requirements
                     of the US Securities Act and applicable state securities laws. These will be no
                     public offer of the securities mentioned herein in the United States. Any failure to
                     comply with this restriction may constitute a violation of the United States
                     securities laws;
               (5)   This application is made in your own name and at your own risk.
               (6)   For FIXED/MAX price securities application, this is your only application. For
                     TENDER price securities application, this is your only application at the selected
                     tender price.

      9    :   Fill in details for securities application and click “Submit”.

    10     :   Check the details of your securities application, your NRIC or passport number and click
               “OK” to confirm your application.

    11     :   Print the Confirmation Screen (optional) for your reference and retention only.


                                                  H-17
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CHANGTIAN PLASTIC & CHEMICAL LIMITED




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CHANGTIAN PLASTIC & CHEMICAL LIMITED

18 Xinsheng Road
Xinyang Industrial Zone
Haicang District
Xiamen City, Fujian Province
People’s Republic of China 361026

T 86-592-6517000
F 86-592-6519700

				
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