PDF《CHINA ZIRCONIUM LIMITED 中国 业有限公司*》

―

1 ― The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this announcement, makes no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

CHINA ZIRCONIUM LIMITED 中国业有限公司*(Incorporated in Cayman Islands with limited liability) (Stock code: 0395) DISCLOSEABLE TRANSACTION ESTABLISHMENT OF A JOINT VENTURE COMPANY The Board is pleased to announce that the Company and PT. Indra Putra Mega entered into a Joint Venture Agreement during the trading hours on

18 September

2007 pursuant to which the Joint Venture Company will be established in Indonesia to engage in separation, processing and refining of Zircon, contracting and management of mining concession and the sale of Products to customers. The transaction constitutes a discloseable transaction for the Company under Chapter

14 of the Listing Rules. A circular containing further details on the Joint Venture Agreement will be despatched to the Shareholders as soon as practicable. 1. THE JOINT VENTURE AGREEMENT Date

18 September

2007 Parties (1) the Company. The Company is an investment holding company and the Group is principally engaged in the research, development, manufacture and sale of a wide range of zirconium chemicals, electronic materials (with zirconium), electronic ceramics, new energy materials ad rechargeable batteries;

and ―

2 ― (2) IPM. IPM is an investment holding company established under the laws of Indonesia. To the best of the Directors'

knowledge, information and belief and having made all reasonable enquiry, IPM and its ultimate beneficial owner is not a connected person (as defined in the Listing Rules) and is independent of, and not parties acting in concert (as defined under the Codes on Takeovers and Mergers) with, any director, chief executive or substantial shareholder or the controlling shareholder of the Company or its subsidiaries or any of its associates. Business of the Joint Venture Company The Joint Venture Company to be jointly established by the Parties is a limited liability company incorporated under the laws of Indonesia whose main business is to engage in separation, processing and refining of Zircon, contracting and management of mining concession and the sale of Products to customers. It has been agreed under the Joint Venture Agreement that the Joint Venture Company will supply Products to the Company at a favourable price and will satisfy the Company'

s demand for Products within its production capabilities. Registered Capital The authorized capital of the Joint Venture Company will be US$12,000,000 (equivalent to approximately HK$93,600,000) divided into 12,000 Shares of US$1,000 each. The issued share capital of the Joint Venture Company will be US$3,000,000 (equivalent to approximately HK$23,400,000). The Company will subscribe for 1,530 Shares, representing 51% of the total issued share capital whereas IPM will subscribe for 1,470 Shares, representing 49% of the total issued share capital. The Parties will contribute its share of the registered capital in cash within the date to be separately designated and agreed by the Parties after the Joint Venture Company has been registered. The committed amount for the Company in respect of forming the Joint Venture Company is US$1,530,000 (equivalent to approximately HK$11,934,000). If further funding is required for the Joint Venture Company, the Parties shall provide funding to the Joint Venture Company by way of shareholder'

s loan. The total investment of the Joint Venture Company was determined on an arm'

s length basis between the Company and IPM with reference to the estimated capital needs of the Joint Venture Company. The Directors expect that the contribution by the Group to the Joint Venture Company will be satisfied by its internal resources. ―

3 ― As at the date of this announcement, the Company has not determined whether the accounts of the Joint Venture Company will be consolidated into the Group'

s accounts and the Company will consult its auditors for this issue. Articles of Association The Company and IPM shall negotiate and execute the Articles of Association to govern their respective obligations under the Joint Venture Company. Board of Directors The board of directors of the Joint Venture Company will comprise

6 directors, of which the Company shall nominate

3 directors and IPM will nominate

3 directors. The president of the board of directors will be nominated by the Company. The president of the Joint Venture Company will not have a casting vote. Board of Commissioners The Joint Venture Company will have a board of commissioners to supervise the board of directors. The number of commissioners shall be two of whom one commissioner as the chairman shall be nominated by IPM and the other commissioner shall be elected from candidate nominated by the Company. Responsibilities of the Parties The Company will be responsible for selection of machineries and equipment, provide technological support, marketing and sales and product research and development. IPM shall be responsible for co-ordination with local government, monitoring production control and selecting zircon ore suppliers. Furthermore, IPM shall, through a new subsidiary to be established by IPM, acquire the mining concession rights for the Joint Venture Company. IPM shall irrevocably warrants and guarantees that its subsidiary will enter into written agreement to subcontract the mining concession right to the Joint Venture Company. Term The term of the Joint Venture Agreement will be

30 years from the date on which the Articles of Association is approved by the Ministry of Justice of Indonesia. ―

4 ― Financial effects The entering into the Joint Venture Agreement has no immediate financial effect on the Group'

s earnings, net assets and liabilities. The Board believes that the Joint Venture Company will provide a stable source of zircon supply, thus enhancing the production c........