\]fl] X]i Ygd`cfbi [cecja` rqwuvsptno \]fl] X]i Ygd`cfbi [cecja` rqwuvsptnoE y|1*24324}6,+ .1 6-, {}80}1 |5/}1+5 7.6- /.0.6,+ /.}~./.68z E [cijcfb ^m Zfjhg`k_jcgf [cijcfb ^m Zfjhg`k_jcgf 5:AA=>> 4D@8< 13B=7 678=;=82 4=?=C:9 *-,+/,. EGPR MJKOTMLMIHTMPO QURQPSKS PONV 5:AA=>> 4D@8< 13B=7 678=;=82 4=?=C:9 IMPORTANT If you are in any doubt about this document, you should consult your stockbroker, bank manager, solicitor, professional accountant or other professional advisers. The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing Company Limited take no LR11.20 17.02(4) responsibility for the contents of this document, make no representation as to its accuracy or completeness and 10.06 expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or (1)(b)(xi) any part of the contents of this document. A1A(1) LISTING BY WAY OF INTRODUCTION OF THE ENTIRE ISSUED SHARE CAPITAL ON THE MAIN BOARD OF THE STOCK EXCHANGE OF HONG KONG LIMITED Stock code on Main Board: 1083 Stock code on GEM: 8132 Sponsor Merrill Lynch (Asia Pacific) Limited This document is published in connection with the listing by way of introduction of the entire issued share capital of Panva Gas Holdings Limited (the “Company”) on the Main Board (the “Main Board”) of The Stock Exchange of Hong Kong Limited (the “Stock Exchange”). This document contains particulars given in compliance with the Rules Governing the Listing of Securities on the Stock Exchange (the “Listing Rules”) and the Securities and Futures (Stock Market Listing) Rules of Hong Kong for the purpose of giving information with regard to the Company. This document does not constitute an offer of, nor is it calculated to invite offers for, the shares or other securities of the Company, nor have any such shares or other securities been allotted with a view to any of them being offered for sale to members of the public. No new shares will be issued in connection with, or pursuant to, the publication of this document. Your attention is drawn to the section headed “Risk Factors” in this document. The shares of HK$0.10 each in the capital of the Company (the “Shares”) have been accepted as eligible securities by Hong Kong Securities Clearing Company Limited (“HKSCC”) for deposit, clearance and settlement in the Central Clearing and Settlement System (“CCASS”) with effect from Apri1 20, 2001, the date on which dealings in the Shares on GEM commenced. Subject to the granting of the listing of, and permission to deal in, the Shares on the Main Board and the continual compliance with the stock admission requirements of HKSCC, the Shares will continue to be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS once dealings in the Shares on the Main Board commence. All necessary arrangements have been made with HKSCC for the Shares to continue to be accepted as eligible securities of CCASS. All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time. * For identification purposes only November 4, 2005 EXPECTED TIMETABLE Despatch of circular, notice of the Extraordinary General Meeting and related forms of proxy to the Shareholders ...................................Friday,November 4, 2005 Despatch of this document to the Shareholders .....................Friday, November 4, 2005 Latest time for lodgement of related forms of proxy for the Extraordinary General Meeting ........10:00 a.m. on Saturday, November 26, 2005 Extraordinary General Meeting. ....................10:00 a.m. on Monday, November 28, 2005 Date of the announcement of results of the Extraordinary General Meeting which are to be published in The Standard (in English), Hong Kong Economic Times (in Chinese) and on the GEM website ..................................Tuesday, November 29, 2005 Last day of dealings in the Shares on GEM .....................Wednesday, December 7, 2005 Withdrawal of listing of the Shares on GEM effective from ................................9:30 a.m. on Thursday, December 8, 2005 Dealings in the Shares on the Main Board A1A(22) to commence on ..............................9:30 a.m. on Thursday, December 8, 2005 Notes: 1. All times and dates refer to Hong Kong local times and dates. 2. Shareholders will be informed by public announcement of any changes in the above expected timetable. i CONTENTS You should rely only on the information contained in this document with regard to the Company. The Company has not authorized anyone to provide you with information that is different from what is contained in this document. Any information or representation not made in this document must not be relied on by you as having been authorized by the Company, the Sponsor, any of their respective directors, or any other person or party involved in the Introduction. Page Expected Timetable ........................................................ i Contents ................................................................. ii Summary ................................................................ 1 Definitions ............................................................... 8 Glossary ................................................................. 19 Risk Factors .............................................................. 20 Forward-Looking Statements ................................................. 31 Information about this Document and the Introduction ............................. 32 Directors and Parties Involved in the Introduction ................................ 36 Corporate Information ...................................................... 38 Industry Overview ......................................................... 40 History and Structure ...................................................... 49 Business ................................................................. 62 Relationship with Controlling Shareholders ...................................... 86 Connected Transactions ..................................................... 89 Directors and Senior Management ............................................. 91 Substantial Shareholders and Controlling Shareholders ............................. 99 Share Capital ............................................................. 103 Financial Information ....................................................... 107 Appendix I — Accountants’ Report of the Group ............................. I-1 Appendix II — Accountants’ Report of Changchun Panva Group .................. II-1 Appendix III — Unaudited Pro Forma Financial Information .....................III-1 Appendix IV — Property Valuation ......................................... IV-1 Appendix V — Summary of the Constitution of the Company and the Companies Law ......................................... V-1 Appendix VI — Summary of Principal Terms of the Convertible Bonds and the Kenson Note..........................................VI-1 Appendix VII — Statutory and General Information ............................VII-1 Appendix VIII — Documents Available for Inspection ............................VIII-1 ii SUMMARY This summary aims to give you an overview of the information contained in this document. As it is a summary, it does not contain all the information that may be important to you. OVERVIEW The Group is principally engaged in the sale of LPG to bulk and retail customers, the construction of gas A1A(28)(1)(a) pipelines, the provision of piped gas and the sale of household gas products in the PRC. End-users primarily use the Group’s gas products for cooking and boiling hot water. The Group’s bulk LPG business, with turnover of HK$756.3 million or 51.9% of the Group’s turnover in 2003, HK$858.6 million or 47.7% of the Group’s turnover in 2004, and HK$418.9 million or 43.7% of the Group’s turnover in the first six months of 2005, has historically contributed the largest portion of the Group’s revenue, followed by the Group’s retail LPG business, with turnover of HK$343.7 million or 23.6% of the Group’s turnover in 2003, HK$412.5 million or 22.9% of the Group’s turnover in 2004, and HK$256.1 million or 26.7% of the Group’s turnover in the first six months of 2005. As at the Latest Practicable Date, the LPG business of the Group and its associated companies had users in 15 cities in Anhui, Guangdong, Guizhou, Hunan, Jiangsu, Jilin, and Yunnan provinces. Although the Group’s bulk and retail LPG sales continued to provide most of its turnover in 2004 and the first six months of 2005, in 1999 the Group began to expand into the piped gas and related pipeline construction businesses, which are generally higher margin businesses. The Group’s piped gas business, comprising sales of piped gas and gas pipeline construction, contributed turnover of HK$350.1 million or 24.0% of the Group’s turnover in 2003, HK$498.1 million or 27.7% of the Group’s turnover in 2004, and HK$254.0 million or 26.5% of the Group’s turnover in the first six months of 2005. As at the Latest Practicable Date, the piped gas business of the Group and its associated companies had customers in 16 cities in Anhui, Guangdong, Jiangsu, Jilin, Shandong and Sichuan provinces. The Group is entitled to 30-year local government concessions for the exclusive supply of piped gas and the exclusive right to operate and expand the city piped gas network in most areas where the Group operates piped gas business in the PRC. The Group charges a connection fee from its piped gas customers on a “per connection” basis for