WAIVERS IN RESPECT OF THE GEM LISTING RULES
For the purpose of the listing of the Shares on GEM, the Company has sought a number of
waivers from the GEM Listing Division in relation to certain requirements under the GEM
Listing Rules. Details of such waivers are set out below.
WAIVERS FROM COMPLIANCE WITH THE GEM LISTING RULES
Waiver relating to active business pursuits
Under Rule 11.12 of the GEM Listing Rules, a new applicant must demonstrate that,
throughout 24 months immediately preceding the date of this prospectus, it has, either by itself
or through one or more of its subsidiaries, actively pursued one focused line of business under
substantially the same management and ownership as existing at the time of the application for
listing.
On 11 March 2000, the Securities and Futures Commission and the Stock Exchange
issued a joint announcement in relation to the GEM Listing Rules (the “Former Joint
Announcement”). Pursuant to the Former Joint Announcement, the issuer concerned is required
to have at least 12 months of “active business pursuits”, or if the issuer concerned has a longer
period of business pursuits, the full period subject to a maximum of 24 months. Further to the
Former Joint Announcement, a joint announcement was issued by the SFC and the Stock
Exchange on 27 July 2001 (the “Latest Joint Announcement”). According to the Latest Joint
Announcement, a waiver may be granted to the issuer which submits the new listing application
on or before 30 September 2001, provided that listing of the issuer takes place on or before 31
December 2001 or before the expiry of the new listing application if earlier. The statement of
active business pursuits of the Group covers only the period from 1 July 2000 to the Latest
Practicable Date. Therefore, as at the Latest Practicable Date, the Group’s history of active
business pursuits would be less than 24 months as required by Rule 11.12 of the GEM Listing
Rules.
As a result of an application by the Company, the Stock Exchange has granted to the
Company a waiver from strict compliance with Rule 11.12 of the GEM Listing Rules.
Waiver relating to accountants’ report
Under Rules 7.03(1) and 11.10 of the GEM Listing Rules, a new applicant is required to
include in the prospectus an accountants’ report covering at least two f inancial years
immediately proceeding the issue of the prospectus. In addition, the accountants’ report must
cover a period of at least 24 months of active business pursuits. As the period of active business
pursuits of the Group started from 1 July 2000, the Company has applied for and the Stock
Exchange has granted to the Company a waiver from the strict compliance with Rules 7.03(1)
and 11.10 of the GEM Listing Rules. The accountants’ report which is set out in Appendix I to
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WAIVERS IN RESPECT OF THE GEM LISTING RULES
this prospectus sets out the f inancial position of the Group as at 31 March 2000, 31 March
2001 and 30 June 2001, and includes the financial results of the Group for the period from 17
November 1999 to 31 March 2000, the year ended 31 March 2001 and the three months ended
30 June 2001.
The Directors confirm that they have performed sufficient due diligence on the Group to
ensure that since 30 June 2001 and up to the date of this prospectus, there has been no material
adverse change in the f inancial position of the Group, and there is no event which would
materially affect the information shown in the accountants’ report set out in Appendix I to this
prospectus.
Waiver on stating properties at the revalued amounts in the financial statements of the
company
Under Rule 18.35 of the GEM Listing Rules, a new listing applicant who causes any of its
property assets to be valued or has caused any valuation to be made of any other tangible assets
and included in the prospectus relating to the initial public offer of shares, the assets shall be
stated in the new listing applicant’s f inancial statements at such valuation (or subsequent
valuation) less the aggregate amount provided or written off for depreciation or diminution in
value.
The Company has sought a waiver from strict compliance with Rule 18.35 of the GEM
Listing Rules from the Stock Exchange on the grounds that the property interests of the Group
are not considered core business and pricing of the Shares to be listed on GEM of the Stock
Exchange is not based on the value of the net tangible assets of the Group and the revaluation
surplus only constitutes approximately 1 per cent. of the adjusted net tangible asset value of the
Group, taking into account the estimated net proceeds under the Placing of New Shares
(without the exercise of the Over-allotment Option). The Stock Exchange has granted a waiver
from strict compliance with the relevant requirements under Rule 18.35 of the GEM Listing
Rules.
The Directors confirm that they have performed sufficient due diligence on the Group to
ensure that, up to the date of issue of this prospectus, there has been no material adverse
change in the financial position of the Group since 30 June 2001, and there is no event which
would materially affect the information shown in the accountants’ report set out in Appendix I
to this prospectus.
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