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Investment Adviser

Investment Adviser

The Company has appointed Yangtze Capital Advisory Limited to act as its Investment Adviser, which is an investment advisory business wholly owned by Wilfred Wong. The Investment Adviser  is led by Wilfred Wong and Richard Zhao (the Key Professionals of the Investment Adviser), an investment Advisory team with a proven track record of private equity investment in China.

The Key Professionals each have more than 10 years' direct experience in the economic and market transformation of China, and who have developed extensive personal networks at both government and business level.

Track record of the Key Professionals of the Investment Adviser

The Key Professionals and their investment advisory team have, as at 31 December 2007, invested US$44 million (excluding the Investments in the Initial Portfolio) in a total of 12 investments in Chinese businesses since 2001, generating an aggregate (realised and unrealised) portfolio value of approximately US$168 million. Based on the amounts invested and returned for each investment, this represents an average gross IRR in excess of 76 per cent. and an average 3.8 times multiple to cost ratio. Of these 12 investments, the Key Professionals have, as at 31 December 2007, realised proceeds of US$81million through two complete exits and 4 partial exits. The investment fund managed by the Key Professionals has invested in five businesses of which the holding or previous operating company is currently listed on international stock markets. Details of the listed companies are as follows:

• Solomon Systech (International) Ltd, a semiconductor display [IC] producer, which was listed on the Main Board of the Hong Kong Stock Exchange in April 2004;
• Walcom Group Limited, an animal science company which was admitted to AIM in December 2006;
• Cosmedia Group Holdings Limited, an advertising and media group with a focus on television advertising in China, which was admitted to AIM in December 2006;
• Gushan Environmental Energy Limited, the largest biodiesel producer in China as measured by annual production capacity in 2006, which was listed on the New York Stock Exchange in December 2007; and
• CIG Yangtze Ports plc, a developer and operator of port projects along the Yangtze River corridor in China, which was listed on the Growth Enterprise Market of the Hong Kong Stock Exchange in September 2005.

Please note that past performance is not a guide to future performance. The valuations referred to above were calculated using the valuation guidelines issued by the British Venture Capital Association ("BVCA") and The European Private Equity and Venture Capital Association ("EVCA").

Key Professionals of the Investment Adviser

Wilfred Ying Wai Wong - Chairman

Wilfred Wong is a Deputy to the National People's Congress of the PRC, having been elected in 1997 and subsequently re-elected in 2002 and 2008. He was formerly a senior official in the Hong Kong government from 1991 until he joined the private sector in 1992. He has since held senior management positions in a number of well-known Hong Kong listed companies. He was previously Managing Director of Henderson China Holdings Limited and Deputy Chief Executive of K.Wah Management Services Limited and was Vice Chairman and Chief Operating Officer of Shui On Land Limited from 2004 to 2007. In June 2007, he was appointed as Group Executive Vice Chairman and Chief Executive Officer of Mission Hills Group, a leisure and real estate group in the PRC. Mr Wong has more than 10 years' investment experience in China and in 1994, he founded China Investment Group Limited for the purpose of making investments in infrastructure projects in China. He was also the Chairman of China-focused private equity funds, The Yangtze Ventures Limited and The Yangtze Ventures II Limited, which he founded in 2000 and 2003. During his time in the Hong Kong government, Mr. Wong held a number of positions, including Deputy Director General of Industry and Deputy Secretary for the Civil Services. From 1985 to 1990 and 1994 to 1997 he was respectively a member of the Basic Law Consultative Committee and the Preparatory Committee, and worked on the transitional arrangements for the establishment of the Hong Kong Special Administrative Region. He was appointed as a Justice of the Peace in 2003 and awarded the Silver Bauhinia Star Medal by the Hong Kong government in 2007. Mr Wong received a Bachelor's Degree in Social Sciences in 1975 from the University of Hong Kong, and an MPA in Public Administration from Harvard University in 1987.

Richard Cong Zhao - Executive Director

Richard Zhao is the general manager of China focused private equity fund, The Yangtze Ventures Management Limited, a position he has held since 2002. He is also a director of the Investment Adviser and Yangtze Capital Management Limited. He has more than 20 years' experience of managing and investing in businesses based in Hong Kong and China. From 2000 to 2001, he was Vice President of the venture capital arm of PCCW Ltd, one of Asia's leading integrated communications companies, where, in its Beijing office, he assisted in completing a number of key investments.  Prior to that, from 1995 to 2000, he was the chief adviser to the President and CEO of China Investment Group Limited, where he was responsible for providing analysis on political and economic issues and investment opportunities in China.

From 1992 to 1995, he was general manager, China Division, at China Strategic Holdings Limited, an investment company listed on the Hong Kong Stock Exchange, where he assisted in the acquisition of approximately 150 joint ventures in China.

The following are examples of transactions concluded while Mr. Zhao was with China Strategic Holdings Limited:

1. Listing of China Enterprises Limited (formerly China Tire Holdings Limited), a tyre manufacturer in China, on NYSE, with China Strategic retaining 33per cent. interest in it;
2. Acquisition of 51per cent. interest in the Australia-listed MRI Holdings Limited, initially engaged in pharmaceutical business and then an investment holding company;
3. Establishment of brewery joint venture with Asahi Breweries Limited, which was then ranked number two in the brewery industry in Japan, and Itochu Corporation, which was then one of the world's largest conglomerates.

During the 1980s he held management positions relating to China trade at several Hong Kong based businesses. He is a Fellow of the Hong Kong Institute of Directors.