A & S Group (Holdings) Limited - Proxy Solicitation & Information Statement 2007

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in doubt as to any aspect of this circular, or as to the action to be taken, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, company secretary, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Le Saunda Holdings Ltd., you should at once hand this circular to the purchaser or the transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or the transferee.

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

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( Incorporated in the Bermuda with limited liability ) (Stock Code: 738)

DISCLOSEABLE AND CONNECTED TRANSACTION PROPOSED DISPOSAL OF THE ENTIRE EQUITY INTEREST IN THE REGISTERED AND PAID-UP CAPITAL OF XIN DA PROPERTY

Independent Financial Adviser

A letter from the Independent Board Committee is set out on page 12 of this circular and a letter from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders is set out on pages 13 to 19 of this circular.

A notice convening the SGM to be held on Thursday, 17 May 2007 at 4:30 p.m. at Elbrus Room, Pacific Place Conference Centre, Level 5, One Pacific Place, 88 Queensway, Hong Kong is set out on page 36 of this circular. Whether or not Shareholders are able to attend the SGM, Shareholders are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon to the Company’s share registrar and transfer office in Hong Kong, Computershare Hong Kong Investor Services Ltd. at 1806-07, 18/F., Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for holding the SGM. Completion and return of the form of proxy will not preclude Shareholders from attending and voting in person at the SGM should Shareholders so wish.

* For identification purposes only

19 April 2007

		Page
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1
LETTER	FROM THE BOARD
1.	Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
2.	The Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
3.	Information on Xin Da Property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
4.	Reasons for the Disposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
5.	Use of proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
6.	Financial effects of the Disposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
7.	General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
8.	Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
9.	SGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
10.	Procedures for demanding a poll at general meeting . . . . . . . . . . . . . . . . . . . . . . . .	10
11.	Additional information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
LETTER	FROM THE INDEPENDENT BOARD COMMITTEE. . . . . . . . . . . . . . . . . . . . . .	12
LETTER	FROM VXLFS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	13
APPENDIX I — VALUATION REPORT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		20
APPENDIX II — GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		28
NOTICE	OF SGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	36

— i —

DEFINITIONS

In this circular, the following expressions have the following meanings unless the context requires otherwise:

“Agreement”	the conditional agreement for the sale and purchase of	the
	entire equity interest in the registered and paid-up capital of
	Xin Da Property dated 26 March 2007 entered into between
	the Vendor and the Purchaser
“Announcement”	the announcement of the Company dated 28 March 2007
	regarding the proposed Disposal
“associates”	has the same meaning ascribed to it under the Listing Rules
“Board”	the board of Directors
“Business Day”	means a day (other than a Saturday or a Sunday or a public
	holiday) on which licensed banks in Hong Kong are open	for
	business
“Company”	Le Saunda Holdings Limited, a company incorporated	in
	Bermuda with limited liability, the Shares of which are listed
	on the Stock Exchange
“Completion”	completion of the transactions contemplated under	the
	Agreement
“Completion Account”	the unaudited balance sheet of Xin Da Property as	at
	Completion Date
“Completion Date”	date of Completion which is currently expected to be on	or
	around 31 July 2007
“Consideration”	the consideration of HK$32,395,000 to be paid by	the
	Purchaser to the Vendor pursuant to the terms of	the
	Agreement
“Controlling Shareholder”	has the same meaning ascribed to it under the Listing Rules
“Directors”	the directors of the Company
“Disposal”	the disposal by the Vendor of the entire equity interest in	the
	registered and paid-up capital of Xin Da Property beneficially
	owned by the Vendor pursuant to the terms of the Agreement
“Group”	the Company and its subsidiaries
“Hong Kong”	the Hong Kong Special Administrative Region of the People’s
	Republic of China

— 1 —

DEFINITIONS

“Independent Board Committee”	the independent board committee of the Board, comprising
	Lam Siu Lun, Simon and Leung Wai Ki George, all being
	independent non-executive Directors
“Independent Financial Adviser”	VXL Financial Services Limited, the independent financial
or “VXLFS”	adviser to the Independent Board Committee and the
	Independent Shareholders in respect of the Agreement and the
	transactions contemplated thereunder, a corporation licensed
	under the SFO to engage in type 6 (advising on corporate
	finance) regulated activity as defined under the SFO
“Independent Shareholders”	Shareholders other than Mr. Lee and his associates
“Latest Practicable Date”	17 April 2007, being the latest practicable date prior to the
	printing of this circular for inclusion of certain information in
	this circular
“Listing Rules”	The Rules Governing the Listing of Securities on the Stock
	Exchange
“Mr. Lee”	Mr. Lee Tze Bun, Marces, the Chairman of the Company and
	the Controlling Shareholder
“Management Account”	the unaudited balance sheet of Xin Da Property as at 31
	January 2007
“PRC”	the People’s Republic of China and for the purpose of this
	circular, excludes Hong Kong
“PRC GAAP”	PRC Generally Accepted Accounting Principles
“Purchaser”	Manful Regent Limited, an investment holding company
	incorporated in Hong Kong owned as to 80% by Mr. Lee
“SFO”	the Securities and Futures Ordinance (Chapter 571, Laws of
	Hong Kong)
“SGM”	a special general meeting of the Company to be convened and
	held for the Shareholders to consider and, if thought fit, to
	approve the Agreement, the Stakeholder Agreement and the
	transactions contemplated thereunder
“Share(s)”	ordinary share(s) of HK$0.10 each in the capital of the
	Company
“Shareholder(s)”	the holder(s) of the ordinary share(s) of HK$0.10 each in the
	capital of the Company

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	DEFINITIONS
“Stake”	a stake of HK$29,155,500 to be delivered by the Purchaser to
	the Vendor’s solicitors pursuant to the terms of	the
	Stakeholder Agreement
“Stakeholder Agreement”	the letter agreement dated 26 March 2007 entered	into
	between the Vendor’s solicitors, the Vendor and the Purchaser
	for the establishment of the stakeholding arrangement of	the
	Stake
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Vendor”	Le Saunda Real Estate Limited, an indirect wholly-owned
“Xin Da Property”	subsidiary of the Company (Fo Shan City Shun	De
	District Xin Da Property Development Company Limited*), a
	wholly foreign owned enterprise established by the Vendor in
	the PRC on 15 November 2001
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong
“RMB”	Renminbi, the lawful currency of the PRC
“sq.ft.”	square feet
“sq. m.”	square meter
“%”	per cent.

* For identification purposes only

For the purpose of this circular, unless otherwise indicated, the exchange rate at RMB1.00 =HK$1.0094 has been used, where applicable, for the purpose of illustration only and does not constitute a representation that any amount has been, could have been or maybe exchanged or at all.

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LETTER FROM THE BOARD

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( Incorporated in the Bermuda with limited liability )

(Stock Code: 738)

Executive Directors:

Mr. Lee Tze Bun, Marces (Chairman) Mr. Wan Tat Wah (Chief Executive Officer) Ms. Chui Kwan Ho, Jacky (Managing Director) Ms. Tsui Oi Kuen Ms. Lau Shun Wai

Independent Non-Executive Directors:

Mr. Lam Siu Lun, Simon Mr. Law King Wan Mr. Leung Wai Ki, George

Registered Office: Clarendon House, 2 Church Street Hamilton HM 11 Bermuda

Head Office and Principal Place of Business: 30/F., Hing Wai Centre 7 Tin Wan Praya Road Aberdeen Hong Kong

19 April 2007

To the Shareholders

Dear Sir/Madam,

DISCLOSEABLE AND CONNECTED TRANSACTION

PROPOSED DISPOSAL OF THE ENTIRE EQUITY INTEREST IN THE REGISTERED AND PAID-UP CAPITAL OF XIN DA PROPERTY

1. INTRODUCTION

It was announced in the Announcement that on 26 March 2007 the Vendor and the Purchaser had entered into the Agreement pursuant to which the Vendor had conditionally agreed to sell, and the Purchaser had conditionally agreed to purchase the entire equity interest in the registered and paid-up capital of Xin Da Property subject to the terms of the Agreement, which is beneficially owned by the Vendor, at the consideration of HK$32,395,000.

The purpose of this circular is to set out (i) details of the Agreement; (ii) a letter of advice from VXLFS to the Independent Board Committee and the Independent Shareholders in respect of the

* For identification purposes only

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LETTER FROM THE BOARD

Agreement and the transactions contemplated thereunder; (iii) a letter from the Independent Board Committee containing the recommendation of the Independent Board Committee to the Independent Shareholders on the Agreement and the transactions contemplated thereunder; and (iv) a notice of the SGM.

2. THE AGREEMENT

I. Date

26 March 2007

II. Parties

Vendor: Le Saunda Real Estate Limited, an indirect wholly-owned subsidiary of the Company

Purchaser: Manful Regent Limited, an investment holding company owned as to 80% by Mr. Lee

III. Subject matter of the Agreement

The sale and purchase of the entire equity interest in the registered and paid-up capital of Xin Da Property.

Xin Da Property is a wholly foreign owned enterprise established by the Vendor in the PRC on 15 November 2001 and is principally engaged in property development in the PRC.

Xin Da Property holds two property projects (the “Properties”) in Foshan City Shunde District. One piece of land owned by Xin Da Property is located at Rong Qi Avenue Central, Ronggui Town, Shunde District, Foshan City with a site area of approximately 7,794.45 sq. m. and held under a land use right expiring on 29 September 2076. As at the Latest Practicable Date, this piece of land owned by Xin Da Property is held for residential and commercial development.

The other property held by Xin Da Property at Sunny Garden is located at Huan Shan Road, Ronggui Town, Shunde District, Foshan City which comprises of (i) 7 car parking spaces; (ii) 6 garages; (iii) 2 retail units; and (iv) 2 residential units. The land use rights of the property at Sunny Garden were granted for a term expiring on 6 March 2071 for residential and commercial uses. Up to 31 January 2007, the profits generated by the sale of property units at Sunny Garden amounted to approximately RMB6,300,000. As at the Latest Practicable Date, this property at Sunny Garden owned by Xin Da Property is for future sale.

According to a valuation made by an independent property valuer, Savills Valuation and Professional Services Limited, on the Properties as at 31 January 2007, the total market value of the Properties was RMB29,950,000. Please refer to Appendix I to this circular for further details.

Based on the Management Account, the aggregate carrying value of the Properties attributable to Xin Da Property as at 31 January 2007 was RMB29,950,000.

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LETTER FROM THE BOARD

IV. Consideration

The Consideration for the Disposal is HK$32,395,000 (subject to adjustment), which was agreed after arm’s length negotiation between the Vendor and the Purchaser on normal commercial terms and determined by reference to the Management Account.

According to the Agreement, the Consideration is required to be paid in the following manner:

(a) a deposit of HK$3,239,500 to be paid in cash by the Purchaser within 10 Business Days after the execution of the Agreement; and
(b) the remaining balance of HK$29,155,500 of the unadjusted Consideration to be paid by way of a solicitor-cheque out of the Stake subject to the terms of the Stakeholder Agreement, at Completion.

The Directors confirmed that the Purchaser had paid the deposit of HK$3,239,500 to the Vendor on 27 March 2007.

V. Conditions of the Disposal

Completion of the Agreement shall be conditional upon the following conditions being fulfilled:

(a) the Agreement and the transactions contemplated thereby are approved by ordinary resolution at the SGM by the Independent Shareholders in accordance with the Listing Rules and the Board is authorised to execute and complete such transactions;
(b) the Agreement and the execution thereof are approved by the Board and the board of directors of the Vendor;
(c) the profit distribution of Xin Da Property for the financial year ended 31 December 2005 having been completed; and
(d) the Agreement and the transactions contemplated thereunder (including but not limited to the Disposal) are approved in writing by Shunde Economy and Trade Bureau ( ) in the PRC.

Upon fulfilment of conditions (a) and (b) by the Vendor and having informed the Purchaser of the same by prior notice in writing, the Purchaser shall deliver the Stake to the Vendor’s solicitors for stakeholding subject to the terms of the Stakeholder Agreement within 10 Business Days of such notice.

As at the Latest Practicable Date, save and except for condition (b), none of the above conditions had been fulfilled.

Pursuant to the Stakeholder Agreement, the Vendor’s solicitors will release the full amount of the Stake to the Vendor on the date notified to the Vendor’s solicitors by not less than 7 Business Days’ prior notice in writing by the Vendor as the Completion Date, if the Vendor shall have delivered to the Vendor’s solicitors certain documents as specified under the Stakeholder Agreement on or before the date of actual receipt of such notice.

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LETTER FROM THE BOARD

VI. Completion and adjustment of the Consideration

Completion shall take place in Hong Kong no later than the 10th Business Day after the date on which all the conditions are fulfilled or, as the case may be, waived and not less than 3 Business Days’ prior notice in writing has been given by the Vendor to the Purchaser.

The Vendor shall provide the Purchaser with the Completion Account within 14 days after the Completion Date (which is currently estimated to be on or around 31 July 2007). If the net asset value of Xin Da Property as ascertained by reference to the Completion Account is more than that as ascertained by reference to the Management Account, the Consideration shall be adjusted upwards to the net asset value of Xin Da Property as ascertained by the Completion Account (on a dollar to dollar basis) and the Purchaser shall pay the difference to the Vendor in cash within 14 Business Days after the relevant adjustment to the Consideration is confirmed by the Vendor and the Purchaser in writing. If the net asset value of Xin Da Property as ascertained by reference to the Completion Account is less than that as ascertained by reference to the Management Account, the Consideration shall be adjusted downwards to the net asset value of Xin Da Property as ascertained by the Completion Account (on a dollar to dollar basis) provided that the Consideration (as adjusted) shall not be less than HK$29,803,000, and the Vendor shall pay the difference to the Purchaser in cash within 14 Business Days after the relevant adjustment to the Consideration is confirmed by the Vendor and the Purchaser in writing. The downward adjustment to be made to the Consideration (if necessary) was arrived at after arm’s length negotiation between the Vendor and the Purchaser with reference to the best estimate of the net asset value of Xin Da Property after Completion. Failing agreement by the Vendor and the Purchaser on the appropriate adjustment (if any), a certificate issued by the auditors of the Company as to the appropriate amount of adjustment to the Consideration shall be final and conclusive.

In the event that an upward adjustment to the Consideration results in a change in the transaction type under Chapter 14 of the Listing Rules, the Company will comply with the relevant requirements of the Listing Rules and will issue an announcement as and when appropriate.

3. INFORMATION ON XIN DA PROPERTY

The audited financial results of Xin Da Property prepared under the PRC GAAP for the two years ended 31 December 2005 and 2006 are as follows:

		For the year ended	For the year ended
		31 December
		2005	2006
		RMB	RMB
Net	profit before tax and extraordinary items	8,439,605	1,405,146
Net	profit/(loss) after tax and extraordinary items	6,867,857	(217,901)

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LETTER FROM THE BOARD

For illustrative purpose only, the unaudited results of Xin Da Property for the two years ended 28 February 2005 and 2006 prepared in accordance with Hong Kong Accounting Standards are as follows:

									For the	year ended
									28 February
									2005	2006
									RMB	RMB
Net	profit/(loss)	before	and	after	tax	and	extraordinary	items	552,000	(2,831,000)

The reason for the decrease in net profit before and after tax and extraordinary items for the year ended 28 February 2006 was due to the decrease in the average selling price per unit of Sunny Garden.

The unaudited net asset value of Xin Da Property pursuant to the Management Account as at 31 January 2007 was approximately RMB31.5 million.

The total asset value of Xin Da Property pursuant to the Management Account was approximately RMB41.4 million which mainly comprises of (i) fixed assets of approximately RMB0.3 million; (ii) value of the Properties of approximately RMB29.95 million; (iii) receivables of approximately RMB1.7 million; and (iv) cash and cash equivalents of approximately RMB9.5 million.

The Directors have confirmed that, to the best of their knowledge and belief, the difference in the audited financial results of Xin Da Property as at 31 December 2006 prepared on the basis of the PRC GAAP and of the Hong Kong Accounting Standards will not result in the transaction being changed to a higher class of notifiable transaction under Chapter 14 of the Listing Rules.

Upon Completion, the Group shall have no equity interest in Xin Da Property and Xin Da Property will cease to be a subsidiary of the Group.

4. REASONS FOR THE DISPOSAL

The Group is principally engaged in manufacturing and sale of shoes and property development. The Board believes that the Disposal represents a good opportunity for the Group to realise its investment in the PRC properties at a fair and reasonable price which enables the Group to rationalise its business scope. The Group would like to focus on its core shoe related businesses and not to divert any of its management time and resources in any other investments. As such, the Board considers that the Disposal is in the interest of the Group and the Shareholders as a whole.

The terms of the Disposal, which were agreed after arm’s length negotiation between the Vendor and the Purchaser, are on normal commercial terms and the Board (including the independent non-executive Directors) considers that the terms of the Agreement are fair and reasonable and are in the interests of the Company and the Shareholders as a whole.

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LETTER FROM THE BOARD

5. USE OF PROCEEDS

It is intended that the sale proceeds from the Disposal will be applied as general working capital of the Company.

6. FINANCIAL EFFECTS OF THE DISPOSAL

Subject to the review by the auditors of the Company and based on the difference between the Consideration and the net asset value stated in the Management Account, it is estimated that the Group will record a gain of approximately HK$2,900,000 (including the realisation of exchange and revaluation reserve) as a result of the Disposal. Apart from the net increase in assets of approximately HK$2,900,000 upon Completion, there will not be any change on the liabilities of the Group as a result of the Disposal.

7. GENERAL

The Disposal constitutes a discloseable transaction for the Company under the Listing Rules. Given that Mr. Lee, a Director and Controlling Shareholder, owns 80% of the Purchaser, the Disposal also constitutes a connected transaction for the Company as defined under Rule 14A.13 of the Listing Rules. Consequently, the Disposal is subject to the reporting and announcement requirements under the Listing Rules as well as the approval of the Independent Shareholders at the SGM by way of poll. Mr. Lee and his associates are required to abstain from voting in respect of the proposed resolution to approve the Disposal. To the best knowledge and belief of the Directors, save and except for Mr. Lee who is interested in 259,254,000 Shares (representing approximately 41.30% of the total issued share capital of the Company), no other parties connected to Mr. Lee owned any Shares as at the Latest Practicable Date.

The Company has established the Independent Board Committee to advise the Independent Shareholders as to whether the terms of the Agreement and the transactions contemplated thereunder are fair and reasonable and are in the interests of the Company and the Independent Shareholders as a whole. As requested, Mr. Law King Wan is not included in the Independent Board Committee due to personal reason. The Board confirms that Mr. Law King Wan does not have any interest in this transaction and his non-involvement in this transaction does not have any material effect that needs to be drawn to the attention of the Shareholders. VXLFS has been appointed as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in this regard.

8. RECOMMENDATION

The Independent Board Committee, having taken into account the advice of VXLFS in relation to the Agreement and the transactions contemplated thereunder, is of the opinion that the Agreement and the transactions contemplated thereunder are in the interests of the Company and the Shareholders as a whole and are fair and reasonable so far as the Independent Shareholders are concerned. The Disposal is subject to the approval by the Independent Shareholders at the SGM by way of poll. Accordingly, the Independent Board Committee recommends the Independent Shareholders to vote in favour of the relevant resolution to be proposed at the SGM to approve the Agreement, the Stakeholder Agreement and the transactions contemplated thereunder.

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LETTER FROM THE BOARD

9. SGM

The notice of the SGM is set out on page 36 of this circular. A form of proxy for use at the SGM is enclosed. Whether or not Shareholders are able to attend the SGM, Shareholders are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon to the Company’s share registrar and transfer office in Hong Kong, Computershare Hong Kong Investor Services Ltd. at 1806-07, 18/F., Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for holding the SGM. Completion and return of the form of proxy will not preclude Shareholders from attending and voting in person at the SGM should Shareholders so wish.

10. PROCEDURES FOR DEMANDING A POLL AT GENERAL MEETING

The procedures by which the Shareholders may demand a poll at any general meeting are as follows.

According to Bye-law 66, at any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands unless voting by way of poll is required by the rules of the designated stock exchange or (before or on the declaration of the result of the show of hands or on the withdrawal of any other demand for a poll) a poll is demanded:

(a) by the chairman of such meeting; or
(b) by at least three members present in person (or in the case of a member being a corporation by its duly authorised representative) or by proxy for the time being entitled to vote at the meeting; or
(c) by a member or members present in person (or in the case of a member being a corporation by its duly authorised representative) or by proxy and representing not less than one-tenth of the total voting rights of all members having the right to vote at the meeting; or
(d) by a member or members present in person (or in the case of a member being a corporation by its duly authorised representative) or by proxy and holding Shares in the Company conferring a right to vote at the meeting being shares on which an aggregate sum has been paid up equal to not less than one-tenth of the total sum paid up on all Shares conferring the right.

A demand by a person as proxy for a member or in the case of a member being a corporation by its duly authorized representative shall be deemed to be the same as a demand by a member.

Notwithstanding any other provisions in the Bye-laws:

(a) if the aggregate proxies held by the chairman of a particular general meeting and the Directors account for 5% or more of the total voting rights at that general meeting; and

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LETTER FROM THE BOARD

(b) if on a show of hands in respect of any resolution, the Shareholders at the general meeting vote in the opposite manner to that instructed in the proxies referred to in (a) above,

the chairman of the general meeting and/or any Director holding the proxies referred to above shall demand a poll provided that if it is apparent from the total proxies held by the persons referred to in (a) above that a vote taken on a poll will not reverse the vote taken on a show of hands, then no poll shall be required.

11. ADDITIONAL INFORMATION

Your attention is drawn to the letter from the Independent Board Committee set out on page 12 of this circular which contains the recommendation of the Independent Board Committee to the Independent Shareholders concerning the Agreement and the transactions contemplated thereunder and the letter from VXLFS set out on pages 13 to 19 of this circular containing its advice to the Independent Board Committee and the Independent Shareholders in this regard. Your attention is also drawn to the additional information set out in the appendices to this circular.

By Order of the Board Le Saunda Holdings Ltd. Wan Tat Wah Director

— 11 —

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

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( Incorporated in the Bermuda with limited liability ) (Stock Code: 738)

19 April 2007

To the Independent Shareholders

Dear Sir or Madam,

DISCLOSEABLE AND CONNECTED TRANSACTION PROPOSED DISPOSAL OF THE ENTIRE EQUITY INTEREST IN THE REGISTERED AND PAID-UP CAPITAL OF XIN DA PROPERTY

We refer to the circular issued by the Company to the Shareholders dated 19 April 2007 (the “circular”), of which this letter forms part. Terms defined in the circular shall have the same meanings in this letter unless the context otherwise requires. As the Independent Board Committee, we have been appointed to advise you in respect of the Agreement and the transactions contemplated thereunder.

VXLFS has been appointed as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the Agreement and the transactions contemplated thereunder. Details of its conclusion and advice, together with the principal factors and reasons considered in arriving at such conclusion and advice, are set out in its letter appeared on pages 13 to 19 of the circular. We urge you to read that letter carefully.

Having considered the terms of the Agreement and the transactions contemplated thereunder and the advice of VXLFS, the Independent Board Committee concurs with the view of VXLFS that the terms of the Agreement are on normal commercial terms and fair and reasonable so far as the Independent Shareholders are concerned and that the entering into the Agreement is in the interests of the Group and the Shareholders as a whole. That being the case, we recommend the Independent Shareholders to vote in favour of the ordinary resolution to be proposed at the SGM to approve the Agreement, the Stakeholder Agreement and the transactions contemplated thereunder.

Yours faithfully,

The Independent Board Committee

Mr. Lam Siu Lun, Simon and Mr. Leung Wai Ki, George Independent non-executive Directors

— 12 —

LETTER FROM VXLFS

The following is the text of a letter of advice from VXLFS to the Independent Board Committee and the Independent Shareholders in respect of the Agreement and the transactions contemplated thereunder, which has been prepared for the purpose of inclusion in this circular.

VXL Financial Services Limited

Unit 3214, 32nd Floor, Cosco Tower Grand Millennium Plaza (High Block) 183 Queen’s Road Central Hong Kong

==> picture [102 x 24] intentionally omitted <==

19 April 2007

To the Independent Board Committee and the Independent Shareholders

Dear Sirs,

DISCLOSEABLE AND CONNECTED TRANSACTION PROPOSED DISPOSAL OF THE ENTIRE EQUITY INTEREST IN THE REGISTERED AND PAID-UP CAPITAL OF XIN DA PROPERTY

I. INTRODUCTION

We refer to our appointment as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders as to whether the terms of the Agreement and the transactions contemplated thereunder are on normal commercial terms and fair and reasonable so far as the Independent Shareholders are concerned and the entering into the Agreement and the transactions contemplated thereunder are in the interests of the Company and the Shareholders as a whole. Details of the Agreement and the transactions contemplated thereunder are contained in the circular of the Company dated 19 April 2007 (the “Circular”) to the Shareholders of which this letter forms part. Capitalized terms used in this letter shall have the same meanings as those defined in the Circular unless the context requires otherwise.

On 26 March 2007, the Vendor and the Purchaser entered into the Agreement pursuant to which the Vendor had conditionally agreed to sell, and the Purchaser had conditionally agreed to purchase the entire equity interest in the registered and paid-up capital of Xin Da Property, which is beneficially owned by the Vendor, at a consideration of HK$32,395,000.

Pursuant to the Listing Rules, the Disposal constitutes a discloseable transaction for the Company. As Mr. Lee, a Director and Controlling Shareholder, owns 80% of the Purchaser, the Purchaser is a connected person of the Company for the purpose of the Listing Rules. As such, the Disposal also constitutes a connected transaction for the Company as defined under Chapter 14A of

— 13 —

LETTER FROM VXLFS

the Listing Rules. The Disposal is therefore subject to the reporting and announcement requirements under the Listing Rules as well as the approval of the Independent Shareholders at the SGM. Mr. Lee and his associates are required to abstain from voting in respect of the proposed resolution to approve the Disposal.

The Independent Board Committee comprising Mr. Lam Siu Lun, Simon and Mr. Leung Wai Ki, George, being independent non-executive Directors, has been formed to advise the Independent Shareholders in connection with the terms of the Agreement and the transactions contemplated thereunder.

In our capacity as the Independent Financial Adviser, our role is to provide the Independent Board Committee and the Independent Shareholders with an independent opinion and recommendation as to whether the terms of the Agreement and the transactions contemplated thereunder are on normal commercial terms and fair and reasonable so far as the Independent Shareholders are concerned, and that the entering into the Agreement and the transactions contemplated thereunder are in the interests of the Company and the Shareholders as a whole.

In formulating our recommendation, we have relied on the information and facts contained or referred to in the Circular and supplied to us by the Company, and the opinion expressed by and the representations of the directors and management of the Company. We have assumed that all the information and representations provided to us or contained or referred to in the Circular were true, accurate and complete in all respects at the time they were made and continue to be so up to the date of the SGM and may be relied upon. We have also assumed that all opinions made by the Directors in the Circular were made reasonably after due and careful enquiry and were based on honestly-held opinion. We have also relied on the responsibility statement set out in Appendix II to the Circular that the Directors collectively and individually accept full responsibility for the accuracy of the information contained in the Circular. We have no reason to doubt the truth, accuracy and completeness of the information and representations provided to us by the Directors. We have also been advised by the Directors and believe that no material facts have been omitted from the information provided and referred to in the Circular, which would make any statement contained in the Circular misleading.

We consider that we have reviewed currently available information and documents, which are available under the present circumstances, and have performed all reasonable steps as required under Rule 13.80 of the Listing Rules including the notes thereon, to enable us to reach an informed view and to justify our reliance on the accuracy of the information contained in the Circular and to provide a reasonable basis for our recommendation. We have no reason to suspect that any relevant information or reports have been withheld, nor are we aware of any facts or circumstances which would render the information provided and the representations made to us to be untrue, inaccurate or misleading. We have not, however, carried out an independent verification on the information provided, nor have we conducted an independent investigation into the business, affairs, operations, financial position or future prospects of the Company or the Purchaser or Xin Da Property or any of their respective subsidiaries or associates.

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LETTER FROM VXLFS

II. PRINCIPAL FACTORS AND REASONS CONSIDERED

In formulating our opinion and recommendation, we have taken into consideration the following principal factors and reasons:

1. Background to and reasons for the Disposal

The Group is principally engaged in manufacturing and sale of shoes and property development.

The Vendor is an indirect wholly-owned subsidiary of the Company principally engaged in investment holding. Xin Da Property is a wholly foreign owned enterprise established by the Vendor in the PRC on 15 November 2001 and is principally engaged in property development in the PRC.

We note from the the letter from the Board in the Circular (“Letter from the Board”) that Xin Da Property holds two property projects (“Properties”) in Foshan City Shunde District. The first property project consists of a parcel of land (“Land”) owned by Xin Da Property located at Rong Qi Avenue Central, Ronggui Town, Shunde District, Foshan City with a site area of approximately 7,794.45 sq. m. and held under a land use right expiring on 29 September 2076. As at the Latest Practicable Date, the Land is held for residential and commercial development. As stated in the legal opinion dated 27 November 2006 issued by the Group’s PRC legal adviser, Xin Da Property has legally obtained the land use rights of the Land and is entitled to transfer, lease or mortgage the Land and the Land is not subject to any mortgages. The Group’s PRC legal adviser has confirmed in its supplemental legal opinion dated 17 April 2007 that the said legal opinion remains valid.

The second property project of Xin Da Property is the property development of Sunny Garden which is located at Huan Shan Road, Ronggui Town, Shunde District, Foshan City. The development of Sunny Garden was completed in various stages between 2003 and 2006. As at 31 January 2007, the property (the “Sunny Garden Property”) held by Xin Da Property at Sunny Garden comprises (i) 7 car parking spaces; (ii) 6 garages; (iii) 2 retail units; and (iv) 2 residential units with a total gross floor area of approximately 730.61 sq. m..The land use rights of the property at Sunny Garden were granted for a term expiring on 6 March 2071 for residential and commercial uses. As at the Latest Practicable Date, the Sunny Garden Property owned by Xin Da Property is for future sale. As stated in the legal opinion dated 13 March 2007 issued by the Group’s PRC legal adviser, Xin Da Property has legally obtained the land use rights of the Sunny Garden Property and is entitled to sell the Sunny Garden Property.

According to the annual report of the Company for the year ended 28 February 2006 (“2006 Annual Report”) and the latest published interim report of the Company for the six months ended 31 August 2006 (“2007 Interim Report”), the turnover generated from the property development segment contributed approximately 8.18% and 6.35% respectively to the total turnover of the Group for the year ended 28 February 2006 and the six months ended 31 August 2006, while the turnover from the manufacture and sale of shoes segments contributed approximately 90.65% and 91.70% respectively to the total turnover of the Group for the year ended 28 February 2006 and the six months ended 31 August 2006. We note from both the 2006 Annual Report and the 2007 Interim Report that the Group intends to focus on strengthening the core shoe related business in both Hong Kong and the PRC.

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LETTER FROM VXLFS

As advised by the Directors, Xin Da Property was established by the Group in 2001 for the investment in the PRC property market in view of the growing prospect of the PRC property market at that time. After a few years of investment in property development in the PRC, and the Group has realized most of the profits generated by the sale of property units at Sunny Garden, the Directors are of the view that the Disposal represents an opportunity for the Group to realize its investment in Xin Da Property and at the same time align with the business strategy of the Group to focus on its core shoe related business.

As stated in the Letter from the Board, up to 31 January 2007, the profits generated by the sale of property units at Sunny Garden amounted to approximately RMB6.3 million. The Board believes that the Disposal represents a good opportunity for the Group to realize its investment in the PRC properties at a fair and reasonable price which enables the Group to rationalize its business scope. The Group would like to focus on its core shoe related businesses and not to divert any of its management time and resources in any other investments.

As the sale proceeds from the Disposal will be applied as general working capital of the Company, it will provide the Group with additional working capital for expansion of the Group’s shoe related business and align with the store expansion strategy of the Group in the PRC.

We are of the view that the Disposal is in line with the existing business strategies of the Group to focus on its core shoe related business and provide additional funding for the implementation of the Group’s strategy.

2. Information of Xin Da Property

The unaudited net asset value of Xin Da Property as at 31 January 2007 was approximately RMB31.54 million (equivalent to approximately HK$31.84 million), comprising an aggregate carrying value of the Properties as at 31 January 2007 of RMB29.95 million (equivalent to approximately HK$30.23 million). The aggregate carrying value of the Properties as at 31 January 2007 was the same as the appraised market value by the independent property valuer, Savills Valuation and Professional Services Limited, as set out in Appendix I to the Circular.

We note from the Letter from the Board that,

(i) the audited financial results of Xin Da Property prepared under the PRC GAAP for the two years ended 31 December 2005 and 2006 were:

		For the year ended	For the year ended
		31 December
		2005	2006
		RMB	RMB
Net	profit before tax and extraordinary items	8,439,605	1,405,146
Net	profit/(loss) after tax and extraordinary items	6,867,857	(217,901)

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LETTER FROM VXLFS

(ii) the unaudited financial results of Xin Da Property for the two years ended 28 February 2005 and 2006 prepared in accordance with Hong Kong Accounting Standards were:

	For the	year ended
	28 February
	2005	2006
	RMB	RMB
Net profit/(loss) before and after tax and extraordinary
items	552,000	(2,831,000)

The decrease in net profit before and after tax and extraordinary items for the year ended 28 February 2006 was due to the decrease in average selling price per unit of Sunny Garden.

Having considered that (i) the Disposal represents a good opportunity for the Group to realize its investments in the PRC properties and the Consideration represents a premium to the unaudited net asset value as at 31 January 2007, details of which are referred to in the paragraph headed “The Consideration” below; and (ii) the Disposal is in line with the Company’s stated business plans, we concur with the view of the Directors that the Disposal is in the interests of the Company and the Shareholders as a whole.

3. The Consideration

The Consideration of HK$32,395,000 (subject to adjustment) for the Disposal will be satisfied by the Purchaser as follows:

(a) a deposit of HK$3,239,500 to be paid in cash by the Purchaser within 10 Business Days after the execution of the Agreement; and
(b) the remaining balance of HK$29,155,500 of the unadjusted Consideration to be paid by way of a solicitor-cheque out of the Stake subject to the terms of the Stakeholder Agreement at Completion.

The Consideration was agreed after arm’s length negotiation between the Vendor and the Purchaser on normal commercial terms and determined by reference to the Management Account.

The Consideration for the Disposal is subject to adjustment upwards or downwards on a dollar to dollar basis (“Adjustment”) by reference to difference of (i) the net asset value ascertained in the Completion Account to be provided by the Vendor to the Purchaser within 14 days after the Completion Date (which is estimated to be on or around 31 July 2007) and (ii) the net asset value of the Management Account. It has been agreed between the Vendor and the Purchaser that the Consideration (as adjusted) for the Disposal shall not be less than HK$29,803,000 (“Minimum Agreed Amount”) and the Purchaser shall pay the difference to the Vendor in cash within 14 Business Days after the relevant adjustment to the Consideration is confirmed by the Vendor and the Purchaser in writing.

— 17 —

LETTER FROM VXLFS

We note that the Consideration of HK$32,395,000 represents a premium of approximately 1.74% over the unaudited net asset value of Xin Da Property as at 31 January 2007 of approximately RMB31.54 million (equivalent to approximately HK$31.84 million).

We also note from the Letter from the Board that the Minimum Agreed Amount was arrived at after arm’s length negotiation between the Vendor and the Purchaser with reference to the best estimate of the net asset value of Xin Da Property after Completion.

As the Adjustment will be on a dollar to dollar basis, there will be no effect of the Adjustment on the absolute value of the premium of the Consideration over the unaudited net asset value of Xin Da Property as at 31 January 2007 provided that the net asset value of Xin Da Property as ascertained by reference to the Completion Account will not be lower than HK$29,248,000. Assuming the Consideration was adjusted by the Adjustment to the Minimum Agreed Amount, the premium of the Consideration (as adjusted) to the net asset value of Xin Da Property as ascertained by reference to the Completion Account will not be lower than approximately 1.90%. We note that there is no maximum amount set for the upward adjustment to the Consideration for the Disposal. Given the Adjustment will be on a dollar to dollar basis, the existence of the Minimum Agreed Amount and the absence of a maximum cap for the Consideration are fair and reasonable and are in the interests of the Company and the Shareholders as a whole.

Given the premium of the Consideration to the unaudited net asset value of Xin Da Property as referred to the Management Account, the basis for which it arrived at and the existence of the mechanism for the Adjustment including the Minimum Agreed Amount, we concur with the Directors’ view that the Consideration is fair and reasonable and is in the interests of the Company and the Shareholders as a whole.

4. Financial impact to the Group upon completion of the Disposal

a) Profit and loss account

We note from the Letter from the Board that it is estimated that the Group will record a gain of approximately HK$2.90 million (including the realization of exchange and revaluation reserve) as a result of the Disposal based on the difference between the Consideration and the net asset value stated in the Management Account.

b) Working Capital

As stated in the Letter from the Board, the sale proceeds from the Disposal is intended to be applied as general working capital of the Company. As a result, the Disposal is expected to improve the working capital and cash position of the Group by the amount of the Consideration after expenses.

Having considered that the Disposal will have positive financial impact to the Company, we are of the view that the Disposal is in the interests of the Group and the Independent Shareholders as a whole.

— 18 —

LETTER FROM VXLFS

III. RECOMMENDATION

Having considered the above principal factors, in particular,

(i) the Disposal is in line with the existing business strategies of the Group to focus on its core business of shoe related business;
(ii) the Disposal represents an opportunity for the Group to realize its investment in the PRC properties;
(iii) the Consideration represents a premium to the unaudited net asset value of Xin Da Property as referred to in the Management Account and the mechanism of the Adjustment including the existence of the Minimum Agreed Amount being fair and reasonable to the Company; and
(iv) the positive financial impact to the Group upon completion of the Disposal,

we consider that the terms of the Agreement and the transactions contemplated thereunder are on normal commercial terms and fair and reasonable so far as the Independent Shareholders are concerned and are in the interests of the Group and the Shareholders as a whole. Accordingly, we advise the Independent Board Committee to recommend the Independent Shareholders to vote in favour of the ordinary resolution to be proposed at the SGM to approve the Agreement and the transactions contemplated thereunder.

Yours faithfully, For and on behalf of VXL Financial Services Limited Gary Mui Director

— 19 —

VALUATION REPORT

APPENDIX I

The following is the text of a letter, summary of values and valuation certificate, prepared for the purpose of incorporation in this circular received from Savills Valuation and Professional Services Limited in connection with its valuations of the property interests of the Group as at 31 January 2007.

==> picture [72 x 72] intentionally omitted <==

T: (852) 2801 6100 F: (852) 2501 5590

23/F Two Exchange Square Central, Hong Kong

EA Licence: C-023750 savills.com

The Directors,

Le Saunda Holdings Ltd., 30th Floor, Hing Wai Centre, No. 7 Tin Wan Praya Road, Aberdeen, Hong Kong

19 April 2007

Dear Sirs,

In accordance with your instructions for us to value the properties in which Le Saunda Holdings Ltd. (the “Company”) and its subsidiaries (hereinafter together referred to as the “Group”) have interests in the People’s Republic of China (the “PRC”), we confirm that we have carried out inspections, made relevant enquiries and searches and obtained such further information as we consider necessary for the purpose of providing you with our opinion of values of such property interests as at 31 January 2007 (the “date of valuation”) for the purpose of incorporation in a circular issued by the Company.

Our valuation of each of the property interests is our opinion of its market value which we would define as intended to mean “the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently, and without compulsion”.

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VALUATION REPORT

APPENDIX I

The market value is the best price reasonably obtainable in the market by the seller and the most advantageous price reasonably obtainable in the market by the buyer. This estimate specifically excludes an estimated price inflated or deflated by special terms or circumstances such as atypical financing, sale and leaseback arrangements, joint ventures, management agreements, special considerations or concessions granted by anyone associated with the sale, or any element of special value. The market value of a property is also estimated without regard to costs of sale and purchase, and without offset for any associated taxes.

In the course of our valuation, we have assumed that, unless otherwise stated, transferable land use rights in respect of the properties for their respective specific terms at nominal annual land use fees have been granted and that any land grant premium payable has already been fully paid. We have also assumed that, unless otherwise stated, the grantees of the properties have free and uninterrupted rights to use, occupy or assign the properties for the whole of the respective unexpired terms as granted.

In valuing the property interest in Group I, which is held by the Group for sale, we have adopted the direct comparison approach and by making reference to comparable sale transactions as available in the relevant market assuming sale with the benefit of vacant possession.

In valuing the property interest in Group II, which is held by the Group for development, we have valued this property on the basis that it will be developed and completed in accordance with the latest development proposal provided to us by the Group. We have assumed that all consents, approvals and licences from relevant government authorities for the development proposal have been obtained. In arriving at our opinion of value, we have adopted the direct comparison approach by making reference to the comparable sale transactions as available in the market.

We have been shown copies of the title documents relating to the properties. However, we have not inspected the original documents to ascertain the existence of any amendments which may not appear on the copies handed to us. In the course of our valuation, we have relied to a very considerable extent on the information given by the Group and its legal adviser, (Guangdong Ying Jian Law Firm*), regarding the titles to the properties. We have also accepted advice given to us on such matters as planning approvals or statutory notices, easements, tenure, particulars of occupancy, development proposal, floor and site areas and all other relevant matters. Dimensions, measurements and areas included in the valuation certificate are based on the information provided to us and are therefore approximations. No on-site measurements have been taken. We have had no reason to doubt the truth and accuracy of the information provided to us by the Group. We have also sought confirmation from the Group that no material factors have been omitted from the information supplied. We consider that we have been provided with sufficient information to reach an informed view.

We have inspected the exterior and, where possible, the interior of the properties. During the course of our inspection, we did not note any serious defects. However, no structural survey has been made, we are therefore unable to report whether the properties are free of rot, infestation or any other

* For identification purposes only

— 21 —

APPENDIX I

VALUATION REPORT

structural defects. No tests were carried out on any of the services. We have not carried out investigations on site to determine the suitability of the ground conditions and the services etc. for any future development. Our valuation is prepared on the assumption that these aspects are satisfactory and no extraordinary expenses or delay will be incurred during the development period.

No allowance has been made in our report for any charges, mortgages or amounts owing on any of the property interests valued nor for any expenses or taxation which may be incurred in effecting a sale. Unless otherwise stated, it is assumed that the properties are free from encumbrances, restrictions and outgoings of an onerous nature which could affect their values.

In valuing the property interests, we have complied with all the requirements contained in Chapter 5 and Practice Note 12 to the Rules Governing the Listing of Securities issued by The Stock Exchange of Hong Kong Limited and the HKIS Valuation Standards on Properties (First Edition 2005) published by The Hong Kong Institute of Surveyors effective from 1 January 2005.

Unless otherwise stated, all money amounts stated in this report are in Renminbi (RMB).

We enclose herewith our summary of values and valuation certificate.

Yours faithfully, For and on behalf of Savills Valuation and Professional Services Limited Charles C K Chan MSc FRICS FHKIS MCIArb RPS(GP) Managing Director

Note: Charles C K Chan, Chartered Estate Surveyor, MSc, FRICS, FHKIS, MCIArb, RPS(GP), has about 22 years’ experience in the valuation of properties in Hong Kong and 17 years’ experience in the valuation of properties in the PRC.

— 22 —

VALUATION REPORT

APPENDIX I

SUMMARY OF VALUES

GROUP I — Property interest held by the Group for sale in the PRC

		Capital value in
		existing state as at
No.	Property	31 January 2007
		RMB
1.	7 car parking spaces and 6 garages, 2 retail units	1,950,000
	and 2 residential units of Stages 1 — 4, Sunny Garden,
	Huan Shan Road,
	Ronggui Town,
	Shunde District,
	Foshan City,
	Guangdong Province,
	PRC
	Sub-total:	1,950,000

GROUP II — Property interest held by the Group for development in the PRC

2.	No. 33 Rong Qi Avenue Central,	28,000,000
	Ronggui Town,
	Shunde District,
	Foshan City,
	Guangdong Province,
	PRC
	Sub-total:	28,000,000
	Total:	29,950,000

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VALUATION REPORT

APPENDIX I

VALUATION CERTIFICATE

GROUP I — Property interest held by the Group for sale in the PRC

							Capital value in
						Particulars of	existing state as at
	Property	Description and tenure				occupancy	31 January 2007
1.	7 car parking	The property comprises 7 car parking spaces,				The property is	RMB1,950,000
	spaces and 6	6 garages, 2 retails units and 2 residential		units		currently
	garages, 2 retail	of a residential development known as Sunny				vacant.
	units and 2	Garden completed in various stages between
	residential units of	2003 and 2006.
	Stages 1 — 4,
	Sunny Garden,	The distribution of the property among various
	Huan Shan Road,	stages is set out below:		Stage
	Ronggui Town,
	Shunde District,	2 Car Parking Spaces			1
	Foshan City,	5 Car Parking Spaces			3
	Guangdong Province,	6 Garages			3
	PRC	2 Retail Units			3
		2 Residential Units			4
		The property has a total	gross floor area		of
		approximately 730.61 sq.m.	(7,864 sq.ft.).
		The land use rights of the property were granted
		for a term expiring on	6 March 2071		for
		residential and commercial	uses.

Notes:

The property comprises Shop Nos. P-9 and P-10 in Stage 3; Units B and E on Level 1 of Block 20 in Stage 4; Car Parking Space Nos. 37 and 41 in Stage 1 and Car Parking Space No. 15 in Stage 3; Garage Nos. Q1, Q2 (including Car Parking Space No. 3), Q3 (including Car Parking Space No. 5), Q5, Q6 (including Car Parking Space Nos. 8 and 9) and Q7 in Stage 3.
Pursuant to the State-owned Land Use Certificate — Shun Fu Guo Yong (2001) No. 1100541 issued by the Planning and State-owned Land Bureau of Shunde City on 11 May 2001, the land use rights of a parcel of land with a site area of approximately 28,338.30 sq.m. (for Stages 1, 2 and 4) were granted to (Fo Shan City Shun De District Xin Da Property Development Company Limited*)

(“Xin Da Property”) for a term expiring on 6 March 2071 for residential and commercial uses.

Pursuant to the State-owned Land Use Certificate — Shun Fu Guo Yong (2004) No. 1100540 issued by the State-owned Land Resources Bureau of Foshan City on 7 December 2004, the land use rights of a parcel of land with a site area of approximately 2,259.30 sq.m. (for Stage 3) were granted to Xin Da Property for a term expiring on 6 March 2071 for residential and commercial uses.
For identification purposes only

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VALUATION REPORT

APPENDIX I

We have been provided with a legal opinion on the title to the property issued by the Group’s PRC legal adviser, (Guangdong Ying Jian Law Firm*), on 13 March 2007, which contains, inter alia, the following

information:

(i) Xin Da Property has legally obtained the land use rights of the property; and
(ii) Xin Da Property is entitled to sell the property.
For identification purposes only

— 25 —

VALUATION REPORT

APPENDIX I

VALUATION CERTIFICATE

GROUP II — Property interest held for development by the Group in the PRC

				Capital value in
			Particulars of	existing state as at
	Property	Description and tenure	occupancy	31 January 2007
2.	No. 33 Rong Qi	The property comprises a parcel of land with a	The property is	RMB28,000,000
	Avenue Central,	site area of approximately 7,794.45 sq.m.	currently
	Ronggui Town,	(83,899 sq.ft.).	vacant.
	Shunde District,
	Foshan City,	The land use rights of the property were granted
	Guangdong	for a term expiring on 29 September 2076 for
	Province,	residential and ancillary commercial uses.
	PRC

Notes:

Pursuant to the State-owned Land Use Certificate — Shun Fu Guo Yong (2006) No. 1002599 issued by the State-owned Land Resources Bureau of Foshan City on 24 March 2006, the land use rights of a parcel of land with a site area of approximately 7,794.45 sq.m. were granted to Xin Da Property for a term expiring on 29 September 2076 for residential and ancillary commercial uses.
Pursuant to the Contract for the Grant of State-owned Land Use Rights No. 440606 — 2006 — 000204 entered into between the State-owned Land Resources Bureau of Foshan City (the “Grantor”) and Xin Da Property (the “Grantee”) on 22 March 2006, the Grantor agreed to transfer the land use rights of a parcel of land with a site area of 7,794.45 sq.m. to the Grantee. The said contract contains, inter-alia, the salient conditions as follows:

Usage : Residential with ancillary commercial uses Land Use Term : 70 years commencing on 30 September 2006 and expiring on 29 September 2076 Land Grant Premium : RMB26,300,000 Plot Ratio : Not more than 5.4 Site Coverage : Levels 1 and 2:Not more than 70% Levels 3 and above:Not more than 45% Building Height : Not higher than 55 metres No. of storey : Not more than 15 Green Ratio : Not less than 10%

— 26 —

VALUATION REPORT

APPENDIX I

We have been provided with a legal opinion on the title to the property issued by the Group’s PRC legal adviser, (Guangdong Ying Jian Law Firm*), on 27 November 2006 and its supplement issued on 17 April

2007, which contain, inter alia, the following information:

(i) Xin Da Property has legally obtained the land use rights of the property;
(ii) Xin Da Property is entitled to transfer, lease or mortgage the property; and
(iii) the property is not subject to any mortgages.
For identification purposes only

— 27 —

GENERAL INFORMATION

APPENDIX II

1. RESPONSIBILITY STATEMENT

This circular includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Group. The Directors collectively and individually accept full responsibility for the accuracy of the information contained in this circular and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts the omission of which would make any statement contained in this circular misleading.

2. DISCLOSURE OF INTERESTS

(I) Interests of Directors and chief executives of the Company

As at the Latest Practicable Date, the Directors and chief executives of the Company had the following interests in the Shares and underlying shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they are taken or deemed to have under such provisions of the SFO), the Model Code for Securities Transactions by Directors of Listed Companies and which are required to be entered in the register under section 352 of the SFO:

(A) Long position in the Shares

Number of Shares

					Approximate
					percentage
					of the issued
					share capital
	Personal	Corporate	Other		of the
Name of Directors	interests	interests	interests	Total	Company
Mr. Lee Tze Bun,	22,870,000	31,384,000	205,000,000	259,254,000	41.30%
Marces (“Mr. Lee”)		(Notes 1 &	(Note 3)
		2)
Mr. Wan Tat Wah	6,000,000	—	—	6,000,000	0.96%
(“Mr. Wan”)					(Note 4)
Ms. Chui Kwan Ho,	3,880,000	—	50,000,000	53,880,000	8.58%
Jacky (“Ms. Chui”)			(Note 5)		(Note 6)
Ms. Tsui Oi Kuen	1,000,000	—	50,000,000	51,000,000	8.13%
(“Ms.Tsui”)			(Note 5)		(Note 7)
Ms. Lau Shun Wai	350,000	—	—	350,000	0.06%

— 28 —

GENERAL INFORMATION

APPENDIX II

(B) Long position in shares and underlying shares of associated corporations

			Approximate
			percentage of the
			issued share capital
			of the associated
Name of associated			corporation of
corporation	Name of Director	Personal interests	the Company
L. S. Retailing Limited	Mr. Lee	20,000 non-voting	100%
		deferred shares	(in respect of
		(Note 8)	non-voting
			deferred shares)

Notes:

30,000,000 Shares are held by Succex Limited, which is wholly owned by Mr. Lee. Therefore, Mr. Lee is deemed to be interested in those Shares.
1,384,000 Shares are held by Xin Chuan Middle School Foundation Limited (“Xin Chuan”), of which Mr. Lee is a governor. Therefore, Mr. Lee is deemed to be interested in those Shares.
Stable Gain Holdings Limited (“Stable Gain”) holds 205,000,000 Shares, representing approximately 32.66% of the issued share capital of the Company. Those Shares were transferred from Lee Tze Bun Trustee Holding Corporation, being the trustee of a unit trust called The Lee Tze Bun Unit Trust (“LTB Trust”), as to 155,000,000 Shares, and from Lee Keung Trustee Holding Corporation, being the trustee of a unit trust called The Lee Keung Unit Trust (“LK Trust”), as to 50,000,000 Shares, upon termination of both the LTB Trust and the LK Trust on 28 July 2006. The entire issued share capital of Stable Gain is registered in the name of LGT Trustees Ltd. (“LGT”) as trustee of The Lee Keung Family Trust (“Lee Family Trust”), a discretionary trust, of which Mr. Lee is the founder and an eligible beneficiary thereunder. Therefore, Mr. Lee is deemed to be interested in those Shares.
Mr. Wan personally holds 6,000,000 Shares and is also entitled to 4,000,000 share options granted by the Company. Upon exercise of these outstanding share options in full, Mr. Wan’s interests in the Company will be increased from the existing 0.96% to 1.58% of the issued share capital of the Company including number of shares in relation to such exercise.
Ms. Chui, Ms. Tsui and Ms. Lee Wing Kam Rowena Jackie (“Ms. Lee”), the daughter of Mr. Lee, being the trustees of The Lee Keung Charitable Foundation (the “Charitable Foundation”) jointly hold 50,000,000 Shares, representing approximately 7.97% of the issued share capital of the Company. Therefore, Ms. Chui, Ms. Tsui and Ms. Lee are deemed to be interested in those Shares.
Ms. Chui personally holds 3,880,000 Shares. Together with the Shares mentioned in (5) above, Ms. Chui holds an aggregate of 53,880,000 Shares, representing approximately 8.58% of the issued share capital of the Company.
Ms. Tsui personally holds 1,000,000 Shares. Together with the Shares mentioned in (5) above, Ms. Tsui holds an aggregate of 51,000,000 Shares, representing approximately 8.13% of the issued share capital of the Company.
Mr. Lee beneficially owns 20,000 non-voting deferred shares in L. S. Retailing Limited, a wholly-owned subsidiary of the Company.

— 29 —

GENERAL INFORMATION

APPENDIX II

As at the Latest Practicable Date, none of the directors and chief executive of the Company or their associates had any short position in the shares, underlying shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) as recorded in the register required to be kept under Section 352 of the SFO or as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Companies.

(D) Interest in share options

			Number of Shares	Number of Shares
					Outstanding
		Outstanding			as at the
Name or	Date of	as at	Exercised	Cancelled	Latest	Exercise
Category of	share options	1 March	during	during	Practicable	price	Exercise
Participant	granted	2006	the period	the period	Date	per Share	period
	(Notes 1 & 2)		(Note 3)
*Directors*
Mr. Wan	13 April 2004	3,000,000	3,000,000	—	—	HK$0.38	26 July 2004 -
(Note 4)							12 April 2014
	13 April 2004	3,000,000	3,000,000	—	—	HK$0.38	26 July 2005 -
							12 April 2014
	13 April 2004	4,000,000	—	—	4,000,000	HK$0.38	26 July 2006 -
							12 April 2014
Ms. Chui	13 April 2004	1,200,000	1,200,000	—	—	HK$0.38	26 July 2006 -
							12 April 2014
Ms. Tsui	13 April 2004	1,200,000	1,200,000	—	—	HK$0.38	26 July 2006 -
							12 April 2014
Total		12,400,000	8,400,000	—	4,000,000

Notes:

The respective vesting periods of the above share options are from their respective dates of the grant until the commencement of their respective exercise periods.
The closing price of the Shares immediately before 13 April 2004 on which the share options were granted was HK$0.40 per Share.
The weighted average closing market price per Share immediately before the respective dates on which the share options were exercised was HK$1.16 per Share.
On 13 April 2004, 10,000,000 share options were granted to Mr. Wan, which were in excess of the specified limit of 4,486,196 Shares, being 1% of the issued Shares as at 25 June 2004. At the annual general meeting of the Company held on 26 July 2004, the shareholders of the Company approved the granting of such share options to Mr. Wan.

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GENERAL INFORMATION

APPENDIX II

(II) Interests of Shareholders Discloseable Pursuant to the SFO

Save as disclosed below, the Directors are not aware of any other person (other than a Director or chief executive of the Company or his/her respective associate(s)) who, as at the Latest Practicable Date, had an interest or short position in the Shares or underlying shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO:—

Number of Shares

						Approximate
						percentage
						of the issued
						share capital
		Personal	Corporate	Other		of the
Name	Note	interests	interests	interests	Total	Company
Mr. Lee	1, 2, 3 & 4	22,870,000	31,384,000	205,000,000	259,254,000	41.30%
LGT	3	—	205,000,000	—	205,000,000	32.66%
Stable Gain	3	205,000,000	—	—	205,000,000	32.66%
Ms. Chui	5	3,880,000	—	50,000,000	53,880,000	8.58%
Ms. Tsui	6	1,000,000	—	50,000,000	51,000,000	8.13%
Ms. Lee	7	4,000,000	—	50,000,000	54,000,000	8.60%
Ms. Chui, Ms. Tsui and	5, 6 & 7	—	—	50,000,000	50,000,000	7.97%
Ms. Lee as trustees
of the Charitable
Foundation
Value Partners Limited	8	—	—	42,082,000	42,082,000	6.70%
(“VPL”)
Mr. Cheah Cheng Hye	8 & 9	—	42,082,000	—	42,082,000	6.70%
(“Mr. Cheah”)

Notes:

Mr. Lee personally holds 22,870,000 Shares.
Succex Limited, in which Mr. Lee is a 100% controlling shareholder, holds 30,000,000 Shares; and Xin Chuan, in which Mr. Lee is a governor, holds 1,384,000 Shares. Therefore, Mr. Lee is deemed to be interested in those Shares.
Stable Gain holds 205,000,000 Shares, representing approximately 32.66% of the issued share capital of the Company. Those Shares were transferred from Lee Tze Bun Trustee Holding Corporation, being the trustee of the LTB Trust, as to 155,000,000 Shares, and from Lee Keung Trustee Holding Corporation, being the trustee of the LK Trust, as to 50,000,000 Shares, upon termination of both the LTB Trust and the LK Trust on 28 July 2006. The entire issued share capital of Stable Gain is registered in the name of LGT as trustee of the Lee Family Trust, a discretionary trust, of which Mr. Lee is the founder and an eligible beneficiary thereunder. Therefore, Mr. Lee is deemed to be interested in those Shares.

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GENERAL INFORMATION

APPENDIX II

Mr. Lee is interested in an aggregate of 259,254,000 Shares as a result of (1), (2) and (3) above, being approximately 41.30% of the issued share capital of the Company.
Ms. Chui holds an aggregate of 53,880,000 Shares (comprising 3,880,000 Shares personal interests and the 50,000,000 Shares jointly held with Ms. Tsui and Ms. Lee as trustees of the Charitable Foundation), representing approximately 8.58% of the issued share capital of the Company.
Ms. Tsui holds an aggregate of 51,000,000 Shares (comprising 1,000,000 Shares personal interests and the 50,000,000 Shares jointly held with Ms. Chui and Ms. Lee as trustees of the Charitable Foundation), representing approximately 8.13% of the issued share capital of the Company.
Ms. Lee holds an aggregate of 54,000,000 Shares (comprising 4,000,000 Shares personal interests and the 50,000,000 Shares jointly held with Ms. Chui and Ms. Tsui as trustees of the Charitable Foundation), representing approximately 8.60% of the issued share capital of the Company.
42,082,000 Shares representing approximately 6.70% of the issued share capital of the Company are held by various funds under the management of VPL, being the fund manager. Therefore, VPL is deemed to be interested in these Shares.
Mr. Cheah is a controlling shareholder of VPL. By virtue of Mr. Cheah’s interests in VPL, Mr. Cheah is deemed to be interested in 42,082,000 Shares.

(III) Substantial Shareholders in Other Members of the Group

Save as disclosed above, the Directors are not aware of any other person (other than a Director or chief executive of the Company, or his/her respective associate(s)) who, as at the Latest Practicable Date, was directly or indirectly interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other member of the Group.

(IV) Material interests

Save as disclosed under the section headed “Connected Transactions” in the report of the directors and in the financial statements in the 2006 annual report of the Company:

i. none of the Directors or the chief executive of the Company has any direct or indirect interest in any assets which have since 28 February 2006, being the date to which the latest published audited financial statements of the Group were made up, been acquired or disposed of by or leased to any member of the Group, or are proposed to be acquired or disposed of by or leased to any member of the Group; and
ii. there is no contract or arrangement subsisting at the Latest Practicable Date, in which any of the Directors is materially interested and which is significant in relation to the business of the Group.

— 32 —

GENERAL INFORMATION

APPENDIX II

3. SERVICE CONTRACTS

There is no existing or proposed service contract between any of the Directors or proposed Directors and the Company or any of its subsidiaries, which is not determinable within one year without payment of compensation other than by statutory compensation.

4. COMPETING INTERESTS

As at the Latest Practicable Date, none of the Directors and their respective associates had any interest in a business which compete or may compete with the business of the Group.

5. EXPERTS AND CONSENTS

The qualification of the experts who have given advice contained in this circular is set out as follows:

Name Qualification VXLFS a corporation licensed under the SFO to engage in type 6 (advising on corporate finance) regulated activity as defined under the SFO practising lawyers in the PRC (Guangdong Ying Jian Law Firm) Savills Valuation and chartered surveyors Professional Services Limited

Each of VXLFS, (Guangdong Ying Jian Law Firm*) and Savills Valuation and Professional Services Limited has given and has not withdrawn their written consents to the issue of this circular with the inclusion of their letters and references to their names in the form and context in which they appear.

As at the Latest Practicable Date, none of VXLFS, (Guangdong Ying Jian Law Firm*) and Savills Valuation and Professional Services Limited has any shareholding interests in any member of the Group or any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group.

* For identification purposes only

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GENERAL INFORMATION

APPENDIX II

6. MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, the Directors confirm that there has been no material adverse change in the financial or trading position of the Group since 28 February 2006, being the date to which the latest published audited accounts of the Group have been made up.

7. LITIGATION

As at the Latest Practicable Date, neither the Company nor any of its subsidiaries is engaged in any litigation or arbitration of material importance and, so far as the Directors are aware, no litigation or claim of material importance is pending or threatened against the Company or any of its subsidiaries.

8. GENERAL

(a) The secretary and the qualified accountant of the Company is Ms. Lau Yin Wan. Ms. Lau has over 17 years of experience in auditing, accounting and financial management. She is a fellow member of the Hong Kong Institute of Certified Public Accountants and the Association of Chartered Certified Accountants respectively.
(b) The registered office of the Company is Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda.
(c) The head office and principal place of business of the Company is 30th Floor, Hing Wai Centre, 7 Tin Wan Praya Road, Aberdeen, Hong Kong.
(d) The Bermuda share registrar of the Company is The Bank of Bermuda Limited at Bank of Bermuda Building, 6 Front Street, Hamilton HM11, Bermuda and its Hong Kong share registrar is Computershare Hong Kong Investor Services Ltd. at 1806-07, 18/F., Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong.
(e) The English text of this circular shall prevail over the Chinese text.

9. DOCUMENT AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection at the principal place of business of the Company in Hong Kong at 30th Floor, Hing Wai Centre, 7 Tin Wan Praya Road, Aberdeen, Hong Kong, during business hours (except Saturdays and public holidays) up to and including the date of the SGM.

(a) The memorandum of association and bye-laws of the Company;
(b) the annual reports of the Company for the two years ended 28 February 2005 and 28 February 2006 respectively;
(c) the interim report of the Company for the six months ended 31 August 2006;
(d) the Agreement;

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GENERAL INFORMATION

APPENDIX II

(e) the Stakeholder Agreement;
(f) the written consents referred to in the paragraph headed “Experts and consents” in this appendix;
(g) the letter from the Independent Board Committee dated 19 April 2007;
(h) the letter of advice from VXLFS, the Independent Financial Adviser, dated 19 April 2007; and
(i) the valuation report dated 19 April 2007 issued by Savills Valuation and Professional Services Limited relating to the Properties.

— 35 —

NOTICE OF SGM

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( Incorporated in the Bermuda with limited liability )

(Stock Code: 738)

NOTICE IS HEREBY GIVEN that a special general meeting of Le Saunda Holdings Ltd. (the “Company”) will be held on Thursday, 17 May 2007 at 4:30 p.m. at Elbrus Room, Pacific Place Conference Centre, Level 5, One Pacific Place, 88 Queensway, Hong Kong for the purpose of considering and, if thought fit, passing (with or without modifications) the following resolution as ordinary resolution of the Company:

ORDINARY RESOLUTION

“THAT:

(a) the conditional agreement for the sale and purchase of the entire equity interest in the registered and paid-up capital of (Fo Shan City Shun De District Xin Da Property Development Company Limited*) (“Xin Da Property”) dated 26 March 2007 (the “Agreement”) and entered into between (i) Le Saunda Real Estate Limited (the “Vendor”), a wholly owned subsidiary of the Company, as vendor, and (ii) Manful Regent Limited (the “Purchaser”), as purchaser, whereby, among other matters, the Vendor agreed to sell and the Purchaser agreed to purchase the entire equity interest in the registered and paid-up capital of Xin Da Property for a consideration of HK$32,395,000.00 subject to the terms and conditions of the Agreement, a copy of which has been produced to this meeting and marked “A” and signed by the Chairman of this meeting for the purpose of identification, be and the same is hereby unconditionally approved, confirmed and ratified; and
(b) the letter agreement dated 26 March 2007 (the “Stakeholder Agreement”) and entered into between (i) the Vendor, (ii) Wilkinson & Grist, the Vendor’s solicitors, and (iii) the Purchaser for the stakeholding of HK$29,155,500.00 as contemplated by the Agreement subject to the terms and conditions of the Stakeholder Agreement, a copy of which has been produced to this meeting and marked “B” and signed by the Chairman of this meeting for the purpose of identification, be and the same is hereby unconditionally approved, confirmed and ratified,

and that the transactions contemplated by the Agreement and the Stakeholder Agreement be and they are hereby generally and unconditionally approved and that the directors of the Company be and they are hereby authorised in the best interest of the Company to do such act or execute such documents for and on behalf of the Company by hand or, in case of execution of documents under seal, to do so jointly with either the secretary of the Company, a second director of the Company or such other

* For identification purposes only

— 36 —

NOTICE OF SGM

person or persons appointed by the directors of the Company for such purpose, as they shall consider necessary, appropriate, desirable or expedient for the implementation and completion of the transactions contemplated by the Agreement and the Stakeholder Agreement.”

On behalf of the Board Lau Yin Wan Company secretary

Hong Kong, 19 April 2007

As at the date of this circular, the Board comprises five executive Directors, namely Mr. Lee Tze Bun, Marces, Mr. Wan Tat Wah, Ms. Chui Kwan Ho, Jacky, Ms. Tsui Oi Kuen and Ms. Lau Shun Wai and three independent non-executive Directors, namely Mr. Lam Siu Lun, Simon, Mr. Law King Wan and Mr. Leung Wai Ki, George.

Principal place of business in Hong Kong:

30th Floor, Hing Wai Centre 7 Tin Wan Praya Road Aberdeen Hong Kong

Notes:

A form of proxy for use at the meeting is being despatched to the shareholders of the Company together with a copy of this circular.
The instrument appointing a proxy shall be in writing under the hand of the appointor or of his/her attorney duly authorized in writing or, if the appointor is a corporation, either under its seal or under the hand of any officer, attorney or other person duly authorized to sign the same.
Any shareholder entitled to attend and vote at the meeting convened by the above notice shall be entitled to appoint one or more proxies to attend and vote instead of him/her. A proxy need not be a member of the Company.
In order to be valid, this form of proxy, duly executed, and the power of attorney, or other authority (if any) under which it is signed or a notarially certified copy thereof, must reach the office of the Company’s Hong Kong registrar and transfer office, Computershare Hong Kong Investor Services Ltd., at 1806-07, 18/F., Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong as soon as possible and in any event not later than 48 hours before the time appointed for the meeting.

— 37 —

NOTICE OF SGM

Completion and deposit of the form of proxy will not preclude a shareholder of the Company from attending and voting in person at the meeting convened or any adjourned meeting and in such event, the form of proxy will be deemed to be revoked.
Where there are joint holders of any share of the Company, any one of such joint holders may vote, either in person or by proxy, in respect of such share as if he/she were solely entitled thereto, but if more than one of such joint holders are present at the meeting, the most senior shall alone be entitled to vote, whether in person or by proxy. For this purpose, seniority shall be determined by the order in which the names stand on the register of members of the Company in respect of the joint holding.

— 38 —

AI assistant

A & S Group (Holdings) Limited — Proxy Solicitation & Information Statement 2007

50130_rns_2007-04-20_bafa2c6a-d2b7-45bf-af91-98f9b471ccf7.pdf

Independent Financial Adviser

CONTENTS

DEFINITIONS

DEFINITIONS

(Stock Code: 738)

DISCLOSEABLE AND CONNECTED TRANSACTION

1. INTRODUCTION

LETTER FROM THE BOARD

2. THE AGREEMENT

I. Date

II. Parties

III. Subject matter of the Agreement

LETTER FROM THE BOARD

IV. Consideration

LETTER FROM THE BOARD

VI. Completion and adjustment of the Consideration

3. INFORMATION ON XIN DA PROPERTY

LETTER FROM THE BOARD

4. REASONS FOR THE DISPOSAL

5. USE OF PROCEEDS

6. FINANCIAL EFFECTS OF THE DISPOSAL

7. GENERAL

8. RECOMMENDATION

9. SGM

10. PROCEDURES FOR DEMANDING A POLL AT GENERAL MEETING

LETTER FROM THE BOARD

11. ADDITIONAL INFORMATION

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

DISCLOSEABLE AND CONNECTED TRANSACTION PROPOSED DISPOSAL OF THE ENTIRE EQUITY INTEREST IN THE REGISTERED AND PAID-UP CAPITAL OF XIN DA PROPERTY

Yours faithfully,

The Independent Board Committee

LETTER FROM VXLFS

VXL Financial Services Limited

DISCLOSEABLE AND CONNECTED TRANSACTION PROPOSED DISPOSAL OF THE ENTIRE EQUITY INTEREST IN THE REGISTERED AND PAID-UP CAPITAL OF XIN DA PROPERTY

I. INTRODUCTION

LETTER FROM VXLFS

II. PRINCIPAL FACTORS AND REASONS CONSIDERED

1. Background to and reasons for the Disposal

LETTER FROM VXLFS

2. Information of Xin Da Property

LETTER FROM VXLFS

3. The Consideration

LETTER FROM VXLFS

4. Financial impact to the Group upon completion of the Disposal

b) Working Capital

III. RECOMMENDATION

APPENDIX I

VALUATION REPORT

SUMMARY OF VALUES

GROUP II — Property interest held by the Group for development in the PRC

VALUATION CERTIFICATE

GROUP I — Property interest held by the Group for sale in the PRC

VALUATION CERTIFICATE

GROUP II — Property interest held for development by the Group in the PRC

1. RESPONSIBILITY STATEMENT

2. DISCLOSURE OF INTERESTS

(I) Interests of Directors and chief executives of the Company

Number of Shares

(II) Interests of Shareholders Discloseable Pursuant to the SFO

Number of Shares

(III) Substantial Shareholders in Other Members of the Group

(IV) Material interests

3. SERVICE CONTRACTS

4. COMPETING INTERESTS

5. EXPERTS AND CONSENTS

6. MATERIAL ADVERSE CHANGE

7. LITIGATION

8. GENERAL

9. DOCUMENT AVAILABLE FOR INSPECTION

( Incorporated in the Bermuda with limited liability )

(Stock Code: 738)

ORDINARY RESOLUTION

NOTICE OF SGM

Notes:

More from A & S Group (Holdings) Limited

A & S Group (Holdings) Limited Proxy Solicitation & Information Statement 2007