AAC Technologies Holdings Inc. — AGM Information 2007

Apr 27, 2007

IMPORTANT

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

If you have sold or transferred all your shares in AAC Acoustic Technologies Holdings Inc., you should at once hand this circular and the accompanying form of proxy to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or 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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AAC ACOUSTIC TECHNOLOGIES HOLDINGS INC .

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 2018)

GENERAL MANDATES TO ISSUE AND REPURCHASE SHARES, RE-ELECTIONS OF DIRECTORS AND NOTICE OF ANNUAL GENERAL MEETING

Resolutions will be proposed at the Annual General Meeting of AAC Acoustic Technologies Holdings Inc. to be held Alexandra Room, 2nd Floor, Mandarin Oriental, Hong Kong Limited, 5 Connaught Road, Central Hong Kong on Monday, 21st May 2007 at 10:30 a.m. to approve the matters referred to in this circular. A notice convening the Annual General Meeting is set out on pages 12 to 14 of this circular. Whether or not you are able to attend the meeting in person, you are requested to complete and return the form of proxy enclosed with this circular in accordance with the instructions printed thereon as soon as possible and in any event not less than 48 hours before the time appointed for holding the annual general meeting or any adjournment thereof. Completion and delivery of the form of proxy will not preclude you from attending and voting at the annual general meeting or any adjournment thereof should you so wish.

27th April 2007

CONTENTS

	Page
Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Letter from the Board
1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2. General Mandate to Issue Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3. General Mandate to Repurchase Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4. Extend General Mandate to Issue Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
5. Re-elections of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
6. Annual General Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
7. Procedures by which a Poll may be demanded . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
8. Responsibility Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
9. Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Appendix I — Explanatory Statement of the Share Repurchase Mandate. . . . . . . . . . . . . . . . 6
Appendix II — Details of the retiring Directors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Notice of Annual General Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

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DEFINITIONS

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

meaning:
‘‘AGM’’	the annual general meeting of the Company to be held at Alexandra
	Room, 2nd Floor, Mandarin Oriental, Hong Kong Limited,
	5 Connaught Road Central, Hong Kong, on 21st May 2007 at 10:30 a.m.
	to consider and, if appropriate, to approve the resolutions as set out in
	the notice of AGM;
‘‘Articles of Association’’	the articles of association of the Company;
‘‘Board’’	the board of Directors;
‘‘Company’’	AAC Acoustic Technologies Holdings Inc., a company incorporated
	in Cayman Islands with limited liability, the shares of which are listed
	on the main board of the Stock Exchange;
‘‘Director(s)’’	the director(s) of the Company;
‘‘Group’’	the Company and its subsidiaries from time to time;
‘‘HK$’’	Hong Kong dollars, the lawful currency of Hong Kong;
‘‘Issue Mandate’’	the proposed issue mandate to be granted to the Directors as further
	described in the section headed ‘‘General Mandate to Issue Shares’’ of
	this circular;
‘‘Latest Practicable Date’’	24th April 2007, being the latest practicable date prior to the printing
	of this circular for ascertaining certain information in this circular;
‘‘Listing Rules’’	the Rules Governing the Listing of Securities on the Stock Exchange;
‘‘Repurchase Mandate’’	the proposed repurchase mandate be granted to the Directors as further
	described in the section headed ‘‘General Mandate to Repurchase
	Shares’’ of this circular;
‘‘SFO’’	the Securities and Futures Ordinance (Cap.571 of the Laws of Hong
	Kong);
‘‘Shareholder(s)’’	holders of Shares;
‘‘Share(s)’’	ordinary share(s) of US$0.01 each in the share capital of the
	Company;
‘‘Stock Exchange’’	The Stock Exchange of Hong Kong Limited;
‘‘Takeovers Code’’	The Codes on Takeovers and Mergers and Share Repurchases
	approved by the Securities and Futures Commission as amended from
	time to time; and
‘‘%’’	per cent.

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LETTER FROM THE BOARD

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AAC ACOUSTIC TECHNOLOGIES HOLDINGS INC.

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 2018)

Executive Director: Mr. Benjamin Zhengmin Pan (Chief Executive Officer) Non-executive Directors: Ms. Ingrid Chunyuan Wu Mr. Pei Kang Dr. Thomas Kalon Ng

Independent non-executive Directors: Mr. Koh Boon Hwee (Chairman) Dr. Dick Mei Chang Mr. Mok Joe Kuen Richard

Registered office in the Cayman Islands: Cricket Square Hutchins Drive P.O. Box 2681 Grand Cayman KY1-1111 Cayman Islands

Principal place of business in Hong Kong: Unit 1409, Peninsula Square 18 Sung On Street Hunghom Hong Kong 27th April 2007

To the Shareholders,

Dear Sir or Madam,

GENERAL MANDATES TO ISSUE AND REPURCHASE SHARES, RE-ELECTIONS OF DIRECTORS AND NOTICE OF ANNUAL GENERAL MEETING

1. INTRODUCTION

The purpose of this circular is to provide you with information in respect of the ordinary resolutions to be proposed at the AGM for the approval of (a) the Issue Mandate; (b) the Repurchase Mandate; (c) the extension of the Issue Mandate; and (d) the re-elections of Directors. This circular contains the explanatory statement in compliance with the Listing Rules and gives all the information reasonably necessary to enable the Shareholders to make informed decisions on whether to vote for or against the resolutions approving the Company to issue and repurchase Shares, to extend the Issue Mandate and to re-elect Directors.

2. GENERAL MANDATE TO ISSUE SHARES

At the annual general meeting of the Company held on 29th May 2006, an ordinary resolution was passed by the Shareholders granting the existing issue mandate to the Directors to issue Shares. Such mandate will be lapsed at the conclusion of the AGM.

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LETTER FROM THE BOARD

An ordinary resolution will be proposed at the AGM to revoke the existing issue mandate and to grant the issue mandate to the Directors, i.e. a general and unconditional mandate to exercise all the powers of the Company to allot, issue and deal with, otherwise than by way of rights issue or any option scheme or similar arrangements for the time being adopted for the grant or issue to officers and/or employees of the Company and/or any of its subsidiaries of shares or rights to acquire shares in the Company or any shares of the Company issued as scrip dividends pursuant to the Articles of Association, Shares with an aggregate nominal value not exceeding 20% of the aggregate nominal amount of the issued share capital of the Company at the date of the passing of such resolution (the ‘‘Issue Mandate’’). The Issue Mandate, if granted, will remain in effect until the earliest of (i) the conclusion of the next annual general meeting of the Company; (ii) the expiration of the period within which the next annual general meeting of the Company is required to be held by the articles of association of the Company or any applicable laws of the Cayman Islands; and (iii) the date upon which such authority is revoked or varied by an ordinary resolution of the Shareholders in a general meeting of the Company.

3. GENERAL MANDATE TO REPURCHASE SHARES

At the annual general meeting of the Company held on 29th May 2006, an ordinary resolution was passed by the Shareholders granting the existing repurchase mandate to the Directors to repurchase shares to the Company. Such mandate will be lapsed at the conclusion of the AGM.

An ordinary resolution will be proposed at the AGM to revoke the existing repurchase mandate and to grant the repurchase mandate to the Directors, i.e. a general and unconditional mandate to exercise all the powers of the Company to repurchase Shares subject to the maximum number of shares of up to 10% of the aggregate nominal amount of the issued share capital of the Company at the date of passing of such resolution (the ‘‘Repurchase Mandate’’). The Repurchase Mandate, if granted, will remain in effect until the earliest of (i) the conclusion of the next annual general meeting of the Company; (ii) the expiration of the period within which the next annual general meeting of the Company is required to be held by thearticles of association of the Company or any applicable laws of the Cayman Islands; and (iii) the date upon which such authority is revoked or varied by an ordinary resolution of the Shareholders in a general meeting of the Company.

4. EXTEND GENERAL MANDATE TO ISSUE SHARES

Conditional upon the passing of the resolutions to grant the Issue Mandate and the Repurchase Mandate, an ordinary resolution will be proposed at the AGM to extend the Issue Mandate by an amount representing the aggregate nominal amount of the Shares of the Company repurchased by the Company pursuant to the Repurchase Mandate provided that such extended amount shall not exceed 10% of the aggregate nominal amount of the issued share capital of the Company at the date of passing the resolution for approving the Issue Mandate.

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LETTER FROM THE BOARD

5. RE-ELECTIONS OF DIRECTORS

In accordance with article 86(3) of the Article of Association, Mr. Pei Kang will hold the office only until the AGM, and being eligible, offer himself for re-election at the AGM.

In accordance with article 87 of the Article of Association, Mr. Benjamin Zhengmin Pan and Ms. Ingrid Chunyuan Wu will retire from office by rotation, and being eligible, offer themselves for re-election at the AGM.

Details of the retiring Directors which are required to be disclosed by the Listing Rules are set out in appendix II to this circular.

6. ANNUAL GENERAL MEETING

The notice of the AGM is set out on pages 12 to 14 of this circular. At the AGM, resolutions will be proposed to approve, inter alia, the granting of the Issue Mandate and Repurchase Mandate and the extension of the Issue Mandate by the addition thereto of the number of Shares repurchased pursuant to the Repurchase Mandate and the re-elections of Directors.

A form of proxy for use at the AGM is enclosed with this circular and such form of proxy is also published on the website of the Stock Exchange (www.hkex.com.hk). In order to be valid, the form of proxy must be completed and signed in accordance with the instructions printed thereon and deposited at the Company’s Hong Kong branch share registrar, Investor Communications Centre of Computershare Hong Kong Investor Services Limited at Rooms 1806–1807, 18th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, together with a power of attorney or other authority, if any, under which it is signed or a notarially certified copy of that power of authority, not less than 48 hours before the time appointed for holding the meeting or adjourned meeting. The completion and return of the form of proxy will not preclude any Shareholder from attending and voting at the meeting if so wished.

7. PROCEDURES BY WHICH A POLL MAY BE DEMANDED

Pursuant to article 66 of the Articles of Association, a resolution put to the vote of a meeting shall be decided on a show of hands unless voting by way of a poll is required by the rules of the Designed Stock Exchange (as defined in the Articles of Association) 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 that right; or

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LETTER FROM THE BOARD

• (e) if required by the rules of the Designated Stock Exchange (as defined in the Articles of Association), by any Director or Directors who, individually or collectively, hold proxies in respect of shares representing five per cent. (5%) or more of the total voting rights at such meeting.

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

To the best of the knowledge and belief of the Board having made due and careful enquiries, none of the Shareholders is required to abstain from voting at the forthcoming AGM under the Listing Rules.

8. RESPONSIBILITY STATEMENT

This circular includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. 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 herein misleading.

9. RECOMMENDATION

The Directors consider that the Issue Mandate, the Repurchase Mandate, the extension of the Issue Mandate and the re-elections of Directors are in the best interests of the Company and the Shareholders. The Directors therefore recommend the Shareholders to vote in favour of the relevant resolutions as set out in the notice of the AGM on pages 12 to 14.

By Order of the Board AAC ACOUSTIC TECHNOLOGIES HOLDINGS INC. Koh Boon Hwee Chairman

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APPENDIX I EXPLANATORY STATEMENT OF THE SHARE REPURCHASE MANDATE

The following explanatory statement contains all the information required pursuant to Rule 10.06 of the Listing Rules to be given to all the Shareholders relating to the resolution to be proposed at the AGM authorising the Repurchase Mandate.

1. EXERCISE OF THE REPURCHASE MANDATE

As at the Latest Practicable Date, the issued ordinary share capital of the Company comprised of 1,248,000,000 Shares. Subject to the passing of the ordinary resolution approving the Repurchase Mandate and on the basis that no further Shares are issued or repurchased after the Latest Practicable Date and up to the date of passing of such resolution, the Directors would be authorised to repurchase up to 124,800,000 Shares (being 10% of the Shares in issue) during the period up to the next annual general meeting in 2008 or the expiration of the period within which the next annual general meeting of the Company is required to be held by the articles of association of the Company or any applicable laws of the Cayman Islands or the revocation or variation of the Repurchase Mandate by an ordinary resolution of the Shareholders in a general meeting of the Company, whichever occurs first.

2. REASONS FOR REPURCHASE

The Directors have no present intention to repurchase any Shares but consider that the Repurchase Mandate will provide the Company with the flexibility to make such repurchases when appropriate and beneficial to the Company. Such repurchases may, depending on market conditions and funding arrangements at the time, lead to an enhancement of the value of the net assets and/or earnings per Share of the Company.

3. IMPACT ON THE WORKING CAPITAL OR GEARING POSITION

As compared with the financial position of the Company as disclosed in its most recent published audited consolidated accounts as at 31st December 2006, the Directors consider that there might be a material adverse impact on the working capital or gearing position of the Company in the event that the proposed share repurchases were to be carried out in full during the proposed re-purchase period. The Directors do not propose to exercise the Repurchase Mandate to such an extent as would, in the circumstances, have a material adverse effect on the working capital or gearing position of the Company.

4. FUNDING OF REPURCHASE

The Directors recognized that the repurchasing of Shares must be made by funds legally available for such purpose in accordance with the memorandum and articles of association of the Company and the applicable laws of the Cayman Islands and the Listing Rules. The Companies laws (2004 Revision) of the Cayman Islands (the ‘‘Laws’’) provide that a share repurchase by the Company may only be made out of profits of the Company or out of the proceeds of a fresh issue of shares made for the purpose or, if so authorised by the articles of association of the Company and subject to the provisions of the Laws, out of capital. Any premium payable on a repurchase over the par value of the Shares repurchased or conditionally or unconditionally to be purchased must be provided for out of profits of the Company or out of the Company’s share premium account or, if so authorised by the articles of association of the Company and subject to the provisions of the Laws, out of capital.

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APPENDIX I EXPLANATORY STATEMENT OF THE SHARE REPURCHASE MANDATE

5. DIRECTORS, THEIR ASSOCIATES AND CONNECTED PERSONS

None of the Directors nor, to the best of their knowledge having made all reasonable enquiries, any of their associates (as defined in the Listing Rules), has any present intention, in the event that the Repurchase Mandate is approved by the Shareholders, to sell Shares to the Company or its subsidiaries.

No connected person (as defined in the Listing Rules) of the Company has notified the Company that he/she has a present intention to sell Shares to the Company or its subsidiaries, or has undertaken not to do so in the event that the Repurchase Mandate is approved by the Shareholders.

6. UNDERTAKING OF THE DIRECTORS

The Directors have undertaken to the Stock Exchange that they will exercise the powers of the Company to make repurchases of its Shares pursuant to the Repurchase Mandate and in accordance with the Listing Rules and all applicable laws of the Cayman Islands.

7. EFFECT OF TAKEOVERS CODE

If on exercise of the power to repurchase Shares pursuant to the Repurchase Mandate, a Shareholder’s proportionate interest in the voting rights of the Company increases, such an increase will be treated as an acquisition for the purpose of Rule 32 of the Takeovers Code. As a result, a Shareholder or a group of Shareholders acting in concert could obtain or consolidate control of the Company and become obliged to make a mandatory offer in accordance with Rules 26 and 32 of the Takeovers Code.

As at the Latest Practicable Date, Mr. Benjamin Zhengmin Pan (‘‘Mr. Pan’’), as a Director, beneficially owns 161,632,926 Shares. Mr. Pan is taken to be interested in 51,439,440 Shares which are beneficially owned by Silver Island Limited, a company 100% owned by Mr. Pan, 72,108,142 Shares as trustee of the Benjamin Zhengmin Pan 2005 Annuity Trust and 8,656,996 Shares which are beneficially owned by his children who are under the age of 18 as beneficiaries of the Pan 2005 Irrevocable Trust under the SFO. Ms. Ingrid Chunyuan Wu, the wife of Mr. Pan and also a Director, beneficially owns 285,049,028 Shares. Ms. Wu is taken to be interested in 72,108,142 Shares as trustee of the Ingrid Chunyuan Wu 2005 Annuity Trust and 8,656,996 Shares which are beneficially owned by her children who are under the age of 18 as beneficiaries of the Pan 2005 Irrevocable Trust under the SFO. For the purpose of the Takeovers Code, Mr. Pan and Ms. Wu are concert parties and are taken to have interests in a total of 578,886,532 Shares representing approximately 46.39% of the issued share capital of the Company.

In the event that the Directors exercise in full the power to repurchase Shares pursuant to the Repurchase Mandate which is proposed to be granted by the Shareholders, then (if the present shareholdings otherwise remained the same) the aggregate interests of both Mr. Pan and Ms. Wu would be increased to approximately 51.54% of the issued share capital of the Company. In the opinion of the Directors, such increase would give rise to an obligation to make a mandatory offer under Rules 26 and 32 of the Takeovers Code. In any event, the Directors do not intend to exercise the Repurchase Mandate to an extent which will trigger off the mandatory offer requirement pursuant to the rules of the Takeovers Code.

The Company will not purchase Shares if that purchase would result in the number of Shares which are in the hands of the public falling below 25% of the Company’s issued share capital.

Save as disclosed above, the Directors are not aware of any Shareholders, or a group of Shareholders acting in concert, who may become obliged to make a mandatory offer in accordance with Rules 26 and 32 of the Takeovers Code in the event that the Directors exercise the power to repurchase Shares pursuant to the Repurchase Mandate.

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APPENDIX I EXPLANATORY STATEMENT OF THE SHARE REPURCHASE MANDATE

8. SHARE PURCHASE MADE BY THE COMPANY

The Company has not repurchased any of its Shares during the six months preceding the Latest Practicable Date.

9. SHARE PRICES

During the previous twelve months before the Latest Practicable Date, the highest and lowest trade prices of the Shares on the Stock Exchange were as follows:

prices of the Shares on the Stock Exchange were as follows:
	Per Share
Months	Highest	Lowest
	HK$	HK$
2006
April	9.4000	7.3500
May	9.2000	7.4500
June	9.0500	6.5000
July	8.3500	6.9500
August	8.7300	7.2800
September	9.4900	8.3100
October	9.7000	8.4500
November	9.3400	7.5700
December	8.5500	7.2000
2007
January	8.2500	6.2400
February	8.0000	6.8000
March	8.2500	8.0000
April (up to the Latest Practicable Date)	7.7400	7.4000

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DETAILS OF THE RETIRING DIRECTORS

APPENDIX II

The following sets out the details of the directors who will retire and, being eligible, offer themselves for re-election at the AGM pursuant to the Articles of Association:

BIOGRAPHICAL INFORMATION

Executive Directors

Mr. Benjamin Zhengmin Pan (‘‘Mr. Pan’’) , aged 38, is an Executive Director and Chief Executive Officer of the Company. Mr. Pan co-founded our Group in 1993. Mr. Pan is responsible for providing strategic direction and leadership and for developing and implementing our Group’s strategic objectives and business plans. Specifically, Mr. Pan is responsible for overseeing the coordination between sales and marketing, research and development, manufacturing, and other functions including quality assurance, finance and human resources. Mr. Pan has been instrumental in spearheading our Group’s expansion outside the People’s Republic of China (‘‘PRC’’ or ‘‘China’’). In 1996, he co-founded and was appointed President and Chief Executive Officer of American Audio Component Inc. (‘‘AAC U.S.’’). Mr. Pan also co-founded Shenzhen Meiou Electronics Corporation (‘‘Shenzhen Meiou’’) in 1998 and American Audio Components (Changzhou) Co., Ltd. (‘‘Changzhou AAC’’) in 2000. In addition to his experience in sales and marketing, manufacturing and management, he has also been instrumental in leading our research and development strategy, and developed a number of patents used in the design and manufacturing of our polyphonic speakers, miniature receivers, transducers and Electret Condenser Microphones. Mr. Pan graduated from the 江蘇省武 進師範學校 (Jiangsu Province Wujin Teacher School) in 1987. Mr. Pan is the spouse of Ms. Ingrid Chunyuan Wu, a Non-executive Director and a substantial shareholder of the Company.

Save as disclosed above, Mr. Pan does not have any relationships with other Directors, senior management, substantial shareholders or controlling shareholders (as defined in the Listing Rules) of the Group. Save as aforesaid, Mr. Pan did not hold other directorship in any public listed companies in the last three years but he has directorship in a number of subsidiaries of the Company.

Mr. Pan has entered into a service agreement with the Company for a term of three years commencing from 15th July 2005, which continues thereafter until terminated by either party giving not less than 60 days’ notice in writing or 60 days’ payment in lieu of notice to the other party. He is entitled to a basic salary of approximately US$200,000 per year and will be paid monthly in arrears which is determined upon negotiation between Mr. Pan and the Company at arm’s length on the basis of his previous experience, professional qualifications, responsibilities to be involved in the Company and the amount of time devoted to the Company’s business as well as the current financial position of the Company and the prevailing market conditions and which is subject to review periodically as determined by the Company.

Non-executive Directors

Ms. Ingrid Chunyuan Wu (‘‘Ms. Wu’’) , aged 36, is a Non-executive Director of the Company. Ms. Wu co-founded our Group in 1993. In 1996, she co-founded and later became Chief Financial Officer of AAC U.S.. She also co-founded Shenzhen Meiou in 1998, Changzhou AAC in 2000, and YEC Electronics Limited in 2001. Before Mr. Du Kuang-Yang joined the Group as our Chief Operating Officer in March 2005, Ms. Wu was responsible for the day-to-day operations of these companies. Ms. Wu graduated from 常州衛生學校 (Changzhou School of Public Health) in 1989. Ms. Wu is the spouse of Mr. Pan, the Executive Director, Chief Executive Officer and a substantial shareholder of the Company.

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DETAILS OF THE RETIRING DIRECTORS

APPENDIX II

Save as disclosed above, Ms. Wu does not have any relationships with other Directors, senior management, substantial shareholders, or controlling shareholders (as defined in the Listing Rules) of the Group. Save as aforesaid, Ms. Wu did not hold other directorship in any public listed companies in the last three years but she has directorship in a number of subsidiaries of the Company.

Ms. Wu has entered into a letter of appointment with the Company for a term of two years commencing from 16th April 2005, which continues thereafter until terminated by either party giving at least one month’s notice in writing or such shorter period as both parties may agree. She is entitled to the director’s fee of HK$110,000 per year or such other sum as the Company may from time to time decide, which is determined upon negotiation between Ms. Wu and the Company at arm’s length on the basis of her previous experience, professional qualifications, responsibilities to be involved in the Company and the amount of time devoted to the Company’s business as well as the current financial position of the Company and the prevailing market conditions.

Mr. Pei Kang (“Mr. Kang”) , aged 49, is a Non-executive Director of the Company. Mr. Kang has been appointed to our Board since February 2007. He has over 25 years of working experience in the technology industry, including over 18 years of experience in various technical and management positions with IBM. He is currently a managing partner of Chengwei Ventures Shanghai LLC, a venture capital investment firm that focuses on investing in companies in China. Mr. Kang holds a Bachelor of Science degree from Chinese Culture University, Taipei.

Mr. Kang does not have any relationship with any other Directors, senior management or substantial shareholders or controlling shareholders (as defined in the Listing Rules) of the Group. Saved as aforesaid, Mr. Kang did not hold any other directorship in any public listed company for the last three years and he does not hold any other position in the Group.

Mr. Kang has entered into a letter of appointment with the Company for a term of two years commencing from 15th February 2007, which continues thereafter until terminated by either party giving at least one month’s notice in writing or such shorter period as both parties may agree. He is entitled to a director’s fee of HK$95,000 per year or such other sum as the Company may from time to time decide, which is determined upon negotiation between Mr. Kang and the Company at arm’s length on the basis of his previous experience, professional qualifications, responsibilities to be involved in the Company and the amount of time devoted to the Company’s business as well as the current financial position of the Company and the prevailing market conditions.

Saved as disclosed above, there are no other matters in relation to the proposed re-elections that needed to be brought to the attention of the Stock Exchange or the Shareholders. There is no information relating to all the retiring Directors that is required to be disclosed pursuant to Rules 13.51(2)(h)–(v) of the Listing Rules.

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DETAILS OF THE RETIRING DIRECTORS

APPENDIX II

Interests in Shares

As at the Latest Practicable Date, the interests of the retiring Directors in the Shares (within the meaning of Divisions 7 and 8 of Part XV of the SFO), were as follows:

			Approximate
	Capacity/		percentage of
Name of Director	Nature of Interest	Number of Shares	shareholding
Mr. Benjamin Zhengmin Pan(1)	Beneficial owner,	293,837,504	23.54%
	interest of children
	under 18; trustee and
	interest of controlled
	corporation
Ms. Ingrid Chunyuan Wu(2)	Beneficial owner,	293,706,024	23.53%
	interest of children
	under 18 and trustee
Mr. Pei Kang	Beneficial owner	12,000	0.001%

Notes:

• (1) Mr. Benjamin Zhengmin Pan (‘‘Mr. Pan’’) beneficially owns 161,632,926 shares. Mr. Pan is also deemed or taken to be interested in the following shares for the purposes of the SFO:

• (i) 51,439,440 shares which are beneficially owned by Silver Island Limited, a company 100% owned by Mr. Pan;

• (ii) 72,108,142 shares which are deemed to be beneficially owned by Mr. Pan, as trustee of the Benjamin Zhengmin Pan 2005 Annuity Trust dated 18th June 2005;

• (iii) 8,656,996 shares which are deemed to be beneficially owned by Mr. Pan and Ms. Ingrid Chunyuan Wu’s (‘‘Ms. Wu’’) descendents, as beneficiaries of the Pan 2005 Irrevocable Trust dated 10th May 2005. Both children of Mr. Pan and Ms. Wu are under the age of 18; and

• (2) Ms. Wu beneficially owns 212,940,886 shares. Ms. Wu is also deemed or taken to be interested in the following shares for the purposes of the SFO:

• (i) 72,108,142 shares which are deemed to be beneficially owned by Ms. Wu, as trustee of the Ingrid Chunyuan Wu 2005 Annuity Trust dated 18th June 2005;

• (ii) 8,656,996 shares which are deemed to be beneficially owned by Mr. Pan and Ms. Wu’s descendents, as beneficiaries of the Pan 2005 Irrevocable Trust dated 10th May 2005. Both children of Mr. Pan and Ms. Wu are under the age of 18.

Save as disclosed in this circular, as at the Latest Practicable Date, none of the retiring Directors had any interests or short positions 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) which would be 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 position which they are deemed or taken to have under such provisions of the SFO, or which would be required, pursuant to Section 352 of the SFO, to be entered in the register referred to therein, or otherwise notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers in the Listing Rules.

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NOTICE OF ANNUAL GENERAL MEETING

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AAC ACOUSTIC TECHNOLOGIES HOLDINGS INC .

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 2018)

NOTICE IS HEREBY GIVEN that the Annual General Meeting of AAC Acoustic Technologies Holdings Inc. (the ‘‘Company’’) will be held at Alexandra Room, 2nd Floor, Mandarin Oriental, Hong Kong Limited, 5 Connaught Road, Central, Hong Kong, on Monday, 21st May 2007 at 10:30 a.m. for the following purposes:

1. To receive and consider the audited financial statements and the reports of the directors and the auditors for the year ended 31st December 2006.

2. To re-elect directors and to authorize the board of directors to fix their remuneration.

3. To re-appoint auditors and to authorize the board of directors to fix their remuneration.

4. As special business, to consider, and if thought fit, pass the following ordinary resolutions:

ORDINARY RESOLUTIONS

1. ‘‘ THAT:

2. (a) subject to paragraph (c) below, the exercise by the directors of the Company during the Relevant Period (as hereinafter defined) of all the powers of the Company to allot, issue and deal with additional shares in the capital of the Company and to make or grant offers, agreements and options which might require the exercise of such power be and is hereby generally and unconditionally approved;

3. (b) the approval in paragraph (a) shall authorize the directors of the Company during the Relevant Period to make or grant offers, agreements and options which might require the exercise of such power after the end of the Relevant Period;

4. (c) the aggregate nominal amount of share capital allotted and issued or agreed conditionally or unconditionally to be allotted (whether pursuant to an option or otherwise) by the directors of the Company pursuant to the approval in paragraph (a), otherwise than pursuant to (i) a Rights Issue (as hereinafter defined) or (ii) the exercise of the subscription rights under the share option scheme of the Company or (iii) an issue of shares as scrip dividends pursuant to the memorandum and articles of association of the Company from time to time shall not exceed 20% of the aggregate nominal amount of the share capital of the Company in issue as at the date of this resolution and the said approval shall be limited accordingly; and

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NOTICE OF ANNUAL GENERAL MEETING

• (d) for the purposes of this resolution:

‘‘Relevant Period’’ means the period from the passing of this resolution until whichever is the earliest of:

• (i) the conclusion of the next annual general meeting of the Company;

• (ii) the expiration of the period within which the next annual general meeting of the Company is required by the articles of association of the Company or any applicable laws of the Cayman Islands to be held; and

• (iii) the revocation or variation of this resolution by an ordinary resolution of the shareholders of the Company in general meeting.

‘‘Rights Issue’’ means an offer of shares open for a period fixed by the directors of the Company to holders of shares on the register on a fixed record date in proportion to their then holdings of such shares (subject to such exclusion or other arrangements as the directors of the Company may deem necessary or expedient in relation to fractional entitlements or having regard to any restrictions or obligations under the law of, or the requirements of any recognized regulatory body or any stock exchange in any territory applicable to the Company).’’

1. ‘‘ THAT:

2. (a) subject to paragraph (b) below, the exercise by the directors of the Company during the Relevant Period of all powers of the Company to purchase its own shares, subject to and in accordance with all applicable laws, be and is hereby generally and unconditionally approved;

3. (b) the aggregate nominal amount of shares of the Company purchased by the Company pursuant to the approval in paragraph (a) during the Relevant Period shall not exceed 10% of the aggregate nominal amount of the share capital of the Company in issue as at the date of this resolution and the said approval be limited accordingly; and

4. (c) for the purposes of this resolution:

‘‘Relevant Period’’ means the period from the passing of this resolution until whichever is the earliest of:

(i) the conclusion of the next annual general meeting of the Company;

• (ii) the expiration of the period within which the next annual general meeting of the Company is required by the articles of association of the Company or any applicable laws of the Cayman Islands to be held; and

• (iii) the revocation or variation of this resolution by an ordinary resolution of the shareholders of the Company in general meeting.’’

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NOTICE OF ANNUAL GENERAL MEETING

1. ‘‘ THAT conditional upon resolutions nos. 4 and 5 above being passed, the aggregate nominal amount of shares in the capital of the Company which are repurchased by the Company under the authority granted to the directors as mentioned in resolution no. 5 above shall be added to the aggregate nominal amount of shares that may be allotted or agreed conditionally or unconditionally to be allotted by the directors of the Company pursuant to resolution no. 4 above.’’

By Order of the Board AAC ACOUSTIC TECHNOLOGIES HOLDINGS INC. Koh Boon Hwee Chairman

Hong Kong, 27th April 2007

Notes:

• (1) A member of the Company entitled to attend and vote at the meeting convened by the above notice is entitled to appoint one or more proxies to attend and, in the event of a poll, vote in his stead. A proxy need not be a member of the Company. In order to be valid, the form of proxy must be deposited at the Company’s Hong Kong branch share registrar, Investor Communications Centre of Computershare Hong Kong Investor Services Limited at Rooms 1806–1807, 18th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong together with a power of attorney or other authority, if any, under which it is signed or a notarially certified copy of that power or authority, not less than 48 hours before the time for holding the meeting or adjourned meeting.

• (2) Completion and return of the form of proxy will not preclude members from attending and voting in person at the annual general meeting or any adjournment.

• (3) The Register of Members of the Company will be closed from 16th May 2007 to 21st May 2007, both days inclusive, during which period no transfers of shares shall be effected. In order to qualify for attending the forthcoming Annual General Meeting, all transfers of shares accompanied by the relevant share certificates and transfer forms, must be lodged with the Company’s Hong Kong branch share registrar, Computershare Hong Kong Investor Services Limited at Shops 1712–1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong for registration not later than 4:30 p.m. on 15th May 2007.

• (4) As at the date of this notice, the Board of Directors of the Company comprises an executive director, Mr. Benjamin Zhengmin Pan; three non-executive directors, Ms. Ingrid Chunyuan Wu, Mr. Pei Kang and Dr. Thomas Kalon Ng; and three independent non-executive directors, Mr. Koh Boon Hwee, Dr. Dick Mei Chang and Mr. Mok Joe Kuen Richard.

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