B & S International Holdings Ltd. — Proxy Solicitation & Information Statement 2007

Jul 11, 2007

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action you should take, 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 VXL Capital Limited (the “Company”), you should at once hand this circular and the accompanying form of proxy to the purchaser or the transferee or the bank, stockbroker or other registered dealer or other agent whom the sale or transfer was affected 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.

This circular does not constitute an offer or invitation to subscribe for or purchase any securities nor is it circulated to invite any such offer or invitation.

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(Incorporated in Hong Kong with limited liability) (Stock Code: 727)

PROPOSED SHARES SUBDIVISION, CHANGE IN BOARD LOT SIZE AND

BONUS WARRANTS ISSUE

A notice convening the EGM (as defined herein) of the Company to be held at 10:00 a.m. on Monday, 6 August 2007 (or any adjournment thereof) at Suite 2707-8, One Exchange Square, 8 Connaught Place, Central, Hong Kong is set out on pages 22 to 23 of this circular. Whether or not you are able to attend the meeting in person, you are requested to complete the form of proxy in accordance with the instructions printed thereon and return the same to the Company’s registered office at Suite 2707-8, One Exchange Square, 8 Connaught Place, Central, Hong Kong or to the Share Registrar of the Company, Computershare Hong Kong Investor Services Limited, at Rooms 1806-7, 18th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, as soon as possible but in any event not less than 48 hours before the time appointed for the holding of the meeting or any adjourned meeting (as the case may be). Completion and delivery of the form of proxy will not preclude you from attending and voting at the meeting if you so wish.

12 July 2007

CONTENTS

		Page
Definitions . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the	Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
Appendix –	Summary of The Principal Terms of the Warrants. . . . . . . . . . . . . . . . . . . . . . . . .	12
Notice of EGM	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	22

i

DEFINITIONS

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

“Announcement”	the announcement of the Company dated 21 June 2007;
“Articles”	the Articles of Association of the Company;
“Board”	the board of Directors;
“Bonus Warrants Issue”	the conditional bonus issue of Warrants by the Company to the
	Qualifying Shareholders as described in this circular;
“CCASS”	Central Clearing and Settlement System, established and operated
	by HKSCC;
“Company”	VXL Capital Limited, a company incorporated in Hong Kong with
	limited liability, the Shares of which are listed on the Main Board;
“Directors”	the directors of the Company;
“EGM”	the extraordinary general meeting proposed to be convened and
	held by the Company at 10:00 am on Monday, 6 August 2007 (or
	any adjournment thereof) at 2707-8, One Exchange Square, 8
	Connaught Place, Central, Hong Kong, for the purpose of approving
	the Shares Subdivision and the Bonus Warrants Issue, notice of
	which is set out on pages 22 and 23 of this circular;
“Group”	the Company and its subsidiaries;
“HKSCC”	Hong Kong Securities Clearing Company Limited;
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong;
“Hong Kong”	the Hong Kong Special Administrative Region of the PRC;
“Initial Subscription Price”	the initial subscription price for each Warrant, being HK$0.95 per
	Subdivided Share, subject to adjustment, payable in cash;
“Last Trading Day”	18 June 2007, being the last day on which the Shares were traded
	on the Stock Exchange prior to suspension of trading in the Shares
	pending release of the Announcement;
“Latest Practicable Date”	9 July 2007, being the latest practicable date prior to the printing
	of this circular for ascertaining certain information contained herein;
“Listing Committee”	the Listing Committee of the Stock Exchange;
“Listing Rules”	The Rules Governing the Listing of Securities on the Stock
	Exchange;
“Main Board”	the main board of the Stock Exchange;
“Overseas Shareholders”	the Shareholders whose addresses, as shown in the Register of
	Members at the close of business on the Record date, are outside
	Hong Kong;
“PRC”	the People’s Republic of China;

1

DEFINITIONS

• “Qualifying Shareholders” the Shareholders, other than those Overseas Shareholders whom the Directors consider their exclusion from the Bonus Warrants Issue to be necessary or expedient on account either of the legal restrictions under the laws of the relevant place or the requirements of the relevant regulatory body or stock exchange in that place, whose names appear on the Register of Members as at the close of business on the Record Date;

• “Record Date” 6 August 2007, being the date for determination of entitlements to the Bonus Warrants Issue;

• “Register of Members” the register of members of the Company;

• “Share(s)” or “Existing ordinary share(s) of HK$0.20 each in the share capital of the Share(s)” Company;

• “Shares Subdivision” the proposed subdivision of every one Existing Share into twenty Subdivided Shares;

• “Shareholder(s)” the holder(s) of the Existing Shares or the holder(s) of the Subdivided Shares upon the Shares Subdivision becoming effective;

• “Stock Exchange” The Stock Exchange of Hong Kong Limited;

• “Subdivided Shares” new ordinary share(s) of HK$0.01 each in the share capital of the Company upon the Shares Subdivision becoming effective;

“Warrant(s)” warrant(s) to be constituted by an instrument by way of deed poll to be executed by the Company and to be issued by the Company under the Bonus Warrants Issue entitling the holders to subscribe up to an aggregate of 305,600,000 Subdivided Shares at the Initial Subscription Price of HK$0.95 per Subdivided Share (subject to adjustment); and

“%” per cent.

2

LETTER FROM THE BOARD

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(Incorporated in Hong Kong with limited liability)

(Stock Code: 727)

Executive Directors: Datuk LIM Chee Wah Mr. Percy ARCHAMBAUD-CHAO Ms. Patsy SO Ying Chi

Registered office: Suite 2707-8, One Exchange Square 8 Connaught Place Central Hong Kong

Independent non-executive Directors: Mr. Michael YEE Kim Shing Mr. Alan Howard SMITH, J.P. Dr. Allen LEE Peng Fei, J.P. Mr. David YU Hon To

12 July 2007

To the Shareholders

Dear Sir or Madam,

PROPOSED SHARES SUBDIVISION, CHANGE IN BOARD LOT SIZE AND BONUS WARRANTS ISSUE

INTRODUCTION

Reference is made to the Announcement. The purpose of this circular is to provide you with information in relation to the resolutions to be proposed at the EGM relating to the proposed Shares Subdivision and the Bonus Warrants Issue, together with information on the change in board lot size and the notice of the EGM.

PROPOSED SHARES SUBDIVISION AND CHANGE IN BOARD LOT SIZE

The Board proposes to effect the Shares Subdivision on the basis that every one Existing Share will be subdivided into twenty Subdivided Shares. The existing board lot size for trading will also be changed from 1,000 Existing Shares to 10,000 Subdivided Shares upon the Shares Subdivision becoming effective.

Effects of the Shares Subdivision

As at the Latest Practicable Date, the authorised share capital of the Company is HK$40,000,000 divided into 200,000,000 Existing Shares of nominal value of HK$0.20 each, of which 76,400,000 Existing Shares have been allotted and issued as fully paid or credited as fully paid. Upon the Shares Subdivision becoming effective, and assuming that the Company does not allot and issue any further Shares or repurchase any Shares prior thereto, the authorised share capital of the Company will become HK$40,000,000 divided into 4,000,000,000 Subdivided Shares of nominal value of HK$0.01 each, out of which 1,528,000,000 Subdivided Shares will be issued and 2,472,000,000 Subdivided Shares will be unissued. Based on the closing price of the Existing Shares of HK$20.80 per Share on the Latest Practicable Date or approximately HK$1.04 per Subdivided Share, the market value of Subdivided Shares per board lot is expected to be approximately HK$10,400 upon completion of the Shares Subdivision.

3

LETTER FROM THE BOARD

Assuming that no further Shares will be issued or repurchased after the Latest Practicable Date and prior to the Shares Subdivision becoming effective, the effect of the Shares Subdivision to the capital structure of the Company is set out below:

	Immediately prior	Immediately after
	to completion of	completion of
	the Shares Subdivision	the Shares Subdivision
Par value of each Share	HK$0.20	HK$0.01
Number of authorised Shares	200,000,000 Shares	4,000,000,000
		Subdivided Shares
Authorised share capital
of the Company	HK$40,000,000	HK$40,000,000
Number of Shares in issue	76,400,000 Shares	1,528,000,000
		Subdivided Shares
Issued share capital
of the Company	HK$15,280,000	HK$15,280,000
Number of unissued Shares	123,600,000 Shares	2,472,000,000
		Subdivided Shares
Unissued share capital of the Company	HK$24,720,000	HK$24,720,000

Subject to the Shares Subdivision becoming effective on 7 August 2007, Shareholders may, during 7 August 2007 to 14 September 2007 (both dates inclusive), submit share certificates for the Existing Shares to the Company’s share registrar, Computershare Hong Kong Investor Services Limited, for exchange, at the expense of the Company, for new share certificates for the Subdivided Shares issued under the name of the Company. Thereafter, certificates for the Existing Shares will be accepted for exchange only on payment of a fee of HK$2.50 (or such higher amount as may from time to time be allowed by the Stock Exchange or the Articles) for each share certificate for the Existing Shares cancelled or each new share certificate issued for the Subdivided Shares, whichever number of certificates cancelled/ issued is higher. The new share certificates of the Company will be issued in green colour in order to distinguish them from existing share certificates which are in orange colour.

The Subdivided Shares will, save for the amount of par value, be identical in all respects with the Existing Shares in issue prior to the completion of Shares Subdivision and the rights and obligations attaching to the Existing Shares will not be affected by the Shares Subdivision.

Upon the Shares Subdivision becoming effective, the Subdivided Shares will rank pari passu in all respects with each other in accordance with the Articles.

The Shares Subdivision will not, by itself, alter the underlying assets, business operations, management or financial position of the Company or the proportionate interests of the Shareholders, except for the payment of related expenses.

4

LETTER FROM THE BOARD

Conditions of the Shares Subdivision

The Shares Subdivision is conditional upon (i) the passing of an ordinary resolution by the Shareholders approving the Shares Subdivision at the EGM; and (ii) the Listing Committee granting the listing of, and permission to deal in, the Subdivided Shares and any Subdivided Shares which may fall to be issued from time to time upon exercise of any share options to be granted under the Company’s share option scheme.

An application will be made by the Company to the Listing Committee for the listing of, and permission to deal in, the Subdivided Shares and any Subdivided Shares which may fall to be issued from time to time upon exercise of any share options to be granted under the Company’s share option scheme. Assuming that all the above conditions are fulfilled, it is expected that the Shares Subdivision will become effective on the next trading day following the date of the EGM.

Subject to the granting of listing of, and permission to deal in, the Subdivided Shares on the Stock Exchange, the Subdivided Shares will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect from the commencement date of dealings in the Subdivided Shares on the Stock Exchange or such other date as determined by HKSCC. Settlement of transactions between participants of the Stock Exchange on any trading day is required to take place in CCASS on the second trading day thereafter. All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time.

Reasons for the Shares Subdivision and the change in board lot size

The Board believes that the reduced amount for investing in a board lot of the Subdivided Shares traded at a lower price as a result of the Shares Subdivision will improve the liquidity in trading of the Shares, thereby enabling the Company to attract more investors and widen the shareholders base. Given the prevailing market conditions, a more liquid market will provide more flexibility for the investors to buy and sell the Shares. Accordingly, the Board considers the Shares Subdivision and the change in board lot size to be in the best interests of the Company and the Shareholders as a whole.

Arrangement on odd lot trading

The Shares Subdivision and the change in board lot size after the Shares Subdivision becoming effective will not result in any odd lots other than those already exist. Accordingly, no arrangement will be made by the Company for matching sale and purchase of odd lot in connection with the Shares Subdivision.

5

LETTER FROM THE BOARD

The expected timetable in relation to the Shares Subdivision and the change in board lot size is set forth below:

Time and date 2007

Latest time for lodging forms of proxy for the EGM . . . . . . . . . . . 10:00 a.m. on Saturday, 4 August EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10:00 a.m. on Monday, 6 August Publication of the results of the EGM announcement

and the effectiveness of the Shares Subdivision. . . . . . . . . . . . . . . . . . . . . . on Tuesday, 7 August Effective date of the Shares Subdivision. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . on Tuesday, 7 August Dealings in the Subdivided Shares commence . . . . . . . . . . . . . . . . . 9:30 a.m. on Tuesday, 7 August

Original counter for trading in Existing Shares in board lots

of 1,000 Existing Shares temporarily closes. . . . . . . . . . . . . . . . . 9:30 a.m. on Tuesday, 7 August

Temporary counter for trading in Subdivided Shares in board lots of 20,000 Subdivided Shares

(in the form of existing share certificates) opens . . . . . . . . . . . . 9:30 a.m. on Tuesday, 7 August

First day of free exchange of existing

share certificates for the new share certificates. . . . . . . . . . . . . . . . . . . . . . . on Tuesday, 7 August

Original counter for trading in Subdivided Shares in board lots of 10,000 Subdivided Shares

(in the form of new share certificates) reopens . . . . . . . . . . . . . 9:30 a.m. on Tuesday, 21 August

Parallel trading in Subdivided Shares (in the form of new share certificates and existing share certificates) commences. . . . . . . . . . . . . . . . . . . . 9:30 a.m. on Tuesday, 21 August

Temporary counter for trading in Subdivided Shares in board lots of 20,000 Subdivided Shares

(in the form of existing share certificates) closes. . . . . . . . . 4:00 p.m. on Tuesday, 11 September

Parallel trading in Subdivided Shares (in the form of new share

certificates and existing share certificates) ends. . . . . . . . . 4:00 p.m. on Tuesday, 11 September

Last day of free exchange of existing share certificates

for new share certificates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . on Friday, 14 September

The existing share certificates will only be valid for delivery, trading and settlement purposes for the period up to 4:00 p.m. on Tuesday, 11 September 2007 and thereafter will not be accepted for delivery, trading and settlement purposes. However, the existing share certificates will continue to be good evidence of legal title to the Subdivided Shares on the basis of one Existing Share for every twenty Subdivided Shares and may be exchanged free of charge for the new share certificates for Subdivided Shares at any time between Tuesday, 7 August 2007 and Friday, 14 September 2007 (both days inclusive) and on payment of a prescribed fee any time after 4:00 p.m. on Friday, 14 September 2007. It is expected that new share certificates will be available for collection within a period of 10 business days after the submission of the existing share certificates.

6

LETTER FROM THE BOARD

PROPOSED BONUS WARRANTS ISSUE

The Board also proposes, upon the Shares Subdivision becoming effective, the Bonus Warrants Issue to the Qualifying Shareholders whose names appear on the Register of Members on the Record Date on the basis of one Warrant for every five Subdivided Shares held on the Record Date.

The Warrants may be exercised (whether wholly or partly provided that they are exercised in board lots of the Warrants) at any time for a term of two years commencing on the date of issue of the Warrants (currently expected to be on or about 8 August 2007 in Hong Kong) and up to 4:00 p.m. on 7 August 2009 (if that day is not a business day, the business day immediately preceding such day), both days inclusive.

Each Warrant will entitle its holder to subscribe for one Subdivided Share at the Initial Subscription Price of HK$0.95 per Subdivided Share in cash, subject to adjustment, upon exercise of any subscription rights attaching to the Warrant.

The Initial Subscription Price represents:

• (i) a premium of approximately 7.47% to the closing price of HK$17.68 per Share as quoted on the Stock Exchange on the Last Trading Day;

• (ii) a premium of approximately 13.64% over the average closing price of HK$16.72 per Share for the last five consecutive trading days up to and including the Last Trading Day;

• (iii) a premium of approximately 17.72% over the average closing price of HK$16.14 per Share for the last ten consecutive trading days up to and including the Last Trading Day; and

• (iv) a discount of approximately 8.65% to the closing price of HK$20.80 per Share as quoted on the Stock Exchange on the Latest Practicable Date.

Number of Warrants and Subdivided Shares to be issued

On the basis of 76,400,000 Existing Shares in issue as at the Latest Practicable Date, and assuming no further Shares will be issued or repurchased by the Company on or before the Record Date, 305,600,000 Warrants are proposed to be issued pursuant to the Bonus Warrants Issue, entitling holders thereof to subscribe for 305,600,000 Subdivided Shares, representing 20% of the issued share capital of the Company as at the date of the Latest Practicable Date and approximately 16.67% of the issued share capital as enlarged by the Subdivided Shares to be issued upon full exercise of the subscription rights attaching to the aggregate of 305,600,000 Warrants. Save for the Bonus Warrants Issue, there are no other outstanding options, warrants and similar rights to subscribe or purchase equity securities of the Company as at the Latest Practicable Date.

It is proposed that the board lot for trading in the Warrants is 40,000 units, entitling the holder thereof to subscribe for 40,000 Subdivided Shares at the Initial Subscription Price of HK$0.95 per Subdivided Share.

In order to alleviate the difficulties arising from the existence of odd lots of the Warrants, the Company has procured Kim Eng Securities (HK) Limited as the broker to provide matching services, on a best effort basis, to those holders of the Warrants who wish to top up or dispose their holdings of odd lots of the Warrants during the period from 10 August 2007 (being the date for which dealings in the Warrants commence) to 10 September 2007 (both dates inclusive). Holders of the Warrants who wish to take advantage of this service either to top up their odd lots of the Warrants into a new board lot or dispose of their odd lots of Warrants, should contact Mr. Ralph Ma of Kim Eng Securities (HK) Limited at Level 30, Three Pacific Place, 1 Queen’s Road East, Hong Kong (Telephone no. 2268 0388) during such period.

Fractional Entitlements

Fractional entitlements to the Warrants (if any) will not be issued but will be aggregated and sold for the benefit of the Company.

7

LETTER FROM THE BOARD

Conditions

The Bonus Warrants Issue is conditional upon (i) the passing of ordinary resolutions by the Shareholders approving the Shares Subdivision and Bonus Warrants Issue at the EGM; (ii) the Shares Subdivision becoming unconditional and effective; and (iii) the Listing Committee granting the listing of and permission to deal in the Warrants and any Subdivided Shares which may fall to be issued upon exercise of the subscription rights attaching to the Warrants.

Overseas Shareholders

The Warrants will not be registered or filed under the securities legislation of any jurisdiction. The Company will exclude, from the Bonus Warrants Issue, Shareholders whose addresses on the Register of Members on the Record Date are outside Hong Kong and who the Board is of the view that their exclusion from the Bonus Warrants Issue is necessary or expedient on account either of the legal restrictions under the laws of the relevant place or the requirements of the relevant regulatory body or stock exchange in that place. However, arrangements will be made for the Warrants which would otherwise be issued to such Overseas Shareholders to be sold in the market as soon as practicable after dealings commence, if a premium can be obtained (net of expenses). Any net proceeds of sale, after deduction of expenses, will be distributed in Hong Kong dollars to the Overseas Shareholders at their own risks pro rata to their respective holdings of Subdivided Shares, unless the amount falling to be distributed to any such person is less than HK$100 in which case it will be retained for the benefit of the Company.

The Company will make appropriate enquiries pursuant to Rule 13.36(2) of the Listing Rules to determine whether Overseas Shareholders should be entitled to the Bonus Warrants Issue.

Application for listing and certificate for the Warrants

An application will be made to the Listing Committee for the listing of and permission to deal in the Warrants and any Subdivided Shares which may fall to be issued from time to time upon the exercise of the subscription rights attaching to the Warrants. No part of the securities of the Company is listed on or dealt in any other stock exchange and no such listing or permission to deal is being or is proposed to be sought. The Company will ensure the compliance of the listing of the Warrants with the relevant requirements under Rule 8.08(2) of the Listing Rules.

The Subdivided Shares to be issued upon exercise of the subscription rights attaching to the Warrants will rank pari passu in all respects with the then existing issued Subdivided Shares and rank for any distribution and/or offers of further securities made by the Company.

Subject to the granting of listing of, and permission to deal in, the Warrants and the Subdivided Shares which may fall to be issued upon the exercise of the subscription rights attaching to the Warrants on the Stock Exchange as well as compliance with the stock admission requirements of HKSCC, the Warrants and the Subdivided Shares which may fall to be issued upon the exercise of the subscription rights attaching to the Warrants will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect from the commencement date of dealings in the Warrants on the Stock Exchange or such other date as determined by HKSCC. Settlement of transactions between participants of the Stock Exchange on any trading day is required to take place in CCASS on the second trading day thereafter. All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time.

Subject to the conditions of the Bonus Warrants Issue being satisfied in full, certificates for the Warrants are expected to be despatched to the Qualifying Shareholders by ordinary post at the risks of the Qualifying Shareholders on or before 8 August 2007.

8

LETTER FROM THE BOARD

Reasons for the Bonus Warrants Issue

The Group is principally engaged in property related investment and securities investment. The assets of the Group mainly comprise investment properties in Hong Kong and the PRC.

The Board believes that the Bonus Warrants Issue is a return to the Shareholders for their longterm support for the Company, and will provide the Shareholders with an opportunity to participate in the growth of the Company. The Bonus Warrants Issue will also strengthen the equity base of the Company and increase the Company’s working capital if and when the subscription rights attaching to the Warrants are exercised.

Assuming the subscription rights attaching to the Warrants are exercised in full at the Initial Subscription Price of HK$0.95 per Subdivided Share, the Company will be able to raise HK$290,320,000 in total. The Company intends to apply any subscription monies received as and when the subscription rights attaching to the Warrants are exercised towards the general working capital of the Company depending on its requirements at the relevant time.

Closure of Register of Members

The Register of Members will be closed from 2 August 2007 to 6 August 2007, both dates inclusive, in order to determine entitlements of the Qualifying Shareholders to the Bonus Warrants Issue. No transfer of Shares will be registered during this period. All transfers, accompanied by the relevant share certificates, must be lodged with the Company’s share registrars, Computershare Hong Kong Investor Services Limited of Rooms 1712-16, 17/F Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong no later than 4:30 p.m. on 1 August 2007 in order to qualify for the Bonus Warrants Issue.

Expected Timetable

The expected timetable for implementing the Bonus Warrants Issue is set forth below:

2007 Last day of dealings in Shares cum entitlements to the Bonus Warrants Issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Monday, 30 July First day of dealings in Shares ex-entitlements to the Bonus Warrants Issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Tuesday, 31 July Latest time for lodging transfers of Shares . . . . . . . . . . . . . . . . . . . . . . . . . 4:30 p.m. on Wednesday, for entitlements to the Bonus Warrants Issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 August Closure of the Register of Members (both dates inclusive) from . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Thursday, 2 August to . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Monday, 6 August EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Monday, 6 August Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Monday, 6 August Despatch of the Warrant certificates on or before . . . . . . . . . . . . . . . . . . . . . . Wednesday, 8 August Commencement of dealings in the Warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Friday, 10 August

GENERAL

The Warrants will be issued in registered form and will form one class and rank pari passu in all respects with each other and with the Subdivided Shares upon exercise of the subscription rights attaching to the Warrants subject to the Articles. The principal terms and conditions of the Warrants will be set out in the certificates for the Warrants to be despatched to the Qualifying Shareholders by ordinary post at the risks of the Qualifying Shareholders on or before 8 August 2007.

9

LETTER FROM THE BOARD

The Shares Subdivision and the Bonus Warrants Issue are subject to the Shareholders’ approval at the EGM. As at the Latest Practicable Date, none of the Shareholders has any interest that is different from other Shareholders and no Shareholder is required to abstain from voting in respect of the Shares Subdivision and the Bonus Warrants Issue at the EGM.

TAXATION AND EXPENSES

Your attention is drawn that dealings in the Warrants will be subject to Hong Kong stamp duty. Shareholders are recommended to consult their professional advisers as to the tax implications of the Bonus Warrants Issue. It is emphasized that taxation implications of the Bonus Warrants Issue, and the holding and exercise of the Bonus Warrants Issue, are a matter for Shareholders themselves and neither the Company nor any of its Directors accept any responsibility for any tax effect on, or liabilities of, its Shareholders. Trading in the Warrants will also be subject to the Stock Exchange’s trading fee, transaction levy of SFC and brokerage fees by both buyers and sellers of the Warrants.

EGM

Set out on pages 22 to 23 of this circular is a notice convening the EGM at which, ordinary resolutions will be proposed to approve the Shares Subdivision and the Bonus Warrants Issue.

You will find enclosed herewith a form of proxy for use at the EGM. Whether or not you intend to attend the EGM, you are requested to complete and return the enclosed form of proxy that is despatched to you together 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 EGM. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM or any adjournment thereof if you so wish.

PROCEDURES FOR DEMANDING A POLL

Article 89 of the Articles sets out the procedures by which the Shareholders may demand a poll.

At any general meeting, a resolution put to the vote of the meeting shall be decided on a show of hands unless a poll is (before or on the declaration of the result of the show of hands) demanded:

• (a) by the Chairman; or

• (b) by at least three Shareholders present in person (or in the case of a Shareholder 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 Shareholder or Shareholders present in person (or in the case of a Shareholder being a corporation by its duly authorised representative) or by proxy and holding Shares 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.

RECOMMENDATION

The Directors consider that the Shares Subdivision and the Bonus Warrants Issue are in the best interests of the Company and the Shareholders as a whole. Accordingly, the Directors recommend the Shareholders to vote in favour of the ordinary resolutions set out in the notice of the EGM.

10

LETTER FROM THE BOARD

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.

ADDITIONAL INFORMATION

Your attention is drawn to the further information contained in the appendix to this circular.

By order of the Board VXL Capital Limited Percy ARCHAMBAUD-CHAO Director and Chief Executive Officer

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The Warrants will be issued subject to and with the benefit of the instrument by way of deed poll (the “ Instrument ”) to be executed by the Company. The Warrants will be issued in registered form and will form one class and rank pari passu in all respects with each other.

The principal terms and conditions of the Warrants (the “ Conditions ”) will be set out in the certificates for the Warrants (the “ Warrant Certificates ”) and will include provisions to the effect set out below. Holders of the Warrants (“ Warrantholders ”) will be entitled to the benefit of, and will be bound by, and be deemed to have notice of the Conditions. They will also be entitled to the benefit of, and will be bound by, and be deemed to have notice of the provisions of the relevant Instrument, copies of which will be available from the Company’s share registrar, Computershare Hong Kong Investor Services Limited, at Rooms 1712-16, 17/F Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong (“ Registrar ”).

1 SUBSCRIPTION RIGHTS

• 1.1 In this Appendix, unless otherwise stipulated, the following terms shall have the following meanings:

“Articles” the memorandum and articles of the Company from time to time

• “Equity Share Capital”

the issued share capital of the Company excluding any part thereof which does not either with respect to dividends or with respect to capital, carry any right to participate beyond a specified amount or beyond an amount calculated by reference to a specified rate in distributions

• “Exercise Moneys”

in relation to any Warrant, the amount stated on the face of the Warrant Certificate issued in respect of the Warrant as the amount in cash which the Warrantholder is entitled to subscribe upon the exercise of the Subscription Rights represented thereby

• “Shares” or “Ordinary Capital”

the shares of HK$0.01 each in the authorised capital of the Company existing on the date of the Instrument and all other shares or stock (if any) from time to time and for the time being ranking pari passu therewith and all other shares or stock (if any) in the Equity Share Capital of the Company resulting from any sub-division, consolidation or re-classification of Shares

• “Subscription Date”

in relation to any Warrant, the close of business on any business day falling during the Subscription Period on which any of the Subscription Rights represented by the Warrant are duly exercised by delivery of the Warrant Certificate in respect thereof to the Registrar with the subscription form duly completed, together with a remittance for the Exercise Moneys or (in the case of partial exercise) the

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relevant portion thereof and otherwise in accordance with Condition 2 provided that if any Subscription Rights are exercised during a period when the register of holders of Shares is closed the Subscription Date shall be the next following business day on which the register of holders of Shares is open

• “Subscription Period” the period from the date on which dealing in the Warrants on the Stock Exchange shall commence (which is expected to be 8 August 2007, up to and including 7 August 2009 (or the immediately preceding business day if that day is not a business day in Hong Kong)

• “Subscription Price” the sum payable in respect of each Share to which the registered holder of each Warrant will be entitled upon exercise of the Subscription Rights represented thereby, being HK$0.95 per Share (at the date of the Instrument) or any adjusted price as may for the time being be applicable in accordance with the terms of the Instrument referred to in Condition 3

• “Subscription Rights” the rights of the Warrantholders represented by the

• the sum payable in respect of each Share to which the registered holder of each Warrant will be entitled upon exercise of the Subscription Rights represented thereby, being HK$0.95 per Share (at the date of the Instrument) or any adjusted price as may for the time being be applicable in accordance with the terms of the Instrument referred to in Condition 3

the rights of the Warrantholders represented by the Warrants to subscribe in aggregate a maximum of HK$290,320,000 for Shares pursuant to the Warrants and, in relation to each Warrant, means the right of the relevant Warrantholder to subscribe the Exercise Moneys for Shares in accordance with and subject to the Conditions

2 EXERCISE OF SUBSCRIPTION RIGHTS

• 2.1 Subject to the provisions of the Conditions and compliance with all fiscal and other laws and regulations applicable hereto the Warrantholder of the Warrant represented by the Warrant Certificate will have the right, which may be exercised in whole or in part (but not in respect of any fraction of a Share and provided that such right is exercised in board lot of the Warrants) at any time during the Subscription Period, to subscribe in Dollars (in units of HK$0.95) the Exercise Moneys for fully paid Shares at the Subscription Price per Share. Any Subscription Rights attaching to the Warrants which have not been exercised at or before the last day of the Subscription Period will lapse and the relevant Warrants will cease to be valid for any purpose. Payment of the Subscription Price must be made in immediately available funds. If such payment is not received, the Warrants comprised in the relevant exercise of Subscription Rights will not be treated as exercised earlier than the date of receipt of such payment. No such payment will be accepted after 4:00 p.m. (Hong Kong time) on the last day of the Subscription Period.

• 2.2 In order to exercise in whole or in part the Subscription Rights represented by the Warrant Certificate, the Warrantholder must complete and sign the subscription form (“ Subscription Form ”) or a separate subscription form which the Company permits to be used (both of which, once signed and completed, shall be irrevocable) and deliver the Warrant Certificate (together with the separate subscription form, if appropriate) to the Registrar, together with a

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remittance for the Exercise Moneys (or, in the case of a partial exercise, the relevant portion of the Exercise Moneys). In each case, compliance must also be made with any exchange control, fiscal or other laws or regulations for the time being applicable.

• 2.3 The number of Shares to be allotted on exercise of the Subscription Rights shall be calculated by dividing the amount specified in the relevant Subscription Form and duly remitted by the Subscription Price applicable on the Subscription Date. No fraction of a Share will be allotted but any balance representing fractions of the Exercise Moneys paid on exercise of the Subscription Rights represented by the Warrant Certificate will be sold and retained by the Company for the benefit of its own use, provided always that for the purpose of determining whether any (and if so what) fraction of a Share arises:

• (a) if the Subscription Rights represented by the Warrant Certificate and any one or more other Warrant Certificates are exercised on the same Subscription Date by the same Warrantholder then the Subscription Rights represented by the Bonus Warrants shall be aggregated; and

• (b) regard shall be had, where applicable, to the provisions on subscription right reserve of the Instrument.

• 2.4 The Company has undertaken in the Instrument that Shares falling to be issued upon the exercise of the Subscription Rights represented by the Warrant Certificate will be allotted and issued, subject to any shorter period as prescribed or required by the Stock Exchange from time to time, not later than twenty-one days after the relevant Subscription Date and will rank pari passu with the fully paid Shares in issue on the relevant Subscription Date and accordingly shall entitle the holders to participate in all dividends or other distributions declared, paid or made after the relevant Subscription Date unless adjustment thereof has been made as provided in Condition 3 and other than any dividend or other distribution previously declared or recommended or resolved to be paid or made if the record date as fixed by the Articles therefor shall be on or before the relevant Subscription Date and notice of the amount and record date as fixed by the Articles therefor shall have been given to the Stock Exchange prior to the relevant Subscription Date.

• 2.5 As soon as practicable after the relevant allotment of Shares under this Condition (and, subject to any shorter period as prescribed by the Stock Exchange from time to time, not later than twenty-one days after the relevant Subscription Date) there will be issued free of charge to the Warrantholder represented by the Warrant Certificate:

• (a) a certificate (or certificates) for the relevant Shares in the name of the Warrantholder;

• (b) (if applicable) a balancing Warrant Certificate in registered form in the name of the Warrantholder in respect of any Subscription Rights represented by the Warrant Certificate and remaining unexercised;

• (c) (if applicable) a cheque representing the payment made in respect of the fractional entitlement to Shares not allotted as mentioned in Condition 2.3; and

• (d) (if applicable) a certificate in registered form evidencing the right of the exercising Warrantholder to the allotment of an additional nominal amount of the capital of the Company, in the event that the credit standing to the subscription right reserve (as defined in the Instrument) is insufficient for the purpose for which it is established.

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The certificate(s) for Shares arising on the exercise of Subscription Rights, the balancing Warrant Certificate (if any), the cheque in respect of fractional entitlement (if any) and the certificate mentioned in Condition 2.5(d) (if any) will be sent by post at the risk of the Warrantholder to the address of the Warrantholder as set out in the register of Warrantholders (“Register”) (or in the case of a joint holding to that one of them whose name stands first in the Register). If the Company agrees, such certificates and cheques may by prior arrangement be retained by the Registrars to await collection by the relevant Warrantholder.

3 ADJUSTMENT OF SUBSCRIPTION PRICE

The Instrument contains detailed provisions relating to the adjustment of the Subscription Price. The following is a summary of, and is subject to, the adjustment provisions of the Instrument.

• 3.1 The Subscription Price shall (except as mentioned in Conditions 3.2 and 3.3) be adjusted as provided in the Instrument in each of the following cases:

• (a) an alteration of the nominal amount of the Shares by reason of any consolidation or subdivision;

• (b) an issue (other than in lieu of a cash dividend) by the Company of Shares credited as fully paid by way of capitalisation of profits or reserves (including any share premium account or capital redemption reserve fund);

• (c) a capital distribution (as provided in the Instrument) being made by the Company, whether on a reduction of capital or otherwise, to holders of Shares in their capacity as such;

• (d) a grant by the Company to the holders of Shares (in their capacity as such) of rights to acquire for cash any assets of the Company or any of its Subsidiaries;

• (e) an offer or grant of new Shares being made by the Company to holders of Shares by way of rights or of options or Warrants to subscribe for Shares at a price which is less than 90 per cent. of the market price (calculated as provided in the Instrument);

• (f) an issue wholly for cash being made by the Company or any other company of securities convertible into or exchangeable for or carrying rights of subscription for new Shares, if in any case the total effective consideration per Share (as provided in the Instrument) is less than 90 per cent. of the market price (calculated as provided in the Instrument), or the terms of any such issue are altered so that the total effective consideration per Share is less than 90 per cent. of the market price;

• (g) an issue being made wholly for cash of Shares (other than pursuant to a share option scheme of the Company) at a price less than 90 per cent. of the market price (calculated as provided in the Instrument);

• (h) the purchase by the Company of Shares in circumstances where the total effective consideration per Share is more than 110 per cent. of the last dealt price of one Share on the Stock Exchange (calculated as provided in the Instrument); and

• (i) the purchase by the Company of Shares or securities convertible into Shares or any rights to acquire Shares in any other circumstance where the Company shall consider that it may be appropriate to make an adjustment to the Subscription Price.

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• 3.2 Except as mentioned in Condition 3.3, no such adjustment as is referred to in Conditions 3.1(b) to 3.1(g) shall be made in respect of:

• (a) an issue of fully paid Shares upon the exercise of any conversion rights attached to securities convertible into Shares or upon the exercise of any rights (including the Subscription Rights) to acquire Shares;

• (b) an issue of Shares, or other securities of the Company or any subsidiary, wholly or partly convertible into, or rights to acquire, Shares pursuant to a share option scheme of the Company;

• (c) an issue by the Company of Shares or by the Company or any subsidiary of securities wholly or partly convertible into or rights to acquire Shares, in consideration in whole or in part for the acquisition of any other securities, assets or business;

• (d) an issue of fully-paid Shares by way of capitalisation of all or part of the subscription right reserve (as set out in the Instrument) which has been or may be established in certain circumstances pursuant to the terms and conditions contained in the Instrument (or any similar reserve which has been or may be established pursuant to the terms of any other securities wholly or partly convertible into or rights to acquire Shares); or

• (e) an issue of Shares in lieu of a cash dividend where an amount not less than the nominal amount of the Shares so issued is capitalised and the market value (calculated as provided in the Instrument) of the Shares is not more than 110 per cent. of the amount of dividend which holders of Shares could elect to or would otherwise receive in cash.

• 3.3 Notwithstanding the provisions referred to in Conditions 3.1 and 3.2 in any circumstances where the Company considers that an adjustment to the Subscription Price provided for under the said provisions should not be made or should be calculated on a different basis or that an adjustment to the Subscription Price should be made notwithstanding that no such adjustment is required under the said provisions or that an adjustment should take effect on a different date or with effect from a different time from that provided for under the said provisions, the Company may appoint an approved merchant bank or auditors of the Company to consider whether for any reason whatsoever the adjustment to be made (or the absence of adjustment) would or might not fairly and appropriately reflect the relative interests of the persons affected thereby and, if the approved merchant bank or auditors of the Company shall consider this to be the case, the adjustment shall be modified or nullified or an adjustment made instead of no adjustment in the manner (including, without limitation, making an adjustment calculated on a different basis) and/or the adjustment shall take effect from the other date and/or time certified by the approved merchant bank to be in its opinion appropriate.

• 3.4 Any adjustment to the Subscription Price shall be made to the nearest one cent so that any amount under half a cent shall be rounded down and any amount of half a cent or more shall be rounded up. No adjustment shall be made to the Subscription Price in any case in which the amount by which the Subscription Price would be reduced would be less than one cent and any adjustment which would otherwise then be required shall not be carried forward. No adjustment may be made (except on a consolidation of Shares) which would increase the Subscription Price.

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• 3.5 Every adjustment to the Subscription Price shall be certified by the auditors of the Company or an approved merchant bank and notice of each adjustment (giving the relevant particulars) shall be given to the Warrantholders. In giving any certificate or making any adjustment hereunder, the auditors of the Company or the approved merchant bank shall be deemed to be acting as experts and not as arbitrators and, in the absence of manifest error, their decision shall be conclusive and binding on the Company and the Warrantholders and all persons claiming through or under them respectively. Any certificates of the auditors of the Company and/or approved merchant bank shall be available at the registered office or principal place of business of the Company or any other place as may be notified to the Warrantholders from time to time, where copies may be obtained.

4 REGISTERED WARRANTS

The Warrants are issued in registered form. The Company shall be entitled to treat the registered holder of any Warrant as the absolute owner thereof and accordingly shall not, except as ordered by a court of competent jurisdiction or as required by law, be bound to recognise any equitable or other claim to or interest in a Warrant on the part of any other person, whether or not the Company has express or other notice thereof.

5 TRANSFER, TRANSMISSION AND REGISTER

• 5.1 The Subscription Rights represented by the Warrant Certificate are transferable, in whole amounts or integral multiples of the Subscription Price (provided that they are transferred in board lot of the Warrants) by instrument of transfer in any usual or common form or in any other form as may be approved by the directors of the Company or, where the transferor or the transferee is HKSCC Nominees Limited or its successor(s) (or such other company as may be approved by the directors of the Company for this purpose) by an instrument of transfer executed under the hands of its authorised person(s) or by machine imprinted signatures. The Company shall maintain a Register accordingly. Transfers of Warrants must be executed by both the transferor and the transferee. The provisions of the Articles for the time being relating to the registration, transfer and transmission of Shares shall apply, mutatis mutandis, to the registration, transfer and transmission of the Warrants and the Register, save that the Company shall not be obliged (but may if the directors of the Company so resolve) to maintain any Register at any place outside Hong Kong.

• 5.2 Persons who hold Warrants and have not registered the Warrants in their own names and wish to exercise the Warrants may incur additional costs and expenses in connection with any expedited re-registration of the Warrants prior to transfer or exercise of Warrants, in particular during the period commencing ten (10) Stock Exchange trading days prior to and including the last day of the Subscription Period.

• 5.3 Since the Warrants will be admitted to the Central Clearing and Settlement System (“CCASS”), so far as applicable laws or regulations of relevant regulatory authorities, terms of the Instrument and circumstances permit, the Company may determine the last day of dealing in the Warrants to be a date at least three dealing days on the Stock Exchange before the last day of the Subscription Period,.

6 CLOSURE OF REGISTER OF WARRANTHOLDERS

The registration of transfers of the Warrants may be suspended and the Register may be closed for any period(s) as the directors of the Company may from time to time direct, provided that the registration may not be suspended or such Register may not be closed for a period of more than 30 days in any one year or, with the approval of an ordinary resolution of the Warrantholders, for a period not

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exceeding 60 days in any one year. Any transfer or exercise of the Subscription Rights attached to his Warrants, made while the Register is closed shall, as between the Company and the person claiming under the relevant transfer of Warrants or, as the case may be, as between the Company and the Warrantholder who has exercised the Subscription Rights attached to his Warrants (but not otherwise), be considered as made immediately after the re-opening of the Register.

7 PURCHASE AND CANCELLATION

• 7.1 The Company or any subsidiary may at any time purchase the Warrants:

• (a) in the open market or by tender (available to all Warrantholders alike) at any price; or

• (b) by private treaty at a price, exclusive of expenses, not exceeding 110 per cent. of the last dealt price prior to the date of purchase of the Warrants on the Stock Exchange;

but not otherwise. All Warrants purchased shall be cancelled forthwith and may not be reissued or re-sold.

8 MEETINGS OF WARRANTHOLDERS AND MODIFICATION OF RIGHTS

• 8.1 The Instrument contains provisions for convening meetings of Warrantholders to consider any matter affecting the interest of Warrantholders, including the modification by special resolution of the provisions of the Instrument and/or these Conditions. A special resolution duly passed at any meeting of Warrantholders shall be binding on the Warrantholders, whether present or not.

• 8.2 All or any of the rights for the time being attached to the Warrants (including any of the provisions of the Instrument) may from time to time (whether or not the Company is being wound up) be altered or abrogated (including but without prejudice to that generality by waiving compliance with, or by waiving or authorising any past or proposed breach of, any or the provisions of these Conditions and/or the Instrument) and the sanction of a special resolution shall be necessary and sufficient to effect the alteration or abrogation.

• 8.3 A quorum for a meeting of Warrantholders shall be two or more persons representing in aggregate the holders of not less than 10 per cent. or for the passing of a special resolution shall be two or more persons holding Warrants and being or representing in aggregate the holders of not less than one-third of the Subscription Rights of all Warrants for the time being outstanding and exercisable present in person or by proxy. No business (other than the choosing of a chairman) shall be transacted at any meeting unless the requisite quorum is present at the commencement of such meeting.

• 8.4 Where the Warrantholder is a recognised clearing house (within the meaning of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)) or its nominee(s), and, in each case, being a corporation, it may authorise such person or persons as it thinks fit to act as its representative (or representatives) or proxy (or proxies) at any Warrantholders’ meeting or (if relevant) at any meeting of any class of Warrantholders provided that, if more than one person is so authorised, the authorisation or proxy form must specify the number and (if relevant) class of Warrants in respect of which each such person is so authorised. The person so authorised will be entitled to exercise the same rights and power on behalf of the recognised clearing house as that clearing house or its nominee(s) could exercise if such person were an individual Warrantholder (or its nominee) in respect of the number (and, in relevant, the class) of the Warrants specified in the relevant authorisation or proxy form.

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9 REPLACEMENT OF WARRANT CERTIFICATES

• 9.1 If a Warrant Certificate is mutilated, defaced, lost or destroyed, it may, at the discretion of the Company, be replaced at the office of the Registrar, for the time being on payment of any costs incurred in connection therewith and on any terms as to evidence, indemnity and/ or security which the Company may require and on payment of a fee not exceeding HK$2.5 (or any higher fee as may from time to time be permitted under the rules prescribed by the Stock Exchange or Articles) as the Company may determine. Mutilated or defaced Warrant Certificates must be surrendered before replacements will be issued.

• 9.2 In the case of lost Warrant Certificates, Section 71A subsections (2), (3), (4), (6), (7) and (8) of the Companies Ordinance (Chapter 32 of the Laws of Hong Kong) shall apply as if “shares” referred to therein include Warrants.

10 PROTECTION OF SUBSCRIPTION RIGHTS

The Instrument contains certain undertakings by and restrictions on the Company designed to protect the Subscription Rights.

11 CALL

If at any time the aggregate of the amount of Exercise Moneys in respect of unexercised Subscription Rights attached to the Warrants is equal to or less than 10% of the aggregate value of the Subscription Rights attached to the Warrants, then the Company may, on giving not less than three months’ notice, require Warrantholders either to exercise their Subscription Rights or to allow them to lapse. On expiry of such notice, all unexercised Warrants will be automatically cancelled without compensation to holders of such Warrants.

12 FURTHER ISSUES

The Company shall be at liberty to issue further subscription warrants subject to applicable restrictions contained in the Rules Governing the Listing of Securities on the Stock Exchange, however, the Warrantholders shall not be entitled to participate in any distributions or further issues of securities by the Company as a result of them being Warrantholders.

13 UNDERTAKINGS BY THE COMPANY

• 13.1 The Company has undertaken in the Instrument that, amongst other matters:

• (a) it will use its best endeavours to ensure that all Shares allotted on exercise of Subscription Rights shall be admitted to listing on the Stock Exchange (and on any other stock exchange on which the Shares may at that time be listed) provided that no admission shall be obtained in the event that the Shares cease to be listed on the Stock Exchange (or any other stock exchange) as a result of an offer being made to the holders of Shares (or to holders excluding the offeror and/or its nominee(s)) to acquire all or a proportion of the Shares;

• (b) it will send to each Warrantholder, at the same time as the same are sent to the holders of Shares, its audited accounts and all other notices, reports and communications despatched by it to the holders of the Shares generally;

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• (c) it will pay all Hong Kong stamp duties, registration fees or similar charges in respect of the execution of the Instrument, the creation and initial issue of the Warrants in registered form, the exercise of the Subscription Rights and the issue of Shares upon exercise of the Subscription Rights;

• (d) it will keep available for issue sufficient Ordinary Capital to satisfy in full all rights for the time being outstanding of subscription for and conversion into Shares;

• (e) it will ensure that no event occurs as a result of which the Subscription Price would be reduced below the nominal amount of the Shares unless at that time the subscription right reserve (as set out in the Instrument) would permit the fulfilment by the Company of its obligations under the Conditions; and

• (f) subject to Condition 5.3, it will use its best endeavours to procure that at all times during the Subscription Period, the Warrants may be dealt in on the Stock Exchange.

14 WINDING-UP OF THE COMPANY

• 14.1 In the event a notice is given by the Company to its shareholders to convene a shareholders’ meeting for the purpose of considering, and if thought fit approving, a resolution to voluntarily wind-up the Company, the Company shall forthwith give notice thereof to each Warrantholder and thereupon, every Warrantholder shall be entitled by irrevocable surrender of his Warrant Certificate(s) to the Company (such surrender to occur not later than two business days prior to the proposed shareholders’ meeting referred to above) with the Subscription Form(s) duly completed, together with payment of the Exercise Moneys or the relative portion thereof, to exercise the Subscription Rights represented by such Warrant and the Company shall as soon as possible and in any event no later than the business day immediately prior to the date of the proposed shareholders’ meeting allot such number of Shares to the Warrantholder which fall to be issued pursuant to the exercise of the Subscription Rights represented by such Warrant. The Company shall give notice to the Warrantholders in accordance with these conditions to the last known place of business or residence, or if there be none, by posting the same for three days at the principal place of business for the time being of the Company in Hong Kong, of the passing of such resolution within seven days after the passing thereof.

• 14.2 If an effective resolution is passed during the Subscription Period for the voluntary windingup of the Company for the purpose of reconstruction or amalgamation pursuant to a scheme of arrangement to which the Warrantholders, or some persons designated by them for such purpose by special resolution, shall be a party or in conjunction with which a proposal is made to the Warrantholders and is approved by special resolution, the terms of such scheme of arrangement or (as the case may be) proposal shall be binding on all the Warrantholders.

• 14.3 Subject to the foregoing, if the Company is wound up, all Subscription Rights which have not been exercised at the date of the passing of such resolution will lapse and each Warrant Certificate will cease to be valid for any purpose.

15 NOTICES

The Instrument contains provisions relating to the notices to be given to Warrantholders.

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16 OVERSEAS WARRANTHOLDERS

If a Warrantholder has a registered address in any territory other than Hong Kong where, in the opinion of the directors of the Company, that their exclusion from the allotment of Shares to the Warrantholder upon exercise of any Subscription Rights is necessary or expedient on account either of the legal restrictions under the laws of that territory or the requirements of the relevant regulatory body or stock exchange of that territory, then the Company will as soon as practicable after exercise by the Warrantholder of any Subscription Rights either:

• (a) allot the Shares which would otherwise have been allotted to the Warrantholder to one or more third parties selected by the Company; or

• (b) allot the Shares to the Warrantholder and then, on his behalf, sell them to one or more third parties selected by the Company;

in each case for the best consideration then reasonably obtainable by the Company.

As soon as reasonably practicable following the allotment or allotment and sale, the Company will pay the Warrantholder an amount equal to the consideration, after deduction of expenses, received by the Company by posting the remittance to him at the risk of such Warrantholder, unless such amount distributable is less than HK$100, in which case such amount will be retained for the benefit of the Company. The Company is hereby deemed to be authorised to effect the transactions required by this Condition 16 and for this purpose the Company may appoint some person to complete and execute transfers or other documents on behalf of the relevant Warrantholders and generally may make all arrangements which the Company considers necessary or appropriate in connection therewith.

17 GOVERNING LAW

The Instrument and the Warrants are governed by and will be construed in accordance with the laws of Hong Kong.

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NOTICE OF EXTRAORDINARY GENERAL MEETING

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(Incorporated in Hong Kong with limited liability)

(Stock Code: 727)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that an Extraordinary General Meeting (“EGM”) of VXL Capital Limited (the “Company”) will be held at Suite 2707-8, One Exchange Square, 8 Connaught Place, Central, Hong Kong on Monday, 6 August 2007 at 10:00 a.m. for the purpose of considering and, if thought fit, passing with or without modifications the following resolutions as ordinary resolutions:-

ORDINARY RESOLUTIONS

• (I) “ THAT subject to and conditional upon the Listing Committee of The Stock Exchange of Hong Kong Limited granting the listing of, and permission to deal in, the Subdivided Shares (as defined below), every share of HK$0.20 each in the issued and unissued share capital of the Company be and is hereby subdivided into twenty shares of HK$0.01 each (“ Subdivided Share(s) ”) without affecting any existing rights attached to the shares of the Company with effect from the business day immediately following the day on which the resolution is passed (“ Share Subdivision ”) and that the directors of the Company be and are hereby authorised to issue new share certificates in respect of the Subdivided Shares to holders of the existing shares of the Company in accordance with the Articles of Association of the Company and to do all things and acts and sign all documents which they may consider necessary, desirable or expedient to implement and/or give effect to any matters relating to or in connection with the Share Subdivision.”

• (II) “ THAT , conditional upon the passing of ordinary resolution numbered 1 set out in the notice hereof and the Share Subdivision becoming unconditional and effective and the Listing Committee of The Stock Exchange of Hong Kong Limited granting the listing of, and permission to deal in, the warrants (“ Warrants ”) and any Subdivided Shares to be issued upon any exercise of the subscription rights attaching to the Warrants, the directors of the Company be and are hereby authorized:-

• (a) to create the Warrants, which shall be in registered form, to subscribe, at the initial Exercise Price of $0.95 per Subdivided Share, subject to adjustments and the terms and conditions set out in the warrant instrument (the “ Warrant Instrument ”, a copy of a draft of which has been produced to the meeting and signed for the purpose of identification by the Chairman) and such Warrants could be exercised at anytime during the period of two years from the date of issue on 8 August 2007 and up to 4:00 p.m. on 7 August 2009 (or the business day immediately before 7 August 2009 if 7 August 2009 is not a business day in Hong Kong) (both dates inclusive) and to issue the same by way of bonus to and among the persons who were registered as shareholders of the Company on 6 August 2007 in the proportion of one Warrant carrying the right to subscribe for cash at an initial subscription price of HK$0.95, subject to adjustment, for one Subdivided Share in the capital of the Company for every five Subdivided Shares held, provided that:

  • (i) in the case of persons having registered addresses outside Hong Kong and the directors of the Company is of the view that their exclusion from the issue of Warrants is necessary or expedient on account either of the legal restrictions

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NOTICE OF EXTRAORDINARY GENERAL MEETING

under the laws of the relevant place or the requirements of the relevant regulatory body or stock exchange in that place, the relevant Warrants shall not be issued to such persons but shall be aggregated and sold in the market and the net proceeds of sale, after deduction of expenses, distributed pro rata to such persons unless such amount falling to be distributed to any such person is less than $100 in which case such amount will be retained for the benefit of the Company; and

• (ii) fractional entitlements to the Warrants will not be issued, but will be aggregated and sold for the benefit of the Company. The net proceeds of the sale will be retained for the benefit of the Company. The directors of the Company shall do all such acts and things as they consider necessary or expedient to give effect to the foregoing arrangements;

• (b) as a specific mandate to the directors of the Company, to allot and issue the Subdivided Shares in the capital of the Company arising from the exercise of subscription rights under such Warrants or any of them;

• (c) to affix common seal of the Company to and to sign the Warrant Instrument in accordance with the Articles of Association of the Company; and

• (d) to do all such acts and things as the directors of the Company consider necessary or expedient to give effect to the transactions contemplated by the Warrant Instrument.”

By order of the Board VXL Capital Limited Ada Mak Company Secretary

Hong Kong, 12 July 2007

Notes:

1. Any Shareholder entitled to attend and vote at the EGM convened by the above notice shall be entitled to appoint one or more proxies to attend and vote instead of him. A proxy need not be a Shareholder but must attend the meeting, or any adjournment thereof, in person to represent his appointor.

2. To be valid, a form of proxy and the power of attorney or other authority, if any, under which it is signed, or a certified copy of such power or authority, must be deposited with the registered office of the Company at Suite 2707-8, One Exchange Square, 8 Connaught Place, Central, Hong Kong or at the Share Registrar of the Company, Computershare Hong Kong Investor Services Limited, at Rooms 1806-7, 18th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong as soon as possible and in any event not later than 48 hours before the time for holding the EGM or any adjournment thereof.

3. The Register of Members will be closed from 2 August 2007 to 6 August 2007, both dates inclusive, in order to determine entitlements of the Qualifying Shareholders to the Bonus Warrants Issue. No transfer of Shares will be registered during this period. All transfers, accompanied by the relevant share certificates, must be lodged with the Company’s share registrars, Computershare Hong Kong Investor Services Limited, at Rooms 1712-16, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong no later than 4:30 p.m. on 1 August 2007 in order to qualify for the Bonus Warrants Issue.

4. Unless otherwise provided in this notice, capitalized terms used herein shall have meanings as defined in the Company’s circular dated 12 July 2007.

5. The Chinese version of this notice is for reference only. Should there be any discrepancies, the English version shall prevail.

As at the date hereof, the Board comprises of three executive directors, namely, Datuk LIM Chee Wah, Mr. Percy ARCHAMBAUD-CHAO and Ms. So Ying Chi Patsy; and four independent non-executive directors, namely, Mr. Michael YEE Kim Shing, Mr. Alan Howard SMITH, J.P., Dr. Allen LEE Peng Fei, J.P. and Mr. David YU Hon To.

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