Bingo Group Holdings Limited — Proxy Solicitation & Information Statement 2005

Jul 19, 2005

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your shares in China Photar Electronics Group Limited (the “ Company ”), 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 the transferee.

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

CHINA PHOTAR ELECTRONICS GROUP LIMITED 中國豐達電子集團有限公司

(incorporated in the Cayman Islands with limited liability)

(Stock code: 8220)

DISCLOSEABLE TRANSACTION

LICENCE AGREEMENT FOR MANUFACTURING AND DISTRIBUTION

A letter from the board of directors of the Company is set out on pages 3 to 6 of this circular.

This circular will remain on the GEM website at http://www.hkgem.com on the “Latest Company Announcements” page for seven days from the date of its publication.

18 July 2005

CHARACTERISTICS OF GEM

GEM has been established as a market designed to accommodate companies to which a high investment risk may be attached. In particular, companies may list on GEM with neither a track record of profitability nor any obligation to forecast future profitability. Furthermore, there may be risks arising out of the emerging nature of companies listed on GEM and the business sectors or countries in which the companies operate. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only after due and careful consideration. The greater risk profile and other characteristics of GEM mean that it is a market more suited to professional and other sophisticated investors.

Given the emerging nature of companies listed on GEM, there is a risk that securities traded on GEM may be more susceptible to high market volatility than securities traded on the Main Board and no assurance is given that there will be a liquid market in the securities traded on GEM.

The principal means of information dissemination of GEM is publication on the Internet website operated by the Stock Exchange. Listed companies are not generally required to issue paid announcements in gazetted newspapers. Accordingly, prospective investors should note that they need to have access to the GEM website at www.hkgem.com in order to obtain up-to-date information of GEM-listed issuers.

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CONTENTS

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
Licence Agreement dated 20 June 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Source of funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Information on SAGEM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
GEM Listing Rules Implications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Reasons for the Licence Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Further information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
Appendix – General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7

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DEFINITIONS

In this circular, unless the context otherwise requires, the following expressions shall have the following meanings when used herein:

“associates”	has the meaning ascribed to this term under the GEM
	Listing Rules
“Board”	the board of Directors
“Company”	China Photar Electronics Group Limited, a company
	incorporated in the Cayman Islands with limited
	liability, and the issued Shares of which are listed on
	GEM
“connected person”	has the meaning ascribed to this term under the GEM
	Listing Rules
“Director(s)”	the director(s) of the Company
“GEM”	the Growth Enterprise Market of the Stock Exchange
“GEM Listing Rules”	the Rules Governing the Listing of Securities on GEM
“Group”	the Company together with its subsidiaries
“Hong Kong”	the Hong Kong Special Administrative Region of the
	People’s Republic of China
“Independent Third Party”	persons who, to the best of the Directors’ knowledge,
	information and belief, having made all reasonable
	enquiries, are third parties independent of the
	Company and its subsidiaries, its directors, chief
	executives and substantial Shareholders or their
	respective associates and are not connected persons of
	the Company and its subsidiaries
“Latest Practicable Date”	14 July 2005, being the latest practicable date prior to
	the printing of this circular for the purpose of
	ascertaining certain information contained in this
	circular
“Licence Agreement”	the licence agreement entered into between the
	Company and SAGEM dated 20 June 2005 in relation
	to the acquisition by the Company of the right to
	manufacture, promote, sell and distribute of “Philips”
	brand thermal sensitive telefacsimile machine products
	in the PRC

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DEFINITIONS

“Macau”	the Macau Special Administrative Region of the
	People’s Republic of China
“Manufacturing Agreement”	the manufacturing agreement entered into between the
	Company and SAGEM dated 20 June 2005 for the
	manufacturing and distribution of the SAGEM’s
	Product in the PRC by the Company
“Philips’ Products”	The thermal sensitive telefacsimile machine products
	under the “Philips” brand
“PRC”	the People’s Republic of China and for the purpose of
	this circular, excluding Taiwan, Hong Kong and Macau
“RMB”	Renminbi, the lawful currency of the PRC
“SAGEM Communication”	SAGEM Communication, a company incorporated in
	France, the issued shares of which are listed in France
“SAGEM”	SAGEM Communication (Tianjin) Company Limited,
	a wholly owned corporation of SAGEM
	Communication registered under the laws of the PRC
“SAGEM’s Products”	The thermal sensitive telefacsimile machine products
	under the “SAGEM”’s brand
“SFO”	the Securities and Futures Ordinance (Chapter 571 of
	the Laws of Hong Kong)
“Shareholder(s)”	holder(s) of the Share(s)
“Shares”	ordinary shares of HK$0.01 each in the share capital
	of the Company
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong
“%”	per cent.

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LETTER FROM THE BOARD

CHINA PHOTAR ELECTRONICS GROUP LIMITED 中國豐達電子集團有限公司

(incorporated in the Cayman Islands with limited liability)

(Stock code: 8220)

Executive Directors: Registered office: Mr. Chen Jijin Century Yard Mr. Lee Chun Piu Cricket Square Ms. Huang Menghuai Hutchins Drive P.O. Box 2681 GT Independent non-executive Directors: George Town Mr. Guo Qing Grand Cayman British West Indies

Mr. Guo Qing Mr. Liu Feng Ms. Guo Wen Hong

Head office and principal place of business in Hong Kong:

Suite 5601 The Center 99 Queen’s Road Central Hong Kong

18 July 2005

To the Shareholders

Dear Sir or Madam,

DISCLOSEABLE TRANSACTION

LICENCE AGREEMENT FOR MANUFACTURING AND DISTRIBUTION

INTRODUCTION

The Board announced on 27 June 2005 that the Company has entered into the Licence Agreement with SAGEM for the acquisition of the right to manufacture, promote, sell and distribute Philips’ Product in the PRC. The term of the Licence Agreement shall be for two years and nine months divided into three intervals and a licensing fee shall be payable by the Company to SAGEM on 25 June 2005, 25 June 2006 and 25 June 2007 for each of the three intervals respectively.

The purpose of this circular is to provide you with further details regarding the Licence Agreement in accordance with the GEM Listing Rules.

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LETTER FROM THE BOARD

LICENCE AGREEMENT DATED 20 JUNE 2005

Date: 20 June 2005

Parties:

• (1) SAGEM Communication (Tianjin) Co. Ltd.

• (2) China Photar Electronics Group Limited

Interests Acquired:

Pursuant to the License Agreement, the Company has agreed to acquire and SAGEM has agreed to license the right to manufacture, promote, sell and distribute Philips’ Products in the PRC. The License Agreement was made in the normal course of business of the Company.

Consideration and Terms:

The License Agreement was entered into for an aggregate term of two years and nine months divided into the following three intervals:

• (1) from 1 July 2005 till 30 June 2006;

• (2) from 1 July 2006 till 30 June 2007; and

• (3) from 1 July 2007 till 31 March 2008.

According to the License Agreement, a licensing fee of RMB2,000,000 per interval shall be payable to SAGEM by the Company on 25 June 2005, 25 June 2006 and 25 June 2007 for the three intervals respectively. The aggregate value of consideration is therefore RMB6,000,000.

The licensing fee was determined after arm’s length negotiations between the parties to the License Agreement with reference to the reputable brand of “Philips” and the stream of income to be generated from the manufacturing and distribution of the Philips’ Products. The Directors consider that the licensing fee and the terms of the License Agreement are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

SOURCE OF FUNDING

The licensing fee will be provided by Mr. Chen Jijin, the controlling shareholder and executive director of the Company by way of shareholders’ loan. The shareholders’ loan is unsecured and on an interest free basis and repayable on demand. The repayment will be satisfied by internal resources of the Company when repayment is so demanded.

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LETTER FROM THE BOARD

INFORMATION ON SAGEM

SAGEM is a wholly owned corporation of SAGEM Communication registered under the laws of the PRC. SAGEM Communication has worldwide rights in the brand of “Philips” for telefacsimile machine products and is one of the largest enterprises in Europe. SAGEM engages in business of selling “Philips” brand thermal sensitive telefacsimile machine products. To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, SAGEM and SAGEM Communication and their ultimate beneficial owners and their respective directors, chief executive and substantial shareholders are Independent Third Party to the Company and its connected persons.

GEM LISTING RULES IMPLICATIONS

Pursuant to Rule 19.06(2) of the GEM Listing Rules, disclosure obligation arises when a transaction or a series of transactions entered by the Company where the percentage ratio is 5% or more, but less than 25%. As the assets ratio and the consideration ratio for the License Agreement are 20.22% and 12.76% respectively, the License Agreement constituted a discloseable transaction on the part of the Company under Rule 19.06 of the GEM Listing Rules.

REASONS FOR THE LICENCE AGREEMENT

The Company principally engages in, among other things, the manufacturing and sale of electronic communication and consumer products.

In collaboration with SAGEM and SAGEM Communication, the Company enlarges its existing customer base and will gain the capability and reputation of manufacturing and distributing world class technological products and generate revenue from the sale thereof.

In addition to the Licence Agreement, the Company has also entered into the Manufacturing Agreement SAGEM, which provides inter alia that the Company has been appointed as the manufacturer of SAGEM’s Products in the PRC and shall manufacture SAGEM’s Products upon receipt of purchase orders from SAGEM from time to time. The Manufacturing Agreement shall be for a term of one year commencing from 1 July 2005 up to 30 June 2006.

In view of the international reputation of the brand of Philips and SAGEM, the Directors believe that the Licence Agreement, together with the Manufacturing Agreement, will enhance the reputation of the Company as a world class technology manufacturer and distributor, broaden its customer base and, gain from the stream of income generated from manufacturing and distribution of the Philips Products and SAGEM’s Products.

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LETTER FROM THE BOARD

FURTHER INFORMATION

Your attention is also drawn to the additional information set out in the appendix to this circular.

Yours faithfully For and on behalf of the Board

China Photar Electronics Group Limited Chen Jijin Executive Director

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APPENDIX

GENERAL INFORMATION

1. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept responsibility, includes particulars given in compliance with the GEM Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that, to the best of their knowledge and belief:

• (1) the information contained in this circular is accurate and complete in all material respects and not misleading;

• (2) there are no other matters the omission of which would make any statement in this circular misleading; and

• (3) all opinions expressed in this circular have been arrived at after due and careful consideration and are founded on bases and assumptions that are fair and reasonable.

2. DISCLOSURE OF INTERESTS

• (a) Director’s interests and short positions in the securities of the Company and its associated corporations

As at the Latest Practicable Date, the following Director had or was deemed to have interests or short positions in the shares, underlying shares or debentures of the Company and its associated corporations (within the meaning of Part XV of the SFO) (i) which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which they were taken or deemed to have under such provisions of the SFO); or (ii) which were required, pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (iii) which were, pursuant to rules 5.46 to 5.67 of the GEM Listing Rules relating to securities transactions by Directors to be notified to the Company and the Stock Exchange:

				Approximate
	Nature of	No. of		percentage of
Name of Director	interest	Shares held	Position	issued share capital
Chen Jijin_Note_	Corporate	346,700,000	Long	66.67%
Note:

The Shares are owned by Modern China Holdings Limited, a company incorporated in the British Virgin Islands and 100% of the issued share capital of which is held by Mr. Chen Jijin.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors nor the chief executive of the Company had or was deemed to have any interests or short positions in the shares, underlying shares or debentures of the Company and its associated corporations (within the meaning of Part XV of the SFO) (i) which

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APPENDIX

GENERAL INFORMATION

were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which they were taken or deemed to have under such provisions of the SFO); or (ii) which were required, pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (iii) which were, pursuant to rules 5.46 to 5.67 of the GEM Listing Rules relating to securities transactions by Directors to be notified to the Company and the Stock Exchange.

(b) Persons who have an interest or short position which is discloseable under Divisions 2 and 3 of Part XV of the SFO and substantial Shareholders

So far as is known to the Directors, as at the Latest Practicable Date, the following person (not being Directors or chief executive of the Company) had, or was deemed to have, interests or short positions in the Shares or underlying Shares which would fall to be disclosed to the Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO or who were directly or indirectly interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any member of the Group:

			Approximate
	No. of		percentage of
Name of Shareholder	Shares held	Position	issued share capital
Modern China Holdings	346,700,000	Long	66.67%
Limited_Note_

Note:

The issued share capital of Modern China Holdings Limited is 100% beneficially owned by Mr. Chen Jijin, an executive Director.

Save as disclosed above, as at the Latest Practicable Date, the Directors were not aware of any other person (other than the Directors and the chief executive of the Company) who had, or was deemed to have, interests or short positions in the Shares or underlying Shares (including any interests in options in respect of such capital), which would fall to be disclosed to the Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO, or who was directly or indirectly interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any member of the Group.

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APPENDIX

GENERAL INFORMATION

3. DIRECTORS’ SERVICE CONTRACTS

Each of Mr. Chen Jijin and Ms. Huang Menghuai has entered into a service agreement with the Company. Mr. Chen’s agreement and Ms. Huang’s agreement took effect on 14 June 2005 and 16 June 2005 respectively. Brief particulars of these service agreements are set out below:

• (a) the term of each of the service agreement shall be for an initial term of three years renewable automatically for successive terms of one year each commencing from the day next after the expiry of the then current term;

• (b) each of the service agreement may be terminated by either party giving to the other not less than three months’ written notice expiring at the end of the initial term or at any time thereafter;

• (c) Mr. Chen Jijin and Ms. Huang Menghuai are entitled to a basic monthly salary of HK$40,000 and HK$15,000 respectively, subject to such increase as may be determined by the Board from time to time; and

• (d) each of the service agreement provides for management bonus in respect of each financial year of the Company in an amount to be determined by the Board in its absolute discretion.

Save as disclosed herein, none of the Directors has entered into any service contract or management agreement, proposed or otherwise with any member of the Group (excluding contracts expiring or terminable by the employer within one year without payment of compensation other than statutory compensation).

4. COMPETING INTERESTS

Pursuant to Rule 19.64(9) and Rule 11.04 of the GEM Listing Rules, as at the Latest Practicable Date, the following Directors are considered to have interests in businesses which compete or are likely to compete, either directly or indirectly, with the businesses of the Group:

Mr. Chen Jijin is an executive Director and a controlling shareholder of the Company. In addition, Mr. Chen also holds shareholdings and directorships in Guangdong Photar High Technology Co., Ltd. (“ Guangdong Photar ”) which engages principally in manufacturing and selling of electronic communication and consumer products. In this regard, Mr. Chen Jijin is considered to have interests in businesses which compete, or might compete, either directly or indirectly, with the businesses of the Group.

Ms. Huang Menghuai is an executive Director. In addition, Ms. Huang is also an executive director and vice president of Guangdong Photar. In this regard, Ms. Huang Menghuai is considered to have interests in businesses which compete, or might compete, either directly or indirectly, with the businesses of the Group.

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APPENDIX

GENERAL INFORMATION

As Guangdong Photar is a private company which is not in any way related to the Company except that Mr. Chen is the sole owner and Mr. Chen and Ms. Huang both being its executive directors, Mr. Chen and Ms. Huang hereby undertake to use their best endeavors to procure Guangdong Photar not to compete in any way with the Group in relation to its business from time to time and with effect from 20 June 2005, Guangdong Photar ceased to engage in any business in relation to telefascimile machine products.

Save as disclosed herein, none of the Directors, the management shareholders or the substantial shareholders of the Company, or any of their respective associates, has engaged in any business that competes or may compete with the business of the Group or has any other conflict of interest with the Group.

5. LITIGATION

As at the Latest Practicable Date, no member of the Group was engaged in any litigation or arbitration of material importance and no litigation, arbitration or claim of material importance was known to the Directors to be pending or threatened against any member of the Group.

6. MISCELLANEOUS

• (a) The registered office of the Company is located at Century Yard, Cricket Square, Hutchins Drive, P.O. Box 2681 GT, George Town, Grand Cayman, British West Indies.

• (b) The head office and principal place of business of the Company in Hong Kong is located at Suite 5601, The Center, 99 Queen’s Road Central, Hong Kong.

• (c) The branch share registrar and transfer office in Hong Kong of the Company is Tengis Limited at Ground Floor, Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong.

• (d) The company secretary and qualified accountant of the Company is Mr. Hung Lap Kay, who is a fellow member of the Association of Chartered Certified Accountants and an associate member of the Hong Kong Institute of Certified Public Accountants, with over 10 years of professional experience in accounting and auditing.

• (e) The compliance officer of the Company is Mr. Chen Jijin who is an executive director of the Company.

• (f) The Company has established an audit committee with written terms of reference in compliance with the GEM Listing Rules. The primary duties of the audit committee are to review and supervise the financial reporting process

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APPENDIX

GENERAL INFORMATION

and internal control system of the Group. The audit committee comprises three independent non-executive Directors, namely, Mr. Guo Qing, Mr. Liu Feng and Ms. Guo Wen Hong:

• (i) Mr. Guo Qing, aged 40, is an independent non-executive Director. He has been working as a manager of the accounts and finance department for a private luggage manufacturing company in Shenzhen, the PRC since 2000. He was awarded the graduation certificate in economic management (經濟管理專業 ) from The Party School of the Communist Party of China Central Committee (中共中央黨校函授學院) in December 2001. He was certified as an accountant in accounts (corporate) (會計

• （企業）) by the Ministry of Finance of the PRC in May 1997 and is a member of The Chinese Institute of Certified Public Accountants. He has not held any directorship in other publicly listed companies in the past three years. He has been an independent non-executive Director since December 2003.

• (ii) Mr. Liu Feng, aged 28, is an independent non-executive Director. He holds a bachelor degree in economic, major in International Accounting, from Jiangxi University of Finance and Economics in July 2000. He has been working as a manger of the Finance Department in an electrical manufacturing company in Shenzhen since August 2000. He is also an independent non-executive director and audit committee member of MP Logistics International Holdings Limited since January 2004. He has been an independent non-executive Director since August 2004.

• (iii) Ms. Guo Wen Hong, aged 36, is an independent non-executive Director. She holds a bachelor degree in Chinese history from Wuhan University in July 1989 and completed a course in business management in November 1997. She worked in various departments of a duty free company in Shenzhen during the period from April 1991 to September 2003 including personnel, training, and merchandise management department. She then worked in the advertisement department of a newspaper publication company in Shenzhen since September 2003. She is also an independent non-executive director and audit committee member of IA International Holdings Limited since September 2004. She has been an independent non-executive Director since August 2004.

• (g) The English text of this circular shall prevail over the Chinese text in case of inconsistency.

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