Capital VC Limited — Proxy Solicitation & Information Statement 2006

Nov 10, 2006

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 registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Sino Katalytics Investment Corporation (“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 transferee.

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

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SINO KATALYTICS INVESTMENT CORPORATION

(Incorporated in the Cayman Islands with limited liability) (Stock Code: 2324)

REFRESHMENT OF GENERAL MANDATE TO ALLOT AND ISSUE SHARES AND NOTICE OF EXTRAORDINARY GENERAL MEETING

Independent financial adviser to the Independent Board Committee and the Independent Shareholders

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Mega Capital (Asia) Company Limited

A notice convening an extraordinary general meeting (“EGM”) of the Company to be held at Suites 403-404, 4/F, Prince’s Building, 10 Chater Road, Central, Hong Kong on Monday, 27 November 2006 at 5:00 p.m. is set out on pages 20 to 22 of this circular. Whether or not you intend to attend and vote at the EGM in person, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon to the Company’s branch share registrar in Hong Kong, Tengis Limited, at 26/F, Tasbury Centre, 28 Queen’s Road East, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for holding the EGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM or any adjourned meeting should you so wish.

9 November 2006

CONTENTS

		Page
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1
LETTER FROM THE BOARD
1.	Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
2.	Usage of the Current General Mandate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
3.	Proposed Grant of New General Mandate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
4.	Reason for the New General Mandate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
5.	Fund Raising since Grant of General Mandate at Last AGM . . . . . . . . . . . . . . . . . . . . . .	5
6.	EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
7.	Procedure by which a poll may be demanded . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
8.	Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
9.	Qualification of the Expert . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
10.	Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
11.	Responsibility Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
LETTER FROM THE INEPENDENT BOARD COMMITTEE . . . . . . . . . . . . . . . . . . . . . .		10
LETTER FROM MEGA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		11
NOTICE OF EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		20
Accompanying document — Form of Proxy

— i —

DEFINITIONS

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

• “2006 Annual Report”

the Audited Consolidated Financial Statements and the Reports of the Directors and Auditors of the Company for the year ended 30 June 2006

• “Articles” the Company’s articles of association

• “associate” has the meaning ascribed to it in the Listing Rules

• “Board” the board of Directors of the Company

• “Company” Sino Katalytics Investment Corporation, a company incorporated in the Cayman Islands with limited liability, whose shares are listed on the Stock Exchange

• “Current General Mandate” the general and unconditional mandate granted to the Directors to allot, issue and deal with up to 22,928,181 new Shares, being 20% of the then issued share capital of the Company as at 19 May 2006, by a resolution of the Shareholders passed at the Last EGM

• “Director(s)” directors of the Company

• “EGM” an extraordinary general meeting of the Company to be held on 27 November 2006

• “Group” the Company and its subsidiaries “Hong Kong” Hong Kong Special Administrative Region of the PRC

“Independent Board Committee” an independent committee of the Board comprising Mr. Lam Kwan, Mr. Chan Ming Sun, Jonathan and Mr. Shiu Siu Tao, all being independent non-executive directors, to advise the Independent Shareholders in respect of the New General Mandate “Independent Shareholders” in respect of the refreshment of the general mandate, the Shareholders other than the Directors (excluding the independent non-executive Directors) and their associates “Last AGM” the last annual general meeting of the Company held on 30 December 2005 “Last EGM” the last extraordinary general meeting of the Company held on 19 May 2006

— 1 —

DEFINITIONS

“Latest Practicable Date”	8 November 2006, being the latest practicable date prior to
	the printing of this circular for the purpose of ascertaining
	certain information contained in this circular
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock
	Exchange
“Mega”	Mega Capital (Asia) Company Limited, a corporation
	licensed under the SFO to carry out types 1 (dealing in
	securities) and 6 (advising on corporate finance) regulated
	activities , and the independent financial adviser appointed by
	the Company to advise the Independent Board Committee and
	the Independent Shareholders in respect of the proposed
	refreshment of the Current General Mandate by granting the
	New General Mandate
“New General Mandate”	the general and unconditional mandate proposed to be granted
	to the Directors to allot and issue new Shares as set out in
	resolutions contained in the notice of the EGM
“Placing Agreement”	the placing agreement dated 9 August 2006 made between the
	Company and Kingston Securities Limited in respect of the
	Share Placement
“Placing Announcement”	the announcement of the Company dated 9 August 2006 in
	relation to the Share Placement
“PRC”	The People’s Republic of China
“SFO”	Securities and Futures Ordinance, Chapter 571 of the Laws of
	Hong Kong
“Share Placement”	the placement of 22,900,000 Shares as announced by the
	Company on 9 August 2006 pursuant to the Placing
	Agreement
“Share(s)”	ordinary share(s) of nominal value of HK$0.01 each in the
	share capital of the Company
“Shareholder(s)”	holders of Shares
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong
“%”	per cent.

— 2 —

LETTER FROM THE BOARD

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SINO KATALYTICS INVESTMENT CORPORATION

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 2324)

Executive Directors:

Mr. Chui Tak Keung, Duncan Mr. Yau Chung Hong Mr. Chow Ka Wo, Alex

Non-executive Director:

Registered office:

Cricket Square Hutchins Drive P.O. Box 2681 Grand Cayman KY1-1111 Cayman Islands

Mr. Ma Kwok Keung, Kenneth

Independent Non-executive Directors:

Mr. Lam Kwan Mr. Chan Ming Sun, Jonathan Mr. Shiu Siu Tao

Head office and principal place of business in Hong Kong: Suites 403-404, 4/F Prince’s Building 10 Chater Road Central Hong Kong

9 November 2006

To the Shareholders

Dear Sir or Madam,

REFRESHMENT OF GENERAL MANDATE TO ALLOT AND ISSUE SHARES AND NOTICE OF EXTRAORDINARY GENERAL MEETING

1. INTRODUCTION

As disclosed in the Placing Announcement, the Company entered into the Placing Agreement on 9 August 2006. Pursuant to the Placing Agreement, the Company has placed a total of 22,900,000 Shares under the Current General Mandate. As at the Latest Practicable Date, the Share Placement has been completed.

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LETTER FROM THE BOARD

Following completion of the Share Placement, the Current General Mandate has been substantially utilized. The Company proposes to refresh the Current General Mandate by the grant of the New General Mandate to the Directors.

The purpose of this circular is to set out (i) details of the New General Mandate; (ii) the recommendation from the Independent Board Committee; (iii) the recommendation from Mega to the Independent Board Committee and the Independent Shareholders; and (iv) a notice convening the EGM at which necessary resolution will be proposed to the Independent Shareholders to consider and, if thought fit, approve the refreshment of the Current General Mandate by the grant of the New General Mandate.

2. USAGE OF THE CURRENT GENERAL MANDATE

At the Last EGM, the Shareholders approved, among other things, an ordinary resolution to grant to the Directors the Current General Mandate to issue not more than 22,928,181 Shares, being 20% of the then aggregate nominal amount of the issued share capital of the Company of 114,640,909 Shares as at the date of passing of the resolution. During the period from the grant of the Current General Mandate to the Latest Practicable Date, the Current General Mandate has been utilized to the extent of 22,900,000 Shares as a result of completion of the Share Placement, being approximately 19.97% of the aggregate nominal amount of the issued share capital of the Company as at the date of passing of the resolution at the Last EGM. Details of the Share Placement are contained in the Placing Announcement.

3. PROPOSED GRANT OF NEW GENERAL MANDATE

The Company will convene the EGM at which an ordinary resolution will be proposed to the Independent Shareholders that the Directors be granted the New General Mandate to allot and issue Shares not exceeding 20% of the issued share capital of the Company as at the date of passing the relevant ordinary resolution.

As at the Latest Practicable Date, the Company has an aggregate of 252,181,818 Shares in issue. Subject to the passing of the ordinary resolution for the approval of the New General Mandate and on the basis that no further Shares are issued and/or repurchased by the Company between the Latest Practicable Date and the date of the EGM, the Company would be allowed under the New General Mandate to allot and issue up to 50,436,363 Shares, being 20% of the 252,181,818 Shares in issue as at the Latest Practicable Date.

— 4 —

LETTER FROM THE BOARD

4. REASONS FOR THE NEW GENERAL MANDATE

A new grant of the New General Mandate will empower the Directors to issue new Shares under the refreshed limit speedily as and when necessary, and without seeking further approval from the Shareholders as opportunities arise. The New General Mandate will also give the Company the ability to capture any capital raising or related investment opportunity as and when it arises. Such ability is crucial in a competitive and rapidly changing investment environment.

The Directors also consider equity financing to be an important mean of fund raising resources to the Company since it does not create any interest paying obligations on the Company. In appropriate circumstances, the Company will also consider other financing methods such as debt financing to fund its operations. While the Directors consider that there is no immediate funding need for the Company’s current operations and that there is currently no concrete proposal presented by potential investors for placement of Shares, the Directors are now proposing to seek the approval of Independent Shareholders at the EGM of the New General Mandate such that the Directors will be able to respond to the market promptly when opportunity of fund raising through equity arises. The refreshment of the New General Mandate is an insurance measure proposed by the Board such that when an equity fund raising requirement or opportunity arises in the future, the Board can proceed with a share placement immediately without the delays of going through an EGM by having the New General Mandate ready and approved.

For these reasons, the Directors believe that it is in the best interests of the Company and its Shareholders as a whole if the Current General Mandate is to be refreshed by the grant of the New General Mandate at the EGM.

Since the Last AGM, the general mandate has been refreshed once and the Current General Mandate has been granted to the Directors and approved by the Shareholders at the Last EGM. Save for the Current General Mandate, there has been no other refreshment of general mandate since the Last AGM.

5. FUND RAISING SINCE GRANT OF GENERAL MANDATE AT LAST AGM

The fund raising completed subsequent to the grant on the Company’s Last AGM included the two share placements dated 9 March 2006 and 9 August 2006 raising net proceeds of approximately HK$12.5 million and HK$8.86 million respectively. Details of the two share placements have been set out in the Company’s announcement dated 13 March 2006 and 9 August 2006 and summarized in the table below. Save for the two aforesaid share placements disclosed, there has been no other fund raising activity undertaken by the Company since the Last AGM.

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LETTER FROM THE BOARD

Summary of fund raising since the refreshment of general mandate at Last AGM:

	Date of				Intended use of
	Mandate	Date of	Date of	Net	proceeds as	Actual use of
Description	Granted	Agreement	Announcement	Proceeds	announced	proceeds
Placing of	30 December	9 March	13 March	approximately	intended to be used for	Of the net proceeds
17,300,000	2005	2006	2006	HK$12.5	general working capital	approximately HK$8.68
new Shares				million	and/or possible	million has been used
					investment in the	to invest in some
					future	companies providing
						products and services
						in the financial sector;
						and approximately
						HK$3.82 million for
						general working capital
						of the Group
Placing of	19 May 2006	9 August	9 August	approximately	intended to be used for	Of the net proceeds
22,900,000		2006	2006	HK$8.86	general working capital	approximately HK$7
new Shares				million	and/or possible	million has been used
					investment in the	to invest in some
					future	companies providing
						products and services
						in the financial sector;
						and approximately
						HK$1.86 million for
						general working capital
						of the Group

6. EGM

At the EGM, ordinary resolutions will be proposed to seek the approval of the Independent Shareholders to grant to the Directors the New General Mandate to allot, issue and deal in Shares not exceeding 20% of the aggregate nominal amount of the share capital of the Company at the date of resolution.

Pursuant to Rule 13.36(4)(a) of the Listing Rules, the New General Mandate requires the approval of the Independent Shareholders at the EGM at which any of the controlling Shareholders and their associates or, where there is no controlling Shareholders, Directors (excluding independent non-executive Directors) and the chief executive of the Company and their respective associates shall abstain from voting in favour of the relevant resolution. As at the Latest Practicable Date, there is no controlling Shareholder and the executive Directors, namely, Mr. Chui Tak Keung, Duncan (“Mr. Chui”), Mr. Yau Chung Hong (“Mr. Yau”) and Mr. Chow Ka Wo, Alex (“Mr. Chow”) shall abstain from voting at the EGM in favour of the resolution to approve the refreshment of the New General Mandate.

Mr. Chui controls or is entitled to exercise control over the voting right in respect of 30,600,000 Shares by virtue of his beneficial interests in Four Gold MS H01 Limited representing 12.13% of the share capital of the Company at the Latest Practicable Date, Mr. Yau controls or is entitled to exercise control over the voting right in respect of 2,600,000 Shares by virtue of his beneficial interests in Sellwell Enterprises Limited, representing 1.03% of the share capital of the Company at the Latest Practicable Date, and Mr. Chow was interested in and controls voting right in respect of 400,000 Shares at the Latest Practicable Date, representing 0.16% of the share capital of the Company. As at the Latest Practicable Date, none of the executive Directors has any intention to vote against the

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LETTER FROM THE BOARD

resolution to approve the refreshment of the New Genera Mandate at the EGM. Other than Mr. Chui, Mr. Yau and Mr. Chow, no other Directors or their respective associates had any interests in the Shares as at the Latest Practicable Date. Pursuant to Rule 13.39(4)(b) of the Listing Rules, any vote of the Independent Shareholders at the EGM will be taken by poll.

The New General Mandate will, if granted, remain effective until the earliest of (i) the conclusion of the next annual general meeting of the Company; (ii) the expiration of the period within which the next annual general meeting of the Company is required to be held by law or the Articles; and (iii) the revocation or variation by an ordinary resolution of the Shareholders in general meeting.

The notice of the EGM is set out on pages 20 to 22 of this circular. A form of proxy for use at the EGM is enclosed. Whether or not you intend to attend and vote at the EGM in person, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon to the Company’s branch share registrar in Hong Kong, Tengis Limited, at 26/F, Tasbury Centre, 28 Queen’s Road East, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for holding the EGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM or any adjourned meeting should you so wish.

7. PROCEDURE BY WHICH A POLL MAY BE DEMANDED

Under article 66 of the Company’s articles of association, a resolution put to the vote of a general meeting shall be decided upon by a show of hands unless (before or on the declaration of the result of the show of hands or on the withdrawal of any other demand for a poll) a poll is demanded:

• (1) by the chairman of such meeting; or

• (2) by at least three Shareholders present in person or in the case of a Shareholder being a corporation by its duly authorized representative or by proxy for the time being entitled to vote at the meeting; or

• (3) by a Shareholder or Shareholders present in person or in the case of a Shareholder being a corporation by its duly authorized representative or by proxy and representing not less than one-tenth of the total voting rights of all Shareholders having the right to vote at the meeting; or

• (4) by a Shareholder or Shareholders present in person or in the case of a Shareholder being a corporation by its duly authorized representative or by proxy and holding Shares in the Company conferring a right to vote at the meeting being Shares on which an aggregate sum has been paid up equal to not less than one-tenth of the total sum paid up on all Shares conferring that right.

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

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LETTER FROM THE BOARD

Under article 72 of the Company’s articles of association, a Shareholder entitled to more than one vote on a poll need not use all his votes or cast all the votes he uses in the same way.

8. RECOMMENDATIONS

Mega has been appointed to advise the Independent Board Committee and the Independent Shareholders with regard to the granting of the New General Mandate and consider that the granting of the New General Mandate to the Directors is in the interest of the Company and the Shareholders as a whole and is fair and reasonable so far as the Independent Shareholders are concerned. Your attention is drawn to the text of the letter of advice from Mega containing its recommendation and the principal factors it has taken into account in arriving at its recommendation are set out on pages 11 to 19 of this circular.

The Independent Board Committee, having taken into account the advice of Mega, considers the granting of the New General Mandate to the Directors is in the interest of the Company and Shareholders as a whole and is fair and reasonable so far as the Independent Shareholders are concerned. Accordingly, the Independent Board Committee recommends the Independent Shareholders to vote in favour of the resolution with regard to the granting of the New General Mandate. The full text of the letter from the Independent Board Committee is set out on page 10 of this circular.

9. QUALIFICATION OF THE EXPERT

The following is the qualification of the expert who has been named in this circular or has given an opinion or advice which is contained in this circular:

Name Qualification Mega Capital (Asia) A corporation licensed under the SFO to carry out types 1 and Company Limited 6 regulated activities (dealing in securities and advising on corporate finance)

Mega has given and has not withdrawn its written consent to the issue of the circular with the inclusion herein of its letter or references to its name in the form and context in which they respectively appear. Mega had no shareholding in any member of the Group or the right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group.

10. ADDITIONAL INFORMATION

Your attention is drawn to (i) the letter from the Independent Board Committee to the Independent Shareholders set out on page 10 of this circular containing its recommendation to the Independent Shareholders with regard to the grant of the New General Mandate and (ii) the letter from Mega set out on pages 11 to 19 of this circular containing its advice to the Independent Board Committee and Independent Shareholders in relation to the grant of the New General Mandate.

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LETTER FROM THE BOARD

11. 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 enquiry, that to the best of their knowledge and belief there are no other facts the omission of which would make any statement herein misleading.

By Order of the Board Chui Tak Keung, Duncan Executive Director

— 9 —

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

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SINO KATALYTICS INVESTMENT CORPORATION

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 2324)

9 November 2006

To the Independent Shareholders

Dear Sir/Madam

We have been appointed as the Independent Board Committee to advise the Independent Shareholders in connection with the grant of the New General Mandate, details of which are set out in the letter from the Board contained in the circular to the Shareholders dated 9 November 2006 (the “Circular”) , of which this letter forms part. Terms defined in the Circular shall have the same meanings when used herein unless the context otherwise requires.

Having considered the refreshment of the Current General Mandate by the grant of the New General Mandate and the advice of Mega in relation thereto as set out on pages 11 to 19 of the Circular, we are of the view that the refreshment of the Current General Mandate by the grant of the New General Mandate to the Directors is in the interest of the Company and the Shareholders as a whole and is fair and reasonable so far as the Independent Shareholders are concerned.

Accordingly, we recommend the Independent Shareholders to vote in favour of the resolution to be proposed at the EGM to approve the refreshment of the Current General Mandate by the grant of the New General Mandate.

Yours faithfully,

Mr. Lam Kwan	Mr. Chan Ming Sun, Jonathan	Mr. Shiu Siu Tao
Independent non-executive	Independent non-executive	Independent non-executive
Director	Director	Director

— 10 —

LETTER FROM MEGA

The following is the text of the letter of advice from Mega to the Independent Board Committee and the Independent Shareholders dated 9 November 2006 for incorporation in this circular.

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MEGA CAPITAL (ASIA) COMPANY LIMITED

Room 3406, 34/F

Edinburgh Tower, The Landmark 15 Queen’s Road Central Hong Kong

9 November 2006

To the Independent Board Committee and the Independent Shareholders of Sino Katalytics Investment Corporation

Dear Sir/ Madam,

REFRESHMENT OF GENERAL MANDATES TO ALLOT AND ISSUE SHARES

INTRODUCTION

We refer to our appointment to advise the Independent Board Committee and the Independent Shareholders in respect of the proposed refreshment of the Current General Mandate by granting the New General Mandate to the Directors, details of which are set out in this circular of which this letter forms part. Capitalised terms used in this letter shall have the same meanings ascribed to them in this circular unless the context otherwise requires.

Pursuant to the Listing Rules, the proposed refreshment of the Current General Mandate by granting the New General Mandate to the Directors is subject to the approval of the Independent Shareholders at the EGM by way of poll. Accordingly, the Independent Board Committee has been established to advise whether the proposed refreshment of the Current General Mandate by granting the New General Mandate to the Directors is fair and reasonable and in the interest of the Company and the Shareholders as a whole. The Independent Board Committee comprises all of the three independent non-executive Directors, namely, Mr. Lam Kwan, Mr. Chan Ming Sun, Jonathan and Mr. Shiu Siu Tao. In this regard, we have been appointed as the independent financial adviser to the Independent Board Committee and the Independent Shareholders.

— 11 —

LETTER FROM MEGA

Pursuant to Rule 13.36(4)(a) of the Listing Rules, the New General Mandate requires the approval of the Independent Shareholders at the EGM at which any of the controlling Shareholders and their associates or, where there is no controlling Shareholders, Directors (excluding independent non-executive Directors) and the chief executive of the Company and their respective associates shall abstain from voting in favour of the proposed refreshment of the Current General Mandate by granting the New General Mandate. As at the Latest Practicable Date, there is no controlling Shareholders and accordingly, the executive Directors shall abstain from voting in favour of the proposed refreshment of the Current General Mandate by granting the New General Mandate at the EGM.

In formulating our opinion, we have relied on the accuracy of the information and representations contained in this circular and information and facts provided to us by the Company, the Directors and the management of the Company. We have also assumed that all statements of belief and intention made by the Directors in this circular were reasonably made after due enquiry. We have assumed that all statements and representations made or referred to in this circular were true at the time they were made and continue to be true at the date of the EGM. We have no reason to doubt the truth, accuracy and completeness of the information and representations provided to us by the Company, the Directors and management of the Company and have no reason to doubt that any relevant material facts have been withheld or omitted. We consider that we have reviewed sufficient information to reach an informed view and to justify reliance on the accuracy of the information contained in this letter and to provide a reasonable basis for our opinion. We have not, however, conducted an independent investigation into the business affairs, financial position or future prospects of the Company nor have we carried out any independent verification of the information supplied.

PRINCIPAL FACTORS AND REASONS CONSIDERED

In arriving at our opinion regarding the proposed refreshment of the Current General Mandate by granting the New General Mandate to the Directors, we have considered the following principal factors and reasons:

1. Background of the refreshment

The Company announced on 9 January 2006 that, on 30 December 2005, Four Gold MS H01 Limited (“Vendor”), an investment holding company controlled by Mr. Chui Tai Keung, Duncan, an executive Director, entered into a placing agreement and a top-up subscription agreement, with a placing agent and the Company respectively. Pursuant to the placing agreement, the Vendor placed through the placing agent an aggregate of 10,500,000 Shares, on a fully underwritten basis, at a price of HK$0.70 per Share. The Vendor then subscribed for an aggregate of 10,500,000 Shares, which were allotted and issued under the general mandate granted to the Directors by a resolution passed at the extraordinary general meeting of the Company held on 11 November 2005, at a price of HK$0.70 per Share (the “First Placement”). The 10,500,000 Shares subscribed by the Vendor represented (i) approximately 12.09% of the then issued share capital of the Company of 86,840,909 Shares; and (ii) approximately 10.79% of the enlarged share capital of the Company of 97,340,909 Shares. As advised by the Directors, the net proceeds from the top-up subscription amounted to approximately HK$7.15 million, of which approximately HK$5 million has been used for investment in listed shares; and approximately HK$2.15 million for general working capital of the Group.

— 12 —

LETTER FROM MEGA

At the Last AGM, the Shareholders approved, among other things, an ordinary resolution to grant to the Directors a general mandate to issue not more than 17,368,181 Shares, being 20% of the aggregate nominal amount of the issued share capital of the Company of 86,840,909 Shares as at the date of passing the resolution.

According to the announcement of the Company dated 13 March 2006, the Company entered into a placing agreement with a placing agent on 9 March 2006 for the placing of a maximum of 17,300,000 new Shares on a best effort basis. Pursuant to the aforesaid placing agreement, 17,300,000 new Shares have been allotted and issued under the general mandate approved at the Last AGM at a price of HK$0.75 per Share to not less than six places who are independent of and not connected with the Company (the “Second Placement”). The 17,300,000 Shares represented (i) approximately 19.92% of the aggregate nominal amount of the issued share capital of the Company as at the date of passing the relevant resolution; and (ii) approximately 15.09% of the issued share capital of the Company of 114,640,909 Shares as enlarged by the Shares issued under the Second Placement.

The total proceeds and net proceeds from the Second Placement amounted to approximately HK$12,975,000 and approximately HK$12,500,000 respectively. As disclosed in the letter from the Board, approximately HK$8.68 million of the net proceeds has been used for investment in companies providing products and services in the financial sector; and approximately HK$3.82 million for general working capital of the Group.

At the extraordinary general meeting of the Company held on 19 May 2006, the Shareholders approved, among other things, an ordinary resolution to grant to the Directors the Current General Mandate to issue not more than 22,928,181 Shares, being 20% of the aggregate nominal amount of the issued share capital of the Company of 114,640,909 Shares as at the date of passing the resolution.

On 13 June 2006, the Company announced a proposed bonus issue of Shares (the “Bonus Issue”) by way of capitalization of the Company’s share premium account on the basis of one bonus Share for every one existing Share. The Bonus Issue was approved by the Shareholders by way of poll on the extraordinary general meeting of the Company held on 21 July 2006. As a result, the issued shares of the Company increased from 114,640,909 Shares to 229,281,818 Shares.

It was announced that, on 9 August 2006, the Vendor entered into the Placing Agreement and a top-up subscription agreement (“Top-up Subscription Agreement”) with a placing agent and the Company respectively. Pursuant to the Placing Agreement, the Vendor placed through the placing agent an aggregate of 22,900,000 existing Shares, on a fully underwritten basis, of which 10,900,000 Shares and 12,000,000 Shares were placed to Mak Tai Wo and Eftpos Ltd., respectively, at a price of HK$0.40 per Share (the “Third Placement”). It was disclosed in the Placing Announcement that, prior to completion of the Third Placement, Mak Tai Wo had no shareholding interest in the Company; whereas Eftpos Ltd., Mr. Wu Wai Yin (“Mr. Wu”), the ultimate beneficial owner of Eftpos Ltd., and his spouse together were interested in 10,400,000 Shares, of which Eftpos Ltd. held 10,000,000 Shares, Mr. Wu personally held 200,000 Shares and the spouse of Mr. Wu personally held 200,000 Shares. Pursuant to the Top-up Subscription Agreement, the Vendor subscribed for an aggregate of 22,900,000 new Shares, which were issued under the Current General Mandate, at a price of HK$0.40 per Share (“Top-up Subscription”).

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LETTER FROM MEGA

The 22,900,000 Shares issued for the Top-up Subscription under the Current General Mandate represented (i) approximately 9.99% of the then issued share capital of the Company of 229,281,818 Shares; and (ii) approximately 9.08% of the issued share capital of the Company of 252,181,818 as enlarged by the Top-up Subscription. As a result of the Third Placement and the Top-up Subscription, the Current General Mandate had been utilized as to 22,900,000 Shares, being approximately 19.97% of the aggregate nominal amount of the issued share capital of the Company as at the date of passing the resolution, to be allotted and issued pursuant thereto. The net proceeds from the Third Placement amounted to approximately HK$8.86 million. As disclosed in the letter from the Board, approximately HK$7 million of the net proceeds has been invested in companies providing products and services in the financial sector; and approximately HK$1.86 million has been used for general working capital of the Group.

Given that 22,900,000 Shares, out of a maximum of 22,928,181 Shares as permitted under the Current General Mandate, have been issued for the Top-up Subscription, the Current General Mandate has been substantially utilized. In this regard, the Directors advised that the grant of the New General Mandate would help to maintain the flexibility of the Company to solicit funding in the future for its business development if appropriate investment opportunities arise. Under such circumstances, the Directors proposed to seek the approval of the Independent Shareholders at the EGM for the grant of the New General Mandate to the Directors to allot and issue not exceeding 20% of the issued share capital of the Company as at the date of passing the relevant resolution at the EGM.

2. Current resources and financial flexibility

The Company is an investment company whose objective is, as disclosed in its prospectus dated 8 October 2003, to achieve earnings in the form of short to medium term (i.e. less than five years) capital appreciation as well as income from interests and dividends by investing in listed and unlisted companies mainly in Hong Kong and the PRC. The Company also intends to invest in unlisted companies with the potential to seek listing on any stock exchanges.

Being an investment company, the Company might have to make prompt decisions and to solicit funding in a relatively short period of time when investment or acquisition opportunities arise. The New General Mandate would allow the Company to allot and issue new Shares to raise capital through placing of Shares or as consideration for such investment and/ or acquisition, thereby enhancing the Company’s financing flexibility. According to the 2006 Annual Report, bank balances and cash of the Company amounted to approximately HK$5.1 million as at 30 June 2006. Total liabilities of the Group amounted to approximately HK$7.5 million and total assets of the Group amounted to approximately HK$86.5 million as at 30 June 2006, contributing to a gearing ratio of approximately 8.7%. In case that any appropriate investment opportunities arise, the Directors cannot ascertain if the internal resources of the Company are sufficient to satisfy the funding needs; or if the Company can obtain borrowings in a short period of time at a cost acceptable by the Company. In this regard, the New General Mandate serves as an alternative of equity funding should the Company encounter any urgent need for capital.

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LETTER FROM MEGA

As disclosed in the 2006 Annual Report, the vision of the Company is to become the world’s premier investor or investment corporation focused on alternative investment opportunities in the PRC. The Company’s investment objective is to achieve long-term capital appreciation for the Shareholders by entering into well-diversified alternative investments with high quality. In order to focus its resources and to execute a consistent strategy, the Company focuses on two sectors, namely, the telecommunications/ media/ technology (“TMT”) sector and the financial services sector. Under the Group’s direct investment initiatives, the investment projects must fulfill at least one of the few prerequisites: (i) ownership of proprietary technology, products, or operating status; (ii) possession of undervalued assets; or (iii) control of distribution infrastructure and/ or channels. In addition to regular investment activities, the Group will also seek to expand its presence in the PRC and Europe in order to attract sophisticated investors, and to develop more exit approaches in respect of the companies in its portfolio.

As advised by the Directors, the investments made by the Company are mainly financed by equity funding, as they intend to maintain the gearing ratio of the Group at the current level. As further disclosed in the 2006 Annual Report, the Company will continue to leverage on its expertise in the TMT sector and financial services sector to identify quality investment opportunities in the PRC. In light of Company’s potential funding needs for investment purpose, we consider the additional financing flexibility as enhanced by the grant of the New General Mandate beneficial to the Company.

As at the Latest Practicable Date, the Company had an aggregate of 252,181,818 Shares. Subject to the passing of the ordinary resolution for the approval of the grant of the New General Mandate at the EGM and on the basis that no further Shares are to be issued and/or repurchased by the Company between the Latest Practicable Date and the date of the EGM, the New General Mandate will empower the Directors to allot, issue or otherwise deal with up to a maximum of 50,436,363 new Shares, representing 20% of the total number of issued Shares as at the Latest Practicable Date. It is expected that the capital which may be raised under the New General Mandate could offer another funding alternative to the Company when contemplating any potential investment and/or acquisitions. The Directors confirmed that, at present, there is no concrete proposal for any investment or acquisition by the Company.

3. Other financing alternatives

Other than raising funds by issuing equity capital, the Directors advised that they would also consider other financing methods such as debt financing and funding through internal resources in order to meet its funding needs arising from future development of the Company. The Directors further advised that they would select an appropriate funding alternative which is in the best interest of the Company depending on a number of factors such as (i) the financial position and capital structure of the Company; (ii) the cost of funding to the Company; and (iii) the then market condition. Provided that there is no immediate funding need for the Company’s current operations and there is currently no concrete proposal presented by potential investors for placement of Shares, the Directors considered that the New General Mandate would enable the Company to respond to the market promptly when opportunities of fund raising through equity arise. As such, we concur with the Directors that it is advisable for them to obtain the New General Mandate.

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LETTER FROM MEGA

4. Potential dilution to shareholding of the Independent Shareholders

For illustration purpose, the table below sets out the respective shareholding structures of the Company (i) as at the Last AGM; (ii) as at the Latest Practicable Date; and (iii) upon full utilization of the New General Mandate:

At the Last AGM As at the Latest Practicable Date Upon full utilization of the New General Mandate No. of Shares % (approximate) No. of Shares % (approximate) No. of Shares % (approximate) Directors: Mr. Chui Tak Keung, Duncan (Note 1) 22,800,000 26.3 30,600,000 12.1 30,600,000 10.1 Mr. Yau Chung Hong (Note 2) — — 2,600,000 1.0 2,600,000 0.9 Mr. Chow Ka Wo, Alex — — 400,000 0.2 400,000 0.1 Substantial Shareholders: Mr. Li Yiu Keung 12,700,000 14.6 30,000,000 11.9 30,000,000 9.9 Public Shareholders: Placees of the First Placement (Note 3) — — 21,000,000 8.3 21,000,000 6.9 Placees of the Second Placement (Note 4) — — 34,600,000 13.7 34,600,000 11.4 Placees of the Third Placement and their associates (Note 5) — — 33,300,000 13.2 33,300,000 11.0 Other public Shareholders 51,340,909 59.1 99,681,818 39.5 99,681,818 32.9 Subtotal: Public Shareholders 51,340,909 59.1 188,581,818 74.8 188,581,818 62.3 Prospective placee(s)/investor(s) — — — — 50,436,363 16.7 Total 86,840,909 100 252,181,818 100 302,618,181 100	At the Last AGM As at the Latest Practicable Date Upon full utilization of the New General Mandate No. of Shares % (approximate) No. of Shares % (approximate) No. of Shares % (approximate) Directors: Mr. Chui Tak Keung, Duncan (Note 1) 22,800,000 26.3 30,600,000 12.1 30,600,000 10.1 Mr. Yau Chung Hong (Note 2) — — 2,600,000 1.0 2,600,000 0.9 Mr. Chow Ka Wo, Alex — — 400,000 0.2 400,000 0.1 Substantial Shareholders: Mr. Li Yiu Keung 12,700,000 14.6 30,000,000 11.9 30,000,000 9.9 Public Shareholders: Placees of the First Placement (Note 3) — — 21,000,000 8.3 21,000,000 6.9 Placees of the Second Placement (Note 4) — — 34,600,000 13.7 34,600,000 11.4 Placees of the Third Placement and their associates (Note 5) — — 33,300,000 13.2 33,300,000 11.0 Other public Shareholders 51,340,909 59.1 99,681,818 39.5 99,681,818 32.9 Subtotal: Public Shareholders 51,340,909 59.1 188,581,818 74.8 188,581,818 62.3 Prospective placee(s)/investor(s) — — — — 50,436,363 16.7 Total 86,840,909 100 252,181,818 100 302,618,181 100	At the Last AGM As at the Latest Practicable Date Upon full utilization of the New General Mandate No. of Shares % (approximate) No. of Shares % (approximate) No. of Shares % (approximate) Directors: Mr. Chui Tak Keung, Duncan (Note 1) 22,800,000 26.3 30,600,000 12.1 30,600,000 10.1 Mr. Yau Chung Hong (Note 2) — — 2,600,000 1.0 2,600,000 0.9 Mr. Chow Ka Wo, Alex — — 400,000 0.2 400,000 0.1 Substantial Shareholders: Mr. Li Yiu Keung 12,700,000 14.6 30,000,000 11.9 30,000,000 9.9 Public Shareholders: Placees of the First Placement (Note 3) — — 21,000,000 8.3 21,000,000 6.9 Placees of the Second Placement (Note 4) — — 34,600,000 13.7 34,600,000 11.4 Placees of the Third Placement and their associates (Note 5) — — 33,300,000 13.2 33,300,000 11.0 Other public Shareholders 51,340,909 59.1 99,681,818 39.5 99,681,818 32.9 Subtotal: Public Shareholders 51,340,909 59.1 188,581,818 74.8 188,581,818 62.3 Prospective placee(s)/investor(s) — — — — 50,436,363 16.7 Total 86,840,909 100 252,181,818 100 302,618,181 100	At the Last AGM As at the Latest Practicable Date Upon full utilization of the New General Mandate No. of Shares % (approximate) No. of Shares % (approximate) No. of Shares % (approximate) Directors: Mr. Chui Tak Keung, Duncan (Note 1) 22,800,000 26.3 30,600,000 12.1 30,600,000 10.1 Mr. Yau Chung Hong (Note 2) — — 2,600,000 1.0 2,600,000 0.9 Mr. Chow Ka Wo, Alex — — 400,000 0.2 400,000 0.1 Substantial Shareholders: Mr. Li Yiu Keung 12,700,000 14.6 30,000,000 11.9 30,000,000 9.9 Public Shareholders: Placees of the First Placement (Note 3) — — 21,000,000 8.3 21,000,000 6.9 Placees of the Second Placement (Note 4) — — 34,600,000 13.7 34,600,000 11.4 Placees of the Third Placement and their associates (Note 5) — — 33,300,000 13.2 33,300,000 11.0 Other public Shareholders 51,340,909 59.1 99,681,818 39.5 99,681,818 32.9 Subtotal: Public Shareholders 51,340,909 59.1 188,581,818 74.8 188,581,818 62.3 Prospective placee(s)/investor(s) — — — — 50,436,363 16.7 Total 86,840,909 100 252,181,818 100 302,618,181 100
	— —	— —	50,436,363 16.7
	86,840,909 100	252,181,818 100	302,618,181 100

Notes:

1. Mr. Chui Tak Keung, Duncan, an executive Director, is deemed to be interested in 30,600,000 Shares by virtue of his shareholding in Four Gold MS H01 Limited.

2. Mr. Yau Chung Hong, an executive Director, is deemed to be interested in 2,600,000 Shares by virtue of his shareholding in Sellwell Enterprises Limited.

3. 10,500,000 Shares are placed in the First Placement, in respect of which 10,500,000 bonus Shares were issued pursuant to the Bonus Issue. Assuming that the placees of the First Placement have not effected any changes in their shareholdings in the Company from the completion of the First Placement to the Latest Practicable Date, they should theoretically hold 21,000,000 Shares as at the Latest Practicable Date.

4. 17,300,000 Shares are placed in the Second Placement, in respect of which 17,300,000 bonus Shares were issued pursuant to the Bonus Issue. Assuming that the placees of the Second Placement have not effected any changes in their shareholdings in the Company from the completion of the Second Placement to the Latest Practicable Date, they should theoretically hold 34,600,000 Shares as at the Latest Practicable Date.

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LETTER FROM MEGA

1. Pursuant to the Third Placement, 12,000,000 Shares were placed with Eftpos Ltd., and 10,900,000 Shares were placed with an independent third party. Eftpos Ltd. is wholly and beneficially owned by Mr. Wu. Prior to the completion of the Third Placement, Eftpos Ltd., Mr. Wu and his spouse together were interested in 10,400,000 Shares, of which Eftpos Ltd. held 10,000,000 Shares, Mr. Wu personally held 200,000 Shares and the spouse of Mr. Wu personally held 200,000 Shares. As a result, the number of Shares held by Eftpos increased to 22,000,000 Shares, and the number of Shares held by Mr. Wu and his associates aggregated to 22,400,000 Shares. Together with the 10,900,000 Shares placed with the aforesaid independent third party, the number of Shares held by the placees of the Third Placement and their associates should amount to 33,300,000 Shares, assuming that they have not effected any change in their shareholdings in the Company from the completion of the Third Placement to the Latest Practicable Date.

Assuming that (i) the New General Mandate will be approved at the EGM; and (ii) no Shares will be repurchased and no new Shares will be issued during the period from the Latest Practicable Date to the date of the EGM (both dates inclusive), 50,436,363 Shares can be issued under the New General Mandate at maximum, representing 20% and approximately 16.67% of the existing issued share capital as at the Latest Practicable Date and the then enlarged issued share capital (as increased by the full utilization of the New General Mandate) of the Company respectively. As shown in the above table, the aggregate shareholding of the public Shareholders will decrease from approximately 74.8% to approximately 62.3% upon full utilization of the New General Mandate.

For illustrative purpose, we aggregate the dilution effects due to previous placing exercises undertaken by the Company since the Last AGM, together with the potential dilution effect upon full utilization of the New General Mandate. In this connection, we demonstrate in the above table that the interests of the public Shareholders, excluding the respective placees of the First Placements, the Second Placement and the Third Placement and their associates, would effectively decrease from approximately 59.1% as at the Last AGM to approximately 32.9% upon full utilization of the New General Mandate. Provided that (i) the Company is an investment company in which no Shareholder controls 30% or more of the votes exercisable at any general meeting of the Company; and (ii) it is reasonable for the Company to conduct equity funding exercises to enlarge its shareholder base and increase it financial resources, we consider that the aggregate dilution effect due to the previous placing exercises undertaken by the Company since the Last AGM, together with the potential dilution effect upon full utilization of the New General Mandate, is acceptable.

In particular, taking into account that the shareholding of all the Shareholders will be diluted to the same extent upon any utilization of the New General Mandate, we consider that the extent of potential dilution to the shareholding of the existing Shareholders is acceptable.

Shareholders should note that the Current General Mandate will be revoked upon approval of the New General Mandate at the EGM and the New General Mandate will be and continue to be in force until the earliest of (i) the conclusion of the next annual general meeting of the Company; (ii) the expiration of the period within which the next annual general meeting of the Company is required to be held by law or the Articles; and (iii) the revocation or variation by an ordinary resolution of the Shareholders in general meeting.

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LETTER FROM MEGA

5. Terms of the New General Mandate

Pursuant to the Listing Rules, the Company will be required to seek prior consent of the Shareholders for any allotment, issue or grant of Shares or securities convertible into Shares or other rights to subscribe for Shares or such convertible securities, unless such allotment, issue or grant falls under the circumstances provided under rule 13.36(2) of the Listing Rules, including certain rights issue and open offer (subject to other Listing Rules requirements on the offering size and structure). Pursuant to rule 13.36(4) of the Listing Rules, an ordinary resolution will be proposed at the EGM to obtain approval from the Independent Shareholders to refresh the Current General Mandate so that the Directors will be entitled to exercise the powers of the Company to allot, issue and deal in Shares not exceeding 20% of the aggregate nominal amount of the issued share capital of the Company as at the date of the EGM.

Pursuant to rule 13.36(5) of the Listing Rules, in the case of a placing of securities for cash consideration, the Company may not issue any securities pursuant to the general mandate given under rule 13.36(2)(b) of the Listing Rules if the relevant price represents a discount of 20% or more to the benchmarked price of the securities as detailed in the Listing Rules unless otherwise allowed by the Stock Exchange. We consider that such restriction can serve as a measure to reasonably govern any future fund raising exercises carried out pursuant to the New General Mandate, thereby safeguarding the interest of the Company and the Shareholders.

RECOMMENDATION

Having considered the above principal factors, in particular,

1. the investment strategy adopted by the Company with a vision to become the world’s premier investment corporation which requires high financial flexibility;

2. the enhancement in financial flexibility of the Company resulting from the refreshment of the Current General Mandate by granting the New General Mandate to the Directors;

3. the acceptable extent of further possible dilution to the shareholdings of the Independent Shareholders in the Company resulting from the issue of new Shares pursuant to the New General Mandate; and

4. the restriction imposed on the discount of issue price under the Listing Rules which itself can serve as a protective measure to safeguard the interest of the Company and the Shareholders,

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LETTER FROM MEGA

we are of the opinion that the proposed refreshment of the Current General Mandate by granting the New General Mandate to the Directors is in the interest of the Company and the Shareholders as a whole and is fair and reasonable so far as the Independent Shareholders are concerned. Accordingly, we recommend the Independent Board Committee to advise the Independent Shareholders to vote in favour of the resolution approving the grant of the New General Mandate at the EGM.

Yours faithfully,

For and on behalf of

Mega Capital (Asia) Company Limited Terence Hong Alfred Wong Managing Director Executive Director

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NOTICE OF EXTRAORDINARY GENERAL MEETING

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SINO KATALYTICS INVESTMENT CORPORATION

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 2324)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that an extraordinary general meeting of the shareholders of Sino Katalytics Investment Corporation (the “Company”) will be held at Suites 403-404, 4/F, Prince’s Building, 10 Chater Road, Central, Hong Kong at 5:00 p.m. on Monday, 27 November 2006, for the purpose of considering and, if thought fit, passing (with or without modifications) the following resolution as an Ordinary Resolution of the Company:

“ THAT

• (1) the general mandate granted to the directors of the Company (“ Directors ”) to exercise the power of the Company to allot, issue and deal with securities of the Company at the extraordinary general meeting of the Company held on 19 May 2006 be and is hereby revoked (without prejudice to the valid exercise of such general mandate, if any, prior to the passing of this resolution);

• (2) subject to paragraph (4) below, pursuant to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, the exercise by the Directors during the Relevant Period (as hereinafter defined) of all the powers of the Company to allot, issue or otherwise deal with the unissued shares in the capital of the Company and to make or grant offers, agreements and options which might require the exercise of such power be and is hereby generally and unconditionally approved;

• (3) the approval in paragraph (2) above shall authorize the Directors during the Relevant Period to make or grant offers, agreements and options which might require the exercise of such power after the end of the Relevant Period;

• (4) the aggregate nominal value of share capital allotted and issued or agreed conditionally or unconditionally to be allotted and issued (whether pursuant to an option or otherwise) by the directors of the Company pursuant to the approval in paragraphs (2) and (3) above, otherwise than pursuant to:

• (a) a Rights Issue (as hereinafter defined); or

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NOTICE OF EXTRAORDINARY GENERAL MEETING

• (b) the exercise of the subscription rights or conversion under the terms of any warrants or other securities issued by the Company as at the date of passing of this Resolution carrying a right to subscribe for or purchase shares in the capital of the Company or otherwise convertible into shares in the capital of the Company; or

• (c) the exercise of the subscription rights under any share option scheme or similar arrangement for the time being adopted for the grant or issue to officers and/or employees of the Company and/or any of its subsidiaries or other eligible grantees of shares or rights to acquire shares of the Company; or

• (d) any scrip dividend or similar arrangement providing for the allotment of shares in the capital of the Company in lieu of the whole or part of a dividend on shares in accordance with the memorandum and articles of association of the Company,

shall not exceed 20% of the aggregate nominal value of the share capital of the Company in issue as at the date of passing of this Resolution and the said approval shall be limited accordingly; and

• (5) for the purpose of this Resolution:

“ Relevant Period ” means the period from the passing of this Resolution until whichever is the earliest of:

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

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

• (c) the passing of an ordinary resolution by shareholders of the Company in general meeting revoking or varying the authority given to the Directors by this Resolution; and

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

By Order of the Board Chui Tak Keung, Duncan Executive Director

Hong Kong, 9 November 2006

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NOTICE OF EXTRAORDINARY GENERAL MEETING

Notes:

1. A member of the Company entitled to attend and vote at the meeting convened by the above notice is entitled to appoint a proxy or proxies to attend and, subject to the provisions of the articles of association of the Company, vote in his stead. A proxy need not be a member of the Company.

2. A form of proxy for use at the meeting is enclosed herewith.

3. To be valid, the form of proxy together with a power of attorney or other authority, if any, under which it is signed or a notarially certified copy of such power or authority must be deposited with the Company’s Hong Kong Branch Registrar, Tengis Ltd., at 26/F, Tasbury Centre, 28 Queen’s Road East, Hong Kong no later than 48 hours before the time appointed for holding the meeting or any adjournment thereof.

4. Completion and return of the accompanying form of proxy will not preclude members of the Company from attending and voting in person at the meeting or any adjournment thereof should they so wish.

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