Capital VC Limited — Proxy Solicitation & Information Statement 2006

Jul 5, 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 德泰中華投資有限公司 (Incorporated in the Cayman Islands with limited liability) (Stock Code: 2324)

PROPOSED BONUS ISSUE OF SHARES AND PROPOSED INCREASE IN AUTHORIZED SHARE CAPITAL

Financial adviser to the Company

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A letter from the board of directors of the Company is set out on page 3 to 7 of this circular. 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 Friday, 21 July 2006 at 3 p.m. is set out on pages 8 to 9 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, Tesbury 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.

5 July 2006

CONTENTS

	Page
EXPECTED TIMETABLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	ii
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
NOTICE OF EXTRAORDINARY GENERAL MEETING. . . . . . . . . . . . . . . . . . . . . . . . .	8

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EXPECTED TIMETABLE

2006 Last day of dealing in Shares cum Entitlement . . . . . . . . . . . . . . . . . . . . . . . . . . .Friday, 14 July First day of dealing in Shares ex-Entitlement . . . . . . . . . . . . . . . . . . . . . . . . . . Monday, 17 July Latest time for lodging forms of transfer in order to be entitled to the Bonus Shares . . . . . . . . . . . . . . . . . . . . . . . 4.00 p.m. on Tuesday, 18 July Latest time for lodging forms of proxy for the EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.00 p.m. on Wednesday, 19 July EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.00 p.m. on Friday, 21 July Closure of register of members of the Company for the Bonus Issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Wednesday, 19 July to Friday, 21 July (both days inclusive) Record date for determining entitlement to the Bonus Shares . . . . . . . . . . . . .Friday, 21 July Announcement of the results of the EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Monday, 24 July The register of members of the Company reopens . . . . . . . . . . . . . . . . . . . . . . Monday, 24 July Despatch of share certificates for Bonus Shares on or before . . . . . . . . . . . . . .Friday, 28 July First day of dealing in Bonus Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tuesday, 1 August

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DEFINITIONS

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

“Board”	the board of Directors
“Bonus Issue”	the proposed issue of Bonus Shares to the Shareholders
	whose names appear on the register of members of
	the Company at the close of business on Record Date
	on the basis of one Bonus Share for every one existing
	Share held on that day
“Bonus Share(s)”	new Share(s) to be issued by way of Bonus Issue by
	the Company as described herein
“Capital Increase”	the proposal to increase the authorized share capital
	of the Company from HK$2,000,000 to HK$5,000,000
“Company”	Sino Katalytics Investment Corporation (德泰中華投
	資有限公司), a company incorporated in the Cayman
	Islands with limited liability, whose shares are listed
	on the Stock Exchange
“Director(s)”	the director(s) of the Company
“EGM”	an extraordinary general meeting of the Company to
	be held on 21 July 2006
“Entitlement”	entitlement to the Bonus Issue
“Hong Kong”	the Hong Kong Special Administrative Region of the
	PRC
“Latest Practicable Date”	5 July 2006, being the latest practicable date prior to
	the printing of this circular for ascertaining certain
	information contained in this circular
“Listing Committee”	the Listing Committee of the Stock Exchange
“Listing Rules”	the Rules Governing the Listing of Securities on the
	Stock Exchange
“Overseas Shareholders”	Shareholders whose address as shown on register of
	members of the Company on the Record Date and are
	outside Hong Kong
“PRC”	the People’s Republic of China

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DEFINITIONS

“Record Date” 21 July 2006, being the date for determining the Entitlement of each Shareholder “Share(s)” the ordinary share(s) of HK$0.01 each in the share capital of the Company “Shareholder(s)” the registered holder(s) of Share(s) in issue “Stock Exchange” The Stock Exchange of Hong Kong Limited “HK$” Hong Kong dollars, the lawful currency of Hong Kong “%” per cent.

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LETTER FROM THE BOARD

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SINO KATALYTICS INVESTMENT CORPORATION 德泰中華投資有限公司

(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: Mr. Ma Kwok Keung, Kenneth

Registered Office: Century Yard, Cricket Square Hutchins Drive P.O. Box 2681 GT George Town Grand Cayman British West Indies

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 Prince’s Building 10 Chater Road Central, Hong Kong

5 July 2006

To the Shareholders

Dear Sir/Madam,

PROPOSED BONUS ISSUE OF SHARES AND PROPOSED INCREASE IN AUTHORIZED SHARE CAPITAL

INTRODUCTION

As stated in the announcement dated 13 June 2006, the Board recommended the Bonus Issue and the Capital Increase. The purpose of this circular is to provide you with necessary information on the proposed ordinary resolutions at the EGM relating to the Bonus Issue and the Capital Increase so as to enable you to make an informed decision to vote on the concerned resolutions.

BONUS ISSUE

The Board recommended a bonus issue of Shares to Shareholders (excluding the Overseas Shareholders) whose names appear on the register of members on the Record Date by way of capitalization of the Company’s share premium account on the basis of one Bonus Share for every one Share held by them on the Record Date subject to fulfillment of the conditions of the Bonus Issue set out below.

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LETTER FROM THE BOARD

STATUS OF THE BONUS SHARES

The Bonus Shares to be issued pursuant to the Bonus Issue will be credited as fully paid by way of capitalization of the Company’s share premium account and will rank pari passu in all aspects with the issued Shares with effect from the date of issue, except that they will not be entitled to Bonus Issue.

FRACTIONS OF THE BONUS SHARES

Because the Bonus Issue is on the basis of one Bonus Share for every one existing Share held on the Record Date, the Company will not allot any fractions of Bonus Shares.

CONDITIONS OF THE BONUS ISSUE

The Bonus Issue is conditional, inter alia, upon:

• (i) the approval of the Bonus Issue and the proposed increase in the authorized share capital of the Company by the Shareholders at the EGM; and

• (ii) the Listing Committee granting the listing of and permission to deal in the Bonus Shares to be issued pursuant to the Bonus Issue.

REASONS FOR THE BONUS ISSUE

The Board believes that the Bonus Issue is a return to the long-term support and care of the Shareholders. The Bonus Issue will also allow the Shareholders to participate in the business growth of the Company by way of capitalization of a portion of the share premium account.

EFFECT TO THE SHAREHOLDING ON THE BONUS ISSUE

As at the Latest Practicable Date, there were an aggregate of 114,640,909 Shares in issue, on which basis as recommended by the Board, and assuming no further Shares are issued or repurchased before the Record Date, 114,640,909 Bonus Shares will be issued under the Bonus Issue and the amount of HK$1,146,409.09 will be capitalized from the share premium account of the Company. As enlarged by the Bonus Issue, there will be a total of 229,281,818 Shares in issue.

SHARE CERTIFICATES

In the absence of any specific instruction to the contrary received in writing by the Company’s branch registrar in Hong Kong, certificates in respect of the Bonus Shares will be sent to the persons entitled thereto at their respective addresses shown in the register of members or in the case of joint holders, to the address of the joint holder whose name stands first in the register of members in respect of the joint holding. It is expected that certificates for the Bonus Shares will be posted to those entitled thereto at their risk on or before 28 July 2006. Dealings in the Bonus Shares are subject to stamp duty pursuant to the Stamp Duty Ordinance (Cap. 117, Laws of Hong Kong).

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LETTER FROM THE BOARD

OVERSEAS SHAREHOLDERS

The Directors consider that the issue of the Bonus Shares to the Shareholders with address outside Hong Kong would or might, in the absence of compliance with registration or other special formalities in such other territories, be unlawful or impracticable. As a result, Bonus Shares will not be issued to Overseas Shareholders. Arrangements will be made for the Bonus Shares which would otherwise be allotted to the Overseas Shareholders to be sold in the market as soon as practicable after dealings in the Bonus Shares commence if a premium, net of expenses, can be obtained. Any net proceeds of sale, after deduction of expenses, will be distributed in Hong Kong currency to such persons at their own risk pro rata to their respective shareholdings in the Company except where the amount payable to individual shareholder is less than HK$100, the sale of proceeds will not be distributed but will be retained for the benefit of the Company.

CLOSURE OF REGISTER OF MEMBERS

The register of members of the Company will be closed from Wednesday, 19 July 2006 to Friday, 21 July 2006, both dates inclusive, during which period no transfer of Shares will be effected. The last day for dealing in Shares cum Entitlement will be Friday, 14 July 2006.

In order to qualify for the Entitlement, person(s) who would like to be registered as Shareholders should lodge forms of transfer with the relevant share certificates with the Company’s branch in Hong Kong, Tengis Limited, at 26/F, Tesbury Centre, 28 Queen’s Road East, Hong Kong for registration no later than 4.00 p.m. on Tuesday, 18 July 2006.

LISTING AND DEALING

Application will be made to the Listing Committee of the Stock Exchange for listing of, and permission to deal in, the Bonus Shares to be issued pursuant to the Bonus Issue.

The Shares of the Company are not listed or dealt in any other stock exchange nor is listing or permission to deal in the same being or proposed to be sought from any other stock exchange.

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

It is expected that the dealing of Bonus Shares on the Stock Exchange will commence on Tuesday, 1 August 2006.

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LETTER FROM THE BOARD

INCREASE IN AUTHORISED SHARE CAPITAL

In order to facilitate the Bonus Issue and to assist in the future expansion of the Company, an ordinary resolution will be proposed at the EGM to approve an increase in the authorized share capital of the Company from HK$2,000,000 comprising 200,000,000 Shares to HK$5,000,000 comprising 500,000,000 Shares.

RECOMMENDATION

The Directors believe that the Bonus Issue and the Capital Increase are in the best interests of the Company and its Shareholders as a whole. Accordingly, the Directors recommend that all Shareholders should vote in favour of the related ordinary resolutions to be proposed at the EGM.

PROCEDURE TO DEMAND A POLL AT THE EGM

Pursuant to Article 66 of the Articles of Association of the Company, a resolution put to the vote of a meeting shall be decided on 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:

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

• (ii) 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

• (iii) 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

• (iv) 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 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.

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LETTER FROM THE BOARD

RESPONSIBILITY STATEMENT

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 not contained in this circular, the omission of which would make any statement herein misleading.

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

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NOTICE OF EXTRAORDINARY GENERAL MEETING

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SINO KATALYTICS INVESTMENT CORPORATION 德泰中華投資有限公司 (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 on Friday, 21 July 2006 at 3 p.m. for the purpose of considering and, if thought fit, passing (with or without modifications) the following resolutions as Ordinary Resolutions of the Company:

ORDINARY RESOLUTIONS

1. “ THAT conditional upon the Listing Committee of The Stock Exchange of Hong Kong Limited granting the listing of, and permission to deal in, the Bonus Shares (as defined in paragraph (a) of this resolution):

2. (a) upon the recommendation of the directors of the Company (the “Directors”), assuming no further shares of the Company are issued or repurchased before 21 July 2006 (the “Record Date”), an amount of HK$1,146,409.09 standing to the credit of the share premium account of the Company be capitalized in accordance with Articles 143 and 150 of the Company’s Articles of Association and the Directors be and are hereby authorized to apply such sum in paying up in full at par 114,640,909 new shares of HK$0.01 each in the capital of the Company (“Bonus Share(s)”) to be allotted and issued as fully paid up to the members of the Company whose names appear on the Register of Members of the Company as at the close of business on the Record Date, on the basis of one Bonus Share for every one existing share of the Company then held by them respectively (the “Bonus Issue”);

the Bonus Shares will rank pari passu in all respects with the existing shares except that they will not rank for the Bonus Issue; and

the Directors be and are hereby authorised to sign and execute such documents and do all such acts and things incidental to the Bonus Issue or as they consider necessary or expedient in connection with the Bonus Issue including making arrangements with respect to members of the Company whose addresses as shown on the Register of Members of the Company are outside of Hong Kong in accordance with Article 50 of the Company’s Articles of Association.”

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NOTICE OF EXTRAORDINARY GENERAL MEETING

1. “ THAT conditional upon the passing of the resolution numbered 1 above, the authorized share capital of the Company be increased from HK$2,000,000 divided into 200,000,000 shares (“Shares”) of HK$0.01 each to HK$5,000,000 divided into 500,000,000 Shares by the creation of an additional 300,000,000 Shares.”

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

Hong Kong, 5 July 2006

Registered Office: Head office and principal place of Century Yard, Cricket Square business in Hong Kong: Hutchins Drive Suites 403-404 P.O. Box 2681 GT Prince’s Building George Town 10 Chater Road Grand Cayman British West Indies Central, Hong Kong

Notes:

• (i) 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.

• (ii) A form of proxy for use at the meeting is enclosed herewith.

• (iii) 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 Limited, at 26/F, Tesbury 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.

• (iv) 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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