Central Development Holdings Limited — Proxy Solicitation & Information Statement 2007

Jul 27, 2007

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult a stockbroker, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in China Timber Resources Group Limited, you should at once hand this circular and the accompanying proxy form to the purchaser or the 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.

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CHINA TIMBER RESOURCES GROUP LIMITED （中國木業資源集團有限公司[*] ） (incorporated in the Cayman Islands with limited liability)

(Stock Code: 269)

PROPOSED GENERAL MANDATES TO ISSUE NEW SHARES PROPOSED RE-ELECTION OF DIRECTORS INCREASE OF AUTHORIZED SHARE CAPITAL AMENDMENT TO ARTICLES OF ASSOCIATION AND NOTICE OF ANNUAL GENERAL MEETING

The notice convening the annual general meeting of the Company to be held at 7/F, Xin Rui Ke Da Lou, Bao Shui Qu, Fu Tian Shi, Shenzhen, China（中國深圳褔田市保稅區鑫瑞科大 樓 7層）, on Thursday, 23 August 2007 at 11:30 a.m. is set out on pages 10 to 13 of this circular.

A proxy form for use at the meeting is enclosed with this circular. Whether or not you are able to attend the meeting, you are requested to complete the proxy form and return the same to the Company’s Branch Share Registrar in Hong Kong, Progressive Registration Limited, 26th Floor, Tesbury Centre, 28 Queen’s Road East, Central, Hong Kong in accordance with the instructions printed thereon as soon as possible but in any event not less than 48 hours before the time appointed for the holding of the meeting or any adjournment thereof. Completion and return of the proxy form will not preclude you from attending and voting in person at the meeting or any adjourned meeting (as the case may be) if you so wish.

27 July 2007

* For identification purpose only

CONTENT

Page(s)	Page(s)
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
Proposed general mandate to issue new Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Proposed re-election of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Increase of authorized share capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Amendment to Articles of Association . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
Notice of Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
Responsibility statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
APPENDIX I — BIOGRAPHICAL DETAILS
OF RETIRING DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
APPENDIX II — NOTICE OF ANNUAL GENERAL MEETING. . . . . . . . . . . . . .	10

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DEFINITIONS

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

“AGM”	the Annual General Meeting of the Company to be held
	at 7/F, Xin Rui Ke Da Lou, Bao Shui Qu, Fu Tian Shi,
	Shenzhen, China（中國深圳褔田市保稅區鑫瑞科大樓
	7層）, on Thursday, 23 August 2007 at 11:30 a.m., notice
	of which is set out on pages 10 to 13 of this circular, or
	any adjournment thereof
“Articles of Association”	the articles of association of the Company
“associate(s)”	has the meaning ascribed thereto in the Listing Rules
“Board”	the board of Directors or a duly authorized committee
	thereof
“Company”	China Timber Resources Group Limited, an exempted
	company incorporated in the Cayman Islands with limited
	liability, the shares of which are listed on the Stock
	Exchange
“connected person”	has the meaning ascribed thereto in the Listing Rules
“Director(s)”	the directors of the Company
“General Mandate”	a general mandate proposed to be granted to the Directors
	to exercise all the powers of the Company to allot, issue
	and deal with Shares in the manner as set out in the
	ordinary resolution no. 5 of the Notice
“Group”	the Company and its subsidiaries
“Latest Practicable Date”	25 July 2007, being the latest practicable date prior to
	the printing of this circular for ascertaining certain
	information contained in this circular
“Listing Rules”	the Rules Governing the Listing of Securities on the
	Stock Exchange, as amended from time to time
“Notice”	the notice of the AGM set out on pages 10 to 13 of this
	circular

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DEFINITIONS

“Shareholder(s)”	registered holder(s) of the Share(s) in issue
“Share(s)”	share(s) 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

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CHINA TIMBER RESOURCES GROUP LIMITED （中國木業資源集團有限公司[*] ）

(incorporated in the Cayman Islands with limited liability)

(Stock Code: 269)

Directors:

Executive Directors

Mr. Fung Tsun Pong (Chairman) Mr. Lau Sing Hung, Stephen (CEO) Mr. Tsang Kam Ching, David Mr. Chow Ki Shui, Louie

Registered Office

The Office of Caledonian Bank & Trust Limited Caledonian House George Town Grand Cayman Cayman Islands

Independent Non-Executive Directors

Mr. Yip Tak On Mr. Jing Baoli Mr. Bao Liang Ming

Head office and Principal Place of Business

Room 1606, Office Tower Convention Plaza Wanchai Hong Kong 27 July 2007

To the Shareholders,

Dear Sir or Madam,

PROPOSED GENERAL MANDATES TO ISSUE NEW SHARES PROPOSED RE-ELECTION OF DIRECTORS INCREASE OF AUTHORIZED SHARE CAPITAL AMENDMENT TO ARTICLES OF ASSOCIATION AND NOTICE OF ANNUAL GENERAL MEETING

INTRODUCTION

The purpose of this circular is to provide you with information in respect of the following resolutions to be proposed at the AGM:

• (a) granting a General Mandate to the Directors to exercise the powers of the Company to allot, issue and deal with additional Shares up to a maximum of 20% of the aggregate nominal share capital of the Company in issue at the time of passing of such resolution;

* For identification purpose only

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LETTER FROM THE BOARD

• (b) re-election of retiring Directors;

• (c) increase of authorized share capital;

• (d) amendment to the Articles of Association; and

• (e) other ordinary businesses to be considered at the AGM, including, among others, the approval and adoption of the audited financial statements and reports of the Directors and auditors for the year ended 31 March 2007, the fixing of Directors’ fees, the re-appointment of the incumbent auditors and the authorization to the Directors to fix audit fees.

PROPOSED GENERAL MANDATE TO ISSUE NEW SHARES

At the annual general meeting of the Company held on 31 August 2006, the Directors were granted a general mandate to allot, issue and deal with Shares of HK$0.01 each in the capital of the Company on the Stock Exchange. The mandate will expire at the conclusion of the AGM.

It will be proposed at the AGM an ordinary resolution, which is set out in resolution No. 5 of the Notice granting the Directors a general mandate to allot, issue, and deal with Shares not exceeding 20 per cent. (20%) of the Shares in the issued share capital of the Company as at the date of passing the resolution.

The Company has in issue an aggregate number of 8,587,969,734 Shares as at the Latest Practicable Date. Subject to the approval of the General Mandate and in accordance with the terms therein, the Company would be allowed to allot up to the aggregate nominal amount of 1,717,593,946 Shares on the basis that no further Shares will be issued or repurchased by the Company prior to the AGM.

The Directors have no immediate plans to issue any new Shares.

PROPOSED RE-ELECTION OF DIRECTORS

The Board currently comprises four executive Directors, namely Messrs Fung Tsun Pong, Lau Sing Hung, Stephen, Tsang Kam Ching, David and Chow Ki Shui, Louie; and three independent non-executive Directors, namely Messrs Yip Tak On, Jing Baoli and Bao Liang Ming.

In accordance with Article 117 of the Articles of Association, at each annual general meeting one-third, or, if their number is not three or a multiple of three, then the number nearest onethird, of the Directors who have been longest in office since their last election by shareholders in a general meeting shall retire from office. As a result, Mr. Yip Tak On, being the longestserving Director shall retire at the AGM.

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LETTER FROM THE BOARD

In addition, Article 100 of the Articles of Association provides that any Director appointed by the Board shall hold office only until the next following general meeting of the Company and shall then be eligible for re-election at that meeting. Accordingly, Mr. Lau Sing Hung, Stephen, Mr. Chow Ki Shui, Louie and Mr. Bao Liang Ming shall retire at the AGM.

Mr. Yip Tak On, Mr. Lau Sing Hung, Stephen, Mr. Chow Ki Shui, Louie and Mr. Bao Liang Ming (together the “ Retiring Directors ”) being eligible, offer himself for re-election. Each of Mr. Yip Tak On and Mr. Bao Liang Ming, independent non-executive Directors of the Company, being eligible for re-election at the AGM, has made an annual confirmation of independence pursuant to Rule 3.13 of the Listing Rules. The Company is of the view that they meet the independent guidelines set out in Rule 3.13 of the Listing Rules and are independent in accordance with the terms of the guidelines.

Brief biographical details of the Retiring Directors are set out in Appendix I to this circular.

Subject to Article 121, if a Shareholder wishes to nominate a person to stand for election as a Director at the AGM, notice of his intention to propose such person for election as a Director and the notice executed by the nominee of his willingness to be elected must be validly served at the Company’s Hong Kong branch share registrar, Progressive Registration Limited at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Central, Hong Kong, at least seven (7) days before the date of the AGM. If a valid notice from a Shareholder to propose a person to stand for election as a Director at the AGM is duly received after the printing of this circular, the Company will issue a supplementary circular to inform the Shareholders of the details of the additional candidate proposed.

INCREASE OF AUTHORIZED SHARE CAPITAL

At the AGM, an ordinary resolution will be proposed to increase the authorized share capital of the Company from HK$100,000,000 divided into 10,000,000,000 shares of a par value of HK$0.01 each to HK$200,000,000 divided into 20,000,000,000 shares of a par value of HK$0.01 each by the creation of an additional 10,000,000,000 new Shares, such new Shares shall rank pari passu in all respect with the existing issued and unissued Shares.

The authorized share capital of the Company as at the Latest Practicable Date is HK$100,000,000 divided into 10,000,000,000 Shares, of which 8,587,969,734 Shares have been issued and are fully paid up, representing approximately 85.9% of its existing authorized share capital. Accordingly, as at the Latest Practicable Date, only 1,412,030,266 Shares are left unissued and are available for further allotment and issue by the Company.

The Directors consider that such increase in the authorized share capital of the Company will provide the Company with greater flexibility to raise funds by allotting and issuing new Shares in the future as and when necessary and it will be in the interests of the Company and the Shareholders as a whole. However, the Directors do not have any immediate intention of issuing any part of the increased authorized share capital.

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LETTER FROM THE BOARD

AMENDMENT TO ARTICLES OF ASSOCIATION

To bring Article 4 of the Articles of Association in line with the proposed increase in the authorized share capital of the Company, a special resolution will be proposed at the AGM to amend the said Article 4. Full details of the proposed amendment to the Articles of Association are set out in resolution No.7 of the Notice under Appendix II to this circular.

NOTICE OF ANNUAL GENERAL MEETING

The Notice is set out on page 10 to 13 of this circular. Resolutions to be proposed at the AGM include:

• (i) ordinary resolutions to approve the proposed re-election of the Retiring Directors, namely Mr. Lau Sing Hung, Stephen and Mr. Chow Ki Shui, Louie as executive Directors; and Mr. Yip Tak On and Mr. Bao Liang Ming as independent non-executive Directors;

• (ii) an ordinary resolution to approve the proposed grant to the Directors a general mandate to allot, issue and deal with Shares not exceeding 20% of the Shares in the issued share capital of the Company as at the date of passing such resolution;

• (iii) an ordinary resolution to approve the proposed increase of authorized share capital of the Company; and

• (iv) a special resolution to amend the Articles of Association.

A proxy form for use at the AGM is enclosed herein. Whether or not you intend to attend the AGM, you are requested to complete and return the accompanying proxy form in accordance with the instructions printed thereon not less than 48 hours before the time appointed for the holding of the AGM or any adjournment thereof. Completion and return of the proxy form will not preclude you from attending and voting in person at the AGM or any adjournment thereof if you so wish.

Set forth below is the procedure by which Shareholders and the chairman of the AGM may demand a poll pursuant to the Article of Association:

According to Article 81 of the Article of Association, a resolution put to vote at any general meeting shall be decided on a show of hands unless a poll is (before or on the declaration of the result of the show of hands) demanded by:

• (i) the chairman of the meeting; or

• (ii) at least three Shareholders present in person or by proxy for the time being entitled to vote at the meeting; or

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LETTER FROM THE BOARD

• (iii) any Shareholder(s) present in person or by proxy and representing not less than onetenth of the total voting rights of all the Shareholders having the right to vote at the meeting; or

• (iv) any Shareholder(s) present in person 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 the shares conferring that right.

Unless a poll is duly demanded in accordance with the foregoing provisions, a declaration by the chairman of the AGM that a resolution has on a show of hands been carried or lost or has or has not been carried by a particular majority, and an entry to that effect in the minutes of the proceedings of the Company, shall be conclusive evidence of the fact without proof of the number, proportion or validity of the votes recorded in favour of or against such resolution.

RESPONSIBILITY STATEMENT

This circular includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors collectively and individually accept full responsibility for the accuracy of the information contained in this circular and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts the omission of which would make any statement herein misleading.

RECOMMENDATIONS

The Directors believe that the General Mandate is in the best interests of the Company and its shareholders as a whole, and that an exercise of the General Mandate to allot and issue new Shares will enable the Company to take advantage of market conditions to raise additional capital for the Company.

The Directors also believe that the proposed re-election of Retiring Directors, increase of authorized share capital, the amendment to the Articles of Association and other resolutions to be proposed at the AGM are all in the best interest of the Company and the Shareholders as a whole.

Accordingly, the Directors recommend you to vote in favour of the relevant resolutions to be proposed at the AGM.

Yours faithfully, By Order of the Board Fung Tsun Pong Chairman

— 7 —

APPENDIX I BIOGRAPHICAL DETAILS OF RETIRING DIRECTORS

This appendix provides you with biographical details of the Directors who will retire from their offices at the AGM and being, eligible, will offer themselves for re-election, at the AGM in accordance with the Articles of Association.

PROPOSED EXECUTIVE DIRECTORS

Mr. Lau Sing Hung, Stephen (“Mr. Lau”), aged 57, has been appointed as an executive director of the Company since 1 June 2007. Mr. Lau has been a fellow of the Institute of Chartered Accountants in England and Wales since 1976 as well as a fellow of the Hong Kong Institute of Certified Public Accountants. Mr. Lau joined Arthur Andersen & Co in 1976 and assisted it in opening its first office in China in early eighties. Mr. Lau became a partner of Arthur Young in 1984 and Ernst & Young (“Ernst Young”) in 1990 when Arthur Young and Ernst Whinney merged to become Ernst & Young. Mr. Lau had served as Chairman of the Tax Department, member of the Management Committee, General Manager of Ernst Young Hua Ming, Managing Partner China North, Office Managing Partner of Beijing Office, Dalian Office and Wuhan Office. Mr. Lau retired from Ernst & Young on 31 December 2006.

Mr. Chow Ki Shui, Louie (“Mr. Chow”), aged 44, has been appointed as an executive director of the Company since 1 June 2007. Mr. Chow graduated from Xiamen University in 1984 with a bachelor degree of Science. Mr. Chow had worked as a Senior Consultant in Mitsui & Co. (HK) Ltd., and a partner in WI Harper Management Consulting Company, which is a venture capital investment company based in San Francisco, USA. In 1998, Mr. Chow co-founded Sino Capital Education Foundation, a non-profit organization to sponsor college student research programs and to assist children in poverty back to school. Mr. Chow is now a partner of Sino Capital Holdings Ltd. and is a co-founder of StemCyte, Inc., one of the largest umbilical cord blood banks in the world.

According to the respective Service Agreements between Mr. Lau, Mr. Chow and the Company, they are appointed for a term of three years determinable by notice of 6 months by either party. The director’s fees for Mr. Lau and Mr. Chow are HK$3,600,000 and HK$1,800,000 per annum respectively which are determined with reference to their experience, duties to the Company and the prevailing range of fees for executive directors of listed companies in Hong Kong.

PROPOSED INDEPENDENT NON-EXECUTIVE DIRECTORS

Mr. Yip Tak On (“Mr. Yip”), aged 61, has been appointed as an independent and nonexecutive director of the Company since 22 September 2004. Mr. Yip is a fellow member of ACCA, HKICPA, Taxation Institute of Hong Kong, and a full member of Hong Kong Securities Institute. Mr. Yip has founded his own Certified Public Accountants firm for more than 20 years and is the managing director of Yip Leung & So Limited. Mr. Yip is also the treasurer of International Chamber of Commerce — Hong Kong China Business Council and the Chairman of a charitable institution, the Neighborhood Advice-Action Council. The appointment

— 8 —

APPENDIX I BIOGRAPHICAL DETAILS OF RETIRING DIRECTORS

of Mr. Yip as an independent non-executive director has been renewed for a term of two years commencing from 25 July 2007 terminable by notice of not less than three months by either party.

Mr. Bao Liang Ming (“Mr. Bao”), aged 51, has been appointed as an independent and nonexecutive director of the Company since 1 February 2007. Mr. Bao has vast executive and management experience. He has held various directorships in state-owned enterprises in Tianjin and Beijing of the People’s Republic of China. According to the appointment letter between Mr. Bao and the Company, Mr. Bao was appointed for a term of two years and shall continue thereafter unless and until terminated by either party.

The director’s fee for each of the independent non-executive directors of the Company is HK$120,000 per year which is determined by the Board with reference to the prevailing range of fees for independent non-executive directors of listed companies in Hong Kong.

The appointments of the Retiring Directors are subject to retirement and re-election at the general meeting of the Company in accordance with the Articles of Association.

So far as the Directors are aware, as at the Latest Practicable Date, none of the Retiring Directors (i) has any interests in the securities of the Company within the meaning of Part XV of the Securities and Futures Ordinance; (ii) held or in the past three years held, save as directors of the Company, any position with the Group or any directorships in any other listed companies, and (iii) has any relationships with any directors, senior management or substantial or controlling shareholders of the Company.

Save as disclosed above and to the best of the Board’s knowledge, information and belief, having made all reasonable enquiries, there is no other information relating to the proposed re-election of the Retiring Directors that needs to be disclosed pursuant to Rules 13.51(2)(h) to 13.51(2)(v) of the Listing Rules nor the Board is aware of any other matters that need to be brought to the attention of the holders of securities of the Company in respect of the above proposed appointments.

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NOTICE OF ANNUAL GENERAL MEETING

APPENDIX II

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CHINA TIMBER RESOURCES GROUP LIMITED （中國木業資源集團有限公司[*] ）

(incorporated in the Cayman Islands with limited liability)

(Stock Code: 269)

NOTICE IS HEREBY GIVEN that an annual general meeting of China Timber Resources Group Limited (the “ Company ”) will be held at 7/F, Xin Rui Ke Da Lou, Bao Shui Qu, Fu Tian Shi, Shenzhen, China（中國深圳褔田市保稅區鑫瑞科大樓7層）, on Thursday, 23 August 2007 at 11:30 a.m. for the purpose of considering the following resolutions:

1. To receive and consider the audited financial statements and the reports of directors and of the auditors for the year ended 31 March 2007.

2. To re-elect the retiring directors, Mr. Lau Sing Hung, Stephen and Mr. Chow Ki Shui, Louie as executive directors; and Mr. Yip Tak On and Mr. Bao Liang Ming as independent non-executive directors.

3. To authorise the board of directors of the Company (“ Board ”) to fix directors’ remuneration.

4. To re-appoint the retiring auditors for the ensuing year and to authorize the Board to fix their audit fee;

5. To consider as special business and, if thought fit, passing with or without amendments, the following resolution as an Ordinary Resolution:

“THAT :

• (a) subject to paragraph (c) below, the exercise by the Directors during the Relevant Period (as hereinafter defined) of all the powers of the Company to allot, issue and deal with additional shares of HK$0.01 each in the capital of the Company (“ Shares ”) and to make or grant offers, agreements and options (including warrants, bonds and debentures convertible into Shares of the Company) which would or might require the exercise of such power be and is hereby generally and unconditionally approved;

• (b) the Directors be and are hereby authorized during the Relevant Period to make or grant offers, agreements and options (including warrants, bonds and debentures convertible Shares) which would or might require the exercise of such powers during or after the end of the Relevant Period;

* For identification purpose only

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NOTICE OF ANNUAL GENERAL MEETING

APPENDIX II

• (c) the aggregate nominal amount of Shares allotted, issued and dealt with or agreed conditionally or unconditionally to be allotted, issued and dealt with (whether pursuant to an option or otherwise) by the Directors of the Company pursuant to the approval in paragraph (a) and (b), otherwise than pursuant to (i) a Right Issue (as hereinafter defined), (ii) the exercise of any rights of subscription or conversion under the terms of any warrants issued by the Company or any securities which are otherwise convertible into Shares, (iii) the exercise of any options granted under a share option scheme or similar arrangement of the Company for the time being adopted by the Company, or (iv) an issue of Shares in lieu of the whole or part of a dividend on Shares or any script dividend scheme or similar arrangement providing for the allotment of Shares in accordance with the Memorandum and Articles of Association of the Company from time to time, shall not exceed the aggregate of twenty per cent (20%) of the aggregate nominal amount of the share capital of the Company in issue as at the date of the passing of this Resolution and the said approval be limited accordingly; and

• (d) for the purpose of this Resolution:

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

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

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

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

“Rights Issue” means an offer of Shares, or offer or issue of warrants, options or other securities giving rights to subscribe for Shares open for a period fixed by the Directors of the Company to the holders of Shares and/or warrants on the respective registers of the Company on a fixed record date in proportion to their then holdings of such shares and/or warrants (subject to such exclusion or other arrangements as the Directors of the Company may deem necessary or expedient in relation to fractional entitlements or having regard to any restrictions or obligations under the laws of, or the requirements of, any jurisdiction applicable to the Company, any recognized regulatory body or any stock exchange applicable to the Company).”

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NOTICE OF ANNUAL GENERAL MEETING

APPENDIX II

1. To consider as special business and, if thought fit, passing with or without amendments, the following resolution as an Ordinary Resolution:

“THAT the authorized share capital of the Company be increased from HK$100,000,000 divided into 10,000,000,000 shares of a par value of HK$0.01 each to HK$200,000,000 divided into 20,000,000,000 shares of a par value of HK$0.01 each by the creation of an additional 10,000,000,000 new shares of a par value of HK$0.01 each which shall rank pari passu in all respect with the existing issued and unissued shares in the capital of the Company; and any one Director be and is hereby authorized to execute all such documents, instruments and agreements and to do all such acts and deeds as he may deem necessary or desirable for or in connection with the completion of the increase in the authorized share capital of the Company and the matters contemplated thereunder.”

1. To consider as special business and, if thought fit, pass with or without amendments, the following resolution as a Special Resolution:

“THAT the existing Article 4 of the Articles of Association be deleted in its entirety and substitution therefor the following as new Article 4:

• “4. The authorized share capital of the Company shall be HK$200,000,000 divided into 20,000,000,000 shares of a par value of HK$0.01 each.””

By Order of the Board

Fung Tsun Pong Chairman

Hong Kong, 27 July 2007

Principal place of business:

Unit 1606, Office Tower

Convention Plaza

1 Harbour Road, Wanchai

Hong Kong

Notes:

• (a) A member entitled to attend and vote at the above meeting is entitled to appoint one or more than one proxies to attend and vote on his behalf. A proxy need not be a member of the Company but must be present in person to represent the member.

• (b) If the appointer is a corporation, the form of proxy must be under its common seal, or under the hand of an officer or attorney duly authorized on its behalf.

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APPENDIX II

NOTICE OF ANNUAL GENERAL MEETING

• (c) In order to be valid, a form of proxy must be deposited at the Company’s Hong Kong branch share registrar, Progressive Registration Limited at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Central, Hong Kong, as soon as possible and in any event not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof. The completion and delivery of the form of proxy will not preclude you from attending and voting at the meeting if you so wish. In the event that you attend the meeting after having lodged the form of proxy, the form of proxy will be deemed to have been revoked.

• (d) With respect to the resolution numbered 5, approval is being sought from shareholders for a general mandate to issue shares to be given to the Directors. The Directors wish to state that they have no immediate plans to issue any new shares of the Company. Approval is being sought from the shareholders as a general mandate for the purpose of Section 57B of the Companies Ordinance and the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.

• (e) Where there are joint registered holders of any share, any one of such persons may vote at the meeting, either personally or by proxy, in respect of such shares as if he was solely entitled thereto; but if more than one of such joint holders be present at the meeting personally or by proxy, that one of the said persons so present whose name stands first on the register of members of the Company in respect of such share shall alone be entitled to vote and will be accepted to the exclusion of other joint registered holders in respect hereof.

• (f) The above meeting is expected not to exceed half an hour, and all member and proxies shall be responsible for their own travelling expenses.

As at the date of this notice, the Board comprises four executive Directors, namely Mr. Fung Tsun Pong, Mr. Lau Sing Hung, Stephen, Mr. Tsang Kam Ching, David and Mr. Chow Ki Shui, Louie; and three independent non-executive Directors, namely Mr. Yip Tak On, Mr. Jing Baoli and Mr. Bao Liang Ming.

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