China Energy Development Holdings Limited — Proxy Solicitation & Information Statement 2006

Oct 16, 2006

THIS CIRCULAR 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 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 Hon Po Group (Lobster King) Limited, you should at once hand this circular, 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 loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

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 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.

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(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 228)

APPROVAL OF SHARE OPTIONS, PROPOSED AMENDMENTS TO THE SHARE OPTION SCHEME AND PROPOSED REFRESHMENT OF THE 10 PER CENT LIMIT ON THE GRANT OF OPTIONS UNDER THE SHARE OPTION SCHEME

A notice convening an extraordinary general meeting of Hon Po Group (Lobster King) Limited to be held at Falcon Room I, Luk Kwok Hotel, 72 Gloucester Road, Wanchai, Hong Kong on Thursday, 2 November 2006 at 9:30 a.m. is set out on pages 13 to 14 of this circular. Shareholders are advised to read the notice and to complete and return the form of proxy as enclosed in accordance with the instructions printed thereon as soon as possible and in any event not later than 48 hours before the time appointed for the holding of the Extraordinary General Meeting or any adjourned meeting. Completion and return of the form of proxy shall not preclude you from attending and voting at the meeting or any adjourned meeting should you so desire.

16 October 2006

CONTENTS

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
Approval of Share Options Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Amendments to the Share Option Scheme . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Proposed refreshment of the 10% limit on the grant of options
under the Share Option Scheme . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
Letter from the Independent Board Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12
Notice of Extraordinary General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	13

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DEFINITIONS

In this circular, the following expressions have the meanings respectively set opposite them unless the context otherwise requires:

“Articles”	Articles of Association of the Company;
“associate(s)”	shall have the meaning ascribed to it under the Listing Rules;
“Board”	the board of Directors;
“Company”	Hon Po Group (Lobster King) Limited, a company incorporated
	in the Cayman Islands with limited liability and the securities of
	which are listed on the main board of the Stock Exchange;
“connected person(s)”	shall have the meaning ascribed to it under the Listing Rules;
“Directors”	the directors of the Company;
“EGM”	means the extraordinary general meeting of the Company to be
	held at Falcon Room I, Luk Kwok Hotel, 72 Gloucester Road,
	Wanchai, Hong Kong on Thursday, 2 November 2006 at 9:30
	a.m., the notice of which is set out on pages 13 to 14 of this
	circular;
“Listing Rules”	Rules Governing the Listing of Securities on the Stock Exchange;
“Group”	the Company together with its subsidiaries;
“Hong Kong”	Hong Kong Special Administrative Region of the PRC;
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong;
“Latest Practicable Date”	9 October 2006, being the latest practicable date prior to the
	printing of this circular for the purpose of ascertaining certain
	information contained in this circular;
“Notice”	means the notice convening the EGM which is set out on pages
	13 to 14 of this circular;
“Share(s)”	share(s) in the registered capital of the Company;
“Shareholder(s)”	holder(s) of Share(s);

– 1 –

DEFINITIONS

“Share Options”	means the 25,000,000, 25,000,000 and 25,000,000 share options
	conditionally granted to each of Mr. Chan Shi Yung, Mr. Chan
	Wai Keung and Mr. Chui Kwong Kau respectively (each a Director)
	to subscribe for Shares at HK$1.78 each subject to approval of
	Shareholders at the EGM;
“Share Option Scheme”	means the existing share option scheme of the Company adopted
	on 28 January 2002 and which became effective on 18 February
	2002;
“Stock Exchange”	The Stock Exchange of Hong Kong Limited.

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LETTER FROM THE BOARD

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(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 228)

Executive Directors: Registered office: Mrs. Cheung Lim Mai Tak, Grace Century Yard Mr. She Hing Chiu Cricket Square Mr. Chan Shi Yung Hutchins Drive Mr. Chui Kwong Kau P. O. Box 2681 GT Mr. Chan Wai Keung Grand Cayman British Virgin Islands

Non-executive Director: Mr. Wang Xiang Jun

Mr. Wang Xiang Jun Head office and principal place of business in Hong Kong: Independent non-executive Directors: Units E & F, Ground Floor Mr. Chang Kin Man Phase II, Kingsway Industrial Building Mr. Wu Tak Lung 173-175 Wo Yi Hop Road Mr. Ip Wing Lun Kwai Chung Hong Kong

16 October 2006

To the shareholders

Dear Sir/Madam,

APPROVAL OF SHARE OPTIONS, PROPOSED AMENDMENTS TO THE SHARE OPTION SCHEME AND

PROPOSED REFRESHMENT OF THE 10 PER CENT LIMIT ON THE GRANT OF OPTIONS UNDER THE SHARE OPTION SCHEME

INTRODUCTION

The purpose of this circular is to provide you with information reasonably necessary to enable you to make a decision on whether to vote for or against the resolutions proposed at the EGM.

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LETTER FROM THE BOARD

A notice convening the EGM setting out the details of the resolutions to be proposed at the EGM is set out on pages 13 to 14 of this circular.

APPROVAL OF SHARE OPTIONS GRANTED

On 2 June 2006, the Company conditionally granted 25,000,000, 25,000,000 and 25,000,000 Share Options to each of Mr. Chan Shi Yung, Mr. Chan Wai Keung and Mr. Chui Kwong Kau respectively. The Share Options give the grantees the right to subscribe for Shares at the price of HK$1.78 each. These grantees may each exercise up to a maximum of 5,000,000 Share Options each year over the first 5 years subject to any carry forward from previous years. However any Share Options not so exercised during such first five years may be carried forward for exercise until the end of a 10 year term from the date of approval by Shareholders of the EGM. Any Share Options not exercised in any one year can be carried forward to the next year. Pursuant to Clause 10.2(e) of the Share Option Scheme, it is provided that options granted to, inter alia, a Director and having an aggregate value based on the closing price of the Shares as at the date of the commencement of the Share Option Scheme, in excess of HK$5,000,000 must be subject to Shareholders’ approval at general meeting.

The aggregate value of the Share Options to each of the Directors exceed HK$5,000,000 per year over a five year period. The term upon which the Share Options may be exercised is a period of 10 years from the date of grant. The subscription price is HK$1.78 per Share, representing a premium of 14% to the closing price of the Shares as at 2 June 2006, being the date of the board meeting approving the granting of the Share Options, a zero discount to the average closing price of the Shares for five trading days before the date of the board meeting approving the granting of the Share Options. The grant of the Share Options to each of the relevant Directors together with all options granted (if any) to them over the last 12 months is approximately 0.98% of the issued share capital of the Company as at the Latest Practicable Date.

The Share Options are granted to the Directors for the purpose of recognising their loyalty and contribution and in order to retain them for the continual operation, development and growth of the Group.

AMENDMENTS TO SHARE OPTION SCHEME

The Share Option Scheme contains certain provisions which are more restrictive and deviate from that of the requirements of Chapter 17 of the Listing Rules. In order to make the terms of the Share Option Scheme consistent with that of the requirements of Chapter 17 of the Listing Rules, the following amendments are proposed.

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LETTER FROM THE BOARD

Existing terms of the Share Option Scheme

Proposed terms of the Share Option Scheme

The second paragraph of 5.1

Where Options are proposed to be granted to a substantial shareholder (as defined in the Listing Rules) or an independent non-executive director for the time being of the Company or any of their respective associates (as defined in the Listing Rules), and the proposed grant of Options, when aggregated with the Options already granted to that person in the past twelve (12) months, would entitle him/her to receive the higher of 0.1 per cent of the total number of the issued Shares for the time being and having an aggregate value, based on the closing price of the issued Shares as at the Commencement Date of each grant, in excess of $5,000,000.00, the proposed grant of Options shall be subject to the prior approval of shareholders of the Company in a general meeting in which all connected persons for the time being of the Company (if any) (except where any connected person intends to vote against the proposed grant of Options provided his/her intention to do so has been stated in the circular to be issued by the Company pursuant to this paragraph 5.1) shall abstain from voting in such general meeting. For the purpose of this paragraph 5.1, the Company shall prepare and deliver to the shareholders of the Company a circular setting out (i) the reason of the proposed grant of Options, (ii) the number of Shares to be issued pursuant to the Options granted, (iii) the terms of the Options to be granted, (iv) the intention of any connected person who desires to vote against the proposed grant of Options; and (v) the recommendation from all the independent non-executive directors for the time being of

Each grant of Options to any director, chief executive or substantial shareholder of the Company (as defined in the Listing Rules), or any of their respective associates shall be subject to the approval of the independent non-executive directors of the Company (excluding any independent non-executive director who is a Grantee of the Option in question). Where any grant of Options to a substantial shareholder (as that term is defined in the Listing Rules) or an independent non-executive director of the Company, or any of their respective associates, would result in the Shares issued and to be issued upon exercise of all Options already granted and to be granted (including Options exercised, cancelled and outstanding) to such person in the 12-month period up to and including the date of such grant:

• (a) representing in aggregate over 0.1% (or such other percentage as may from time to time be specified by the Stock Exchange) of the Shares in issue; and

• (b) having an aggregate value, based on the closing price of the Shares as stated in the daily quotations sheets issued by the Stock Exchange on the Date of Grant, in excess of HK$5 million (or such other percentage as may from time to time be specified by the Stock Exchange),

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LETTER FROM THE BOARD

Existing terms of the Share Option Scheme

Proposed terms of the Share Option Scheme

the Company on whether or not to vote in favour of the proposed grant of Option by not less than fourteen (14) Business Days before the relevant general meeting convenes.

such grant of Options shall be subject to approval by resolution of the Shareholders (voting by way of poll). All connected persons (as defined in the Listing Rules) of the Company shall abstain from voting at such general meeting, except that any connected person may vote against the relevant resolution at the general meeting provided that his intention to do so has been stated in the circular to be sent to the Shareholders in connection therewith.

10.2(a)

10.2(a)

the total number of Shares available for issue under Options which may be granted under this Scheme must not in aggregate exceed 63,000,000 Shares, representing ten (10) per cent of the issued share capital of the Company as at the date of listing of Shares on the Stock Exchange, unless an approval by shareholders of the Company at general meeting has been obtained pursuant to paragraph (b) or (c) below;

the total number of Shares available for issue under Options which maybe granted under this Scheme must not exceed ten (10) per cent. of the issued share capital of the Company on the Adoption Date , unless an approval by shareholders of the Company at general meeting has been obtained pursuant to paragraph (b) or (c) below;

10.2(b)

10.2(b)

the Company may seek approval of its shareholders at general meeting to renew the ten (10) per cent limit. However, the total number of Shares available for issue under Options which may be granted under this Scheme in these circumstances must not exceed ten (10) per cent of the issued share capital of the Company at the date of approval of renewing the limit;

the Company may seek approval of its shareholders at general meeting to renew the ten (10) per cent limit. However, the total number of Shares available for issue under Options which may be granted under this Scheme in these circumstances must not exceed ten (10) per cent of the issued share capital of the Company at the date of approval of renewing the limit, excluding the aggregate number of Shares which have been duly allotted and issued pursuant to this Scheme or any other share option schemes (including those outstanding, cancelled, lapsed in accordance with the terms or exercised);

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LETTER FROM THE BOARD

Existing terms of the Share Option Scheme

Proposed terms of the Share Option Scheme

10.2(e)

10.2(e)

where Options are proposed to be granted to a Director, chief executive, a substantial shareholder (as defined in the Listing Rules) or an independent non-executive director of the Company or any of their respective associates (as defined in the Listing Rules), and the proposed grant of Options, when aggregate the Options already granted and to be granted (including Options exercised, cancelled and outstanding) to such connected person in the past twelve (12) months period, would entitle that person to receive the higher of 0.1 per cent of the total issued shares of the Company as at the date of such further proposed grant and having an aggregate value, based on the closing price of the Shares as at the Commencement Date of each grant, in excess of HK$5,000,000.00, then the proposed grant must be subject to the approval of the shareholders of the Company at general meeting, where their votes shall be taken on a poll. All other connected persons of the Company must abstain from voting in such general meeting (except where any connected person intends to vote against the proposed grant provided his/her intention to do has been stated in the circular to be issued by the Company). The Company shall prepare and deliver to the shareholders of the Company a circular in accordance with the provisions set out in paragraph 10.3.

the maximum number of Shares in respect of which Options may be granted to a specifically identified single Grantee under this Scheme shall not (when aggregated with any Shares subject to any other share option scheme(s) of the Company) in any 12-month period exceed 1 per cent of the Shares in issue (the “Individual Limit”);

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LETTER FROM THE BOARD

Existing terms of the Share Option Scheme

Proposed terms of the Share Option Scheme

10.2(f)

10.2(f)

no Option may be granted to any one Participant which, if exercised in full, would result in the total number of Shares issued or to be issued upon exercise of all Options granted and to be granted to him/her (including exercised, outstanding and cancelled) in the past 12 months and which are for the time being subsisting and unexecuted, exceeding one (1) per cent of the issued share capital of the Company as at the date of such grant. Any further grant of Options in excess of the foregoing limit must be subject to the approval of the shareholders of the Company in a general meeting, with that Participant and his/her associates (defined in the Listing Rules) abstaining from voting (if any of them are entitled to vote at the Company’s general meeting at that time) and the Company shall prepare and deliver to the shareholders of the Company a circular in accordance with the provisions of paragraph 10.3.

the Company may grant Options beyond the Individual Limit referred to above to a Participant at any time if:–

• (i) the Company has first sent a circular to Shareholders containing the identity of the Participant in question, the number and terms of the Options to be granted (and Options previously granted to such Participant), the information required under Rule 17.03(4) of the Listing Rules; and

• (ii) separate Shareholder’s approval has been obtained with the proposed relevant Grantee as stated above (as the case may be) and his associates (as such term is defined in the Listing Rules) abstaining from voting.

PROPOSED REFRESHMENT OF THE 10% LIMIT ON THE GRANT OF OPTIONS UNDER THE SHARE OPTION SCHEME

The Company adopted the Share Option Scheme on 28 January 2002 (the “Adoption Date”).

At present, the Company has no other share option scheme apart from the Share Option Scheme.

Since the adoption of the Share Option Scheme on 28 January 2002, approval was obtained from Shareholders in the annual general meeting held on 29 May 2006 for refreshment of the 10 per cent. limit on the grant of options under the Share Option Scheme to 255,120,000 Shares.

As at the Latest Practicable Date, an aggregate of 220,500,000 options, representing 8.64% of the issued share capital of the Company, remain outstanding under the Share Option Scheme and 12,600,000 options granted in 19 April 2006 had lapsed.

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LETTER FROM THE BOARD

Details of the share options granted and outstanding as at the Latest Practicable Date are as follows:

		Exercise Period	Exercise Period	Exercise	Options
Grantee	Date of Grant	From	To	Price	Outstanding
Executive Directors:
Chan Shi Yung	2 June 2006	(Within ten years		1.78	25,000,000*
Chan Wai Keung	2 June 2006	from date of		1.78	25,000,000*
Chui Kwong Kau	2 June 2006	obtaining approval		1.78	25,000,000*
		from Shareholders)
Continuous Contract
Employees	21 July 2006	21 July 2006	20 July 2016	1.29	500,000
	25 Sept 2006	25 Sept 2006	24 Sept 2016	1.29	45,000,000
Others	2 June 2006	2 June 2006	1 June 2016	1.78	25,000,000
	25 Sept 2006	25 Sept 2006	24 Sept 2016	1.29	75,000,000

* These are subject to Shareholders’ approval at the EGM.

Following the grant of 220,500,000 share options since 2 June 2006, a balance of 34,620,000 options remaining outstanding to be granted.

If the General Scheme Limit is “refreshed” on the basis of 2,551,200,000 Shares in issue as at the Latest Practicable Date and assuming that no Shares are issued or repurchased by the Company prior to the EGM, the General Scheme Limit will be re-set to 255,120,000 Shares (being 10% of the issued share capital of the Company as at the date of the EGM in which the refreshed limit is approved) and the Company will be allowed to grant further options under the Share Option Scheme and any other share option schemes of the Company carrying the rights to subscribe for a maximum of 255,120,000 Shares.

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LETTER FROM THE BOARD

The purpose of the Share Option Scheme is to encourage the Eligible Participants to perform their best in achieving the goals of the Group and to recognise the contribution of and provide incentives to the employees and directors of the Group. The refreshment of the General Scheme Limit will allow the Directors more flexibility in employing the Share Option Scheme in the future should they need to grant more options that are over the current limit to recognise contributions made to the Group. Accordingly, the Directors would like to take the EGM as an opportunity to approve the refreshment of the General Scheme Limit.

In this regard, the Company will seek approval from the Shareholders in the EGM for refreshing the General Scheme Limit. Application will be made to the Listing Committee of the Stock Exchange for the approval of the listing of, and permission to deal in, the Shares, representing a maximum of 10% of the issued share capital as at the date of passing of the relevant resolution for refreshing the General Scheme Limit, which may be issued upon the exercise of the options to be granted under the aforesaid refreshed limit of the Share Option Scheme. The Directors confirm that the refreshment of the General Scheme Limit shall not be subject to other condition or approval apart from the above.

Resolution no. 3 as set out in the notice of EGM will be proposed at the EGM to approve the refreshment of the General Scheme Limit on the grant of options under the Share Option Scheme.

Outcome of the EGM

The Company will make further announcements on the outcome of the EGM.

EGM

A notice convening the EGM to be held at Falcon Room I, Luk Kwok Hotel, 72 Gloucester Road, Wanchai, Hong Kong on Thursday, 2 November 2006 at 9:30 a.m. is set out on pages 13 to 14 of this circular.

A form of proxy for use at the EGM is enclosed. Whether or not you are able to attend the EGM, please 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, Wanchai, Hong Kong, as soon as possible and in any event not less than 48 hours before the time appointed for holding of the EGM or any adjourned meeting (as the case may be). Completion and return of the form of proxy will not preclude you from attending and voting at the EGM or any adjourned meeting (as the case may be) should you so wish.

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LETTER FROM THE BOARD

Procedures for demanding a poll at general meeting

According to article 66 of the Articles of Association, a resolution put to the vote at the EGM will 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 duly demanded. A poll may be demanded by:

• (a) the chairman of the EGM; or

• (b) at least three Shareholders present in person or by representative(s) or by proxy/ proxies and entitled to vote; or

• (c) any Shareholder or Shareholders present in person or by representative(s) or by proxy/ proxies and representing in the aggregate not less than one-tenth of the total voting rights of all Shareholders having the right to attend and vote at the EGM; or

• (d) any Shareholder or Shareholders present in person or by representative(s) or by proxy/ proxies and holding Shares conferring a right to attend and vote at the EGM on which there have been paid up sums in the aggregate equal to not less than one-tenth of the total sum paid up on all shares conferring that right.

RECOMMENDATION

The Directors are of the opinion that the proposed amendments to the Share Option Scheme and proposed refreshment of the 10 per cent limit on the grant of options under the Share Option Scheme referred to in this circular are in the best interests of the Company and the Shareholders as a whole. The Directors therefore recommend you to vote in favour of such resolutions at the EGM.

Your attention is also drawn to the letter from the Independent Non-executive Directors set out in page 12 to this circular.

Yours faithfully, By Order of the Board

Hon Po Group (Lobster King) Limited Chan Wai Keung

Executive Director & Chief Executive Officer

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LETTER FROM THE INDEPENDENT BOARD COMMITTEE

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(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 228)

16 October 2006

To the Shareholders

Dear Sir or Madam,

APPROVAL OF SHARE OPTIONS

We refer to the circular of the Company to the Shareholders dated 16 October 2006 (the “Circular”), in which this letter forms a part. Unless the context requires otherwise, capitalised terms used in this letter will have the same meanings given to them in the section headed “Definitions” of the Circular.

We have been authorised by the Board to advise the Shareholders on how to vote in respect of the grant of the Share Options.

Having considered, among other matters, the fact that the Share Options are granted to the relevant Directors for the purpose of recognising their loyalty and contribution and in order to retain them for the continual operation, development and growth of the Group, we consider that the grant of the Share Options to each of Mr. Chan Shi Yung, Mr. Chan Wai Keung and Mr. Chui Kwong Kau is fair and reasonable so far as the Shareholders are concerned and is in the interests of the Company and the Shareholders as a whole and accordingly recommend the Shareholders to vote in favour of the ordinary resolution in relation thereto to be proposed at the EGM.

Yours faithfully,

For and on behalf of

The Independent Board Committee of

Hon Po Group (Lobster King) Limited Mr. Chang Kin Man Mr. Wu Tak Lung Mr. Ip Wing Lun

Independent non-executive Directors

– 12 –

NOTICE OF EXTRAORDINARY GENERAL MEETING

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(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 228)

NOTICE IS HEREBY GIVEN that the extraordinary general meeting (the “Extraordinary General Meeting”) of the shareholders of Hon Po Group (Lobster King) Limited (the Company”) will be held at Falcon Room I, Luk Kwok Hotel, 72 Gloucester Road, Wanchai, Hong Kong on Thursday, 2 November 2006 at 9:30 a.m. for the purpose of considering and, if thought fit, passing with or without amendments, the following resolutions of the Company:

ORDINARY RESOLUTIONS

1. To approve the grant of share options to Mr. Chan Shi Yung, Mr. Chan Wai Keung and Mr. Chui Kwong Kau in the amount of 25,000,000 share options each to subscribe for Shares at HK$1.78 each.

2. To amend the Share Option Scheme.

3. Subject to and conditional upon The Stock Exchange of Hong Kong Limited granting the listing of and permission to deal in the ordinary shares of HK$0.05 each (the “Shares”) in the share capital of the Company (representing a maximum of 10 per cent of the ordinary shares of the Company in issue as at the date of passing this resolution) which may be issued pursuant to the exercise of options granted under the Company’s share option scheme adopted on 28 January 2002 (the “Scheme”), the refreshing of the scheme limit on grant of options under the Scheme and any other share option scheme(s) of the Company up to 10 per cent, of the ordinary shares of the Company in issue as at the date of passing this resolution (the “Refreshed Mandate Limit”) be and is hereby approved and any director of the Company be and is hereby authorised to do such act and execute such document to effect the Refreshed Mandate Limit.

By order of the Board

Hon Po Group (Lobster King) Limited Chan Wai Keung

Executive Director & Chief Executive Officer

Hong Kong, 16 October 2006

– 13 –

NOTICE OF EXTRAORDINARY GENERAL MEETING

Registered office: Head office and Principal place of business Century Yard Units E & F, Ground Floor Cricket Square Phase II, Kingsway Industrial Building Hutchins Drive 173-175 Wo Yi Hop Road P O Box 2681 GT Kwai Chung Grand Cayman Hong Kong British West Indies

Notes:

1. A member of the Company entitled to attend and vote at the Extraordinary General Meeting convened by the above notice is entitled to appoint one or more proxies to attend and, on a poll, vote instead of such member. A proxy need not be a member of the Company.

2. In the case of joint holders of shares in the Company, the vote of the senior who tenders a vote whether in person or by proxy, shall be accepted to the exclusion of the vote(s) of the other joint holders, seniority being determined by the order in which names stand in the register of members.

3. In order 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 thereof, must be deposited to the office of Tengis Limited, the Company’s Branch Share Registrar in Hong Kong at 26/F., Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong not less than 48 hours before the time appointed for holding the Extraordinary General Meeting (or any adjournment thereof).

4. As at the date of this notice, the directors of the Company are Mrs. Cheung Lim Mai Tak, Grace, Mr. She Hing Chiu, Mr. Chan Shi Yung, Mr. Chui Kwong Kau, Mr. Chan Wai Keung, Mr. Chang Kin Man, Mr. Wu Tak Lung, Mr. Ip Wing Lun and Mr. Wang Xiang Jun.

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