Dadi International Group Limited — Proxy Solicitation & Information Statement 2008

Feb 25, 2008

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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.

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

If you have sold or otherwise transferred all your shares in Brilliant Arts Multi-Media Holding Limited, you should at once hand this circular, together with the enclosed form of proxy, to the purchaser(s) or transferee(s) or to the bank, licensed securities dealer or another agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

This circular is for information purpose only and does not constitute an invitation or offer to acquire, purchase or subscribe for the securities mentioned herein.

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(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 8130)

(i) PROPOSED CAPITAL REORGANISATION; (ii) PROPOSED CHANGE IN BOARD LOT SIZE; (iii) PROPOSED REFRESHMENT OF SCHEME MANDATE LIMIT

OF SHARE OPTION SCHEME;

AND

(iv) NOTICE OF EGM

A notice convening an extraordinary general meeting (the “ EGM ”) of the Company to be held at 11:30 a.m. on Wednesday, 19 March 2008 at Unit 1611, 16/F., Shun Tak Centre, West Tower, 168-200 Connaught Road Central, Hong Kong is set out on page 14 to page 16 of this circular.

Whether or not you are able to attend the EGM, you are advised to read the notice and to complete and return the enclosed form of proxy, in accordance with the instructions printed thereon, to the Hong Kong branch share registrar and transfer office of the Company, Tricor Secretaries Limited, at 26/F., Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong, as soon as possible but in any event not less than 48 hours before the time appointed for the holding of the EGM or any adjourned meeting. The completion and return of the form of proxy will not preclude you from attending and voting at the EGM or any adjourned meeting in person if you so wish.

This circular will remain at www.hkgem.com on the “Latest company announcements” page of the GEM website for at least 7 days from the date of its posting.

26 February 2008

CHARACTERISTICS OF GEM

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

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

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

– i –

CONTENTS

	Page
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
EXPECTED TIMETABLE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
LETTER FROM THE BOARD
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
(i) Proposed Capital Reorganisation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
(ii) Proposed change in board lot size . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
(iii) Proposed refreshment of scheme mandate limit of Share Option Scheme . . .	9
Free exchange of the share certificates and trading arrangement . . . . . . . . . . . . . .	11
Odd lots arrangement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
Listing and dealings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
Procedures by which a poll may be demanded. . . . . . . . . . . . . . . . . . . . . . . . . . . .	12
EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	13
NOTICE OF EGM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	14

– ii –

DEFINITIONS

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

• “Announcement”

• the announcement of the Company dated 5 February 2008 relating to, among other things, the Capital Reorganisation and the change of board lot size

• “Board” board of Directors

• “Business Day(s)”

• any day (other than a Saturday, Sunday or public holiday) on which licensed banks are generally open for business in Hong Kong throughout their normal business hours

• “Capital Reduction”

• the reduction in the nominal value of the existing Shares from HK$0.10 each to HK$0.001 each

• “Capital Reorganisation”

• the Capital Reduction, the Share Consolidation and the Increase in Authorised Share Capital

• “CCASS”

• the Central Clearing and Settlement System established and operated by HKSCC

• “Company”

• Brilliant Arts Multi-Media Holding Limited, a company incorporated in the Cayman Islands with limited liability and the issued Shares of which are listed on the Stock Exchange

• “Consolidated Share(s)”

• ordinary share(s) of HK$0.01 each of the Company immediately after the Capital Reduction and Share Consolidation becoming effective

• “Convertible Bond”

• the convertible bond in the principal amount of HK$24 million issued by the Company in favour of Billion ERA Group Limited

• “Court”

• the Grand Court of the Cayman Islands

• “CSL”

• Classical Statute Limited, an indirect wholly-owned subsidiary of China Star Entertainment Limited, a company listed on Hong Kong Stock Exchange

• “CSL Convertible Bonds”

the convertible bonds issued by the Company in favour of CSL with an aggregate principal amount of HK$25 million and as at the Latest Practicable Date, HK$1,000,000 of the CSL Convertible Bonds remained outstanding

– 1 –

DEFINITIONS

• “EGM” an extraordinary general meeting of the Company to be convened to consider, among others, and, if thought fit, approve (i) the Capital Reorganisation; (ii) the change in board lot size; and (iii) the refreshment of scheme mandate limit of Share Option Scheme

• “Eligible Participant” means (i) any full-time employees of the Company or of any of its Subsidiaries; (ii) any directors (including non-executive directors and independent non-executive directors) of the Company or of any of its Subsidiaries; (iii) any advisers, consultants, suppliers and agents to the Company or to any of its subsidiaries; and (iv) such other persons who have contributed to the Group, the assessment criteria of which are: (a) contribution to the development and performance of the Group; (b) quality of work performed for the Group; (c) initiative and commitment in performing his/her duties; and (d) length of service or contribution to the Group

• “GEM” the Growth Enterprise Market of the Stock Exchange “GEM Listing Committee” the listing sub-committee of the board of directors of the Stock Exchange with responsibility for GEM

• “GEM Listing Rules” the Rules Governing the Listing of Securities on GEM

• “Group”

• the Company and its subsidiaries

• “HKSCC”

• Hong Kong Securities Clearing Company Limited

• “Hong Kong”

• the Hong Kong Special Administrative Region of the People’s Republic of China

• “Increase in Authorised Share the increase in the authorised share capital of the Capital” Company from HK$3,000,000 divided into 300,000,000 Consolidated Shares of HK$0.01 each to HK$30,000,000 divided into 3,000,000,000 Consolidated Shares of HK$0.01 each by the creation of 2,700,000,000 new Consolidated Shares of par value HK$0.01 each

• “Latest Practicable Date” 22 February 2008, being the latest practicable date prior to the printing of this circular for ascertaining certain information in this circular

• “Reduced Share(s)”

• ordinary share(s) of HK$0.001 each of the Company immediately after the Capital Reduction becoming effective

– 2 –

DEFINITIONS

“Share(s)”	ordinary share(s) of HK$0.10 each of the Company
	prior to the Capital Reorganisation
“Share Consolidation”	the consolidation of every ten unissued and issued
	Reduced Shares into one Consolidated Share
“Share Options”	the outstanding 67,315,110 share options of the
	Company exercisable into 67,315,110 Shares granted
	under the Share Option Scheme
“Share Option Scheme”	the share option scheme adopted by the Company
	pursuant to the written resolution of the Company on 2
	August 2002
“Shareholder(s)”	holder(s) of the Share(s)
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong

– 3 –

EXPECTED TIMETABLE

The expected timetable for implementation of the Capital Reorganisation and the change in board lot size and the associated trading arrangement, which are conditional on the results of the EGM and the approval from the Court, are set out below:

	2008
Latest time for return of proxy form of EGM . . . . .	. . . . . . 11:30 a.m., Monday, 17 March
Expected date and time of EGM . . . . . . . . . . . . . . . . . . . 11:30 a.m., Wednesday, 19 March
Announcement of results of EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . Wednesday, 19 March
Effective date of the Capital Reorganisation . . . . . . .	. . . . . . . . . . . . . . . Wednesday, 2 July
Commencement of dealings in Consolidated Shares .	. . . . . . . . . . . . . . . Wednesday, 2 July
Original counter for trading in Shares in board lots of
10,000 Shares to be temporarily closed . . . . . . . . .	. . . . . . . 9:30 a.m., Wednesday, 2 July
Temporary counter for trading in Consolidated Shares
in board lots of 1,000 Consolidated Shares
in the form of existing share certificate(s) opens . .	. . . . . . . 9:30 a.m., Wednesday, 2 July
First day for free exchange of existing share certificate(s)
for new share certificate(s) for
the Consolidated Shares commences . . . . . . . . . . .	. . . . . . . . . . . . . . . Wednesday, 2 July
Original counter for trading in Consolidated Shares
in board lots of 4,000 Consolidated Shares
in form of new share certificate(s) for
Consolidated Shares to be re-opened . . . . . . . . . . .	. . . . . . 9:30 a.m., Wednesday, 16 July
Parallel trading in Consolidated Shares in form of
new and existing certificate(s) commences . . . . . .	. . . . . . 9:30 a.m., Wednesday, 16 July
Designated broker starts to stand in the market to provide
matching services for the sale and purchase of
odd lots of Consolidated Shares . . . . . . . . . . . . . .	. . . . . . . . . . . . . . Wednesday, 16 July
Parallel trading in Consolidated Shares in form of
new and existing certificate(s) ends . . . . . . . . . . .	. . . . . 4:00 p.m., Wednesday, 6 August
Temporary counter for trading in board lot of
1,000 Consolidated Shares in the form of
existing share certificate(s) closes . . . . . . . . . . . .	. . . . . 4:00 p.m., Wednesday, 6 August
Designated broker ceases to stand in the market to
purchase and sell odd lots of Consolidated Shares	. . . . . 4:00 p.m., Wednesday, 6 August
Last day for free exchange of existing share certificate(s)
for new share certificate(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tuesday, 12 August

– 4 –

LETTER FROM THE BOARD

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(Incorporated in the Cayman Islands with limited liability) (Stock Code: 8130)

Executive Directors:

Mr. Lei Hong Wai (Chairman) Mr. Yip Tai Him

Independent non-executive Directors:

Mr. Lai Hok Lim Mr. Leung Wai Man Mr. Man Kong Yui

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

Head office and principal place of business in Hong Kong: Unit 1611, 16/F Shun Tak Centre West Tower 168-200 Connaught Road Central Hong Kong

26 February 2008

To the Shareholders

Dear Sir or Madam,

(i) PROPOSED CAPITAL REORGANISATION;

(ii) PROPOSED CHANGE IN BOARD LOT SIZE; (iii) PROPOSED REFRESHMENT OF SCHEME MANDATE LIMIT OF SHARE OPTION SCHEME;

AND

(iv) NOTICE OF EGM

INTRODUCTION

Reference is made to the Announcement relating to the proposed Capital Reorganisation and change in board lot size. The Board also proposed to refresh the scheme mandate limit of Share Option Scheme at the EGM.

The purpose of this circular is to provide the Shareholders with, among other things, further details of (i) the Capital Reorganisation; (ii) the change in board lot size; (iii) refreshment of scheme mandate limit of Share Option Scheme; and (iv) the notice of the EGM.

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LETTER FROM THE BOARD

(i) PROPOSED CAPITAL REORGANISATION

The Company proposes to effect the Capital Reorganisation which will involve (i) the Capital Reduction pursuant to which the nominal value of each issued and unissued Share will be reduced from HK$0.10 each to HK$0.001 each; (ii) the Share Consolidation pursuant to which every ten unissued and issued Reduced Shares will be consolidated into one Consolidated Share; and (iii) the Increase in Authorised Share Capital from HK$3,000,000 to HK$30,000,000 by the creation of 2,700,000,000 new Consolidated Shares of par value HK$0.01 each. The following table shows the effects on the share capital of the Company pursuant to the Capital Reorganisation:

Authorised Shares

orised Shares
3,000,000,000	Shares authorised with a par value of HK$0.10		HK$300,000,000
	each as at the Latest Practicable Date
3,000,000,000	Reduced Shares authorised with a par value of		HK$3,000,000
	HK$0.001 each after the Capital Reduction
	becoming effective
300,000,000	Consolidated Shares authorised with a par value		HK$3,000,000
	of HK$0.01 each after the Capital Reduction
	and Share Consolidation becoming effective
3,000,000,000	Consolidated Shares authorised with a par value		HK$30,000,000
	of HK$0.01 each after the Capital Reduction,
	Share Consolidation and Increase in
	Authorised Share Capital becoming effective
Issued Shares
1,053,853,908	Shares in issue with a par value of HK$0.10	HK$105,385,390.80
	each as at the Latest Practicable Date
1,053,853,908	Reduced Shares in issue with a par value of		HK$1,053,853.91
	HK$0.001 each after the Capital Reduction
	becoming effective
105,385,390	Consolidated Shares in issue with a par value of		HK$1,053,853.91
	HK$0.01 each after the Capital Reduction
	and Share Consolidation becoming effective

Note: The total number of issued Shares in this circular differs from the total number as stated in the Announcement due to a number of 450,000,000 new Shares were issued by the Company to the independent subscribers as at the Latest Practicable Date pursuant to the tranche II placing agreement dated 23 October 2007, which was completed on 21 February 2008. The information on tranche II placing has been set out in the Company’s announcement dated 26 October 2007 and the circular dated 7 November 2007.

Capital Reduction

As at the Latest Practicable Date, the authorised share capital of the Company is HK$300,000,000 comprising 3,000,000,000 Shares, of which 1,053,853,908 Shares are in issue. The nominal value of each of the unissued and issued existing Shares of HK$0.10 each in the share capital of the Company will be reduced from HK$0.10 to HK$0.001 each by cancelling paid-up capital to the extent of HK$0.099 per issued Share. Part of the credit arising from such reduction will be applied towards canceling the accumulated losses of the

– 6 –

LETTER FROM THE BOARD

Company, whilst the balance will be transferred to the distributable capital reduction reserve account of the Company. Upon the Capital Reduction becoming effective, the authorised share capital of the Company will comprise of HK$3,000,000 divided into 3,000,000,000 Reduced Shares of par value HK$0.001 each, of which 1,053,853,908 Reduced Shares will be in issue.

Share Consolidation

Every ten unissued and issued Reduced Shares will be consolidated into one Consolidated Share. Fractions of Consolidated Shares that arise from the Share Consolidation will be aggregated and sold for the benefit of the Company.

On the basis of the existing issued share capital of the Company and assuming no further issue of new Shares from the Latest Practicable Date up to the date on which the Capital Reduction and Share Consolidation becoming effective, the authorised share capital of the Company will comprise of HK$3,000,000 divided into 300,000,000 Consolidated Shares of par value HK$0.01 each, of which 105,385,390 Consolidated Shares will be in issue.

Increase in Authorised Share Capital

Upon the Capital Reduction and Share Consolidation becoming effective, the authorised share capital will be increased from HK$3,000,000 divided into 300,000,000 Consolidated Shares of HK$0.01 each to HK$30,000,000 divided into 3,000,000,000 Consolidated Shares of HK$0.01 each by the creation of 2,700,000,000 new Consolidated Shares of par value HK$0.01 each.

Conditions of the Capital Reorganisation

The Capital Reorganisation is conditional on:

• (i) the passing by the Shareholders of a special resolution to approve the Capital Reorganisation at the EGM;

• (ii) the GEM Listing Committee of the Stock Exchange granting the listing of, and permission to deal in, the Consolidated Shares in issue and to be issued upon the Capital Reorganisation becoming effective;

• (iii) approval of the Capital Reduction to the extent required by the Court; and

• (iv) compliance with any conditions imposed by the Court.

Subject to the fulfillment of the conditions of the Capital Reorganisation, the effective date of the Capital Reorganisation is expected to be on or about July 2008.

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LETTER FROM THE BOARD

Adjustment to the Share Options, the CSL Convertible Bonds and the Convertible Bond

Upon the Capital Reorganisation becoming effective, the exercise price/conversion price and the number of Consolidated Shares to be issued pursuant to the Share Options, the CSL Convertible Bonds and the Convertible Bond will be adjusted in accordance with the relevant provisions of the agreements relating to the Share Options, the CSL Convertible Bonds and the Convertible Bond. Such adjustments will be reviewed and certified by auditors or an approved merchant bank to be appointed by the Company and the Company will announce the adjustments in due course.

Application will be made by the Company to the GEM Listing Committee of the Stock Exchange for the granting of and permission to deal in the Consolidated Shares and the Consolidated Shares which fall to be issued upon exercise or conversion of the Share Options, the CSL Convertible Bonds and the Convertible Bond.

Save for the Share Options, the CSL Convertible Bonds and the Convertible Bond, the Company has no other outstanding convertible securities, options or warrants in issue which confer any right to subscribe for, convert or exchange into Shares as at the Latest Practicable Date.

Reasons for the Capital Reorganisation

The Company had an unaudited consolidated accumulated loss of approximately HK$33.25 million as at 31 December 2007. Upon the Capital Reorganisation becoming effective, a credit of aggregate of approximately HK$104.33 million will be applied to eliminate the accumulated loss of approximately HK$33.25 million and the remaining balance will be transferred to the distributable capital reduction reserve account of the Company, in accordance with the articles of association of the Company.

The Shares have been trading at prices below their nominal value of HK$0.10 each on 16 January 2008 and 21 January 2008 thereafter. The proposed Capital Reorganisation will reduce the total number of Shares currently in issue and is also required for the compliance with Rule 17.76 of the GEM Listing Rules. As such, it is expected to bring about a corresponding upward adjustment in the trading price of the Consolidated Shares on the Stock Exchange. The Directors believe that the implementation of the Capital Reorganisation will reduce the overall transaction costs for dealings in the Consolidated Shares and will allow flexibility for the issue of new shares of the Company to facilitate fund raising exercise in future to attract more investors and subsequently will improve the liquidity in trading in Shares and to provide for flexibility and accommodate future expansion and growth of the Company. Save for the administrating expenses to be incurred by the Company relating to the Capital Reorganisation, no material effect to the financial position and business operation of the Group as a result of the Capital Reorganisation. Accordingly, the Directors are of the view that the proposed Capital Reorganisation is fair and reasonable and in the interests of the Company and the Shareholders as a whole.

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LETTER FROM THE BOARD

(ii) PROPOSED CHANGE IN BOARD LOT SIZE

The Shares are traded in board lot size of 10,000 Shares. It is proposed that the board lot size for trading in the shares of the Company be changed from 10,000 Shares to 4,000 Consolidated Shares upon the Capital Reorganisation becoming effective.

(iii) PROPOSED REFRESHMENT OF SCHEME MANDATE LIMIT OF SHARE OPTION SCHEME

The Company also proposes to refresh of scheme mandate limit of Share Option Scheme at the EGM to authorise the Directors to grant share options under the Share Option Scheme to the effect that the Shares or the Consolidated Shares to be allotted and issued under such share options shall not exceed 10% of the number of the Shares or the Consolidated Share in issue as at the date of approval of the refreshed limit by the Shareholders.

Pursuant to the resolution passed by Shareholders at the extraordinary general meeting of the Company held on 17 January 2008, the limit of the Share Option Scheme was approved and refreshed by a resolution of the Shareholders (the “January Refreshment”), which allowed the Directors to grant further options under the Share Option Scheme carrying rights to subscribe for a maximum of 42,385,390 Shares (representing 4,238,539 Consolidated Shares upon the Capital Reorganisation becoming effective), being 10% of the issued share capital of the Company as at the date of the extraordinary general meeting on 17 January 2008 (the “Current Limit”). As at the Latest Practicable Date, none of the 42,385,390 options has been granted under the Current Limit in accordance with the terms of the Share Option Scheme.

The purpose of the Share Option Scheme is to enable the Company to provide incentives and reward Eligible Participants for their contribution or potential contribution to the Group and provide the Company with greater flexibility on recruiting and retaining high-calibre employees and attracting human resources that are valuable to the Group. Given the Current Limit represents 4.02% of the existing issued share capital of the Company as at the Latest Practicable Date, the Directors consider that the limit under the Share Option Scheme should be refreshed so that the Company could have more flexibility to provide incentives to those Eligible Participants of the Share Option Scheme by way of granting share options to them.

Under the Share Option Scheme, the Directors were authorised to grant options to subscribe for Shares thereunder and to allot, issue and deal with Shares pursuant to the exercise of the options granted. The Company may grant options up to the limit imposed under the Share Option Scheme, i.e. 10% of the issued share capital of the Company as at the date of adoption of the Share Option Scheme.

In accordance with GEM Listing Rules 23.03(3) note 1 and 2, the Group may seek approval from its shareholders in general meeting for “refreshing” the 10% limit under the scheme. However, the total number of securities which may be issued upon exercise of all options to be granted under all of the schemes of the Group (or the subsidiary) under the limit as “refreshed” must not exceed 10% of the relevant class of securities in issue as at the

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LETTER FROM THE BOARD

date of approval of the limit. Options previously granted under the schemes (including those outstanding, cancelled, lapsed in accordance with the scheme or exercised options) will not be counted for the purpose of calculating the limit as “refreshed”. However, the limit on the number of securities which may be issued upon exercise of all outstanding options granted and yet to be exercised under the scheme and any other schemes must not exceed 30% of the relevant class of securities of the Group (or the subsidiary) in issue from time to time. No options may be granted under any schemes of the Group (or the subsidiary) if this will result in the limit being exceeded.

If the refreshment of scheme mandate limit of Share Option Scheme are approved at the EGM, based on the 1,053,853,908 Shares in issue as at the Latest Practicable Date and assume no further Shares are allotted and issued or repurchased after the Latest Practicable Date and up to the date of the EGM, the Company will be allowed to grant further options under the Share Option Scheme for subscription of up to a total of 105,385,390 Shares (representing 10,538,539 Consolidated Shares upon the Capital Reorganisation becoming effective), representing 10% of the issued share capital of 1,053,853,908 Shares of the Company as at the Latest Practicable Date. As there is 67,315,110 outstanding options in issue at the Latest Practicable Date carrying rights to subscribe for a maximum of 67,315,110 Shares (representing 6,731,511 Consolidated Shares upon the Capital Reorganisation becoming effective), grant of 105,385,390 Shares (representing 10,538,539 Consolidated Shares upon the Capital Reorganisation becoming effective) under the Shares Option Scheme would not exceed 30% of the issued share capital of 1,053,853,908 Shares (representing 105,385,390 Consolidated Shares upon the Capital Reorganisation becoming effective).

Taking into account the increase in issued share capital of the Company since the January Refreshment and the proposed Capital Reorganisation, the Directors consider that, to maintain high flexibility on recruiting and relating high-calibre employees and attracting human resources, the refreshment of the scheme mandate limit under the Share Option Scheme is in the interests of the Group and the shareholders as a whole because it enables the Company to reward and motivate its employees and other Eligible Participants under the Share Option Scheme.

Conditions of the refreshment of scheme mandate limit

The refreshment of the scheme mandate limit under the Share Option Scheme is conditional upon:

• (i) the passing of the ordinary resolution at the EGM to approve the refreshment; and

• (ii) the GEM Listing Committee of the Stock Exchange granting the listing of, and permission to deal in any new Shares or Consolidated Shares which may fall to be allotted and issued upon the exercise of the subscription rights attaching to the options that may be granted under the refreshed limit of the Share Option Scheme up to 10% of the issued share capital of the Company as at the date of passing of the relevant ordinary resolution at the EGM.

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LETTER FROM THE BOARD

Application will be made to the Stock Exchange for the listing of, and permission to deal in, the Shares or the Consolidated Shares to be issued pursuant to the exercise of share options to be granted under the refreshed scheme mandate limit.

FREE EXCHANGE OF SHARE CERTIFICATES AND TRADING ARRANGEMENT

Subject to the Capital Reorganisation becoming effective, Shareholders may, during a specified period, submit certificates for the existing Shares to the Company’s branch share registrar, Tricor Secretaries Limited, at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong, for exchange, at the expense of the Company, for certificates of the Consolidated Shares. The existing certificates will be valid for trading and settlement up to 4:00 p.m., Wednesday, 6 August 2008, being the latest date for trading in board lot of 1,000 Consolidated Shares in the form of existing certificates (or such other date which will be announced by the Company). Thereafter, certificates for the existing Shares will be accepted for exchange only on payment of a fee of HK$2.50 (or such higher amount as may from time to time be allowed by the Stock Exchange) for each certificate issued or cancelled, whichever is higher. Certificates for the existing Shares will continue to be good evidence of legal title and may be exchanged for certificates of the Consolidated Shares at any time. It is expected that new certificates for Consolidated Shares will be available for collection within 10 Business Days from the date of submission of the existing certificates of Shares to Company’s branch share registrar, Tricor Secretaries Limited, for exchange.

New share certificates for the Consolidated Shares will be in yellow colour in order to distinguish them from the existing share certificates which are in green colour.

All Consolidated Shares will rank pari passu in all respects with each other.

ODD LOTS ARRANGEMENT

In order to facilitate the trading of odd lots (if any) of the Consolidated Shares arising from the Capital Reorganisation and the change in board lot size, the Company has procured an agent to arrange for the sale and purchase of odd lots of Consolidated Shares on behalf of the Shareholders. Holders of odd lots of Consolidated Shares who wish to take advantage of this trading facility to dispose of or top up odd lots should contact Mr. Leung Siu Wa at 2235-7801 of Hantec International Finance Group Limited located at 45/F., COSCO Tower, 183 Queen’s Road Central, Hong Kong, during the period from Wednesday, 16 July 2008 to Wednesday, 6 August 2008, both dates inclusive.

Holders of Consolidated Shares in odd lots should note that successful matching of the sale and purchase of odd lots of Consolidated Shares will not be guaranteed. Shareholders are advised to consult their professional advisers if they are in doubt about the above procedures.

LISTING AND DEALING

The Company will apply to the GEM Listing Committee of the Stock Exchange for the granting of the listing of, and permission to deal in, the Consolidated Shares.

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LETTER FROM THE BOARD

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

For those persons whose interests in the Company are currently held through CCASS, dealings in the Consolidated Shares are expected to be capable of settlement through CCASS with effect from the date of commencement of dealings in the Consolidated Shares on the Stock Exchange and without any need on the part of such persons to deposit the certificates for Consolidated Shares with HKSCC.

Dealings in the Consolidated Shares may be settled through CCASS. You should seek the advice of your licensed securities dealer or other professional advisers for details of the settlement arrangement and how such arrangement will affect your rights and interests.

PROCEDURES BY WHICH A POLL MAY BE DEMANDED

Articles 66 and 67 of the Articles of Association set out the procedures under which a poll may be demanded. At any general meeting, 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:

• (a) by the Chairman of such meeting; or

• (b) by at least three members present in person or in the case of a member being a corporation by its duly authorised representative or by proxy for the time being entitled to vote at the meeting; or

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

• (d) by a member or members present in person or in the case of a member being a corporation by its duly authorised 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 member or in the case of a member being a corporation by its duly authorised representative shall be deemed to be the same as a demand by a member.

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LETTER FROM THE BOARD

Notwithstanding any other provisions of the Articles, (a) if the aggregate proxies held by the chairman of a particular meeting and the Directors account for 5 per cent or more of the total voting rights at that meeting, and (b) if on a show of hands in respect of any resolution the Members at the meeting vote in the opposite manner to that instructed in the proxies referred to in (a) above, then the chairman of the meeting and/or any Director holding the proxies referred to above shall demand a poll. However, if it is apparent from the total proxies held by the persons referred to in (a) above that a vote taken on a poll will not reverse the vote taken on a show of hands, then no poll shall be required. Unless a poll is so required under the rules of the Designated Stock Exchange or duly demanded and, in the latter case, the demand is not withdrawn, a declaration by the chairman that a resolution has been carried, or carried unanimously, or by a particular majority, or not carried by a particular majority, or lost, and an entry to that effect made in the minute book of the Company, shall be conclusive evidence of the facts without proof of the number or proportion of the votes recorded for or against the resolution.

EGM

The EGM will be convened and held at Unit 1611, 16/F., Shun Tak Centre, West Tower, 168-200 Connaught Road Central on Wednesday, 19 March 2008 at 11:30 a.m. to consider and, if thought fit, to approve (i) the Capital Reorganisation; (ii) the change in board lot size; and (iii) the refreshment of scheme mandate limit of Share Option Scheme. A notice convening the EGM is set out on page 14 to page 16 of this circular and a proxy form for use at the EGM is enclosed with this circular.

Whether or not you intend to attend the EGM, you are requested to complete the form of proxy in accordance with the instructions printed thereon and return the same to the Company’s branch share registrar in Hong Kong, Tricor Secretaries Limited, at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong, not less than 48 hours before the time fixed for the EGM. Completion and delivery of the form of proxy will not preclude you from attending and voting at the EGM or any adjourned meeting in person if you so wish.

By Order of the Board Brilliant Arts Multi-Media Holding Limited Lei Hong Wai Chairman

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NOTICE OF EGM

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(Incorporated in the Cayman Islands with limited liability) (Stock Code: 8130)

NOTICE IS HEREBY GIVEN that an extraordinary general meeting of Brilliant Arts Multi-Media Holding Limited (the “Company”) will be held at Unit 1611, 16/F., Shun Tak Centre, West Tower, 168-200 Connaught Road Central, Hong Kong on Wednesday, 19 March 2008 at 11:30 a.m. for the purpose of considering and, if thought fit, passing the following resolutions as a special resolution and an ordinary resolutions respectively:–

SPECIAL RESOLUTION

1. “ THAT , conditional upon (i) the GEM Listing Committee of the Stock Exchange granting approval of the listing of and permission to deal in the Consolidated Shares (as defined below); (ii) approval by the Grand Court of Cayman Islands (the “Court”) and (iii) compliance with any conditions imposed by the Court and with effect from the date on which those conditions are fulfilled:–

2. (A) the share capital of the Company as at the date of filing of the order of the Court relating to the Capital Reduction (as defined below) at the Registrar of Companies in the Cayman Islands (“Order Date”) reducing the nominal value of each issued and unissued share from a par value of HK0.10 each to a par value of HK$0.001, such reduction, in the case of the issued shares, to be effected by cancelling paid up capital to the extent of HK$0.099 on each of the Shares in issue as of the date of this resolution (the “Capital Reduction”) so that following such reduction (i) the authorised capital of the Company shall be an amount of HK$3,000,000 divided into 3,000,000,000 shares of par value HK$0.001 each; (ii) each issued and unissued share of HK$0.10 in the capital of the Company shall be treated as one share of HK$0.001 in the capital of the Company (“Reduced Share”) and (iii) any liability of the holders of issued shares in the capital of the Company to make any further contribution to the capital of the Company on each such share shall be treated as satisfied;

3. (B) every ten unissued and issued Reduced Shares of HK$0.001 each be consolidated into one Consolidated Share of HK$0.01 and any fraction of Consolidated Shares arising from the share consolidation shall not be allocated to the holders of the Reduced Shares otherwise entitled thereto but such fractions shall be aggregated and be sold for the benefit of the Company (“Share Consolidation”);

4. (C) the credit arising from the Capital Reduction be applied towards cancelling the accumulated deficit of the Company with the balance to be transferred to the distributable capital reduction reserve account of the Company;

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NOTICE OF EGM

• (D) all of the Consolidated Shares resulting from the Capital Reduction shall rank pari passu in all respects and have the rights and privileges and be subject to the restrictions contained in the Company’s articles of association;

• (E) the authorised share capital of the Company be increased by the creation of 2,700,000,000 new ordinary shares of HK$0.01 each such as to increase the authorised share capital to HK$30,000,000 divided into 3,000,000,000 Shares of HK$0.01 each (“Increase in Authorised Share Capital”); and

• (F) the directors of the Company be and are hereby authorised generally to do all things they may consider appropriate and desirable to effect and implement the Capital Reduction, Share Consolidation, application of credit arising from the Capital Reduction, and Increase in Authorised Share Capital (together the “Capital Reorganisation”).”

ORDINARY RESOLUTIONS

1. “ THAT conditional on the Capital Reorganisation referred to in Resolution 1 becoming effective, the change of board lot size for trading in the Shares of the Company from 10,000 Shares to 4,000 Consolidated Shares with effect from the completion of the Capital Reorganisation be and is hereby approved and the Directors be and are hereby authorised to do all things and execute all documents as the Directors may in their absolute discretion deem necessary and desirable to effect and implement the foregoing.”

2. “ THAT subject to and conditional upon the granting by the GEM Listing Committee of The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) of the listing of and permission to deal in the Shares or Consolidated Shares which may be issued pursuant to the exercise of options to be granted under the refreshed scheme mandate limit (the “Scheme Mandate Limit”) under the share option scheme adopted on 2 August 2002, which entitles the Directors to grant options after the listing of Shares on the Stock Exchange, in the manner as set out in paragraph (a) of this resolution,

3. (a) the refreshment of the Scheme Mandate Limit of up to 10 per cent. of the Shares in issue as at the date of passing of this resolution be and is hereby approved; and

4. (b) the Directors be and are hereby authorised do all such acts and things and execute all such documents, including under seal where applicable, as they consider necessary or expedient to give effect to the foregoing arrangement.”

By order of the Board Brilliant Arts Multi-Media Holding Limited Lei Hong Wai Chairman

Hong Kong, 26 February 2008

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NOTICE OF EGM

Notes:

1. A form of proxy for use at the extraordinary general meeting is enclosed herewith. To be valid, the instrument appointing a proxy must be in writing under the hand of the appointor or of his attorney duly authorised in writing or if the appointor is a corporation, either under seal or under the hand of an officer, attorney or other person duly authorised.

2. Any member of the Company entitled to attend and vote at a meeting of the Company shall be entitled to appoint another person as his proxy to attend and vote instead of him. A proxy duly appointed pursuant to the articles of association of the Company is entitled to vote on a show of hands at the meeting. On a poll votes may be given either personally or by proxy. A proxy need not be a member of the Company. A member may appoint more than one proxy to attend on the same occasion.

3. The instrument appointing a proxy and the power of attorney or other authority, if any, under which it is signed or a certified copy of that power or authority must be deposited at the Company’s share registrar in Hong Kong, Tricor Secretaries Limited, at 26/F., Tesbury Centre, 28 Queen’s Road East, Hong Kong not less than 48 hours before the time for holding the meeting or adjourned meeting (as the case may be) at which the person named in such instrument proposes to vote, and in default the instrument of proxy shall not be treated as valid.

4. Where there are joint holders of any share, any one of such joint holders may vote at the meeting, either personally or by proxy, in respect of such share as if he were solely entitled thereto; but if more than one of such joint holders be present at any meeting personally or by proxy, that one of the said persons so present whose name stands first on the register in respect of such share shall alone be entitled to vote in respect thereof.

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