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

If you have sold or transferred all your shares in Nam Hing Holdings Limited (the “ Company ”), you should at once hand this circular and accompanying form of proxy to the purchaser or the transferee or to the bank, licensed securities dealer, registered institution in securities or other agent through whom the sales or transfer was effected for transmission to the purchaser or the transferee.

This circular is not an offer of, nor is it intended to invite offers for, securities of the Company.

Hong Kong Exchanges and Clearing Limited, Hong Kong Securities Clearing Company Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

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NAM HING HOLDINGS LIMITED 南興集團有限公司[*]

(Incorporated in Bermuda with limited liability)

(Stock Code: 986)

(I) CAPITAL REORGANIZATION; (II) CHANGE OF COMPANY NAME;

(III) RIGHTS ISSUE ON THE BASIS OF TWENTY SIX RIGHTS SHARES FOR EVERY ONE NEW SHARE HELD ON THE RECORD DATE; AND

(IV) REFRESHMENT OF GENERAL MANDATE AND NOTICES OF SPECIAL GENERAL MEETINGS

Underwriter to the Rights Issue

Radland International Limited

Independent Financial Adviser to the Independent Board Committee

and the Independent Shareholders

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A letter from the Board is set out on pages 8 to 38 of this circular. A letter of recommendation from the Independent Board Committee to the Independent Shareholders is set out on pages 39 to 40 of this circular. A letter of advice from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders is set out on pages 41 to 71 of this circular.

A notice convening the First SGM to be held at 27/F., Yuen Long Trade Centre, 99-109 Castle Peak Road, Yuen Long, New Territories, Hong Kong at 10:30 a.m. on Friday, 18 March 2011 is set out on pages 100 to 103 of this circular. Whether or not you are able to attend the meeting in person, you are requested to complete and return the accompanying form of proxy in accordance with the instructions printed thereon and return it to the branch share registrar of the Company in Hong Kong, Tricor Tengis Ltd. at 26/F Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong, as soon as possible and in any event not later than 48 hours before the time appointed for holding the meeting or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the meeting or any adjournment thereof should you so wish.

A notice convening the Second SGM to be held at 27/F., Yuen Long Trade Centre, 99-109 Castle Peak Road, Yuen Long, New Territories, Hong Kong at 9:00 a.m. on Wednesday, 27 April 2011 is set out on pages 104 to 106 of this circular. Whether or not you are able to attend the meeting in person, you are requested to complete and return the accompanying form of proxy in accordance with the instructions printed thereon and return it to the branch share registrar of the Company in Hong Kong, Tricor Tengis Ltd. at 26/F Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong, as soon as possible and in any event not later than 48 hours before the time appointed for holding the meeting or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the meeting or any adjournment thereof should you so wish.

The Shareholders and potential investors of the Company should note that the Rights Issue is conditional upon the Underwriting Agreement having become unconditional and the Underwriter not having terminated the Underwriting Agreement in accordance with the terms thereof (a summary of which is set out in the sub-paragraph headed “Termination of the Underwriting Agreement” below). Accordingly, the Rights Issue may or may not proceed.

The New Shares will be dealt in on an ex-rights basis from Tuesday, 22 March 2011. Dealings in the Rights Shares in the nil-paid form will take place from Monday, 4 April 2011 to Tuesday, 12 April 2011 (both days inclusive). If the conditions of the Rights Issue are not fulfilled or the Underwriting Agreement is terminated by the Underwriter, the Rights Issue will not proceed. Any persons dealing in the nil-paid Rights Shares during the period from Monday, 4 April 2011 to Tuesday, 12 April 2011 (both days inclusive) will accordingly bear the risk that the Rights Issue may not become unconditional or may not proceed.

23 February 2011

For identification purposes only

	Page
Expected Timetable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	ii
Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
Letter from the Independent Board Committee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	39
Letter from the Independent Financial Adviser. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	41
Appendix I – Financial Information of the Group. . . . . . . . . . . . . . . . . . . . . . . . . .	72
Appendix II – Unaudited Pro Forma Financial Information
of the Group. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	74
Appendix III – General Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	80
Notice of the First Special General Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	100
Notice of the Second Special General Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	104

– i –

EXPECTED TIMETABLE

The expected timetable for the Capital Reorganization and the Rights Issue is set out below:

Event Time and date
2011
(Hong Kong time)
Expected date of despatch of the Circular and
form of proxy of the SGMs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . not later than Wednesday,
23 February
Latest time for return of proxy form for the First SGM . . . . . . . . . . . . . 10:30 a.m. on Wednesday,
16 March
Expected date of the First SGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10:30 a.m. on Friday, 18 March
Announcement of results of the First SGM to be
published on the Stock Exchange website . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Friday, 18 March
Effective date of the Capital Reorganization . . . . . . . . . . . . . . . . . . . . . . . . . . . .Monday, 21 March
Commencement of dealings in New Shares . . . . . . . . . . . . . . . . . . 9:00 a.m. on Monday, 21 March
Original counter for trading in Existing Shares
in Existing Share Certificates in board lots of
2,000 Existing Shares temporarily closes . . . . . . . . . . . . . . . . . 9:00 a.m. on Monday, 21 March
Temporary counter for trading in board lots of
125 New Shares (in the form of
Existing Share Certificates) opens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9:00 a.m. on Monday,
21 March
Free exchange of Existing Share Certificates
for new certificate for the New Shares commences . . . . . . . . . . . . . . . . . . . . .Monday, 21 March
Last day of dealings in New Shares on a cum-rights basis . . . . . . . . . . . . . . . . .Monday, 21 March
First day of dealings in the New Shares on an ex-rights basis . . . . . . . . . . . . . . .Tuesday, 22 March
Latest time for lodging transfer of the New Shares
in order to be qualified for the Rights Issue . . . . . . . . . . . . . . . 4:30 p.m. Wednesday, 23 March

– ii –

EXPECTED TIMETABLE

Register of members closes . . . . . . . . . . . . . . . . . . . . . . . . . . . . Thursday, 24 March to Wednesday, 30 March Record Date for the Rights Issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Wednesday, 30 March Prospectus Documents expected to be despatched . . . . . . . . . . . . . . . . . . . . . . . Thursday, 31 March Register of members of the Company reopens . . . . . . . . . . . . . . . . . . . . . . . . . Thursday, 31 March First day of dealings in nil-paid Rights Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . .Monday, 4 April Original counter for trading in the New Shares in board lots of 20,000 New Shares (only New Share Certificates for the New Shares can be traded at this counter) reopens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9:00 a.m. on Monday, 4 April Parallel trading in the New Shares (in the form of New Share Certificates and Existing Share Certificates) commences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9:00 a.m. on Monday, 4 April Designated broker starts to stand in the market to provide matching services for the sale and purchase of odd lots of the New Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . 9:00 a.m. on Monday, 4 April Latest time for splitting nil-paid Rights Shares . . . . . . . . . . . . . . . . . . . . . . 4:30 p.m. on Thursday, 7 April Last day of dealings in nil-paid Rights Shares . . . . . . . . . . . . . . . . . . . . . . . . . . .Tuesday, 12 April Latest time for acceptance of and payment for the Rights Shares and application and payment for excess Rights Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4:00 p.m. on Friday, 15 April Rights Issue expected to become unconditional . . . . . . . . . . . . . . . . . . . . . . . . . .Monday, 18 April

– iii –

EXPECTED TIMETABLE

Latest time for return of proxy form for the Second SGM . . . . . . . . . . . . . . 9:00 a.m. on Monday, 25 April Announcement of results of acceptance and excess application of the Rights Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Tuesday, 26 April Refund cheques in respect of wholly or partially unsuccessful applications for excess Rights Shares expected to be posted on or before . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Wednesday, 27 April Certificates for the Rights Shares expected to be despatched on or before . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Wednesday, 27 April Expected date of the Second SGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9:00 a.m. on Wednesday, 27 April Designated broker ceases to stand in the market to provide matching services for the sale and purchase of odd lots of New Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . 4:00 p.m. on Wednesday, 27 April Temporary counter for trading in board lots of 125 New Shares (in the form of Existing Share Certificates) closes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4:00 p.m. on Wednesday, 27 April Parallel trading in the New Shares (in the form of New Share Certificates and Existing Share Certificates) ends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4:00 p.m. on Wednesday, 27 April Dealings in fully-paid Rights Shares commence . . . . . . . . . . . . . . . . . . . . . . . .9:00 a.m. on Friday, 29 April Last day of free exchange of Existing Share Certificates for New Share Certificates for the New Shares . . . . . . . . . . . . . . . . . . . . . . . . . . .Wednesday, 4 May

Notes:

All times and dates in this Circular refer to Hong Kong local times and dates. Dates or deadlines specified in this Circular for events in the expected timetable above regarding the Capital Reorganization and the Rights Issue are indicative only and may be extended or varied by agreement between the Company and the Underwriter, and subject to the approval by the Stock Exchange of such amendments. Any consequential changes to the expected timetable will be published or notified to the Shareholders as and when appropriate.

– iv –

EXPECTED TIMETABLE

EFFECT OF BAD WEATHER ON THE LATEST TIME FOR ACCEPTANCE OF AND PAYMENT FOR THE RIGHTS SHARES AND FOR APPLICATION AND PAYMENT FOR EXCESS RIGHTS SHARES

The latest time for acceptance of and payment for the Rights Shares and for application and payment for excess Rights Shares will not take place if there is:

a tropical cyclone warning signal number 8 or above, or
a “black” rainstorm warning
(i) in force in Hong Kong at any local time before 12:00 noon and no longer in force after 12:00 noon on the Acceptance Date. Instead the latest time for acceptance of and payment for the Rights Shares and for application and payment for excess Rights Shares will be extended to 5:00 p.m. on the same Business Day; or
(ii) in force in Hong Kong at any local time between 12:00 noon and 4:00 p.m. on the Acceptance Date. Instead the latest time for acceptance of and payment for the Rights Shares and for application and payment for excess Rights Shares will be rescheduled to 4:00 p.m. on the following Business Day which does not have either of those warnings in force in Hong Kong at any time between 9:00 a.m. and 4:00 p.m..

If the latest time for acceptance of and payment for the Rights Shares and for application and payment for excess Rights Shares does not take place on the Acceptance Date, the dates mentioned in this section may be affected. An announcement will be made by the Company in such event as soon as possible.

– v –

DEFINITIONS

In this Circular, unless the context otherwise requires, capitalized terms used shall have the following meanings:

“Acceptance Date” 15 April 2011 (or such other date as the Underwriter may agree in writing with the Company as the latest date for acceptance of and payment for the Rights Shares and application and payment for excess Rights Shares)
“Announcement” the announcement of the Company dated 31 January 2011 in relation to the Capital Reorganization, the Change of Company Name and the Rights Issue
“associate(s)” has the meaning ascribed thereto under the Listing Rules “Authorization” the proposed authorization to the Directors to apply the entire amount standing to the credit of the contributed surplus account of the Company in such manner as they consider appropriate, including but not limited to setting off against the accumulated losses of the Company from time to time
“Board” the board of Directors “Branch Registrar” the branch share registrar of the Company in Hong Kong, Tricor Tengis Limited, with office at 26/F, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong
“Business Day” a day (other than a Saturday, Sunday and public holidays) on which banks are generally open for business more than five hours in Hong Kong
“Bye-Laws” the bye-laws of the Company, as amended from time to time
“Capital Reduction” the proposed reduction of issued share capital of the Company through a cancellation of the paid-up capital of the Company to the extent of HK$1.599 on each of the issued Consolidated Shares so that the nominal value of each issued Consolidated Share will be reduced from HK$1.60 to HK$0.001
“Capital Reorganization” the Share Consolidation, the Capital Reduction and the Subdivision

– 1 –

DEFINITIONS

“CB Holder(s)”	holder(s) of the Convertible Bonds
“CCASS”	the Central Clearing and Settlement System established and
	operated by HKSCC
“Change of Company Name”	the proposed change of the English name of the Company
	from “Nam Hing Holdings Limited” to “China Environmental
	Energy Investment Limited” and adoption of the Chinese name
	“中國環保能源投資有限公司*” for identification purpose
	only to replace “南興集團有限公司*” which was adopted for
	identification purpose only
“Circular”	the circular to be despatched to the Shareholders in relation
	to the Capital Reorganization, the Change of Company Name,
	the Rights Issue and the Refreshment of General Mandate
	(together with the notices of the First SGM and the Second
	SGM)
“Companies Act”	the Companies Act 1981 of Bermuda
“Company”	Nam Hing Holdings Limited, a company incorporated in
	Bermuda with limited liability, the shares of which are listed
	on the Stock Exchange
“connected person(s)”	has the meaning ascribed thereto under the Listing Rules
“Consolidated Share(s)”	share(s) of HK$1.60 each in the issued share capital of the
	Company upon the Share Consolidation taking effect
“Convertible Bonds”	an outstanding principal amount of HK$10,240,000 convertible
	bonds due 2013 with conversion price of HK$0.18 per Share as
	at the Latest Practicable Date
“Director(s)”	director(s) of the Company

For identification purposes only

– 2 –

DEFINITIONS

“EAF(s)”	the form(s) of application for use by the Qualifying
	Shareholders who wish to apply for excess Rights Shares,
	being in such usual form as may be agreed between the
	Company and the Underwriter
“Existing Issue Mandate”	the general mandate to issue up to 136,088,775 new Shares
	granted by the Shareholders to the Directors at the annual
	general meeting of the Company held on 19 November 2010
“Existing Share Certificates”	certificates for the existing Shares in red colour
“First SGM”	the special general meeting of the Company to be convened
	to consider and, if thought fit, approve the proposed Capital
	Reorganization, the Authorization, the Change of Company
	Name and the Rights Issue
“Group”	the Company and its subsidiaries
“HKSCC”	Hong Kong Securities Clearing Company Limited
“HK$”	Hong Kong dollar, the lawful currency of Hong Kong
“Hong Kong”	the Hong Kong Special Administrative Region of the People’s
	Republic of China
“Independent Board	an independent committee of the Board, comprising all the
Committee”	independent non-executive Directors to be formed to make
	recommendations to the Independent Shareholders in relation
	to the fairness and reasonableness of the Rights Issue and the
	Refreshment of General Mandate
“Independent Financial	China Merchants Securities (HK) Company Limited, a
Adviser”	licensed corporation under the SFO to carry on type 1 (dealing
	in securities), type 2 (dealing in future contracts), type 4
	(advising on securities), type 6 (advising on corporate finance)
	and type 9 (asset management) regulated activities under SFO,
	an independent financial adviser to make recommendations
	to the Independent Board Committee and the Independent
	Shareholders in relation to the fairness and reasonableness of
	the Rights Issue and the Refreshment of General Mandate

– 3 –

DEFINITIONS

“Independent Shareholder(s)”	any Shareholder other than controlling Shareholders and their
	associates or, where there are no controlling Shareholders, any
	Shareholder other than directors (excluding independent non-
	executive directors) and the chief executive of the Company
	and their respective associates
“Independent Third	third parties independent of and not connected with the
Party(ies)”	directors, chief executive and substantial shareholders of the
	Company or any of its subsidiaries, or any of their respective
	associates
“Issue Mandate”	the new mandate proposed to be sought at the Second SGM
	to authorize the Directors to allot, issue and deal with New
	Shares not exceeding 20% of the issued share capital of the
	Company as at the date of passing of the relevant resolution(s)
	at the Second SGM
“Last Trading Day”	31 January 2011, being the date of the Underwriting
	Agreement
“Latest Practicable Date”	21 February 2011, being the latest practicable date prior to the
	printing of this Circular for the purpose of ascertaining certain
	information for inclusion therein
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock
	Exchange
“New Shares”	shares of HK$0.001 each in the share capital of the Company
	upon the Capital Reorganization taking effect
“New Share Certificates”	certificates for the New Shares in blue colour
“Non-Qualifying	those Overseas Shareholders whom the Directors, based
Shareholders”	on legal advice provided by the Company’s legal advisers,
	consider it necessary or expedient not to offer the Rights Issue
	to such shareholders on account either of legal restrictions
	under the laws of the relevant place or the requirements of the
	relevant regulatory body or stock exchange in that place

– 4 –

DEFINITIONS

“Overseas Shareholder(s)”	Shareholder(s) whose name(s) appear(s) on the register of
	members of the Company at the close of business on the
	Record Date and whose address(es) as shown on such register
	is (are) outside Hong Kong
“PAL(s)”	the renounceable provisional allotment letter(s) proposed to be
	issued to the Qualifying Shareholders in connection with the
	Rights Issue
“Posting Date”	31 March 2011 or such other date as the Underwriter may
	agree in writing with the Company, as the date of despatch of
	the Prospectus Documents to the Qualifying Shareholders or
	the Prospectus for information only (as the case may be) to the
	Non-Qualifying Shareholders
“PRC”	the People’s Republic of China
“Prospectus”	the prospectus to be despatched to the Shareholders containing
	details of the Rights Issue
“Prospectus Documents”	the Prospectus, PAL and EAF
“Qualifying Shareholders”	Shareholders, other than the Non-Qualifying Shareholders
“Record Date”	30 March 2011 (or such other date as the Underwriter may
	agree in writing with the Company), as the date by reference
	to which entitlements to the Rights Issue are expected to be
	determined
“Refreshment of General	the proposed refreshment of the Existing Issue Mandate
Mandate”

– 5 –

DEFINITIONS

“Rights Issue”	the proposed rights issue by way of twenty six (26) Rights
	Shares for every one (1) New Share in issue and held on the
	Record Date at the Subscription Price on the terms and subject
	to the conditions set out in the Underwriting Agreement and
	the Prospectus Documents
“Rights Shares”	Shares to be issued and allotted under the Rights Issue, being
	not less than 3,030,531,634 New Shares and not more than
	3,122,976,064 New Shares
“Second SGM”	the special general meeting of the Company to be convened to
	consider and, if thought fit, approve the proposed Refreshment
	of General Mandate
“SFO”	The Securities and Futures Ordinance (Chapter 571 of the
	Laws of Hong Kong)
“Share(s)”	ordinary share(s) of HK$0.10 each in the share capital of the
	Company
“Shareholder(s)”	the holder(s) of issued Shares
“Share Consolidation”	the proposed consolidation of every 16 Shares of HK$0.10
	each in the issued share capital of the Company into 1 issued
	Consolidated Share of HK$1.60 in the issued share capital of
	the Company
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Subdivision”	the proposed subdivision of each authorized but unissued Share
	into 100 New Shares of HK$0.001 each
“Subscription Price”	HK$0.068 per Rights Share with nominal value of HK$0.001
	each
“Takeovers Code”	the Hong Kong Code on Takeovers and Mergers

– 6 –

DEFINITIONS

“Undertaking”	the irrevocable undertaking dated 28 January 2011 given by
	Mr. Chen Zhong to the Company to undertake that he shall
	(and shall procure his associates to) subscribe and pay in
	full for 178,750,000 Rights Shares (or any number of Rights
	Shares he shall be entitled to subscribe as announced by the
	Company pursuant to the Rights Issue) at the Subscription
	Price of HK$0.068 (or any subscription price as announced by
	the Company pursuant to the Rights Issue)
“Underwriter”	Radland International Limited
“Underwriting Agreement”	the underwriting agreement dated 31 January 2011 entered into
	between the Company and the Underwriter in relation to the
	underwriting arrangement in respect of the Rights Issue
“Underwritten Shares”	not less than 2,851,781,634 and not more than 2,944,226,064
	Rights Shares underwritten by the Underwriter pursuant to the
	terms of the Underwriting Agreement
“%” or “per cent.”	percentage or per centum

– 7 –

LETTER FROM THE BOARD

==> picture [54 x 54] intentionally omitted <==

NAM HING HOLDINGS LIMITED 南興集團有限公司[*]

(Incorporated in Bermuda with limited liability)

(Stock Code: 986)

Executive Directors: Ms. Chen Tong (Chairman) Ms. Deng Hong Mei Ms. Chan Ching Ho, Kitty Mr. Xiang Liang Mr. Lau Chung Yim

Non-executive Director:

Ms. Yao Zhengwei

Independent non-executive Directors:

Mr. Yau Kwan Shan Mr. Lam Kwun Fu Ms. Zhou Jue

Registered office: Clarendon House Church Street Hamilton HM 11 Bermuda

Head office and principal place of business: 27/F., Yuen Long Trade Centre, 99-109 Castle Peak Road, Yuen Long, New Territories, Hong Kong

23 February 2011

To the Shareholders

Dear Sir or Madam,

(I) CAPITAL REORGANIZATION; (II) CHANGE OF COMPANY NAME; (III) RIGHTS ISSUE ON THE BASIS OF TWENTY SIX RIGHTS SHARES FOR EVERY ONE NEW SHARE HELD ON THE RECORD DATE; AND

(IV) REFRESHMENT OF GENERAL MANDATE AND NOTICES OF SPECIAL GENERAL MEETINGS

INTRODUCTION

On 31 January 2011, the Board announced that the Company proposed to raise not less than approximately HK$206.08 million and not more than approximately HK$212.36 million, before expenses, by issuing not less than 3,030,531,634 Rights Shares and not more than 3,122,976,064 Rights Shares to the Qualifying Shareholders by way of rights issue at the Subscription Price of HK$0.068 per Rights Share on the basis of twenty six (26) Rights Shares for every one (1) New Share held on the Record Date. The Rights Issue is subject to, among other things, the completion of the Capital Reorganization.

For identification purposes only

– 8 –

LETTER FROM THE BOARD

The implementation of the Rights Issue and the Capital Reorganization are subject to the fulfillment of a number of conditions precedent. There is no certainty that the transaction, either in whole or in part, can be executed. Shareholders are therefore urged to exercise extreme caution in dealing in the Shares.

Upon completion of the Rights Issue, the Board considers that it is in the best interests for the Company to have additional options when considering fund raising activities in the future. The Board proposes to refresh the Existing Issue Mandate for the Directors to allot, issue and deal with the New Shares with an aggregate nominal amount of not exceeding 20% of the aggregate nominal amount of the issued share capital of the Company.

The Independent Board Committee has been formed to advise the Independent Shareholders in respect of the Rights Issue and the Refreshment of General Mandate, and the Independent Financial Adviser has been appointed to advise the Independent Board Committee and the Independent Shareholders in this regard.

The purpose of this Circular is to provide you with details of, amongst other things, the Capital Reorganization, the Change of Company Name, the Rights Issue and the Refreshment of General Mandate, the advice from the Independent Board Committee, the recommendation from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders on the Rights Issue and the Refreshment of General Mandate and to give you the notices convening the First SGM and the Second SGM for the purpose of considering and, if thought fit, approving the Capital Reorganization, the Authorization, the Change of Company Name, the Rights Issue and the Refreshment of General Mandate.

(I) CAPITAL REORGANIZATION

The Board proposes to reorganize the share capital of the Company in the following manner:

Share Consolidation of every sixteen (16) Shares of HK$0.10 each in the issued share capital of the Company into one (1) issued Consolidated Share of HK$1.60 in the issued share capital of the Company;
Capital Reduction of the issued share capital of the Company through a cancellation of the paid-up capital of the Company to the extent of HK$1.599 on each of the issued Consolidated Shares so that the nominal value of each issued Consolidated Share will be reduced from HK$1.60 to HK$0.001; and
Subdivision of each authorized but unissued Share into 100 New Shares of HK$0.001 each.

– 9 –

LETTER FROM THE BOARD

The credit of approximately HK$186.38 million arising from the Capital Reduction will be credited to the contributed surplus account of the Company.

Under Bermuda law, the amount standing to the credit of the contributed surplus account is a distributable reserve and the Company may apply the contributed surplus in any manner not prohibited by the Companies Act and the Bye-Laws.

The Board also proposes to put forward to the Shareholders to approve the Authorization, i.e. to authorize the Directors to apply the entire amount standing to the credit of the contributed surplus account of the Company in such manner as they consider appropriate, including but not limited to setting off against the accumulated losses of the Company from time to time.

As at the Latest Practicable Date, the Company has an authorized share capital of HK$1,000,000,000 divided into 10,000,000,000 Shares, of which 1,864,942,545 Shares have been issued and are fully paid or credited as fully paid.

Assuming there will be no change in the issued share capital of the Company from the Latest Practicable Date up to the date on which the Capital Reorganization becomes effective, the share capital structure of the Company will be as follows:

Immediately before Immediately after Capital Reorganization Capital Reorganization Amount of authorized share capital HK$1,000,000,000 HK$1,000,000,000 Par value HK$0.10 per Share HK$0.001 per New Share Number of authorized shares 10,000,000,000 Shares 1,000,000,000,000 New Shares Amount of issued share capital HK$186,494,254.4 HK$116,558.91 Number of issued shares 1,864,942,545 Shares 116,558,909 New Shares Amount of unissued share capital HK$813,505,745.5 HK$999,883,441.091 Number of unissued shares 8,135,057,455 Shares 999,883,441,091 New Shares

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LETTER FROM THE BOARD

Change in board lot size

Currently, the Shares are traded on the Stock Exchange in the board lot size of 2,000 Shares. The Board proposes that subject to and upon the Share Consolidation becoming effective, the Consolidated Shares will be traded in the board lot size of 20,000 Consolidated Shares. Based on the closing price of the Shares of HK$0.059 as at the Last Trading Day, the theoretical ex-right price would be approximately HK$0.100 and the value of the board lot size of 20,000 Consolidated Shares would be approximately HK$2,000.

The Board considers that the change in the board lot size would result in the Consolidated Shares being traded in a more reasonable board lot size and value and is in the interests of the Company and its Shareholders as a whole.

Conditions of the Capital Reorganization

The Capital Reorganization will be completed upon fulfilling all the following conditions:

(a) the passing of the necessary resolution by the Shareholders at the First SGM to approve the Capital Reorganization;
(b) compliance with the relevant procedures and requirements under Bermuda laws and the Listing Rules to effect the Capital Reorganization; and
(c) the Listing Committee of the Stock Exchange granting the listing of, and permission to deal in, the New Shares arising from the Capital Reorganization.

Subject to the fulfillment of the above conditions, the Capital Reorganization will become effective on the Business Day following the date of the First SGM.

Reasons for the Capital Reorganization and impact on the Company and the Shareholders

The Board is of the opinion that the Capital Reorganization would enable the Company to offset accumulated losses partially and the reduced par value of the Shares will give the Company greater flexibility in pricing and future issue of shares (including the Rights Issue). In view of the foregoing, the Board considers that the Capital Reorganization is in the interests of the Company and the Shareholders as a whole.

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LETTER FROM THE BOARD

Implementation of the Capital Reorganization will not, of itself, alter the underlying assets, liabilities, business, operations, management, financial position or the share capital of the Company or the proportionate interests of the Shareholders, except for the payment of the related expenses. The Board believes that the Capital Reorganization will not have any adverse effect on the financial position of the Company and the Board believes that on the effective date of the Capital Reorganization, there will be no reasonable grounds for believing that the Company is, or after the Capital Reorganization would be, unable to pay its liabilities as they become due. No capital of the Company will be lost as a result of the Capital Reorganization and, except for the expenses involved in relation to the Capital Reorganization, which are expected to be insignificant to the net asset value of the Company, the net asset value of the Company will remain unchanged before and after the Capital Reorganization becoming effective. The Capital Reorganization does not involve any diminution of any liability in respect of any unpaid capital of the Company or the repayment to the Shareholders of any paid up capital of the Company nor will it result in any change in the relative rights of the Shareholders.

Application for listing of New Shares

Approval from Court of Bermuda or Court of Hong Kong is not required for the Capital Reorganization.

Application will be made to the Stock Exchange for granting the listing of, and permission to deal in, the New Shares arising from the Capital Reorganization and all necessary arrangements will be made for the New Shares to be admitted into the CCASS established and operated by HKSCC.

The New Shares will be identical in all respects and rank pari passu in all respects with each other as to all future dividends and distributions which are declared, made or paid. Subject to the granting of the listing of, and permission to deal in, the New Shares on the Stock Exchange, the New 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 New 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 settlement day thereafter. All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time.

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LETTER FROM THE BOARD

Arrangement on odd lot trading

In order to facilitate the trading of odd lots of the New Shares, the Company has agreed to procure Cheong Lee Securities Limited, as an agent to stand in the market to provide matching services regarding the sale and purchase of odd lots of New Shares on a best efforts basis. Holders of the New Shares in odd lots who wish to take advantage of this matching facility either to dispose of their odd lots of New Shares or to top up to board lots of 20,000 New Shares, may contact Mr. Lau Ka Lung, Ali at telephone number (852) 3426 6324 during office hours. Shareholders should note that successful matching of the sale and purchase of odd lots of the New Shares in not guaranteed. Please refer to the section headed “EXPECTED TIMETABLE” on pages ii to v of this Circular for the period during which the Company will provide matching service for the sale and purchase of odd lots of the New Shares.

Convertible Bonds

As at the Latest Practicable Date, there is an outstanding principal amount of HK$10,240,000 Convertible Bonds due 2013 with conversion price of HK$0.18 per Share.

The number of Shares to be issued upon conversion of the Convertible Bonds in full is 56,888,888 Shares. Should the Convertible Bonds be fully converted before the Capital Reorganization becomes effective, the credit arising hereof will be amounted to HK$5.63 million, being the number of Shares issued upon the full conversion of the Convertible Bonds times the difference of par value of each issued Share before and after the Capital Reorganization, and will be transferred to the contributed surplus account of the Company and used to offset accumulated losses of the Company partially.

Save for the Convertible Bonds, 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.

An approved merchant bank will be engaged by the Company in accordance with the terms of the Convertible Bonds to certify in writing as to the adjustments to the conversion price of the Convertible Bonds required to be made in respect of the outstanding Convertible Bonds as a result of the Share Consolidation. The Company will make a further announcement about the adjustments to the Convertible Bonds in due course.

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LETTER FROM THE BOARD

Exchange of share certificates

Subject to the Capital Reorganization becoming effective, which is expected to be on 21 March 2011, the Existing Share Certificates will cease to be valid for trading purpose after 4:00 p.m. on 27 April 2011. The Shareholders may, on or after 21 March 2011 until 4 May 2011 (both days inclusive) submit their Existing Share Certificates (in red colour) for Shares to the Branch Registrar, to exchange, at the expenses of the Company, for New Share Certificates (on the basis of sixteen (16) Shares for one (1) Consolidated Share). It is expected that the New Share Certificates (in blue colour) for the Consolidated Shares will be available for collection within 10 Business Days after the submission of the Existing Share Certificates to the Branch Registrar for exchange. Thereafter, Existing Share Certificates will remain effective as documents of legal title but will be accepted for exchange only on payment of a fee of HK$2.5 (or such higher amount as may from time to time be allowed by the Stock Exchange) per certificate issued or cancelled, whichever is higher, payable by the Shareholders to the Branch Registrar.

The New Share Certificates will be issued in blue colour in order to distinguish them from the Existing Share Certificates which are in red colour.

Warning

Shareholders and potential investors should be aware of and take note that the Capital Reorganization is conditional upon satisfaction of the conditions precedent set out in the paragraph headed “Conditions of the Capital Reorganization” in the section headed “CAPITAL REORGANIZATION”. Therefore, the Capital Reorganization may or may not proceed.

Shareholders and potential investors are advised to exercise caution when dealing in the Shares, and if they are in any doubt about their position, they should consult their professional advisers.

(II) CHANGE OF COMPANY NAME

The Board proposes to change the English name of the Company from “Nam Hing Holdings Limited” to “China Environmental Energy Investment Limited” and to adopt the Chinese name “中國環保能源投資有限公司” for identification purpose only to replace the existing Chinese name “南興集團有限公司” which was adopted for identification purpose only.

For identification purposes only

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LETTER FROM THE BOARD

Reasons for the Change of Company Name

The Board considers that the new name of the Company can refresh the corporate image and identity of the Company to implement the business development of the Group in the future. In view of the foregoing, the Board considers that the Change of Company Name is in the interests of the Company and the Shareholders as a whole.

Conditions of the Change of Company Name

The Change of Company Name will be subject to the following conditions:

the passing of a resolution by the Shareholders approving the Change of Company Name at the First SGM; and
the approval of the Change of Company Name by the Bermuda Registrar having been obtained.

The relevant filing with the Bermuda Registrar will be made after the passing of the resolution at the First SGM.

Subject to satisfaction of the conditions set out above, the Change of Company Name will take effect from the date on which the Bermuda Registrar enters the new English name on the register in place of the existing name. Thereafter, the Company will carry out any necessary filing procedures with the Companies Registry in Hong Kong.

Effects of the Change of Company Name

The Change of Company Name, once approved and after becoming effective, will not in any way affect any of the rights of any Shareholders and all existing share certificates of the Company in issue bearing the present name of the Company will, even after the change has become effective, continue to be effective as documents of title to the shares of the Company and will be valid for trading, settlement, registration and delivery purposes. The Company will make arrangement for free exchange of existing share certificates, within a specific period of time, for new share certificates under the new English name of the Company. Should the Change of Company Name become effective, all new share certificates of the Company will be issued in the new English name of the Company thereafter and the English and Chinese stock short names of the Company will also be changed.

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LETTER FROM THE BOARD

The Company will make further announcements on the Change of Company Name, the change in the stock short names and the details for the arrangement on free exchange of share certificates once the proposed Change of Company Name has become effective in compliance with the Listing Rules.

(III) RIGHTS ISSUE

Issue statistics

Basis of the Rights Issue : Twenty six (26) Shares for every one (1) New Share held on the Record Date Number of Shares in issue : 1,864,942,545 Shares as at the Latest Practicable Date Number of New Shares in : 116,558,909 New Shares issue upon completion of the Capital Reorganization Number of Rights Shares : Not less than 3,030,531,634 Rights Shares (assuming there are no new Shares being issued and no Shares being repurchased by the Company from the Latest Practicable Date to the Record Date); and Not more than 3,122,976,064 Rights Shares. Subscription Price : HK$0.068 per Rights Share with nominal value of HK$0.001 each

Based on the above, the maximum number of Rights Shares that may be issued under the Rights Issue would be 3,122,976,064.

Save for the outstanding Convertible Bonds, 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.

Assuming the Convertible Bonds will not be converted on or before the Record Date, the 3,030,531,634 nil-paid Rights Shares proposed to be provisionally allotted represent approximately 2,600% of the Company’s issued share capital as at the Latest Practicable Date and approximately 96.30% of the Company’s issued share capital as enlarged by the issue of the 3,030,531,634 Rights Shares.

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LETTER FROM THE BOARD

Qualifying Shareholders

To qualify for the Rights Issue, a Shareholder must:

be registered as a member of the Company at the close of business on the Record Date; and
be a Qualifying Shareholder.

In order to be registered as members of the Company at the close of business on the Record Date, owners of Shares must lodge any transfers of Shares (together with the relevant share certificates) with the Company’s Branch Registrar no later than 23 March 2011.

Closure of register of member

The register of members of the Company will be closed from 24 March 2011 to 30 March 2011, both dates inclusive. No transfer of Shares will be registered during this period.

Rights of Overseas Shareholders

As at the Latest Practicable Date, the Company had certain Shareholders whose addresses as shown on the register of members of the Company were located outside Hong Kong.

In compliance with necessary requirements of the Listing Rules, the Company will make enquiries regarding the feasibility of extending the Rights Issue to the Overseas Shareholders (if any). If, based on legal advice, the Directors consider that it is necessary or expedient not to offer the Rights Shares to the Overseas Shareholders on account either of the legal restrictions under the laws of the relevant place or the requirements of the relevant regulatory body or stock exchange in that place, the Rights Issue will not be available to such Overseas Shareholders. Further information in this connection will be set out in the Prospectus Documents containing, among other things, details of the Rights Issue, to be despatched to the Qualifying Shareholders on the Posting Date. The Company will send copies of the Prospectus to the Non-Qualifying Shareholders for their information only, but will not send any PAL and EAF to them on the Posting Date.

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LETTER FROM THE BOARD

Arrangements will be made for Rights Shares which would otherwise have been provisionally allotted to the Non-Qualifying Shareholders to be sold in the market in their nil-paid form as soon as practicable after dealings in the nil-paid Rights Shares commence, if a premium (net of expenses) can be obtained. The proceeds of such sale, less expenses, of more than HK$100 will be paid pro rata to the Non-Qualifying Shareholders. The Company will retain individual amounts of HK$100 or less for the benefits of the Company. Any unsold entitlement of Non-Qualifying Shareholders, together with any Rights Shares provisionally allotted but not accepted, will be made available for excess application on EAFs by Qualifying Shareholders.

According to the register of members of the Company as at the Latest Practicable Date, there were five Shareholders with registered addresses in three jurisdictions outside Hong Kong shown on such register, namely, Australia, the PRC and Singapore.

The Company has made due enquiries pursuant to Rule 13.36(2) of the Listing Rules regarding the feasibility of extending the Rights Issue to the Overseas Shareholder in the PRC and found that it would be lawful for the Company to offer the Rights Shares to the Shareholders with registered address in the PRC, even though the Prospectus Documents will not be registered in the PRC. Therefore, the Directors have decided to extend the Rights Issue to such Overseas Shareholders with registered address located in the PRC as shown on the register of members of the Company as at the Record Date.

Based on the advice provided by the legal advisers on the laws of Australia and having regard the likely costs and time involved if overseas compliance were to be observed, the Company is of the opinion that it would be necessary or expedient to exclude such Overseas Shareholders whose registered addresses are in Australia as shown on the register of members of the Company as at the Record Date. Accordingly, the Overseas Shareholders whose registered addresses are in Australia will be regarded as Non-Qualifying Shareholders.

Based on the advice provided by the legal advisers on the laws of Singapore and having regard the likely costs and time involved if overseas compliance were to be observed, the Company is of the opinion that it would be necessary or expedient to exclude such Overseas Shareholders whose registered addresses are in Singapore as shown on the register of members of the Company as at the Record Date. Accordingly, the Overseas Shareholders whose registered addresses are in Singapore will be regarded as Non-Qualifying Shareholders.

The Company will continue to ascertain whether there is any other Overseas Shareholder on the Record Date and will, if necessary, make further enquiries with legal adviser(s) in other overseas jurisdiction(s) regarding the feasibility of extending the Rights Issue to such other Overseas Shareholders on the Record Date and make relevant disclosures in the Prospectus.

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LETTER FROM THE BOARD

Subscription Price

The Subscription Price for the Rights Shares is HK$0.068 per Rights Share, payable in full upon acceptance of the relevant provisional allotment of Rights Shares and, where applicable, application for excess Rights Shares under the Rights Issue or when a transferee of nil-paid Rights Shares applies for the Rights Shares.

The Subscription Price represents:

(a) a discount of approximately 92.80% to the closing price of HK$0.944 per New Share as quoted on the Stock Exchange on the Last Trading Day;
(b) a discount of approximately 32.30% to the theoretical ex-rights price of approximately HK$0.100 per New Share based on the closing price of HK$0.944 per New Share as quoted on the Stock Exchange on the Last Trading Day;
(c) a discount of approximately 93.17% to the average closing price of approximately HK$0.995 per New Share for the five consecutive trading days up to and including the Last Trading Day;
(d) a discount of approximately 87.12% to the closing price of HK$0.528 per New Share as quoted on the Stock Exchange on the Latest Practicable Date; and
(e) a discount of approximately 20.00% to the theoretical ex-rights price of approximately HK$0.085 per New Share based on the closing price of HK$0.528 per New Share as quoted on the Stock Exchange on the Latest Practicable Date.

The Subscription Price was determined after arm’s length negotiations between the Company and the Underwriter with reference to the prevailing market price and trading liquidities of the Shares prior to the Last Trading Day. The Directors consider the terms of the Rights Issue, including the Subscription Price which has been set as a deeper discount to the recent closing prices of the Shares with an objective of encouraging existing Shareholders to take up their entitlements so as to participate in the potential growth of the Company in the future, to be fair and reasonable and in the best interests of the Company and the Shareholders as a whole. The net price per Rights Share upon full acceptance of the relevant provisional allotment of Rights Shares (assuming no conversion or subscription rights attaching to the Convertible Bonds are exercised on or before Record Date) will be approximately HK$0.066.

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LETTER FROM THE BOARD

Basis of provisional allotment

The basis of the provisional allotment shall be twenty six (26) Rights Shares for every one (1) New Share held on Record Date, being not less than 3,030,531,634 Rights Shares (assuming there are no new Shares being issued/no Shares being repurchased by the Company from the Latest Practicable Date to the Record Date) and not more than 3,122,976,064 Rights Shares.

Application for all or any part of a Qualifying Shareholder’s provisional allotment should be made by completing the PAL and lodging the same with a remittance for the Rights Shares being applied for.

Status of the Rights Shares

The Rights Shares, when allotted and fully paid, will rank pari passu in all respects with the Shares then in issue. Holders of fully-paid Rights Shares will be entitled to receive all future dividends and distributions which are declared, made or paid after the date of allotment of the Rights Shares in their fully-paid form.

Fractions of Rights Shares

The Company will not provisionally allot fractions of Rights Shares. All fractions of Rights Shares will be aggregated and all nil-paid Rights Shares arising from such aggregation will be sold in the market, if a premium (net of expenses) can be achieved, and the Company will retain the proceeds from such sale(s) for its benefit. Any unsold fractions of Rights Shares will be made available for excess application by the Qualifying Shareholders.

Application for excess Rights Shares

Qualifying Shareholders may apply, by way of excess application, for any unsold entitlements of the Non-Qualifying Shareholders and for any Rights Shares provisionally allotted but not accepted.

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LETTER FROM THE BOARD

Applications for excess Rights Shares may be made by completing the EAFs for application for excess Rights Shares and lodging the same with a separate remittance for the excess Rights Shares being applied for. The Directors will allocate the excess Rights Shares at their discretion on a fair and equitable basis on the following principles:

(1) preference will be given to applications for topping-up odd lots holdings to whole lot holdings; and
(2) subject to availability of excess Rights Shares after allocation under principle (1) above, the excess Rights Shares will be allocated to Qualifying Shareholders who have applied for excess Rights Shares based on a pro-rata basis based on the number of the excess Rights Shares applied by them, with board lots allocation to be made on a best effort basis.

There are no restrictions affecting the remittance of profits or repatriation of capital into Hong Kong from outside Hong Kong.

Investors with their Shares held by a nominee company should note that the Board will regard the nominee company as a single Shareholder according to the register of members of the Company. Accordingly, the Shareholders should note that the aforesaid arrangement in relation to the allocation of the excess Rights Shares will not be extended to beneficial owners individually. Investors with their Shares held by a nominee company are advised to consider whether they would like to arrange for the registration of the relevant Shares in the name of the beneficial owner(s) prior to the Record Date. Shareholders and investors should consult their professional advisers if they are in any doubt as to their status.

Investors whose Shares are held by their nominee(s) and who would like to have their names registered on the register of members of the Company, must lodge all necessary documents with the Branch Registrar for completion of the relevant registration by 4:30 p.m. on 23 March 2011.

Share certificates and refund cheques for Rights Shares

Subject to the fulfillment or the waiver in whole or in part by the Underwriter of the conditions of the Rights Issue, certificates for all fully-paid Rights Shares are expected to be posted to those entitled thereto by ordinary post at their own risk on or before 27 April 2011. Refund cheques in respect of wholly or partially unsuccessful applications for excess Rights Shares (if any) are expected to be posted on or before 27 April 2011 by ordinary post to the applicants at their own risk.

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LETTER FROM THE BOARD

Application for listing

The Company will apply to the Listing Committee of the Stock Exchange for the listing of, and permission to deal in, the Rights Shares in both their nil-paid and fully-paid forms to be issued and allotted pursuant to the Rights Issue.

Subject to the granting of the listing of, and permission to deal in, the Rights Shares in both their nil-paid and fully-paid forms on the Stock Exchange, the Rights Shares in both their nil-paid and fully-paid forms will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect from the respective commencement dates of dealings in the Rights Shares in both their nil-paid and fully-paid forms on the Stock Exchange or such other dates 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 settlement day thereafter. All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time.

Dealings in the Rights Shares in both their nil-paid and fully-paid forms (both in board lots of 20,000), which are registered in the branch register of members of the Company in Hong Kong will be subject to the payment of stamp duty, Stock Exchange trading fee, transaction levy, investor compensation levy or any other applicable fees and charges in Hong Kong.

Conditions of the Rights Issue

The Rights Issue is conditional upon the following conditions being fulfilled or waived (as appropriate):

(a) the completion of the Capital Reorganization;
(b) the delivery to the Stock Exchange and registration with the Registrar of Companies in Hong Kong respectively one copy of each of the Prospectus Documents duly certified by two Directors (or by their agents duly authorised in writing) as having been approved by resolution of the Board (and all other documents required to be attached thereto) not later than the Record Date or otherwise in compliance with the Listing Rules and the Companies Ordinance;
(c) the filing of one copy of each of the Prospectus Documents signed by one Director on behalf of all Directors with the Registrar of Companies in Bermuda prior to or as soon as reasonably practicable after publication of the Prospectus Documents;

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LETTER FROM THE BOARD

(d) the posting of the Prospectus Documents to the Qualifying Shareholders and the posting of the Prospectus stamped “For Information Only” to the NonQualifying Shareholders, in each case, on the 1st Business Day after the Record Date;
(e) the Listing Committee of the Stock Exchange granting or agreeing to grant (subject to allotment), and not having revoked, the listing of, and permission to deal in, the Rights Shares in nil-paid and fully-paid forms prior to 4 April 2011 and 29 April 2011, being the expected date of commencement of dealings in the Rights Shares in nil-paid form and fully-paid form respectively (or such other date as may be agreed between the Company and the Underwriter);
(f) if required, the Bermuda Monetary Authority granting the consent to the issue of the Rights Shares on or before the Acceptance Date; and
(g) the approval by the Independent Shareholders of the Company in respect of the Rights Issue and any transactions contemplated thereunder.

If the above conditions are not satisfied and/or waived in whole or in part by the Underwriter by 30 April 2011 or such later date or dates as the Underwriter may agree with the Company in writing, the Underwriting Agreement shall terminate and (save for any antecedent breach of the Underwriting Agreement and any rights or obligations which may accrue under the Underwriting Agreement prior to such termination) no party will have any claim against any other party for costs, damages, compensation or otherwise.

Undertaking

Pursuant to the Undertaking, Mr. Chen Zhong has undertaken to the Company that he shall (and shall procure his associates to) subscribe and pay in full for 178,750,000 Rights Shares (or any number of Rights Shares he shall be entitled to subscribe as announced by the Company pursuant to the proposed Rights Issue) at the Subscription Price of HK$0.068 (or any subscription price as announced by the Company pursuant to the proposed Rights Issue).

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LETTER FROM THE BOARD

The Underwriting Agreement

Date : 31 January 2011 Underwriter : Radland International Limited, to the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, the Underwriter and its ultimate beneficial owners are Independent Third Parties

Total number of Rights Shares : The Underwriter has conditionally agreed being underwritten by the pursuant to the Underwriting Agreement to Underwriter underwrite the Rights Shares not subscribed by the Qualifying Shareholders on a fully underwritten basis, being not less than 2,851,781,634 Rights Shares (assuming there are no new Shares being issued/no Shares being repurchased by the Company from the Latest Practicable Date to the Record Date) and not more than 2,944,226,064 Rights Shares, subject to the terms and conditions of the Underwriting Agreement Commission : 3.0% of the aggregate Subscription Price of the Underwritten Shares as determined on the Record Date

The commission rate was determined after arm’s length negotiation between the Company and the Underwriter by reference to the existing financial position of the Group, the size of the Rights Issue, and the current and expected market condition. The Board considers the terms of the Underwriting Agreement including the commission rate are fair and reasonable so far as the Company and the Shareholders are concerned.

As at the Latest Practicable Date, the Board have received an irrevocable Undertaking from Mr. Chen Zhong, being the substantial Shareholder and pursuant to which Mr. Chen Zhong shall accept or procure the acceptance of 178,750,000 Rights Shares, being the rights entitlement which will be provisionally allotted to him as the holder of 110,000,000 Shares under the Rights Issue prior to 4:00 p.m. on the Acceptance Date.

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LETTER FROM THE BOARD

Termination of the Underwriting Agreement

The Underwriter may terminate the arrangements set out in the Underwriting Agreement by notice in writing issued to the Company by the Underwriter at any time prior to 4:00 p.m. on the 1st Business Day following the Acceptance Date if:–

(a) the Underwriter shall become aware of the fact that, or shall have reasonable cause to believe that any of the warranties in the Underwriting Agreement was untrue, inaccurate, misleading or breached, and in each case the same is (in the absolute opinion of the Underwriter) material in the context of the Rights Issue; or
(b) there shall be:–
any new law or regulation is enacted, or there is any change in existing laws or regulations or any change in the interpretation or application thereof by any court or other competent authority, whether in Hong Kong or elsewhere;
any change in local, national or international financial, political, industrial or economic conditions;
any change of an exceptional nature in local, national or international equity securities or currency markets;
any local, national or international outbreak or escalation of hostilities, insurrection or armed conflict;
any moratorium, suspension or material restriction on trading in securities generally on the Stock Exchange;
any suspension in the trading of the Shares on the Stock Exchange for a continuous period of 7 trading days (as defined in the Listing Rules); or
any change or development involving a prospective change in taxation or exchange controls in Hong Kong or elsewhere

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LETTER FROM THE BOARD

which is or are, in therein the absolute opinion of the Underwriter:–

(i) likely to have a material adverse effect on the business, financial position or prospects of the Group taken as a whole; or
(ii) likely to have a material adverse effect on the success of the Rights Issue or the level of Rights Shares to be taken up; or
(iii) so material as to make it inappropriate, inadvisable or inexpedient to proceed further with the Rights Issue,

If the Underwriter exercises such right, the Rights Issue will not proceed. Further announcement will be made if the Underwriting Agreement is terminated by the Underwriter.

Upon giving any of such notice, all obligations of the Underwriter under the Underwriting Agreement shall cease and determine and no party thereunder shall have any claim against any other parties in respect of any matter or thing arising out of or in connection with the Underwriting Agreement and the Company shall not be liable to pay any underwriting commission.

Shareholding structure of the Company

The following is the shareholding structure of the Company (extracted from the Disclosure of Interests forms posted in the website of the Stock Exchange) immediately before and after completion of the Capital Reorganization and the Rights Issue (assuming no further Shares will be issued or repurchased after the Latest Practicable Date):

Scenario 1: No conversion of the Convertible Bonds on or before the Record Date:

Shareholder Chen Zhong Lau Chung Yim (Director) Underwriter Public Shareholders Total	As at the L Practicable Number of Shares 110,000,000 546,000 – 1,754,396,545 1,864,942,545	atest Date % 5.90 0.03 – 94.07 100.00	Immediately aft Reorganization completion of the Number of New Shares 6,875,000 34,125 – 109,649,784 116,558,909	er Capital but before Rights Issue % 5.90 0.03 – 94.07 100.00	Immediately after completion of the Rights Issue (assuming all the Qualifying Shareholders take up their assured entitlement of Rights Shares Number of New Shares % 185,625,000 5.90 921,375 0.03 – – 2,960,544,168 94.07 3,147,090,543 100.00	Immediately after completion of the Rights Issue (Except Mr. Chen Zhong, assuming no Qualifying Shareholders take up their assured entitlement of Rights Shares and all the Rights Shares are taken up by the Underwriter) (Note) Number of New Shares % 185,625,000 5.90 34,125 0.00 2,851,781,634 90.62 109,649,784 3.48 3,147,090,543 100.00	Immediately after completion of the Rights Issue (Except Mr. Chen Zhong, assuming no Qualifying Shareholders take up their assured entitlement of Rights Shares and all the Rights Shares are taken up by the Underwriter) (Note) Number of New Shares % 185,625,000 5.90 34,125 0.00 2,851,781,634 90.62 109,649,784 3.48 3,147,090,543 100.00
							100.00

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LETTER FROM THE BOARD

Scenario 2: Assuming all the Convertible Bonds being converted on or before the Record Date:

Shareholder Chen Zhong Lau Chung Yim (Director) Underwriter CB Holder Public Shareholders Total	As at the L Practicable Number of Shares 110,000,000 546,000 – – 1,754,396,545 1,864,942,545	atest Date % 5.90 0.03 – – 94.07 100.00	Immediately after Capital Reorganization and full conversion of the Convertible Bonds but before completion of the Rights Issue Number of New Shares % 6,875,000 5.72 34,125 0.03 – – 3,555,555 2.96 109,649,784 91.29 120,114,464 100.00	Immediately after completion of the Rights Issue (assuming all the Qualifying Shareholders take up their assured entitlement of Rights Shares Number of New Shares % 185,625,000 5.72 921,375 0.03 – – 95,999,985 2.96 2,960,544,168 91.29 3,243,090,528 100.00	Immediately after completion of the Rights Issue (Except Mr. Chen Zhong, assuming no Qualifying Shareholders take up their assured entitlement of Rights Shares and all the Rights Shares are taken up by the Underwriter) (Note) Number of New Shares % 185,625,000 5.72 34,125 0.00 2,944,226,064 90.78 3,555,555 0.12 109,649,784 3.38 3,243,090,528 100.00	Immediately after completion of the Rights Issue (Except Mr. Chen Zhong, assuming no Qualifying Shareholders take up their assured entitlement of Rights Shares and all the Rights Shares are taken up by the Underwriter) (Note) Number of New Shares % 185,625,000 5.72 34,125 0.00 2,944,226,064 90.78 3,555,555 0.12 109,649,784 3.38 3,243,090,528 100.00
						100.00

Note: The Underwriter has sub-underwritten its underwriting obligations under the Underwriting Agreement to sub-underwriters such that each of the Underwriter and the sub-underwriters (together with their respective parties acting in concert as defined in the Takeovers Code) will not own 30% or more of the issued share capital of the Company immediately after completion of the Rights Issue. To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, each of the Underwriter and the sub-underwriters and their respective ultimate beneficial owners are Independent Third Parties.

Based on the latest disclosure of interests posted on the website of the Stock Exchange, the Company believes that the Underwriter and its sub-underwriters will not become substantial Shareholders, except for Get Nice Securities Limited who will own 16.39% of the issued share capital of the Company, immediately upon completion of the Rights Issue in the event that none of the Shareholder participates in the Rights Issue. Based of the published information, the Company is of the view that sufficient public float upon the completion of the Rights Issue will be maintained.

As stipulated in the Underwriting Agreement, in the event that the Underwriter or any of the sub-underwriters mentioned above is required to take up the Rights Shares pursuant to their underwriting/sub-underwriting obligations, (i) the Underwriter will not and shall procure that the sub-underwriters will not own 30% or more of the issued share capital of the Company immediately after the Rights Issue; and (ii) the Underwriter shall and shall cause the sub-underwriters to procure independent placees to take up such number of Rights Shares as necessary to ensure that the public float requirements under Rule 8.08 of the Listing Rules are complied with.

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LETTER FROM THE BOARD

Reasons for the Rights Issue and use of proceeds

The Group has been engaged principally in (i) trading and manufacturing of printed circuit board; and (ii) investment in electric car battery business.

The gross proceeds of the Rights Issue will be approximately HK$206.08 million to approximately HK$212.36 million. The estimated net proceeds of the Rights Issue will be approximately HK$198.26 million to approximately HK$204.36 million and the Company intends to apply such net proceeds from the Rights Issue as to approximately 90% for financing the possible acquisition of a recycling business (the “ Recycling Business Acquisition ”) in the PRC as disclosed in the Company’s announcements dated 19 November 2010, 30 November 2010 and 4 January 2011 if materializes, while as to approximately 10% for (i) general corporate working capital of the Group; and/or (ii) reduction of liabilities of the Group; and/or (iii) financing any future investment opportunities to be identified by the Company, however, if the Recycling Business Acquisition is not materializes, the Company will apply all the net proceeds from the Rights Issue for (i) general corporate working capital of the Group; and/or (ii) reduction of liabilities of the Group; and/or (iii) financing any future investment opportunities to be identified by the Company.

The Board considers that the Rights Issue will give the Qualifying Shareholders the opportunity to maintain their respective pro-rata shareholding interests in the Company and, hence the Board considers that fund raising through the Rights Issue is in the best interests of the Company and the Shareholders as a whole.

Fund raising exercise of the Company

Save for the below, the Company has not conducted any other fund raising exercise in the past twelve months immediately preceding the Latest Practicable Date.

Date of				Actual use of proceeds as at the latest
announcement	Event	Net proceeds	Intended use of proceeds	practicable date
31 May 2010	Placing of	Approximately	General working capital of the Group	HK$25 million was used to settle the
	new shares	HK$28 million	and/or financing the possible	cash portion of the consideration for
			acquisition under the supplemental	the electricity car business acquisition;
			memorandum of understanding	HK$1.9 million for professional fee;
			as set out in the Company’s	and HK$1.1 million for general working
			announcement dated 18 May 2010	capital
			if materialised.
2 July 2010	The placing of	Approximately	Up to approximately HK$100 million for	HK$96 million has been paid as refundable
	convertible bonds	HK$106 million	financing the acquisition set out in the	earnest money for Recycling Business
	for the amount of		Company’s announcement dated 16 July	Acquisition. Approximately HK$4.2
	HK$110 million		2010 and the balance of not more than	million have been used for working
			HK$50 million will be used as general	capital of the Group and HK$3.6 million
			working capital to maintain liquidity and	for professional fees and the balance of
			net current assets position of the Group	HK$2.2 million is being held
			and the remaining balance for	as bank deposit and intended to be
			general acquisition activities.	used as general working capital

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LETTER FROM THE BOARD

Possible adjustments to the Convertible Bonds

As a result of the Rights Issue, the conversion price of the Convertible Bonds may be adjusted in accordance with the respective terms and conditions of the Convertible Bonds and the Listing Rules or guidelines issued by the Stock Exchange from time to time. The Company will instruct its auditors or an independent financial adviser to certify the adjustments, if any, to the Convertible Bonds and will inform the CB Holders of the adjustments, if any, accordingly. Further announcement will be made by the Company in respect of such adjustments as and when appropriate.

Warning of the risks of dealing in Shares and Rights Shares

The Shares will be dealt in on an ex-rights basis from 22 March 2011. Dealings in the Rights Shares in the nil-paid form will take place from 4 April 2011 to 12 April 2011 (both dates inclusive). If the conditions of the Underwriting Agreement are not fulfilled or the Underwriting Agreement is terminated by the Underwriter, the Rights Issue will not proceed.

Any Shareholders or other persons contemplating selling or purchasing Rights Shares in their nil-paid form during the period from 4 April 2011 to 12 April 2011 (both dates inclusive) who are in any doubt about their position are recommended to consult their professional advisers. Any Shareholders or other persons dealing in the Shares up to the date on which all the conditions to which the Rights Issue is subject are fulfilled (and the date on which the Underwriter’s right of termination of the Underwriting Agreement ceases) and any persons dealing in the nil-paid Rights Shares during the period from 4 April 2011 to 12 April 2011 (both dates inclusive) will accordingly bear the risk that the Rights Issue may not become unconditional or may not proceed.

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LETTER FROM THE BOARD

(IV) REFRESHMENT OF GENERAL MANDATE

Background of the Refreshment of General Mandate

At the annual general meeting of the Company held on 19 November 2010, the Shareholders approved, among other things, an ordinary resolution to grant to the Directors the Existing Issue Mandate to allot up to 136,088,775 Shares. As at the Latest Practicable Date, the Existing Issue Mandate has not yet been utilized.

On 31 January 2011, the Company announced to raise approximately HK$206.08 million to approximately HK$212.36 million, before expenses, by issuing not less than 3,030,531,634 Rights Shares and not more than 3,122,976,064 Rights Shares to the Qualifying Shareholders by way of the Rights Issue at Subscription Price of HK$0.068 per Rights Share on the basis of twenty six (26) Rights Shares for every one (1) New Share held on the Record Date. Dealings in the Rights Shares on the Stock Exchange are expected to be effective from 29 April 2011.

Reasons for the Refreshment of General Mandate

The issued share capital of the Company is expected to be increased substantially upon the completion of the Rights Issue (which is subject to, among other things, the approval from the Independent Shareholders on the First SGM), the Board considers that (i) it is necessary to refresh the Existing General Mandate to reflect the actual number of New Shares to be allotted given the number of New Shares exists has been increased substantially as a result of the Rights Issue; (ii) the proposed refreshment of the Existing General Mandate will enable the Group to conduct fund raising activities as and when opportunities arise; and (iii) granting of specific mandate is subject to the approval of the Independent Shareholders which may cause undue delay if the Group wishes to carry out timely acquisitions. As at the Latest Practicable Date, the Existing General Mandate has not yet been utilized and have to be refreshed to reflect the actual number of New Shares after the completion of the Rights Issue (which is subject to the approval of the Independent Shareholders) to allow the Company to conduct fund raising activities in the event that the Company is able to identify the placing agent(s)/suitable subscriber(s).

In view of the foregoing, the Board considers that it is in the best interests for the Company to have additional options when considering fund raising activities in the future. Given that equity financing (i) does not incur any interest paying obligations on the Group as compared with bank financing; (ii) is less costly and time-consuming than raising funds by way of rights issue or open offer and it is not guaranteed that the underwriter could fulfill the capital requirements of the Company; and (iii) provides the Company with the capability to capture any capital raising or prospective investment opportunity as and when it arises, the Board proposes to refresh the Existing Issue Mandate for the Directors to allot, issue

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LETTER FROM THE BOARD

and deal with New Shares with an aggregate nominal amount of not exceeding 20% of the aggregate nominal amount of the issued share capital of the Company as at the date of the Second SGM. The Company would exercise due and careful consideration when choosing the best financing method available to the Group and taking into account the then Company’s estimated working capital requirement and cash balance. As at the Latest Practicable Date, the Company does not have any concrete plan or intention to raise capital by using the Issue Mandate. However, based on the preliminary capital requirement forecasted by the Company, the Company has preliminary plans to increase its investment in the electric car battery business and based also on the framework agreement dated 19 November 2010, the Company is required to pay HK$180 million as earnest money to the vendor and as at the Latest Practicable Date, only HK$96 million was paid. From the preliminary negotiations between the Company and the Vendors, the consideration of the Recycling Business Acquisition will be amounted to not less than RMB720 million, of which the vendors indicated that not less than 40% of the possible consideration shall be paid by cash. In view of all of the foregoing, it is important for the Company to obtain the Issue Mandate from the Independent Shareholders such that the Company can have additional options when conducting fund raising activities.

It is expected that, after the completion of the Rights Issue, the number of New Shares of the Company in issue will not be less than 3,147,090,543 New Shares and will not be more than 3,243,090,528 New Shares. Subject to the passing of the proposed resolution for the Refreshment of General Mandate and on the basis that, save as and except for the Rights Shares, no New Share will be issued or repurchased by the Company prior to the Second SGM, the Company will be allowed under the Issue Mandate to issue a maximum of not less than 629,418,108 New Shares and not more than 648,618,105 New Shares.

Fund raising exercise of the Company in the past twelve months

The fund raising exercise of the Company in the past twelve months has been detailed on page 28 of this Circular.

As set out in the circular of the Company dated 24 January 2011, the intended use of proceeds of the placing of the convertible bonds of HK$110 million, the net proceeds thereof was approximately HK$106 million, of which HK$96 million have been paid as refundable earnest money pursuant to the framework agreement dated 19 November 2010 relating to the Recycling Business Acquisition, approximately HK$5.7 million have been used for working capital of the Group and professional fees and the balance is being held as bank deposit and intended to be used as general working capital. The proceeds from the placing of the convertible bonds has been changed from financing the acquisition of Swift Profit International Limited to payment of deposits for the possible Recycling Business Acquisition

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LETTER FROM THE BOARD

as the settlement method has been agreed with the vendors of Swift Profit International Limited and the Company decides to enter into a new acquisition to diversify the Company’s existing businesses. The said placing has been approved by the Shareholders on 11 February 2011.

Potential dilution to shareholding of the existing public Shareholders

For illustrative purpose only, the table below sets out the shareholding structure of the Company on the assumption that the Rights Issue is completed.

Table 1: No conversion of the Convertible Bonds on or before the Record Date based on scenario 1 on page 26 and the Disclosure of Interests posted on the website of the Stock Exchange as at the Latest Practicable Date:

Shareholder Chen Zhong Lau Chung Yim (Director) Underwriter Public Shareholders New Shares available to be issued under the Issue Mandate Total	Immediately after completion of the Rights Issue (assuming all the Qualifying Shareholders take up their assured entitlement of Rights Shares) Number of New Shares % 185,625,000 5.90 921,375 0.03 – – 2,960,544,168 94.07 – – 3,147,090,543 100.00	Immediately after completion of the Rights Issue (Except Mr. Chen Zhong, assuming no Qualifying Shareholders take up their assured entitlement of Rights Shares and all the Rights Shares are taken up by the Underwriter) Number of New Shares % 185,625,000 5.90 34,125 0.00 2,851,781,634 90.62 109,649,784 3.48 – – 3,147,090,543 100.00	After full utilization of the Issue Mandate (assuming all the Qualifying Shareholders take up their assured entitlement of Rights Shares) Number of New Shares % 185,625,000 4.92 921,375 0.02 – – 2,960,544,168 78.39 629,418,108 16.67 3,776,508,651 100.00	After full utilization of the Issue Mandate (Except Mr. Chen Zhong, assuming no Qualifying Shareholders take up their assured entitlement of Rights Shares and all the Rights Shares are taken up by the Underwriter) Number of New Shares % 185,625,000 4.92 34,125 0.00 2,851,781,634 75.51 109,649,784 2.90 629,418,108 16.67 3,776,508,651 100.00	After full utilization of the Issue Mandate (Except Mr. Chen Zhong, assuming no Qualifying Shareholders take up their assured entitlement of Rights Shares and all the Rights Shares are taken up by the Underwriter) Number of New Shares % 185,625,000 4.92 34,125 0.00 2,851,781,634 75.51 109,649,784 2.90 629,418,108 16.67 3,776,508,651 100.00
					100.00

The Table 1 above illustrates that (i) the shareholding of the existing public Shareholders would be decreased from approximately 94.07% based on the assumption that all the Qualifying Shareholders take up their assured entitlements of Rights Shares to approximately 78.39% upon full utilization of the Issue Mandate (subject to the passing of the proposed resolution for the Refreshment of General Mandate and assuming that, other than the Rights Shares, no New Shares are issued or repurchased by the Company prior to the Second SGM), which represents a dilution of approximately 15.68 percent points; and (ii) the shareholding of the existing public Shareholders would be decreased from approximately 3.48% based on the assumption that all the Qualifying Shareholders did not take up their assured entitlements of Rights Shares to approximately 2.90% upon full utilization of the Issue Mandate (subject to the passing of the proposed resolution for the Refreshment of General Mandate and assuming that, other than the Rights Shares, no New Shares are issued or repurchased by the Company prior to the Second SGM), which represents a dilution of approximately 0.58 percent point.

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LETTER FROM THE BOARD

Table 2: Assuming all the Convertible Bonds being converted on or before the Record Date based on scenario 2 on page 27 and the disclosure of interests posted on the website of the Stock Exchange as at the Latest Practicable Date:

Shareholder Chen Zhong Lau Chung Yim (Director) Underwriter CB Holder Public Shareholders New Shares available to be issued under the Issue Mandate Total	Immediately after completion of the Rights Issue (assuming all the Qualifying Shareholders take up their assured entitlement of Rights Shares) Number of New Shares % 185,625,000 5.72 921,375 0.03 – – 95,999,985 2.96 2,960,544,168 91.29 – – 3,243,090,528 100.00	Immediately after completion of the Rights Issue (Except Mr. Chen Zhong, assuming no Qualifying Shareholders take up their assured entitlement of Rights Shares and all the Rights Shares are taken up by the Underwriter) Number of New Shares % 185,625,000 5.72 34,125 0.00 2,944,226,064 90.78 3,555,555 0.12 109,649,784 3.38 – – 3,243,090,528 100.00	After full utilization of the Issue Mandate (assuming all the Qualifying Shareholders take up their assured entitlement of Rights Shares) Number of New Shares % 185,625,000 4.77 921,375 0.02 – – 95,999,985 2.47 2,960,544,168 76.07 648,618,105 16.67 3,891,708,633 100.00	After full utilization of the Issue Mandate (Except Mr. Chen Zhong, assuming no Qualifying Shareholders take up their assured entitlement of Rights Shares and all the Rights Shares are taken up by the Underwriter) Number of New Shares % 185,625,000 4.77 34,125 0.00 2,944,226,064 75.65 3,555,555 0.09 109,649,784 2.82 648,618,105 16.67 3,891,708,633 100.00	After full utilization of the Issue Mandate (Except Mr. Chen Zhong, assuming no Qualifying Shareholders take up their assured entitlement of Rights Shares and all the Rights Shares are taken up by the Underwriter) Number of New Shares % 185,625,000 4.77 34,125 0.00 2,944,226,064 75.65 3,555,555 0.09 109,649,784 2.82 648,618,105 16.67 3,891,708,633 100.00
					100.00

The Table 2 above illustrates that (i) the shareholding of the existing public Shareholders would be decreased from approximately 91.29% based on the assumption that all the Qualifying Shareholders take up their assured entitlements of Rights Shares to approximately 76.07% upon full utilization of the Issue Mandate (subject to the passing of the proposed resolution for the Refreshment of General Mandate and assuming that, other than the Rights Shares, no New Shares are issued or repurchased by the Company prior to the Second SGM), which represents a dilution of approximately 15.22 percent points; and (ii) the shareholding of the existing public Shareholders would be decreased from approximately 3.38% based on the assumption that all the Qualifying Shareholders did not take up their assured entitlements of Rights Shares to approximately 2.82% upon full utilization of the Issue Mandate (subject to the passing of the proposed resolution for the Refreshment of General Mandate and assuming that, other than the Rights Shares, no New Shares are issued or repurchased by the Company prior to the Second SGM), which represents a dilution of approximately 0.56 percent point.

Period during which the Issue Mandate will remain effective

The Issue Mandate will, if granted, remain effective until the earliest of (i) the conclusion of the next annual general meeting of the Company; (ii) the date by which the next annual general meeting of the Company is required by law or the Company’s Bye-Laws to be held; or (iii) the date upon which such authority is revoked or varied by an ordinary resolution of the Shareholders in a general meeting of the Company.

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LETTER FROM THE BOARD

FINANCIAL AND TRADING PROSPECTS OF THE GROUP

Your attention is drawn to (i) the announcement made by the Company on 30 November 2010 in relation to the Recycling Business Acquisition; (ii) the 2010/2011 interim report of the Company; and (iii) the circular issued by the Company on 24 December 2010 in relation to the disposal of the industrial laminates and copper foils manufacturing business. In 2010, the Group has conducted a series of business restructuring including: (i) disposal of manufacturing plants and facilities for manufacturing industrial laminates and copper foils and relevant connected transactions as announced by the Company on 28 June 2010; (ii) acquisition of 9.9% issued share capital of Swift Profit International Limited as announced by the Company on 16 July 2010; (iii) proposed disposal of the Suzhou property as announced by the Company on 4 November 2010; and (iv) possible acquisition of 80% of the issued share capital of Ideal Market Holdings Limited as announced by the Company on 19 November 2010. The Directors believe that it is in the interests of the Company and the Independent Shareholders as a whole to re-allocate the management and the Group’s financial resources to more prospective business.

The management discussion and analysis on the Group’s businesses is as follows:

Trading and manufacturing of printed circuit board (“PCB”)

As published in the 2010/2011 interim report, for the six months ended 30 September 2010, the PCB division recorded a turnover of HK$28,748,000 (2009: HK$22,970,000). The Group has placed more focus on the PCB business in the period under review. Although the PCB market is not picking up generally, the Group has still achieved an increase in turnover. With attendance at trade shows and launch of more aggressive marketing and promotion campaigns, new customers have been attracted to the Group. With the increase in turnover, the profitability of the Group’s PCB business is expected to be improved. It is further expected that the PCB division will be the Group’s main focus in the coming years.

Investment in electric car battery business

On 16 July 2010, the Company entered into an agreement pursuant to which the Company conditionally agreed to acquire 9.9% of the issued share capital of Swift Profit International Limited (“ Swift Profit ”) at a consideration of HK$170,000,000. Swift Profit is exclusively licensed to apply the technology of manufacturing of electric car battery. Completion of the acquisition took place on 29 December 2010 and the consideration was settled as to HK$99 million by convertible notes and the balance by cash. As at the Latest Practicable Date, HK$10,240,000 of the Convertible Bonds have not yet been converted.

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LETTER FROM THE BOARD

Under the business model of Swift Profit, it will receive a royalty fee of 12% from Zhongsheng Dongli New Energy Investment Limited (“ Zhongsheng ”) on sale of multielement polymer battery to the market without bearing any production cost and capital expenditure. Zhongsheng has already secured orders from the automotive manufacturers for 200 electric vehicles. Based on the secured orders from the automotive manufacturers, it is estimated that 3,000 sets of the multi-element polymer battery will be sold to the automotive manufacturers in 2012. It is expected that the electric car battery business will generate revenue of approximately HK$25 million to Swift Profit in the first quarter of 2011. The Board is of the view that the electric car battery business will be developed into a sustainable income source for the Group.

Recycling Business Acquisition

On 19 November 2010, the Company entered into a framework agreement with four parties in relation to a possible acquisition of 80% of the issued share capital of Ideal Market Holdings Limited. Ideal Market Holdings Limited indirectly holds Suzhou Baina Renewable Resources Co., Ltd (“ Suzhou Baina ”) which is principally engaged in the recycling business of waste paper, scrap metal and consumable waste. Under the framework agreement, the Company will pay HK$180,000,000 as refundable earnest money. As announced on 4 January 2011, HK$96,000,000 has been paid by the Company as earnest money and due diligence on Suzhou Baina is in process. Further announcement(s) in relation to the possible acquisition will be made as and when appropriate.

GENERAL

The Capital Reorganization, the Authorization and the Change of Company Name are subject to the Shareholders’ approval at the First SGM and no Shareholders are required to abstain from voting on the resolution(s) in relation to the Capital Reorganization, the Authorization and the Change of Company Name.

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LETTER FROM THE BOARD

In accordance with Rule 7.19(6) of the Listing Rules, the Rights Issue must be made conditional on approval by Shareholders in general meeting by a resolution on which any controlling Shareholders and their associates or, where there are no controlling shareholders, Directors (excluding independent non-executive Directors) and the chief executive of the Company and their respective associates shall abstain from voting in favour of the Rights Issue. As at the Latest Practicable Date, the Company does not have any controlling shareholder. The Directors and their respective associates (including Mr. Lau Chung Yim, being the Director and interested in 546,000 Shares) shall abstain from voting in favour of the relevant resolution(s) regarding the Rights Issue. As at the Latest Practicable Date, the Directors (excluding the independent nonexecutive Directors) and the chief executive of the Company and their respective associates had indicated that they have no intention to vote against the resolution(s) regarding the Capital Reorganization, the Authorization, the Change of Company Name and the Rights Issue at the First SGM.

Upon the approval of the Capital Reorganization and the Rights Issue by the Shareholders (where applicable, the Independent Shareholders) at the First SGM, the Prospectus Documents setting out details of the Rights Issue will be despatched to the Qualifying Shareholders as soon as practicable and the Prospectus will be despatched to the Non-Qualifying Shareholders for information only.

In accordance with Rule 13.36(4)(a) of the Listing Rules, any controlling Shareholders and their associates, or where there is no controlling Shareholder, the Directors (excluding independent non-executive Directors) and the chief executive of the Company and their respective associates shall abstain from voting in favour of the relevant resolution(s) regarding the Refreshment of General Mandate to be proposed at the Second SGM. As at the Latest Practicable Date, there is no controlling Shareholder and therefore the Directors and their respective associates (including Mr. Lau Chung Yim, being the Director and interested in 546,000 Shares) shall abstain from voting in favour of the relevant resolution(s) regarding the Refreshment of General Mandate. In accordance with Rule 13.39(4) of the Listing Rules, the vote of the Independent Shareholders in respect of the Refreshment of General Mandate at the Second SGM will be taken by way of poll. As at the Latest Practicable Date, the Directors (excluding the independent non-executive Directors) and the chief executive of the Company and their respective associates had indicated that they have no intention to vote against the resolution(s) regarding the Refreshment of General Mandate at the Second SGM.

The Independent Board Committee comprising Mr. Yau Kwan Shan, Mr. Lam Kwun Fu and Ms. Zhou Jue, all being the independent non-executive Directors, has been formed to make recommendations to the Independent Shareholders in respect of the Rights Issue and the Refreshment of General Mandate. An Independent Financial Adviser has been appointed to advise the Independent Board Committee and the Independent Shareholders in this regard.

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LETTER FROM THE BOARD

FIRST SGM

Set out on pages 100 to 103 is a notice convening the First SGM to be held at 27/F., Yuen Long Trade Centre, 99-109 Castle Peak Road, Yuen Long, New Territories, Hong Kong on Friday, 18 March 2011 at 10:30 a.m. which relevant resolution(s) will be proposed to the Shareholders to consider and, if thought fit, approve the Capital Reorganization, the Change of Company Name, the Rights Issue and the transactions contemplated thereunder.

A form of proxy for use at the First SGM is enclosed with this Circular. Whether or not you are able to attend the special general meeting, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return the same to the Branch Registrar, Tricor Tengis Limited, at 26th Floor, 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 special general meeting or any adjourned meeting. Completion and delivery of the form of proxy will not preclude you from attending and voting in person at the First SGM if you so wish.

SECOND SGM

Set out on pages 104 to 106 is a notice convening the Second SGM to be held at 27/F., Yuen Long Trade Centre, 99-109 Castle Peak Road, Yuen Long, New Territories, Hong Kong on 27 April 2011 at 9:00 a.m. at which relevant resolution(s) will be proposed to the Shareholders to consider and, if thought fit, approve the Refreshment of General Mandate.

A form of proxy for use at the Second SGM is enclosed with this Circular. Whether or not you are able to attend the special general meeting, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return the same to the Branch Registrar, Tricor Tengis Limited, at 26th Floor, 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 special general meeting or any adjourned meeting. Completion and delivery of the form of proxy will not preclude you from attending and voting in person at the Second SGM if you so wish.

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LETTER FROM THE BOARD

RECOMMENDATION

You are advised to read carefully the letter from the Independent Board Committee and the letter from the Independent Financial Adviser set out on pages 39 to 40 and pages 41 to 71 respectively of this Circular.

The Independent Board Committee, having taken into account the advice of the Independent Financial Adviser, considers that the terms of the Rights Issue and the Issue Mandate are fair and reasonable so far as the Independent Shareholders are concerned and the Rights Issue and the Refreshment of General Mandate are in the interests of the Company and the Shareholders as a whole. Accordingly, the Independent Board Committee recommends the Independent Shareholders to vote in favour of the proposed resolution(s) approving the Rights Issue at the First SGM and the proposed resolution(s) approving the Refreshment of General Mandate at the Second SGM.

Accordingly, the Directors believe that the terms of the Rights Issue and Issue Mandate are fair and reasonable and in the interests of the Group and the Shareholders as a whole, therefore, the Directors recommend the Independent Shareholders to vote in favour of the relevant resolution(s) to be proposed at the First SGM to approve the Rights Issue and Second SGM to approve the Refreshment of General Mandate.

ADDITIONAL INFORMATION

Your attention is drawn to the additional information set out in the appendices to this Circular.

Yours faithfully,

By order of the Board of

Nam Hing Holdings Limited Chen Tong

Chairman

– 38 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

The following is the text of the letter of recommendation, prepared for the purpose of incorporation in this Circular, from the Independent Board Committee to the Independent Shareholders regarding the Rights Issue and the Refreshment of General Mandate.

==> picture [54 x 54] intentionally omitted <==

NAM HING HOLDINGS LIMITED 南興集團有限公司[*]

(Incorporated in Bermuda with limited liability)

(Stock Code: 986)

23 February 2011

To the Independent Shareholders

Dear Sir or Madam,

(I) CAPITAL REORGANIZATION; (II) CHANGE OF COMPANY NAME;

(III) RIGHTS ISSUE ON THE BASIS OF TWENTY SIX RIGHTS SHARES FOR EVERY ONE NEW SHARE HELD ON THE RECORD DATE;

AND

(IV) REFRESHMENT OF GENERAL MANDATE AND NOTICES OF SPECIAL GENERAL MEETINGS

We refer to the circular of the Company dated 23 February 2011 (the “ Circular ”) of which this letter forms part. Unless the context specifies otherwise, capitalized terms used herein have the same meanings as defined in the Circular.

We have been appointed by the Company as the Independent Board Committee to advise the Independent Shareholders as to whether the terms of the Rights Issue and the Issue Mandate are fair and reasonable insofar as the Independent Shareholders are concerned. The Independent Financial Adviser has been appointed to advise the Independent Shareholders and the Independent Board Committee in this respect.

For identification purposes only

– 39 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

Having taken into account the principal reasons and factors considered by, and the advice of the Independent Financial Adviser as set out in its letter of advice to the Independent Shareholders and the Independent Board Committee on pages 41 to 71 of the Circular, we are of the opinion that the Rights Issue and the Refreshment of General Mandate are in the interests of the Company and the Shareholders as a whole and the terms of the Rights Issue and the Issue Mandate are fair and reasonable insofar as the Company and the Shareholders are concerned. Accordingly, we recommend the Independent Shareholders to vote in favour of the relevant resolution(s) to be proposed at the First SGM to approve the Rights Issue and the ordinary resolution(s) to be proposed at the Second SGM to approve the Refreshment of General Mandate.

Mr. Yau Kwan Shan

Yours faithfully, For and on behalf of Independent Board Committee Mr. Lam Kwun Fu

Ms. Zhou Jue

Independent non-Executive Directors

– 40 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The following is the text of a letter from China Merchants Securities (HK) Company Limited for the purpose of incorporation in this circular, in connection with its advice to the Independent Board Committee and the Independent Shareholders in respect of the Rights Issue and the Refreshment of General Mandate.

==> picture [28 x 28] intentionally omitted <==

48th Floor One Exchange Square Central Hong Kong

23 February 2011

To: the Independent Board Committee and

the Independent Shareholders of Nam Hing Holdings Limited

Dear Sirs,

RIGHTS ISSUE ON THE BASIS OF TWENTY-SIX RIGHTS SHARES FOR EVERY ONE NEW SHARE HELD ON THE RECORD DATE AND REFRESHMENT OF GENERAL MANDATE

INTRODUCTION

We refer to our engagement as the independent financial adviser to the Independent Board Committee and the Independent Shareholders in respect of the Rights Issue and the Refreshment of General Mandate, details of which are set out in the letter from the Board (the “ Letter from the Board ”) contained in the circular dated 23 February 2011 (the “ Circular ”) issued by the Company to the Shareholders, of which this letter forms part. Unless otherwise stated, terms used herein shall have the same meanings as those defined in the Circular.

Subject to the Capital Reorganization becoming effective, the Company announced on 31 January 2011 that it proposed to raise not less than approximately HK$206.08 million and not more than approximately HK$212.36 million, before expenses, by issuing not less than 3,030,531,634 Rights Shares and not more than 3,122,976,064 Rights Shares to the Qualifying Shareholders by way of rights issue at the Subscription Price of HK$0.068 per Rights Share on the basis of twenty six (26) Rights Shares for every one (1) New Share held on the Record Date. The Rights Issue is subject to, among other things, the completion of the Capital Reorganization.

– 41 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The gross proceeds of the Rights Issue will be approximately HK$206.08 million to approximately HK$212.36 million. The estimated net proceeds of the Rights Issue will be approximately HK$198.27 million to approximately HK$204.36 million and the Company intends to apply such net proceeds from the Rights Issue as to approximately 90% for financing the possible acquisition of the Recycling Business Acquisition in the PRC as disclosed in the Company’s announcements dated 19 November 2010, 30 November 2010 and 4 January 2011 if materializes, while as to approximately 10% for (i) general corporate working capital of the Group; and/or (ii) reduction of liabilities of the Group; and/or (iii) financing any future investment opportunities to be identified by the Company, however, if the Recycling Business Acquisition is not materializes, the Company will apply all the net proceeds from the Rights Issue for (i) general corporate working capital of the Group; and/or (ii) reduction of liabilities of the Group; and/or (iii) financing any future investment opportunities to be identified by the Company.

The Independent Board Committee comprising all the Company’s independent nonexecutive Directors, namely Mr. Yau Kwan Shan, Mr. Lam Kwun Fu and Ms. Zhou Jue, has been formed to consider and advise the Independent Shareholders in respect of the Rights Issue and the Refreshment of General Mandate are fair and reasonable so far as the Company and the Independent Shareholders are concerned and are in the interests of the Company and the Shareholders as a whole. We, China Merchants Securities (HK) Company Limited, have been appointed as the independent financial adviser to advise the Independent Board Committee in this respect.

– 42 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

BASIS OF OUR OPINION

In formulating our advice and recommendation, we have relied on the information and facts supplied, and the opinions expressed, by the Directors and the management of the Group and have assumed that they are true, accurate and complete at the date of the Circular or the Latest Practicable Date (as the case maybe) and will remain so up to the time of the First SGM and Second SGM. We have also sought and received confirmations from the Directors and management of the Group that all material relevant information has been supplied to us and that no material facts have been omitted from the information supplied and opinions expressed to us. We have no reason to doubt the truth or accuracy of the information provided to us, or to believe that any material information has been omitted or withheld. We have performed all necessary steps as required under Rule 13.80 of the Listing Rules, including the notes thereto, to enable us to reach an informed view and to justify our reliance on the information provided so as to provide a reasonable basis for our opinions and have relied on such information and consider that the information we have received is sufficient for us to reach our advice and recommendation as set out in this letter and to justify our reliance on such information. We have assumed that all representations contained or referred to in the Circular are true as at the date of the Circular or the Latest Practicable Date (as the case may be) and will remain so up to the time of the First SGM and Second SGM. We have not, however, conducted any form of in-depth investigation into the business affairs, financial position or future prospects of the Group nor carried out any independent verification of the information supplied, representations made or opinions expressed by the Company, the Directors and the management of the Group.

I. THE RIGHTS ISSUE

Principal Factors Considered

In formulating and giving our independent advice and recommendation, we have taken into consideration the following principal factors and reasons:

1. Background of the Group

The Group has been engaged principally in (i) trading and manufacturing of printed circuit board; and (ii) investment in electric car battery business.

– 43 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The table below summarised the financial results of the Group for the two years ended 31 March 2010 and the interim period ended 30 September 2010 as extracted from the annual report and interim report of the Company:

	For the
	period ended
	30 September	For the year ended 31 March
	2010	2010	2009
	HK$’000	HK$’000	HK$’000
	(unaudited)	(Audited)	(Audited)
Revenue	34,725	69,042	129,394
Loss for the period/year	(6,332)	(39,963)	(82,405)
Pledged fixed deposits	2,025	12,041	18,641
Cash and cash equivalents	633	5,618	1,635
Net assets value	71,209	43,845	30,363

Turnover of the Group for the year ended 31 March 2010 was HK$69,042,000, representing a 46.6% decline as compared with HK$129,394,000 of the previous year. Operating loss of the Group decreased from HK$82,405,000 to HK$39,963,000 in which HK$2,090,000 incurred from the impairment loss on property, plant and equipment (2009: HK$52,438,000).

As at 30 September 2010, the Group’s total cash and bank balances and pledged fixed deposits amounted to HK$2,658,000 (31 March 2010: HK$17,659,000). Total bank loans and other borrowings decreased from HK$98,376,000 as at 31 March 2010 to HK$92,472,000 as at 30 September 2010. Finance costs incurred decreased from HK$1,747,000 for the six months ended 30 September 2009 to HK$1,065,000 for the six months ended 30 September 2010. The Group’s gearing ratio, being the net debt divided by total shareholders’ equity plus net debt, also decreased to 0.59 as compared to 0.75 as at 31 March 2010. Net debt included bank and other borrowings, trade, bills and other payables and accruals less cash and bank balances. The Group has a current ratio of 0.96 (31 March 2010: 0.79) and net current liabilities of HK$4,056,000 as at 30 September 2010 (31 March 2010: HK$24,576,000).

– 44 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

As reflected in the trends and results of the previous year, operating loss arose from the unfavourable operating environment for the whole Group, in particular for the laminate division. Decrease in market demand and increase in raw material costs during the year imposed great pressure on the Group’s operations.

The consolidated turnover of the Group for the six months ended 30 September 2010 was HK$34,725,000, representing a 7% decrease from HK$37,407,000 of the corresponding period last year. The loss of the Group decreased from HK$8,684,000 for the six months ended 30 September 2009 to HK$6,332,000 for the six months ended 30 September 2010.

We note that the Group is still sustaining net loss as the economies of the industrial laminate and printed circuit board market are not recovering as expected. The Group has the intention to dispose of certain loss-making subsidiaries, in particular, the subsidiaries holding the laminate factory plant in Zhongshan, the copper foil factory plant in Thailand, and the idle factory plant in Zuhai.

2. Reasons for the Rights Issue

As stated in the Letter from the Board, the gross proceeds of the Rights Issue will be approximately HK$206.08 million to approximately HK$212.36 million. The estimated net proceeds of the Rights Issue will be approximately HK$198.27 million to approximately HK$204.36 million and the Company intends to apply such net proceeds from the Rights Issue as to approximately 90% for financing the possible acquisition of the Recycling Business Acquisition in the PRC as disclosed in the Company’s announcements dated 19 November 2010, 30 November 2010 and 4 January 2011 if materializes, while as to approximately 10% for (i) general corporate working capital of the Group; and/or (ii) reduction of liabilities of the Group; and/or (iii) financing any future investment opportunities to be identified by the Company, however, if the Recycling Business Acquisition is not materializes, the Company will apply all the net proceeds from the Rights Issue for (i) general corporate working capital of the Group; and/or (ii) reduction of liabilities of the Group; and/or (iii) financing any future investment opportunities to be identified by the Company.

We note from the said announcements that the Recycling Business Acquisition target is principally engaged in the recycling business of waste paper, scrap metal, consumable waste. According to the said announcements, the target recorded an unaudited revenue, profit/(loss) before taxation and profit/(loss) after taxation of approximately RMB19.06 million, RMB(2.40) million and RMB(2.40) million for the year ended 31 December 2008 and, approximately RMB241.94 million, RMB19.78 million and RMB16.69 million for the year ended 31 December 2009. The Company had on 30 November 2010 and 4 January 2011 made two payments (earnest money) to the vendors’ solicitors in an amount of HK$50 million and HK$46 million respectively.

– 45 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

As stated above, the Group has been recording net losses for the last two financial years, the Directors consider debt financing to be relatively uncertain and time-consuming as compared to equity financing as the financial institution has concern as to the overall profitability and financial performance of the Company. The Directors believe that the Group would be difficult to obtain additional debts/bank borrowings with favourable terms. As stated in the Company’s 2010 interim report, total bank loans and other borrowings decreased from HK$98,376,000 as at 31 March 2010 to HK$92,472,000 as at 30 September 2010. Finance costs incurred decreased from HK$1,747,000 for the six months ended 30 September 2009 to HK$1,065,000 for the six months ended 30 September 2010. The Group’s gearing ratio, being the net debt divided by total shareholders’ equity plus net debt, also decreased to 0.59 as compared to 0.75 as at 31 March 2010. Net debt included bank and other borrowings, trade, bills and other payables and accruals less cash and bank balances. The Directors confirmed that the Company prefers not to further enlarge the debt liabilities of the Group (if possible) so that the gearing level and the liquidity position of the Group will not be further worsened. In view of the above, the Directors consider debt financing to be impractical to the Group.

In view of the above, we consider that the Rights Issue is an appropriate means to settle the existing debts and provide working capital for the Group by considering that (i) as compared to debt financing, interest cost can be saved; (ii) all the Qualifying Shareholders have an equal opportunity to participate in the enlargement of the Company’s capital base and the Company’s future development; and (iii) the Rights Issue enables all the Qualifying Shareholders to maintain their proportionate interests in the Company. The Rights Issue is effected on a pro-rata basis and we are of the view that the Rights Issue offers all the Qualifying Shareholders an equal opportunity to participate in the enlargement of the capital base of the Company and enables the Qualifying Shareholders to maintain their proportionate interest in the Company and to continue to participate in the future development of the Group. The nil-paid Rights Shares will be traded on the Stock Exchange. Shareholders who do not take up their entitlements in full will have the opportunity to realize their nil-paid Rights Shares on the market, subject to market conditions. In view of the above reasons, we consider the Rights Issue is fair and reasonable to the Qualifying Shareholders.

– 46 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

3. Terms of the Rights Issue

Major terms of the Rights Issue

The table below summarises the major terms of the Rights Issue:

Basis of the Rights Issue : Twenty six (26) Shares for every one (1) New Shares held on the Record Date Number of Shares in : 1,864,942,545 Shares issue as at the Latest Practicable Date Subscription Price: : HK$0.068 per Rights Share with nominal value of HK$0.001 each Number of Rights Shares : Not less than 3,030,531,634 Rights Shares (assuming there is no new Shares being issued and no Shares being repurchased by the Company from the Latest Practicable Date to the Record Date); and

Not more than 3,122,976,064 Rights Shares.

The Subscription Price of HK$0.068 per Rights Share represents:

(a) a discount of approximately 87.12% to the closing price of HK$0.528 per New Share based on the closing price of HK$0.033 per Share as quoted on the Stock Exchange on the Latest Practicable Date and adjusted for the effect of the Capital Reorganization;
(b) a discount of approximately 20.00% to the theoretical ex-rights price of HK$0.085 per New Share based on the closing price of HK$0.033 per Share as quoted on the Stock Exchange on the Latest Practicable Date and adjusted for the effect of the Capital Reorganization;
(c) a discount of approximately 92.80% to the closing price of HK$0.944 per New Share as quoted on the Stock Exchange on the Last Trading Day and adjusted for the effect of the Capital Reorganization;

– 47 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

(d) a discount of approximately 32.30% to the theoretical ex-rights price of approximately HK$0.100 per New Share based on the closing price of HK$0.944 per New Share as quoted on the Stock Exchange on the Last Trading Day (the “ Theoretical Ex-rights Price ”) and adjusted for the effect of the Capital Reorganization;
(e) a discount of approximately 93.17% to the average closing price of approximately HK$0.995 per New Share for the five consecutive trading days up to and including the Last Trading Day discount and adjusted for the effect of the Capital Reorganization; and
(f) a premium of approximately 78.95% to the unaudited net asset value of approximately HK$0.038 per Share as at 30 September 2010.

The Subscription Price was arrived at after arm’s length negotiation between the Company and the Underwriter with reference to the market price of the Shares under the prevailing market conditions. The Directors consider that the discount of the Subscription Price would encourage Shareholders to participate in the Rights Issue and accordingly maintain their shareholdings in the Company and participate in the future growth of the Group. The Directors consider the terms of the Rights Issue (including the rate of commission) to be fair and reasonable and in the best interests of the Group and Shareholders as a whole.

– 48 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Analyses on the Subscription Price

In order to assess the fairness and reasonableness of the Subscription Price, we set out the following informative analyses for illustrative purpose:

(i) Review on Share prices

The highest and lowest closing prices and the average daily closing price of the Shares as quoted on the Stock Exchange in each of the 6 months during the period commencing from 1 August 2010, being the 6 months period prior to the date of the Underwriting Agreement, up to and including the Last Trading Day (the “ Review Period ”) are shown as follows:

	Highest	Lowest	Average daily
Month	closing price	closing price	closing price
	HK$ per Share	HK$ per Share	HK$ per Share
2010
Aug*	0.30	0.30	0.30
Sep*	0.30	0.30	0.30
Oct	0.30	0.237	0.253
Nov*	0.26	0.194	0.207
Dec	0.22	0.079	0.144
2011
Jan (up to and
including
the Last
Trading
Day)	0.10	0.039	0.063

Source: the Stock Exchange web-site (www.hkex.com.hk)

Note: * Trading in the Shares was suspended on 2 August 2010 to 30 September 2010 (both days inclusive).

Trading in the Shares was suspended on 1 November 2010 to 4 November 2010 (both days inclusive).
Trading in the Shares was suspended on 3 January 2011 to 14 January 2011 (both days inclusive).

– 49 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

During the Review Period, the highest and lowest closing price of the New Shares were HK$4.80 on 4 October 2010 and HK$0.624 on 19 January 2011 respectively, based on the closing price of 0.30 of the Share as quoted on the Stock Exchange on 4 October 2010 and the closing price of 0.039 of the Share as quoted on the Stock Exchange on 19 January 2011. The Subscription Price is lower than the lowest closing price of the New Shares, and represents a discount of approximately 98.58% and 89.10% to the aforesaid highest and lowest closing prices of the New Share respectively. The Company is of the view that the Subscription Price which represents discounts to the market prices as illustrated above may be likely to attract the Qualifying Shareholders to participate in the Rights Issue.

(ii) Review on trading liquidity of the Shares

The average daily number of the Shares traded per month, and the respective percentages of the Shares’ monthly trading volume as compared to the total number of issued Shares at the end of each calendar month during the Review Period are tabulated as follows:

	Average daily	Number of	% of the Average
	trading volume	issued Shares	Volume to total
	(the “Average	(at the end of	number of
Month	Volume”)	each month)	issued Shares
	Number of Shares	Number of Shares
	(in thousand	(in thousand
	Shares)	Shares)	%
2010
Aug*	0	603,224	0
Sep*	0	603,224	0
Oct	7,182	680,444	1.06
Nov*	13,333	871,831	1.53
Dec	64,342	1,321,831	4.87
2011
Jan (up to and
including the
Last Trading
Day)	519,100	1,864,943	27.83

Source: the Stock Exchange web-site (www.hkex.com.hk)

– 50 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Note: * Trading in the Shares was suspended on 2 August 2010 to 30 September 2010 (both days inclusive).

Trading in the Shares was suspended on 1 November 2010 to 4 November 2010 (both days inclusive).
Trading in the Shares was suspended on 3 January 2011 to 14 January 2011 (both days inclusive).

The above table illustrates that the average daily trading volume of the Shares per month was, during the Review Period, with ranges of approximately 1.06% to 27.83% of the total number of issued Shares. Apart from January 2011, we note that trading in the Shares had been historically inactive and the Shares were hence rather illiquid. Due to this reason and having also considered with the trend of the market price of the Shares during the Review Period, we concur with the Directors that it would be difficult to attract the Qualifying Shareholders to reinvest in the Company through the Rights Issue if the Subscription Price was not set at relatively substantial discount to the historical closing prices of the Shares. Accordingly, we are of the view that the substantial discount of the Subscription Price is justifiable.

(iii) Comparison with other rights issue

As part of our analysis, we have identified rights issue transactions (the “ Comparables ”) from 1 August 2010 to the Last Trading Day by companies listed on the Main Board and GEM of the Stock Exchange. To the best of our knowledge and as far as we are aware of, we found 35 companies which met these criteria. Shareholders should note that the businesses, operations and prospects of the Company are not the same as the Comparables and thus the

– 51 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Comparables are only used to provide a general reference for the common market practice in rights issue transactions of companies listed in Hong Kong. Summarised below is our relevant finding:

			Discount of	Discount of
			subscription	subscription
			price to the	price to the
			closing price	theoretical
Comparables	Date of	Basis of	on the last	ex-entitlement	Underwriting
(stock code)	announcement	entitlement	trading day	price	Commission
			(%)	(%)	(%)
Hanny Holdings	31-Jan-11	8 for 1	90.16	50.50	2.5
Limited (275)
Sheng Yuan	21-Jan-11	2 for 5	46.84	38.24	1.5
Holdings
Limited (851)
Capital VC	12-Jan-11	1 for 2	28.57	21.05	3
Limited (2324)
Heritage	6-Jan-11	1 for 2	35.06	26.47	2.5
International
Holdings
Limited (412)
Easyknit	5-Jan-11	1 for 2	34.00	25.50	1
Enterprises
Holdings
Limited (616)
Pan Asia Mining	23-Dec-10	5 for 1	74.36	32.58	2.5
Limited (8173)
V.S. International	22-Dec-10	1 for 3	18.37	14.44	N/A
Group Limited
(1002)
CultureCom	17-Dec-10	1 for 2	41.70	32.70	N/A
Holdings
Limited (343)
Zhongtian	17-Dec-10	10 for 1	96.70	72.50	N/A
International
Limited (2379)
Wang On Group	13-Dec-10	8 for 1	87.65	37.89	3
Limited (1222)
Shangri-La Asia	9-Dec-10	1 for 12	5.8	5.4	1
Limited (69)
Champion	1-Dec-10	4 for 9	21.10	29.60	2.5
Technology
Holdings
Limited (92)

– 52 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

			Discount of	Discount of
			subscription	subscription
			price to the	price to the
			closing price	theoretical
Comparables	Date of	Basis of	on the last	ex-entitlement	Underwriting
(stock code)	announcement	entitlement	trading day	price	Commission
			(%)	(%)	(%)
China Yunnan	29-Nov-10	8 for 1	87.80	44.40	3
Tin Minerals
Group
Company
Limited (263)
ForeFront Group	25-Nov-10	8 for 1	86.56	41.59	3
Limited (885)
Morning Star	19-Nov-10	5 for 1	89.53	45.05	2.5
Resources
Limited (542)
Dah Sang	16-Nov-10	1 for 10	40.94	38.65	2.25
Banking
Group Limited
(2356)
Dah Sang	16-Nov-10	1 for 8	39.97	37.18	2.25
Financial
Holdings
Limited (440)
Industrial and	10-Nov-10	0.45 for 10	47.40	46.20	N/A
Commercial
Bank of China
Limited (1398)
China	2-Nov-10	0.7 for 10	42.70	41.00	N/A
Construction
Bank
Corporation
(939)
Inno-Tech	29-Oct-10	10 for 1	72.31	19.28	3
Holdings
Limited (8202)
Bank of China	28-Oct-10	1 for 10	41.20	38.98	N/A
Limited (3988)
Hong Kong	27-Oct-10	3 for 1	69.70	37.50	2.5
Life Group
Holdings
Limited (8212)

– 53 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

			Discount of	Discount of
			subscription	subscription
			price to the	price to the
			closing price	theoretical
Comparables	Date of	Basis of	on the last	ex-entitlement	Underwriting
(stock code)	announcement	entitlement	trading day	price	Commission
			(%)	(%)	(%)
Bao Yuan	20-Oct-10	8 for 1	81.82	33.33	2.5
Holdings
Limited (692)
M Dream	15-Oct-10	4 for 1	83.74	21.26	N/A
InWorld
Limited (8100)
Standard	13-Oct-10	1 for 8	32.93	30.38	2.15
Chartered Plc
(2888)
China Gogreen	12-Oct-10	9 for 1	67.67	17.31	2.50
Assets
Investment
Limited (397)
Century City	7-Oct-10	1 for 10	30.40	28.46	2.50
International
Holdings
Limited (355)
Hengli Properties	4-Oct-10	3 for 5	71.43	60.98	2.50
Development
(Group)
Limited (169)
China Primary	27-Sept-10	1 for 2	36.50	27.70	1.5
Resources
Holdings
Limited (8117)
Hua Xia	27-Sept-10	1 for 3	36.08	29.54	6.00
Healthcare
Holdings
Limited (8143)
Oriental City	27-Sept-10	1 for 2	84.44	71.13	2.50
Group
Holdings
Limited (8325)
21 Holdings	22-Sept-10	10 for 1	87.66	39.30	2.25
Limited (1003)
New Smart	20-Sept-10	2 for 1	26.32	10.40	2.50
Energy Group
Limited (91)

– 54 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

			Discount of	Discount of
			subscription	subscription
			price to the	price to the
			closing price	theoretical
Comparables	Date of	Basis of	on the last	ex-entitlement	Underwriting
(stock code)	announcement	entitlement	trading day	price	Commission
			(%)	(%)	(%)
Polyard	13-Aug-10	1 for 2	28.06	20.63	1.50
Petroleum
International
Group Limited
(8011)
Wai Yuen Tong	9-Aug-10	5 for 1	83.10	35.91	2.50
Medicine
Holdings
Limited (897)
Average			55.67	34.37	2.46
Maximum			96.70	72.50	6
Minimum			5.80	5.40	1
The Company	31-Jan-11	26 for 1	92.80	32.30	3.0

Source: Website of the Stock Exchange (www.hkex.com.hk)

As shown by the above table, the subscription prices of the Comparables ranged from discounts of approximately 5.80% to 96.70% to the respective closing prices of their shares on the last trading days prior to the release of the rights issue announcements (the “ LTD Market Range ”). The discount of approximately 92.80% to the closing price of the Shares on the Last Trading Day as represented by the Subscription Price (the “ LTD Discount ”) is higher than the average and falls within the LTD Market Range.

Moreover, the subscription prices of the Comparables ranged from a discount of approximately 5.40% to approximately 72.50% to the respective theoretical ex-rights prices of their shares on the last trading days prior to the release of the rights issue announcements (the “ TERP Market Range ”). The discount of approximately 32.30% to the Theoretical Ex-rights Price as represented by the Subscription Price (the “ TERP Discount ”) is higher than the average and falls within the TERP Market Range.

– 55 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

In view of that (i) the LTD Discount falls within the LTD Market Range; (ii) the TERP Discount falls within the TERP Market Range; and (iii) the discount of the Subscription Price would encourage the Shareholders to participate in the Rights Issue and accordingly maintain their shareholding interests in the Company and participate in the future growth of the Group, we concur with the Directors that the Subscription Price is fair and reasonable so far as the Independent Shareholders are concerned.

(iv) Application for excess Rights Shares

Pursuant to the terms of the Rights Issue, Qualifying Shareholders may apply, by way of excess application, for any unsold entitlements of the NonQualifying Shareholders and for any Rights Shares provisionally allotted but not accepted. The Directors will allocate the excess Rights Shares at their discretion on a fair and equitable basis on the following principles: (1) preference will be given to applications for topping-up odd lots holdings to whole lot holdings; and (2) subject to availability of excess Rights Shares after allocation under principle (1) above, the excess Rights Shares will be allocated to Qualifying Shareholders who have applied for excess Rights Shares based on a pro-rata basis based on the number of the excess Rights Shares applied by them, with board lots allocation to be made on a best effort basis. We have reviewed such arrangement and compared with the arrangements of those Comparables which also offered excess applications for the Rights Shares. We note that the arrangement is the same as the relevant arrangements of most of the Comparables. Accordingly, we consider this is in line with normal market practice.

We have also reviewed the other terms of the Rights Issue and the Underwriting Agreement and are not aware of any terms which are uncommon to normal market practice. Accordingly, we consider that the terms of the Rights Issue and the Underwriting Agreement are on normal commercial terms and are fair and reasonable so far as the Independent Shareholders are concerned.

– 56 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

4. Underwriting arrangement

The Company will pay the Underwriter an underwriting commission of 3.0%, which was determined after arm’s length negotiation between the Company and the Underwriter by reference to the existing financial position of the Group, the size of the Rights Issue, and the current and expected market condition. As illustrated in the table above, the underwriting commissions of the Comparables ranged from 1.0% to 6.0%, with an average of 2.46%. Given the underwriting commission of 3.0% falls within the said range and is just above the average underwriting commission for the Comparables, we are of the view that the underwriting commission paid to the Underwriter is in line with the market and is fair and reasonable.

Saved for the underwriting commission, we have also reviewed other major terms of the Underwriting Agreement including, but not limited to, the termination of the Underwriting Agreement and conditions of the Rights Issue (details of which are set out in the Letter from the Board) and we are not aware of any terms which are unusual. As such, we are of the view that the terms of the Underwriting Agreement are fair and reasonable and in the interests of the Company and the Independent Shareholders as a whole.

5. Dilution effect on the shareholding interests of the Independent Shareholders

Set out below is the shareholding structure of the Company as at the Latest Practicable Date to immediately after completion of the Rights Issue:

Scenario 1: No conversion of the Convertible Bonds on or before the Record Date:

Shareholder Chen Zhong Lau Chung Yim (Director) Underwriter Public Shareholders Total	As at the Practicabl Number of Shares 110,000,000 546,000 – 1,754,396,545 1,864,942,545	Latest e Date % 5.90 0.03 – 94.07 100.00	Immediately after Capital Reorganization but before completion of the Rights Issue Number of New Shares % 6,875,000 5.90 34,125 0.03 – – 109,649,784 94.07 116,558,909 100.00	Immediately after completion of the Rights Issue (assuming all the Qualifying Shareholders take up their assured entitlement of Rights Shares Number of New Shares % 185,625,000 5.90 921,375 0.03 – – 2,960,544,168 94.07 3,147,090,543 100.00	Immediately after completion of the Rights Issue (Except Mr. Chen Zhong, assuming no Qualifying Shareholders take up their assured entitlement of Rights Shares and all the Rights Shares are taken up by the Underwriter) Number of New Shares % 185,625,000 5.90 34,125 0.00 2,851,781,634 90.62 109,649,784 3.48 3,147,090,543 100.00	Immediately after completion of the Rights Issue (Except Mr. Chen Zhong, assuming no Qualifying Shareholders take up their assured entitlement of Rights Shares and all the Rights Shares are taken up by the Underwriter) Number of New Shares % 185,625,000 5.90 34,125 0.00 2,851,781,634 90.62 109,649,784 3.48 3,147,090,543 100.00
						100.00

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Scenario 2: Assuming all the Convertible Bonds being converted on or before the Record Date:

Shareholder Chen Zhong Lau Chung Yim (Director) Underwriter CB Holder Public Shareholders Total	As at the Practicabl Number of Shares 110,000,000 546,000 – – 1,754,396,545 1,864,942,545	Latest e Date % 5.90 0.03 – – 94.07 100.00	Immediately after Capital Reorganization and full conversion of the Convertible Bonds but before completion of the Rights Issue Number of New Shares % 6,875,000 5.72 34,125 0.03 – – 3,555,555 2.96 109,649,784 91.29 120,114,464 100.00	Immediately after completion of the Rights Issue (assuming all the Qualifying Shareholders take up their assured entitlement of Rights Shares Number of New Shares % 185,625,000 5.72 921,375 0.03 – – 95,999,985 2.96 2,960,544,168 91.29 3,243,090,528 100.00	Immediately after completion of the Rights Issue (Except Mr. Chen Zhong, assuming no Qualifying Shareholders take up their assured entitlement of Rights Shares and all the Rights Shares are taken up by the Underwriter) Number of New Shares % 185,625,000 5.72 34,125 0.00 2,944,226,064 90.78 3,555,555 0.12 109,649,784 3.38 3,243,090,528 100.00	Immediately after completion of the Rights Issue (Except Mr. Chen Zhong, assuming no Qualifying Shareholders take up their assured entitlement of Rights Shares and all the Rights Shares are taken up by the Underwriter) Number of New Shares % 185,625,000 5.72 34,125 0.00 2,944,226,064 90.78 3,555,555 0.12 109,649,784 3.38 3,243,090,528 100.00
						100.00

All Qualifying Shareholders are entitled to subscribe for the Rights Shares. For those Qualifying Shareholders who take up their provisional allotments in full under the Rights Issue, their shareholding interests in the Company will remain unchanged upon completion of the Rights Issue. Qualifying Shareholders who do not accept the Rights Issue can, subject to the then prevailing market conditions, consider selling their nil-paid rights to subscribe for the Rights Shares in the market. In such case, where all Qualifying Shareholders do not accept the Rights Issue and thus the Underwriter is obligated to take up the unsubscribed Right Shares, the Qualifying Shareholders’ shareholding interests of the Qualifying Shareholders in the Company will be diluted by a maximum of 90.69 percent point.

Meanwhile, Qualifying Shareholders who wish to increase their shareholding interests in the Company through the Rights Issue may (i) subject to availability, acquire additional nil-paid rights in the market; and (ii) apply for the excess Rights Shares since the Rights Issue also allows for excess application of the Rights Shares.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

As stated in the Letter from the Board, the Underwriter has sub-underwritten its underwriting obligations under the Underwriting Agreement to sub-underwriters such that each of the Underwriter and the sub-underwriters (together with their respective parties acting in concert as defined in the Takeovers Code) will not own 30% or more of the issued share capital of the Company immediately after completion of the Rights Issue. So far as the Company is aware, each of the Underwriter and the sub-underwriters (and their respective ultimate beneficial owners) is not a party acting in concert with each other. To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, each of the Underwriter and the sub-underwriters and their respective ultimate beneficial owners are Independent Third Parties. As stipulated in the Underwriting Agreement, in the event that the Underwriter or any of the sub-underwriters mentioned above is required to take up the Rights Shares pursuant to their underwriting/sub-underwriting obligations, (i) the Underwriter will not and shall procure that the sub-underwriters will not own 30% or more of the issued share capital of the Company immediately after the Rights Issue; and (ii) the Underwriter shall and shall cause the sub-underwriters to procure independent placees to take up such number of Rights Shares as necessary to ensure that the public float requirements under Rule 8.08 of the Listing Rules are complied with.

We are aware of the aforementioned potential dilution to the Independent Shareholders’ shareholding interests in the Company. However, we consider the interest of Independent Shareholders should be balanced against by (i) the Independent Shareholders are offered a chance to express their view on the terms of the Rights Issue and the Underwriting Agreement through their votes at the First SGM; (ii) the Qualifying Shareholders have their choice whether to accept the Rights Issue or not; (iii) the Qualifying Shareholders have the opportunity to realize their nil-paid rights to subscribe for the Rights Shares in the market; (iv) the Rights Issue offers the Qualifying Shareholders a chance to subscribe for their prorata Rights Shares for the purpose of maintaining their respective existing shareholding interests in the Company at a relatively low price as compared to the historical and prevailing market price of the Shares; and (v) those Qualifying Shareholders who choose to accept the Rights Issue in full can maintain their respective existing shareholding interests in the Company after the Rights Issue.

Having considered the above, we consider the potential dilution effect on the shareholding interests of the Independent Shareholders, which may only happen when the Qualifying Shareholders do not subscribe for their pro-rata Rights Shares, to be acceptable.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

6. Financial effects of the Rights Issue

Net tangible assets

According to the unaudited pro forma financial information of the Group as set out in Appendix II to the Circular, the consolidated net tangible assets of the Group was approximately HK$87.83 million as at 30 September 2010. Upon completion of the Rights Issue, the unaudited pro forma adjusted consolidated net tangible assets of the Group based on the minimum number of 3,030,531,634 Rights Shares and the maximum number of 3,122,976,064 Rights Shares to be allotted and issued will be approximately HK$286.10 million and approximately HK$292.20 million, representing an increase of approximately 225.74% and approximately 232.69%, respectively. Such increase is attributable to the estimated net proceeds from the Rights Issue and this significant improvement in the financial position of the Group is beneficial to the Company and the Shareholders as a whole.

Liquidity

As at 31 March 2010, the bank balances and cash of the Group was approximately HK$17.66 million. Upon completion of the Rights Issue, the Company would raise net proceeds of not less than approximately HK$206.08 million but not more than approximately HK$212.36 million. The bank balances and cash of the Group is expected to increase by an amount of the net proceeds and the cash position is expected to improve. Accordingly, the financial liquidity of the Company is expected to improve.

Gearing ratio

According to the annual report of the Company for the year ended 31 March 2010, the Group’s gearing ratio (being the net debt divided by total shareholders’ equity plus net debt) was approximately 0.75 times. Upon completion of the Rights Issue, the total equity of the Group would increase as a result of the issue of Rights Shares. As such, the gearing ratio of the Group subsequent to completion of the Rights Issue is expected to improve.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

II. REFRESHMENT OF GENERAL MANDATE

Principal Factors Considered

In formulating and giving our independent advice and recommendation in respect of the Refreshment of General Mandate, we have taken into consideration the following principal factors and reasons:

1. Background of and the reasons for the Refreshment of General Mandate

At the annual general meeting of the Company held on 19 November 2010, the Shareholders approved, amongst other things, an ordinary resolution to grant to the Directors the Existing Issue Mandate to allot up to 136,088,775 Shares. As at the Latest Practicable Date, the Existing Issue Mandate has not yet been utilized.

As announced by the Company on 31 January 2011, the Company proposed to raise not less HK$206.08 million to approximately HK$212.36 million, before expenses, by issuing not less than 3,030,531,634 Rights Shares and not more than 3,122,976,064 Rights Shares to the Qualifying Shareholders by way of the Rights Issue at Subscription Price of HK$0.068 per Rights Share on the basis of twenty six (26) Rights Shares for every one (1) New Share held on the Record Date. Pursuant to the Underwriting Agreement, the Rights Shares not subscribed by the Qualifying Shareholders are fully underwritten by the Underwriter. Upon completion of the Rights Issue, the number of New Shares in issue is expected to be not less than 3,147,090,543 New Shares and not more than 3,243,090,528 New Shares. As the issued share capital of the Company is expected to be increased substantially upon completion of the Rights Issue (which is subject to, among other things, the approval from the Shareholders on the First SGM), the Board considers that (i) it is necessary to refresh the Existing General Mandate to reflect the actual number of New Shares to be allotted and repurchased given the number of New Shares has been increased substantially as a result of the Rights Issue; (ii) the proposed refreshment of the Existing General Mandate will enable the Group to conduct fund raising activities through issue of additional New Shares as and when opportunities arise; and (iii) granting of specific mandate is subject to the approval of the Independent Shareholders which may cause undue delay if the Group wishes to carry out timely acquisitions. Although the Company has proposed to raise funds by the Rights Issue, the Board considers that it is in the best interests for the Company to have additional options when considering fund raising activities in the future. Given that equity financing through utilization of the Issue Mandate (i) does not incur any interest paying obligations on the Group as compared with bank financing; (ii) is less costly and time-consuming than raising funds by way of rights issue or open offer

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

and it is not guaranteed that the underwriter could fulfill the capital requirements of the Company; and (iii) provides the Company with the capability to capture any capital raising or prospective investment opportunity as and when it arises, the Board proposes to refresh the Existing Issue Mandate for the Directors to allot, issue and deal with New Shares with an aggregate nominal amount of not exceeding 20% of the aggregate nominal amount of the issued share capital of the Company as at the date of the Second SGM. As at the Latest Practicable Date, the Existing General Mandate has not yet been utilized and have to be refreshed to reflect the actual number of New Shares after the completion of the Rights Issue (which is subject to the approval of the Independent Shareholders) to allow the Company to conduct fund raising activities in the event that the Company is able to identify the placing agent(s)/suitable subscriber(s). The Company does not have any concrete plan or intention to raise capital by using the Issue Mandate. The Company would exercise due and careful consideration when choosing the best financing method available to the Group and taking into account the then Company’s estimated working capital requirement and cash balance.

As stated in the Letter from the Board, based on the preliminary capital requirement forecasted by the Company, the Company has preliminary plans to increase its investment in the Recycling Business Acquisition and based on the framework agreement dated 19 November 2010, the Company is required to pay HK$180 million as earnest money to the vendor and as at the Latest Practicable Date, only HK$96 million was paid. From the preliminary negotiations between the Company and the Vendor, the consideration of the Recycling Business Acquisition will be amounted to not less than RMB720 million, of which the vendor indicated that not less than 40% of the possible consideration shall be paid by cash. In view of all of the foregoing, it is important for the Company to obtain the Issue Mandate from the Independent Shareholders such that the Company can have additional options when conducting fund raising activities.

We understand from the Company and as set out in the circular of the Company dated 24 January 2011, the intended use of proceeds of the placing of the convertible bonds of HK$110 million, the net proceeds thereof was approximately HK$106 million, of which HK$96 million have been paid as refundable earnest money pursuant to the framework agreement dated 19 November 2010 relating to the Recycling Business Acquisition, approximately HK$5.7 million have been used for working capital of the Group and professional fees and the balance is being held as bank deposit and intended to be used as general working capital. The proceeds from the placing of the convertible bonds has been changed from financing the acquisition of Swift Profit International Limited to payment of deposits for the possible Recycling Business Acquisition. The said placing has been approved by the Shareholders on 11 February 2011.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Fund raising exercise and capital status of the Company

Set out below is the fund raising activities conducted by the Company in the past twelve months prior to the Latest Practicable Date together with the capital status of the Company since the six months period ended 30 September 2010:

Fund raising

		Net proceed/
Date of		(possible		Effect on
announcement	Event	cash outlay)	Status	cash position
31 May 2010	Placing of new	HK$28 million	HK$25 million was	Fully utilized
	shares		used to settle the
			cash portion of the
			consideration for
			the electricity car
			business acquisition;
			HK$1.9 million for
			professional fee;
			and HK$1.1 million
			for general working
			capital
2 July 2010	The placing of	HK$106 million	HK$96 million has been	Fully utilized
	convertible		paid as refundable
	bonds		earnest money for
			Recycling Business
			Acquisition.
			Approximately
			HK$4.2 million have
			been used for working
			capital of the Group
			and HK$3.6 million
			for professional fees
			and the balance of
			HK$2.2 million is
			being held as bank
			deposit and intended
			to be used as general
			working capital

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

		Net proceed/
Date of		(possible		Effect on
announcement	Event	cash outlay)	Status	cash position
Rights Issue		approximately		*HK$198.27
		HK$198.27		million
		million to
		approximately
		HK$204.36
		million
Proceeds from
certain
disposals
announced by
the Company
28 June 2010	Disposal of	HK$28 million	Approved by	HK$28 million
	subsidiaries		Shareholders on
			11 January 2011
4 November	Disposal of	RMB62.5 million	Announced on	*HK$72.5
2010	PRC	(approximately	14 February 2011 that	million
	property	HK$72.5	delay in despatch of
		million)	circular to
			7 March 2011
Convertible
bond
3 January 2011	Extension of	HK$90 million	Extension approved by	*HK$90
	the		Shareholders on	million
	placing		11 February 2011
	of the
	remaining
	balance
	of the
	convertible
	bond to 31
	March 2011

– 64 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

		Net proceed/
Date of		(possible		Effect on
announcement	Event	cash outlay)	Status	cash position
Recycling
Business
Acquisition
19 November	Possible	(Not less than	Not less than 40% of	*(HK$238
2010	acquisition	RMB720	the possible	million)
	of a target	million)	consideration shall be
	principally	(approximately	paid by cash
	engaged in	HK$835.20	(i.e. approximately
	the recycling	million)	HK$334 million)
	business of
	waste paper,		HK$96 million has been
	scrap metal,		paid as refundable
	consumable		earnest money
	waste.

Estimation of capital position of the Company

	HK$’ million
Cash in hand (as at 30 September 2010)	2.66
Total bank and other borrowing
(as at 30 September 2010)	(92.47)
Disposal of subsidiaries	28.00
Disposal of PRC property	*72.50
Placing of remaining convertible bond	*90.00
Rights Issue	*198.27
Cash reserved for Recycling Business Acquisition	*(238.00)
Estimated capital position	60.96

yet to complete and/or approve by Shareholders

– 65 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

According to the latest published interim report of the Company for the six months ended 30 September 2010, the unaudited cash and cash equivalents of the Group was approximately HK$2,658,000 (pledged fixed deposit of HK$2,025,000 and cash and bank balances of HK$633,000), total bank and other borrowings of approximately HK$92,472,000 as at 30 September 2010. The Company had conducted two fund raising exercise in the past twelve months immediately preceding the Latest Practicable Date (details of which is stated in the Letter from the Board), having considered the proceeds raised from the aforementioned fund raising exercises and the uses of proceeds and taking into account the Rights Issue and the use of proceeds, we are of the view that the existing cash resources of the Group should be sufficient for the Group to conduct its daily operations and the Group has sufficient working capital to meet its present requirements. However, taking into account the Recycling Business Acquisition there is no certainty that such cash resources will be adequate for the business development and acquisition of appropriate investments that may be identified by the Company in the future. In the event that the Group identifies suitable business and/or investment opportunities and does not have sufficient cash resources on hand, and it fails to obtain loans on terms which the Directors consider acceptable to the Group or raise funds from the equity market, or it cannot find other alternatives to finance the business development or acquisition of such investment opportunities in a timely manner, the Group may lose its opportunity in an otherwise favourable development/investment.

In view of the said stringent provisions and requirements of the Listing Rules, we believe that there to be sufficient control and measures to guide the Refreshment of General Mandate and the continuity of the Issue Mandate. In this respect, it is fair and reasonable to infer that the terms of the Refreshment of General Mandate are fair and reasonable so far as the Independent Shareholders are concerned.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Based on the foregoing and taking into account some of the funds to be received by the Company are still yet to complete and/or approve by Shareholders and the Existing General Mandate has not yet been utilized, we are of the opinion that the Refreshment of General Mandate would provide the Company with the necessary flexibility to fulfill any possible funding needs for the Group’s prospective investment opportunity and future business development. Consequently, we are of the view that the Refreshment of General Mandate is in the interests of the Company and the Shareholders as a whole.

2. Flexibility in financing

As advised by the Directors, the Group does not obviate the possibilities of further issuing capital if there is/are investor(s) indicating interest in the business of the Company. The Directors believe that the Refreshment of General Mandate will provide the Group with flexibility for possible future fund raising. The Directors are therefore of the view that the Refreshment of General Mandate is in the interests of the Company and the Shareholders as a whole. We understand from the Company that it does not have any concrete plan or intention to raise capital by using the Issue Mandate. As discussed previously, we consider that the Refreshment of General Mandate would provide the Company with the necessary flexibility to fulfill any possible funding needs for the Group’s prospective investment opportunity and future business development. The Refreshment of General Mandate would provide the Company with the flexibility as allowed under the Listing Rules to issue and allot additional New Shares for equity fund raising activities, such as placing of additional New Shares, or as consideration for potential investments in the future as and when such opportunities arise. Furthermore, the additional amount of equity which may be raised after the Refreshment of General Mandate would provide the Group with more financing options when assessing and negotiating potential investments in a timely manner. Given the financial flexibility available to the Company as discussed above, we concur with the Directors’ view that the Refreshment of General Mandate is in the interests of the Company and the Shareholders as a whole.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

3. Other financing alternatives

We have enquired into the Directors and the Directors confirmed that apart from equity financing, the Group will also consider debt financing, such as bank borrowings, to be other possible fund raising alternatives available to the Group. However, the Directors are of the view that the ability of the Group to obtain bank borrowings usually depends on the Group’s profitability, financial position and the then prevailing market condition. Furthermore, such alternative may be subject to lengthy due diligence and negotiations with banks. In light of also that debt financing will usually incur interest burden on the Group, the Directors consider debt financing to be relatively uncertain and time-consuming as compared to equity financing through issue of New Shares under the Issue Mandate for the Group to obtain additional funding. Besides that, the Directors also prefer not to further increase the gearing level of the Group under the current uncertain market situation. With regard to equity financing, the Directors advised us that although both open offer and rights issue would allow Shareholders to maintain their respective prorate shareholdings in the Company, however, such fund raising exercises would be relatively time consuming as compared with the placing of new Shares. The Directors confirmed that they would exercise due and careful consideration when choosing the best financing method available to the Group. With all of the above being the case, along with the fact that the refreshment of the Existing General Mandate will provide the Company with an additional alternative and it is reasonable for the Company to have the flexibility in deciding the financing methods for its future business development, we are of the view that the Refreshment of General Mandate is in the interests of the Company and the Shareholders as a whole.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

4. Potential dilutions to shareholding of the existing public Shareholders

The tables below set out the effects of Rights Issue on the shareholding structure of Company under two different scenarios, assuming that (i) completion of the Rights Issue takes place; (ii) the Refreshment of General Mandate is approved by the Shareholders; and (iii) other than the Rights Shares, no Shares are issued and/or repurchased by the Company prior to the Second SGM:

Table 1: No conversion of the Convertible Bonds on or before the Record Date

Shareholders Mr. Chen Zhong Mr. Lau Chung Yim (Director) Underwriter Public Shareholders New Shares available to be issued under the Issue Mandate Total	Immediately after completion of the Rights Issue (assuming all the Qualifying Shareholders take up their assured entitlement of the Rights Shares) Number of New Shares % 185,625,000 5.90 921,375 0.03 – – 2,960,544,168 94.07 – – 3,147,090,543 100.00	Immediately after completion of the Rights Issue (Except Mr. Chen Zhong, assuming no Qualifying Shareholders take up their assured entitlement of the Rights Shares and all the Rights Shares are taken up by the Underwriter) Number of New Shares % 185,625,000 5.90 34,125 0.00 2,851,781,634 90.62 109,649,784 3.48 – – 3,147,090,543 100.00	After full utilization of the Issue Mandate (assuming all the Qualifying Shareholders take up their assured entitlement of the Rights Shares) Number of New Shares % 185,625,000 4.92 921,375 0.02 – – 2,960,544,168 78.39 629,418,108 16.67 3,776,508,651 100.00	After full utilization of the Issue Mandate (Except Mr. Chen Zhong, assuming no Qualifying Shareholders take up their assured entitlement of the Rights Shares and all the Rights Shares are taken up by the Underwriter) Number of New Shares % 185,625,000 4.92 34,125 0.00 2,851,781,634 75.51 109,649,784 2.90 629,418,108 16.67 3,776,508,651 100.00	After full utilization of the Issue Mandate (Except Mr. Chen Zhong, assuming no Qualifying Shareholders take up their assured entitlement of the Rights Shares and all the Rights Shares are taken up by the Underwriter) Number of New Shares % 185,625,000 4.92 34,125 0.00 2,851,781,634 75.51 109,649,784 2.90 629,418,108 16.67 3,776,508,651 100.00
					100.00

The table above illustrates that (i) the shareholding of the existing public Shareholders would be decreased from approximately 94.07% based on the assumption that all the Qualifying Shareholders take up their assured entitlement of the Rights Shares to approximately 78.39% upon full utilization of the Issue Mandate, which represents a dilution of approximately 15.68 percent points; and (ii) the shareholding of the existing public Shareholders would be decreased from approximately 3.48% based on the assumption that all the Qualifying Shareholders do not take up their assured entitlement of Rights Shares to approximately 2.90% upon full utilization of the Issue Mandate, which represents a dilution of approximately 0.58 percent point.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Table 2: All the Convertible Bonds being converted on or before the Record

Date

Shareholders Mr. Chen Zhong Mr. Lau Chung Yim (Director) Underwriter CB Holder Public Shareholders New Shares available to be issued under the Issue Mandate Total	Immediately after completion of the Rights Issue (assuming all the Qualifying Shareholders take up their assured entitlement of the Rights Shares) Number of New Shares % 185,625,000 5.72 921,375 0.03 – – 95,999,985 2.96 2,960,544,168 91.29 – – 3,243,090,528 100.00	Immediately after completion of the Rights Issue (Except Mr. Chen Zhong, assuming no Qualifying Shareholders take up their assured entitlement of the Rights Shares and all the Rights Shares are taken up by the Underwriter) Number of New Shares % 185,625,000 5.72 34,125 0.00 2,944,226,064 90.78 3,555,555 0.12 109,649,784 3.38 – – 3,243,090,528 100.00	After full utilization of the Issue Mandate (assuming all the Qualifying Shareholders take up their assured entitlement of the Rights Shares) Number of New Shares % 185,625,000 4.77 921,375 0.02 – – 95,999,985 2.47 2,960,544,168 76.07 648,618,105 16.67 3,891,708,633 100.00	After full utilization of the Issue Mandate (Except Mr. Chen Zhong, assuming no Qualifying Shareholders take up their assured entitlement of the Rights Shares and all the Rights Shares are taken up by the Underwriter) Number of New Shares % 185,625,000 4.77 34,125 0.00 2,944,226,064 75.65 3,555,555 0.09 109,649,784 2.82 648,618,105 16.67 3,891,708,633 100.00	After full utilization of the Issue Mandate (Except Mr. Chen Zhong, assuming no Qualifying Shareholders take up their assured entitlement of the Rights Shares and all the Rights Shares are taken up by the Underwriter) Number of New Shares % 185,625,000 4.77 34,125 0.00 2,944,226,064 75.65 3,555,555 0.09 109,649,784 2.82 648,618,105 16.67 3,891,708,633 100.00
					100.00

The table immediately above illustrates that (i) the shareholding of the existing public Shareholders would be decreased from approximately 91.29% based on the assumption that all the Qualifying Shareholders take up their assured entitlement of Rights Shares to approximately 76.07% upon full utilization of the Issue Mandate, which represents a dilution of approximately 15.22 percent points and (ii) the shareholding of the existing public Shareholders would be decreased from approximately 3.38% based on the assumption that all the Qualifying Shareholders did not take up their assured entitlement of Rights Shares to approximately 2.82% upon full utilization of the Issue Mandate, which represents a dilution of approximately 0.56 percent point.

Taking into account the benefits of the Refreshment of General Mandate as mentioned in the sections headed “Background of and the reasons for the Refreshment of General Mandate” and “Flexibility in financing” above and the fact that the shareholdings of all existing Shareholders will be decreased in proportion to their respective shareholdings upon any utilization of the Issue Mandate, we consider that the potential dilution of shareholdings of the existing public Shareholders is acceptable.

– 70 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

RECOMMENDATION

Taking into consideration of the above factors and reasons, we concur with the Directors’ view that the Rights Issue is fair and reasonable so far as the Company and the Independent Shareholders as a whole are concerned and the Rights Issue is in the interests of the Company and the Independent Shareholders as a whole. Accordingly, we recommend the Independent Board Committee to advise the Independent Shareholders to vote in favour of the relevant resolution to be proposed at the First SGM to approve the Rights Issue. We also concur with the Directors’ view that the Refreshment of General Mandate is fair and reasonable so far as the Company and the Independent Shareholders as a whole are concerned. Accordingly, we also recommend the Independent Board Committee to advise the Independent Shareholders to vote in favour of the relevant resolution to be proposed at the Second SGM to approve the Refreshment of General Mandate.

Yours faithfully For and on behalf of

China Merchants Securities (HK) Company Limited Jiang Jun

Executive Director Investment Banking Department

– 71 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

FINANCIAL INFORMATION INCORPORATED BY REFERENCE

The audited consolidated financial statements of the Group for each of the year ended 31 March 2008, 31 March 2009 and 31 March 2010, including the notes thereto, have been published in the annual reports of the Company for the year ended 31 March 2008 (pages 39 to 43), 31 March 2009 (pages 39 to 43) and 31 March 2010 (pages 39 to 43) respectively, which are incorporated by reference into this Circular. The said annual reports of the Company are available on the Company’s website at www.namhingholdings.com and the website of the Stock Exchange at www.hkexnews.hk.

The unaudited consolidated financial statements of the Group for the six months ended 30 September 2010 together with the relevant notes to the accounts are disclosed in the interim report of the Company dated 25 November 2010, which are incorporated by reference into this Circular. The said interim report of the Company is available on the Company’s website at www.namhingholdings.com and the website of the Stock Exchange at www.hkexnews.hk.

The financial information regarding the major transaction announced by the Company on 16 July 2010 has been detailed in the circular of the Company dated 15 November 2010 (available on the Company’s website at www.namhingholdings.com and website of the Stock Exchange at www.hkexnews.hk, which are incorporated by reference into this Circular.

STATEMENT OF INDEBTEDNESS

(a) Borrowing

At the close of business on 4 February 2011, being the latest practicable date for the purpose of this statement of indebtedness prior to the printing of this Circular, the Group had aggregate outstanding secured bank borrowings of approximately HK$17.35 million and unsecured, noninterests bearing of other borrowings of approximately HK$15.31 million. The Group also had amounts due to a director and a related company of approximately HK$8.75 million and HK$3.82 million, respectively, which were unsecured and non-interests bearing except for an amount due to a related company of approximately HK$1.67 million which bear interests at 7.25% per annum.

(b) Pledge of Asset

As at the close of business on 4 February 2011, the Group had pledged certain of its investment property and bank deposit amounting to approximately HK$6.96 million and HK$2.03 million, respectively to secure the general banking facilities granted to the Group.

– 72 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

(c) Convertible Bonds

As at 4 February 2011, there is an outstanding principal amount of HK$10,240,000 convertible bonds due 2013 with conversion price of HK$0.18 per share.

Save as aforesaid or as otherwise disclosed herein, and apart from intra-group liabilities and normal trade payables, as at the close of business on 4 February 2011, the Group did not have any debt securities issued and outstanding or agreed to be issued, bank overdrafts, loans or other similar indebtedness, liabilities under acceptances or acceptance credits, debentures, mortgages, charges, hire purchases or finance lease commitments, guarantees or other material contingent liabilities.

WORKING CAPITAL

The Directors are of the opinion that, after taking into account the present internal resources available, the proceeds from the proposed major disposal as announced by the Company on 4 November 2010 to be received and the estimated net proceeds from the Rights Issue, the Group has sufficient working capital for its present requirements for at least the next twelve months from the date of this Circular in the absence of unforeseen material circumstances.

MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, the Directors were not aware of any material adverse change in the financial or trading position of the Group since 31 March 2010, being the date to which the latest published audited consolidated accounts of the Group were made up.

– 73 –

APPENDIX II

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

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23 February 2011

The Board of Directors Nam Hing Holdings Limited 27th Floor Yuen Long Trade Centre 99-109 Castle Peak Road Yuen Long New Territories Hong Kong

Dear Sirs,

We report on the unaudited pro forma statement of adjusted consolidated net tangible assets (the “Unaudited Pro Forma Financial Information”) of Nam Hing Holdings Limited (the ”Company”) and its subsidiaries (hereinafter collectively referred to as the “Group”), set out on pages 77 to 79 under the heading of “Unaudited Pro Forma Statement of Adjusted Consolidated Net Tangible Assets of the Group” of Appendix II to the Company’s circular dated 23 February 2011 (the “Circular”), which has been prepared by the directors of the Company, for illustrative purpose only, to provide information about how the proposed rights issue of not less than 3,030,531,634 rights shares and not more than 3,122,976,064 rights shares at subscription price of HK$0.068 per rights share on the basis of 26 rights share for every one new share held might have affected the consolidated net tangible assets of the Group presented. The basis of preparation of the Unaudited Pro Forma Financial Information is set out in Appendix II to the Circular.

– 74 –

APPENDIX II

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

RESPECTIVE RESPONSIBILITIES OF DIRECTORS OF THE COMPANY AND REPORTING ACCOUNTANTS

It is the responsibility solely of the directors of the Company to prepare the Unaudited Pro Forma Financial Information in accordance with paragraph 29 of Chapter 4 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”) and with reference to Accounting Guideline 7 “Preparation of Pro Forma Financial Information for Inclusion in Investment Circulars” issued by the Hong Kong Institute of Certified Public Accountants (the “HKICPA”).

It is our responsibility to form an opinion, as required by paragraph 29(7) of Chapter 4 of the Listing Rules, on the Unaudited Pro Forma Financial Information and to report our opinion to you. We do not accept any responsibility for any reports previously given by us on any financial information used in the compilation of the Unaudited Pro Forma Financial Information beyond that owed to those to whom those reports were addressed by us at the dates of their issue.

BASIS OF OPINION

We conducted our engagement in accordance with Hong Kong Standard on Investment Circular Reporting Engagements 300 “Accountants’ Reports on Pro Forma Financial Information in Investment Circulars” issued by the HKICPA. Our work consisted primarily of comparing the unadjusted consolidated net tangible assets with source documents, considering the evidence supporting the adjustments and discussing the Unaudited Pro Forma Financial Information with the directors of the Company. This engagement did not involve independent examination of any of the underlying financial information.

We planned and performed our work so as to obtain the information and explanations we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the Unaudited Pro Forma Financial Information has been properly compiled by the directors of the Company on the basis stated, that such basis is consistent with the accounting policies of the Group and that the adjustments are appropriate for the purpose of the Unaudited Pro Forma Financial Information as disclosed pursuant to paragraph 29(1) of Chapter 4 of the Listing Rules.

The Unaudited Pro Forma Financial Information is for illustrative purpose only, based on the judgements and assumptions of the directors of the Company, and, because of its hypothetical nature, does not provide any assurance or indication that any event will take place in future and may not be indicative of the financial position of the Group as at 30 September 2010 or any future date.

– 75 –

APPENDIX II

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

OPINION

In our opinion:

(a) the Unaudited Pro Forma Financial Information has been properly compiled by the directors of the Company on the basis stated;
(b) such basis is consistent with the accounting policies of the Group; and
(c) the adjustments are appropriate for the purposes of the Unaudited Pro Forma Financial Information as disclosed pursuant to paragraph 29(1) of Chapter 4 of the Listing Rules.

SHINEWING (HK) CPA Limited

Certified Public Accountants

Chong Kwok Shing Practising Certificate Number: P05139

Hong Kong

– 76 –

APPENDIX II

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

UNAUDITED PRO FORMA STATEMENT OF ADJUSTED CONSOLIDATED NET TANGIBLE ASSETS OF THE GROUP

The following is the unaudited pro forma statement of adjusted consolidated net tangible assets of the Group which has been prepared to illustrate the effect of the Rights Issue on the unaudited consolidated net tangible assets of the Group as if the Rights Issue had been completed on 30 September 2010.

The unaudited pro forma statement of adjusted consolidated net tangible assets of the Group is prepared for illustrative purpose only, based on the judgements, estimates and assumptions of the Directors, and because of its nature, it may not give a true picture of the financial position of the Group upon completion of the Rights Issue.

The unaudited pro forma statement of adjusted consolidated net tangible assets of the Group is prepared based on the unaudited consolidated net tangible assets of the Group as at 30 September 2010 as extracted from the published unaudited interim report of the Group for the six months ended 30 September 2010 and is adjusted for the effect of the Rights Issue.

					Unaudited
			Unaudited		pro forma
			pro forma	Unaudited	adjusted
			adjusted	consolidated	consolidated
	Unaudited		consolidated	net tangible	net tangible
	consolidated		net tangible	assets	assets
	net tangible		assets	of the Group	of the Group
	assets		of the Group	per share as at	per share
	of the Group	Estimated	immediately	30 September	immediately
	as at	net proceeds	after	2010 before	after
	30 September	from the	completion of	completion of	completion of
	2010	Rights Issue	the Rights Issue	the Rights Issue	the Rights Issue
	(Note 2)	(Note 3)		(Note 4)	(Note 5)
	HK$’000	HK$’000	HK$’000	HK$	HK$
Rights Issue of
3,030,531,634
Rights Shares	87,834	198,265	286,099	0.146	0.093

– 77 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

APPENDIX II

Notes:

The Rights Issue of 3,030,531,634 Rights Shares is based on 116,558,909 Consolidated Shares in issue upon the Share Consolidation becoming effective.
Details of movements in number of issued Shares/Consolidated Shares from 30 September 2010 up to the Latest Practicable Date is as follows:

As at 30 September 2010 Shares issued upon conversion of convertible bonds for the period from 1 October 2010 to the Latest Practicable Date Total issued Shares before the Share Consolidation becoming effective As at the Latest Practicable Date upon the Share Consolidation becoming effective	Number of issued Shares 603,223,800 1,261,718,745
	1,864,942,545

	Number of issued Consolidated Shares 116,558,909

As at the Latest Practicable Date, there were outstanding Convertible Bonds with an aggregate principal amount of HK$10,240,000 convertible into 56,888,888 Shares at the conversion price of HK$0.18 per Share. Assuming full exercise of the conversion rights attaching to the Convertible Bonds on or before the Record Date, an additional 92,444,430 Rights Shares will be issued and total number of Rights Shares will be 3,122,976,064. Based on the 3,122,976,064 Rights Shares and the notes explained below, the unaudited pro forma adjusted consolidated net tangible assets of the Group per share immediately after completion of the Rights Issue will be HK$0.092 per share.

The unaudited consolidated net tangible assets of the Group as at 30 September 2010 is based on the net assets of the Group of approximately HK$87,834,000 as extracted from the published unaudited interim report of the Group for the six months ended 30 September 2010.
The estimated net proceeds from the Rights Issue are calculated based on 3,030,531,634 and 3,122,976,064 Rights Shares expected to be issued at the subscription price of HK$0.068 per Rights Share, after deducting the estimated underwriting fees and other related expenses of approximately HK$7,811,000 and HK$7,999,000 respectively.
The number of Shares used for the calculation of the unaudited consolidated net tangible assets of the Group per share before completion of the Rights Issue is based on 603,223,800 Shares in issue as at 30 September 2010.

– 78 –

APPENDIX II

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

The unaudited pro forma adjusted consolidated net tangible assets of the Group per share immediately after completion of the Rights Issue is calculated based on 3,068,223,122 Shares and 3,160,677,552 Shares which represents:
(i) 37,701,488 Shares, which is calculated based on 603,223,800 issued Shares of the Company as at 30 September 2010 after taking into account the proposed Share Consolidation which will consolidate each 16 issued and unissued Shares into 1 Consolidated Share. (The Shares issued by the Company from 1 October 2010 to the Latest Practicable Date of 1,261,718,745 Shares has not been taken into account in the calculation).
(ii) 3,030,531,634 and 3,122,976,064 Rights Shares to be issued respectively.
No adjustment has been made to reflect any trading results or other transactions of the Group entered into subsequent to 30 September 2010.

– 79 –

GENERAL INFORMATION

APPENDIX III

1. RESPONSIBILITY STATEMENT

This Circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this Circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein misleading.

2. SHARE CAPITAL

The authorized and issued share capital of the Company as at the Latest Practicable Date and immediately upon completion of the Rights Issue are as follows:

					HK$
Authorized:
	10,000,000,000	Shares	as at the Latest Practicable Date		1,000,000,000

(i)	Assuming no	conversion		of the Convertible Bonds on or before the Record Date:
					HK$
	Issued and to	be issued:
	1,864,942,545		Shares in issue as at		186,494,245.5
				the Latest Practicable Date
	116,558,909		New Shares in issue as at the effective date of		116,558.909
				the Capital Reorganization
	3,030,531,634		Rights Shares to be issued		3,030,531.634
	3,147,090,543				3,147,090.543

– 80 –

GENERAL INFORMATION

APPENDIX III

(ii) Assuming all the Convertible Bonds being converted on or before the Record Date:

Issued and to be issued: 1,864,942,545 Shares in issue and fully paid as at the Latest Practicable Date 116,558,909 New Shares in issue as at the effective date of the Capital Reorganization 3,555,555 New Shares to be issued in the event that the Convertible Bonds being converted in full on or before the Record Date 3,122,976,064 Rights Shares to be issued 3,243,090,528	HK$ 186,494,254.5 116,558.909 3,555.55 3,122,976.06
	3,243,090.528

All of the Rights Shares to be issued will rank pari passu in all respects with each other, including, in particular, as to dividends, voting rights and capital, and with all the New Shares in issue as at the date of allotment and issue of the Rights Shares. The Rights Shares to be issued will be listed on the Stock Exchange.

No part of the share capital or any equity or debt securities of the Company is listed or dealt in on any stock exchange other than the Stock Exchange and no application is being made or is currently proposed or sought for the Shares or Rights Shares or any equity or debt securities of the Company to be listed or dealt in on any other stock exchange.

As at the Latest Practicable Date, save for the Convertible Bonds, 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.

– 81 –

GENERAL INFORMATION

APPENDIX III

As at the Latest Practicable Date, there was no arrangement under which future dividends are waived or agreed to be waived.

As at the Latest Practicable Date, no share or loan capital of the Company or any members of the Group had been put under option or agreed conditionally or unconditionally to be put under option and no warrant or conversion right affecting the Shares has been issued or granted or agreed conditionally, or unconditionally to be issued or granted, except for the Rights Shares and the Convertible Bonds.

3. DIRECTORS’ AND CHIEF EXECUTIVE’S INTERESTS AND SHORT POSITIONS IN SHARES, UNDERLYING SHARES AND DEBENTURES

As at the Latest Practicable Date, the interests and short positions of the Directors and chief executives of the Company or their respective associates in the shares, underlying shares and debentures of the Company and its associated corporations (within the meaning of Part XV of the SFO) which are required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which were taken or deemed to have under such provisions of the SFO), or which were required, pursuant to section 352 of the SFO, to be entered in the register referred to therein, or which were required, pursuant to the Model Code, to be notified to the Company and the Stock Exchange were as follows:

Nature of interests

	Number or			Approximate
	attributable			percentage or
	number of	Interests in		attributable
	Shares held or	controlled	Beneficial	percentage of
Name of Directors	short positions	corporation	owner	shareholding
Mr. Lau Chung Yim	546,000 (L)	–	546,000 (L)	0.03%
L: Long Position

Save as disclosed above, as at the Latest Practicable Date, none of the Directors or chief executives of the Company or their respective associates had any interests or short positions in the shares, underlying shares or debentures of the Company or its associated corporations (within Part XV of the SFO) which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they were taken or deemed to have under such provisions of the SFO), or which were required, pursuant to section 352 of the SFO, to be entered in the register referred to therein, or which were required, pursuant to the Model Code, to be notified to the Company and the Stock Exchange.

– 82 –

GENERAL INFORMATION

APPENDIX III

4. INTERESTS AND SHORT POSITIONS OF SUBSTANTIAL SHAREHOLDERS

Save as disclosed below, as at the Latest Practicable Date, according to the register of interest kept by the Company under Section 336 of the SFO and so far as was known to the Directors, no other person or companies had an interest or short positions in Shares or underlying Shares which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or who were, directly or indirectly, interested in 5% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other member of the Group or had any option in respect of such capital:

Long/short position in the Shares and underlying Shares of the Company

			Approximate
		Number of	percentage of
		Shares and/or	issued ordinary
Name of		underlying	share capital of
Substantial Shareholder	Capacity	Shares held	the Company
Mr. Chen Zhong	Beneficial owner	110,000,000 (L)	5.9%

L: Long Position

5. DIRECTORS’ INTERESTS IN CONTRACTS AND ASSETS

As at the Latest Practicable Date, save for Mr. Lau Chung Yim being a party to the following contracts and arrangements with Nature Ample Limited, none of the Directors had material interests, directly or indirectly, in any contract or arrangement entered into by any member of the Group and subsisting at the date of this Circular which was significant in relation to the business of the Group:

(a) the master supply agreement dated 28 June 2010 entered into between Nam Hing Circuit Board Company Limited and Nam Hing Circuit Board (Dongguan) Co., Ltd., as purchasers, and Zhongshan Chung Yuen, as supplier, in relation to the supply and purchase of industrial laminates;
(b) the supplemental agreement dated 30 September 2010 entered into among Nature Ample Limited as Purchaser, Nam Hing (B.V.I.) Limited as Vendor and Mr. Lau Chung Yim as guarantor in relation to the sale and purchase agreement dated 28 June 2010;

– 83 –

GENERAL INFORMATION

APPENDIX III

(c) the supplemental agreement dated 30 September 2010 entered into between Nam Hing Circuit Board Company Limited and Nam Hing Circuit Board (Dongguan) Co., Ltd. and Zhongshan Chung Yuen in relation to the master supply agreement as referred to in (a) above;
(d) the supplemental agreement dated 21 December 2010 entered into between Nam Hing Circuit Board Company Limited and Nam Hing Circuit Board (Dongguan) Co., Ltd and Zhongshan Chung Yuen in relation to the master supply agreement as referred to in (a) above; and
(e) the supplemental agreement dated 21 December 2010 entered into among Nature Ample Limited, Nam Hing (B.V.I.) Limited and Mr. Lau Chung Yim in relation to the sale and purchase agreement dated 28 June 2010.

For further details of the above contracts and arrangements, please refer to the Company’s circular dated 24 December 2010 in respect of (i) major disposal and connected transaction; (ii) continuing connected transaction in relation to master supply agreement;(iii) discloseable and connected transaction in relation to provision of financial assistance under corporate guarantee; and (iv) discloseable and connected transaction in relation to provision of financial assistance by way of loans advances.

As at the Latest Practicable Date, none of the Directors or proposed Directors or expert has, directly or indirectly, any interest in any assets which have since 31 March 2010 (being the date to which the latest published audited accounts of the Company were made up) been acquired or disposed of by or leased to any member of the Group, or were proposed to be acquired or disposed of by or leased to any member of the Group.

6. COMPETING INTEREST

Nature Ample Limited is a company incorporated in the British Virgin Islands and wholly and beneficially owned by Mr. Lau Chung Yim, and executive Director.

On 28 June 2010, Nam Hing (B.V.I.) Limited as the Vendor, Nature Ample Limited as the Purchaser and Mr. Lau Chung Yim as guarantor entered into the sale and purchase agreement with regard to the disposal of the entire issued share capital of Cosmo Terrace Corporation, Fittingco Inc., Majestic Mountain Limited and Ottawa Enterprises Limited (the “ Disposed Group ”) and the relevant sale loans (the “ Disposal ”). Details of the Disposal are set out in the Company’s circular dated 24 December 2010. The Disposal was completed on 21 January 2011.

– 84 –

APPENDIX III

GENERAL INFORMATION

The Disposed Group is principally engaged in manufacturing of copper foil and laminate and trading of laminate with production facilities in the PRC and Thailand. Nam Hing Industrial Laminate Limited, a subsidiary of the Group, is engaged mainly in the trading of laminate business. The Disposed Group will supply their finished products to Nam Hing Industrial Laminate Limited for trading, which may compete, directly or indirectly, with the Group’s business.

Save for the above, as at the Latest Practicable Date, none of the Directors nor their respective associates was interested in any business apart from the Group’s business which completes or is likely to compete, either directly or indirectly, with the Group’s businesses pursuant to Rule 8.10 of the Listing Rules.

7. LITIGATION

No member of the Group is engaged in any litigation, arbitration or claim of material importance and no litigation, arbitration or claim of material importance is known to the Directors to be pending or threatened against any member of the Group as at the Latest Practicable Date.

8. DIRECTORS’ SERVICES CONTRACTS

As at the Latest Practicable Date, none of the Directors had any existing or proposed service contract with any member of the Group (excluding contracts expiring or determinable by the employer within one year without payment of compensation (other than statutory compensation)).

9. EXPERTS AND CONSENTS

The following are the qualifications of the experts who have given opinions and advices, which are contained in this Circular:

Name Qualification

China Merchants Securities a licensed corporation under the SFO to carry on type 1 (HK) Company Limited (dealing in securities), type 2 (dealing in future contracts), type 4 (advising on securities), type 6 (advising on corporate finance) and type 9 (asset management) regulated activities

SHINEWING (HK) CPA Certified Public Accountants Limited

Each of China Merchants Securities (HK) Company Limited and SHINEWING (HK) CPA Limited has given and not withdrawn their written consents to the issue of this Circular with the inclusion of its letters, references to its name and/or its advice in the form and context in which they respectively appear.

– 85 –

GENERAL INFORMATION

APPENDIX III

10. EXPERTS’ INTERESTS IN ASSETS

As at the Latest Practicable Date, each of China Merchants Securities (HK) Company Limited and SHINEWING (HK) CPA Limited:

(a) was not interested, either directly or indirectly, in any assets which have been acquired or disposed of by or leased to any member of the Group or are proposed to be acquired or disposed of by or leased to any member of the Group since 31 March 2010, being the date to which the latest published audited consolidated accounts of the Group were made up; and
(b) did not have any shareholding in any member of the Group or any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group.

11. MATERIAL ADVERSE CHANGE

The Directors are not aware of any material adverse change in the financial position or trading position of the Group since 31 March 2010, being the date to which the latest published audited financial statements of the Group was made up.

12. MISCELLANEOUS

(a) The registered office of the Company and the principal office of the Company is situated at 27th Floor, Yuen Long Trade Centre, 99-109 Castle Peak Road, Yuen Long, New Territories, Hong Kong.
(b) The Hong Kong branch share registrar and transfer office of the Company is Tricor Tengis Limited at 26/F Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong.
(c) The company secretary of the Company is Mr. Leung Chi Wing, Billy. Mr. Leung is a member of the Hong Kong Institute of Certified Public Accountants and The Association of Chartered Certified Accountants and a graduate of The Institute of Chartered Secretaries and Administrators in the United Kingdom. Mr. Leung holds a Bachelor’s degree in Accountancy and has extensive experiences in finance, accounting and company secretarial functions.
(d) The English text of this Circular and the accompanying form of proxy shall prevail over their respective Chinese texts in the case of inconsistency.

– 86 –

GENERAL INFORMATION

APPENDIX III

13. MATERIAL CONTRACTS

The following contracts (not being contracts in the ordinary course of business) have been entered into by the members of the Group within the two years immediately preceding the Latest Practicable Date:

(a) the non-binding memorandum of understanding dated 23 November 2009 (the “ MOU ”) entered into between the Company and Nurture Power Limited in relation to a possible acquisition of the entire issued share capital in Swift Profit International Limited;
(b) the supplement dated 9 December 2009 entered into between the Company and Nurture Power Limited in which certain conditions precedent were supplemented to the MOU;
(c) the placing agreement dated 17 December 2009 entered into between Chung Nam Securities Limited and the Company pursuant to which the Company has conditionally agreed to place 83,685,000 new shares of the Company, through Chung Nam Securities Limited on a fully underwritten basis, to not less than six placees, at a price of HK$0.63 per share;
(d) the sale and purchase agreement dated 15 April 2010 entered into between Nurture Power Limited as vendor and the Company as purchaser for the acquisition by the Company of such number of shares of US$1.00 each as representing the entire issued share capital of Swift Profit International Limited for a consideration of HK$3,000,000,000;
(e) the termination agreement dated 18 May 2010 entered into between the Company and Nurture Power Limited to terminate the agreement as referred to in (a) above;
(f) the placing agreement dated 31 May 2010 entered into between the Company and Cheong Lee Securities Limited, as the placing agent, in relation to the placing of, on a best effort basis, 100,500,000 new shares of the Company at HK$0.29 per share;
(g) the memorandum of understanding dated 18 May 2010 entered into by the Company and Nurture Power Limited, a company incorporated in the British Virgin Islands, in relation to the possible acquisition of the entire issued share capital in Swift Profit International Limited, a company incorporated in the British Virgin Islands with limited liability, by the Company from the Nurture Power Limited;

– 87 –

APPENDIX III

GENERAL INFORMATION

(h) the supplemental memorandum of understanding dated 10 June 2010 entered into by the Company and Nurture Power Limited, a company incorporated in the British Virgin Islands, in relation to the possible acquisition of the entire issued share capital in Swift Profit International Limited, a company incorporated in the British Virgin Islands with limited liability, by the Company from the Nurture Power Limited;
(i) the sale and purchase agreement dated 28 June 2010 entered into between Nam Hing (B.V.I.) Limited as vendor, Nature Ample Limited as purchaser and Mr. Lau Chung Yim as the guarantor in relation to the sale and purchase of (a) 10 issued shares of US$1.00 each of Cosmo Terrace Corporation (“ Cosmo ”) (together with its subsidiaries as the “ Cosmo Group ”), being the entire issued share capital of Cosmo; (b) 10,000 issued shares of US$1.00 each of Fittingco Inc. (“ Fittingco ”) (together with its subsidiaries as the “ Fittingco Group ”), being the entire issued share capital of Fittingco; (c) two issued shares of HK$10.00 each of Majestic Mountain Limited (“ Majestic ”) (together with its subsidiaries as the “ Majestic Group ”), being the entire issued share capital of Majestic; (d) 10 issued shares of US$1.00 each of Ottawa Enterprises Limited (“ Ottawa ”) (together with its subsidiaries as the “ Ottawa Group ”) (the Cosmo Group, the Fittingco Group, the Majestic Group and the Ottawa Group, collectively, the “ Disposed Group ”); and (e) the all obligations, liabilities and debts owing or incurred by Disposed Group to the Group (excluding the Disposed Group) as at the completion of the Disposal for a consideration of HK$28,000,000 in cash (the “ Connected Disposal ”);
(j) the master supply agreement dated 28 June 2010 entered into between Zhongshan Chung Yuen Electric Applied Materials Company Limited (“ Zhongshan CY ”) as supplier and Nam Hing Circuit Board Company Limited (“ Nam Hing HK ”) and Nam Hing Circuit Board (Dongguan) Co., Ltd. (“ Nam Hing DG ”) as purchaser in relation to the supply and purchase of industrial laminates for a term up to 31 March 2012 commencing from the completion of the Connected Disposal with the maximum aggregate annual value for period ending 31 March 2011 and the year ending 31 March 2012 at HK$10,000,000 and HK$15,000,000 respectively;
(k) the placing agreement dated 2 July 2010 entered into between the Company and Cheong Lee Securities Limited, as the placing agent, in relation to the placing of, on a best effort basis, convertible bonds for an aggregate principal amount of HK$200,000,000;
(l) the sale and purchase agreement dated 16 July 2010 entered into between Nurture Power Limited as vendor and the Company as purchaser for the acquisition of the 9.9% interest in the entire issued share capital of Swift Profit International Limited for a consideration of HK$170,000,000;

– 88 –

GENERAL INFORMATION

APPENDIX III

(m) the supplemental agreement dated 30 September 2010 entered into among Nature Ample Limited as Purchaser, Nam Hing (B.V.I.) Limited as Vendor and Mr. Lau Chung Yim as guarantor in relation to extending the long stop date of the sale and purchase agreement as referred to in (f) above;
(n) the supplemental agreement dated 30 September 2010 entered into between Nam Hing Circuit Board Company Limited and Nam Hing Circuit Board (Dongguan) Co., Ltd. and Zhongshan Chung Yuen in relation to the master supply agreement as referred to in (g) above;
(o) the agreement dated 28 October 2010 for sale and purchase of a parcel of land situate at No. 148, Xiang Yang Road, Suzhou National New & Hi-tech Industrial Development Zone（蘇州國家高新技術產業開發區向陽路148號）and buildings erected thereon and entered into amongst Suzhou Nam Hing Industrial Laminate Co., Ltd., the 蘇州市土地儲備中心 (Suzhou Municipal Land Reserve Centre) and 蘇州國家高新技術產業開發區管理委員會 (Suzhou National New & Hi-tech Industrial Development Zone) for a consideration of RMB62,506,663;
(p) the framework agreement dated 19 November 2010 entered into between the Company, as purchaser, and Lucky Start Holdings Limited, All Prosper Group Limited, Triumph Return Holdings Limited and Jia Sheng Holdings Limited, as vendors, in relation to the potential acquisition by the Company of 80% of the entire issued share capital of Ideal Market Holdings Limited, pursuant to which the Company had paid the refundable earnest money of HK$180,000,000, which shall be treated as part of the consideration paid if a formal agreement is entered into;
(q) the supplemental agreement dated 21 December 2010 entered into between Nam Hing Circuit Board Company Limited and Nam Hing Circuit Board (Dongguan) Co., Ltd and Zhongshan Chung Yuen in relation to the master supply agreement as referred to in (g) above;
(r) the supplemental agreement dated 21 December 2010 entered into among Nature Ample Limited, Nam Hing (B.V.I.) Limited and Mr. Lau Chung Yim in relation to the sale and purchase agreement as referred to in (f) above;
(s) the letter of confirmation dated 31 December 2010 in relation to item (h) above; and
(t) the underwriting agreement dated 31 January 2011 entered into between the Company and Radland International Limited in relation to the underwriting arrangement in respect of a proposed issue by way of rights issue as announced in the announcement dated 31 January 2011 of the Company.

– 89 –

GENERAL INFORMATION

APPENDIX III

14. CORPORATE INFORMATION AND PARTIES INVOLVED IN THE RIGHTS ISSUE

Registered office & Head office and principal place of business in Hong Kong

27/F., Yuen Long Trade Centre, 99-109 Castle Peak Road, Yuen Long, New Territories, Hong Kong

Authorised representatives

Ms. Deng Hong Mei 27/F., Yuen Long Trade Centre, 99-109 Castle Peak Road, Yuen Long, New Territories, Hong Kong

Mr. Leung Chi Wing, Billy 27/F., Yuen Long Trade Centre, 99-109 Castle Peak Road, Yuen Long, New Territories, Hong Kong

Company secretary

Mr. Leung Chi Wing, Billy 27/F., Yuen Long Trade Centre, 99-109 Castle Peak Road, Yuen Long, New Territories, Hong Kong

– 90 –

GENERAL INFORMATION

APPENDIX III

Legal advisers to the Company As to Hong Kong Law and in Relation to Angela Ho & Associates the Rights Issue 1106, Tower 1, Lippo Centre, 89 Queensway, Hong Kong As to Bermuda Law Conyers Dill & Pearman 2901 One Exchange Square 8 Connaught Place Central Hong Kong Auditors and reporting SHINEWING (HK) CPA Limited accountants 43/F., The Lee Gardens 33 Hysan Avenue Causeway Bay Hong Kong Independent Financial Adviser China Merchants Securities (HK) Company Limited 48/F., One Exchange Square, Central, Hong Kong Underwriter Radland International Limited 26/F., China United Centre, 28 Marble Road, North Point, Hong Kong Branch share registrar and Tricor Tengis Limited transfer office in Hong Kong 26/F., Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong

– 91 –

GENERAL INFORMATION

APPENDIX III

Principal banker

DBS Bank (Hong Kong) Limited G/F, The Center, 99 Queen’s Road Central, Central, Hong Kong DBS Bank Limited, Shanghai Branch 18th Floor DBS Bank Tower, 1318 Lujiazui Ring Road, Pudong, Shanghai, PRC The Hongkong and Shanghai Banking Corporation Limited 1 Queen’s Road Central, Central, Hong Kong Bank of China (Hong Kong) Limited 1 Garden Road, Hong Kong Shanghai Commercial Bank Limited 12 Queen’s Road Central, Central, Hong Kong Industrial and Commercial Bank of China Limited 33/F, ICBC Tower, 3 Garden Road, Central, Hong Kong

15. EXPENSES

The expenses in connection with the Right Issue, including financial advisory fees, underwriting commission (based on the scenario that 3,030,531,634 Rights Shares and 3,122,976,064 Rights Shares are issued), printing, registration, translation, legal and accountancy charges are estimated to be approximately HK$7.81 million to HK$8 million, which are payable by the Company.

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GENERAL INFORMATION

APPENDIX III

16. PARTICULARS OF DIRECTORS AND SENIOR MANAGEMENT STAFF OF THE COMPANY

(a) Name and address of Directors

Name Address

Executive Director:

Ms. Chen Tong 27/F., Yuen Long Trade Centre (Chairman) 99-109 Castle Peak Road, Yuen Long, New Territories, Hong Kong Ms. Deng Hong Mei 27/F., Yuen Long Trade Centre 99-109 Castle Peak Road, Yuen Long, New Territories, Hong Kong Ms. Chan Ching Ho, Kitty 27/F., Yuen Long Trade Centre 99-109 Castle Peak Road, Yuen Long, New Territories, Hong Kong Mr. Xiang Liang 27/F., Yuen Long Trade Centre 99-109 Castle Peak Road, Yuen Long, New Territories, Hong Kong Mr. Lau Chung Yim 27/F., Yuen Long Trade Centre 99-109 Castle Peak Road, Yuen Long, New Territories, Hong Kong

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GENERAL INFORMATION

APPENDIX III

Name Address Non-executive Director: Ms. Yao Zhengwei 27/F., Yuen Long Trade Centre 99-109 Castle Peak Road, Yuen Long, New Territories, Hong Kong Independent nonexecutive Directors: Mr. Yau Kwan Shan 27/F., Yuen Long Trade Centre 99-109 Castle Peak Road, Yuen Long, New Territories, Hong Kong Mr. Lam Kwun Fu 27/F., Yuen Long Trade Centre 99-109 Castle Peak Road, Yuen Long, New Territories, Hong Kong Ms. Zhou Jue 27/F., Yuen Long Trade Centre 99-109 Castle Peak Road, Yuen Long, New Territories, Hong Kong

Non-executive Director:

Independent nonexecutive Directors:

– 94 –

GENERAL INFORMATION

APPENDIX III

(b) Profiles of Directors

Executive Directors

Ms. Chen Tong

Ms. Chen Tong (“ Ms. Chen ”), aged 47, has been Executive Director and Chairman of the Company since 15 December 2010. Ms. Chen, graduated from Tongji University in 2002 with bachelor degree in administrative management. She is currently the vice general manager of a logistic company in the PRC. She has over 10 years experience in the banking industry and is an economist. Ms. Chen is the sister of Mr. Chen Zhong who is a substantial shareholder of the Company interested in approximately 5.9% equity interest in the Company.

Ms. Chen does not hold any other major appointments and has not held any position or directorships in any other listed public companies in the last three years.

Ms. Deng Hong Mei

Ms. Deng Hong Mei (“ Ms. Deng ”), aged 39, is an Executive Director and a member of the executive committee of the Company. Ms. Deng joined the Group in November 2009. She has served as a project manager in a private company in Hong Kong for about 9 years and has extensive experience in the field of business and project management.

Ms. Deng does not hold any other major appointments and has not held any position or directorships in any other listed public companies in the last three years.

Ms. Chan Ching Ho, Kitty

Ms. Chan Ching Ho, Kitty (“ Ms. Chan ”), aged 54, is an Executive Director and a member of the executive committee of the Company. Ms. Chan joined the Group in March 2010. She holds (i) a certificate in real estate agency practice from School of Professional and Continuing Education, the University of Hong Kong; (ii) a professional diploma in estate and facilities management from the Hong Kong Productivity Council; and (iii) a certificate course for management and instructors in security and property management from Hong Kong Collage of Technology. Prior to joining the Company, Ms. Chan has around 30 years’ experience in sales and marketing and property management in Hong Kong.

Ms. Chan does not hold any other major appointments and has not held any position or directorships in any other listed public companies in the last three years.

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GENERAL INFORMATION

APPENDIX III

Mr. Xiang Liang

Mr. Xiang Liang (“ Mr. Xiang ”), aged 41, is an Executive Director and a member of the executive committee of the Company. Mr. Xiang joined the Group in March 2010. He holds a degree in accounting and finance from Shanghai TV University and is a banker of Hongkou Qu, Shanghai Branch, China Construction Bank for more than 20 years.

Mr. Xiang does not hold any other major appointments and has not held any position or directorships in any other listed public companies in the last three years.

Mr. Lau Chung Yim

Mr. Lau Chung Yim (“ Mr. Lau ”), aged 60, is an Executive Director of the Company. He holds a bachelor’s degree in mechanical engineering from the University of Massachusetts at Lowell, the United States of America and is a registered professional engineer in the province of Ontario, Canada. He joined the Group in 1977 and has over 30 years’ experience in the production of laminates and printed circuit boards.

Mr. Lau does not hold any other major appointments and has not held any position or directorships in any other listed public companies in the last three years.

Non-executive Director

Ms. Yao Zhengwei

Ms. Yao Zhengwei (“ Ms. Yao ”), aged 24, has been Non-executive Director of the Company since 26 January 2011. Ms. Yao graduated in Shanghai I&C Foreign Languages School. She is currently studying Finance in Shanghai Jiao Tong University and working in the investment division of a fund management company.

Ms. Yao does not hold any other major appointments and has not held any position or directorships in any other listed public companies in the last three years.

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GENERAL INFORMATION

APPENDIX III

Independent non-Executive Directors

Mr. Yau Kwan Shan

Mr. Yau Kwan Shan (“ Mr. Yau ”), aged 47, was appointed as an independent non-executive director and the Chairman of the Audit Committee of the Company with effect from 30 November 2008. He is a fellow member of both the Hong Kong Institute of Certified Public Accountants and the Association of Chartered Certified Accountants. He has extensive experience in accounting and financial management. He had previously worked for an international accounting firm and a number of companies listed on the Main Board of The Stock Exchange of Hong Kong Limited. He had been the financial controller and company secretary of the Group from September 1996 to February 2000.

Mr. Yau has not held any directorships in any listed public companies in the last three years.

Mr. Lam Kwun Fu

Mr. Lam Kwun Fu (“ Mr. Lam ”), aged 52, has been Independent Nonexecutive Director of the Company since 15 December 2010. Mr. Lam is currently the consultant of Li, Wong, Lam & W.I. Cheung. He has been a practicing solicitor in Hong Kong since 1992. Mr. Lam graduated from the Chinese University of Hong Kong and University of Leeds with bachelor degrees.

Mr. Lam does not hold any other major appointments and has not held any position or directorships in any other listed public companies in the last three years.

Ms. Zhou Jue

Ms. Zhou Jue (“ Ms. Zhou ”), aged 24, has been Independent Non-executive Director of the Company since 15 December 2010. Ms. Zhou studied in Shanghai Maritime University in corporate management. She is currently an investment consultant in an investment management company and she has experience in hotel management.

Ms. Zhou does not hold any other major appointments and has not held any position or directorships in any other listed public companies in the last three years.

– 97 –

GENERAL INFORMATION

APPENDIX III

(c) Profiles of senior management staff of the Company

Mr. Lau Chung Pun, Daniel

Mr. Lau Chung Pun, Daniel, aged 43, is a younger brother of Mr. Lau Chung Yim. Mr. Lau joined the Group in 1995 and is the Assistant General Manager of Zhongshan Nam Hing Insulating Material Limited. He holds a bachelor’s degree and a master’s degree in electrical engineering from the University of Southern California, the USA. He had extensive experience in computer software simulations before joining the Group. He has not held any other positions or directorships in any other listed public companies in the last three years.

Ms. Ip Sau Wah Katherine

Ms. Ip Sau Wah Katherine, aged 50, is the Administrative Manager of the Group. She joined the Group in 1997 and has extensive experience in office administration and the human resources field. She has not held any other positions or directorships in any other listed public companies in the last three years.

Mr. Leung Chi Wing, Billy

Mr. Leung Chi Wing, Billy is the Company’s secretary, authorized representative and authorized person to accept service of process and notices on behalf of the Company in Hong Kong. He joined the Group in January 2011. He is a member of the Hong Kong Institute of Certified Public Accountants and The Association of Chartered Certified Accountants and a graduate of The Institute of Chartered Secretaries and Administrators in the United Kingdom. He holds a Bachelor’s degree in Accountancy and has extensive experiences in finance, accounting and company secretarial functions. He has not held any directorships in any other listed public companies in the last three years.

– 98 –

GENERAL INFORMATION

APPENDIX III

17. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection at the principal place of business of the Company at 27/F Yuen Long Trade Centre, 99-109 Castle Peak Road, Yuen Long, New Territories, Hong Kong during normal business hours on any weekday other than public holidays, up to and including the date of the Second SGM:

(a) the memorandum of association and Bye-Laws of the Company;
(b) the “Letter from the Independent Board Committee” as set out in this Circular;
(c) the “Letter from the Independent Financial Adviser” as set out in this Circular;
(d) the annual reports of the Company for each of the two financial years ended 31 March 2010;
(e) the written consents referred to in the paragraph headed “Experts and Consents” to this Appendix;
(f) the material contracts referred to in the paragraph headed “Material Contracts” to this Appendix;
(g) the unaudited pro-forma financial information of the Group as set out in Appendix II to this Circular;
(h) a copy of each of the circulars issued by the Company pursuant to the requirements set out in Chapter 14 and/or 14A of the Listing Rules since 31 March 2010, being the date of the latest published audited accounts of the Company; and
(i) this Circular.

– 99 –

NOTICE OF FIRST SPECIAL GENERAL MEETING

==> picture [54 x 54] intentionally omitted <==

NAM HING HOLDINGS LIMITED 南興集團有限公司[*]

(Incorporated in Bermuda with limited liability)

(Stock Code: 986)

NOTICE IS HEREBY GIVEN that a special general meeting (the “ Meeting ”) of Nam Hing Holdings Limited (the “ Company ”) will be held at 27/F., Yuen Long Trade Centre, 99-109 Castle Peak Road, Yuen Long, New Territories, Hong Kong on Friday, 18 March 2011 at 10:30 a.m. for the purpose of considering and, if thought fit, passing the following resolutions which will be proposed as a special or an ordinary resolution(s) with or without amendment:

SPECIAL RESOLUTIONS

“ THAT subject to the fulfillment of all the conditions set out in the section headed “Conditions of the Capital Reorganization” in the circular of the Company dated 23 February 2011 (the “ Circular ”, a copy of which has been tabled at the meeting marked “ A ” and initialed by the chairman of the meeting for the purpose of identification), with effect from the date immediately after the date of passing this resolution:
(a) the Share Consolidation of every sixteen (16) Shares of HK$0.10 each in the issued share capital of the Company into one (1) issued Consolidated Share of HK$1.60 each in the issued share capital of the Company;
(b) the Capital Reduction involving the reduction of the issued share capital of the Company through a cancellation of the paid-up capital of the Company to the extent of HK$1.599 on each of the issued Consolidated Shares so that the nominal value of each issued Consolidated Share will be reduced from HK$1.60 to HK$0.001;
(c) the credit arising from the Capital Reduction be transferred to the contributed surplus account of the Company and the Directors be and are hereby authorized to apply the entire amount standing to the credit of the contributed surplus account of the Company in such manner as they consider appropriate, including but not limited to setting off against the accumulated losses of the Company from time to time;

For identification purposes only

– 100 –

NOTICE OF FIRST SPECIAL GENERAL MEETING

(d) the Subdivision of each authorized but unissued Share into 100 New Shares of HK$0.001 each; and
(e) any of the Directors be and is hereby authorised to do all things and acts and sign all documents which he considers necessary, desirable, or expedient in connection with the implementation of the Capital Reorganization.”
“ THAT subject to the fulfillment of all the conditions set out in the section headed “Conditions of the Change of Company Name” in the Circular, with effect from the date immediately after the date of passing this resolution:
(a) change of the English name of the Company from “Nam Hing Holdings Limited” to “China Environmental Energy Investment Limited” and the adoption of the Chinese name “中國環保能源投資有限公司” for identification purpose only to replace the existing Chinese name “南興集團有限公司” which was adopted for identification purpose only, be and is hereby approved; and
(b) any of the Directors be and is hereby authorised to do all things and acts and sign all documents which he considers necessary, desirable, or expedient in connection with the implementation of the Change of Company Name.”

ORDINARY RESOLUTION

“ THAT subject to the fulfillment or waiver of the conditions set out in the underwriting agreement (the “ Underwriting Agreement ”) dated 31 January 2011 in respect of the proposed rights issue by the Company and entered into between the Company and Radland International Limited (the “ Underwriter ”) (a copy of the Underwriting Agreement has been produced to the meeting marked “ B ” and signed by the Chairman of the meeting for the purpose of identification):
(a) the allotment and issue of not less than 3,030,531,634 New Shares and not more than 3,122,976,064 New Shares ranking pari passu in all respects with the shares of the Company (the “ Rights Shares ”) of HK$0.001 each in the share capital of the Company pursuant to an offer by way of rights to the holders of Shares (the “ Shareholders ”) at the subscription price of HK$0.068 per Rights Share in the proportion of twenty six (26) Rights Shares for every one (1) New Share held by the Shareholders whose names appear on the register of members of the Company on Wednesday, 30 March 2011 (or such later date as the Company and the Underwriter may agree to be the record date for such Rights Issue) (the “ Record Date ”) other than those Shareholders whose addresses on the Record Date are outside Hong Kong (the “ Overseas Shareholders ”) (the “ Rights Issue ”) as described in further details in the Circular, be and is hereby approved;

For identification purposes only

– 101 –

NOTICE OF FIRST SPECIAL GENERAL MEETING

(b) any one or more director(s) of the Company be and is/are hereby authorised to allot and issue the Rights Shares pursuant to or in connection with the Rights Issue notwithstanding that the same may be offered, allotted or issued otherwise than pro rata to the existing shareholdings of the Shareholders and, in particular, the directors of the Company may make such exclusions or other arrangements in relation to the Overseas Shareholders as they deem necessary or expedient having regard to any restrictions or obligations under the laws of, or the requirements of any recognised regulatory body or any stock exchange in, any territory outside Hong Kong, and to do all such acts and things as they consider necessary, desirable or expedient to give effect to any or all other transactions contemplated in this resolution; and
(c) the Directors be and are hereby authorised for and on behalf of the Company to do all acts and things as they deem, in their absolute discretion, necessary in connection with the allotment and issue of the Rights Shares, the implementation of the Rights Issue and the Underwriting Agreement, the exercise or enforcement of any of the Company’s rights under the Underwriting Agreement and to make and agree such variations of the terms of the Underwriting Agreement as they may in their discretion consider to be appropriate and in the interests of the Company.”

By Order of the Board Nam Hing Holdings Limited Chen Tong Chairman

Hong Kong, 23 February 2011

Registered office & Principal Place of Business:

27/F., Yuen Long Trade Centre, 99-109 Castle Peak Road,

Yuen Long, New Territories, Hong Kong

– 102 –

NOTICE OF FIRST SPECIAL GENERAL MEETING

Notes:

A form of proxy for use at the Meeting is enclosed herewith.
Any member of the Company entitled to attend and vote at the Meeting shall be entitled to appoint another person as his proxy to attend and vote instead of him. A member of the Company who is the holder of two or more shares may appoint more than one proxy to represent him and vote on his behalf at a general meeting of the Company. A proxy need not be a member of the Company.
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 share as if he were solely entitled thereto; but if more than one of such joint holders is 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 in respect thereof.
The instrument appointing a proxy shall 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 or attorney duly authorised.
The instrument appointing a proxy and the power of attorney or other authority, if any, under which it is signed or a notarially certified copy of that power or authority shall be deposited at the office of the Company’s share registrar, Tricor Tengis Limited, at 26/F., Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong, not less than 48 hours before the time for holding the Meeting or adjourned meeting or poll (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.
Delivery of an instrument appointing a proxy shall not preclude a member from attending and voting in person at the Meeting or poll concerned and, in such event, the instrument appointing a proxy shall be deemed to be revoked.

– 103 –

NOTICE OF SECOND SPECIAL GENERAL MEETING

==> picture [54 x 54] intentionally omitted <==

NAM HING HOLDINGS LIMITED 南興集團有限公司[*]

(Incorporated in Bermuda with limited liability)

(Stock Code: 986)

NOTICE IS HEREBY GIVEN that a special general meeting (the “ Meeting ”) of Nam Hing Holdings Limited (the “ Company ”) will be held at 27/F., Yuen Long Trade Centre, 99-109 Castle Peak Road, Yuen Long, New Territories, Hong Kong on Wednesday, 27 April 2011 at 9:00 a.m. for the purpose of considering and, if thought fit, passing the following resolution which will be proposed as an ordinary resolution with or without amendment:

ORDINARY RESOLUTION

“ THAT :

(a) subject to paragraph (c) below, the exercise by the directors of the Company (the “ Directors ”) during the Relevant Period (as defined in paragraph (d) below) of all the powers of the Company to allot, issue and deal with new Shares with an aggregate nominal amount of not exceeding 20% of the aggregate nominal amount of the issued share capital of the Company;
(b) the approval in paragraph (a) above shall be in addition to any other authorisation given to the Directors and shall authorise the Directors during the Relevant Period to make or grant offers, agreements, options and rights of exchange or conversion which might require the exercise of such powers after the end of the Relevant Period;
(c) the aggregate nominal amount of share capital allotted or agreed conditionally or unconditionally to be allotted (whether pursuant to an option or otherwise) by the Directors pursuant to the approval granted in paragraph (a) above, otherwise than pursuant to (i) a Rights Issue (to be defined in paragraph (d) below), or (ii) any share option schemes of the Company approved by The Stock Exchange of Hong Kong Limited, or (iii) any scrip dividend or similar arrangement providing for the allotment of shares in lieu of the whole or part of a dividend on shares of the Company in accordance with the articles of association of the Company, shall not exceed 20 per cent. of the aggregate nominal amount of the issued share capital of the Company as at the date of passing this resolution, and the said approval shall be limited accordingly; and
For identification purposes only

– 104 –

NOTICE OF SECOND SPECIAL GENERAL MEETING

(d) for the purposes of this resolution:

“ Relevant Period ” means the period from 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 day by which the next annual general meeting of the Company is required by law or the Company’s Bye-Laws to be held; or
(iii) the date upon which such authority is revoked or varied by an ordinary resolution of the Shareholders in a general meeting of the Company; and

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

By Order of the Board Nam Hing Holdings Limited Chen Tong Chairman

Hong Kong, 23 February 2011

Registered office & Principal Place of Business:

27/F., Yuen Long Trade Centre, 99-109 Castle Peak Road, Yuen Long, New Territories, Hong Kong

– 105 –

NOTICE OF SECOND SPECIAL GENERAL MEETING

Notes:

A form of proxy for use at the Meeting is enclosed herewith.
Any member of the Company entitled to attend and vote at the Meeting shall be entitled to appoint another person as his proxy to attend and vote instead of him. A member of the Company who is the holder of two or more shares may appoint more than one proxy to represent him and vote on his behalf at a general meeting of the Company. A proxy need not be a member of the Company.
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 share as if he were solely entitled thereto; but if more than one of such joint holders is 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 in respect thereof.
The instrument appointing a proxy shall 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 or attorney duly authorised.
The instrument appointing a proxy and the power of attorney or other authority, if any, under which it is signed or a notarially certified copy of that power or authority shall be deposited at the office of the Company’s share registrar, Tricor Tengis Limited, at 26/F., Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong, not less than 48 hours before the time for holding the Meeting or adjourned meeting or poll (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.
Delivery of an instrument appointing a proxy shall not preclude a member from attending and voting in person at the Meeting or poll concerned and, in such event, the instrument appointing a proxy shall be deemed to be revoked.

– 106 –

AI assistant

Dufu Liquor Group Limited — Proxy Solicitation & Information Statement 2011

49605_rns_2011-02-22_888a2c38-8b43-4769-ba79-a7d02c6df906.pdf

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

NAM HING HOLDINGS LIMITED 南興集團有限公司[*]

CONTENTS

EXPECTED TIMETABLE

EXPECTED TIMETABLE

EXPECTED TIMETABLE

Notes:

EXPECTED TIMETABLE

EFFECT OF BAD WEATHER ON THE LATEST TIME FOR ACCEPTANCE OF AND PAYMENT FOR THE RIGHTS SHARES AND FOR APPLICATION AND PAYMENT FOR EXCESS RIGHTS SHARES

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

LETTER FROM THE BOARD

NAM HING HOLDINGS LIMITED 南興集團有限公司[*]

(IV) REFRESHMENT OF GENERAL MANDATE AND NOTICES OF SPECIAL GENERAL MEETINGS

INTRODUCTION

LETTER FROM THE BOARD

(I) CAPITAL REORGANIZATION

LETTER FROM THE BOARD

Change in board lot size

Conditions of the Capital Reorganization

Reasons for the Capital Reorganization and impact on the Company and the Shareholders

LETTER FROM THE BOARD

Application for listing of New Shares

LETTER FROM THE BOARD

Arrangement on odd lot trading

Convertible Bonds

LETTER FROM THE BOARD

Exchange of share certificates

Warning

(II) CHANGE OF COMPANY NAME

LETTER FROM THE BOARD

Reasons for the Change of Company Name

Conditions of the Change of Company Name

Effects of the Change of Company Name

LETTER FROM THE BOARD

(III) RIGHTS ISSUE

Issue statistics

LETTER FROM THE BOARD

Qualifying Shareholders

Closure of register of member

Rights of Overseas Shareholders

LETTER FROM THE BOARD

LETTER FROM THE BOARD

Subscription Price

LETTER FROM THE BOARD

Basis of provisional allotment

Status of the Rights Shares

Fractions of Rights Shares

Application for excess Rights Shares

LETTER FROM THE BOARD

Share certificates and refund cheques for Rights Shares

LETTER FROM THE BOARD

Application for listing

Conditions of the Rights Issue

LETTER FROM THE BOARD

Undertaking

LETTER FROM THE BOARD

The Underwriting Agreement

LETTER FROM THE BOARD

Termination of the Underwriting Agreement

LETTER FROM THE BOARD

Shareholding structure of the Company

LETTER FROM THE BOARD

LETTER FROM THE BOARD

Reasons for the Rights Issue and use of proceeds

Fund raising exercise of the Company

LETTER FROM THE BOARD

Possible adjustments to the Convertible Bonds

Warning of the risks of dealing in Shares and Rights Shares

LETTER FROM THE BOARD

(IV) REFRESHMENT OF GENERAL MANDATE

Background of the Refreshment of General Mandate

Dufu Liquor Group Limited Proxy Solicitation & Information Statement 2011