Fujian Holdings Limited — Proxy Solicitation & Information Statement 2011

Apr 1, 2011

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 stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

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

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

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FUJIAN HOLDINGS LIMITED

(Incorporated in Hong Kong with limited liability)

(Stock Code: 00181)

PROPOSALS FOR GRANT OF GENERAL MANDATES TO ISSUE AND REPURCHASE SHARES, RE-ELECTION OF DIRECTORS AND NOTICE OF ANNUAL GENERAL MEETING

A notice convening the annual general meeting of the Company to be held at 10:00 a.m. on Thursday, 28 April, 2011 at Ballroom, 1st Floor, South Pacific Hotel, 23 Morrison Hill Road, Wanchai, Hong Kong or any adjournment thereof is set out on pages 14 to 17 of this circular. A form of proxy for use at the annual general meeting is enclosed with this circular. Such form of proxy is also published on the websites of The Stock Exchange of Hong Kong Limited (www.hkexnews.hk) and the Company (www.fujianholdings.com) respectively.

Whether or not you are able to attend the meeting, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon to the registered office of the Company at Unit 1216, 12/F., China Merchants Tower, Shun Tak Centre, 168-200 Connaught Road Central, Hong Kong, as soon as practicable and in any event not less than 48 hours before the time appointed for the holding of the meeting or any adjournment meeting (as the case may be). Completion and return of the form of proxy will not preclude you from attending and voting in person at the meeting or at any adjournment meeting thereof should you so wish.

Hong Kong, 4 April, 2011

DEFINITIONS

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

“AGM”	the annual general meeting of the Company to be held
	at 10:00 a.m. on Thursday, 28 April, 2011 at Ballroom,
	1st Floor, South Pacific Hotel, 23 Morrison Hill Road,
	Wanchai, Hong Kong
“Articles”	the articles of association of the Company
“associate(s)”	has the meaning ascribed to it under the Listing Rules
“Board”	the board of Directors or a duly authorised committee
	thereof
“Company”	Fujian Holdings Limited, a company incorporated in Hong
	Kong with limited liability, the shares of which are listed on
	the Stock Exchange
“connected person(s)”	has the meaning ascribed to it under the Listing Rules
“Directors”	the directors of the Company
“General Mandate”	the general and unconditional mandate to the Directors
	to allot, issue and otherwise deal with the Shares with
	an aggregate nominal value not exceeding 20% of the
	aggregate nominal value of the share capital of the
	Company in issue at the date of the passing of the relevant
	resolution granting the general mandate at the AGM
“Hong Kong”	the Hong Kong Special Administrative Region of the
	Peoples’ Republic of China
“Latest Practicable Date”	29 March, 2011, being the latest practicable date prior
	to the printing of this circular for ascertaining certain
	information contained in this circular
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock
	Exchange, as amended from time to time

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DEFINITIONS

“Repurchase Mandate”	the general and unconditional mandate proposed to be
	granted to the Directors to repurchase the Shares with
	an aggregate nominal amount not exceeding 10% of
	the aggregate nominal value of the share capital of the
	Company in issue as at the date of passing the resolution
	granting such repurchase mandate at the AGM
“SFO”	The Securities and Futures Ordinance (Chapter 571 of the
	Laws of Hong Kong), as amended from time to time
“Share(s)”	ordinary share(s) of HK$0.125 each (or such other amount
	as such ordinary share(s) may be divided or consolidated or
	converted into) in the capital of the Company
“Shareholder(s)”	holder(s) of the Share(s) in issue
“Share Repurchase Rules”	the relevant rules set out in the Listing Rules to regulate the
	repurchase by companies with primary listing on the Stock
	Exchange of their own securities on the Stock Exchange
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“substantial shareholders”	has the meaning ascribed to it under the Listing Rules
“Takeovers Code”	the Hong Kong Code on Takeovers and Mergers
“HK$ and cents”	the lawful currency of Hong Kong, Hong Kong dollars and
	cents respectively
“%”	per cent.

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LETTER FROM THE BOARD

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FUJIAN HOLDINGS LIMITED

(Incorporated in Hong Kong with limited liability)

(Stock Code: 00181)

Executive Directors: Wang Xiaowu (Chairman) Wang Ruilian Liu Xiaoting

Non-executive Directors: Ye Tao Feng Qiang

Registered Office: Unit 1216, 12th Floor China Merchants Tower Shun Tak Centre 168-200 Connaught Road Central Hong Kong

Independent Non-executive Directors: Lam Kwong Siu Cheung Wah Fung, Christopher Leung Hok Lim

Hong Kong, 4 April, 2011

To the Shareholders

Dear Sir or Madam,

PROPOSALS FOR GRANT OF GENERAL MANDATES TO ISSUE AND REPURCHASE SHARES, RE-ELECTION OF DIRECTORS AND NOTICE OF ANNUAL GENERAL MEETING

1. INTRODUCTION

The purpose of this circular is to provide you with information regarding the proposed resolutions relating to the granting of the general mandates to enable you to make an informed voting decision.

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LETTER FROM THE BOARD

At the AGM, ordinary resolutions will be proposed to grant to the Directors general and unconditional mandates to issue and repurchase securities of the Company since the previous general mandates granted on 24 May, 2010 to the Directors will expire at the AGM.

2. GENERAL MANDATE TO ISSUE SHARES

At the AGM, an ordinary resolution will be proposed to grant the Directors a general and unconditional mandate to allot, issue and deal with new Shares up to a maximum of 20% of the aggregate nominal value of the issued share capital of the Company as at the date of passing such resolution. Another ordinary resolution will be proposed to increase the aforesaid 20% limit by the amount of any Shares repurchased by the Company under the authority of the Repurchase Mandate up to a maximum of 10% of the aggregate nominal value of the issued share capital of the Company as at the date of passing of such resolution.

3. GENERAL MANDATE TO REPURCHASE SHARES

At the AGM, an ordinary resolution will be proposed that the Directors be granted the Repurchase Mandate to exercise all powers of the Company to repurchase Shares not exceeding 10% of the aggregate nominal value of the issued share capital of the Company as at the date of passing of such resolution. The Company’s authority is restricted to the purchase of the Company’s securities on the Stock Exchange and otherwise in accordance with the Listing Rules.

In accordance with the Share Repurchase Rules, which regulate the repurchase by companies with a primary listing on the Stock Exchange of their own securities, the Company is required to send to Shareholders an explanatory statement containing information reasonably necessary to enable Shareholders to make an informed decision on whether to vote for or against the resolution to approve the purchase by the Company of its own Shares. This explanatory statement is set out in Appendix I to this circular.

4. RE-ELECTION OF DIRECTORS

Pursuant to the Articles, Mr. Liu Xiaoting, Mr. Leung Hok Lim and Mr. Feng Qiang will retire from office at the AGM and, being eligible, offer themselves for re-election. Details of such Directors required to be disclosed under the Listing Rules are set out in Appendix II to this circular.

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LETTER FROM THE BOARD

5. ANNUAL GENERAL MEETING

Notice of the AGM to be held at 10:00 a.m. on Thursday, 28 April, 2011 at Ballroom, 1st Floor, South Pacific Hotel, 23 Morrison Hill Road, Wanchai, Hong Kong, is set out on pages 14 to 17 of this circular, at which, among others things, the resolutions relating to the General Mandate and the Repurchase Mandate will be proposed to the Shareholders.

Pursuant to the amendments to the Listing Rules, any vote of shareholders at a general meeting must be taken by poll under Rule 13.39(4) of the Listing Rules. Accordingly, all resolutions will be put to vote by way of poll at the AGM. An announcement on the poll vote results will be made by the Company after the AGM in the manner prescribed under Rule 13.39(5) of the Listing Rules.

A form of proxy for the AGM is enclosed with this circular. Whether or not you intend to be present at the meeting, you are requested to complete the proxy form and return it to the Company’s registered office at the address stated therein and in accordance with the instructions printed thereon not less than 48 hours before the time fixed for holding the meeting. The completion of a form of proxy will not preclude you from attending and voting at the AGM in person.

6. RECOMMENDATION

The Directors believe that the granting of the General Mandate, the Repurchase Mandate and the re-election of the said Directors are in the best interests of the Company and the Shareholders as a whole and recommend you to vote in favour of such resolutions to be proposed at the AGM.

7. GENERAL INFORMATION

Your attention is drawn to the additional information set out in the Appendix I (Explanatory Statement on Share Repurchase) and Appendix II (Details of the Retiring Directors proposed to be re-elected at the Annual General Meeting) to the circular.

Yours faithfully,

By order of the Board Fujian Holdings Limited WANG XIAOWU

Chairman

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APPENDIX I EXPLANATORY STATEMENT ON SHARE REPURCHASE

This appendix serves as an explanatory statement, as required by the Share Repurchase Rules, to provide requisite information to you for your consideration of the proposal to permit the repurchase of Shares of the Company up to a maximum of 10% of the issued share capital of the Company as at the date of passing resolution number 5 (“Ordinary Resolution”) referred to in the notice convening the AGM dated 28 April, 2011.

1. SHAREHOLDERS’ APPROVAL

The Share Repurchase Rules provide that all on-market share repurchase made by the Company with and its primary listing on the Stock Exchange must be of fully paid up shares and approved in advance by an ordinary resolution, either by way of a general mandate or by special approval in relation to specific transactions.

2. SHARE CAPITAL

As at the Latest Practicable Date, the issued and fully paid-up share capital of the Company comprised 534,240,000 Shares.

Subject to the passing of the Ordinary Resolution and on the basis that no further Shares are issued or repurchased prior to the AGM, the Company would be allowed to repurchase a maximum of 534,240,000 Shares.

3. REASONS FOR REPURCHASE

The Directors believe that the Repurchase Mandate is in the best interests of the Company and the Shareholders. Such repurchase may, depending on market conditions and funding arrangement at the time, lead to an enhancement of the net assets and/or earnings per Share and will only be made when the Directors believe that such a repurchase will benefit the Company and the Shareholders.

4. FUNDING OF REPURCHASES

In repurchasing the Shares, the Company may only apply funds legally available for such purpose in accordance with the memorandum of association of the Company, the Articles and all applicable laws of Hong Kong.

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APPENDIX I

EXPLANATORY STATEMENT ON SHARE REPURCHASE

The Directors do consider that there may have a material adverse effect on the working capital and the gearing of the Company (as compared with the position disclosed in the Company’s latest published audited accounts for the year ended 31 December, 2010), if any mandate to repurchase securities is exercised in full during the proposed repurchase period. However, the Directors do not propose to exercise the Repurchase Mandate to such an extent as would, in any circumstances, have a material adverse effect on the working capital and the gearing which in the opinion of the Directors of the Company is from time to time appropriate for the Company to do so.

5. SHARE PRICES

The highest and lowest prices for the Shares having trade on the Stock Exchange in each of the previous twelve months immediately prior to the Latest Practicable Date were as follows:–

		Shares
	Highest		Lowest
	HK$		HK$
2010:
April	0.760		0.630
May	0.710		0.550
June	0.610		0.540
July	0.630		0.570
August	0.620		0.510
September	0.560		0.510
October	0.550		0.510
November	0.550		0.450
December	0.510		0.430
2011:
January	0.500		0.440
February	0.495		0.420
March (up to the Latest Practicable Date)	0.450		0.405

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APPENDIX I EXPLANATORY STATEMENT ON SHARE REPURCHASE

6. DISCLOSURE OF INTERESTS

The Directors have undertaken to the Stock Exchange to exercise the power of the Company to make repurchase pursuant to the Repurchase Mandate in accordance with the Listing Rules, the applicable laws of Hong Kong, the memorandum of association of the Company and the Articles.

None of the Directors nor, to the best of their knowledge having made all reasonable enquiries, any of their associates presently intend to sell Shares to the Company or its subsidiaries under the Repurchase Mandate in the event that the Repurchase Mandate is approved by its Shareholders.

The Company has not been notified by any connected persons (as defined under the Listing Rules) of the Company that they have a present intention to sell any Shares to the Company or its subsidiaries, or that they have undertaken not to do in the event that the Repurchase Mandate is approved by its Shareholders.

7. TAKEOVERS CODE

If on the exercise of the power to repurchase securities pursuant to the Repurchase Mandate, a shareholder’s proportionate interest in the voting rights of the Company will increase, such increase will be treated as an acquisition for the purposes of Rule 32 of the Takeovers Code.

As at the Latest Practicable Date, the Substantial Shareholder of the Company, HC Technology Capital Company Limited (“HC Tech”), holds a total of 52.27% of the Company’s issued share capital.

If the Repurchase Mandate is exercised in full, HC Tech will be interested in approximately 58.08% of the reduced issued share capital of the Company. Despite such an increase in shareholding, HC Tech would not become obliged to make a mandatory offer for all securities not already owned by it or its concert parties under Rule 26.1 of the Takeovers Code.

8. SHARES REPURCHASES MADE BY COMPANY

No purchase of Shares has been made by the Company in the six months prior to the Latest Practicable Date, whether on the Stock Exchange or otherwise.

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APPENDIX II DETAILS OF THE RETIRING DIRECTORS PROPOSED TO BE RE-ELECTED AT THE ANNUAL GENERAL MEETING

Pursuant to the Listing Rules, the requisite details of the Directors, who will retire and stand for re-election at the AGM, are provided below.

(1) Mr. Liu Xiaoting, aged 45

Position & experience

Mr. Liu Xiaoting (“Mr. Liu”) is the Vice General Manager of the Group. Mr. Liu joined the Group in November 2004 and assists the General Manager for the daily operations. Mr. Liu has over 20 years’ experience in finance management. Mr. Liu has taken up a number of management posts, included the related Department of Fujian Provincial People’s Government; Director of Fujian Hua Min Import & Export Co., Ltd.; Assistant General Manager and the in charge of Finance Department of Fujian Industrial Company Limited; Financial Controller of trading firm in Hong Kong.

Save as disclosed above, Mr. Liu has not held any other directorships in the last three years in public companies the securities of which are listed on any securities market in Hong Kong or overseas.

Length of service

Mr. Liu’s service with the Company does not have a fixed term but he is subject to the retirement by rotation pursuant to the Articles. His emolument will be determined by the Board with reference to his qualification and experience, responsibilities to be undertaken, and the prevailing market level of remuneration of executive of similar position. In the financial year ended 31 December, 2010, Mr. Liu received a total emolument of HK$455,000.

Interests in shares

As far as the Directors are aware, as at the Latest Practicable Date, Mr. Liu was not interested or deemed to be interested in the shares or underlying shares of the Company or its associated corporations pursuant to Part XV of the SFO.

Relationships

As far as the Directors are aware, Mr. Liu does not have any relationships with any other Directors, senior management, substantial Shareholders (as defined in the Listing Rules), or controlling Shareholders (as defined in the Listing Rules) of the Company.

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APPENDIX II DETAILS OF THE RETIRING DIRECTORS PROPOSED TO BE RE-ELECTED AT THE ANNUAL GENERAL MEETING

Director’s emoluments

Pursuant to the service contract entered into between Mr. Liu and the Company, he is entitled to receive a salary of HK$455,000 per annum, payable on a 12-months basis, together with a discretionary bonus that is subject to the Company having a profit in its audited accounts for the financial year which he is employed as an Executive Director. The emoluments of Mr. Liu are determined by the Board with reference to his duties and responsibilities with the Company and the Company’s remuneration policy and are subject to review by the Board from time to time.

Information that needs to be disclosed and matters that need to be brought to the attention of the Shareholders

There is no information of Mr. Liu which is discloseable pursuant to any of the requirements under Rules 13.51(2)(h) to 13.51(2)(v) of the Listing Rules and there are no other matters concerning Mr. Liu that need to be brought to the attention of the Shareholders.

(2) Mr. Leung Hok Lim, FCPA (Aust.), CPA (Macau), FCPA (Practising), aged 75

Position & experience

Mr. Leung Hok Lim (“Mr. Leung”) is an Independent Non-executive Director, the Chairman of the Audit Committee and a member of the Nomination Committee and Remuneration Committee of the Company. He joined the Group in September 2004. Mr. Leung is the founder and Senior Partner of PKF. Mr. Leung, is a Non-executive Director of Beijing Hong Kong Exchange of Personnel Centre Limited, an Independent Non-executive Director of a number of listed companies namely Yangtzekiang Garment Ltd., YGM Trading Ltd., S E A Holdings Ltd., High Fashion International Ltd., and Phoenix Satellite Television Holdings Ltd.. Mr. Leung was also an independent non-executive director of Dejin Resources Group Company Limited (formerly known as Bright International Group Limited) and Theme International Holdings Limited, both are listed companies in Hong Kong, until his resignation on 31 December 2008 and 26 November 2009 respectively.

Save as disclosed above, Mr. Leung has not held any other directorships in the last three years in public companies the securities of which are listed on any securities market in Hong Kong or overseas.

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APPENDIX II DETAILS OF THE RETIRING DIRECTORS PROPOSED TO BE RE-ELECTED AT THE ANNUAL GENERAL MEETING

Length of service

Pursuant to the letter of appointment issued by the Company to Mr. Leung, his initial term of office is two years commencing from 24 September, 2004 with tenure of two years and was reappointed at most two times with tenure of two years and expired on 23 September 2010, and was reappointed again with tenure of two years, expiring on 23 September 2012. He is also subject to retirement by rotation and re-election at the annual general meeting of the Company in accordance with the Articles.

Interests in shares

As far as the Directors are aware, as at the Latest Practicable Date, Mr. Leung was not interested or deemed to be interested in the shares or underlying shares of the Company or its associated corporations pursuant to Part XV of the SFO.

Relationships

As far as the Directors are aware, Mr. Leung does not have any relationships with any other Directors, senior management, substantial Shareholders (as defined in the Listing Rules), or controlling Shareholders (as defined in the Listing Rules) of the Company.

Director’s emoluments

Pursuant to the service contract entered into between Mr. Leung and the Company, Mr. Leung is entitled to receive a salary of HK$100,000 per annum. The emoluments of Mr. Leung are determined with reference to his duties, responsibilities and time commitment and the Company’s remuneration policy and are subject to review by the Board from time to time.

Information that needs to be disclosed and matters that need to be brought to the attention of the Shareholders

There is no information of Mr. Leung which is discloseable pursuant to any of the requirements under Rules 13.51(2)(h) to 13.51(2)(v) of the Listing Rules and there are no other matters concerning Mr. Leung that need to be brought to the attention of the Shareholders.

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APPENDIX II DETAILS OF THE RETIRING DIRECTORS PROPOSED TO BE RE-ELECTED AT THE ANNUAL GENERAL MEETING

(3) Mr. Feng Qiang, aged 44

Position & experience

Mr. Feng Qiang (“Mr. Feng”) is the General Manager of Investment and Planning Department Fujian Huamin Industrial Group Company Limited. Mr. Feng joined the Group in January 2005. He spent years of research in the Chinese Academy of Social Science at Fujian for corporate strategies and reforms. He also has practical experience in corporate investment planning, operational management and corporate restructuring during his service in the government of Fujian Province and its related companies. Mr. Feng has over 24 years’ corporation and investment management experience.

Mr. Feng has a Bachelor Degree in Economics from Shanghai University of Finance and Economics.

Save as disclosed above, Mr. Feng has not held any other directorships in the last three years in public companies the securities of which are listed on any securities market in Hong Kong or overseas.

Length of service

There is no service contract between Mr. Feng Qiang and the Company. Mr. Feng’s service with the Company does not have a fixed term, nor does he receive any emolument for being the Non-executive Director of the Company, but he is subject to the retirement by rotation pursuant to the Articles.

Interests in shares

As far as the Directors are aware, as at the Latest Practicable Date, Mr. Feng was not interested or deemed to be interested in the shares or underlying shares of the Company or its associated corporations pursuant to Part XV of the SFO.

Relationships

As far as the Directors are aware, Mr. Feng does not have any relationships with any other Directors, senior management, substantial Shareholders (as defined in the Listing Rules), or controlling Shareholders (as defined in the Listing Rules) of the Company.

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APPENDIX II DETAILS OF THE RETIRING DIRECTORS PROPOSED TO BE RE-ELECTED AT THE ANNUAL GENERAL MEETING

Director’s emoluments

There is no service contract between Mr. Feng and the Company and he does not receive any emolument for being the Non-executive Director of the Company.

Information that needs to be disclosed and matters that need to be brought to the attention of the Shareholders

There is no information of Mr. Feng which is discloseable pursuant to any of the requirements under Rules 13.51(2)(h) to 13.51(2)(v) of the Listing Rules and there are no other matters concerning Mr. Feng that need to be brought to the attention of the Shareholders.

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NOTICE OF ANNUAL GENERAL MEETING

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FUJIAN HOLDINGS LIMITED

(Incorporated in Hong Kong with limited liability)

(Stock Code: 00181)

NOTICE IS HEREBY GIVEN that the annual general meeting of Fujian Holdings Limited (the “Company”) will be held at Ballroom, 1st Floor, South Pacific Hotel, 23 Morrison Hill Road, Wanchai, Hong Kong on Thursday, 28 April, 2011 at 10:00 a.m. for the following purposes:

As Ordinary Business:

1. To receive, consider and adopt the audited financial statements and the reports of the directors and auditors for the year ended 31 December, 2010;

2. To re-elect the retiring directors, namely, Mr. Liu Xiaoting, Mr. Leung Hok Lim and Mr. Feng Qiang and to authorize the board of directors to fix the directors’ remuneration;

3. To re-appoint HLB Hodgson Impey Cheng as auditors of the Company and to authorize the board of directors to fix their remuneration;

As Special Business:

To consider and, if thought fit, pass with or without amendments, the following resolutions as Ordinary Resolutions:

1. “ THAT :

2. (a) subject to paragraph (c) of this Resolution and pursuant to section 57B of the Companies Ordinance, the exercise by the directors of the Company during the Relevant Period (as hereinafter defined) of all the powers of the Company to allot, issue and deal with additional shares in the share capital of the Company and to make or grant offers, agreements and options (including warrants, bonds, notes, debentures and other securities which carry rights to subscribe for or are convertible into shares) which might require the exercise of such power be and is hereby generally and unconditionally approved;

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NOTICE OF ANNUAL GENERAL MEETING

• (b) the approval in paragraph (a) above shall authorise the directors of the Company during the Relevant Period to make or grant offers, agreements and options 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, warrants or otherwise) by the directors of the Company pursuant to the authority in paragraph (a) of this Resolution, otherwise than pursuant to (i) a Rights Issue (as hereinafter defined), or (ii) an issue of shares upon the exercise of options granted under any share option scheme or similar arrangement for the time being adopted for the grant or issue of shares or rights to acquire shares in the Company, or (iii) an issue of shares as scrip dividends pursuant to the articles of association of the Company from time to time, or (iv) any issue of shares in the Company upon the exercise of rights of subscription or conversion under the terms of any existing warrants of the Company or any existing securities of the Company which carry rights to subscribe for or are convertible into shares of the Company, shall not exceed 20 per cent of the aggregate nominal amount of the issued share capital of the Company at the date of passing this Resolution, and the said approval shall be limited accordingly; and

• (d) for the purpose 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 expiration of the period within which the next annual general meeting of the Company is required by the Companies Ordinance or the articles of association of the Company to be held; and

• (iii) the date on which the authority set out in this Resolution is revoked or varied by an ordinary resolution of the shareholders in general meeting of the Company;

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NOTICE OF ANNUAL GENERAL MEETING

“ Rights issue ” means an offer of shares in the share capital of the Company open for a period fixed by the directors of the Company to holders of shares whose names appear on the register of members of the Company on a fixed record date in proportion to their then holdings of such shares (subject to such exclusion or other arrangements as the directors of the Company may deem necessary or expedient in relation to fractional entitlements or having regard to any restrictions or obligations under the laws of, or the requirements of, any recognised regulatory body or any stock exchange in any territory applicable to the Company).”

1. “ THAT :

2. (a) subject to paragraph (b) of this Resolution, the exercise by the directors of the Company during the Relevant Period (as hereinafter defined) of all the powers of the Company to repurchase shares of the Company on The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) or on any other stock exchange on which the shares of the Company may be listed and recognised by the Securities and Futures Commission of Hong Kong and the Stock Exchange for this purpose, subject to and in accordance with all applicable laws and the requirements of the Rules Governing the Listing of Securities on the Stock Exchange or of any other stock exchange as amended from time to time, be and is hereby generally and unconditionally approved;

3. (b) the amount of shares of the Company which the Company is authorized to repurchase pursuant to the approval in paragraph (a) of this Resolution shall not exceed 10 per cent of the aggregate nominal amount of the issued share capital of the Company at the date of passing this Resolution, and the said approval shall be limited accordingly; and

4. (c) for the purpose 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 expiration of the period within which the next annual general meeting of the Company is required by the Companies Ordinance or the Articles of Association of the Company to be held; and

   • (iii) the date on which the authority set out in this Resolution is revoked or varied by an ordinary resolution of the shareholders in general meeting of the Company.”

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NOTICE OF ANNUAL GENERAL MEETING

1. “ THAT conditional upon the passing of Resolutions (4) and (5) as set out in the notice convening this meeting, the general mandate granted to the directors of the Company to exercise the powers of the Company to allot, issue and deal with shares in the Company pursuant to Resolution (4) set out in the notice convening this meeting be and is hereby extended by the addition to the aggregate nominal value of the share capital which may be allotted and issued or agreed conditionally or unconditionally to be allotted and issued by the directors of the Company pursuant to such general mandate of an amount representing the aggregate nominal value of the issued share capital of the Company repurchased by the Company pursuant to the mandate to repurchase shares of the Company as referred to in Resolution (5) set out in the notice convening this meeting, provided that such extended amount shall not exceed 10 per cent of the aggregate nominal amount of the issued share capital of the Company at the date of passing this Resolution.”

By Order of the Board Wang Xiaowu Chairman

Hong Kong, 4 April, 2011

Notes:

1. A member of the Company entitled to attend and vote at the meeting (or at any adjournment thereof) is entitled to appoint one or more proxies to attend and vote in his stead. A proxy need not be a member of the Company.

2. In order to be valid, the form of proxy and the power of attorney (if any), under which it is signed or a notarially certified copy thereof, must be deposited at the registered office of the Company at Unit 1216, 12th Floor, China Merchants Tower, Shun Tak Centre, 168-200 Connaught Road Central, Hong Kong not less than 48 hours before the appointed time for holding the above meeting or any adjournment thereof.

3. In relation to Resolution no. 2 in this notice, Mr. Liu Xiaoting, Mr. Leung Hok Lim and Mr. Feng Qiang will retire at the meeting and will be eligible for re-election. Details of the above Directors that are required to be disclosed under the Rules Governing the Listing of Securities on the Stock Exchange are set out in Appendix II to the circular of the Company.

4. In relation to the ordinary resolutions set out in items 4, 5 and 6 of the above notice, the directors wish to state that they have no immediate plan to issue any new shares or repurchase any existing shares of the Company.

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