Fulum Group Holdings Limited — Proxy Solicitation & Information Statement 2010

Mar 22, 2010

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 Wing Hing International (Holdings) Limited, you should at once hand this circular and the accompany form of proxy to the purchaser(s) or transferee(s) or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser(s) or transferee(s).

Hong Kong Exchanges and Clearing 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.

(Incorporated in Bermuda with limited liability)

(Stock code: 621)

PROPOSED REFRESHMENT OF GENERAL MANDATES AND

NOTICE OF SPECIAL GENERAL MEETING

Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders

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A letter from the Independent Board Committee is set out on page 9 of this circular and a letter from Kingsway to the Independent Board Committee and the Independent Shareholders is set out on pages 10 to 16 of this circular.

A notice convening a special general meeting (‘‘SGM’’) of the Company to be held at Unit 1901, 19th Floor, Nina Tower, 8 Yeung Uk Road, Tsuen Wan, New Territories, Hong Kong on Friday, 9 April 2010 at 11: 00 a.m. is set out on pages 21 to 24 of this circular.

Whether or not you are able to attend the SGM, you are requested to complete the accompanying form of proxy for use at the SGM in accordance with the instructions printed thereon and return the same to the Company’s branch share registrar in Hong Kong, 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 SGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the SGM or any adjourned meeting thereof should you so wish.

22 March 2010

CONTENTS

		Page
Definitions	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from	the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Letter from	the Independent Board Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
Letter from	Independent Financial Adviser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
Appendix I	— Explanatory Statement on the Repurchase Mandate . . . . . . . . . . . . . . . .	17
Notice of special general meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		21

– i –

DEFINITIONS

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

• ‘‘associate(s)’’ has the meaning ascribed thereto in the Listing Rules

• ‘‘Board’’ the board of directors of the Company

• ‘‘Business Day’’ any day on which the Stock Exchange is open for business of dealing in securities

• ‘‘Bye-laws’’ the bye-laws of the Company

• ‘‘Companies the Companies Ordinance (Chapter 32 of the Laws of Hong Ordinance’’ Kong)

• ‘‘Company’’ Wing Hing International (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 in the Listing Rules

• ‘‘Controlling has the meaning ascribed thereto in the Listing Rules Shareholder(s)’’

• ‘‘Director(s)’’ the director(s) of the Company

• ‘‘Existing General Mandate’’

• the general mandate granted to the Directors by the Shareholders at the special general meeting of the Company held on 4 January 2010, among other things, to allot, issue and deal with up to 323,848,000 Shares, representing 20% of the then issued share capital of the Company and to repurchase up to 161,924,000 Shares, representing 10% of the then issued share capital of the Company

• ‘‘Extension Mandate’’ the proposed extension of the Issue Mandate to be sought at the SGM to authorise the Directors to issue further Shares equal to the Shares repurchased under the Repurchase Mandate

• ‘‘Group’’

• the Company and its subsidiaries

• ‘‘Hong Kong’’ the Hong Kong Special Administrative Region of the PRC

• ‘‘Independent Board an independent committee of the Board established by the Board Committee’’ to advise the Independent Shareholders in respect of the Issue Mandate and the Extension Mandate

– 1 –

DEFINITIONS

• ‘‘Independent Financial Kingsway Capital Limited, a licensed corporation to carry out Adviser’’ or type 1 (dealing in securities) and type 6 (advising on corporate ‘‘Kingsway’’ finance) regulated activities as defined under the SFO and the independent financial adviser to the Independent Board Committee and the Independent Shareholders in respect of the Issue Mandate and the Extension Mandate

• ‘‘Independent Shareholders other than the Controlling Shareholder(s) and their Shareholders’’ 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

• ‘‘Issue Mandate’’ the general mandate proposed to be sought at the SGM to authorize the Directors to allot, issue and deal with Shares not exceeding 20% of the aggregate nominal amount of the issued share capital of the Company as at the date of approval of the mandate

• ‘‘Latest Practicable 18 March 2010, being the latest practicable date prior to the Date’’ 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

• ‘‘New General the Issue Mandate, the Repurchase Mandate and the Extension Mandates’’ Mandate

• ‘‘Repurchase Mandate’’ the general mandate proposed to be sought at the SGM to authorize the Directors to exercise all the powers of the Company to repurchase Shares not exceeding 10% of the total fully paid-up nominal amount of the share capital of the Company as at the date of approval of the mandate

• ‘‘SFO’’ the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)

• ‘‘SGM’’ the special general meeting of the Company to be held on 9 April 2010 for the purpose of considering and, if thought fit, approving, among other things, the New General Mandates

• ‘‘Share(s)’’ ordinary share(s) of HK$0.01 each in the share capital of the Company

• ‘‘Shareholder(s)’’ holder(s) of the Share(s)

• ‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited

– 2 –

DEFINITIONS

• ‘‘Substantial Shareholder(s)’’

• has the meaning ascribed thereto in the Listing Rules

• ‘‘Takeovers Code’’

• the Hong Kong Code on Takeovers and Mergers

• ‘‘Warrant(s)’’

• 323,848,000 unlisted warrant(s) issued by the Company at the issue price of HK$0.001 per Warrant, each entitles the holder thereof to subscribe for one Warrant Share at the initial exercise price of HK$0.16 per Warrant Share (subject to adjustment) at any time during a period of 5 years commencing from the date of issue of the Warrants

• ‘‘Warrant Share(s)’’ the 323,848,000 new Share(s) to be issued by the Company upon the full exercise of the subscription rights attaching to the Warrant(s)

• ‘‘Warrant Subscription’’ the subscription for the Warrants by Orient Best Holdings Limited at the issue price of HK$0.001 per Warrant pursuant to the Warrant Subscription Agreement, details of which were set out in the announcement of the Company dated 26 February 2010

• ‘‘Warrant Subscription Agreement’’

• the conditional warrant subscription agreement dated 26 February 2010 entered into between Orient Best Holdings Limited and the Company in relation to the Warrant Subscription

• ‘‘HK$’’ Hong Kong dollars, the lawful currency of Hong Kong

• ‘‘%’’ per cent.

– 3 –

LETTER FROM THE BOARD

(Incorporated in Bermuda with limited liability)

(Stock code: 621)

Executive Directors: Ms. Leung Pui Kwan Mr. Shen Junchen Mr. Li Hok Yin

Non-executive Director: Ms. Yuen Sau Ying, Christine

Independent non-executive Directors: Mr. Hui Wah Tat, Anthony Mr. Li Kam Chung Mr. Chan Kam Fuk

Registered office: Canon’s Court 22 Victoria Street Hamilton HM 12 Bermuda

Head office and principal place of business in Hong Kong: Unit 1901, 19th Floor Nina Tower, 8 Yeung Uk Road Tsuen Wan, New Territories Hong Kong

22 March 2010

To the Shareholders

Dear Sir or Madam,

PROPOSED REFRESHMENT OF GENERAL MANDATES AND

NOTICE OF SPECIAL GENERAL MEETING

INTRODUCTION

The purpose of this circular is to provide you with further information regarding, among other things, (i) the New General Mandates; (ii) the recommendation from the Independent Board Committee on the refreshment of the Issue Mandate and the Extension Mandate; (iii) the recommendation from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders on the Issue Mandate and the Extension Mandate; and (iv) the notice convening the SGM.

REFRESHMENT OF GENERAL MANDATES

Since the annual general meeting of the Company held on 31 August 2009, the Company has refreshed its general mandate to issue new Shares on 4 January 2010. At the special general meeting of the Company held on 4 January 2010, the Shareholders approved, among other things, ordinary resolutions to grant to the Directors the Existing General Mandate (i) to allot up to 323,848,000 Shares, which is equivalent to 20% of the then issued share capital of the Company; and (ii) to repurchase up to 161,924,000 Shares on the Stock Exchange, representing 10% of the then issued share capital of the Company.

– 4 –

LETTER FROM THE BOARD

During the period from the granting of the Existing General Mandate to the Latest Practicable Date, the Existing General Mandate has been utilized as to 323,848,000 Shares (being 100% of the 323,848,000 Shares that are allowed to be allotted and issued under the Existing General Mandate) pursuant to the completion of the Warrant Subscription Agreement on 10 March 2010 and on the basis that full exercise of the subscription rights attaching to the Warrants. Following the completion of the Warrant Subscription, and on the basis that full exercise of the subscription rights attaching to the Warrants, 323,848,000 Warrant Shares will be issued and the issued share capital of the Company will be enlarged to 1,943,088,000 Shares.

Pursuant to the announcement of the Company dated 26 February 2010 in relation to the Warrant Subscription, the Company intended to use the aggregate net proceeds from the Warrant Subscription of approximately HK$300,000 as the general working capital of the Group. Any additional proceeds from the issue of the Warrant Shares upon the exercise of the subscription rights attaching to the Warrants in future up to a maximum amount of approximately HK$51.82 million will be applied as the general working capital and as funds for future development of the Group. As at the Latest Practicable Date, the net proceeds raised from the Warrant Subscription have not been utilized and will be used as intended.

In order to provide a flexible mean for the Company to raise further funds and/or to procure potential merger and acquisition opportunities through the issue of new Shares for its future business development, the Board proposes to refresh the general mandates for the Directors to (i) issue and allot new Shares not exceeding 20% of the issued share capital of the Company as at the date of the SGM; (ii) repurchase Shares on the Stock Exchange not exceeding 10% of the issued share capital of the Company as at the date of the SGM; and (iii) extend the Issue Mandate so that the Directors be given a general mandate to issue further Shares equal to the number of Shares repurchased under the Repurchase Mandate. The Company at present does not have any concrete plan regarding the utilization of the Issue Mandate.

Each of the Issue Mandate and the Extension Mandate is proposed to the Shareholders prior to the Company’s next annual general meeting, and therefore, pursuant to the Listing Rules, the Issue Mandate and the Extension Mandate will be subject to the Independent Shareholders approval by way of poll at the SGM, and the Controlling Shareholder of the Company and its associates or, where there are no Controlling Shareholders, the Directors (excluding independent non-executive Directors) and the chief executive of the Company and their respective associates are required to abstain from voting in favour thereon.

Based on the 1,619,240,000 Shares in issue and assuming that no other changes in the share capital structure of the Company prior to the SGM, subject to the passing of the relevant ordinary resolutions to approve the New General Mandates at the SGM, the Directors will be authorized to allot and issue up to a limit of 323,848,000 Shares under the Issue Mandate; and to repurchase up to 161,924,000 Shares under the Repurchase Mandate. The Directors consider that the New General Mandates will enhance the flexibility for the Company to manage its business and therefore the New General Mandates are fair and

– 5 –

LETTER FROM THE BOARD

reasonable and the granting of the New General Mandates are in the interests of the Company and the Shareholders as a whole. As at the Latest Practicable Date, the Company had no present intention to exercise the Issue Mandate to allot and issue any new Shares.

The Independent Board Committee comprising Mr. Hui Wah Tat, Anthony, Mr. Li Kam Chung and Mr. Chan Kam Fuk, all being independent non-executive Directors, has been formed to advise the Independent Shareholders on the Issue Mandate and the Extension Mandate. Kingsway has been appointed as the independent financial adviser to advise the Independent Board Committee and Independent Shareholders on the Issue Mandate and the Extension Mandate.

The text of the letter from the Independent Board Committee is set out on page 9 of this circular and the text of the letter from Independent Financial Adviser containing its advice is set out on pages 10 to 16 of this circular.

FUND RAISING ACTIVITIES IN THE PAST TWELVE MONTHS

Set out below are the fund raising activities conducted by the Company in the past twelve months before the Latest Practicable Date:

			Intended use of
		Net proceeds	proceeds
Date of announcement	Event	(approximately)	as announced	Actual use of proceeds
10 August 2009	Issue and allotment	HK$19.95 million	Intended to be used as	HK$10 million for repayment
	of Shares to two		general working	of promissory note; and
	subscribers		capital of the Group	approximately HK$9.95
				million for general
				working capital of the
				Group, of which
				approximately HK$1.9
				million for purchase of
				plant and equipment,
				approximately HK$2
				million for repayment of
				other payables and
				accruals, approximately
				HK$2 million for legal and
				professional fees and
				approximately HK$4
				million for other operating
				and administrative
				expenses.
25 September 2009	Issue and allotment	HK$21 million	Intended to be used to	Part of the proceeds in the
	of Shares to a		finance the	sum of HK$8 million has
	subscriber under		Company’s future	been used as refundable
	the general		potential	deposit in a proposed
	mandate granted		investments if	investment announced on
	on 31 August		suitable	7 October 2009. The
	2009		opportunities arise	remaining proceeds will be
				used as intended.

– 6 –

LETTER FROM THE BOARD

			Intended use of
		Net proceeds	proceeds
Date of announcement	Event	(approximately)	as announced	Actual use of proceeds
16 November 2009	Proposed open	HK$79.8 million	Intended to be used to	Part of the proceeds in the
	offer of		finance the possible	sum of HK$25 million has
	46,264,000 offer		acquisition as	been used as refundable
	shares		announced on	deposit in a proposed
			7 October 2009 (the	acquisition announced on
			‘‘First	17 February 2010;
			Acquisition’’), or, if	approximately HK$10
			the First	million has been used for
			Acquisition is not	repayment of promissory
			materialized, be	note; and approximately
			used as general	HK$2 million has been
			working capital of	used as general working
			the Company	capital of the Group
				(including legal and
				professional fees, other
				operating and
				administrative expenses
				and purchase of plant and
				equipment). Save as
				aforesaid, the net proceeds
				from the open offer will be
				used as intended.
26 February 2010	Issue of unlisted	Net proceeds from	Intended to be used as	All of the net proceeds will be
	warrants to a	the Warrant	general working	used as intended.
	subscriber under	Subscription of	capital of the Group
	the general	approximately
	mandate granted	HK$300,000
	on 4 January
	2010	Proceeds from the	Intended to be used as	All of the net proceeds will be
		issue of the	general working	used as intended.
		Warrant Shares	capital of the Group
		of approximately	and as funds for
		HK$51.82	future development
		million	of the Group

As the funds previously raised has been utilized or earmarked for use as the Group’s general working capital or certain future investments, the Directors consider it is important for the Company to maintain the financial flexibility for the Company to raise further funds and/or to procure potential merger and acquisition opportunities through the issue of new Shares for its future business development. As such, the Board considers that the proposed refreshment of the New General Mandate is in the interests of the Company and the Shareholders as a whole. To the best knowledge, information and belief of the Directors, the Company has sufficient working capital for its present requirements.

SPECIAL GENERAL MEETING

A notice convening the SGM is set out on pages 21 to 24 of this circular. The SGM will be convened for the purpose of considering and, if thought fit, passing the resolutions to approve the New General Mandates.

– 7 –

LETTER FROM THE BOARD

Pursuant to the Listing Rules, each of the Issue Mandate and the Extension Mandate requires the approval of the Independent Shareholders by poll at the SGM. The Controlling Shareholder of the Company and its associates or, where there are no Controlling Shareholders, the Directors (excluding independent non-executive Directors) and the chief executive of the Company and their respective associates are required to abstain from voting in favour thereon. As at the Latest Practicable Date, the Company had no Controlling Shareholder and no Shares were held by the Directors or their associates. On the aforesaid basis, no Shareholder is required to abstain from voting in favour of the relevant resolutions in relation to the Issue Mandate and the Extension Mandate.

A form of proxy for use at the SGM is sent to the Shareholders together with this circular. Whether or not the Shareholders are able to attend the SGM, the Shareholders are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon as soon as possible and in any event not less than 48 hours before the time for holding of the SGM or adjournment thereof. Completion and return of the form of proxy will not preclude the Shareholders from attending and voting at the SGM or any adjourned meeting thereof should the Shareholders so wish.

RESPONSIBILITY STATEMENT

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

RECOMMENDATION

The Directors consider that the New General Mandates are in the best interests of the Company and the Shareholders as a whole. Accordingly, the Board recommends the Shareholders to vote in favour of the relevant resolutions to be proposed at the SGM.

GENERAL

The English text of this circular and proxy form shall prevail over the Chinese text.

Your attention is also drawn to the information set out in the appendices to this circular.

Yours faithfully, For and on behalf of the Board

Wing Hing International (Holdings) Limited Leung Pui Kwan Chairman

– 8 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

(Incorporated in Bermuda with limited liability)

(Stock code: 621)

22 March 2010

To the Independent Shareholders

Dear Sir or Madam,

REFRESHMENT OF GENERAL MANDATES TO ISSUE AND ALLOT SHARES

We refer to the circular of the Company to the Shareholders dated 22 March 2010 (the ‘‘Circular’’), of which this letter forms part. Terms defined herein shall have the same meanings as defined in the Circular unless the context otherwise requires.

We have been appointed by the Board to advise the Independent Shareholders as to whether the terms of the Issue Mandate and the Extension Mandate are fair and reasonable so far as the Independent Shareholders are concerned. Kingsway has been appointed as the Independent Financial Adviser to advise us and the Independent Shareholders in this respect. Details of its advice, together with the principal factors and reasons taken into account in arriving at such advice, are set out in their letter of advice on pages 10 to 16 of the Circular.

Having considered the advice of Independent Financial Adviser, we consider that the Issue Mandate and the Extension Mandate are fair and reasonable so far as the Independent Shareholders are concerned and the Issue Mandate and the Extension Mandate are in the interests of the Company and the Shareholders as a whole. Accordingly, we recommend the Independent Shareholders to vote in favour of the resolutions to be proposed at the SGM to approve the Issue Mandate and the Extension Mandate.

Yours faithfully,

Independent Board Committee Hui Wah Tat, Anthony Li Kam Chung Chan Kam Fuk Independent Independent Independent Non-executive Director Non-executive Director Non-executive Director

– 9 –

LETTER FROM INDEPENDENT FINANCIAL ADVISER

The following is the full text of a letter received from Kingsway setting out its advice to the Independent Board Committee and the Independent Shareholders in relation to the grant of the Issue Mandate and the Extension Mandate for inclusion in the Circular.

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5/F, Hutchison House, 10 Harcourt Road, Central, Hong Kong Tel. No.: (852) 2877-1830 Fax. No.: (852) 2283-7722 22 March 2010

• To the Independent Board Committee and the Independent Shareholders of Wing Hing International (Holdings) Limited

Dear Sirs,

PROPOSED REFRESHMENT OF GENERAL MANDATES

INTRODUCTION

We refer to our appointment as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the grant of the Issue Mandate and the Extension Mandate, details of which are set out in the circular (the ‘‘Circular’’) of the Company to the Shareholders dated 22 March 2010, of which this letter forms part. Unless otherwise defined, capitalized terms used in this letter shall have the same meanings as defined in the Circular.

Pursuant to Rule 13.36(4)(a) of the Listing Rules, the grant of the Issue Mandate and the Extension Mandate requires the approval of the Independent Shareholders at the SGM at 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 relevant resolutions approving the grant of the Issue Mandate and the Extension Mandate. As set out in the letter from the Board (the ‘‘Letter from the Board’’) in the Circular, as at the Latest Practicable Date, the Company had no Controlling Shareholder and no Shares were held by the Directors or their associates. Accordingly, none of the Shareholders would be required to abstain from voting in favour of the relevant resolutions at the SGM in relation to the grant of the Issue Mandate and the Extension Mandate.

The Independent Board Committee, comprising Mr. Hui Wah Tat, Anthony, Mr. Li Kam Chung and Mr. Chan Kam Fuk, all being independent non-executive Directors, has been formed to advise the Independent Shareholders on the grant of the Issue Mandate and the Extension Mandate. We have been appointed to advise the Independent Board Committee and the Independent Shareholders in this respect.

– 10 –

LETTER FROM INDEPENDENT FINANCIAL ADVISER

BASIS OF OUR OPINION

In formulating our view and recommendation to the Independent Board Committee and the Independent Shareholders, we have relied on the information, opinions and representations contained or referred to in the Circular and provided to us by the Company, the Directors and the management of the Company, which the Directors consider to be complete, accurate and relevant. We have assumed that all the information, opinions and representations contained or referred to in the Circular were true, accurate and complete at the time they were made and continue to be true and accurate as at the date of the Circular. We have also assumed that all the statements of belief, opinion and intention made by the Directors in the Circular were reasonably made after due and careful enquiry. We have no reason to doubt that any relevant information has been withheld, nor are we aware of any fact or circumstance, which would render the information provided and representations and opinions made to us by the Company, the Directors and the management of the Company untrue, inaccurate or misleading. We consider that we have reviewed sufficient information to enable us to reach an informed view. The Directors have confirmed that no material facts or representations have been withheld or omitted from the information provided and referred to in the Circular. We have not, however, carried out any independent verification of the information provided by the Company, the Directors and the management of the Company, nor have we conducted an independent investigation into the business and affairs, financial condition and future prospects of the Company or its subsidiaries or associated companies.

PRINCIPAL REASONS AND FACTORS CONSIDERED

In arriving at our recommendation to the Independent Board Committee and the Independent Shareholders in respect of the grant of the Issue Mandate and the Extension Mandate, we have taken into consideration the following principal factors and reasons:

1. Background and reasons for the grant of the Issue Mandate and the Extension Mandate

Principal business and funding requirement

The Group has injected its resources into coal mining business since 2008 and is principally engaged in the operation of coal mines and leasing of mining licences in the PRC following its disposal of business of construction-related business in Hong Kong (the ‘‘Disposal’’) which was approved by the then Independent Shareholders in October 2009.

The Group also intends to diversify into gold mining business. As stated in the announcement of the Company dated 17 February 2010 (the ‘‘Acquisition Announcement’’), the Group has entered into an acquisition agreement (the ‘‘Acquisition Agreement’’) to purchase the entire issued share capital of Bestkin International Limited (‘‘Bestkin’’) which in turn will complete its acquisition of another company (the ‘‘PRC Company’’) that indirectly owns and holds three entire exploration or exploitation licences, namely, San Dao Ying Exploration Licence, San Dao Ying Exploitation Licence and Long Men Sou Exploration

– 11 –

LETTER FROM INDEPENDENT FINANCIAL ADVISER

Licence, and a shareholder’s loan. The total consideration under the Acquisition Agreement amounts to HK$288,000,000, of which the second refundable deposit of HK$20,000,000 shall be satisfied in cash upon the Group’s inspection and confirmation that the indirect wholly-owned subsidiary of Bestkin having obtained the extended San Dao Ying Exploration Licence and the extended Long Men Sou Exploration Licence. The Directors further advise that the Group is actively reviewing certain mining projects and intends to invest in other gold mines should any suitable opportunity arises.

As stated in the circular of the Company dated 28 September 2009 (the ‘‘Disposal Circular’’) and further confirmed by the Directors, the Disposal did not generate material net proceeds. Furthermore, the Group’s coal mining business does not generate much income currently as the mining licences of three out of the five coal mines in Guizhou in the PRC acquired by the Group during November 2008 have been leased back to the former owners to operate so as to release the pressure of cash flow for operating costs due to the difficulty in securing funding under the impact of the global financial crisis and significant drop in price of coal products in the meantime, while the remaining two coal mines are undergoing expansion.

Previous fund raising activities and use of net proceeds

The Group has completed an open offer by the end of December 2009. As stated in the Letter from the Board, HK$25 million and HK$12 million out of the net proceeds of approximately HK$79.8 million raised from such open offer has been used to satisfy the first refundable deposit under the Acquisition Agreement, and repayment of promissory note and as general working capital of the Group respectively, while the remaining proceeds has been earmarked for the possible acquisition of the entire issued share capital of Richome Enterprises Limited which, through its subsidiaries, is engaged in coal related business as announced on 7 October 2009.

As announced by the Company on 26 February 2010, the Group entered into an agreement to issue Warrants to a subscriber. The net proceeds from the issue of the Warrants and from the issue of the new shares (the ‘‘Warrant Shares’’) upon full exercise of the subscription rights attaching to the Warrants was up to approximately HK$300,000 and HK$51.82 million respectively and would be used as general working capital and/or funds for future development of the Group. The latter proceeds of up to approximately HK$51.82 million would not be received by the Group unless and until full exercise of the Warrant subscription rights by the then warrant holder(s) within the exercisable period, being 5 years since the issue of the Warrants. In addition, the Warrants Shares will be issued under and thus will fully utilise the Existing General Mandate.

– 12 –

LETTER FROM INDEPENDENT FINANCIAL ADVISER

Cash position of the Group

As advised by the management of the Company, the unaudited amount of bank balances and cash of the Group as at 28 February 2010 was estimated to be approximately HK$55.5 million, out of which over HK$40 million is the remaining net proceeds from the open offer completed in December 2009 and has been earmarked for the possible acquisition of the entire issued share capital of Richome Enterprises Limited as mentioned above.

The price of Shares to be issued under the Issue Mandate and the Extension Mandate for cash consideration shall be limited to a discount of less than 20% to the benchmarked price, being the higher of (1) the closing price on the date of relevant placing or other agreement involving such issue; and (2) the 5-day average closing price as stipulated under rule 13.36(5) of the Listing Rules unless the issuer can satisfy the Stock Exchange that it is in a serious financial position and that the only way it can be saved is by an urgent rescue operation which involves the issue of new securities at a price representing a discount of 20% or more to the benchmarked price of the securities or that there are other exceptional circumstances.

Having considered the above, in particular, that (i) the funding requirement of the second refundable deposit of HK$20,000,000 in cash under the Acquisition Agreement; (ii) the cash position of the Group as at 28 February 2010; (iii) the Existing General Mandate have been fully utilised by the possible issue of the Warrant Shares upon full exercise of the Warrant subscription rights; and (iv) the grant of Issue Mandate and the Extension Mandate shall enhance the financial flexibility of the Group to raise fund for development of its mining business and allow the Group to response promptly when potential investments arise, we concur with the Directors’ view and consider that the grant of the Issue Mandate and the Extension Mandate is in the interests of the Company and the Shareholders as a whole.

2. Other financing alternatives

The Directors advise that they will take into account various financing alternatives such as debt financing, open offer and rights issue and private placement of Shares when considering any fund raising activities in future. Nevertheless, the Directors consider that as debt financing may incur interest burden to the Group while equity financing by way of open offer or rights issue may take a long time to complete, the Directors consider equity financing by way of issue of Shares under general mandate a simpler and less time-consuming financing method without increasing interest burden of the Group.

As such, we concur with the Directors’ view that the grant of the Issue Mandate and the Extension Mandate provides additional financing alternatives to the Group which is in the interests of the Company and the Shareholders as a whole.

– 13 –

LETTER FROM INDEPENDENT FINANCIAL ADVISER

3. Potential dilution to shareholdings of the Independent Shareholders

Pursuant to the annual report of the Company for the year ended 31 March 2009, the Company recorded net current liabilities of approximately HK$5.2 million as at 31 March 2009. As stated in announcements of the Company dated 10 August 2009, 25 September 2009 and 16 November 2009, the Company raised funds through the previous placing exercises or open offer as it needed to improve its financial and funding position in order to strengthen the Company’s capital base for any possible future investments which it considers beneficial to the Company to enhance the Shareholders’ value.

As at the Latest Practicable Date, the Company had 1,619,240,000 Shares in issue. As set out in the Letter from the Board, assuming no other changes in the share capital structure of the Company prior to the SGM and subject to the passing of the relevant ordinary resolutions for the grant of the New General Mandates, the Directors will be authorised under the Issue Mandate to allot and issue up to 323,848,000 new Shares, representing 20% of the then issued share capital of the Company.

Set out below is the shareholdings of the Company (i) as at the Latest Practicable Date; for illustrative purpose, (ii) the potential dilution effect on the shareholdings upon full utilisation of the Issue Mandate and the Extension Mandate (assuming no other Shares, including the Warrant Shares, are issued and/or repurchased during the period between the Latest Practicable Date and the date of the SGM); and (iii) the potential dilution effect on the shareholdings upon full utilisation of the Issue Mandate and the Extension Mandate and immediately after the full exercise of the Warrant subscription rights after the SGM (assuming no other Shares are issued and/or repurchased during the period between the Latest Practicable Date and the date of the SGM):

Newly Rich International Overseas Limited (Note 1) Cheever Capital Management (Asia) Limited (Note 2) Subtotal Public Shareholders Other public Shareholders Additional Shareholders upon fully utilization of the Issue Mandate and the Extension Mandate Warrant holder(s) Subtotal Total	As at the Latest Practicable Date Number of Shares Approximate % 163,800,000 10.12% 128,000,000 7.90% 291,800,000 18.02% 1,327,440,000 81.98% — — — — 1,327,440,000 81.98% 1,619,240,000 100%	Upon full utilisation of the Issue Mandate and the Extension Mandate (assuming no other Shares, including the Warrant Shares, are issued and/ or repurchased during the period between the Latest Practicable Date and the date of the SGM) Number of Shares Approximate % 163,800,000 8.43% 128,000,000 6.59% 291,800,000 15.02% 1,327,440,000 68.31% 323,848,000 16.67% — — 1,651,288,000 84.98% 1,943,088,000 100%	Upon full utilisation of the Issue Mandate and the Extension Mandate and immediately after the full exercise of the Warrants subscription rights after the SGM (assuming no other Shares are issued and/or repurchased during the period between the Latest Practicable Date and the date of the SGM) Number of Shares Approximate % 163,800,000 7.23% 128,000,000 5.65% 291,800,000 12.88% 1,327,440,000 58.56% 323,848,000 14.28% 323,848,000 14.28% 1,975,136,000 87.12% 2,266,936,000 100%	Upon full utilisation of the Issue Mandate and the Extension Mandate and immediately after the full exercise of the Warrants subscription rights after the SGM (assuming no other Shares are issued and/or repurchased during the period between the Latest Practicable Date and the date of the SGM) Number of Shares Approximate % 163,800,000 7.23% 128,000,000 5.65% 291,800,000 12.88% 1,327,440,000 58.56% 323,848,000 14.28% 323,848,000 14.28% 1,975,136,000 87.12% 2,266,936,000 100%
				12.88% 58.56% 14.28% 14.28%
				87.12%
				100%

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LETTER FROM INDEPENDENT FINANCIAL ADVISER

Notes:

1. Newly Rich International Overseas Limited is wholly-owned by Cheever Asian Growth Fund Limited which in turn is wholly-owned by Cheung Siu Chung. Hence, Cheung Siu Chung is deemed to be interested in the Shares held by Newly Rich International Overseas Limited for the purpose of SFO.

2. Cheever Capital Management (Asia) Limited is wholly-owned by Cheung Siu Chung. Hence, Cheung Siu Chung is deemed to be interested in the Shares held by Cheever Capital Management (Asia) Limited for the purpose of SFO.

As illustrated in the table above, upon full utilisation of the Issue Mandate and the Extension Mandate, the aggregate shareholdings of the other public Shareholders will decrease from approximately 81.98% as at the Latest Practicable Date to approximately 68.31% (assuming no other Shares, including the Warrant Shares, are issued and/or repurchased during the period between the Latest Practicable Date and the date of the SGM), and will further decrease to approximately 58.56% immediately after the full exercise of the Warrant subscription rights after the SGM (assuming no other Shares are issued and/or repurchased during the period between the Latest Practicable Date and the date of the SGM). The shareholdings of all the other existing Shareholders will also decrease proportionately.

Taking into account that (i) the Group has changed its core business upon completion of the Disposal and is principally engaged in the mining business which requires substantial capital investment and working capital; (ii) the Disposal did not generate material net proceeds while the Group’s coal mining business does not generate much income currently and thus the Group has to raise funds for the development of its mining business and for funding future investment should any potential opportunities arise; (iii) the largest dilution effect resulted from the fund raising activities in the past 12 months was attributable to the open offer abovementioned which was offered to all the then Shareholders; (iv) the Issue Mandate and the Extension Mandate will provide the Group an alternative to enhance capital base for future development; and (v) the fact that the shareholdings of all the Shareholders will be diluted proportionately to their respective shareholding upon any utilisation of the Issue Mandate and the Extension Mandate, we consider such potential dilution to shareholdings of the Independent Shareholders to be justifiable.

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LETTER FROM INDEPENDENT FINANCIAL ADVISER

RECOMMENDATION

Having considered the above principal factors and reasons, we are of the view that the grant of the Issue Mandate and the Extension Mandate is fair and reasonable and in the interests of the Company and the Shareholders as a whole.

Yours faithfully, For and on behalf of Kingsway Capital Limited Chu Tat Hoi

Executive Director

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APPENDIX I

EXPLANATORY STATEMENT ON THE REPURCHASE MANDATE

This Appendix serves as an explanatory statement, as required by the Listing Rules, to provide requisite information to Members for consideration of the Repurchase Mandate.

1. SHARE CAPITAL

As at the Latest Practicable Date, the issued share capital of the Company comprised of 1,619,240,000 Shares.

Subject to the passing of ordinary resolution no. 1 as set out in the notice of SGM and on the basis that no Shares are issued or repurchased by the Company prior to the SGM, the Company would be allowed under the Repurchase Mandate to repurchase a maximum of 161,924,000 Shares.

The Repurchase Mandate and Issue Mandate, unless revoked or varied by way of an ordinary resolution of the Shareholders in general meeting, will expire at the conclusion of the next annual general meeting of the Company.

2. REASONS FOR SHARE REPURCHASE

The Directors believe that the proposed granting of the Repurchase Mandate is in the interests of the Company and the members as a whole.

Repurchases may, depending on market conditions and funding arrangements at the time, result in an enhancement of the net assets and/or earnings per Share. The Directors are seeking granting of the Repurchase Mandate to give the Company the flexibility to do so if and when appropriate. The number of Shares to be repurchased on any occasion and the price and other terms upon which the same are repurchased will be decided by the Directors at the relevant time, having regard to the circumstances then pertaining.

3. FUNDING OF REPURCHASES

Any repurchases will only be funded out of funds of the Company legally available for the purpose of making the proposed Repurchase Mandate in accordance with its Memorandum of Association and Bye-laws and the applicable laws of Bermuda.

The Company is empowered by its Memorandum of Association and Bye-laws to repurchase its Shares. Under Bermuda law, repurchases may only be effected out of either the capital paid up on the relevant shares or the funds of the Company which would otherwise be available for dividend or distribution or the proceeds of a fresh issue of Shares made for such purpose. The amount of premium payable on repurchase may only be paid out of funds of the Company which would otherwise be available for dividend or distribution or out of the share premium account of the Company before the Shares are repurchased.

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APPENDIX I

EXPLANATORY STATEMENT ON THE REPURCHASE MANDATE

4. EFFECT OF EXERCISING THE REPURCHASE MANDATE

There might be material adverse impact on the working capital or gearing position of the Company (as compared with the position disclosed in the latest published audited accounts contained in the annual report of the Company for the year ended 31 March 2009) in the event that the Repurchase Mandate was to be carried out in full at any time during the proposed repurchase period. However, the Directors do not propose to exercise the Repurchase Mandate to such extent as would, in the circumstances, have a material adverse effect on the working capital requirements of the Company or the gearing levels which in the opinion of the Directors are from time to time appropriate for the Company.

5. DISCLOSURE OF INTERESTS

None of the Directors and, to the best of their knowledge having made all reasonable enquiries, none of their respective associates, have any present intention to sell any Shares to the Company in the event that the granting of the Repurchase Mandate is approved by the Shareholders.

6. DIRECTOR’S UNDERTAKING

The Directors have undertaken to the Stock Exchange to exercise the Repurchase Mandate in accordance with the Listing Rules and applicable laws of Bermuda.

7. TAKEOVERS CODE CONSEQUENCE

If on the exercise of the power to repurchase Shares pursuant to the Repurchase Mandate, a Shareholder’s proportionate interest in the voting rights of the Company increases, such increase will be treated as an acquisition for the purposes of the Takeovers Code. As a result, a Shareholder, or group of Shareholders acting in concert, could obtain or consolidate control of the Company and become obliged to make a mandatory offer in accordance with Rule 26 of the Takeovers Code for all Shares not already owned by such Shareholder or group of Shareholders.

As at the Latest Practicable Date, the following Shareholders are interested in more than 10 per cent of the Shares in issue:

	Number of	Percentage
Name	Shares	Holding
Newly Rich International Overseas Limited (Note 1)	163,800,000	10.12%
Cheever Capital Management (Asia) Limited (Note 2)	128,000,000	7.90%

Notes:

1. Newly Rich International Overseas Limited is wholly-owned by Cheever Asian Growth Fund Limited which in turn is wholly-owned by Cheung Siu Chung. Hence, Cheung Siu Chung is deemed to be interested in the Shares held by Newly Rich International Overseas Limited under the SFO.

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APPENDIX I

EXPLANATORY STATEMENT ON THE REPURCHASE MANDATE

1. Cheever Capital Management (Asia) Limited is wholly-owned by Cheung Siu Chung. Hence, Cheung Siu Chung is deemed to be interested in the Shares held by Cheever Capital Management (Asia) Limited under the SFO.

In the event that the Directors exercise in full the power to repurchase Shares in accordance with the Repurchase Mandate, the total interests of the above Shareholders in the Shares would be increased to:

Name	Percentage Holding
Newly Rich International Overseas Limited	11.24%
Cheever Capital Management (Asia) Limited	8.78%

The Directors are not aware of any consequences which may arise under the Takeovers Code as a consequence of any purchase made under the Repurchase Mandate. However, the Company may not repurchase Shares which would result in the amount of Shares held by the public being reduced to less than 25% as prescribed in the Listing Rules.

8. SHARE REPURCHASES MADE BY THE COMPANY

No repurchase of Shares has been made by the Company during the last six months immediately preceding the Latest Practicable Date (whether on the Stock Exchange or otherwise).

9. CONNECTED PERSON

No connected person has notified the Company that he has a present intention to sell Shares to the Company, or has undertaken not to do so in the event that the granting of the Repurchase Mandate is approved by the Shareholders.

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APPENDIX I

EXPLANATORY STATEMENT ON THE REPURCHASE MANDATE

10. MARKET PRICES OF SHARES

The highest and lowest prices at which the Shares were traded on Stock Exchange during each of the previous twelve months before the Latest Practicable Date were as follows:

	Share Prices
	Highest	Lowest
	HK$	HK$
2009
March	0.136	0.102
April	0.111	0.101
May	0.123	0.106
June	0.151	0.121
July	0.151	0.131
August	0.209	0.148
September	0.226	0.170
October	0.243	0.176
November	0.230	0.191
December	0.273	0.190
2010
January	0.320	0.167
February	0.230	0.168
March (up to Latest Practicable Date)	0.445	0.180

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NOTICE OF SPECIAL GENERAL MEETING

(Incorporated in Bermuda with limited liability)

(Stock code: 621)

NOTICE IS HEREBY GIVEN that a special general meeting (the ‘‘Meeting’’) of Wing Hing International (Holdings) Limited (the ‘‘Company’’) will be held at Unit 1901, 19th Floor, Nina Tower, 8 Yeung Uk Road, Tsuen Wan, New Territories, Hong Kong on Friday, 9 April 2010 at 11: 00 a.m. for the purpose of considering and, if thought fit, passing with or without amendments the following resolutions:

ORDINARY RESOLUTIONS

1. ‘‘THAT

2. (a) the exercise by the Directors during the Relevant Period (as defined below) of all the powers of the Company to purchase its shares, subject to and in accordance with the applicable laws, be and is hereby generally and unconditionally approved;

3. (b) the total nominal amount of shares of the Company to be purchased pursuant to the approval in paragraph (a) above shall not exceed 10% of the total nominal amount of the issued share capital of the Company on the date of passing of 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 revocation or variation of the authority given under this resolution by ordinary resolution passed by the Company’s shareholders in general meetings; and

   • (iii) the expiration of the period within which the next annual general meeting of the Company is required by the Bye-laws of the Company or any applicable laws to be held.’’;

– 21 –

NOTICE OF SPECIAL GENERAL MEETING

1. ‘‘THAT

2. (a) the exercise by the Directors during the Relevant Period (as defined below) of all the powers of the Company to issue, allot and deal with additional shares of the Company and to make or grant offers, agreements and options which would or might require shares to be allotted, issued or dealt with during or after the end of the Relevant Period (as defined below), be and is hereby generally and unconditionally approved, provided that, otherwise than pursuant to (i) a rights issue where shares are offered to shareholders on a fixed record date in proportion to their then holdings of 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, or the requirements of any recognized regulatory body or any stock exchange in any territory outside Hong Kong) or (ii) any option scheme or similar arrangement for the time being adopted for the grant or issue to officers and/or employees of the Company and/or any of its subsidiaries and/or any eligible grantee pursuant to the scheme of shares or rights to acquire shares of the Company, or (iii) any scrip dividend scheme 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 Bye-laws of the Company, the total nominal amount of additional shares to be issued, allotted, dealt with or agreed conditionally or unconditionally to be issued, allotted or dealt with shall not in total exceed 20% of the total nominal amount of the issued share capital of the Company on the date of passing of this resolution and the said approval shall be limited accordingly; and

3. (b) 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 revocation or variation of the authority given under this resolution by ordinary resolution passed by the Company’s shareholders in general meetings; and

   • (iii) the expiration of the period within which the next annual general meeting of the Company is required by the Bye-laws of the Company or any applicable laws to be held.’’;

– 22 –

NOTICE OF SPECIAL GENERAL MEETING

1. ‘‘THAT the general mandate granted to the directors of the Company pursuant to resolution no. 2 above and for the time being in force to exercise the powers of the Company to allot shares and to make or grant offers, agreements and options which might require the exercise of such powers be and is hereby extended by the total nominal amount of shares in the capital of the Company repurchased by the Company pursuant to the exercise by the directors of the Company of the powers of the Company to purchase such shares since the granting of such general mandate referred to in the above resolution no. 2, provided that such amount shall not exceed 10% of the total nominal amount of the issued share capital of the Company on the date of passing of this resolution.’’

By order of the Board Wing Hing International (Holdings) Limited Leung Pui Kwan Chairman

Hong Kong, 22 March 2010

Registered office: Canon’s Court, 22 Victoria Street Hamilton HM 12 Bermuda

Head office and principal place of business in Hong Kong: Unit 1901, 19th Floor Nina Tower, 8 Yeung Uk Road Tsuen Wan, New Territories Hong Kong

Notes:

1. A member entitled to attend and vote at the SGM is entitled to appoint one or more than one proxy to attend and, subject to the provisions of the bye-laws of the Company, to vote on his behalf. A proxy need not be a member of the Company but must be present in person at the SGM to represent the member. If more than one proxy is so appointed, the appointment shall specify the number and class of shares in respect of which each such proxy is so appointed.

2. A form of proxy for use at the SGM is enclosed. Whether or not you intend to attend the SGM in person, you are encouraged to complete and return the enclosed form of proxy in accordance with the instructions printed thereon. Completion and return of a form of proxy will not preclude a member from attending in person and voting at the SGM or any adjournment thereof, should he so wish.

3. In order to be valid, the form of proxy, together with a power of attorney or other authority, if any, under which it is signed, or a certified copy of such power or authority must be deposited at Company’s branch share registrar in Hong Kong, Tricor Tengis Limited, at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong not less than 48 hours before the time appointed for holding the SGM or any adjournment thereof.

– 23 –

NOTICE OF SPECIAL GENERAL MEETING

1. In the case of joint holders of shares, any one of such holders may vote at the SGM, either personally or by proxy, in respect of such share as if he was solely entitled thereto, but if more than one of such joint holder are present at the SGM 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 shares shall alone be entitled to vote in respect thereof.

2. As at the date hereof, the Board comprises seven Directors. The executive Directors are Ms. Leung Pui Kwan, Mr. Shen Junchen and and Mr. Li Hok Yin. The non-executive Director is Ms. Yuen Sau Ying, Christine. The independent non-executive Directors are Mr. Hui Wah Tat, Anthony, Mr. Li Kam Chung and Mr. Chan Kam Fuk.

– 24 –