GBA Holdings Limited — Proxy Solicitation & Information Statement 2004

Dec 23, 2004

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, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your Shares in CCT Tech International Limited, you should at once hand this circular and the accompanying form of proxy to the purchaser or the transferee or to the bank, licensed securities dealer or other agent through whom the sale or the transfer was effected for onward transmission to the purchaser or the transferee.

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

TECH INTERNATIONAL LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 261)

CONTINUING CONNECTED TRANSACTIONS

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

ALTUS CAPITAL LIMITED

A letter from the Board is set out on pages 3 to 8 of this circular and a letter from the Independent Board Committee containing its recommendation to the Independent Shareholders is set out on page 9 of this circular. A letter from the Independent Financial Adviser containing its advice to the Independent Board Committee and the Independent Shareholders is set out on pages 10 to 14 of this circular.

A notice convening the Special General Meeting to be held at 32/F., China Merchants Tower, Shun Tak Centre, 168–200 Connaught Road Central, Hong Kong on Wednesday, 12 January 2005 at 10: 00 a.m. is set out on pages 23 to 24 of this circular. A form of proxy for use by the Independent Shareholders at the Special General Meeting is also enclosed. Whether or not you intend to attend and vote at the Special General Meeting in person, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon to the branch share registrar and transfer office of the Company in Hong Kong, Tengis Limited at G/F., Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong, as soon as practicable but in any event, not less than 48 hours before the time appointed for holding the Special General Meeting. Such form of proxy for use at the Special General Meeting is also published on the website of the Stock Exchange (www.hkex.com.hk). Completion and return of the form of proxy will not preclude you from attending and voting in person at the Special General Meeting should you so wish.

23 December 2004

CONTENTS
	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
Letter from the Independent Board Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
Letter from the Independent Financial Adviser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
Appendix — General information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	15
Notice of the Special General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	23

— i —

DEFINITIONS

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

• ‘‘associate’’ has the same meaning as given to it in the Listing Rules ‘‘Board’’ the board of Directors ‘‘Business Day’’ a day (excluding Saturday or Sunday) on which banks are generally open in Hong Kong for business for more than four hours

• ‘‘CCT Telecom’’ CCT Telecom Holdings Limited, a company incorporated in the Cayman Islands with limited liability and the shares of which are listed on the main board of the Stock Exchange

• ‘‘CCT Telecom Group’’ CCT Telecom and its subsidiaries including the Group ‘‘CCT Telecom Remaining the CCT Telecom Group excluding the Group Group’’

• ‘‘Company’’ CCT Tech International Limited, an exempted company incorporated in Bermuda with limited liability and the Shares of which are listed on the main board of the Stock Exchange

• ‘‘connected person’’ has the same meaning as given to it in the Listing Rules ‘‘Continuing Connected the transactions contemplated under the Outsourcing Agreement Transactions’’

• ‘‘Director(s)’’ the director(s) (including independent non-executive directors) of the Company

‘‘Group’’	the Company and its subsidiaries
‘‘HK$’’	Hong Kong dollar(s), the lawful currency of Hong Kong
‘‘Hong Kong’’	Hong Kong Special Administrative Region of the People’s Republic of
	China
‘‘Independent Board	the independent board committee of the Company comprising the
Committee’’	independent non-executive Directors of Messrs. Lau Ho Kit, Ivan and
	Chow Siu Ngor, which is formed to advise the Independent
	Shareholders in respect of the Outsourcing Agreement and the
	respective caps in relation to the Continuing Connected Transactions
‘‘Independent Financial	Altus Capital Limited, a deemed licensed corporation under the SFO
Adviser’’	and engaged in types 1 (dealing in securities), 4 (advising on
	securities), 6 (advising on corporate finance) and 9 (asset
	management) regulated activities, and the independent financial
	adviser to the Independent Board Committee and the Independent
	Shareholders

— 1 —

DEFINITIONS

‘‘Independent	the Shareholders other than CCT Telecom and its associates
Shareholders’’
‘‘Latest Practicable Date’’	20 December 2004, being the latest practicable date prior to	the
	printing of this circular for the purpose of ascertaining certain
	information contained herein
‘‘Listing Rules’’	the Rules Governing the Listing of Securities on the Stock Exchange
‘‘ODM’’	original design manufacturing
‘‘OEM’’	original equipment manufacturing
‘‘Outsourcing Agreement’’	the conditional outsourcing agreement entered into between	the
	Company and CCT Telecom for the outsourcing of the non-electronic
	baby and health care products (including but not limited to the plastic
	baby health care products, sewed soft toys, baby and toy wears	and
	other accessories) and related components on an OEM basis
‘‘PRC’’	the People’s Republic of China, excluding Hong Kong, Macau Special
	Administrative Region of the People’s Republic of China and Taiwan
	for the purpose of this circular
‘‘SFO’’	Securities and Futures Ordinance (Chapter 571 of the Laws of Hong
	Kong)
‘‘Share(s)’’	the ordinary share(s) of HK$0.01 each in the capital of the Company
‘‘Shareholder(s)’’	the holder(s) of the Share(s)
‘‘Special General	the special general meeting of the Company to be convened and held to
Meeting’’	consider and, if thought fit, the Continuing Connected Transactions,	the
	Outsourcing Agreement and the respective caps in relation to	the
	Continuing Connected Transactions or any adjournment thereof (as	the
	case may be)
‘‘Stock Exchange’’	The Stock Exchange of Hong Kong Limited
‘‘substantial shareholder’’	has the same meaning as given to it in the Listing Rules
‘‘%’’	per cent.

— 2 —

LETTER FROM THE BOARD

TECH INTERNATIONAL LIMITED

(Incorporated in Bermuda with limited liability)

Registered office: Canon’s Court 22 Victoria Street Hamilton HM12 Bermuda

Executive Directors: Registered office: Mak Shiu Tong, Clement Canon’s Court Tam Ngai Hung, Terry 22 Victoria Street Cheng Yuk Ching, Flora Hamilton HM12 Tong Chi Hoi Bermuda William Donald Putt Head office and principal place Independent non-executive Directors: of business in Hong Kong: Lau Ho Kit, Ivan 32/F., China Merchants Tower Chow Siu Ngor Shun Tak Centre Chen Li 168–200 Connaught Road Central Hong Kong

23 December 2004

To the Shareholders and, for information only, the holders of the convertible notes and the share options of the Company

Dear Sir or Madam,

CONTINUING CONNECTED TRANSACTIONS

INTRODUCTION

Reference is made to the announcement of the Company dated 2 December 2004.

It was announced on 2 December 2004 that the Company entered into the Outsourcing Agreement with CCT Telecom on 29 November 2004 for the outsourcing of non-electronic baby and health care products (including but not limited to the plastic baby health care products, sewed soft toys, baby and toy wears and other accessories) and related components on an OEM basis from members of the CCT Telecom Remaining Group.

The Company is approximately 34.5% owned by CCT Telecom and CCT Telecom is a substantial shareholder and hence a connected person of the Company under the Listing Rules. The Continuing Connected Transactions constitute connected transactions for the Company for the purposes of the Listing Rules.

The Independent Board Committee has been formed to advise the Independent Shareholders on the terms of the Outsourcing Agreement and the respective caps in relation to the Continuing Connected Transactions.

The Independent Financial Adviser, Altus Capital Limited, has been appointed to advise the Independent Board Committee and the Independent Shareholders as to whether or not the terms of the Outsourcing Agreement and the respective caps in relation to the Continuing Connected Transactions are fair and reasonable so far as the Independent Shareholders are concerned.

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LETTER FROM THE BOARD

The purpose of this circular is:

• (i) to provide the Shareholders with details of the Outsourcing Agreement and the respective caps in relation to the Continuing Connected Transactions;

• (ii) to set out the opinion of the Independent Financial Adviser in respect of the terms of the Outsourcing Agreement and the respective caps in relation to the Continuing Connected Transactions;

• (iii) to set out the recommendation of the Independent Board Committee in respect of the terms of the Outsourcing Agreement and the respective caps in relation to the Continuing Connected Transactions; and

• (iv) to give you the notice of the Special General Meeting to consider and, if thought fit, to approve the Outsourcing Agreement and the respective caps in relation to the Continuing Connected Transactions.

THE OUTSOURCING AGREEMENT

Date: 29 November 2004

Parties: (1) The Company (2) CCT Telecom

Subject: Conditional upon the requisite resolution being passed by the Independent Shareholders at the Special General Meeting in compliance with the Listing Rules approving the Outsourcing Agreement and the transactions contemplated thereunder, the Company will outsource from members of the CCT Telecom Remaining Group non-electronic baby and health care products (including but not limited to the plastic baby health care products, sewed soft toys, baby and toy wears and other accessories) and related components on an OEM basis.

Term: The Outsourcing Agreement will become effective from 1 January 2005 or such later date as both parties may agree in writing and will continue until 31 December 2007 (both dates inclusive). Both parties may renew the Outsourcing Agreement upon its expiry for another three years subject to compliance with the Listing Rules and either party will have the right to terminate the Outsourcing Agreement without cause by serving the other party with not less than three months’ prior written notice.

Price: Based on prevailing market conditions for that type of the product at that time and depending on the product specifications on a case-by-case basis, capped by the amount of direct material costs plus a mark-up of no more than 300% of such material costs.

For each of the two years ended 31 December 2002 and 2003, sales of baby and health care product business of the CCT Telecom Remaining Group amounted to approximately HK$166 million and approximately HK$157 million respectively.

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LETTER FROM THE BOARD

Under the Outsourcing Agreement, the cap amounts for each of the three financial years ending 31 December 2007 will not exceed HK$250 million, HK$350 million and HK$450 million, respectively. The cap amount is determined with reference to (i) the historical sales of baby and health care product business of the CCT Telecom Remaining Group; (ii) the expectation of the Group that sales of the non-electronic baby and health care products will be stimulated by the electronic baby products; and (iii) the trend of growth for traditional non-electronic baby and health care products.

REASONS FOR THE CONTINUING CONNECTED TRANSACTIONS

The Directors consider that the Continuing Connected Transactions will be entered into in the usual and ordinary course of businesses of the Group. The terms of the transactions have been negotiated with reference to prevailing market price and conditions and will be conducted on an arm’s length basis and on normal commercial terms. The Directors are of the view that the Continuing Connected Transactions and the terms thereof are fair and reasonable and in the best interests of the Company and the Shareholders as a whole.

The Group is principally engaged in the sale, manufacture, design and development of telecom products and electronic products on the ODM and OEM basis. The CCT Telecom Group’s principal activities can broadly be categorised into (i) manufacture, sale, design and development of telecom products and electronic products through the Group; (ii) manufacture of power supply components; and (iii) manufacture and sale of plastic components and baby and health care products (including but not limited to the plastic baby health care products, sewed soft toys, baby and toy wears and other accessories).

The recent years have seen as a growing trend in the baby and health care product business for electronic products. There is also a strong tendency for the distributors to outsource manufacturing on an ODM basis. The Group has a strong capability in research and development and is specialised in radio frequency technology and the manufacture of electronic products. On the other hand, the CCT Telecom Remaining Group is specialised in the manufacture of traditional baby and health care products (including but not limited to the plastic baby health care products, sewed soft toys, baby and toy wears and other accessories) on an OEM basis. However, the CCT Telecom Remaining Group does not have the capability and technology to design products and therefore cannot accept orders for manufacturing of baby and health care products on an ODM basis. Furthermore, the CCT Telecom Remaining Group does not have the capability to produce baby and health care products with substantial electronic components. The Group has been approached by customers for orders to produce baby and health care products with electronic components on an ODM basis. Yet, these orders are often bundled with orders for the traditional non-electronic baby and health care products on an ODM basis. The Group does not have the capability to produce traditional non-electronic baby and health care products especially those made in plastic. On the other hand, the CCT Telecom Remaining Group is specialised in the manufacture of non-electronic baby and health care products on an OEM basis. Therefore, the Group intends to outsource the manufacture of the traditional baby and health care products to the members of the CCT Telecom Remaining Group on an OEM basis whilst the Group will design the products and will produce those electronic baby and health care products itself.

The Directors believe that the arrangement under the Outsourcing Agreement will enhance management and operational efficiency by having these products being produced by the CCT Telecom Remaining Group which is better equipped to produce these products on an OEM basis.

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LETTER FROM THE BOARD

The Directors consider that it is in the interests of the Group to outsource the non-electronic baby and health care products to the members of the CCT Telecom Remaining Group on an OEM basis as the CCT Telecom Remaining Group can offer quality products and reliable delivery service at a competitive price.

PROPOSED ANNUAL AMOUNT

The Continuing Connected Transactions will be subject to the reporting, announcement and the Independent Shareholders’ approval requirements under Rule 14A.35 of the Listing Rules at the Special General Meeting by way of a poll. The Company will seek the approval by the Independent Shareholders of the Outsourcing Agreement and the respective caps in relation to the Continuing Connected Transactions for a period of three financial years ending 31 December 2007 on the following conditions:

• (a) Cap amounts:

The amount of payment to the CCT Telecom Remaining Group under the Outsourcing Agreement for each of the three financial years ending 31 December 2007 will not exceed HK$250 million, HK$350 million and HK$450 million, respectively.

• (b) The Continuing Connected Transactions will be:

• (i) entered into in the usual and ordinary course of businesses of the Group;

• (ii) conducted either (A) on normal commercial terms; or (B) if there is no available comparison, on terms no less favourable to the Group than terms available from independent third parties; and

• (iii) entered into in accordance with the terms of the Outsourcing Agreement.

• (c) Brief details of the Continuing Connected Transactions will be disclosed in the Company’s next and each successive annual report and accounts, each accompanied with a statement of opinion of the independent non-executive Directors in such manner as referred to in paragraph (d) below.

• (d) The independent non-executive Directors will review annually the Continuing Connected Transactions and they will confirm in the Company’s annual report and accounts for the year in question that such Continuing Connected Transactions under their review were conducted in the manner as stated in paragraphs (a) and (b) above.

• (e) The auditors of the Company will review annually the Continuing Connected Transactions and they will confirm in a letter to the Directors (a copy of which letter will be provided to the Stock Exchange at least 10 Business Days prior to the bulk printing of the annual report of the Company) in respect of each relevant financial year, during which the Continuing Connected Transactions were conducted, stating that:

• (i) the Continuing Connected Transactions have been approved by the Directors;

• (ii) the Continuing Connected Transactions have been entered into in accordance with the terms of the relevant agreement governing the transactions;

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LETTER FROM THE BOARD

• (iii) the value of the Continuing Connected Transactions has not exceeded their respective annual caps set out in paragraph (a) above; and

• (iv) the Continuing Connected Transactions have been entered into in accordance with the pricing policy of the Group,

and where for whatever reasons, if the auditors of the Company decline to accept the engagement or are unable to provide the auditors’ letter, the Directors will contact the Listing Division of the Stock Exchange immediately.

• (f) So long as the Shares are listed on the Stock Exchange, the Company will, and will procure CCT Telecom to, provide auditors of the Company with sufficient access to the relevant records of the Continuing Connected Transactions for the purpose of auditors’ review as referred to in paragraph (e) above.

• (g) The Company will comply with the applicable provisions of the Listing Rules governing connected transactions in the event that the total amount of any of the Continuing Connected Transactions exceeds their respective caps or that there is any material amendment to the terms of the Outsourcing Agreement.

• (h) The Directors will comply with all relevant requirements applicable to the Continuing Connected Transactions as stipulated under the Listing Rules in effect from time to time.

GENERAL

The Company is approximately 34.5% owned by CCT Telecom and CCT Telecom is a substantial shareholder and hence a connected person of the Company under the Listing Rules. The Continuing Connected Transactions constitute connected transactions for the Company for the purposes of the Listing Rules and are therefore subject to the approval by the Independent Shareholders by way of a poll with CCT Telecom and its associates abstain from voting at the Special General Meeting.

The Independent Board Committee has been established to advise the Independent Shareholders on the terms of the Outsourcing Agreement and the respective caps in relation to the Continuing Connected Transactions. The Independent Financial Adviser has been appointed to advise the Independent Board Committee and the Independent Shareholders in respect of the terms of the Outsourcing Agreement and the respective caps in relation to the Continuing Connected Transactions.

SPECIAL GENERAL MEETING

The notice convening the Special General Meeting to be held at 10: 00 a.m. on Wednesday, 12 January 2005 at 32/F., China Merchants Tower, Shun Tak Centre, 168–200 Connaught Road Central, Hong Kong at which an ordinary resolution will be proposed to approve the Outsourcing Agreement and the respective caps of the Continuing Connected Transactions is set out on pages 23 to 24 of this circular.

A form of proxy for use by the Independent Shareholders at the Special General Meeting is enclosed. Whether or not you intend to attend and vote at the Special General Meeting in person, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon to the branch share registrar and transfer office of the Company in Hong

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LETTER FROM THE BOARD

Kong, Tengis Limited at G/F., Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong, as soon as practicable but in any event, not less than 48 hours before the time appointed for holding the Special General Meeting. Such form of proxy for use at the Special General Meeting is also published on the website of the Stock Exchange (www.hkex.com.hk). Completion and return of the form of proxy will not preclude you from attending and voting in person at the Special General Meeting should you so wish.

Pursuant to bye-law 70 of the bye-laws of the Company, every resolution submitted to a general meeting shall be determined on a show of hands in the first instance by the Shareholders present in person or by proxy or by a duly authorised corporate representative, but a poll may be demanded (before or on the declaration of the result of the show of hands or on the withdrawal of any other demand for a poll) by the chairman of the general meeting or by:

• (a) at least 3 Shareholders present in person (or in the case of a corporation, by its duly authorised representative) or by proxy and entitled to vote at the general meeting; or

• (b) any Shareholder or Shareholders present in person (or in the case of a corporation, by its duly authorised representative) or by proxy and representing in the aggregate not less than one-tenth of the total voting rights of all the Shareholders having the right to vote at the general meeting; or

• (c) a Shareholder or Shareholders present in person (or in the case of a corporation, by its duly authorised representative) or by proxy and holding the Shares conferring a right to vote at the general meeting being the Shares on which an aggregate sum has been paid up equal to not less than one-tenth of the total sum paid up on all Shares conferring that right.

As the transactions contemplated under the Outsourcing Agreement are connected transactions, the vote of the Independent Shareholders at the Special General Meeting will be taken by way of a poll pursuant to the Listing Rules and CCT Telecom and its associates will abstain from voting at the Special General Meeting.

RECOMMENDATION

Your attention is drawn to the letter from the Independent Board Committee as set out on page 9 of this circular which contains its recommendation to the Independent Shareholders on the terms of the Outsourcing Agreement and the respective caps in relation to the Continuing Connected Transactions. Your attention is also drawn to the letter of advice received from the Independent Financial Adviser as set out on pages 10 to 14 of this circular which contains, amongst other matters, its advice to the Independent Board Committee and the Independent Shareholders in relation to the terms of the Outsourcing Agreement and the respective caps in relation to the Continuing Connected Transactions and the principal factors and reasons considered by it in concluding its advice.

Your attention is also drawn to the general information as set out in the appendix of this circular.

Yours faithfully,

For and on behalf of the Board of

CCT TECH INTERNATIONAL LIMITED Mak Shiu Tong, Clement Chairman

— 8 —

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

TECH INTERNATIONAL LIMITED

(Incorporated in Bermuda with limited liability)

The Independent Board Committee: Lau Ho Kit, Ivan Chow Siu Ngor

Registered office: Canon’s Court 22 Victoria Street Hamilton HM12 Bermuda

Head office and principal place of business in Hong Kong: 32/F., China Merchants Tower Shun Tak Centre 168–200 Connaught Road Central Hong Kong

23 December 2004

To the Independent Shareholders

Dear Sir or Madam,

CONTINUING CONNECTED TRANSACTIONS

We refer to the circular of the Company to the Shareholders dated 23 December 2004 (the ‘‘Circular’’), in which this letter forms part. Unless the context requires otherwise, capitalised terms used in this letter will have the same meanings as given to them in the section headed ‘‘Definitions’’ of the Circular.

We have been appointed by the Board as the Independent Board Committee to advise the Independent Shareholders on whether the terms of the Outsourcing Agreement and the respective caps in relation to the Continuing Connected Transactions are fair and reasonable so far as the Independent Shareholders are concerned.

We wish to draw your attention to the letter of advice from the Independent Financial Adviser as set out on pages 10 to 14 of the Circular and the letter from the Board as set out on pages 3 to 8 of the Circular.

Having considered, amongst other matters, the factors and reasons considered by, and the opinion of the Independent Financial Adviser as stated in its letter of advice, we consider that the terms of the Outsourcing Agreement and the respective caps in relation to the Continuing Connected Transactions are fair and reasonable so far as the Independent Shareholders are concerned and accordingly recommend the Independent Shareholders to vote in favour of the ordinary resolution in relation to the Outsourcing Agreement and the respective caps in relation to the Continuing Connected Transactions to be proposed at the Special General Meeting.

Yours faithfully,

The Independent Board Committee of CCT TECH INTERNATIONAL LIMITED Lau Ho Kit, Ivan Chow Siu Ngor Independent non-executive Directors

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Set out below is the text of the letter from Altus Capital Limited to the Independent Board Committee and the Independent Shareholders prepared for inclusion in this Circular:

ALTUS CAPITAL LIMITED

8/F Hong Kong Diamond Exchange Building 8 Duddell Street, Central Hong Kong

23 December 2004

To the Independent Board Committee and the Independent Shareholders of CCT Tech International Limited

32/F China Merchants Tower Shun Tak Centre 168–200 Connaught Road Central Hong Kong

Dear Sirs

CONTINUING CONNECTED TRANSACTIONS

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 terms of the Continuing Connected Transactions, particulars of which are set out in the letter from the board (the ‘‘Board’s Letter’’) contained in the circular to the Shareholders dated 23 December 2004 (the ‘‘Circular’’), of which this letter forms part. Unless the context requires otherwise, terms used in this letter shall have the same meanings as given to them under the definitions section of the Circular.

An Independent Board Committee has been formed to advise the Independent Shareholders in relation to the Continuing Connected Transactions and the related cap amounts. CCT Telecom and its associates will abstain from voting at the special general meeting to be convened for this purpose. The votes of the Independent Shareholders in the special general meeting shall be taken by way of a poll.

BASIS OF OUR OPINION

In formulating our opinion, we have relied to a considerable extent on the information, statements, opinion and representations contained or referred to in the Circular and the information and representations contained or referred to in the Circular and all information and representations which have been provided by the Directors, for which they are solely and wholly responsible, are true and accurate at the time when they were made and continue to be so at the date hereof. We have also assumed that all statements of belief, opinion and intention of the Directors set out in the Board’s Letter were reasonably made after due and careful inquiry. We have also sought and obtained confirmation from the Company that no material facts have been omitted from the information provided and referred to in the Circular.

The Directors confirmed that they have provided us with all currently available information and documents which are available under present circumstances to enable us to reach an informed view and we have relied on the accuracy of the information contained in the Circular so as to provide a

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

reasonable basis of our opinion. We have no reason to suspect that any material facts or information (which is known to the Company) have been omitted or withheld from the information supplied or opinions expressed in the Circular nor to doubt the truth and accuracy of the information and facts, or the reasonableness of the opinions expressed by the Company and the Directors which have been provided to us. We have not, however, carried out any independent verification on the information provided to us by the Directors, nor have we conducted any form of independent in-depth investigation into the business and affairs or the prospects of the Group and the CCT Telecom Remaining Group.

PRINCIPAL FACTORS AND REASONS CONSIDERED

In arriving at our recommendation in respect of the terms of the Continuing Connected Transactions, we have taken the following principal factors and reasons into consideration:

1. Background and reasons for the Continuing Connected Transactions

With reference to the annual report of the Group for the financial year ended 31 December 2003 and as set out in the Board’s Letter, the Group is principally engaged in the manufacture, sale, design and development of telecom products and electronic products on the ODM and OEM bases. The CCT Telecom Group, a substantial shareholder holding approximately 34.5% of the entire issued share capital in the Company, is principally engaged in: (i) the manufacture, sale, design and development of telecom products and electronic products through the Group; (ii) the manufacture of power supply components; and (iii) the manufacture and sale of plastic components and baby and health care products (including but not limited to plastic baby health care products, sewed soft toys, baby and toy wears and other accessories).

As stated above, the Group specialises in the manufacturing of electronic products. The Directors have also noted a growing trend in the demand for electronic products within the baby and health care product business as well as a strong tendency for the distributors of such products to outsource manufacturing on an ODM basis as the Group has been approached by customers for orders to produce baby and health care products with electronic components on an ODM basis. These orders are often bundled with orders for non-electronic baby and health care products on an ODM basis, for which the Group does not have the production capability, especially in respect of those products made in plastic.

However, as stated above, the CCT Telecom Remaining Group specialises in the manufacturing of traditional baby and health care products on an OEM basis. As the CCT Telecom Remaining Group does not have the capability and technology to design products on an ODM basis, it: (i) cannot accept orders for baby and health care products on an ODM basis; and (ii) does not have the capability to manufacture baby and health care products with substantial electronic components.

Therefore, in respect of those orders to produce baby and health care products on an ODM basis, as mentioned above, the Group intends to design the product and will produce those electronic baby and health care products itself and to outsource the manufacturing of the traditional baby and health care products to the CCT Telecom Remaining Group on an OEM basis.

The Directors believe that the arrangement under the Outsourcing Agreement enables the Group to outsource the production of products as stated above. The Directors also consider that it is in the interests of the Group to outsource the manufacturing of non-electronic baby and health care

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

products to the CCT Telecom Remaining Group on an OEM basis as the CCT Telecom Remaining Group is better equipped than the Group in respect of such production, and can offer quality products and reliable delivery service at a competitive price.

As the Continuing Connected Transactions are part of the principal businesses of the Group, thus will be entered into the usual and ordinary course of business of the Group. The Directors have confirmed that they will be conducted on an arm’s length basis and on normal commercial terms. On this basis, the Directors are of the view that the arrangement under the Outsourcing Agreement will enhance management and operational efficiency, by enabling the CCT Telecom Remaining Group to provide complementary services to the Company. We therefore agree to the Directors and are of the view that it is in the interest of the Company and the Shareholders as a whole to engage in the Continuing Connected Transactions.

2. Basis of determination

As stated in the Board’s Letter, the price of the Outsourcing Agreement will be based on the prevailing market price and market conditions for that type of the product at that time and depending on the product specifications on a case-by-case basis, capped by the amount of direct material costs plus a mark-up of no more than 300% of such material costs. We have reviewed copies of sample invoices and bills of materials lists of baby and health care products of the CCT Telecom Remaining Group which showed that their respective mark-ups are of no more than 300% of the direct material costs.

On the basis that the Continuing Connected Transactions will be: (i) entered into in the usual and ordinary and usual course of business of the Group; (ii) conducted either on normal commercial terms; or if there is no available comparison, on terms no less favourable to the Group than terms available from independent third parties; and (iii) entered into in accordance with terms of the Outsourcing Agreement, we consider that the Continuing Connected Transactions provide the Group with a reliable OEM services at market prices and are in the interest of the Group and the Shareholders as a whole.

3. The Cap Amounts

As stated in the Board’s Letter, for each of the two years ended 31 December 2002 and 2003, sales of baby and health care products business of the CCT Telecom Remaining Group amounted to approximately HK$166 million and approximately HK$157 million respectively.

Under the Outsourcing Agreement, the cap amounts (the ‘‘Caps’’) for each of the three financial years ending 31 December 2007 will not exceed HK$250 million, HK$350 million and HK$450 million, respectively. We understand from the Directors that in determining the Caps for each of the three years ending 31 December 2007, the Directors have made reference to (i) the historical sales of baby and health care products business of the CCT Telecom Remaining Group; (ii) the expectation of the Group that sales of the non-electronic baby and health care products will be stimulated by the electronic baby products; and (iii) the trend of growth for traditional nonelectronic baby and health care products, which the Directors expect such growth to be approximately 40% for the year 2006 and approximately 28% for the year 2007.

— 12 —

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Having considered the basis and assumptions (including the contracts in hand, the enquires received by the Group and the expected business and economic environment as anticipated by the Directors) for arriving at the projections by the Company for the determination of the Caps, we are of the view that the Caps are fair and reasonable as far as the Company and its shareholders are concerned.

4. Conditions of the Continuing Connected Transactions

The Continuing Connected Transactions will also be subject to the reporting, announcement and the Independent Shareholders’ approval requirements under Rule 14A.35 of the Listing Rules at the Special General Meeting by way of a poll. The Company will seek the approval by the Independent Shareholders of the Outsourcing Agreement and the Caps in relation to the Continuing Connected Transactions for a period of three financial years ending 31 December 2007 on the following conditions:

• (a) Cap amounts:

The amount of payment to the CCT Telecom Remaining Group under the Outsourcing Agreement for each of the three financial years ending 31 December 2007 will not exceed HK$250 million, HK$350 million and HK$450 million, respectively.

• (b) The Continuing Connected Transactions will be:

• (i) entered into in the usual and ordinary course of businesses of the Group;

• (ii) conducted either (A) on normal commercial terms; or (B) if there is no available comparison, on terms no less favourable to the Group than terms available from independent third parties; and

• (iii) entered into in accordance with the terms of the Outsourcing Agreement.

• (c) Brief details of the Continuing Connected Transactions will be disclosed in the Company’s next and each successive annual report and accounts, each accompanied with a statement of opinion of the independent non-executive Directors in such manner as referred to in paragraph (d) below.

• (d) The independent non-executive Directors will review annually the Continuing Connected Transactions, and they will confirm in the Company’s annual report and accounts for the year in question that such Continuing Connected Transactions under their review were conducted in the manner as stated in paragraphs (a) and (b) above.

• (e) The auditors of the Company will review annually the Continuing Connected Transactions, and they will confirm in a letter to the Directors (a copy of which letter will be provided to the Stock Exchange at least 10 Business Days prior to the bulk printing of the annual report of the Company) in respect of each relevant financial year, during which the Continuing Connected Transactions were conducted, stating that:

• (i) the Continuing Connected Transactions have been approved by the Directors;

• (ii) the Continuing Connected Transactions have been entered into in accordance with the terms of the relevant agreement governing the transactions;

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

• (iii) the value of the Continuing Connected Transactions has not exceeded their respective annual caps set out in paragraph (a) above; and

• (iv) the Continuing Connected Transactions have been entered into in accordance with the pricing policy of the Group,

and where for whatever reasons, if the auditors of the Company decline to accept the engagement or are unable to provide the auditors’ letter, the Directors will contact the Listing Division of the Stock Exchange immediately.

• (f) So long as the Shares are listed on the Stock Exchange, the Company will, and will procure CCT Telecom to, provide auditors of the Company with sufficient access to the relevant records of the Continuing Connected Transactions for the purpose of auditors’ review as referred to in paragraph (e) above.

• (g) The Company will comply with the applicable provisions of the Listing Rules governing connected transactions in the event that the total amount of any of the Continuing Connected Transactions exceeds their respective caps or that there is any material amendment to the terms of the Outsourcing Agreement.

• (h) The Directors will comply with all relevant requirements applicable to the Continuing Connected Transactions as stipulated under the Listing Rules in effect from time to time.

Having considered the fact that the Outsourcing Agreement and the Caps in relation to the Continuing Connected Transactions will be subject to the conditions as stated above, we consider that the Company has taken appropriate measures to govern itself in carrying out the Continuing Connected Transactions, thereby safeguarding the interest of the Independent Shareholders thereunder.

RECOMMENDATION

Having considered the above principal factors and reasons, we are of the view that the Continuing Connected Transactions are in the usual and ordinary course of business of the Company and the terms and conditions of the Continuing Connected Transactions, including the Outsourcing Agreement and the Caps, are on normal commercial terms and fair and reasonable so far as the Company and the Independent Shareholders are concerned and are in the interest of the Company and the Independent Shareholders as a whole. We have advised the Independent Board Committee accordingly and would recommend to the Independent Shareholders to vote in favour of the resolution to approve the Continuing Connected Transactions, the Outsourcing Agreement and the Caps to be proposed at the Special General Meeting.

Yours faithfully, For and on behalf of Altus Capital Limited Kevin Chan

Executive Director

— 14 —

GENERAL INFORMATION

APPENDIX

1. 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 with regard to the Company and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, opinions expressed in this circular have been arrived at after due and careful consideration and, there are no other facts not contained in this circular, the omission of which would make any statement contained herein misleading.

2. SHARE CAPITAL

As at the Latest Practicable Date, the authorised and issued share capital of the Company were as follows:

Authorised share capital: HK$ 120,000,000,000 Shares 1,200,000,000.00

Issued and fully paid or credited as fully paid Shares:

15,938,422,562 Shares

159,384,225.62

— 15 —

GENERAL INFORMATION

APPENDIX

1. DISCLOSURE OF INTERESTS

(a) Directors’ interests and short positions in the shares, underlying shares and debentures of the Company and its associated corporations

As at the Latest Practicable Date, the interests and short positions of the Directors and the chief executive of the Company and 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 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 were required, pursuant to section 352 of the SFO, to be entered in the register of the Company referred to therein or were required, pursuant to Part XV of the SFO or the Model Code for Securities Transactions by Directors of Listed Issuers of the Listing Rules, to be notified to the Company and the Stock Exchange were as follows:

• (1) Interests and short positions in the Shares, underlying Shares and debentures of the Company

Long positions in the underlying Shares of equity derivatives of the Company:

• (i) Share options:

	Date of	Exercise		Number	Number	Approximate
	grant	period	Exercise	of share	of total	percentage
	of share	of share	price per	options	underlying	of total
Name of Director	options	options	Share	outstanding	Shares	shareholding
			HK$			(%)
Mak Shiu Tong,	30/4/2003	30/4/2003–	0.014	100,000,000	100,000,000	0.63
Clement		29/4/2008
Cheng Yuk Ching,	30/4/2003	30/4/2003–	0.014	100,000,000	100,000,000	0.63
Flora		29/4/2008
Tam Ngai Hung, Terry	30/4/2003	30/4/2003–	0.014	100,000,000	100,000,000	0.63
		29/4/2008
Tong Chi Hoi	30/4/2003	30/4/2003–	0.014	50,000,000	50,000,000	0.31
		29/4/2008
Chow Siu Ngor	30/4/2003	30/4/2003–	0.014	8,000,000	8,000,000	0.05
		29/4/2008
Lau Ho Kit, Ivan	30/4/2003	30/4/2003–	0.014	8,000,000	8,000,000	0.05
		29/4/2008

— 16 —

GENERAL INFORMATION

APPENDIX

(ii)	Convertible note:
			Number	Approximate
			of total	percentage
		Description of	underlying	of total
Name of Director		equity derivatives	Shares	shareholding
				(%)
Mak	Shiu Tong, Clement (Note)	HK$45 million	4,500,000,000	28.23
		zero coupon
		convertible note
		due 2005

• Note: The HK$45 million zero coupon convertible note due 2005 was held by New Capital Industrial Limited, which is a corporation controlled by Mr. Mak Shiu Tong, Clement. This interest in the underlying Shares has also been disclosed under the section headed ‘‘Substantial Shareholders’ Interests’’ below.

• (2) Interests and short positions in the shares, underlying shares and debentures of an associated corporation — CCT Telecom

• (i) Long positions in the shares of CCT Telecom:

						Approximate
		Number of shares beneficially			held	percentage of
			and nature	of interest		total
Name of Director	Notes	Personal	Family	Corporate	Total	shareholding
						(%)
Mak Shiu Tong, Clement	(1)	—	—	86,261,941	86,261,941	20.42
Cheng Yuk Ching, Flora	(2)	9,876,713	100,000	—	9,976,713	2.36
Tong Chi Hoi		282,000	—	—	282,000	0.07
William Donald Putt		171,500	—	—	171,500	0.04

Notes:

• (1) The shares were held by Capital Force International Limited and Capital Interest Limited, which are corporations controlled by Mr. Mak Shiu Tong, Clement.

• (2) The family interest of Ms. Cheng Yuk Ching, Flora in 100,000 shares was held by her husband, Mr. Po Pui Lam, and she was deemed to be interested in the same under the provisions of Part XV of the SFO.

— 17 —

GENERAL INFORMATION

APPENDIX

• (ii) Long positions in the underlying shares of equity derivatives of CCT Telecom — share options:

	Date of	Exercise		Number	Number	Approximate
	grant of	period	Exercise	of share	of total	percentage
	share	of share	price per	options	underlying	of total
Name of Director	options	options	share	outstanding	shares	shareholding
			HK$			(%)
Mak Shiu Tong,	17/3/2003	17/3/2003–	0.75	420,000	420,000	0.10
Clement		16/3/2008
Cheng Yuk Ching,	17/3/2003	17/3/2003–	0.75	4,200,000	4,200,000	1.00
Flora		16/3/2008
Tam Ngai Hung, Terry	17/3/2003	17/3/2003–	0.75	4,200,000	4,200,000	1.00
		16/3/2008
Tong Chi Hoi	17/3/2003	17/3/2003–	0.75	1,000,000	1,000,000	0.24
		16/3/2008
William Donald Putt	17/3/2003	17/3/2003–	0.75	420,000	420,000	0.10
		16/3/2008

(b) Particulars of Directors’ other interests

As at the Latest Practicable Date, none of the Directors had entered or was proposing to enter into a service contract with the Company or any of its subsidiaries (excluding contracts expiring or determinable within one year without payment of compensation other than statutory compensation).

(c) Save as disclosed above, as at the Latest Practicable Date:

• (i) none of the Directors and the chief executive of the Company and their respective associates held any interests or short positions in the shares, underlying shares and debentures of the Company or any of its associated corporations (within the meaning of the SFO) which had 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 of the Company referred to therein or which were required, pursuant to Part XV of the SFO or the Model Code for Securities Transactions by Directors of Listed Issuers of the Listing Rules, to be notified to the Company and the Stock Exchange; and

• (ii) none of the Directors was interested in any business that was in competition with the Company.

— 18 —

GENERAL INFORMATION

APPENDIX

4. SUBSTANTIAL SHAREHOLDERS’ INTERESTS

As at the Latest Practicable Date, so far as was known to, or could be ascertained after reasonable enquiry by, the Directors, the following persons (other than the Directors or the chief executive of the Company) had interests or short positions in the Shares or underlying Shares as recorded in the register required to be kept by the Company under section 336 of the SFO:

• (i) Long positions in the Shares:

			Approximate
			percentage of
		Number of	total
Name of Shareholder	Notes	Shares held	shareholding
			(%)
CCT Telecom	(1)	5,500,000,000	34.51
CCT Technology Investment Limited	(2)	5,500,000,000	34.51
Jade Assets Company Limited		1,800,000,000	11.29
CCT Assets Management Limited		1,350,000,000	8.47
Expert Success International Limited		1,350,000,000	8.47
Noble Team Investments Limited		1,000,000,000	6.28
Kwong Cheong Trading Limited		2,000,000,000	12.55
Yang Shao Wu	(3)	2,000,000,000	12.55
Deutsche Bank Aktiengesellschaft		799,920,000	5.02

Notes:

• (1) The interest disclosed comprises 5,500,000,000 Shares indirectly owned by CCT Technology Investment Limited through the subsidiaries stated in note (2) below. CCT Technology Investment Limited is a whollyowned subsidiary of CCT Telecom.

• (2) The interest disclosed comprises 1,800,000,000 Shares held by Jade Assets Company Limited, 1,350,000,000 Shares held by CCT Assets Management Limited, 1,350,000,000 Shares held by Expert Success International Limited and 1,000,000,000 Shares held by Noble Team Investments Limited, all of them are wholly-owned subsidiaries of CCT Technology Investment Limited.

• (3) The interest disclosed comprises 2,000,000,000 Shares held by Kwong Cheong Trading Limited, which is wholly-owned by Mr. Yang Shao Wu.

— 19 —

APPENDIX

GENERAL INFORMATION

(ii) Long positions in the underlying Shares of equity derivatives of the Company — convertible notes:

			Number of	Approximate
			total	percentage
Name of holder of		Description of	underlying	of total
equity derivatives	Notes	equity derivatives	Shares	shareholding
				(%)
CCT Telecom	(1)	HK$615 million out	43,928,571,428	275.61
		of the principal
		sum of HK$768
		million prime or
		best lending rate
		plus 2%
		convertible note
		due 2008
CCT Technology	(2)	HK$615 million out	43,928,571,428	275.61
Investment Limited		of the principal
		sum of HK$768
		million prime or
		best lending rate
		plus 2%
		convertible note
		due 2008
Noble Team		HK$615 million out	43,928,571,428	275.61
Investments Limited		of the principal
		sum of HK$768
		million prime or
		best lending rate
		plus 2%
		convertible note
		due 2008
New Capital Industrial	(3)	HK$45 million zero	4,500,000,000	28.23
Limited		coupon
		convertible notes
		due 2005

Notes:

• (1) The interest disclosed comprises 43,928,571,428 underlying Shares indirectly owned by CCT Technology Investment Limited through the subsidiary stated in note (2) below. CCT Technology Investment Limited is a wholly-owned subsidiary of CCT Telecom.

• (2) The interest disclosed comprises 43,928,571,428 underlying Shares held by Noble Team Investments Limited, which is a wholly-owned subsidiary of CCT Technology Investment Limited.

• (3) New Capital Industrial Limited is a corporation controlled by Mr. Mak Shiu Tong, Clement. This interest in the underlying Shares has also been disclosed under the section headed ‘‘Disclosure of Interests’’ above.

— 20 —

GENERAL INFORMATION

APPENDIX

Save as disclosed above, so far as was known to the Directors, as at the Latest Practicable Date, no other person (other than the Directors or the chief executive of the Company) had any interests or short positions in the Shares and underlying Shares as recorded in the register required to be kept by the Company under section 336 of the SFO.

5. LITIGATION

As at the Latest Practicable Date, neither the Company nor any of its subsidiaries was engaged in any litigation or arbitration of material importance and no litigation or claim of material importance was known to the Directors to be pending or threatened by or against the Company or any member of the Group.

6. MATERIAL ADVERSE CHANGES

Save as disclosed herein, as at the Latest Practicable Date, the Directors were not aware of any material adverse change in the financial or trading position of the Company since 31 December 2003, being the date to which the latest published audited financial statements of the Company were made up.

7. INTERESTS IN ASSETS AND/OR CONTRACTS AND OTHER INTERESTS

As at the Latest Practicable Date, none of the Directors had any direct or indirect interest in any asset which had been, since 31 December 2003, being the date of the latest published audited accounts of the Company were made up, 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.

As at the Latest Practicable Date, none of the Directors was materially interested in any contract or arrangement entered into by any member of the Group which was subsisting and which was significant in relation to the business of the Group taken as a whole.

8. QUALIFICATION AND CONSENT OF EXPERT

Altus Capital Limited has given and has not withdrawn its written consent to the issue of this circular with the inclusion of its letter and reference to its name in the form and context in which they appear.

The qualification of the expert who has provided its advice as contained in this circular is as follows:

Name Qualification

Altus Capital Limited A deemed licensed corporation under the SFO and engaged in types 1, 4, 6 and 9 regulated activities.

Save as disclosed in this circular, Altus Capital Limited is not interested in any Share or share in any member of the Group nor does it have any right or option (whether legally enforceable or not) to subscribe for or nominate persons to subscribe for any Share or share in any member of the Group.

— 21 —

GENERAL INFORMATION

APPENDIX

1. GENERAL

2. (a) The registered office of the Company is Canon’s Court, 22 Victoria Street, Hamilton HM12, Bermuda and the head office and the principal place of business of the Company in Hong Kong is located at 32/F., China Merchants Tower, Shun Tak Centre, 168–200 Connaught Road Central, Hong Kong.

3. (b) The branch share registrar and transfer office of the Company in Hong Kong is Tengis Limited at G/F., Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong.

4. (c) The qualified accountant of the Company is Mr. Ho Yiu Hong, Victor, who is a fellow of the Association of Chartered Certified Accountants and an associate of The Institute of Chartered Secretaries and Administrators.

5. (d) The company secretary of the Company is Ms. Low Pui Man, Jaime, who is a fellow of both The Institute of Chartered Secretaries and Administrators and The Hong Kong Institute of Company Secretaries.

6. (e) In the event of inconsistency, the English text of this circular shall prevail over the Chinese text.

10. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection during normal business hours on any Business Day at the head office and the principal place of business of the Company in Hong Kong at 32/F., China Merchants Tower, Shun Tak Centre, 168–200 Connaught Road Central, Hong Kong from the date of this circular up to and including the date of the Special General Meeting:

• (a) the bye-laws of the Company;

• (b) the annual reports of the Company for the two years ended 31 December 2002 and 2003;

• (c) the interim reports of the Company for the six months ended 30 June 2003 and 2004;

• (d) the letter of recommendation from the Independent Board Committee to the Independent Shareholders, the text of which is set out on page 9 of this circular;

• (e) the letter of advice from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders, the text of which is set out on pages 10 to 14 of this circular;

• (f) the written consent from the Independent Financial Adviser referred to in paragraph 8 of this appendix; and

• (g) the Outsourcing Agreement.

— 22 —

NOTICE OF THE SPECIAL GENERAL MEETING

TECH INTERNATIONAL LIMITED (Incorporated in Bermuda with limited liability)

NOTICE IS HEREBY GIVEN that a special general meeting of the shareholders of CCT Tech International Limited (the ‘‘Company’’) will be held at 32/F., China Merchants Tower, Shun Tak Centre, 168–200 Connaught Road Central, Hong Kong on Wednesday, 12 January 2005 at 10: 00 a.m. for the purpose of considering and, if thought fit, passing with or without modifications, the following resolution as an ordinary resolution of the Company:

ORDINARY RESOLUTION

‘‘THAT:

• (a) the agreement (the ‘‘Outsourcing Agreement’’) dated 29 November 2004 entered into between the Company and CCT Telecom Holdings Limited (‘‘CCT Telecom’’, together with its subsidiaries, the ‘‘CCT Telecom Group’’), a copy of which is tabled at the meeting and marked ‘‘A’’ and initialled by the chairman of the meeting for identification purpose, pursuant to which the Company will outsource from members of the CCT Telecom Group (excluding the Company and its subsidiaries) non-electronic baby and health care products (including but not limited to the plastic baby health care products, sewed soft toys, baby and toy wears and other accessories) and related components on an OEM basis, and the transactions contemplated thereunder be and are hereby approved, ratified and confirmed;

• (b) the proposed caps in relation to the Continuing Connected Transactions (as defined in the circular of the Company dated 23 December 2004 (the ‘‘Circular’’), a copy of which is tabled at the meeting and marked ‘‘B’’ and initialled by the chairman of the meeting for identification purpose, for each of the three financial years ending 31 December 2007 being HK$250 million, HK$350 million and HK$450 million respectively be and are hereby approved; and

• (c) any one director of the Company, or any two directors of the Company if the affixation of the common seal is necessary, be and is/are hereby authorised for and on behalf of the Company to execute all such other documents, instruments and agreements and to do all such acts or things deemed by him/them to be incidental to, ancillary to or in connection with the matters contemplated in and completion of the Outsourcing Agreement and/or the Continuing Connected Transactions.’’

By Order of the Board of CCT TECH INTERNATIONAL LIMITED Mak Shiu Tong, Clement Chairman

Hong Kong, 23 December 2004

Head office and principal place of business in Hong Kong:

32/F., China Merchants Tower Shun Tak Centre 168–200 Connaught Road Central Hong Kong

— 23 —

NOTICE OF THE SPECIAL GENERAL MEETING

Notes:

1. A form of proxy for use at the meeting is enclosed herewith.

2. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his/her attorney duly authorised in writing or, if the appointor is a corporation, either executed under its common seal or under the hand of any officer, attorney or other person authorised to sign the same.

3. Any member entitled to attend and vote at the meeting is entitled to appoint not more than two proxies (who must be an individual or individuals) to attend and vote instead of him/her on the same occasion. A proxy need not be a member of the Company but must attend the meeting in person to represent him/her.

4. In order to be valid, the form of proxy, together with the power of attorney or other authority (if any) under which it is signed, or a notarially certified copy of such power or authority, must be lodged at the branch share registrar and transfer office of the Company in Hong Kong, Tengis Limited at G/F., Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong, not less than 48 hours before the time appointed for holding the meeting or any adjourned meeting thereof (as the case may be).

5. Completion and return of the form of proxy will not preclude a member from attending and voting in person at the meeting or any adjourned meeting thereof (as the case may be) should they so wish and in such event, the form of proxy shall be deemed to be revoked.

6. Where there are joint registered holders of any share(s), any one of such joint holders may attend and vote at the meeting, either in person or by proxy, in respect of such share(s) as if he/she was solely entitled thereto, but if more than one of such joint holders are present at the meeting or any adjourned meeting thereof (as the case may be), the most senior shall alone be entitled to vote, whether in person or by proxy. For this purpose, seniority will be determined by the order in which the names stand in the register of members of the Company in respect of the joint holding.

— 24 —