GBA Holdings Limited - Proxy Solicitation & Information Statement 2011

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your securities in CCT Tech International Limited, you should at once hand this circular and the accompanying form of proxy to the purchaser(s), the transferee(s) or to the bank, licensed securities dealer or registered institution in securities, or other agent through whom the sale or transfer was effected for onward transmission to the purchaser(s) or the 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: 00261)

NON-EXEMPT CONTINUING CONNECTED TRANSACTIONS

Independent financial adviser to the Independent Board Committee and the Independent Shareholders

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FIRST SHANGHAI CAPITAL LIMITED

A letter from the Board is set out on pages 4 to 13 of this circular.

A letter from the Independent Board Committee is set out on pages 14 to 15 of this circular.

A letter from First Shanghai containing its advice to the Independent Board Committee and the Independent Shareholders is set out on pages 16 to 23 of this circular.

A notice convening the SGM to be held at 2208, 22/F., St. George’s Building, 2 Ice House Street, Central, Hong Kong on Tuesday, 8 November 2011 at 10:30 a.m. is set out on pages 29 to 30 of this circular. A form of proxy for use by the Independent Shareholders at the SGM is enclosed with this circular. Whether or not you intend to attend and vote at the SGM in person, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return it to the branch share registrar and transfer office of the Company in Hong Kong, Tricor Tengis Limited at 26/F., Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong as soon as practicable but in any event, not later than 48 hours before the time appointed for holding the SGM. Such form of proxy for use at the SGM is also published on the websites of the Stock Exchange (www.hkexnews.hk) and the Company (www.cct-tech.com.hk). Completion and return of the form of proxy will not preclude you from attending and voting in person at the SGM should you so wish.

18 October 2011

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Letter from the Independent Board Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	14
Letter from First Shanghai . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	16
Appendix – General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	24
Notice of the SGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	29

– i –

DEFINITIONS

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

“associate(s)” has the same meaning as ascribed to it under the Listing Rules;
“Baby and Child Products” products for infants and children including but not limited to child nursery, feeding, health care, hygiene and safety products (excluding the Baby Monitors), and accessories that the CCT Telecom Remaining Group sells or will sell to its own customers around the world from time to time;
“Baby Monitors” a series of models of electronic wireless transmitter and receiver systems used to remotely monitor the condition and safety of infants that the CCT Telecom Remaining Group sells or will sell to its own customers around the world from time to time;
“Board” the board of the Directors;
“Business Day” a day (other than Saturdays, Sundays and public holidays) on which licensed banks in Hong Kong are open for business;
“CCT Assets” CCT Assets Management Limited, a company incorporated in the British Virgin Islands with limited liability and an indirect wholly-owned subsidiary of CCT Telecom;
“CCT Tech” or “Company” CCT Tech International Limited, a company incorporated in Bermuda with limited liability and whose Shares are listed on the main board of the Stock Exchange;
“CCT Telecom” CCT Telecom Holdings Limited, a company incorporated in the Cayman Islands and continued in Bermuda with limited liability and whose shares are listed on the main board of the Stock Exchange;
“CCT Telecom Group” CCT Telecom and its subsidiaries from time to time;
“CCT Telecom Remaining Group” CCT Telecom and its subsidiaries other than the Group from time to time and reference to the CCT Telecom Remaining Group as the context required refers to its member(s);
“connected person(s)” has the same meaning as ascribed to it under the Listing Rules;
“DECT” digital enhanced cordless telephone;
“Director(s)” the director(s) of the Company from time to time;

– 1 –

DEFINITIONS

“Expert Success”
“First Shanghai”
“Group”
“HK$”
“Hong Kong”
“Independent Board Committee”
“Independent Shareholders”
“Jade Assets”
“Latest Practicable Date”
“Listing Rules”
“New Manufacturing Agreement”

Expert Success International Limited, a company incorporated in the British Virgin Islands with limited liability and an indirect wholly-owned subsidiary of CCT Telecom;

First Shanghai Capital Limited, a licensed corporation under the SFO to carry out type 6 (advising on corporate finance) regulated activity, being the independent financial adviser to the Independent Board Committee and the Independent Shareholders in relation to the New Manufacturing Agreement, the New Manufacturing Transactions and the New Manufacturing Transactions Caps;

the Company and its subsidiaries from time to time;

Hong Kong dollar(s), the lawful currency of Hong Kong;

the Hong Kong Special Administrative Region of the PRC;

the independent board committee of the Company comprising Mr. Chow Siu Ngor and Mr. Lau Ho Kit, Ivan, the independent non-executive Directors not having material interest in the New Manufacturing Agreement, the New Manufacturing Transactions and the New Manufacturing Transactions Caps, formed to advise the Independent Shareholders in respect of the New Manufacturing Agreement, the New Manufacturing Transactions and the New Manufacturing Transactions Caps;

Shareholders other than CCT Telecom and its associates;

Jade Assets Company Limited, a company incorporated in the British Virgin Islands with limited liability and an indirect wholly-owned subsidiary of CCT Telecom;
13 October 2011, being the latest practicable date prior to the printing of this circular for the purpose of ascertaining certain information contained herein;

the Rules Governing the Listing of Securities on the Stock Exchange;

the manufacturing agreement entered into between CCT Tech and CCT Telecom on 30 September 2011 in relation to the design, development, manufacture and supply of the Products by the Group for the CCT Telecom Remaining Group;

– 2 –

DEFINITIONS

“New Manufacturing Transactions”

the transactions as contemplated under the New Manufacturing Agreement;

“New Manufacturing Transactions Caps” the cap amounts for the New Manufacturing Transactions as set out in the sub-section headed “The New Manufacturing Transactions Caps” under the section headed “Details of the New Manufacturing Transactions” in the “Letter from the Board” of this circular;

“ODM” original design manufacturing;
“PRC” the People’s Republic of China, excluding Hong Kong and Macau for the purpose of this circular;
“Previous ECP Manufacturing the previous manufacturing agreement entered into Agreement” between CCT Telecom and the Company on 31 August 2009 in relation to the design, development, manufacture and supply of the electronic children products and moulds and toolings for the production of the electronic children products by the Group for the CCT Telecom Remaining Group;
“Products” the Baby and Child Products and the Baby Monitors, which will be manufactured and supplied by the Group to the CCT Telecom Remaining Group under the New Manufacturing Agreement;
“R&D” research and development;
“SFO” Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong);
“SGM” the special general meeting of the Company to be convened and held to consider and, if thought fit, approve, inter alia, the New Manufacturing Agreement, the New Manufacturing Transactions and the New Manufacturing Transactions Caps or any adjournment thereof (as the case may be);
“Share(s)” the ordinary share(s) of HK$0.01 each in the share capital of the Company;
“Shareholder(s)” the holder(s) of the Share(s); “Stock Exchange” The Stock Exchange of Hong Kong Limited; and “%” per cent.

– 3 –

LETTER FROM THE BOARD

(Incorporated in Bermuda with limited liability)

(Stock Code: 00261)

Executive Directors: Mak Shiu Tong, Clement Cheng Yuk Ching, Flora Tam Ngai Hung, Terry William Donald Putt

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

Independent non-executive Directors: Chow Siu Ngor Lau Ho Kit, Ivan Chen Li

Head office and principal place of business in Hong Kong: 2208, 22/F., St. George’s Building 2 Ice House Street Central Hong Kong 18 October 2011

To the Shareholders

Dear Sir or Madam,

NON-EXEMPT CONTINUING CONNECTED TRANSACTIONS

INTRODUCTION

Reference is made to the announcements of the Company dated 30 September 2011 and 10 October 2011.

It was announced that on 30 September 2011, the Company entered into the New Manufacturing Agreement with CCT Telecom in relation to the design, development, manufacture and supply of the Products by the Group for the CCT Telecom Remaining Group; and the New Manufacturing Agreement will replace the Previous ECP Manufacturing Agreement.

CCT Tech is owned as to approximately 50.49% by CCT Telecom and is a non wholly-owned subsidiary of CCT Telecom. As CCT Telecom is a substantial shareholder of CCT Tech, CCT Telecom is a connected person of CCT Tech under the Listing Rules. Transactions between the Group and the CCT Telecom Remaining Group therefore constitute connected transactions for CCT Tech under the Listing Rules.

The Directors are of the view that the terms of the New Manufacturing Agreement have been negotiated on an arm’s length basis and on normal commercial terms and are in the best interests of the Group and the Shareholders as a whole. The SGM will be convened and held to approve the New Manufacturing Agreement, the New Manufacturing Transactions and the New Manufacturing Transactions Caps. CCT Telecom and its associates will abstain from voting in respect of the resolution for approving the New Manufacturing Agreement, the New Manufacturing Transactions and the New Manufacturing Transactions Caps at the SGM.

– 4 –

LETTER FROM THE BOARD

The Independent Board Committee has been formed to advise the Independent Shareholders on the terms of the New Manufacturing Agreement, the New Manufacturing Transactions and the New Manufacturing Transactions Caps.

An independent financial adviser, First Shanghai, has been appointed to advise the Independent Board Committee and the Independent Shareholders as to whether or not the terms of the New Manufacturing Agreement, the New Manufacturing Transactions and the New Manufacturing Transactions Caps are fair and reasonable so far as the Independent Shareholders are concerned.

The purpose of this circular is to:

(i) provide the Shareholders with details of the New Manufacturing Agreement, the New Manufacturing Transactions and the New Manufacturing Transactions Caps;
(ii) set out the opinion of First Shanghai to the Independent Board Committee and the Independent Shareholders in respect of the terms of the New Manufacturing Agreement, the New Manufacturing Transactions and the New Manufacturing Transactions Caps;
(iii) set out the recommendation of the Independent Board Committee to the Independent Shareholders in respect of the terms of the New Manufacturing Agreement, the New Manufacturing Transactions and the New Manufacturing Transactions Caps; and
(iv) give the Shareholders the notice of the SGM to consider and, if thought fit, to approve the New Manufacturing Agreement, the New Manufacturing Transactions and the New Manufacturing Transactions Caps.

DETAILS OF THE NEW MANUFACTURING TRANSACTIONS

The New Manufacturing Agreement

Date of agreement: 30 September 2011 Parties: (1) CCT Telecom (2) CCT Tech Subject: Pursuant to the New Manufacturing Agreement, the Company will, and/or will procure other member(s) of the Group to design, develop, manufacture and supply the Products to the CCT Telecom Remaining Group based on orders to be placed by the CCT Telecom Remaining Group from time to time.

Conditions precedent:

The New Manufacturing Agreement is conditional upon:

(a) the passing by the Independent Shareholders at the SGM with CCT Telecom and its associates abstaining from voting at the SGM of an ordinary resolution approving (1) the New Manufacturing Agreement; (2) the New Manufacturing Transactions; and (3) the New Manufacturing Transactions Caps; and

– 5 –

LETTER FROM THE BOARD

(b) the Company having fully complied with all other rules and regulations under the Listing Rules that are relevant to the proposed arrangements under the New Manufacturing Agreement and the New Manufacturing Transactions.

If the above conditions precedent are not fulfilled on or before 31 December 2011 (or such later date as may be agreed between CCT Telecom and the Company in writing), the New Manufacturing Agreement will cease to be of force and effect and the parties thereto will be released from all obligations thereunder.

Term:

Price and terms of payment:

The New Manufacturing Agreement has a fixed term of not exceeding three (3) years as provided under Rule 14A.35 of the Listing Rules and will commence on 1 January 2012 and continue until 31 December 2014 (both dates inclusive). Both parties may renew the New Manufacturing Agreement in writing upon expiry on 31 December 2014 for another three years subject to compliance with the Listing Rules and either party will have the right to terminate the New Manufacturing Agreement without cause by serving the other party with not less than six months’ prior written notice. Shorter notice of termination may be agreed by both parties in writing.

Prices of the Products to be payable by the CCT Telecom Remaining Group to the Group will be determined on an arm’s length basis and will be fixed on a case-by-case basis, depending on the model to be produced provided that the prices will be capped by the amount of total direct material costs plus a mark-up of no more than 100%. The price in respect of a specific model of the Products is determined based on the comparable gross margin or price charged by the Group to its other independent third party customers in respect of similar or telecom products.

The New Manufacturing Transactions will be entered on open account basis. Credit period of up to 90 days from date of monthly statements will be allowed by the Group to the CCT Telecom Remaining Group, which is comparable to the credit period given by the Group to its independent third party customers. Sale prices for the Products will be payable by the CCT Telecom Remaining Group by cheque, bank transfer or by deposit directly to the Group’s designated bank accounts.

– 6 –

LETTER FROM THE BOARD

Background leading to the execution of the New Manufacturing Agreement

Under the Previous ECP Manufacturing Agreement, the Group has been engaged by the CCT Telecom Remaining Group to design, develop, manufacture and supply electronic children products which comprise basically the baby monitors. So far, one model of the Baby Monitors has been successfully launched into the market and sold to one of the customers of the CCT Telecom Remaining Group. As the Previous ECP Manufacturing Agreement will expire on 31 December 2011, the New Manufacturing Agreement has therefore been entered into to replace the Previous ECP Manufacturing Agreement. Because of the reasons elaborated below, the scope of the products and transactions under the New Manufacturing Agreement has been widely expanded from the Previous ECP Manufacturing Agreement to cover the following products:

1. Baby and Child Products

At present, the CCT Telecom Remaining Group is engaged in the manufacture and sale of infant and child products, comprising the Baby and Child Products and one model of the Baby Monitors. At present, the Baby and Child Products with little or no electronic components are manufactured by the CCT Telecom Remaining Group, whereas the production of electronic children products (which at present comprise only one model of the Baby Monitors) is outsourced to the Group under the Previous ECP Manufacturing Agreement. According to the CCT Telecom Remaining Group, as a result of acute shortage of labour in the Guangdong Province, soaring payroll costs, high inflation, and small production scale of the Baby and Child Products, the production costs of the Baby and Child Products rose sharply in the first half of 2011 and are expected to rise further if the CCT Telecom Remaining Group continues to manufacture the products itself. The surging production costs have eroded the profit margin of the infant and child product business and have caused its operating profit to decline by 75% in the first half on a period to period basis. In order to combat the current difficult operating environment, the CCT Telecom Remaining Group intends to restructure its operations.

The Group has been engaged in the design, development and manufacture of telecom and electronic products for many years. The Group is strong in R&D and manufacture of products and has invested large amounts in R&D activities and manufacturing facilities, plant and machinery. The Group therefore has much stronger R&D and manufacturing capacity and capability than the CCT Telecom Remaining Group. Besides, the Group has extensive experience working with multinational major companies and possesses an excellent product quality track record as none of its products has been recalled before.

To tackle the current difficult operating challenges, the CCT Telecom Remaining Group has decided to outsource the design, development and manufacture of the Baby and Child Products to the Group in order to streamline its operations and costs. If the New Manufacturing Transactions are approved by the Independent Shareholders at the SGM, from 2012 onwards, the CCT Telecom Remaining Group will be engaged in the distribution and sale of the Baby and Child Products which will be outsourced to the Group for design, development and manufacture. This restructuring will benefit both the Group and the CCT Telecom Remaining Group. From the Group’s perspective, the plan will increase turnover and economy of scale of the Group which has enough R&D and production facilities to cope with the design, development and production of the Products, without any significant additional investment. The overall costs and efficiency of the Group and the CCT Telecom Remaining Group will be streamlined and improved as production of finished products will be centralised in the Group which specialises in manufacture. Furthermore, the New Manufacturing Transactions will broaden the product and revenue base and enhance the profitability of the Group.

– 7 –

LETTER FROM THE BOARD

Although turnover of the infant and child product business was affected by the current unfavourable global economic environment, the CCT Telecom Remaining Group is optimistic about the prospect of this business. Through successful marketing and product strategy and initiatives, the infant and child product business has been able to penetrate into new markets, expand its product range and broaden its customer base. It is encouraging to see that the infant and child product business has gained a number of major international customers with well-known child product brand names. The broadening of customer base and the enhancement of product offerings have built up a solid foundation for the infant and child product business to grow at a faster pace in the future. As such, the CCT Telecom Remaining Group forecasts that sales of the Baby and Child Products will deliver solid growth in the coming years.

2. Baby Monitors

Sale of the Baby Monitors is small at present because only one model has been launched and sold to only one customer. The CCT Telecom Remaining Group expects that this situation will change a lot and the revenue of the Baby Monitors will rise rapidly in the next three years, especially when many new models of the Baby Monitors are launched to the market. It is because parents nowadays have become more conscious of the quality and safety of products used for their children and as such they are willing to purchase high quality children products with advance technology and safety, even during period of economic slow down. Furthermore, widespread media coverage of dangers that babies may face in their homes has led to rising demand for baby monitors. The Group is strong in radio-frequency and broadband technologies. Leveraging on the core R&D competence of the Group, a series of over 18 new models of the Baby Monitors, built on advance technology, transforming from analogue to digital technology including DECT, wireless transmission for both sound and video signal, with smart design and including the video Baby Monitors have been developed. These new models of the Baby Monitors will be launched by the CCT Telecom Remaining Group to the market from 2012 onwards. The CCT Telecom Remaining Group has shown the new models of the Baby Monitors to its customers and many of them have expressed strong interest in the new range of the Baby Monitors. These customers, including internationally renowned brand names, have indicated that they will select the CCT Telecom Remaining Group as their supplier of their baby monitor product line as when the new models of the Baby Monitors are launched into the market starting from 2012 onwards. The CCT Telecom Remaining Group therefore believes that the Baby Monitors will receive good response from the market and will deliver high growth in sales after they are launched because of the advance technology used and high quality of the products. As such, the CCT Telecom Remaining Group forecasts substantial increase in turnover of the Baby Monitors in the coming few years as it has successfully secured new customers and extensively expanded the range of the Baby Monitors.

Historical figures for the non-exempt continuing connected transactions

The financial information regarding sale of certain electronic children products (which comprise only one model of the Baby Monitors) by the Group to the CCT Telecom Remaining Group under the Previous ECP Manufacturing Agreement for each of the two years ended 31 December 2010 and for the six months ended 30 June 2011 is set out as follows:

	Amount of sales	Previously
	of electronic	approved annual
Period	children products	cap amounts
	HK$ million	HK$ million
Year ended 31 December:
2009 (Note)	–	6
2010	1.5	80
First half of 2011	4	150

Note: 2009 only covers the period from 7 October 2009 (the date of approval by the Independent Shareholders) to 31 December 2009.

– 8 –

LETTER FROM THE BOARD

Up to the Latest Practicable Date, as the Baby and Child Products are manufactured by the CCT Telecom Remaining Group itself, there is no historical financial information in relation to the inter-group sales of the Baby and Child Products by the Group to the CCT Telecom Remaining Group. However, for reference purpose, the following historical turnover of the infant and child product business segment of the CCT Telecom Remaining Group, which includes predominantly revenue from sale of the Baby and Child Products, has been extracted from CCT Telecom’s annual reports for 2009 and 2010 and its interim report for 2011:

	Turnover of the
	infant and child
Period	product business
	HK$ million
Year ended 31 December:
2009	166
2010	214
First half of 2011	97

The New Manufacturing Transactions Caps

Pursuant to the New Manufacturing Agreement, the aggregate value of sale of the Baby and Child Products and the Baby Monitors for each of the three years ending 31 December 2014 will not exceed the following amounts:

Baby and Child Products Baby Monitors Total representing the New Manufacturing Transactions Caps	Year ending 31 December 2012 2013 2014 HK$ million HK$ million HK$ million 200 240 270 80 100 115 280 340 385	Year ending 31 December 2012 2013 2014 HK$ million HK$ million HK$ million 200 240 270 80 100 115 280 340 385
		385

The basis of the New Manufacturing Transactions Caps for the next three years is determined with reference to (i) the historical turnover of the infant and child product business of the CCT Telecom Remaining Group; (ii) the rate of sale growth of the Baby and Child Products forecasted by the CCT Telecom Remaining Group as it has broadened its customer base, diversified its product range and penetrated into new markets; and (iii) the expectation of sharp rise in the demand of the Baby Monitors as the CCT Telecom Remaining Group gains new customers and plans to launch a large number of new models of the Baby Monitors with more advanced technology into the market. If the CCT Telecom Remaining Group has the support of the Group on the technical and manufacturing aspects, the CCT Telecom Remaining Group plans to relocate more resources in its sales and marketing functions and plans to solicit and secure large volume of business especially in the Baby Monitors.

– 9 –

LETTER FROM THE BOARD

It is not appropriate to compare the historical financial information for the Previous ECP Manufacturing Agreement with the New Manufacturing Transactions Caps because the scope of the products under the New Manufacturing Agreement has been widely expanded from the Previous ECP Manufacturing Agreement, to include the Baby and Child Products which are currently manufactured by the CCT Telecom Remaining Group itself. Furthermore, sale of the Baby Monitors is expected to rise at much faster rate because of the reasons elaborated in the sub-section headed “Background leading to the execution of the New Manufacturing Agreement” above.

REASONS FOR AND BENEFITS OF THE NEW MANUFACTURING TRANSACTIONS

The Directors (including the independent non-executive Directors) consider that the New Manufacturing Transactions will be entered in the ordinary and usual course of business of the Group. They also consider the terms of the New Manufacturing Agreement have been negotiated and will be conducted on an arm’s length basis and on normal commercial terms. The Directors are of the view that the New Manufacturing Agreement, the New Manufacturing Transactions and the terms thereof are fair and reasonable and in the best interests of the Company and the Shareholders as a whole.

The Directors are of the view that it is beneficial for the Company to enter into the New Manufacturing Agreement because of the following reasons:

(i) the principal business of the Group is the design, development and manufacture of telecom and electronic products primarily on the ODM basis and the contract manufacturing basis. The Group is strong in product R&D and manufacture of telecom, electronic and other consumer products and can support the limited capability of the CCT Telecom Remaining Group in the design, development and manufacture of the Products which will in turn enhance the R&D and manufacturing capability for the Group and expand and diversify its product range and mix;
(ii) the entering of the New Manufacturing Agreement enables the Group to increase its sales and expand its business in the manufacture of the Products through orders placed by the CCT Telecom Remaining Group, which will lead to increase in the turnover, economy of scale and profitability of the Group;
(iii) the New Manufacturing Transactions will streamline the costs and operations of each of the Group and the CCT Telecom Remaining Group to enable each of the two groups to focus on the areas in which it is specialised, such that the Group will focus on the design, development and production of the Products whilst the CCT Telecom Remaining Group will concentrate on the distribution and trading of the Products. The rationalising and restructuring will improve management coordination, accountability, efficiency and will deliver cost savings to each of the two groups through better allocation of resources;
(iv) to enable CCT Tech to attach a clearer corporate identity (whose core businesses are principally design, development and manufacture of products) with a view to enabling a better evaluation of its business; and
(v) it is beneficial for the Group to enter into the New Manufacturing Agreement as this allows effective use of resources and enhancement of returns to the Group.

The Directors are of the view that the New Manufacturing Agreement will not be prejudicial to the Shareholders and the Group as a whole since the benefits would be enhanced from both the perspective of the Shareholders and the Group itself.

– 10 –

LETTER FROM THE BOARD

LISTING RULES IMPLICATIONS

As CCT Telecom, holding through its indirect wholly-owned subsidiaries, Jade Assets, Expert Success and CCT Assets 29,326,391,124 Shares, 2,350,000,000 Shares and 1,350,000,000 Shares respectively as at the Latest Practicable Date, which represent approximately 44.83%, 3.59% and 2.07% respectively of the total issued share capital of the Company, is a controlling Shareholder and therefore a connected person of the Company.

As (i) the applicable percentage ratios (other than the profits ratio and the equity capital ratio which are not applicable) under Chapter 14 of the Listing Rules in respect of the New Manufacturing Transactions are expected to be more than 25% on an annual basis; and (ii) the annual consideration for the New Manufacturing Transactions is expected to be higher than HK$10,000,000, the New Manufacturing Transactions are subject to the reporting, announcement and independent shareholders’ approval requirements under Rule 14A.35 of the Listing Rules.

The controlling Shareholder, CCT Telecom and its indirect wholly-owned subsidiaries, Jade Assets, Expert Success and CCT Assets which held 29,326,391,124 Shares, 2,350,000,000 Shares and 1,350,000,000 Shares respectively as at the Latest Practicable Date, through which they control the voting rights of their respective Shares, together with their respective associates will abstain from voting in respect of the resolution to approve the New Manufacturing Agreement, the New Manufacturing Transactions and the New Manufacturing Transactions Caps at the SGM. CCT Telecom’s associate, Mr. Mak Shiu Tong, Clement who is an executive director, the chairman and the chief executive officer of the Company and CCT Telecom and controls more than one-third of the shareholding of CCT Telecom, and who held 120,000,000 Shares as at the Latest Practicable Date, through which he controls the voting rights in respect of these Shares, will also abstain from voting in respect of the resolution to approve the New Manufacturing Agreement, the New Manufacturing Transactions and the New Manufacturing Transactions Caps at the SGM.

GENERAL

The Company is a non wholly-owned subsidiary of CCT Telecom and the Group is principally engaged in the manufacture, sale, design and development of telecom and electronic products on the ODM basis and the contract manufacturing basis.

As at the Latest Practicable Date, the CCT Telecom Group is principally engaged through the Group in the design, development, manufacture and sale of telecom and electronic products and through the CCT Telecom Remaining Group in (i) the manufacture of components; (ii) the manufacture and sale of infant and child products; (iii) the securities business; (iv) the property development; and (v) the property investment and holding.

Mr. Mak Shiu Tong, Clement, who is an executive director, the chairman and the chief executive officer of both the Company and CCT Telecom and controls more than one-third of the shareholding of CCT Telecom, is an associate of CCT Telecom, he is therefore deemed to have material interest in the New Manufacturing Agreement. Given Mr. Mak Shiu Tong, Clement has material interest in the New Manufacturing Agreement, he had to abstain from voting on the Board resolution(s) of 30 September 2011 which approved the New Manufacturing Agreement. As announced by the Company on 10 October 2011, the Board, with Mr. Mak Shiu Tong, Clement abstained from voting, has rectified the matter on 10 October 2011 and disregarded the vote(s) of Mr. Mak Shiu Tong, Clement on the Board resolution(s) of 30 September 2011 which approved the New Manufacturing Agreement.

– 11 –

LETTER FROM THE BOARD

Save as the aforesaid, none of the Directors (other than Mr. Mak Shiu Tong, Clement) have any material interest in the New Manufacturing Agreement. Therefore, none of them (other than Mr. Mak Shiu Tong, Clement) had to abstain from voting on the Board resolution(s) which approved the New Manufacturing Agreement. Other than the vote(s) of Mr. Mak Shiu Tong, Clement, all other Directors’ votes with which all voted in favour of the Board resolution approving the New Manufacturing Agreement were permitted to be counted.

As Mr. Chen Li is a common independent non-executive director of both the Company and CCT Telecom, Mr. Chen Li is not eligible to act as a member of the Independent Board Committee to advise on the terms of the New Manufacturing Agreement, the New Manufacturing Transactions and the New Manufacturing Transactions Caps. Mr. Lau Ho Kit, Ivan is an independent non-executive Director whereas his brother, Mr. Lau Ho Man, Edward is an independent non-executive director of CCT Telecom. Mr. Lau Ho Kit, Ivan has no material interest in the New Manufacturing Agreement, the New Manufacturing Transactions and the New Manufacturing Transactions Caps contemplated therein. As such, Mr. Lau Ho Kit, Ivan is eligible to be appointed as a member of the Independent Board Committee to advise on the terms of the New Manufacturing Agreement, the New Manufacturing Transactions and the New Manufacturing Transactions Caps. The Independent Board Committee comprising Mr. Chow Siu Ngor and Mr. Lau Ho Kit, Ivan (all being the independent non-executive Directors and not having material interest in the New Manufacturing Agreement, the New Manufacturing Transactions and the New Manufacturing Transactions Caps) has been formed to advise the Independent Shareholders. First Shanghai has been appointed as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders on the terms of the New Manufacturing Agreement, the New Manufacturing Transactions and the New Manufacturing Transactions Caps.

SGM

A notice convening the SGM to be held at 2208, 22/F., St. George’s Building, 2 Ice House Street, Central, Hong Kong on Tuesday, 8 November 2011 at 10:30 a.m. is set out on pages 29 to 30 of this circular. At the SGM, an ordinary resolution will be proposed and, if thought fit, passed to approve the New Manufacturing Agreement, the New Manufacturing Transactions and the New Manufacturing Transactions Caps.

A form of proxy for use by the Independent Shareholders at the SGM is enclosed herein. Whether or not you intend to attend and vote at the SGM in person, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return it to the branch share registrar and transfer office of the Company in Hong Kong, Tricor Tengis Limited at 26/F., Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong as soon as practicable but in any event, not later than 48 hours before the time appointed for holding the SGM. Such form of proxy for use at the SGM is also published on the websites of the Stock Exchange (www.hkexnews.hk) and the Company (www.cct-tech.com.hk). Completion and return of the form of proxy will not preclude you from attending and voting in person at the SGM should you so wish.

– 12 –

LETTER FROM THE BOARD

Pursuant to Rule 13.39(4) of the Listing Rules, voting at the SGM will be conducted by way of poll. The chairman of the SGM will therefore demand a poll on the resolution put forward at the SGM pursuant to bye-law 70 of the bye-laws of the Company. The controlling Shareholder, CCT Telecom and its indirect wholly-owned subsidiaries, Jade Assets, Expert Success and CCT Assets which held 29,326,391,124 Shares, 2,350,000,000 Shares and 1,350,000,000 Shares respectively as at the Latest Practicable Date, through which they control the voting rights of their respective Shares, together with their respective associates will abstain from voting in respect of the resolution to approve the New Manufacturing Agreement, the New Manufacturing Transactions and the New Manufacturing Transactions Caps at the SGM. CCT Telecom’s associate, Mr. Mak Shiu Tong, Clement who is an executive director, the chairman and the chief executive officer of the Company and CCT Telecom and controls more than one-third of the shareholding of CCT Telecom, and who held 120,000,000 Shares as at the Latest Practicable Date, through which he controls the voting rights in respect of these Shares, will also abstain from voting in respect of the resolution to approve the New Manufacturing Agreement, the New Manufacturing Transactions and the New Manufacturing Transactions Caps at the SGM. An announcement on the poll results of the SGM will be published on the websites of the Stock Exchange (www.hkexnews.hk) and the Company (www.cct-tech.com.hk) after the SGM.

RECOMMENDATION

Your attention is drawn to (i) the letter from the Independent Board Committee as set out on pages 14 to 15 of this circular which contains its recommendation to the Independent Shareholders on the terms of the New Manufacturing Agreement, the New Manufacturing Transactions and the New Manufacturing Transactions Caps; and (ii) the letter of advice from First Shanghai as set out on pages 16 to 23 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 New Manufacturing Agreement, the New Manufacturing Transactions and the New Manufacturing Transactions Caps and the principal factors and reasons considered by it in concluding its advice.

Having considered the factors mentioned above, the Directors are of the view that the New Manufacturing Agreement and the New Manufacturing Transactions are in the usual and ordinary course of business of the Group; and that the terms of the New Manufacturing Agreement and the New Manufacturing Transactions are on normal commercial terms, and are fair and reasonable so far as the Independent Shareholders are concerned, and are in the interest of the Shareholders and the Company as a whole. Accordingly, the Directors recommend the Independent Shareholders to vote in favour of the ordinary resolution to be proposed at the SGM to approve the New Manufacturing Agreement, the New Manufacturing Transactions and the New Manufacturing Transactions Caps.

OTHER INFORMATION

Your attention is also drawn to the additional information set out in the appendix and the notice of the SGM, which form part of this circular.

Yours faithfully, For and on behalf of the Board of CCT TECH INTERNATIONAL LIMITED Mak Shiu Tong, Clement Chairman

– 13 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

(Incorporated in Bermuda with limited liability)

(Stock Code: 00261)

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

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

Head office and principal place of business in Hong Kong: 2208, 22/F. St. George’s Building 2 Ice House Street Central Hong Kong 18 October 2011

To the Independent Shareholders

Dear Sir or Madam,

NON-EXEMPT CONTINUING CONNECTED TRANSACTIONS

We refer to the circular of the Company to the Shareholders dated 18 October 2011 (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 New Manufacturing Agreement, the New Manufacturing Transactions and the New Manufacturing Transactions Caps are fair and reasonable so far as the Independent Shareholders are concerned and are in the interest of the Company and the Shareholders as a whole. First Shanghai has been appointed as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the New Manufacturing Agreement, the New Manufacturing Transactions and the New Manufacturing Transactions Caps.

We wish to draw your attention to the letter of advice from the independent financial adviser, First Shanghai, as set out on pages 16 to 23 of the Circular and the letter from the Board as set out on pages 4 to 13 of the Circular.

– 14 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

Having considered, amongst other matters, the factors and reasons considered by, and the opinion of First Shanghai as stated in its letter of advice, we consider that the terms of the New Manufacturing Agreement, the New Manufacturing Transactions and the New Manufacturing Transactions Caps are on normal commercial terms and are fair and reasonable so far as the Independent Shareholders are concerned and are in the interest of the Company and the Shareholders as a whole. Accordingly, we recommend the Independent Shareholders to vote in favour of the ordinary resolution to approve the New Manufacturing Agreement, the New Manufacturing Transactions and the New Manufacturing Transactions Caps to be proposed at the SGM.

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

– 15 –

LETTER FROM FIRST SHANGHAI

The following is the text of the letter of advice to the Independent Board Committee and the Independent Shareholders from First Shanghai for the purpose of incorporation into this circular.

==> picture [94 x 41] intentionally omitted <==

FIRST SHANGHAI CAPITAL LIMITED

19th Floor, Wing On House 71 Des Voeux Road Central Hong Kong

18 October 2011

To the Independent Board Committee and the Independent Shareholders

Dear Sir or Madam,

NON-EXEMPT CONTINUING CONNECTED TRANSACTIONS

INTRODUCTION

We refer to our engagement to advise the Independent Board Committee and the Independent Shareholders in respect of the terms of the New Manufacturing Agreement, the New Manufacturing Transactions and the New Manufacturing Transactions Caps, details of which are set out in the circular of CCT Tech to the Shareholders dated 18 October 2011 (the “ Circular ”) of which this letter forms a part. Unless the context otherwise requires, terms used in this letter shall have the same meanings as those defined in the Circular.

On 30 September 2011, the New Manufacturing Agreement was entered into between CCT Tech and CCT Telecom to replace the Previous ECP Manufacturing Agreement, which will expire on 31 December 2011. As at the Latest Practicable Date, CCT Telecom is a controlling shareholder of CCT Tech, therefore the New Manufacturing Transactions constitute continuing connected transactions of CCT Tech under the Listing Rules and are subject to, amongst others, the approval by the Independent Shareholders at the SGM.

The Independent Board Committee, comprising two of the independent non-executive Directors, namely Mr. Chow Siu Ngor and Mr. Lau Ho Kit, Ivan, has been formed to advise the Independent Shareholders in respect of the terms of the New Manufacturing Agreement, the New Manufacturing Transactions and the New Manufacturing Transactions Caps. We, First Shanghai Capital Limited, have been appointed to advise the Independent Board Committee and the Independent Shareholders in this regard.

– 16 –

LETTER FROM FIRST SHANGHAI

In putting forth our opinion and recommendation, we have relied on the accuracy of the information and representations included in the Circular and provided to us by the management of the Group, and have assumed that all such information and representations made or referred to in the Circular and provided to us by the management of the Group were true at the time they were made and will continue to be true up to the time of the holding of the SGM. We have also assumed that all statements of belief, opinion and intention made in the Circular were reasonably made after due enquiry. We have no reason to doubt the truth, accuracy and completeness of the information and representations provided to us by the management of the Group and have been advised that no material facts have been withheld or omitted from the information provided and referred to in the Circular. We consider that we have reviewed sufficient information to reach an informed view and to justify reliance on the accuracy of the information contained in the Circular and to provide a reasonable basis for our advice. We have not, however, conducted any independent verification of the information included in the Circular and provided to us by the management of the Group nor have we conducted any form of investigation into the business, affairs or future prospects of the Group or the CCT Telecom Remaining Group.

PRINCIPAL FACTORS AND REASONS CONSIDERED

In formulating our opinion in respect of the terms of the New Manufacturing Agreement, the New Manufacturing Transactions and the New Manufacturing Transactions Caps, we have taken into account the following principal factors and reasons:

1. Background of and benefits for the entering into of the New Manufacturing Agreement

CCT Tech is a non-wholly-owned subsidiary of CCT Telecom, which is principally engaged in (i) the design, development, manufacture and sale of telecom and electronic products through the Group; and (ii) the manufacture of components, manufacture and sale of infant and child products, securities business, property development and property investment and holding through the CCT Telecom Remaining Group.

The CCT Telecom Remaining Group is engaged in, amongst others, the manufacture and sale of infant and child products, comprising the Baby and Child Products and one model of the Baby Monitors. We understand that only the manufacture of the Baby Monitors (which presently comprise only one model of the Baby Monitors) is currently outsourced to the Group under the Previous ECP Manufacturing Agreement, whereas the Baby and Child Products with little or no electronic components are manufactured by the CCT Telecom Remaining Group. As mentioned in the letter from the Board, as a result of acute shortage of labour in the Guangdong Province, soaring payroll costs, high inflation, and small production scale of the Baby and Child Products, the production costs of the Baby and Child Products rose sharply in the first half of 2011 and are expected to rise further if the CCT Telecom Remaining Group continues to manufacture the products by itself. We have reviewed the interim report of CCT Telecom for the six months ended 30 June 2011 (the “ 2011 CCT Telecom Interim Report ”) and we noted that the segment operating profit margin of infant and child products of the CCT Telecom Group has deteriorated from approximately 7% for the six months ended 30 June 2010 to approximately 2% for the six months ended 30 June 2011.

– 17 –

LETTER FROM FIRST SHANGHAI

As disclosed in the letter from the Board, the Group has invested large amounts in R&D activities and manufacturing facilities, plant and machinery, therefore the Group has much stronger R&D and manufacturing capacity and capability than the CCT Telecom Remaining Group. Besides, the Group has extensive experience working with multinational companies and possesses an excellent product quality track record as none of its products has been recalled before. As such, as advised by the management of the Group, the Group is capable and equipped to carry out the design, development and manufacture of the Baby and Child Products and the Baby Monitors for the CCT Telecom Remaining Group.

Apart from the utilisation of the available resources and expertise of the Group, which has been principally engaged in the design, development and manufacture and electronic products for many years, there are a variety of benefits to the Group for performing the New Manufacturing Transactions under the New Manufacturing Agreement. We understand that the New Manufacturing Transactions are of revenue nature to the Group and may lead to economy of scale, which may improve the financial performance of the Group. Moreover, the additional production of the Baby and Child Products and new models of the Baby Monitors can diversify the revenue stream and product mix of the Group. Furthermore, the Group already has enough R&D and production facilities to cope with the design, development and production of all the Baby Monitors and the Baby and Child Products, where no significant additional investment is needed to enjoy the mentioned potential financial benefits. In addition, the business activities and corporate identities of both the Group, which will focus on manufacture of products, and the CCT Telecom Remaining Group, which will concentrate on distribution and trading of infant and child products, can be better delineated.

Given the Previous ECP Manufacturing Agreement will expire on 31 December 2011 and the abovementioned benefits to the Group, the New Manufacturing Agreement has been entered into to replace the Previous ECP Manufacturing Agreement and to expand the coverage of outsourced products to include the Baby and Child Products and the Baby Monitors. Having considered, in particular, (i) the New Manufacturing Transactions are in the ordinary and usual course of business of the Group; (ii) the New Manufacturing Transactions are of revenue nature and may also lead to economy of scale; (iii) no significant additional investment is needed for the Group to cope with the design, development and production of the Baby and Child Products and the Baby Monitors; (iv) the better delineation of the business activities and corporate identities of both the Group and the CCT Telecom Remaining Group; and (v) the terms of the New Manufacturing Agreement are fair and reasonable as discussed below, we are of the view that the entering into of the New Manufacturing Agreement is in the interests of CCT Tech and the Shareholders as a whole.

– 18 –

LETTER FROM FIRST SHANGHAI

2. Principal terms of the New Manufacturing Agreement

Pursuant to the New Manufacturing Agreement, the Group will be engaged in the design, development, manufacture and supply of the Products for the CCT Telecom Remaining Group. The New Manufacturing Agreement has a fixed term of three years, which will commence on 1 January 2012 and continue until 31 December 2014 (both dates inclusive).

Prices of the Products payable by the CCT Telecom Remaining Group to the Group will be determined on an arm’s length basis and will be fixed on a model by model basis with reference to the comparable gross margin or price charged by the Group to its other independent third party customers in respect of similar or telecom product provided that the prices charged by the Group will be capped by the amount of total direct material costs plus a mark-up of no more than 100%. As advised by the management of the Group, the cap of 100% is an upper limit of mark-up and is fixed to provide flexibility for the Group to determine the prices of the Products to be charged to the CCT Telecom Remaining Group. We understand from the management of the Group that the Group has a right to reject any order of the Products if the prices will not generate a gross margin comparable to or more favourable than that charged by the Group to its independent third party customers in respect of similar or telecom products. As for the payment terms, we are advised that the Group will allow a credit period to the CCT Telecom Remaining Group comparable to the credit period given by the Group to its independent third party customers, up to a limit of 90 days. As such, we consider the above basis of determining the credit period to be offered by the Group to the CCT Telecom Remaining Group to be fair and reasonable and will not prejudice the benefit of the Group.

In addition to the above, we also understand from the management of the Group that the Group has no contractual obligation under the New Manufacturing Agreement to design, develop, manufacture and supply the Products for the CCT Telecom Remaining Group. Therefore, the entering into of the New Manufacturing Agreement would not restrict the Group from utilising its resources to serve other customers should the terms with other customers be more favourable to the Group.

Having taken into account, in particular, (i) the principal pricing basis to be charged by the Group to the CCT Telecom Remaining Group will be comparable to that charged by the Group to its independent third party customers; (ii) the payment terms offered by the Group to the CCT Telecom Remaining Group will be comparable to that given by the Group to its independent third party customers; (iii) the Group has the discretion to decide whether to utilise its resources to serve the CCT Telecom Remaining Group or other customers, whichever is considered to be more favourable to the Group; and (iv) measures are in place as required under the Listing Rules to govern the internal control of the Group as detailed in the section headed “Measures to ensure compliance with the Listing Rules” below, we are of the view that the terms of the New Manufacturing Agreement are on normal commercial terms and are fair and reasonable so far as the Independent Shareholders are concerned.

– 19 –

LETTER FROM FIRST SHANGHAI

3. The New Manufacturing Transactions Caps

We understand from the letter from the Board that the basis of the New Manufacturing Transactions Caps is determined with reference to (i) the historical turnover of the infant and child product business of the CCT Telecom Remaining Group; (ii) the rate of sale growth of the Baby and Child Products forecasted by the CCT Telecom Remaining Group as it has broadened its customer base, diversified its product range and penetrated into new markets; and (iii) the expectation of sharp rise in the demand of the Baby Monitors as the CCT Telecom Remaining Group gains new customers and plans to launch a large number of new models of the Baby Monitors with more advanced technology into the market. The following table sets out the proposed New Manufacturing Transactions Caps under the New Manufacturing Agreement:

Baby Monitors Baby and Child Products Total	For the year ending 31 December 2012 2013 2014 (HK$ million) (HK$ million) (HK$ million) 80 100 115 200 240 270 280 340 385	For the year ending 31 December 2012 2013 2014 (HK$ million) (HK$ million) (HK$ million) 80 100 115 200 240 270 280 340 385
		385

The transaction amount under the Previous ECP Manufacturing Agreement was only approximately HK$1.5 million for the year ended 31 December 2010 and approximately HK$4 million for the six months ended 30 June 2011. We are advised that the historical transaction amounts were low as only one model of the Baby Monitors has been launched and sold to only one customer. Given the enlarged product coverage under the New Manufacturing Agreement and the expected significant expansion of the Baby Monitors business, we understand that a direct comparison of the historical transaction amounts under the Previous ECP Manufacturing Agreement with the New Manufacturing Transactions Caps is not meaningful.

(i) Baby Monitors

As stated in the letter from the Board, leveraging on the core R&D competence of the Group, a series of over 18 new models of the Baby Monitors built on advance technologies have been developed and these new models of the Baby Monitors will be launched by the CCT Telecom Remaining Group to the market from 2012 onwards. Further, the CCT Telecom Remaining Group has shown the new models of the Baby Monitors to its customers, including internationally renowned brand names, and these customers have indicated that they will select the CCT Telecom Remaining Group as their supplier of their baby monitor product line as when the new models of the Baby Monitors are launched into the market starting from 2012 onwards.

– 20 –

LETTER FROM FIRST SHANGHAI

To assess the reasonableness of the New Manufacturing Transactions Caps for the Baby Monitors, we have reviewed a sales schedule in relation to the product model, price and volume breakdown of the projected transaction amounts for each model of the Baby Monitors to arrive at the transaction cap amounts of the Baby Monitors for each of the years ending 31 December 2012, 2013 and 2014. We understand that the sales schedule was prepared by the management of the CCT Telecom Remaining Group and the Group with reference to, inter alia , (i) the models of the Baby Monitors expected to be sold during the relevant periods; (ii) the preliminary projection of demand from potential customers of the CCT Telecom Remaining Group for each model of the Baby Monitors; and (iii) the expected prices of each model of the Baby Monitors to be charged by the Group. We noted that the New Manufacturing Transactions Caps for the Baby Monitors are based on the projected transaction amounts as contained in the sales schedule. We also noted that the New Manufacturing Transactions Caps for the Baby Monitors represent less than 30% of the total New Manufacturing Transactions Caps for each of the years ending 31 December 2012, 2013 and 2014.

Having considered, in particular, (i) the historical transaction amount involved only one model of the Baby Monitors sold to only one customer, but a series of over 18 new models of the Baby Monitors built on advance technologies have been developed and will be launched by the CCT Telecom Remaining Group to the market from 2012 onwards; (ii) potential customers have indicated that they will select the CCT Telecom Remaining Group as their supplier of their baby monitor product line; and (iii) the New Manufacturing Transactions Caps for the Baby Monitors are based on the projected transaction amounts as contained in the sales schedule, we are of the view that the New Manufacturing Transactions Caps for the Baby Monitors are fair and reasonable so far as the Independent Shareholders are concerned.

(ii) Baby and Child Products

To assess the reasonableness of the New Manufacturing Transactions Caps for the Baby and Child Products, we have reviewed the relevant historical segment revenue of the CCT Telecom Remaining Group. Based on the annual report of CCT Telecom for the year ended 31 December 2010, we noted that the revenue from the infant and child product business segment of the CCT Telecom Remaining Group increased from approximately HK$167 million for the year ended 31 December 2009 to approximately HK$215 million for the year ended 31 December 2010, representing an annual growth rate of approximately 29%. According to the 2011 CCT Telecom Interim Report, revenue from the infant and child products segment of the CCT Telecom Remaining Group dropped to approximately HK$97 million for the six months ended 30 June 2011 due to the decline of business of its major customer in the United States. Nonetheless, according to the 2011 CCT Telecom Interim Report, the management of the CCT Telecom Remaining Group remains positive on the growth potential of the infant and child product business and will continue to dedicate more resources to expand its business, broaden its customer base and enhance its product offerings of this business segment. In addition, as stated in the letter from the Board, the infant and child product business of the CCT Telecom Remaining Group has gained a number of major international customers with well-known child product brand names, where the broadening of customer base and the enhancement of product offerings has built up a solid foundation for the business to grow at a faster pace in the future.

– 21 –

LETTER FROM FIRST SHANGHAI

Further, we have reviewed a sales schedule in relation to the product model, price and volume breakdown of the projected transaction amounts of each model of the Baby and Child Products to arrive at the transaction cap amounts of the Baby and Child Products for each of the years ending 31 December 2012, 2013 and 2014. We understand that the sales schedule was prepared by the management of the CCT Telecom Remaining Group and the Group with reference to, inter alia , (i) the types of the Baby and Child Products expected to be sold during the relevant periods; (ii) the projection of demand from existing customers of the CCT Telecom Remaining Group for each type of the Baby and Child Products; and (iii) the expected prices of each type of the Baby and Child Products to be charged by the Group. We noted that the New Manufacturing Transactions Caps for the Baby and Child Products are based on the projected transaction amounts as contained in the sales schedule.

Having considered, in particular, (i) the comparison between New Manufacturing Transactions Caps for the Baby and Child Products for the year ending 31 December 2012 with the historical segment revenue of infant and child product business of the CCT Telecom Remaining Group; (ii) the historical annual growth rate and the growth potential of the infant and child product business as expected by the CCT Telecom Remaining Group; and (iii) the New Manufacturing Transactions Caps for the Baby and Child Products are based on the projected transaction amounts as contained in the sales schedule, we are of the view that the New Manufacturing Transactions Caps for the Baby and Child Products are fair and reasonable so far as the Independent Shareholders are concerned.

4. Measures to ensure compliance with the Listing Rules

In compliance with the annual review requirements under Chapter 14A of the Listing Rules, CCT Tech will comply with the following during the term of the New Manufacturing Agreement in relation to the New Manufacturing Transactions:

(i) each year the independent non-executive Directors must review the New Manufacturing Transactions and confirm in the annual report and accounts of CCT Tech that the New Manufacturing Transactions have been entered into (a) in the ordinary and usual course of business of CCT Tech; (b) either on normal commercial terms or, if there are not sufficient comparable transactions to judge whether they are on normal commercial terms, on terms no less favourable to the Group than terms available to or from (as appropriate) independent third parties; and (c) in accordance with the New Manufacturing Agreement governing them on terms that are fair and reasonable and in the interests of the Shareholders as a whole;
(ii) each year the auditors of CCT Tech must provide a letter to the Board (with a copy provided to the Stock Exchange at least 10 business days prior to the bulk printing of the annual report of CCT Tech) confirming that the New Manufacturing Transactions (a) have received the approval of the Board; (b) are in accordance with the pricing policies of CCT Tech if the New Manufacturing Transactions involve provision of goods or services by CCT Tech; (c) have been entered into in accordance with the relevant agreement governing the transactions; and (d) have not exceeded the New Manufacturing Transactions Caps;
(iii) CCT Tech will allow, and will procure that the CCT Telecom Remaining Group will allow, the auditors of CCT Tech with sufficient access to the relevant records of the New Manufacturing Transactions for the purpose of reporting on the New Manufacturing Transactions. The Board must state in the annual report whether its auditors have confirmed the matters stated in paragraph (ii) above; and

– 22 –

LETTER FROM FIRST SHANGHAI

(iv) CCT Tech shall promptly notify the Stock Exchange and publish an announcement in accordance with the Listing Rules if it knows or has reason to believe that the independent non-executive Directors and/or auditors of CCT Tech will not be able to confirm the matters set out in paragraphs (i) and/or (ii) above respectively.

In light of the reporting requirements attached to the New Manufacturing Transactions, in particular, (i) the restriction of the value of the New Manufacturing Transactions by way of the New Manufacturing Transactions Caps; and (ii) the ongoing review by the independent non-executive Directors and the auditors of CCT Tech of the terms of the New Manufacturing Transactions and the New Manufacturing Transactions Caps not being exceeded, we are of the view that appropriate measures will be in place to govern the conduct of the New Manufacturing Transactions and safeguard the interests of the Independent Shareholders.

RECOMMENDATION

Having taken into account the above principal factors, we are of the view that (i) the entering into of the New Manufacturing Agreement is in the ordinary and usual course of business of the Group and in the interests of CCT Tech and the Shareholders as a whole; and (ii) the terms of the New Manufacturing Agreement are on normal commercial terms, and together with the bases of the New Manufacturing Transactions Caps, are fair and reasonable so far as the Independent Shareholders are concerned. Accordingly, we advise the Independent Board Committee to recommend, and we ourselves advise, the Independent Shareholders to vote in favour of the relevant resolution to be proposed at the SGM to approve the New Manufacturing Agreement, the New Manufacturing Transactions and the New Manufacturing Transactions Caps.

Yours faithfully, For and on behalf of First Shanghai Capital Limited Eric Lee Fanny Lee Managing Director Managing Director

– 23 –

GENERAL INFORMATION

APPENDIX

1. RESPONSIBILITY STATEMENT

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

2. DISCLOSURE OF INTERESTS

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

As at the Latest Practicable Date, the Directors and chief executive of the Company and/or any of their respective associates had the following interests and short positions in the shares, underlying shares and debentures of the Company and/or any of 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 which were required, pursuant to Part XV of the SFO or the Model Code for Securities Transactions by Directors of Listed Issuers contained in the Listing Rules, to be notified to the Company and the Stock Exchange:

(1) Interests and short positions in the Shares and the underlying Shares of the share options of the Company as at the Latest Practicable Date
(i) Long positions in the Shares:

				Approximate
				percentage of
				the total issued
	Number of the Shares interested and			share capital
		nature of interest		of the
Name of the Directors	Personal	Corporate	Total	Company
				(%)
Mak Shiu Tong, Clement	120,000,000	33,026,391,124	33,146,391,124	50.67
(Note)
Cheng Yuk Ching, Flora	18,000,000	–	18,000,000	0.03
Tam Ngai Hung, Terry	20,000,000	–	20,000,000	0.03
Chen Li	10,000,000	–	10,000,000	0.02

Note: Of the shareholding in which Mr. Mak Shiu Tong, Clement was interested, 33,026,391,124 Shares were held by CCT Telecom through its indirect wholly-owned subsidiaries. Mr. Mak Shiu Tong, Clement is deemed to be interested in such Shares under the SFO as he is entitled to exercise or control the exercise of one-third or more of the voting power at general meetings of CCT Telecom through his interest in the shareholding of 50.03% of the total issued share capital in CCT Telecom as at the Latest Practicable Date.

– 24 –

GENERAL INFORMATION

APPENDIX

(ii) Long positions in the underlying Shares of the share options granted under the share option scheme of the Company:

						Approximate
						percentage
	Date of	Exercise		Number of	Number of	of the total
	grant of	period of	Exercise	the share	the total	issued share
Name of the	the share	the share	price per	options	underlying	capital of the
Directors	options	options	Share	outstanding	Shares	Company
			HK$			(%)
Cheng Yuk	23/7/2009	23/7/2009 –	0.01	245,000,000	245,000,000	0.37
Ching, Flora		6/11/2012
Tam Ngai Hung,	23/7/2009	23/7/2009 –	0.01	223,000,000	223,000,000	0.34
Terry		6/11/2012
William Donald	23/7/2009	23/7/2009 –	0.01	8,000,000	8,000,000	0.01
Putt		6/11/2012
Chow Siu Ngor	23/7/2009	23/7/2009 –	0.01	8,000,000	8,000,000	0.01
		6/11/2012
Lau Ho Kit,	23/7/2009	23/7/2009 –	0.01	8,000,000	8,000,000	0.01
Ivan		6/11/2012
Chen Li	23/7/2009	23/7/2009 –	0.01	8,000,000	8,000,000	0.01
		6/11/2012

(2) Interests and short positions in the shares and the underlying shares of an associated corporation – CCT Telecom as at the Latest Practicable Date

Long positions in the shares of CCT Telecom:

				Approximate
				percentage of
				the total issued
	Number of the shares interested and			share capital
		nature of interest		of CCT
Name of the Directors	Personal	Corporate	Total	Telecom
				(%)
Mak Shiu Tong, Clement_(Note)_	8,475,652	294,775,079	303,250,731	50.03
Tam Ngai Hung, Terry	500,000	–	500,000	0.08
William Donald Putt	591,500	–	591,500	0.10

Note: Of the shareholding in which Mr. Mak Shiu Tong, Clement was interested, an aggregate of 294,775,079 shares of CCT Telecom were beneficially held by Capital Force International Limited, New Capital Industrial Limited and Capital Winner Investments Limited, all of which are corporations wholly-owned by him, his spouse and his two sons. Mr. Mak Shiu Tong, Clement is deemed to be interested in such shares of CCT Telecom under the SFO as he controls the exercise of one-third or more of the voting power at general meetings of Capital Force International Limited, New Capital Industrial Limited and Capital Winner Investments Limited.

– 25 –

GENERAL INFORMATION

APPENDIX

(b) Particulars of the 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 other member of the Group (excluding contracts expiring or determinable by the Company or any member of the Group within one year without payment of any compensation, other than statutory compensation).

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

(i) none of the Directors and chief executive of the Company and/or any of their respective associates had any interest and short position in the shares, underlying shares and debentures of the Company and/or any of 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 contained in the Listing Rules, to be notified to the Company and the Stock Exchange;
(ii) none of the Directors had any direct or indirect interest in any assets which had been, since 31 December 2010, 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; and
(iii) none of the Directors was materially interested in any contract or arrangement entered into by any member of the Group which contract or arrangement was subsisting and which was significant in relation to the business of the Group taken as a whole.

(d) Substantial Shareholders’ interests

As at the Latest Practicable Date, so far as was known to, or could be ascertained after reasonable enquiries by, the Directors, the following persons (other than the Directors or chief executive of the Company) had interests or short positions in the Shares or the underlying Shares which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or were, directly or indirectly interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other member of the Group:

Long positions in the Shares as at the Latest Practicable Date:

		Approximate
		percentage of
		the total issued
		share capital
	Number of the	of the
Name of the Shareholders	Shares held	Company
		(%)
CCT Telecom (Note 1)	33,026,391,124	50.49
CCT Technology Investment Limited (Note 2)	33,026,391,124	50.49
Jade Assets	29,326,391,124	44.83

– 26 –

GENERAL INFORMATION

APPENDIX

Notes:

1. The interest disclosed represents 33,026,391,124 Shares indirectly owned by CCT Technology Investment Limited through the subsidiaries stated in Note 2 below. CCT Technology Investment Limited is a wholly-owned subsidiary of CCT Telecom.

2. The interest disclosed represents 29,326,391,124 Shares held by Jade Assets, 1,350,000,000 Shares held by CCT Assets and 2,350,000,000 Shares held by Expert Success, all of which are wholly-owned subsidiaries of CCT Technology Investment Limited.

Save as disclosed above, so far as was known to the Directors, as at the Latest Practicable Date, there was no other person (other than the Directors or chief executive of the Company) who had any interests or short positions in the Shares and the underlying Shares which would fall to be disclosed under the provisions of Divisions 2 and 3 of Part XV of the SFO, or were, directly or indirectly interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other member of the Group.

3. LITIGATION

As at the Latest Practicable Date, neither the Company nor any member of the Group was engaged in any litigation or claims 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.

4. COMPETING INTERESTS

As at the Latest Practicable Date, none of the Directors and their respective associates was considered to have an interest in a business which competes or is likely to compete, either directly or indirectly, with the business of the Group.

5. QUALIFICATION AND CONSENT OF EXPERT

The following is the qualification of the expert who has given opinions and advice which are contained in this circular:

Name Qualification

First Shanghai A licensed corporation under the SFO to carry out type 6 (advising on corporate finance) regulated activity

(i) First Shanghai did not have any shareholding, directly or indirectly, in the Company or any member of the Group or any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in the Company or any member of the Group;
(ii) First Shanghai has given and has not withdrawn its written consent to the issue of this circular with the inclusion herein of its letter dated 18 October 2011 and/or reference to its name in the form and context in which it is included; and
(iii) First Shanghai did not have any direct or indirect interest in any asset which had been acquired, or disposed of by, or leased to the Company or any member of the Group, or was proposed to be acquired, or disposed of by, or leased to any member of the Group since 31 December 2010, the date to which the latest published audited financial statements of the Group were made up.

– 27 –

GENERAL INFORMATION

APPENDIX

6. MATERIAL ADVERSE CHANGE

Save as disclosed herein and in the interim report of the Group for the period ended 30 June 2011, the Directors have confirmed that there has been no material adverse change in the financial or trading position or prospects of the Group since 31 December 2010, being the date to which the latest published audited financial statements of the Group were made up, up to the Latest Practicable Date.

7. MISCELLANEOUS

(a) The registered office of the Company is located at Canon’s Court, 22 Victoria Street, Hamilton HM 12, Bermuda and the head office and the principal place of business of the Company in Hong Kong is located at 2208, 22/F., St. George’s Building, 2 Ice House Street, Central, Hong Kong.
(b) The branch share registrar and transfer office of the Company in Hong Kong is Tricor Tengis Limited at 26/F., Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong.
(c) The company secretary of the Company is Ms. Tong Kam Yin, Winnie, who is an associate member of both The Institute of Chartered Secretaries and Administrators and The Hong Kong Institute of Chartered Secretaries.
(d) In the event of inconsistency, the English text of this circular shall prevail over the Chinese text.

8. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection at the head office and the principal place of business of the Company in Hong Kong at 2208, 22/F., St. George’s Building, 2 Ice House Street, Central, Hong Kong during normal business hours on any Business Day from the date of this circular up to and including the date of the SGM:

(a) the memorandum of association and the bye-laws of the Company;
(b) the letter from the Board to the Shareholders, the text of which is set out on pages 4 to 13 of this circular;
(c) the letter of recommendation from the Independent Board Committee to the Independent Shareholders, the text of which is set out on pages 14 to 15 of this circular;
(d) the letter of advice from First Shanghai to the Independent Board Committee and the Independent Shareholders, the text of which is set out on pages 16 to 23 of this circular;
(e) the written consent from First Shanghai referred to in the section headed “Qualification and Consent of Expert” in this appendix;
(f) the New Manufacturing Agreement; and
(g) this circular.

– 28 –

NOTICE OF THE SGM

(Incorporated in Bermuda with limited liability)

(Stock Code: 00261)

NOTICE IS HEREBY GIVEN that a special general meeting (the “ SGM ”) of the shareholders of CCT Tech International Limited (the “ Company ”) will be held at 2208, 22/F., St. George’s Building, 2 Ice House Street, Central, Hong Kong on Tuesday, 8 November 2011 at 10:30 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 manufacturing agreement dated 30 September 2011 (the “ New Manufacturing Agreement ”) entered into between the Company and CCT Telecom Holdings Limited, a copy of which is tabled at the meeting and marked “A” and initialled by the chairman of the meeting (the “ Chairman ”) for identification purpose, pursuant to which the Company will, and/or will procure its subsidiaries (the Company and its subsidiaries hereinafter referred to as the “ Group ”) to design, develop, manufacture and supply the Products (as defined in the circular of the Company dated 18 October 2011, a copy of which is tabled at the meeting and marked “B” and initialled by the Chairman for identification purpose (the “ Circular ”)) to the CCT Telecom Remaining Group (as defined in the Circular) based on orders to be placed by the CCT Telecom Remaining Group from time to time to the Group, and the transactions contemplated thereunder (the “ New Manufacturing Transactions ”) be and are hereby approved, ratified and confirmed;
(b) the proposed caps in relation to the New Manufacturing Transactions, for each of the three financial years ending 31 December 2014, being HK$280 million, HK$340 million and HK$385 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/her/them to be incidental to, ancillary to or in connection with the matters contemplated in and completion of the New Manufacturing Agreement and/or the New Manufacturing Transactions.”

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

Hong Kong, 18 October 2011

– 29 –

NOTICE OF THE SGM

Head office and principal place of business

in Hong Kong:

2208, 22/F., St. George’s Building

2 Ice House Street Central

Hong Kong

Notes:

A form of proxy for use at the SGM is enclosed herewith.
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 duly authorised to sign the same.
Any shareholder entitled to attend and vote at the SGM is entitled to appoint another person as his/her proxy to attend and vote instead of him/her. A shareholder who is the holder of two or more shares may 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 shareholder of the Company but must attend the SGM in person to represent him/her.
In order to be valid, a form of proxy in the prescribed form 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 with the branch share registrar and transfer office of the Company in Hong Kong, Tricor Tengis Limited at 26/F., Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong, not later than 48 hours before the time appointed for holding the SGM or any adjourned meeting thereof (as the case may be). Such prescribed form of proxy for use at the SGM is also published on the websites of The Stock Exchange of Hong Kong Limited at www.hkexnews.hk and the Company at www.cct-tech.com.hk.
Completion and return of the form of proxy will not preclude shareholders from attending and voting in person at the SGM or at 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.
Where there are joint registered holders of any share(s), any one of such joint holders may attend and vote at the SGM or at any adjourned meeting thereof (as the case may be), 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 SGM or at 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 shall be determined by the order in which the names stand in the register of members of the Company in respect of the joint holding.

– 30 –

AI assistant

GBA Holdings Limited — Proxy Solicitation & Information Statement 2011

49077_rns_2011-10-17_c1f8a8f6-27ec-437f-bd23-eaea538ce731.pdf

NON-EXEMPT CONTINUING CONNECTED TRANSACTIONS

Independent financial adviser to the Independent Board Committee and the Independent Shareholders

FIRST SHANGHAI CAPITAL LIMITED

CONTENTS

DEFINITIONS

NON-EXEMPT CONTINUING CONNECTED TRANSACTIONS

INTRODUCTION

DETAILS OF THE NEW MANUFACTURING TRANSACTIONS

The New Manufacturing Agreement

Background leading to the execution of the New Manufacturing Agreement

1. Baby and Child Products

2. Baby Monitors

Historical figures for the non-exempt continuing connected transactions

LETTER FROM THE BOARD

The New Manufacturing Transactions Caps

REASONS FOR AND BENEFITS OF THE NEW MANUFACTURING TRANSACTIONS

LISTING RULES IMPLICATIONS

GENERAL

LETTER FROM THE BOARD

SGM

RECOMMENDATION

OTHER INFORMATION

NON-EXEMPT CONTINUING CONNECTED TRANSACTIONS

FIRST SHANGHAI CAPITAL LIMITED

NON-EXEMPT CONTINUING CONNECTED TRANSACTIONS

INTRODUCTION

PRINCIPAL FACTORS AND REASONS CONSIDERED

1. Background of and benefits for the entering into of the New Manufacturing Agreement

2. Principal terms of the New Manufacturing Agreement

3. The New Manufacturing Transactions Caps

(i) Baby Monitors

(ii) Baby and Child Products

4. Measures to ensure compliance with the Listing Rules

RECOMMENDATION

1. RESPONSIBILITY STATEMENT

2. DISCLOSURE OF INTERESTS

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

(b) Particulars of the Directors’ other interests

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

(d) Substantial Shareholders’ interests

Long positions in the Shares as at the Latest Practicable Date:

3. LITIGATION

4. COMPETING INTERESTS

5. QUALIFICATION AND CONSENT OF EXPERT

Name Qualification

6. MATERIAL ADVERSE CHANGE

7. MISCELLANEOUS

8. DOCUMENTS AVAILABLE FOR INSPECTION

ORDINARY RESOLUTION

“ THAT :

NOTICE OF THE SGM

Head office and principal place of business

Hong Kong

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GBA Holdings Limited Proxy Solicitation & Information Statement 2011