GBA Holdings Limited - Proxy Solicitation & Information Statement 2012

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)

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 12 of this circular.

A letter from the Independent Board Committee is set out on pages 13 to 14 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 15 to 23 of this circular.

A notice convening the SGM to be held at 31/F., Fortis Tower, 77–79 Gloucester Road, Hong Kong on Friday, 16 November 2012 at 10:30 a.m. is set out on pages 30 to 31 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/eng/investor/statutory.php). 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.

31 October 2012

		Page
Definitions	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from	the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Letter from	the Independent Board Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	13
Letter from	First Shanghai . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	15
Appendix	— General information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	24
Notice of the SGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		30

– 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;
‘‘Board’’ the board of the Directors;
‘‘Business Day(s)’’
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, an exempted company incorporated in Bermuda with limited liability and whose Shares are listed on the main board of the Stock Exchange;
‘‘CCT Tech Group’’

the Company and its subsidiaries from time to time;

‘‘CCT Telecom’’
CCT Telecom Holdings Limited, a company incorporated in the Cayman Islands and continued in Bermuda as an exempted company 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 Group excluding the CCT Tech Group;
‘‘CMS’’

contract manufacturing services;

‘‘Component Products’’

plastic casings and components and any other components to be manufactured and supplied by the CCT Telecom Remaining Group to the CCT Tech Group pursuant to the New Manufacturing Agreement;

‘‘connected person(s)’’
has the same meaning as ascribed to it under the Listing Rules;
‘‘Continuing Connected Transactions’’

the transactions as contemplated under the New Manufacturing Agreement to be entered into between the CCT Tech Group and the CCT Telecom Remaining Group in relation to the manufacture and supply of the Component Products and the Toolings by the CCT Telecom Remaining Group for the CCT Tech Group;

– 1 –

DEFINITIONS

‘‘Director(s)’’
‘‘Expert Success’’
‘‘First Shanghai’’
‘‘HK$’’
‘‘Hong Kong’’
‘‘Independent Board Committee’’
‘‘Independent Shareholders’’
‘‘Jade Assets’’
‘‘Latest Practicable Date’’
‘‘Listing Rules’’
the director(s) (including the independent non-executive directors) of the Company from time to time;
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 Continuing Connected Transactions and the New Transaction Caps;
Hong Kong dollar(s), the lawful currency of Hong Kong;
the Hong Kong Special Administrative Region of the People’s Republic of China;
the independent board committee of the Company comprising Mr. Lau Ho Kit, Ivan and Mr. Chow Siu Ngor, the independent non-executive Directors not having material interest in the New Manufacturing Agreement, the Continuing Connected Transactions and the New Transaction Caps, formed for the purpose of advising the Independent Shareholders on the Continuing Connected Transactions;
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;
25 October 2012, 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;

– 2 –

DEFINITIONS

‘‘New Manufacturing Agreement’’
the agreement dated 9 October 2012 entered into between CCT Tech and CCT Telecom governing the terms and conditions for the manufacture and supply of the Component Products and the Toolings by the CCT Telecom Remaining Group to the CCT Tech Group for the production of telecom, electronic and child products for the next three years ending 31 December 2015;
‘‘New Transaction Caps’’
the respective new cap amounts in relation to the Continuing Connected Transactions for the period of the three financial years ending 31 December 2015 as set out in the sub-section headed ‘‘New Transaction Caps’’ under the section headed ‘‘Details of the Continuing Connected Transactions’’ in the ‘‘Letter from the Board’’ of this circular;
‘‘Previous Manufacturing the agreement dated 30 October 2009 entered into between Agreement’’ CCT Tech and CCT Telecom governing the terms and conditions for the manufacture and supply of the Component Products and the Toolings by the CCT Telecom Remaining Group to the CCT Tech Group for the production of the telecom, electronic and other products for the next three years ending 31 December 2012;
‘‘SFO’’
the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong);
‘‘SGM’’
‘‘Share(s)’’
the special general meeting of the Company to be convened and held for the Shareholder(s) to consider and, if thought fit, approve, inter alia, the New Manufacturing Agreement, the Continuing Connected Transactions and the New Transaction Caps or any adjournment thereof (as the case may be); 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;
‘‘Toolings’’
the dies, casts, moulds and any other relevant toolings required to manufacture the Component Products pursuant to the New Manufacturing Agreement; 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: Lau Ho Kit, Ivan Chow Siu Ngor Chen Li

Head office and principal place of business in Hong Kong: 31/F., Fortis Tower 77–79 Gloucester Road Hong Kong

31 October 2012

To the Shareholders

Dear Sir or Madam,

CONTINUING CONNECTED TRANSACTIONS

INTRODUCTION

Reference is made to the announcement of the Company dated 9 October 2012.

It was announced that on 9 October 2012, CCT Tech entered into the New Manufacturing Agreement with CCT Telecom to renew the terms and conditions of the Continuing Connected Transactions. Pursuant to the New Manufacturing Agreement, CCT Telecom will, and/or will procure other members of the CCT Telecom Remaining Group to, manufacture and supply the Component Products and the Toolings to CCT Tech and/or other members of the CCT Tech Group for the production of telecom, electronics and child products based on orders to be placed by member(s) of the CCT Tech Group from time to time to the CCT Telecom Remaining Group. The New Manufacturing Agreement will replace the Previous Manufacturing Agreement.

CCT Telecom, which indirectly owns approximately 50.49% of the total issued share capital of CCT Tech as at the Latest Practicable Date, is the controlling Shareholder. Accordingly, CCT Telecom is a connected person of CCT Tech under the Listing Rules. The transactions between the CCT Tech Group and the CCT Telecom Remaining Group contemplated under the New Manufacturing Agreement therefore constitute continuing connected transactions for CCT Tech for the purpose of the Listing Rules.

– 4 –

LETTER FROM THE BOARD

The Directors are of the view that 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 and are in the best interests of the CCT Tech Group and the Shareholders as a whole. The SGM will be convened and held to approve the New Manufacturing Agreement, the Continuing Connected Transactions and the New Transaction Caps. CCT Telecom and its associates will abstain from voting in respect of the resolution(s) to approve the New Manufacturing Agreement, the Continuing Connected Transactions and the New Transaction Caps at the SGM.

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

First Shanghai, has been appointed as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders as to whether or not the terms of the New Manufacturing Agreement, the Continuing Connected Transactions and the New Transaction 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 Continuing Connected Transactions and the New Transaction 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 Continuing Connected Transactions and the New Transaction 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 Continuing Connected Transactions and the New Transaction Caps; and
(iv) give the Shareholders the notice of the SGM to consider and, if thought fit, to approve the New Manufacturing Agreement, the Continuing Connected Transactions and the New Transaction Caps.

DETAILS OF THE CONTINUING CONNECTED TRANSACTIONS

The New Manufacturing Agreement

Date: 9 October 2012

Parties: (1) CCT Tech (2) CCT Telecom

– 5 –

LETTER FROM THE BOARD

Subject:

Pursuant to the New Manufacturing Agreement, CCT Telecom will, and/or will procure other members of the CCT Telecom Remaining Group to, manufacture and supply the Component Products and the Toolings to CCT Tech and/or other members of the CCT Tech Group for the production of telecom, electronics and child products based on orders to be placed by member(s) of the CCT Tech Group from time to time to the CCT Telecom Remaining Group. The Component Products and the Toolings to be manufactured by the CCT Telecom Remaining Group will be manufactured in accordance with the specifications and requirement of the CCT Tech Group.

Conditions The New Manufacturing Agreement and the Continuing Connected precedent: Transactions are 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 Continuing Connected Transactions; and (3) the New Transaction Caps; and
(b) CCT Tech 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 Continuing Connected Transactions.

If the above conditions precedent are not fulfilled on or before 31 December 2012 (or such later date as may be agreed between CCT Telecom and CCT Tech in writing), the New Manufacturing Agreement will cease to be of force and effect and the parties hereto will be released from all obligations thereunder.

Term:

The New Manufacturing Agreement has a fixed term of not exceeding three years as provided under Rule 14A.35 of the Listing Rules and will be effective as from 1 January 2013 when all the conditions precedent have been fulfilled and will continue until 31 December 2015 (both dates inclusive). Both parties may renew the New Manufacturing Agreement in writing upon expiry on 31 December 2015 for another three (3) 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 (6) months’ prior written notice.

– 6 –

LETTER FROM THE BOARD

Price and terms In respect of the transactions contemplated under the New Manufacturing of payment: Agreement, the price of the Component Products to be manufactured and supplied by the CCT Telecom Remaining Group to the CCT Tech Group will be determined on an arm’s length basis and will be fixed on a case-bycase basis, depending on the model to be produced provided that the price of the Component Products will be capped by the amount of direct material costs plus a mark-up of no more than 250%. The sale price in respect of specific models of the Component Products payable by the CCT Tech Group will be comparable to that charged by the members of the CCT Telecom Remaining Group to the independent third party customers of the CCT Telecom Remaining Group.

The price of the Toolings will be determined on arm’s length basis with reference to market price provided that the price of the Toolings will be capped by the total costs of manufacturing the Toolings plus a mark-up of no more than 50% of such costs, subject to certain rebates to the CCT Tech Group to be agreed between the relevant members of the CCT Tech Group and the CCT Telecom Remaining Group with reference to the preagreed annual quantity of each model of the Component Products. The pricing of the Toolings will be comparable to that charged by the members of the CCT Telecom Remaining Group to the independent third party customers of the CCT Telecom Remaining Group.

The purchase price for the Component Products will be payable by the CCT Tech Group by cheque, bank transfer or by deposit directly by member(s) of the CCT Tech Group into the designated bank accounts of the member(s) of the CCT Telecom Remaining Group, unless otherwise agreed, will be payable within 150 days from the date of monthly statements which set out the outstanding invoices. The terms of payment are comparable to or not worse than those credit terms granted to the independent third party customers of the CCT Telecom Remaining Group.

The price for the Toolings will be payable in three installments as follows:

(a) 40% immediately upon the commencement of the manufacturing of the Toolings;
(b) 30% after the Toolings are manufactured and have passed all acceptance testing; and
(c) 30% prior to the commencement of the use of the Toolings for the production of the relevant Component Products by the relevant member(s) of the CCT Telecom Remaining Group.

– 7 –

LETTER FROM THE BOARD

Historical Figures for the Continuing Connected Transactions

The financial information regarding the purchase of the Component Products and the Toolings by the CCT Tech Group from the CCT Telecom Remaining Group for each of the two years ended 31 December 2010 and 2011 and for the six months ended 30 June 2012 is set out as follows:

	Amounts of
	purchase of the
	Component	Approved
	Products and	cap amounts
Period	the Toolings	previously granted
	HK$ million	HK$ million
Financial year ended 31 December
2010	251	450
2011	202	650
	Amount of
	purchase of the	Approved cap
	Component	amount previously
	Products and	granted for the
Period	the Toolings	financial year 2012
	HK$ million	HK$ million
Six months ended 30 June 2012	57	850

New Transaction Caps

Pursuant to the New Manufacturing Agreement, the aggregate value of purchase of the Component Products including the Toolings by the CCT Tech Group from the CCT Telecom Remaining Group will not exceed the following amounts:

(a) in respect of the financial year ending 31 December 2013, HK$300 million;
(b) in respect of the financial year ending 31 December 2014, HK$400 million; and
(c) in respect of the financial year ending 31 December 2015, HK$500 million (each of the caps in (a), (b) and (c) are the ‘‘New Transaction Caps’’).

The basis of the New Transaction Caps is determined with reference to: (i) the historical figures of purchase of the Component Products and the Toolings by the CCT Tech Group from the CCT Telecom Remaining Group; (ii) the expectation of the CCT Tech Group to use the Component Products and Toolings to meet the manufacture demand of its products in the next three years; (iii) to meet additional sales orders to be placed with the new child product business acquired by CCT Tech from CCT Telecom at the end of March 2012; and (iv) the anticipated business growth of the CCT Tech Group in the next three years due mainly to the anticipated increasing demand for its products especially the technologically advanced products and the CMS products. The New Transaction Caps for the three years ending 31 December 2015 are determined with reference to the above factors.

– 8 –

LETTER FROM THE BOARD

In projecting the business growth and the anticipated demand of the products of the CCT Tech Group, the management of the CCT Tech Group has taken into account the following basis and factors:

(a) The management considers that the measures taken by the western leaders recently to simulate economic activity including the measures taken by the European Central Bank to control the euro crisis and the third round of quantitative easing (QE3) introduced by the US Federal Reserve will eventually bolster consumer markets.
(b) The child product business will contribute full year sales in 2013 whereas this business division has only started to contribute revenue to the CCT Tech Group since April this year. The historical sales of the child product business for the year ended 31 December 2011 amounted to approximately HK$210 million, which would contribute, for illustrative purpose, approximately 14% additional revenue to the CCT Tech Group, based on its revenue in 2011.
(c) According to the 2011 annual report and the interim report for the six months ended 30 June 2012 of CCT Tech, the revenue of the CMS business, which contributed approximately 13% of the revenue of the CCT Tech Group for the six months ended 30 June 2012, recorded annual growth of approximately 254% in 2011 as compared with the revenue for the corresponding previous year and growth of approximately 134% for the six months ended 30 June 2012, as compared with that for the corresponding previous period, mainly due to the gaining of additional customers and broadening its product mix to, among other products, e-Books, mobile headsets and bluetooth cell link devices.
(d) The CCT Tech Group has a strong capability in development and launching of technologically advanced and innovative products. The new products that the CCT Tech Group plans to launch to the market in 2013 include indoor-use multimedia android devices, broadband telecom products, accessories for smartphones and mobile devices, new models of baby monitors, feeding and nursery products.

Reasons for and Benefits of the Continuing Connected Transactions

The Directors (including the independent non-executive Directors) consider that the Continuing Connected Transactions contemplated under the New Manufacturing Agreement are entered into, and will continue to be entered into, in the usual and ordinary course of business of the CCT Tech Group. The Directors are of the opinion that 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 also take the view that it is beneficial to the CCT Tech Group to enter into the New Manufacturing Agreement as this will enable the CCT Tech Group to purchase good quality component products and toolings at reasonable prices. The Directors are of the opinion that the entering of the New Manufacturing Agreement will provide a secured and reliable source of supply of the Component Products and the Toolings to the CCT Tech Group. As CCT Telecom is the holding company of CCT Tech, the Directors believe that it is in the interest of CCT Telecom to support the CCT Tech Group and therefore the prices of Component Products and Toolings will be set on a reasonable basis. In view of the above, the Directors (including the independent non-executive Directors) are of the view that the Continuing Connected Transactions contemplated under the New Manufacturing Agreement and the terms thereof are fair and reasonable and in the best interests of the CCT Tech and the Shareholders as a whole.

– 9 –

LETTER FROM THE BOARD

INFORMATION ON CCT TECH AND CCT TELECOM

CCT Tech is the holding company of the CCT Tech Group which is principally engaged in the manufacture and sale of telecom, electronic and child products.

CCT Telecom is the holding company of the CCT Telecom Group whose principal activities are (i) the manufacture and sale of telecom, electronic and child products through the CCT Tech Group; (ii) the manufacture and sale of components; (iii) the securities business; (iv) the property development; and (v) the property investment and holding.

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 CCT Tech, CCT Telecom is a controlling Shareholder and therefore a connected person of CCT Tech. As each of the applicable percentage ratios (other than the profits ratio, the revenue ratio and the equity capital ratio which are not applicable) under Chapter 14 of the Listing Rules in respect of the Continuing Connected Transactions is expected to be more than 25% on an annual basis and the annual consideration for the Continuing Connected Transactions is expected to be more than HK$10,000,000, the New Manufacturing Agreement and the Continuing Connected Transactions will be subject to reporting, announcement and independent shareholders’ approval requirements under Rule 14A.35 of the Listing Rules.

The New Manufacturing Agreement, the Continuing Connected Transactions and the New Transaction Caps contemplated thereunder are therefore subject to the approval of the Independent Shareholders by way of poll at the SGM. CCT Telecom and its associates will abstain from voting in respect of the resolution(s) to approve the New Manufacturing Agreement, the Continuing Connected Transactions and the New Transaction Caps at the SGM.

GENERAL

Mr. Mak Shiu Tong, Clement, who is an executive director, the chairman and the chief executive officer of both CCT Telecom and CCT Tech and controls more than one-third of the shareholding of CCT Telecom, is an associate of CCT Telecom. Mr. Mak Shiu Tong, Clement is therefore deemed to have material interest in the New Manufacturing Agreement, the Continuing Connected Transactions and the New Transaction Caps in the perspective of CCT Tech. As such, he has abstained from voting on the resolution(s) of the Board approving the New Manufacturing Agreement, the Continuing Connected Transactions and the New Transaction Caps. Save as aforesaid, none of the Directors (other than Mr. Mak Shiu Tong, Clement) have any material interest in the New Manufacturing Agreement, the Continuing Connected Transactions and the New Transaction Caps, and therefore none of them (other than Mr. Mak Shiu Tong, Clement) has abstained from voting on the resolution(s) of the Board approving the New Manufacturing Agreement, the Continuing Connected Transactions and the New Transaction Caps.

– 10 –

LETTER FROM THE BOARD

As Mr. Chen Li is a common independent non-executive director of both CCT Telecom and CCT Tech, 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 Continuing Connected Transactions and the New Transaction Caps. Mr. Lau Ho Kit, Ivan is an independent non-executive director of CCT Tech 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 Continuing Connected Transactions and the New Transaction Caps. As such, Mr. Lau Ho Kit, Ivan is eligible to be appointed as member of the Independent Board Committee to advise on the terms of the New Manufacturing Agreement, the Continuing Connected Transactions and the New Transaction Caps. The Independent Board Committee comprising Mr. Chow Siu Ngor and Mr. Lau Ho Kit, Ivan (both being independent non-executive directors of CCT Tech and not having material interest in the New Manufacturing Agreement, the Continuing Connected Transactions and the New Transaction Caps) has been formed to advise the Independent Shareholders as to whether or not the terms of the New Manufacturing Agreement, the Continuing Connected Transactions and the New Transaction Caps are fair and reasonable and in the interests of CCT Tech and the Independent 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 this regard.

SGM

A notice convening the SGM to be held at 31/F., Fortis Tower, 77–79 Gloucester Road, Hong Kong on Friday, 16 November 2012 at 10:30 a.m. is set out on pages 30 to 31 of this circular. At the SGM, an ordinary resolution will be proposed and, if thought fit, passed to approve the New Manufacturing Agreement, the Continuing Connected Transactions and the New Transaction 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/eng/investor/ statutory.php). 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.

– 11 –

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 Continuing Connected Transactions and the New Transaction 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/eng/investor/ statutory.php) after the SGM.

RECOMMENDATION

Your attention is drawn to (i) the letter from the Independent Board Committee as set out on pages 13 to 14 of this circular which contains its recommendation to the Independent Shareholders on the terms of the New Manufacturing Agreement, the Continuing Connected Transactions and the New Transaction Caps; and (ii) the letter of advice from First Shanghai as set out on pages 15 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 Continuing Connected Transactions and the New Transaction 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 Continuing Connected Transactions are in the usual and ordinary course of business of the CCT Tech Group; and that the terms of the New Manufacturing Agreement and the Continuing Connected 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 Continuing Connected Transactions and the New Transaction 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

– 12 –

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: 31/F., Fortis Tower, 77–79 Gloucester Road, Hong Kong 31 October 2012

To the Independent Shareholders

Dear Sir or Madam,

CONTINUING CONNECTED TRANSACTIONS

We refer to the circular of the Company to the Shareholders dated 31 October 2012 (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 Continuing Connected Transactions and the New Transaction 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 Continuing Connected Transactions and the New Transaction Caps.

We wish to draw your attention to the letter of advice from the independent financial adviser, First Shanghai, as set out on pages 15 to 23 of the Circular and the letter from the Board as set out on pages 4 to 12 of the Circular.

– 13 –

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 Continuing Connected Transactions and the New Transaction 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 Continuing Connected Transactions and the New Transaction 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

– 14 –

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 [98 x 42] intentionally omitted <==

FIRST SHANGHAI CAPITAL LIMITED

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

31 October 2012

To the Independent Board Committee and the Independent Shareholders

Dear Sir or Madam,

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 Continuing Connected Transactions and the New Transaction Caps, details of which are set out in the circular of CCT Tech to the Shareholders dated 31 October 2012 (the ‘‘Circular’’) of which this letter forms part. Unless the context otherwise requires, terms used in this letter shall have the same meanings as those defined in the Circular.

As the Previous Manufacturing Agreement will expire on 31 December 2012, CCT Tech entered into the New Manufacturing Agreement with CCT Telecom on 9 October 2012 to renew the terms and conditions of the relevant transactions. As at the Latest Practicable Date, CCT Telecom is a controlling shareholder of CCT Tech, therefore the transactions contemplated under the New Manufacturing Agreement constitute continuing connected transactions for CCT Tech under the Listing Rules and are subject to, among other requirements, the approval by the Independent Shareholders by way of poll 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 Continuing Connected Transactions and the New Transaction Caps. We, First Shanghai Capital Limited, have been appointed to advise the Independent Board Committee and the Independent Shareholders in this regard.

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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 CCT Tech 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 CCT Tech 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 CCT Tech 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 CCT Tech Group nor have we conducted any form of investigation into the business, affairs or future prospects of the CCT Tech Group and 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 Continuing Connected Transactions and the New Transaction Caps, we have taken into account the following principal factors and reasons:

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

CCT Telecom is the holding company of CCT Tech. The CCT Telecom Group is principally engaged in (i) the manufacture and sale of telecom, electronic and child products through the CCT Tech Group; and (ii) the manufacture and sale of components, securities business, property development and property investment and holding through the CCT Telecom Remaining Group.

We are advised by the management of the CCT Tech Group that the CCT Tech Group has been procuring the Component Products and the Toolings from the CCT Telecom Remaining Group for the production of its products. We are further advised by the management of the CCT Tech Group that the CCT Tech Group is expected to continue to purchase the Component Products and the Toolings from the CCT Telecom Remaining Group for its manufacturing business in the upcoming years. As the Previous Manufacturing Agreement will expire on 31 December 2012, CCT Tech has entered into the New Manufacturing Agreement with CCT Telecom to renew the terms and conditions of the subject transactions in relation to the purchase of the Component Products and the Toolings for each of the years ending 31 December 2013, 2014 and 2015.

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LETTER FROM FIRST SHANGHAI

Having considered, in particular, (i) the established business relationship between the CCT Tech Group and the CCT Telecom Remaining Group, where the CCT Tech Group has been procuring the Component Products and the Toolings from the CCT Telecom Remaining Group; (ii) the CCT Tech Group is expected to continue to purchase the Component Products and the Toolings for its manufacturing business in the upcoming years; (iii) the Previous Manufacturing Agreement will expire on 31 December 2012 and the New Manufacturing Agreement is for the renewal of the terms and conditions of the subject transactions to provide a secured and reliable source of supply of the Component Products and the Toolings from the CCT Telecom Remaining Group; and (iv) 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 ordinary and usual course of business of the CCT Tech Group and is in the interests of CCT Tech and the Shareholders as a whole.

2. Principal terms of the New Manufacturing Agreement

Pursuant to the New Manufacturing Agreement, the CCT Tech Group will procure the Component Products and the Toolings from the CCT Telecom Remaining Group. The New Manufacturing Agreement has a fixed term of three years, which will commence on 1 January 2013 and continue until 31 December 2015 (both dates inclusive).

As detailed in the letter from the Board, the prices of the Component Products and the Toolings payable by the CCT Tech Group will be comparable to those charged by members of the CCT Telecom Remaining Group to their independent third party customers. We have reviewed sample invoices recently issued by the CCT Telecom Remaining Group to the CCT Tech Group under the Previous Manufacturing Agreement and to an independent third party in relation to the supply of component products and toolings, where we noted that the basis of the prices charged by the CCT Telecom Remaining Group to the CCT Tech Group were comparable to or not less favourable than those charged to the independent third party. We are also advised by the management of the CCT Tech Group that, for the additional benefit and protection to the CCT Tech Group, the prices of the Component Products and the Toolings to be sold by the CCT Telecom Remaining Group to the CCT Tech Group will be capped by the relevant costs plus a mark-up of no more than 250% and 50%, respectively (the ‘‘Pricing Caps’’). In determining the prices for the Continuing Connected Transactions, the Pricing Caps will not be exceeded, whereas, as advised by the management of the CCT Tech Group, prices charged by the CCT Telecom Remaining Group to independent third parties will not be limited to any pricing cap. We are further advised by the management of the CCT Tech Group that all the transactions conducted under the Previous Manufacturing Agreement were below the Pricing Caps and the pricing caps under the Previous Manufacturing Agreement. Having primarily considered the prices payable by the CCT Tech Group will be comparable to those payable by independent third parties and the Pricing Caps are set to offer additional benefit and protection to the CCT Tech Group, we consider the pricing terms to be acceptable.

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LETTER FROM FIRST SHANGHAI

The purchase costs of the Component Products will be payable by the CCT Tech Group within 150 days from the date of monthly statements which set out the outstanding invoices. As such, we have reviewed (i) the annual report of CCT Tech for the year ended 31 December 2011 (the ‘‘2011 Annual Report’’), where we noted that the majority of the age of the trade and bills payables as at 31 December 2011 was within 90 days; and (ii) sample invoices recently issued by the CCT Telecom Remaining Group to the CCT Tech Group and to an independent third party in relation to the procurement of components, where we noted that the credit period granted by the CCT Telecom Remaining Group to the CCT Tech Group was comparable to or not less favourable than that offered to the independent third party. On the other hand, the purchase costs of the Toolings will be payable by the CCT Tech Group in three installments, where 40% of the costs will be paid immediately upon the commencement of the manufacturing of the Toolings, 30% after the Toolings are manufactured and have passed all acceptance testing and the remaining 30% prior to the commencement of the use of the Toolings. As such, we have reviewed sample invoices recently issued by the CCT Telecom Remaining Group to the CCT Tech Group and to an independent third party in relation to the supply of toolings, where we noted that the payment terms granted to the CCT Tech Group were comparable to those to the independent third party and that payments were made in three installments. Therefore, we consider the payment terms contemplated under the New Manufacturing Agreement to be acceptable.

In addition to the above, we are further advised by the management of the CCT Tech Group that the CCT Tech Group has no contractual obligation under the New Manufacturing Agreement to procure the Component Products and the Toolings from the CCT Telecom Remaining Group. As such, notwithstanding the entering into of the New Manufacturing Agreement, members of the CCT Tech Group will still have the right to choose whether to procure component products and toolings from the CCT Telecom Remaining Group or third party suppliers, whichever is considered to be more favourable to the CCT Tech Group.

Taking into account the abovementioned factors, in particular, (i) prices of the Component Products and the Toolings payable by the CCT Tech Group will be comparable to those charged by members of the CCT Telecom Remaining Group to their independent third party customers; (ii) payment terms granted by the CCT Telecom Remaining Group to the CCT Tech Group are comparable to or not less favourable than those offered to independent third parties; (iii) the CCT Tech Group has the discretion to decide whether to procure component products and toolings from the CCT Telecom Remaining Group or third party suppliers, whichever is considered to be more favourable to the CCT Tech Group; (iv) the background of and benefits for entering into the New Manufacturing Agreement as discussed in the previous section; and (v) measures which are in place as required under the Listing Rules to govern the internal control of the CCT Tech 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.

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LETTER FROM FIRST SHANGHAI

3. The New Transaction Caps

As detailed in the letter from the Board, the basis of the New Transaction Caps is determined with reference to (i) the historical transaction amounts; (ii) the expectation to use the Component Products and the Toolings to meet the manufacturing demand; (iii) additional sales orders for the new child product business acquired from CCT Telecom in March 2012; and (iv) the anticipated business growth of the CCT Tech Group. The following table sets out the historical transaction amounts for the year ended 31 December 2011 and for the six months ended 30 June 2012 and the New Transaction Caps for each of the years ending 31 December 2013, 2014 and 2015:

Historical transaction

	Historical transaction	Historical transaction
	amounts
		For the
	For the	six months
	year ended	ended	New Transaction Caps
	31 December	30 June	For the year ending 31		December
	2011	2012	2013	2014	2015
	(HK$ million)	(HK$ million)	(HK$ million)	(HK$ million)	(HK$ million)
Procurement of the
Component Products and
the Toolings from
the CCT Telecom
Remaining Group	202	57	300	400	500

We are advised by the management of the CCT Tech Group that it is reasonable to project the annual transaction amounts under the New Manufacturing Agreement based on the turnover of the CCT Tech Group as the demand of the Component Products and the Toolings is directly related to the sales of the CCT Tech Group. As such, the management has projected the annual cap for the year ending 31 December 2013 based on the expected revenue of the CCT Tech Group for that year, which represents a compound annual growth rate of approximately 13% as compared with the revenue for the year ended 31 December 2011, and approximately 15% of such revenue would be utilised to purchase the Component Products and the Toolings from the CCT Tech Group.

We note that the historical transaction amount for the six months ended 30 June 2012 was approximately HK$57 million, which represents, on a pro rata basis, an annual decline of approximately 44% as compared with the historical transaction amount for the year ended 31 December 2011. We are advised by the management of the CCT Tech Group that the decline was mainly attributable to the discontinuation of the production of power supplies components by the CCT Telecom Remaining Group and the decrease in sales of the CCT Tech Group, which in turn, adversely affected the demand for the Components Products and the Toolings. The decline in sales of the CCT Tech Group was caused by lower revenue from the traditional fixed line phones and the discontinuation of the license agreement entered into between the CCT Tech Group and GE Trademark Licensing, Inc. as disclosed in the announcement of CCT Tech dated 29 December 2011. We are advised by the management of the CCT Tech Group that, despite the decline in revenue in the first half of 2012, the management of the CCT Tech Group plans for a growth of revenue for 2013 compared with 2011, attributable to the following factors:

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LETTER FROM FIRST SHANGHAI

(a) The management considers that the measures taken by the western leaders recently to simulate economic activity including the measures taken by the European Central Bank to control the euro crisis and the third round of quantitative easing (QE3) introduced by the US Federal Reserve will eventually bolster consumer markets.
(b) The child product business will contribute full year sales in 2013 whereas this business division has only started to contribute revenue to the CCT Tech Group since April this year. The historical sales of the child product business for the year ended 31 December 2011 amounted to approximately HK$210 million, which, for illustrative purpose, would contribute approximately 14% additional revenue to the CCT Tech Group for the same year.
(c) According to the 2011 Annual Report and the interim report of CCT Tech for the six months ended 30 June 2012 (the ‘‘2012 Interim Report’’), the revenue of the contract manufacturing service (‘‘CMS’’) business, which contributed approximately 13% of the revenue of the CCT Tech Group for the six months ended 30 June 2012, recorded annual growth of approximately 254% for the year ended 31 December 2011 and period on period growth of approximately 134% for the six months ended 30 June 2012, mainly due to the gaining of additional customers and broadening its product mix to, among other products, e-Books, mobile headsets and bluetooth cell link devices.
(d) The CCT Tech Group has a strong capability in development and launching of technologically advanced and innovative products. The new products that the CCT Tech Group plans to launch to the market in 2013 include indoor-use multimedia android devices, broadband telecom products, accessories for smartphones and mobile devices, new models of baby monitors, feeding and nursery products.

Furthermore, as advised by the management of the CCT Tech Group, the historical transaction amounts in relation to the procurement of component products and toolings from the CCT Telecom Remaining Group represented approximately 15%, 16%, 16% and 13% of the revenue of the CCT Tech Group for each of the years ended 31 December 2008, 2009, 2010 and 2011, respectively. As such, the historical percentage of 15% has been used to project the annual cap for the year ending 31 December 2013.

Despite the decline in the historical transaction amount for the six months ended 30 June 2012, taking into account, among other factors, (i) the global economy may recover in the coming years; (ii) the full year revenue contribution by the child product business to the CCT Tech Group; (iii) the recent strong growth of the CMS business of the CCT Tech Group; (iv) new products are expected to be developed and launched to the market in 2013; and (v) the expected percentage of revenue to be utilised for the procurement of component products and toolings from the CCT Telecom Remaining Group is comparable to those of the previous years, we consider the annual cap for the year ending 31 December 2013 to be acceptable.

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LETTER FROM FIRST SHANGHAI

The annual cap for each of the years ending 31 December 2014 and 2015 represents annual growth of approximately 33% and 25%, respectively. According to the 2012 Interim Report, the CCT Tech Group has invested in the research and development of technologically advanced and innovative products, such as the introduction of the screen communication tablet and the Android based multimedia phone, and has made significant inroads in these areas. We are advised by the management of the CCT Tech Group that, as one of the prime business focuses of the CCT Tech Group, technologically advanced and innovative products will continue to be developed and launched to the market in 2014 and 2015, the manufacturing of which will require the Component Products and the Toolings. In this connection, we have reviewed public industry information published on the website of iSuppli Corporation (‘‘iSuppli’’), which provides services ranging from electronic component research to device-specific application market forecasts, and we note that the industry information published by iSuppli is quoted in, among other publications, the listing documents of several Hong Kong listed companies. According to the article titled ‘‘Shipments of Internet-Enabled Consumer Devices to Exceed PCs in 2013’’ dated 9 August 2011 published on the website of iSuppli, worldwide shipments of Internetenabled consumer electronics devices are expected to record compound annual growth rate of approximately 25% from 2013 to 2015. According to the article titled ‘‘No Contest: Apple iOS to Maintain Tablet Dominance in 2012’’ dated 15 May 2012 published on the website of iSuppli, worldwide sales of tablets is expected to record compound annual growth rate of approximately 30% from 2012 to 2016. According to the article titled ‘‘With iPhone 4S Intro, Apple Misses out on Booming Low-End Smartphone Market’’ dated 5 October 2011 published on the website of iSuppli, global shipment of smartphones is expected to record compound annual growth rate of approximately 29% from 2010 to 2015. Taking into account, in particular, (i) the plan of the CCT Tech Group to continue to develop and launch technologically advanced and innovative products in 2014 and 2015; (ii) the expected industry growth trends as projected by iSuppli; and (iii) the recent growth of the CMS business of the CCT Tech Group, we consider the annual cap for each of the years ending 31 December 2014 and 2015 to be acceptable.

Having considered the abovementioned factors, in particular, (i) the recent strong growth of the CMS business of the CCT Tech Group; (ii) as one of the prime business focuses of the CCT Tech Group, the CCT Tech Group plans to continue to develop and launch technologically advanced and innovative products to the market in 2013, 2014 and 2015; (iii) the expected industry growth trends as projected by iSuppli; (iv) the New Transaction Caps provide flexibility to the CCT Tech Group to procure the Component Products and the Toolings from the CCT Telecom Remaining Group on terms that are fair and reasonable as discussed in the previous section; and (v) measures which are in place as required under the Listing Rules to govern the internal control of the CCT Tech Group as detailed in the section headed ‘‘Measures to ensure compliance with the Listing Rules’’ below, we consider that the New Transaction Caps are fair and reasonable so far as the Independent Shareholders are concerned.

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LETTER FROM FIRST SHANGHAI

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 followings during the term of the New Manufacturing Agreement in relation to the Continuing Connected Transactions:

(i) each year the independent non-executive Directors must review the Continuing Connected Transactions and confirm in the annual report and accounts of CCT Tech that the Continuing Connected 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 CCT Tech 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 Continuing Connected Transactions (a) have received the approval of the Board; (b) are in accordance with the pricing policies of CCT Tech if the Continuing Connected 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 Transaction Caps;
(iii) CCT Tech will allow, and will procure that the counterparties will allow, the auditors of CCT Tech with sufficient access to the relevant records of the Continuing Connected Transactions for the purpose of reporting on the Continuing Connected Transactions. The Board must state in the annual report whether its auditors have confirmed the matters stated in paragraph (ii) above; and
(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 Continuing Connected Transactions, in particular, (i) the limit of the value of the Continuing Connected Transactions by way of the New Transaction Caps; and (ii) the ongoing review by the independent non-executive Directors and the auditors of CCT Tech of the terms of the Continuing Connected Transactions and the New Transaction Caps not being exceeded, we are of the view that appropriate measures will be in place to govern the conduct of the Continuing Connected Transactions and safeguard the interests of the Independent Shareholders.

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LETTER FROM FIRST SHANGHAI

RECOMMENDATION

Having taken into account the above principal factors, we are of the view that (i) the entering into of the New Manufacturing Agreement and the Continuing Connected Transactions are in the ordinary and usual course of business of the CCT Tech Group and in the interests of CCT Tech and the Shareholders as a whole; and (ii) the terms of the New Manufacturing Agreement and the Continuing Connected Transactions are on normal commercial terms, and together with the bases of the New Transaction 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(s) to be proposed at the SGM to approve the New Manufacturing Agreement, the Continuing Connected Transactions and the New Transaction Caps.

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

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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
	Number of the Shares interested			issued share
	and nature of interest			capital of the
Name of the Directors	Personal	Corporate	Total	Company
				(%)
Mak Shiu Tong, Clement
(Note)	—	33,026,391,124	33,026,391,124	50.49
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: The interest disclosed represents 33,026,391,124 Shares 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 approximately 50.03% of the total issued share capital in CCT Telecom as at the Latest Practicable Date.

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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 of
				Number of	Number of	the total
	Date of	Exercise	Exercise	the share	the total	issued share
Name of	grant of the	period of the	price	options	underlying	capital of
the Directors	share options	share options	per Share	outstanding	Shares	the Company
			HK$			(%)
Cheng Yuk Ching,	23/7/2009	23/7/2009–	0.01	245,000,000	245,000,000	0.37
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 Putt	23/7/2009	23/7/2009–	0.01	8,000,000	8,000,000	0.01
		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, Ivan	23/7/2009	23/7/2009–	0.01	8,000,000	8,000,000	0.01
		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
	Number of the shares interested			the total issued
	and nature of interest			share capital of
Name of the Directors	Personal	Corporate	Total	CCT 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.

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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 CCT Tech Group (excluding contracts expiring or determinable by the Company or any member of the CCT Tech 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 2011, 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 CCT Tech Group, or were proposed to be acquired or disposed of by or leased to any member of the CCT Tech Group; and
(iii) none of the Directors was materially interested in any contract or arrangement entered into by any member of the CCT Tech Group which contract or arrangement was subsisting and which was significant in relation to the business of the CCT Tech Group taken as a whole.

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GENERAL INFORMATION

APPENDIX

(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 CCT Tech Group:

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

		Approximate
		percentage of
		the total issued
	Number of	share capital of
Name of the Shareholders	the Shares held	the 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

Notes:

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. Mr. Mak Shiu Tong, Clement, an executive Director, chairman and chief executive officer of the Company is deemed to be interested in the above-mentioned 33,026,391,124 Shares 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. Mr. Mak’s interest in such Shares has been disclosed in sub-section (a)(1)(i) of this section.
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 CCT Tech Group.

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GENERAL INFORMATION

APPENDIX

3. LITIGATION

As at the Latest Practicable Date, neither the Company nor any member of the CCT Tech 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 CCT Tech 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 CCT Tech 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 CCT Tech 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 CCT Tech 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 31 October 2012 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 CCT Tech Group, or was proposed to be acquired, or disposed of by, or leased to any member of the CCT Tech Group since 31 December 2011, the date to which the latest published audited financial statements of the CCT Tech Group were made up.

6. MATERIAL ADVERSE CHANGE

Save as disclosed in the interim report of the CCT Tech Group for the period ended 30 June 2012, the Directors have confirmed that there has been no material adverse change in the financial or trading position or prospects of the CCT Tech Group since 31 December 2011, being the date to which the latest published audited financial statements of the CCT Tech Group were made up, up to the Latest Practicable Date.

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GENERAL INFORMATION

APPENDIX

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 31/F., Fortis Tower, 77–79 Gloucester Road, 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 Mr. Tam Ngai Hung, Terry, who is a fellow of the Association of Chartered Certified Accountants and an associate of both the Hong Kong Institute of Certified Public Accountants and the Institute of Chartered Secretaries and Administrators.
(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 31/F., Fortis Tower, 77–79 Gloucester Road, Hong Kong during normal business hours on any business day from the date of this circular up to 14 days thereafter:

(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 12 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 13 to 14 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 15 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.

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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 31/F., Fortis Tower, 77–79 Gloucester Road, Hong Kong on Friday, 16 November 2012 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 9 October 2012 (the ‘‘New Manufacturing Agreement’’) entered into between the Company and CCT Telecom Holdings Limited (‘‘CCT Telecom’’), 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 CCT Telecom will, and/or will procure its subsidiaries (excluding the Company and its subsidiaries) to manufacture and supply the Component Products (as defined in the circular of the Company dated 31 October 2012, a copy of which is tabled at the meeting and marked ‘‘B’’ and initialled by the Chairman for identification purpose (the ‘‘Circular’’)) and the Toolings (as defined in the Circular) to the Company and/or its subsidiaries, for the production of products of the CCT Tech Group (as defined in the Circular), and the transactions contemplated thereunder (the ‘‘Continuing Connected Transactions’’) be and are hereby approved, ratified and confirmed;
(b) the proposed caps in relation to the Continuing Connected Transactions, in the amounts of HK$300 million, HK$400 million and HK$500 million for the three financial years ending 31 December 2013, 2014 and 2015 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 Continuing Connected Transactions.’’

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

Hong Kong, 31 October 2012

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NOTICE OF THE SGM

Head office and principal place of business in Hong Kong:

31/F., Fortis Tower 77–79 Gloucester Road 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 or at any adjourned meeting thereof (as the case may be) 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/eng/investor/statutory.php.
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.

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AI assistant

GBA Holdings Limited — Proxy Solicitation & Information Statement 2012

49077_rns_2012-10-30_5cd75c87-d0fe-4899-b5d2-f61385ddaf3a.pdf

CONTINUING CONNECTED TRANSACTIONS

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

FIRST SHANGHAI CAPITAL LIMITED

CONTENTS

CONTINUING CONNECTED TRANSACTIONS

INTRODUCTION

DETAILS OF THE CONTINUING CONNECTED TRANSACTIONS

The New Manufacturing Agreement

LETTER FROM THE BOARD

LETTER FROM THE BOARD

Historical Figures for the Continuing Connected Transactions

New Transaction Caps

Reasons for and Benefits of the Continuing Connected Transactions

INFORMATION ON CCT TECH AND CCT TELECOM

LISTING RULES IMPLICATIONS

GENERAL

SGM

RECOMMENDATION

OTHER INFORMATION

(Incorporated in Bermuda with limited liability)

CONTINUING CONNECTED TRANSACTIONS

FIRST SHANGHAI CAPITAL LIMITED

CONTINUING CONNECTED TRANSACTIONS

INTRODUCTION

PRINCIPAL FACTORS AND REASONS CONSIDERED

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

2. Principal terms of the New Manufacturing Agreement

3. The New Transaction Caps

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

3. LITIGATION

4. COMPETING INTERESTS

5. QUALIFICATION AND CONSENT OF EXPERT

Name Qualification

6. MATERIAL ADVERSE CHANGE

7. MISCELLANEOUS

8. DOCUMENTS AVAILABLE FOR INSPECTION

(Incorporated in Bermuda with limited liability)

ORDINARY RESOLUTION

‘‘THAT:

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

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GBA Holdings Limited Proxy Solicitation & Information Statement 2012