Glorious Sun Enterprises Limited — Proxy Solicitation & Information Statement 2006

May 2, 2006

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 shares in Glorious Sun Enterprises Limited, you should at once hand this circular and the accompanying form of proxy to the purchaser or the transferee or to the licensed securities dealer or registered institution in securities or other agent through whom the sale or transfer was effected for transmission to the purchaser or the transferee.

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

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GLORIOUS SUN ENTERPRISES LIMITED

(Incorporated in Bermuda with limited liability) (Stock Code: 393)

ACQUISITION OF THE ENTIRE ISSUED SHARE CAPITAL OF GOLDPROMISE AND RELATED SHAREHOLDERS’ LOANS

NON-EXEMPT CONNECTED TRANSACTION

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

A letter from the Independent Board Committee containing its recommendation to the independent Shareholders is set out on page 8 of this circular. A letter from Centurion, the independent financial adviser, containing its advice to the Independent Board Committee and the independent Shareholders is set out on pages 9 to 19 of this circular.

A notice convening the SGM to be held on Friday, 26 May 2006 immediately following the conclusion of the annual general meeting which is scheduled to be held at 2:30 p.m. on the same date, at Xiamen Suite, 3/F., The Marco Polo Prince, Harbour City, 23 Canton Road, Tsimshatsui, Kowloon, Hong Kong is set out on pages 27 and 28 of this circular. Whether or not you are able to attend the meeting, please complete and return the form of proxy accompanying this circular in accordance with the instructions printed thereon to the principal place of business of the Company at Glorious Sun Group Building, 97 How Ming Street, Kwun Tong, Kowloon, Hong Kong as soon as possible and, in any event, not later than 48 hours before the time appointed for the holding of the meeting or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting at the meeting should you so wish.

28 April 2006

CONTENTS

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
Letter from the Independent Board Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
Letter from Centurion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
Appendix – General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	20
Notice of Special General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	27

DEFINITIONS

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

• “Acquisition”

the acquisition of the Sale Interest and the transactions contemplated by the Acquisition Agreement;

• “Acquisition Agreement”

the sale and purchase agreement dated 7 April 2006 entered into between the Vendors and JeansWest International in respect of the Acquisition;

• “Board”

the board of Directors;

• “Centurion”

• Centurion Corporate Finance Limited, a deemed licensed corporation under the SFO permitted to engage in types 1, 4, 6, 9 of the regulated activities as defined in the SFO, being the independent financial adviser appointed by the Company to advise the Independent Board Committee and the independent Shareholders in relation to the Acquisition;

• “Company” Glorious Sun Enterprises Limited, a company incorporated in Bermuda with limited liability and whose securities are listed on the Stock Exchange;

• “Directors”

the directors of the Company;

• “Goldpromise” Goldpromise Limited, a company incorporated in the British Virgin Islands with limited liability;

• “Goldpromise Group” Goldpromise and its wholly-owned subsidiaries;

• “Group” the Company and its subsidiaries;

• “Independent Board Committee” an independent committee of the Board comprising Mr Lau Hon Chuen, Ambrose, Mr Wong Man Kong, Peter and Mr Chung Shui Ming, Timpson, all of whom are independent non-executive Directors;

• “JeansWest International” Jeanswest International (L) Limited, a wholly-owned subsidiary of the Company;

• “JeansWest NZ” Jeanswest Corporation (New Zealand) Limited, a company incorporated in New Zealand and a wholly-owned subsidiary of Goldpromise;

1

DEFINITIONS

“Latest Practicable Date”	24 April 2006, being the latest practicable date prior to the printing
	of this circular for ascertaining certain information referred to of
	this circular;
“Listing Rules”	the Rules Governing the Listing of Securities on The Stock
	Exchange of Hong Kong Limited;
“Model Code”	Model Code for Securities Transactions by Directors of Listed
	Companies set out in Appendix 10 of the Listing Rules;
“Mr Charles Yeung”	Mr Yeung Chun Kam, alias Charles Yeung, a director and a
	substantial shareholder of the Company;
“NZ$”	New Zealand dollars, the lawful currency of New Zealand;
“Sale Interest”	the entire issued share capital of Goldpromise and related
	shareholders’ loans in the total amount of US$4,782,344 from the
	Vendors to Goldpromise;
“SFO”	Securities and Futures Ordinance (Chapter 571 of the Laws of
	Hong Kong);
“SGM”	the Special General Meeting of the Company to be held for the
	purpose of considering and, if thought fit, approving the
	Acquisition;
“Shareholders”	the shareholders of the Company;
“Stock Exchange”	The Stock Exchange of Hong Kong Limited;
“US$”	United States dollars, the lawful currency of the United States of
	America;
“Vendors”	Mr Charles Yeung and Mr Yeung Chun Fan, whose connections
	with the Company are set out in the paragraph headed “Connection
	between the parties” in the section headed “Letter from the Board”
	in this circular.

In this circular, for reference only and unless specified, the translation of New Zealand dollars and United States dollars into Hong Kong dollars is based on the following exchange rates respectively:

NZ$1.00 = HK$4.76 US$1.00 = HK$7.8

2

LETTER FROM THE BOARD

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GLORIOUS SUN ENTERPRISES LIMITED

(Incorporated in Bermuda with limited liability) (Stock Code: 393)

Executive Directors: Dr Charles Yeung, SBS, JP (Chairman) Mr Yeung Chun Fan (Vice-chairman) Mr Yeung Chun Ho Mr Pau Sze Kee, Jackson Mr Hui Chung Shing, Herman, JP Ms Cheung Wai Yee Mr Chan Wing Kan, Archie Mr Teo Heng Kee, Peter

Independent Non-Executive Directors: Mr Wong Man Kong, Peter, BBS, JP Mr Lau Hon Chuen, Ambrose, GBS, JP Mr Chung Shui Ming, Timpson, GBS, JP

Registered Office: Clarendon House 2 Church Street Hamilton, HM11 Bermuda

Principal Place of Business in Hong Kong: Glorious Sun Group Building 97 How Ming Street Kowloon Hong Kong

Non-Executive Director:

Dr Lam Lee G.

28 April 2006

To Shareholders

Dear Sir or Madam,

ACQUISITION OF THE ENTIRE ISSUED SHARE CAPITAL OF GOLDPROMISE

AND RELATED SHAREHOLDERS’ LOANS

NON-EXEMPT CONNECTED TRANSACTION

INTRODUCTION

Reference is made to the Company’s announcement dated 7 April 2006 regarding the Acquisition.

The purposes of this circular are:

• (a) to provide you with further information relating to the Acquisition and other information required by the Listing Rules;

3

LETTER FROM THE BOARD

• (b) to set out the letter of advice from Centurion to the Independent Board Committee and the independent Shareholders and the recommendation and opinion of the Independent Board Committee as advised by Centurion in relation to the Acquisition; and

• (c) to give you notice of the SGM to consider and, if thought fit, to approve the Acquisition.

THE ACQUISITION AGREEMENT

Date: 7 April 2006

Parties: (1) the Vendors, as sellers of the Sale Interest; and

• (2) JeansWest International, as purchaser of the Sale Interest.

Assets involved

The Vendors’ entire interest in Goldpromise is represented by the entire issued share capital of Goldpromise (owned by Mr Charles Yeung as to 50%, being one share, and Mr Yeung Chun Fan as to the other 50%, being the remaining one share) and shareholders’ loans in the total amount of US$4,782,344 (approximately HK$37.3 million) from the Vendors to Goldpromise (as to US$2,391,172 (approximately HK$18.65 million) from Mr Charles Yeung and US$2,391,172 (approximately HK$18.65 million) from Mr Yeung Chun Fan). On completion of the Acquisition, Goldpromise will be wholly owned by the Company and the sale of garment by the Group to JeansWest NZ (as announced on 1 June 2004) will cease to be continuing connected transaction. Please also refer to the paragraph headed “Information relating to Goldpromise” below.

Consideration for the Acquisition

The total consideration for the Acquisition is US$10,180,000 (approximately HK$79.4 million). The consideration will be payable to the Vendors in cash on completion as follows:

• (a) US$5,090,000 to Mr Charles Yeung; and

• (b) US$5,090,000 to Mr Yeung Chun Fan.

The consideration was determined after arm’s length negotiation between the parties and having regard to (i) the market value of the Goldpromise Group with reference to the historical earnings of JeansWest NZ; (ii) the face value of the shareholders’ loans; (iii) the future prospects of JeansWest NZ; and (iv) an independent business valuation submitted in confidence to the Board in respect of the proposed Acquisition.

The Acquisition will be financed by internal resources of the Group.

4

LETTER FROM THE BOARD

Completion

Completion of the Acquisition is conditional upon (a) the Company obtaining independent Shareholders’ approvals required under the Listing Rules on or before 26 May 2006 (or such later date as the parties may agree), and (b) there being no material adverse change to the business, financial condition or results of operations of Goldpromise and its subsidiaries until completion.

Completion is expected to take place on 27 May 2006 (or such other date as the parties may agree) after the last of the above conditions has been satisfied.

INFORMATION RELATING TO GOLDPROMISE

Goldpromise is an investment holding company. Through a wholly-owned subsidiary, Goldpromise is interested in the entire equity interest in JeansWest NZ and two other dormant companies. JeansWest NZ is engaged in the business of selling by retail jeans and other fashion goods through “JeansWest” retail outlets in New Zealand.

Goldpromise became the holding company of Goldpromise Group in May 2005. According to its unaudited management accounts, Goldpromise’s consolidated net profits (since it became the holding company in May 2005) before and after tax for the year ended 31 December 2005 were approximately US$705,004 (approximately HK$5.5 million) and US$470,070 (approximately HK$3.7 million) respectively. Based on the unaudited balance sheet as at 31 December 2005, the total value of Goldpromise’s consolidated net asset (US$570,137) and the shareholders’ loans (US$4,782,344) were US$5,352,481 (approximately HK$41.7 million).

The net profits (both before and after taxation and extraordinary items) of JeansWest NZ, being the only operational subsidiary of Goldpromise Group at present, for the two financial years immediately preceding the Acquisition as extracted from its audited financial statements are set out below:

Year	ended	31	December	Profit before Taxation (NZ$)	Profit after Taxation (NZ$)
2005				1,888,305	1,270,483
				(approximately HK$8.99 million)	(approximately HK$6.05 million)
2004	(Note)			1,428,948	1,703,286
				(approximately HK$6.8 million)	(approximately HK$8.11 million)

Note: There was an income tax benefit of NZ$274,338 (approximately HK$1.31 million) as a result of tax loss carried forward, for the year ended 31 December 2004.

REASONS FOR, AND BENEFITS OF, THE ACQUISITION

The Group is principally engaged in retailing, export and production of casual wear.

5

LETTER FROM THE BOARD

The Goldpromise Group is engaged in the business of selling by retail jeans and other fashion goods through “JeansWest” retail outlets in New Zealand. Messrs. Charles Yeung and Yeung Chun Fan, both being Directors, purchased the now-dormant companies in the Goldpromise Group in 2001 at a cost of US$3,609,200 and JeansWest NZ in 2002 at a cost of US$2,153,660, from the Company when these companies were performing below the management’s expectation.

JeansWest NZ has since been turnaround and the Board believes that acquiring back JeansWest NZ will contribute sustainable and satisfactory earnings towards the Group in the near future. Given the positive development in the New Zealand clothing retail industry, the Board considers that the Acquisition will enable the Company to re-enter the New Zealand market on terms it considers to be appropriate.

The Board, including the independent non-executive Directors whose views are set out in the section headed “Letter from the Independent Board Committee” of this circular, is of the view that the terms of the Acquisition are on normal commercial terms, in the ordinary and usual course of business, fair and reasonable and are in the interests of the Company and the Shareholders as a whole.

CONNECTION BETWEEN THE PARTIES

Both Mr Charles Yeung and Mr Yeung Chun Fan are directors and substantial shareholders of the Company and therefore are connected persons of the Company.

COMPLIANCE WITH THE LISTING RULES

The applicable percentage ratios as defined under Rule 14.07 of the Listing Rules for the Acquisition exceed 2.5%. Accordingly, the Acquisition constitutes a non-exempt connected transaction for the Company and is subject to the reporting, announcement and independent shareholders’ approval requirements of Chapter 14A of the Listing Rules.

The Independent Board Committee has been constituted to advise the independent Shareholders in respect of the resolution to approve the Acquisition. Centurion has been appointed as independent financial adviser to advise the Independent Board Committee and the independent Shareholders on the Acquisition.

SGM

The Company will convene the SGM to consider and, if thought fit, to approve the Acquisition Agreement. In accordance with the Listing Rules, any connected person with a material interest in the Acquisition and any Shareholder with a material interest in the Acquisition and its associates must abstain from voting at the SGM. The Vendors and their respective associates will be required to abstain from voting at the SGM.

There is set out on pages 27 and 28 a notice convening the SGM to be held on Friday, 26 May 2006 immediately following the conclusion of the annual general meeting which is scheduled to be held at 2:30 p.m. on the same date, at Xiamen Suite, 3/F., The Marco Polo Prince, Harbour City, 23 Canton Road, Tsimshatsui, Kowloon, Hong Kong, at which a resolution will be proposed to the independent Shareholders to approve the Acquisition. The vote of the independent Shareholders at the SGM will be taken by poll.

6

LETTER FROM THE BOARD

A form of proxy for use at the SGM is enclosed. Whether or not you are able to attend the SGM in person, you are requested to complete and return the form of proxy in accordance with the instructions printed thereon as soon as possible and in any event not later than 48 hours before the time appointed for the holding of the SGM or any adjourned meeting thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the SGM or any adjourned meeting thereof and, in such event, the relevant form of proxy shall be deemed to be revoked.

RECOMMENDATIONS

Your attention is drawn to (i) the letter from the Independent Board Committee set out on page 8 of this circular which contains its recommendation to the independent Shareholders concerning the Acquisition; and (ii) the letter from Centurion set out on pages 9 to 19 of this circular which contains their advice to the Independent Board Committee and the independent Shareholders in relation to the Acquisition and the principal factors and reasons considered by them in formulating their advice.

ADDITIONAL INFORMATION

Your attention is also drawn to the information set out in appendix of this circular and the notice of the SGM set out in this circular.

By order of the Board Glorious Sun Enterprises Limited Hui Chung Shing, Herman, JP Director

7

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

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GLORIOUS SUN ENTERPRISES LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 393)

28 April 2006

To the independent Shareholders of the Company

Dear Sir or Madam,

ACQUISITION OF THE ENTIRE ISSUED SHARE CAPITAL OF GOLDPROMISE AND RELATED SHAREHOLDERS’ LOANS

NON-EXEMPT CONNECTED TRANSACTION

We refer to the circular dated 28 April 2006 of the Company (the “ Circular ”) of which this letter forms part. Terms defined in the Circular bear the same meanings in this letter unless the context otherwise requires.

We have been appointed to form the Independent Board Committee to consider the terms of the Acquisition and to advise the independent Shareholders whether, in our opinion, such terms are fair and reasonable and in the interests of the Company and the Shareholders as a whole. Centurion has been appointed to advise the Independent Board Committee and the independent Shareholders in respect of the terms of the Acquisition.

We wish to draw your attention to the letter from the Board set out on pages 3 to 7 of the Circular which contains, inter alia, information on the Acquisition, and the letter of advice from Centurion set out on pages 9 to 19 of the Circular which contains its advice in respect of the terms of the Acquisition.

Having taken into account the advice of Centurion, we consider that the terms of the Acquisition are on normal commercial terms, in the ordinary and usual course of business, fair and reasonable and are in the interests of the Company and the Shareholders as a whole. Accordingly, we recommend the independent Shareholders to vote in favour of the ordinary resolution to be proposed at the SGM.

Yours faithfully,

The Independent Board Committee Mr Lau Hon Chuen, Ambrose, JP Mr Wong Man Kong, Peter, JP Mr Chung Shui Ming, Timpson, JP Independent Non-Executive Directors

8

LETTER FROM CENTURION

The following is the text of a letter received from Centurion setting out its advice to the Independent Board Committee and the independent Shareholders in respect of the Acquisition for inclusion in this circular.

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28 April 2006

To the Independent Board Committee and independent Shareholders of Glorious Sun Enterprises Limited

Dear Sirs,

ACQUISITION OF THE ENTIRE ISSUED SHARE CAPITAL OF GOLDPROMISE AND RELATED SHAREHOLDERS’ LOANS

NON-EXEMPT CONNECTED TRANSACTION

INTRODUCTION

We have been engaged to advise the Independent Board Committee and the independent Shareholders with respect to the terms and conditions of the Acquisition under the Acquisition Agreement, details of which are contained in the “Letter From The Board” set out from pages 3 to 7 of the circular dated 28 April 2006 to the Shareholders (“Circular”) of which this letter forms a part. We have been appointed to give an opinion as to whether the terms and conditions of the Acquisiton under the Acquisition Agreement are normal commercial terms, and are fair and reasonable and in the interests of the Company and its Shareholders as a whole. Capitalised terms used in this letter shall have the same meanings as defined in the Circular unless the context otherwise requires.

The Company announced on 7 April 2006 the entering into of the Acquisition Agreement and for the reasons set out in the “Letter From The Board”, the Acquisition constitutes a non-exempt connected transaction of the Company under the Listing Rules. As such, the Acquisition Agreement and the proposed Acquisition contemplated thereunder are subject to the approval of the independent Shareholders by way of poll at the SGM. For the reasons cited in the “Letter From The Board”, both Mr Charles Yeung and Mr Yeung Chun Fan and their respective associates are connected persons of the Company under Rule 14A.11 of the Listing Rules and are required to abstain from voting at the SGM. In this regard, please refer to the “Letter From The Board” for further details.

9

LETTER FROM CENTURION

The Independent Board Committee, the composition of which is also set out in the “Letter From The Board”, has been formed to advise the independent Shareholders in relation to the terms and conditions of the Acquisition Agreement.

BASIS OF OUR OPINION

In formulating our opinion and recommendation, we have relied on the accuracy of the information, opinions and representation contained in the Circular and other documents relating to the Acquisiton (including but not limited to the Acquisiton Agreement) which have been provided to us by the Directors and for which they take full responsibility. We have also assumed that all statements, information, opinions and representations made or referred to in the Circular were true at the time they were made and continued to be true at the date of this Circular. We have also assumed that all statements of belief, opinions and intention made by the Directors in the Circular are reasonably made after due and careful enquiry.

In respect of the financial positions of each of the Group and the Goldpromise Group, we have relied principally on their respective audited/unaudited consolidated/unconsolidated financial statements, all prepared by the Company and for which the Directors take full responsibility. We have also sought and obtained confirmation from the Company that no material facts have been omitted from the information provided and/or referred to in the Circular.

We have no reason to doubt the truth, accuracy and completeness of the information and representations provided to us by the Directors. We consider that we have reviewed sufficient financial information to enable us to reach an informed view and to justify reliance on the accuracy of the financial information of the Group as contained in the Circular. We have not, however, conducted any form of independent or in-depth investigation into the businesses and affairs of the prospects of the Group, the Goldpromise Group, or any of their respective subsidiaries or associates, nor have we independently verified any of the information supplied to us.

10

LETTER FROM CENTURION

PRINCIPAL FACTORS AND REASONS CONSIDERED

In formulating our recommendation, we have taken into consideration the following principal factors and reasons:

1. BACKGROUND

Information of the Group

The Company is principally engaged in retailing, export and production of casual wear. For the year ended 31 December 2005, turnover of the Group amounted to approximately HK$3,802.4 million, the breakdown of such turnover by activities is as follows:

Types of activities Retailing of casual wear Export of apparel Trading of fabric and other businesses Total	HK$ 2,492.5 million 1,148.1 million 161.8 million HK$ 3,802.4 million	% 65.6 30.2 4.2
		100.0

The approximately HK$3,802.4 million turnover of the Group set out above generated a profit from operating activities of approximately HK$335.4 million. As highlighted above, the retail operations accounted for approximately 65.6% of the Group’s turnover or approximately HK$2,492.5 million, and profit from operating activities attributable to such retail operations was approximately HK$221.7 million, or approximately 66.1% of the profit from operating activities of the Group for the year ended 31 December 2005.

For the six months ended 30 June 2005, turnover of the Group was HK$1,762.5 million and net profit attributable to Shareholders of the Company was HK$112.83 million.

Information of the Goldpromise Group

Goldpromise is incorporated in the British Virgin Islands and is an investment holding company with neither active business nor operation. It holds the entire equity interest in GS Australasia Pty Ltd., another non-operating company incorporated in Australia which in turn, holds the entire equity interest in each of JeansWest NZ and two other companies which have become dormant since 2002, namely Old Garage Retail Pty Ltd and Old Garage Trading Pty Ltd. JeansWest NZ is engaged in the business of selling and retailing jeans and other fashion goods through “JeansWest” retail outlets in New Zealand. JeansWest NZ has been operating in New Zealand since 1996 and has a retail network consisting of a total of 27 leased stores including two clearance stores across New Zealand.

11

LETTER FROM CENTURION

According to its unaudited and consolidated management accounts, Goldpromise’s net profits before and after tax for the year ended 31 December 2005 was approximately US$0.71 million (approximately HK$5.54 million) and US$0.47 million (approximately HK$3.67 million) respectively and its unaudited consolidated net assets as at 31 December 2005 was approximately US$0.57 million (approximately HK$4.4 million). Goldpromise does not have any audited accounts.

Having considered the fact that Goldpromise is only a holding company whose accounts are not required to be audited and its underlying principal asset is its entire equity interest in JeansWest NZ, we have therefore placed more emphasis on JeansWest NZ for the purpose of our independent letter of advice.

For each of the two years ended 31 December 2005, based on the audited accounts of JeansWest NZ, its net profit before tax was NZ$1,428,948 (approximately HK$6,802,000) and NZ$1,888,305 (approximately HK$8,988,000) respectively. Its net profit after tax for each of the two years ended 31 December 2005 was NZ$1,703,286 (approximately HK$8,108,000) and NZ$1,270,483 (approximately HK$6,047,000) respectively. JeansWest NZ’s audited net assets as at 31 December 2004 and 2005 were NZ$2,322,234 (approximately HK$11,054,000) and NZ$3,592,717 (approximately HK$17,101,000) respectively.

For the two years ended 31 December 2005, JeansWest NZ’s EBITDA (earnings before interest, tax and depreciation) were approximately NZ$1,734,000 (approximately HK$8,254,000) and approximately NZ$2,268,000 (approximately HK$10,796,000) respectively.

JeansWest NZ was originally established by the Company in 1996. It was sold to a company owned as to 75% by Messrs. Charles Yeung and Yeung Chun Fan, both being Directors, in mid 2002. At the time of the sale, according to the audited accounts of JeansWest NZ, for the year ended 31 March 2002, its net profit was NZ$236,683 (approximately HK$1,127,000) and its accumulative losses was NZ$1,719,802 (approximately HK$8,186,000) as at 31 March 2002. Its divestiture was designed to allow the Company to take a more focus approach on its core business under the “JeansWest” brand and not to be distracted by the then struggling JeansWest NZ. Please refer to the section headed “Reasons For, And Benefits Of, The Acquisition” in the “Letter From The Board” for details of the previous purchase of JeansWest NZ and the now-dormant companies in the Goldpromise Group by Messrs. Charles Yeung and Yeung Chun Fan.

2. THE PROPOSED ACQUISITION UNDER THE ACQUISITION AGREEMENT

The proposed Acquisition constitutes a non-exempt connected transaction under the Listing Rules as the Vendors, namely both Mr. Charles Yeung and Mr. Yeung Chun Fan, are Directors and substantial Shareholders and therefore are connected persons of the Company. As the Acquisition constitutes a nonexempt connected transaction for the Company, it is subject to the reporting, announcement and independent shareholders’ approval requirements of Chapter 14A of the Listing Rules.

12

LETTER FROM CENTURION

Principal terms of the Acquisition Agreement

Pursuant to the Acquisition Agreement, the Company will acquire the Vendors’ entire interest in Goldpromise, which is represented by the (i) entire issued share capital of Goldpromise (owned by Mr Charles Yeung as to 50%, being one share, and Mr Yeung Chun Fan as to the other 50%, being the remaining one share); and (ii) shareholders’ loans in the total amount of US$4,782,344 (approximately HK$37,302,000) from the Vendors to Goldpromise. On completion of the Acquisition, Goldpromise will be wholly-owned by the Company. Please also refer to the “Letter From The Board” for more details on the Acquisiton.

As set out in the “Letter From The Board”, the consideration was determined after arm’s length negotiation between the parties and having regard to (i) the market value of the Goldpromise Group with reference to the historical earnings of JeansWest NZ; (ii) the face value of the shareholders’ loans; (iii) the future prospects of the JeansWest NZ; and (iv) an independent business valuation submitted in confidence to the Board in respect of the proposed Acquisition.

The US$10,180,000 (approximately HK$79,404,000) consideration payable is for the value of the Goldpromise Group and the value of the shareholders’ loans in the total amount of US$4,782,344 (approximately HK$37,302,000). The consideration will be payable to the Vendors in cash on completion.

Bases of the Consideration

As set out above, the US$10,180,000 (approximately HK$79,404,000) consideration is for (i) the market value of the Goldpromise Group; and (ii) the face value of the shareholders’ loans in the total amount of US$4,782,344 (approximately HK$37,302,000). Dealing with each of these two factors in turn:

• (i) The underlying value of the Goldpromise Group

On the premise that fair market value of the shareholders’ loans is its face value, out of the total consideration of US$10,180,000 (approximately HK$79,404,000), US$5,397,656 (approximately HK$42,102,000) is thus attributable to the value of the Goldpromise Group.

As set out above in the section headed “Information of the Goldpromise Group”, according to Goldpromise’s management accounts, net profits before and after tax for the year ended 31 December 2005 were approximately US$0.47 million (approximately HK$3.67 million) and its net assets as at 31 December 2005 was approximately US$0.57 million (approximately HK$4.4 million). Such net assets value is based on Goldpromise’s “carrying book value” of investments in its direct and indirect subsidiaries, and did not make any adjustments by taking into consideration the “fair market value” of any of its subsidies, in particular, the fair market value of JeansWest NZ.

Goldpromise is only a holding company with no operations. Based on Goldpromise’s unconsolidated and management prepared balance sheet as at 31 December 2005 (i) total assets consisted of a loan advance of US$4,782,344 (approximately HK$37,302,000) to GS

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LETTER FROM CENTURION

Australasia Pty Ltd (“GS Australasia”) and the book value of an investment of US$2 (approximately HK$15.6) in GS Australasia; and (ii) total liabilities consisted of shareholders’ loans of US$4,782,344 (approximately HK$37,302,000); and (iii) a paid-up share capital of US$2 (approximately HK$15.6).

GS Australasia, the only subsidiary of Goldpromise, is also a dormant company with no net income or loss for the year ended 31 December 2005 but holds a 100% equity interest in each of (i) JeansWest NZ; (ii) Old Garage Retail Pty Ltd; and (iii) Old Garage Trading Pty Ltd. Both Old Garage Retail Pty Ltd and Old Garage Trading Pty Ltd have been dormant since 2002. JeansWest NZ is the sole operating subsidiary of the Goldpromise Group with more details set out above in the section headed “Information of the Goldpromise Group”.

On the basis that for each of the two years ended 31 December 2005, JeansWest NZ’s (i) audited net profit before tax was NZ$1,428,948 (approximately HK$6,802,000) and NZ$1,888,305 (approximately HK$8,988,000) respectively; and (ii) net profit after tax was NZ$1,703,286 (approximately HK$8,108,000) and NZ$1,270,483 (approximately HK$6,047,000) respectively, JeansWest NZ’s profitability had a rising historical trend, notwithstanding that net profit was distorted by a NZ$274,338 (approximately HK$1,306,000) income tax benefit, as a result of tax losses carried forward, for the year ended 31 December 2004.

Based on JeansWest NZ’s net profit after tax of NZ$1,270,483 (approximately HK$6,047,000) for the year ended 31 December 2005 and the aforesaid US$5,397,656 (approximately HK$42,102,000) portion of the consideration attributable to the underlying value of the Goldpromise Group, namely JeansWest NZ, such portion of the consideration represents a historical price-earnings multiple of approximately 6.9 times.

Further, on the basis that for the year ended 31 December 2005, JeansWest NZ’s EBITDA was approximately NZ$2,268,000 (approximately HK$10,796,000), such portion of the consideration set out above represents a historical price-EBITDA multiple of approximately 3.9 times.

• (ii) The value of the shareholders’ loans and related issues

On the surface, the face value of the shareholders’ loans in the total amount of US$4,782,344 (approximately HK$37,302,000) represents aggregate advances from the Vendors to Goldpromise, which if not acquired or assigned, the Vendors would remain to be creditors of Goldpromise following completion of the Acquisition. In order to satisfy ourselves that such shareholders’ loans are not “quasi equity” which would be required to maintain the operations of the JeansWest NZ, we have sought further clarifications from the management of the Company and its responses are as follows:

• The operations of JeansWest NZ, being principally in retail of casual wear, is of cash business nature;

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LETTER FROM CENTURION

• Bank facility of NZ$ 3,500,000 (approximately HK$16,660,000) available to JeansWest NZ is currently not drawn down due to a lack of need for bank financing (NZ$94,000 (approximately HK$447,000) of such facility was used to issue guarantee for various landlords); and

• JeansWest NZ is cash flow positive with a historical trend of rising EBITDA.

Whilst we find these responses satisfactory, we adopt the more conservative view that since as at 31 December 2005, audited cash balance of JeansWest NZ amounted to NZ$ 3,517,079 (approximately HK$16,741,000), which would reasonably represent the maximum amount of free surplus cash available for distribution as either dividends or in specie or repayment of intercompany advances to Goldpromise for the repayment of the subject shareholders’ loans, had such repayment been demanded by the Vendors. On this basis, we conclude that the following adjustments should be made to the total amount of US$4,782,344 (approximately HK$37,302,000) consideration payable for the shareholders loan and the consideration of US$5,397,656 (approximately HK$42,102,000) attributable to the value of the Goldpromise Group:

• Attributable to Attributable to the

• Goldpromise Group shareholders’ loans

• A. Consideration under the US$5,397,656 US$4,782,344 Acquisition Agreement (approximately (approximately HK$42,102,000) HK$37,302,000)

• B. Cash available for NZ$3,517,079 distribution by JeansWest NZ (approximately HK$16,741,000

• or US$2,146,000)

• C. Adjustments to A assuming US$2,636,344 (US$2,636,344) value of the shareholders’ (approximately (approximately loan is equivalent to B (HK$20,563,000)) (HK$20,563,000))

• D. Adjusted value of the US$8,034,000 US$2,146,000 consideration in A (approximately (approximately HK$62,665,000) HK$16,739,000)

Summary of the pricing issues on the consideration

On the assumption that the maximum value of the shareholders’ loans should be equivalent to the surplus cash balance on the balance sheet of JeansWest NZ and the difference between the face value of the shareholders’ loans and such cash balance is thus quasi equity, and based on JeansWest NZ’s net profit after tax of NZ$1,270,483 (approximately HK$6,047,000) for the year ended 31 December 2005 and the aforesaid US$8,034,000 (approximately HK$62,665,000) adjusted consideration attributable to the underlying value of the Goldpromise Group, namely JeansWest NZ, such adjusted consideration represents a historical price-earnings multiple of approximately 10.4 times.

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LETTER FROM CENTURION

Further, on the basis that for the year ended 31 December 2005, JeansWest NZ’s EBITDA was approximately NZ$2,268,000 (approximately HK$10,796,000), such adjusted consideration represents a historical EBITDA multiple of approximately 5.8 times.

A summary of the price-earnings and EBITDA multiples based on the analyses set out above is as follows:

			Consideration adjusted
			based on the assumption
			that portion of the
			shareholders’ loans
	Consideration as set out		not supported
	under the Acquisition		by cash surplus
		Agreement	is quasi equity
Historical price-earnings multiple		6.9 times	10.4 times
Historical EBITDA multiple		3.9 times	5.8 times

We take the view that the higher ends of the above ranges are more applicable to pricing of the Acquisition.

Comparables to the consideration and other pricing issues

We have noted that in the valuation report on the Goldpromise Group commissioned by the Company and submitted in confidence to the Board for its consideration, a number of comparable Australian listed companies in the clothing retail industry were cited and their respective EBITDA multiples range from 4 times to 12 times. We take the view that the lower range of the EBITDA is more applicable, given the relatively smaller operations of JeansWest NZ and its unlisted status when compared to the larger listed Australian clothing retailers. Following our enquiry, we understand that there was no comparable private company in the New Zealand clothing retail industry which had been acquired recently by a listed issuer.

We further noted that there was no comparable private company in the Hong Kong clothing retail industry which had been acquired recently by a listed issuer either but there was one privatelyowned company which engaged in running a number of retail outlets principally in Hong Kong selling high quality coffee was acquired by a listed issuer whose shares are listed on the Stock Exchange last year. The announced consideration for that acquisition, which we consider reasonably comparable to the Acquisition on a number of factors, indicated (i) a historical price-earnings multiple of 22 times; (ii) an implied price-earnings multiple of 8 times based on guaranteed net profit before tax for a 11-month period; and (iii) a historical multiple of 8.5 times of the EBITDA.

We further noted that according to Goldpromise’s unaudited consolidated balance sheet prepared by management of the Company, net asset value, based on book carrying value, amounted to US$570,138 as at 31 December 2005. We are of the opinion that net asset value backing of a clothing retail business is less relevant to the pricing of the valuation of such business than say, EBITDA and price-earnings multiples. The Shares is currently trading at a historical price-earnings multiple of approximately 17 times as set out below in the sub-section headed “Earnings”.

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LETTER FROM CENTURION

In light of the above, we are of the opinion that the ranges of the price-earnings and EBITDA multiples set out above are considered reasonable in so far as the consideration for the Acquisition is concerned.

Completion

Completion of the Acquisition is conditional upon (a) the Company obtaining independent shareholders’ approvals required under the Listing Rules on or before 26 May 2006 (or such later date as the parties may agree), and (b) there being no material adverse change to the business, financial condition or results of operations of Goldpromise and its subsidiaries until completion.

Reasons for, effects and benefits of the Acquisition

The Group is principally engaged in retailing, export and production of casual wear. The Goldpromise Group is engaged in the retail business of selling jeans and other fashion goods through “JeansWest” retail outlets in New Zealand. JeansWest NZ was divested in mid-2002 when it was struggling with profitability and consequently, the Company had decided to take a more focus approach on its core business under the “JeansWest” brand. JeansWest NZ has since been successfully turnaround and the Board believes that acquiring back JeansWest NZ will contribute sustainable and satisfactory earnings towards the Group in the near future. Given the expected positive development in the New Zealand clothing retail industry with a low single digit growth rate per annum from now until 2010 (source: IBISWorld Industry Report, as referred to by the valuation report commissioned by the Company), the Board considers that the Acquisition will enable the Company to re-enter the New Zealand market on terms it considers to be appropriate.

The Acquisition allows the Group to re-enter the clothing retail industry in New Zealand with the considerable net work of 27 store outlets, including 2 clearance stores that are currently owned by JeansWest NZ and thus mitigating any risks or time costs associated with start-ups in a relatively mature marketplace, possibly with significant barriers to entry by new entrants which are pursuing multiple stores retail strategy with a meaning critical mass of such number of stores at “one go”.

In light of the above, we are in concurrence with the reasons for and benefits of the Acquisition cited by the Board (other than the independent non-executive Directors) and we are of the opinion that the Acquisition is in the interests of the Shareholders and the Company as a whole.

3. FINANCIAL EFFECTS OF THE ACQUISITION

As set out in the “Letter From The Board”, the Goldpromise Group and its underlying assets, JeansWest NZ, will become wholly-owned subsidiaries of the Group and its financial performance will be accounted for using the consolidation method. In other words, each of the assets and liabilities, or income and expenses and cash flow, as the case may be, of the companies within the Goldpromise Group will be consolidated, based on the Group’s 100% interest, into the financial statements of the Group.

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LETTER FROM CENTURION

Earnings

As set out in the audited consolidated income statement of the Group for the year ended 31 December 2005, earnings per Share was HK$0.2335 and based on the closing price per Share on 24 April 2006 of HK$4.0, the Share is trading at a historical price-earnings multiple of approximately 17 times. The Acquisition, which is on a price-earnings multiple range from approximately 6.9 times to 10.4 times, will further enhance the earnings of the Group. Turnover of JeansWest NZ for the year ended 31 December 2005 amounted to NZ$20,852,675 (approximately HK$99,259,000), which will further enhance the Group’s turnover following completion of the Acquisition. It is also important to note that the Acquisition will enable the Group to re-enter the New Zealand clothing retail market and will provide more geographical diversification to its retailing of casual wear businesses.

As set out in the section below, a goodwill will arise from the Acquisition. Such goodwill will not need to be amortised but will be subject to an annual impairment review as stipulated under the Hong Kong Financial Reporting Standards. Should no recognition of impairment be required at such review process, the goodwill will not have any impact on the Group’s profit and loss statement.

Assets and liabilities

Whilst the precise amount of Goodwill will only be quantifiable based on the consolidated net assets of the Goldpromise Group on completion of the Acquisiton, based on the consideration of US$10,180,000 (or approximately HK$79,404,000) and after adjusting for the US$4,782,344 (approximately HK$37,302,000) consideration payable for the shareholders loan, the consideration of US$5,397,656 (approximately HK$42,102,000) attributable to the value of the Goldpromise Group, which had unaudited consolidated net assets value of US$0.57 million (approximately HK$4.4 million) as at 31 December 2005. For illustration purpose, assuming such consolidated net assets of US$0.57 million (approximately HK$4.4 million) as at 31 December 2005 is the net assets value on completion, a goodwill amount of approximately US$4.83 million (approximately HK$37.67 million) would arise from the Acquisition. The Group’s unaudited and consolidated net assets value as at 31 Dec 2005 was approximately HK$1,663,138,000 and the goodwill arising from the Acquisition therefore, will not have any material impact on the Group’s net assets value.

As at 31 December 2005, the Group unaudited consolidated total liabilities was HK$1,599,109,000. The Goldpromise Group does not have any bank borrowings and given the retail and cash business nature of that of JeansWest NZ, the Acquisition is not expected to have any material impact on the Group’s liabilities or gearing ratio as well.

Cash flow

The Acquisition will be financed by internal resources of the Group.

As at 31 December 2005, the Group’s unaudited cash and cash equivalents amounted to approximately HK$1,266,197,000 and net cash in hand amounted to approximately HK$1,030,790,000. As such, we consider the Group has adequate financial resources for the Acquisition and its cash flow will not be adversely impacted on, as a result of the Acquisition.

18

LETTER FROM CENTURION

RECOMMENDATION

Having considered the principal factors and reasons set out above, we consider that the terms and conditions of the Acquisition under the Acquisition Agreement are on normal commercial basis, are fair and reasonable so far as the Company and the Shareholders are concerned and are in the interests of the Company and the Shareholders as a whole. We therefore, advise the Independent Board Committee to recommend the independent Shareholders to vote in favour of the ordinary resolution approving the Acquisiton Agreement and the transactions contemplated thereunder at the SGM.

Yours faithfully, for and on behalf of Centurion Corporate Finance Limited Baldwin LEE Managing Director

19

GENERAL INFORMATION

APPENDIX

1. RESPONSIBILITY STATEMENT

This document includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company.

The Directors collectively and individually accept full responsibility for the accuracy of the information contained in this document and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief there are no other facts the omission of which would make any statement herein misleading.

2. DISCLOSURE OF INTERESTS

(a) Share Interests of Directors

Save as disclosed below, as at the Latest Practicable Date, none of the Directors had any interest or short position in the shares, underlying shares and debentures of the Company or any associated corporations (within the meaning of the SFO) which (a) 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 have taken or deemed to have taken under such provisions of the SFO); or (b) were required pursuant to Section 352 of the SFO to be entered in the register referred to therein; or (c) were required, pursuant to the Model Code, to be notified to the Company and the Stock Exchange.

Interests in shares of the Company

		No. of	Shares held
Name of		Long	Short			Percentage of
Director	Capacity	Position	Position		Total	shareholding
						(%)
Dr Charles Yeung,SBS, JP	Interest of controlled	625,134,000	6,600,000		631,734,000(1)	60.036
	corporations
Mr Yeung Chun Fan	(i) Interest of controlled corporations (ii) Interest of spouse	625,134,000 6,730,000	6,600,000 –	}	638,464,000(1)&(3)	60.676
Mr Yeung Chun Ho	Interest of a controlled	32,430,000	–		32,430,000(2)	3.082
	corporation
Mr Pau Sze Kee, Jackson	Beneficial Owner	9,370,000	–		9,370,000	0.890
Mr Hui Chung Shing,	Beneficial Owner	6,250,000	–		6,250,000	0.594
Herman,JP
Ms Cheung Wai Yee	(i) Beneficial Owner (ii) Interest of spouse	6,730,000 625,134,000	– 6,600,000	}	638,464,000(1)&(3)	60.676
Mr Lau Hon Chuen,	Beneficial Owner	956,000	–		956,000	0.091
Ambrose,GBS, JP

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GENERAL INFORMATION

APPENDIX

Notes:

1. 396,454,000 shares (of which interests in 6,600,000 shares are short position) were held by Glorious Sun Holdings (BVI) Limited (the entire issued voting share capital of which was held as to 51.934% by Mr Charles Yeung, JP and as to 48.066% by Mr Yeung Chun Fan), 233,540,000 shares were held by Advancetex Holdings (BVI) Limited (the entire issued voting share capital of which was held as to 51.934% by Mr Charles Yeung, JP and as to 48.066% by Mr Yeung Chun Fan) and 1,740,000 shares were held by G. S. Strategic Investment Limited (the entire issued voting share capital of which was held as to 50% by each of Mr Charles Yeung, JP and Mr Yeung Chun Fan).

2. 32,430,000 shares were held by Unicom Consultants Limited, a company wholly owned by Mr Yeung Chun Ho.

3. Ms Cheung Wai Yee is the spouse of Mr Yeung Chun Fan. 6,730,000 shares related to the same block of shares held by Ms Cheung Wai Yee and 631,734,000 shares related to the same block of shares held by three companies controlled by Mr Yeung Chun Fan.

(b) Substantial shareholders

Save as disclosed below, the Directors are not aware that there was any party (other than the Directors disclosed under the paragraph headed “Share Interests of Directors” above) who, as at the Latest Practicable Date, had an interest or short position in the shares and underlying shares (including options) of the Company which would fall to be disclosed to the Company under Divisions 2 and 3 of Part XV of the SFO:

Interests in shares of the Company

		Number of	shares held			Percentage
		Long	Short			of issued
Name of Shareholder	Capacity	Position	Position		Total	share capital
						(%)
Glorious Sun Holdings	Beneficial owner	389,854,000	6,600,000		396,454,000	37.677
(BVI) Limited
Advancetex Holdings	Beneficial owner	233,540,000	–	233,540,000		22.194
(BVI) Limited
Cheah Cheng Hye	Beneficial owner Interest of child under 18 or spouse Interest of a controlled	500,000 240,000 61,075,000	– – –	}	61,815,000	5.875
	corporation	(note 1)
Value Partners Limited	Investment manager	61,775,000	–		61,775,000	5.871
Commonwealth Bank	Interest of controlled	62,935,100	–		62,935,100	5.981
of Australia	corporations				(note 2)

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GENERAL INFORMATION

APPENDIX

Note 1: Mr. Cheah Cheng Hye was deemed to be interested in these shares held by Value Partners Limited, a company controlled by Mr. Cheah Cheng Hye.

Note 2: These shares were held by various wholly owned subsidiaries of Commonwealth Bank of Australia.

(c) Substantial shareholders in the Company’s subsidiaries

So far as is known to any Director, as at the Latest Practicable Date, the following persons were interested in 10% or more of the issued capital carrying rights to vote at general meetings of the following subsidiaries of the Company:

		Number and class	Percentage of
Name of subsidiary	Name of shareholder	of shares held	shareholding (%)
GS Kenneth Fashion Design	Kenneth Fong Design De	40 ordinary shares	40
Company Limited	Moda E Planeamento Lda
Golden Prospects Enterprises	The Wins Trading Company	35 ordinary shares	35
Limited
Unity Glory Interior Design	The Wins Trading Company	35 ordinary shares	35
& Decoration (H.K.) Limited
Famebish Industrial Limited	Mr Lam Cheung Chuen	12,000 ordinary shares	12
	Mr Lam Cheung Fat	12,000 ordinary shares	12
	Mr Fung Hing Tse	16,000 ordinary shares	16
Petrie Mansions Management	Mr Lam Cheung Chuen	1,200 ordinary shares	12
Limited	Mr Lam Cheung Fat	1,200 ordinary shares	12
	Mr Fung Hing Tse	1,600 ordinary shares	16
Sparrow Apparels Limited	Mrs Nurjehan Mazhar	12,617 ordinary shares	12.62
蘇州工業園區爵柏服飾	Asia Accord Limited	US$168,000	40
有限公司		(registered capital)
泰州爵柏服飾有限公司	Asia Accord Limited	US$12,000	12
		(registered capital)
石家莊常宏建築裝飾	河北囱山建築工程有限	US$294,000	14
工程有限公司	責任公司	(registered capital)
	The Wins Trading Company	US$441,000	21
		(registered capital)
Gennon Fashion Garment	Mr Lee Fung Tai	266,600 ordinary shares	24.8
Manufactory (H.K.) Limited	Mr Li Fung Lok	266,600 ordinary shares	24.8

22

GENERAL INFORMATION

APPENDIX

		Number and class	Percentage of
Name of subsidiary	Name of shareholder	of shares held	shareholding (%)
Main Pui Investments Limited	Mr Lee Fung Tai	362,080 ordinary shares	24.8
	Mr Li Fung Lok	362,080 ordinary shares	24.8
J-Loong Trading Limited	Mr Lee Fung Tai	74,400 ordinary shares	24.8
	Mr Li Fung Lok	74,400 ordinary shares	24.8
Gennon Enterprises Limited	Mr Lee Fung Tai	248,000 ordinary shares	24.8
	Mr Li Fung Lok	248,000 ordinary shares	24.8
Gennon International Trading	Mr Lee Fung Tai	124,000 ordinary shares	24.8
(H.K.) Limited	Mr Li Fung Lok	124,000 ordinary shares	24.8
Chapman Development Limited	Mr Lee Fung Tai	248 ordinary shares	24.8
	Mr Li Fung Lok	248 ordinary shares	24.8
J-Loong Overseas Production	Mr Lee Fung Tai	248 ordinary shares	24.8
(Singapore) Pte Limited	Mr Li Fung Lok	248 ordinary shares	24.8
Gennon International	Mr Lee Fung Tai	248 ordinary shares	24.8
(Singapore) Pte Limited	Mr Li Fung Lok	248 ordinary shares	24.8
Recent Garments And	Mrs Anar Khali Chowdhury	290 ordinary shares	29
Knitting Industries Ltd.
Gennon International	Mr Lee Fung Tai	248 ordinary shares	24.8
Trading Limited	Mr Li Fung Lok	248 ordinary shares	24.8
Profit Gain Trading (BVI)	Mr Lee Fung Tai	248 ordinary shares	24.8
Limited	Mr Li Fung Lok	248 ordinary shares	24.8
Chapman International	Mr Lee Fung Tai	248 ordinary shares	24.8
Trading Limited	Mr Li Fung Lok	248 ordinary shares	24.8
Super Connection	Mr Lee Fung Tai	248 ordinary shares	24.8
International Limited	Mr Li Fung Lok	248 ordinary shares	24.8
Goldmark Development	Mr Lee Fung Tai	248 ordinary shares	24.8
Limited	Mr Li Fung Lok	248 ordinary shares	24.8

23

GENERAL INFORMATION

APPENDIX

		Number and class	Percentage of
Name of subsidiary	Name of shareholder	of shares held	shareholding (%)
Shamoli Garments Limited	Mr Golam Kibria	24,998 ordinary shares	24.998
	Chowdhury
Recent Sweaters Limited	Mr G.S. Hasan Chowdhury	300 ordinary shares	15
	Mr Golam Kabir Chowdhury	300 ordinary shares	15
RTG Garments Manufacturing	Golden Top Limited	1 ordinary share *	50 *
(HK) Limited

• share is held by a joint venture company in which Golden Top Limited owns 50% interest

(d) Others

None of the Directors has had any direct or indirect interest in any assets which have since 31 December 2005 (being the date to which the latest published audited financial statements of the Company were made up) been acquired or disposed of by or leased to or are proposed to be acquired or disposed of by or leased to any member of the Group.

Other than the Acquisition Agreement, there is no contract or arrangement subsisting at the Latest Practicable Date in which any of the Directors is materially interested and which is significant in relation to the business of the Group.

3. MATERIAL ADVERSE CHANGE

The Directors are not aware of any material adverse change in the financial or trading position of the Group since 31 December 2005, the date to which the latest published audited financial statements of the Company were made up.

4. EXPERTS

• (a) The qualification of Centurion who has given advice contained in this circular are set out as follows:

Name Qualification Centurion Corporate Finance Limited a deemed licensed corporation under the SFO permitted to engage in types 1, 4, 6, 9 of the regulated activities as defined in the SFO

• (b) Centurion has confirmed that it has no shareholding in any member of the Group or the right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group.

24

GENERAL INFORMATION

APPENDIX

• (c) Centurion has confirmed that it does not have any interest, direct or indirect, in any assets which have been acquired or disposed of by or leased to any member of the Group, or which are proposed to be acquired or disposed of by or leased to any member of the Group since 31 December 2005, being the date to which the latest published audited financial statements of the Company were made up.

• (d) Centurion has given and has not withdrawn its written consent to the issue of this circular with the inclusion of its letter and references to its name in the form and context in which it appears.

• (e) The letter from Centurion is given as of the date of this circular for incorporation herein.

5. COMPETING INTEREST

In so far as the Directors are aware, none of the Directors or their respective associates have any interest in a business which competes or is likely to compete with the business of the Group.

6. SERVICE CONTRACTS

There is no existing or proposed service contracts between any of the Directors and the Company or any of its subsidiaries, other than contracts expiring or determinable by the employer within one year without payment of compensation (other than statutory compensation).

7. GENERAL

• (a) The secretary of the Company is Mr Mui Sau Keung, Isaac, AHKICPA and the qualified accountant of the Company appointed pursuant to Rule 3.24 of the Listing Rules is Mr. Lai Man Sum, Sam, FCCA, AHKICPA.

• (b) The registered office of the Company is at Clarendon House, 2 Church Street, Hamilton, HM11, Bermuda and the head office and principal place of business in Hong Kong is at Glorious Sun Group Building, 97 How Ming Street, Kwun Tong, Kowloon, Hong Kong.

• (c) The Hong Kong branch share registrar and transfer office of the Company is Computershare Hong Kong Investor Services Limited, 46/F., Hopewell Centre, 183 Queen’s Road East, Hong Kong.

• (d) The English text of this circular shall prevail over the Chinese text.

25

GENERAL INFORMATION

APPENDIX

8. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection on any weekday (Saturdays and Sundays excepted) during business hours at the head office and principal place of business of the Company at Glorious Sun Group Building, 97 How Ming Street, Kwun Tong, Kowloon, Hong Kong from the date of this circular up to and including 26 May 2006:

• (a) the Acquisition Agreement;

• (b) the letter from the Independent Board Committee, the text of which is set out in the section headed “Letter from the Independent Board Committee” of this circular; and

• (c) the letter from Centurion, the text of which is set out in the section headed “Letter from Centurion” of this circular.

9. POLL PROCEDURE

Under the bye-laws of the Company, at any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands unless a poll is (before or on the declaration of the result of the show of hands or on the withdrawal of any other demand for a poll) demanded. The bye-laws of the Company provide that a poll may be demanded by:

• (i) the chairman of the meeting; or

• (ii) at least three members present in person (or in the case of a member being a corporation, by its duly authorised representative) or by proxy for the time being entitled to vote at the meeting; or

• (iii) any member or members present in person (or, in the case of a member being a corporation, by its duly authorised representative) or by proxy and representing not less than one-tenth of the total voting rights of all members having the right to attend and vote at the meeting; or

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

26

NOTICE OF SPECIAL GENERAL MEETING

==> picture [42 x 42] intentionally omitted <==

GLORIOUS SUN ENTERPRISES LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 393)

NOTICE OF SPECIAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that a Special General Meeting of the shareholders of Glorious Sun Enterprises Limited (the “Company”) will be held on Friday, 26 May 2006 immediately following the conclusion of the annual general meeting which is scheduled to be held at 2:30 p.m. on the same date, at Xiamen Suite, 3/F., The Marco Polo Prince, Harbour City, 23 Canton Road, Tsimshatsui, Kowloon, Hong Kong 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 Acquisition Agreement (as defined in the circular of the Company dated 28 April 2006 (the “Circular”)) (a copy of which is tabled at the meeting and marked “A” and initialled by the chairman of the meeting for identification purposes) and the transactions contemplated thereunder and the implementation thereof be and are hereby approved, ratified and confirmed; and

• (b) 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 to be incidental to, ancillary to or in connection with the matters contemplated in the Acquisition Agreement.”

By order of the Board Mui Sau Keung, Isaac Secretary

Hong Kong, 28 April 2006

27

NOTICE OF SPECIAL GENERAL MEETING

Notes:

• (1) Any member entitled to attend and vote at the meeting convened by the above notice is entitled to appoint one or more proxies to attend and, on a poll, vote instead of him. A proxy need not be a member of the Company. All proxies must be deposited at the Company’s principal place of business at Glorious Sun Group Building, 97 How Ming Street, Kwun Tong, Kowloon, Hong Kong, not less than 48 hours before the time appointed for the holding of the meeting, or adjourned meeting, as the case may be.

• (2) Completion and delivery of the form of proxy will not preclude you from attending and voting at the meeting if you so wish.

• (3) Where there are joint holders of any shares, any one of such joint holders may vote at the meeting, either in person or by proxy, in respect of such share as if he were solely entitled thereto, but if more than one of such joint holders be present at the meeting personally or by proxy, that one of such holders so present whose name stands first on the register of members in respect of such share shall alone be entitled to vote in respect thereof.

The Directors of the Company as at the date of this notice are as follows:

Executive Directors:

Dr Charles Yeung, SBS, JP, Mr Yeung Chun Fan, Mr Yeung Chun Ho, Mr Pau Sze Kee, Jackson, Mr Hui Chung Shing, Herman, JP, Ms Cheung Wai Yee, Mr Chan Wing Kan, Archie and Mr Teo Heng Kee, Peter

Independent Non-Executive Directors:

Mr Wong Man Kong, Peter, BBS, JP, Mr Lau Hon Chuen, Ambrose, GBS, JP and Mr Chung Shui Ming, Timpson, GBS, JP

Non-Executive Director:

Dr Lam Lee G.

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