Greentech Technology International Limited — Proxy Solicitation & Information Statement 2010

Mar 1, 2010

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your Shares, you should at once hand this circular and the accompanying form of proxy to the purchaser(s) or the transferee(s) or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser(s) or 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.

==> picture [57 x 57] intentionally omitted <==

VITAR INTERNATIONAL HOLDINGS LIMITED

(Incorporated in the Cayman Islands with limited liability) (Stock Code: 195)

DISCLOSEABLE AND CONNECTED TRANSACTION DISPOSAL OF THE PROPERTIES

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

Kingsway Capital Limited

A letter from the Board is set forth on pages 5 to 14 of this circular. A letter from the Independent Board Committee is set forth on page 15 of this circular. A letter from the Independent Financial Adviser containing its advice and recommendation to the Independent Board Committee and the Independent Shareholders of the Company is set forth on pages 16 to 22 of this circular.

The Notice convening the EGM to be held at Unit 7, 26/F., Greenfield Town, Concordia Plaza, 1 Science Museum Road, Tsim Sha Tsui, Kowloon, Hong Kong on Thursday, 18 March 2010 at 10:00 a.m. or any adjournment (as the case may be) is set forth on pages 37 to 39 of this circular. Whether or not you are able to attend the meeting in person, you are requested to complete and return the accompanying form of proxy to the Company’s share registrar in Hong Kong, Tricor Investor Services Limited, at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for the holding of the EGM. Completion and return of the form of proxy shall not preclude you from attending and voting at the EGM should you so wish.

2 March 2010

TABLE OF CONTENTS

	Page
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
LETTER FROM THE INDEPENDENT BOARD COMMITTEE. . . . . . . . . . . . . . .	15
LETTER FROM THE INDEPENDENT FINANCIAL ADVISER. . . . . . . . . . . . . . .	16
APPENDIX I – PROPERTY VALUATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	23
APPENDIX II – GENERAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . .	32
NOTICE OF EGM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	37

– i –

DEFINITIONS

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

• “associates”

• has the same meaning as ascribed thereto under the Listing Rules;

• “Board” the board of Directors;

• “Business Day” Monday to Friday (excluding public holidays) on which banks in Hong Kong are generally open for banking business;

• “Company” Vitar International Holdings Limited, a company incorporated in the Cayman Islands with limited liability, and the securities of which are listed on the main board of the Stock Exchange;

• “Completion” completion of the transactions contemplated under the Definitive Documents;

• “connected person” the meaning ascribed thereto in the Listing Rules;

• “Definitive Documents”

• the sale and purchase agreement, assignment and any other document required to be executed in connection with the Transactions;

• “Directors”

• means the directors of the Company for the time being and from time to time;

• “EGM”

means the extraordinary general meeting of the Company to be convened and held at Unit 7, 26/F., Greenfield Town, Concordia Plaza, 1 Science Museum Road, Tsim Sha Tsui, Kowloon, Hong Kong on Thursday, 18 March 2010, at 10:00 a.m. by the Company for the purpose of considering and, if thought fit, approving the Transactions by the Independent Shareholders;

• “First Framework Agreement”

• the framework agreement dated 9 February 2010 and entered into between New Ocean and Vitar Insulation in respect of the sale and purchase of the First Property;

• “First Property”

the residential property situated at Flat H on 6th Floor of Block 5 and Car Parking Spaces Nos. 35 and 79 on basement, Villa Concerto, Symphony Bay, No. 530 Sai Sha Road, New Territories which is currently held by the Group for investment purposes;

– 1 –

DEFINITIONS

• “Fourth Framework Agreement” the framework agreement dated 9 February 2010 and entered into between Major Business and Vitar Insulation in respect of the sale and purchase and lease back of the Fourth Property;

• “Fourth Property” the commercial property situated at Workshop C on 26th Floor, Shield Industrial Centre, Nos. 84-92 Chai Wan Kok Street, Tsuen Wan, New Territories which is currently used by the Group as its warehouse;

• “Framework Agreements” the First Framework Agreement, the Second Framework Agreement, the Third Framework Agreement and the Fourth Framework Agreement;

• “Grandeur China”

• Grandeur (China) Limited, the purchaser under the Second Framework Agreement and a company incorporated in Hong Kong on 19 October 2009 and wholly-owned by Vitar Development;

• “Group”

• means the Company and its subsidiaries including Vitar Insulation;

• “Hong Kong”

• means the Hong Kong Special Administrative Region of the People’s Republic of China;

• “Independent Board Committee”

• the committee established by the Board comprising all independent non-executive Directors;

• “Independent Financial Adviser”

• Kingsway Capital Limited, the independent financial adviser appointed by the Company to render its advice to the Independent Board Committee and the Independent Shareholders on terms of the Transactions, as required by the Listing Rules and a corporation licensed to carry out type 1 (dealing in securities) and type 6 (advising on corporate finance) regulated activity under the SFO;

• “Independent Shareholders”

all Shareholders other than Vitar Development;

• “Joy Success”

• Joy Success Corporation Limited, the purchaser under the Third Framework Agreement and a company incorporated in Hong Kong on 28 January 2010 and wholly-owned by Vitar Development;

• “Latest Practicable Date”

• 26 February 2010, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained herein;

– 2 –

DEFINITIONS

• “Lease Agreement(s)” the lease agreements to be entered into by each of Grandeur China, Joy Success and Major Business with Vitar Insulation following Completion for the lease back of the Second Property, the Third Property and the Fourth Property;

• “Listing Rules” means the Rules Governing the Listing of Securities on the Stock Exchange;

• “Major Business” Major Business Limited, the purchaser under the Fourth Framework Agreement and a company incorporated in Hong Kong on 28 January 2010 and wholly-owned by Vitar Development;

• “New Ocean”

• New Ocean (China) Limited, the purchaser under the First Framework Agreement and a company incorporated in Hong Kong on 22 January 2010 and wholly-owned by Vitar Development;

• “Notice” means the notice convening the EGM as set forth in this circular;

• “Ordinary Resolution(s)” means the proposed ordinary resolution(s) as referred to in the Notice;

• “Property Valuer” JonesLang LaSalle Sallmanns Limited, an independent valuer and whose property valuation report in respect of the Properties is set forth in Appendix I to this circular;

• “Properties” the First Property, the Second Property, the Third Property and the Fourth Property;

• “Second Framework Agreement”

• the framework agreement dated 9 February 2010 and entered into between Grandeur China and Vitar Insulation in respect of the sale and purchase and lease back of the Second Property;

• “Second Property”

• the residential property situated at Unit 3A on 3rd & 4th Floors including Roof and Car Parking Spaces Nos. 16 and 22 on Ground Floor of Block A, Ascot Heights, No. 21 Lok Lam Road, Shatin, New Territories, Hong Kong which is currently used by the Group as its staff quarters;

• “SFO”

means the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong);

– 3 –

DEFINITIONS

• “Shareholder(s)”

means the holder(s) of the Share(s);

• “Share(s)” means the share(s) of HK$0.005 each in the capital of the Company (or of such nominal amount as shall result from a subdivision, consolidation, reclassification or reconstruction of the share capital of the Company from time to time);

• “Third Framework Agreement” the framework agreement dated 9 February 2010 and entered into between Joy Success and Vitar Insulation in respect of the sale and purchase and lease back of the Third Property;

• “Third Property” the commercial property situated at Workshop 12 on 7th Floor of Block A, New Trade Plaza, No. 6 On Ping Street, Shatin, New Territories which is currently used by the Group as its office and warehouse;

• “Stock Exchange” means The Stock Exchange of Hong Kong Limited;

• “Takeovers Code” means Hong Kong Code on Takeovers and Mergers; and

• “Transactions” the sale and purchase of the Properties;

• “Vitar Development” Vitar Development Holdings Limited, a company incorporated in the British Virgin Islands on 25 January 2008, the controlling Shareholder (as such term is defined under the Listing Rules) of the Company holding 36.67% shareholding in the Company and is owned by Mr. LEUNG Chau Hiu, Mr. LEUNG Kai Wing, Ms. TSANG Chi Yung, Ms. LEUNG Chun Yin, being executive Directors, Mr. YIP Sai Keung and Ms. WONG Lai Mui as to 35%, 32.5%, 10%, 10%, 7.5% and 5% respectively;

• “Vitar Insulation”

• Vitar Insulation Manufacturers Limited, a company incorporated in Hong Kong on 7 November 1978 and a wholly-owned subsidiary of the Company;

• “HK$”

Hong Kong dollars, the lawful currency of Hong Kong;

• “%”

means per cent.

– 4 –

LETTER FROM THE BOARD

==> picture [57 x 57] intentionally omitted <==

VITAR INTERNATIONAL HOLDINGS LIMITED

(Incorporated in the Cayman Islands with limited liability) (Stock Code: 195)

Executive Directors: Mr. LEUNG Chau Hiu (Chairman) Mr. LEUNG Kai Wing (Chief Executive Officer) Ms. TSANG Chi Yung Ms. LEUNG Chun Yin Mr. CHEUNG Wai Kuen Mr. CHENG Pak Lung Mr. CHANG Yong Tian

Independent non-executive Directors: Mr. WONG Hing Tat Mr. CHENG Hau Yan Mr. ZHONG Wei Guang

Registered office: Cricket Square Hutchins Drive P.O. Box 2681 Grand Cayman KY1-1111 Cayman Islands

Head office and principal place of business in Hong Kong: Flat 4-6, 3rd Floor New Trade Plaza Tower B 6 On Ping Street Siu Lek Yuen Shatin Hong Kong 2 March 2010

To the Shareholders

Dear Sir/Madam,

DISCLOSEABLE AND CONNECTED TRANSACTION

INTRODUCTION

We refer to the announcement of the Company dated 9 February 2010 in which the Board announced that on 9 February 2010, Vitar Insulation entered into the Framework Agreements with New Ocean, Grandeur China, Joy Success and Major Business. Pursuant to the Framework Agreements, Vitar Insulation agreed to sell and each of New Ocean, Grandeur China, Joy Success and Major Business have agreed to purchase the Properties for a total consideration of HK$31.11 million, subject to a number of conditions precedent. In addition, it is a term of the Second Framework Agreement, the Third Framework Agreement and the Fourth Framework Agreement that following Completion, each of Grandeur China, Joy Success and Major Business will lease the Second Property, the Third Property and the Fourth Property back to Vitar Insulation at the current market rent for a term of three years pursuant to the terms and conditions under the Lease Agreements.

– 5 –

LETTER FROM THE BOARD

The purpose of this circular is (i) to provide you with further information in relation to the Framework Agreements and the Transactions; (ii) to set forth the valuation report on the Properties; (iii) to set forth the recommendations of the Independent Board Committee to the Independent Shareholders; (iv) the advice from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders; and (v) the Notice.

PRINCIPAL TERMS OF THE FRAMEWORK AGREEMENTS

The First Framework Agreement

Introduction

Date: 9 February 2010 Parties: Vitar Insulation as the vendor New Ocean as the purchaser

New Ocean is a wholly-owned subsidiary of Vitar Development, a controlling Shareholder of the Company, and is therefore a connected person (as such term is defined under the Listing Rules) of the Company.

The transactions under the First Framework Agreement

Vitar Insulation has agreed to sell, and New Ocean has agreed to purchase the First Property for a consideration of HK$7.9 million. The amount of consideration shall be settled by New Ocean from its own internal resources by cash upon Completion. The amount of consideration was determined with reference to the market value of the First Property as of 31 December 2009 as appraised by the Property Valuer.

Completion of the sale and purchase of the First Property is conditional upon the following conditions being satisfied:

• (i) the convening of the EGM and the approval of the Independent Shareholders in the EGM having been obtained for (a) the sale of the First Property; (b) the entering into the Definitive Documents and (c) such other matters that are incidental to the Transactions under the First Framework Agreement and the Definitive Documents;

• (ii) all other consents and approvals being obtained for the purpose of the Transactions set forth in the Definitive Documents;

• (iii) approval from the Stock Exchange on the despatch of the required circular by the Company to the Shareholders for the purpose of the Transactions and such other documents required to be despatched in accordance with the Listing Rules;

• (iv) delivery to New Ocean of a final valuation report prepared by the Property Valuer prior to the entering into of the Definitive Documents;

– 6 –

LETTER FROM THE BOARD

• (v) in accordance with the terms and conditions set forth in the Definitive Documents, Vitar Insulation providing copies or originals, as the case may be, of the relevant title documents to the full satisfaction of New Ocean that Vitar Insulation is the sole lawful and beneficial owner of the First Property free from all encumbrances, charges, pledges and all other third parties’ interests;

• (vi) release of relevant property charges/mortgages created on the First Property as security for the banking facilities granted to the Group; and

• (vii) such other conditions as Vitar Insulation may consider appropriate in light of the requirements under the Listing Rules and the applicable laws and regulations.

As at the Latest Practicable Date, the above conditions have not been satisfied. If condition (i) above is not satisfied by obtaining the approval at the EGM, the First Framework Agreement shall be terminated with immediate effect.

Completion shall take place within 10 Business Days of fulfillment or waiver (as the case may be) of all the above conditions or on such other date as Vitar Insulation and New Ocean may agree in writing. Vitar Insulation shall implement the Transactions under the First Framework Agreement in accordance with the Listing Rules and the applicable laws and regulations.

Other terms of the First Framework Agreement

The First Framework Agreement may only be terminated in the event that approval from the Independent Shareholders is not obtained at the EGM. In such event, the First Framework Agreement shall be terminated with immediate effect. Each party to the First Framework Agreement shall bear its own costs and expenses in relation to the negotiations and preparation of the First Framework Agreement and the Definitive Documents. Hong Kong stamp duty is payable in respect of the sale and purchase of the First Property and New Ocean shall pay such stamp duty as and when it becomes due.

Additional information on the First Property

The First Property is currently held by the Group for investment purposes. Set forth below is the profits attributable to the First Property for the two financial years immediately preceding the transactions under the First Framework Agreement:

Profit	For the years ended 31 December	For the years ended 31 December
	2008	2009
Net profit before tax	HK$247,910	HK$246,228
Net profit after tax	HK$207,004	HK$205,600

– 7 –

LETTER FROM THE BOARD

The Second Framework Agreement

Introduction

The Second Framework Agreement contains similar terms and conditions to the First Framework Agreement save for (i) the subject matter of the Second Framework Agreement is confined to the Second Property; and (ii) the intended purchaser of the Second Property is Grandeur China.

Date: 9 February 2010 Parties: Vitar Insulation as the vendor and lessee (for the subsequent lease transaction)

Grandeur China as the purchaser and lessor (for the subsequent lease transaction)

Grandeur China is a wholly-owned subsidiary of Vitar Development, a controlling Shareholder of the Company and is therefore a connected person (as such term is defined under the Listing Rules) of the Company.

The transactions under the Second Framework Agreement

Vitar Insulation has agreed to sell, and Grandeur China has agreed to purchase, the Second Property for a consideration of HK$17.00 million. The amount of consideration shall be settled by Grandeur China from its own internal resources by cash upon Completion. The amount of consideration was determined with reference to the market value of the Second Property as of 31 December 2009 as appraised by the Property Valuer. Under the Second Framework Agreement, following Completion, Vitar Insulation shall lease back the Second Property from Grandeur China at the current market rent for a period of three years following Completion. It is proposed that the main terms of the Lease Agreement for the Second Property be as follows:

Term: Three years commencing from the date of Completion Monthly rent: HK$48,000 Yearly rent: HK$576,000

The monthly rent is determined with reference to the current market rental value of the Second Property as valued by the Property Valuer on 31 December 2009.

Other terms of the Second Framework Agreement

The Second Framework Agreement may only be terminated in the event that approval from the Independent Shareholders is not obtained at the EGM. In such event, the Second Framework Agreement shall be terminated with immediate effect. Each party to the Second Framework Agreement shall bear its own costs and expenses in relation to the negotiations

– 8 –

LETTER FROM THE BOARD

and preparation of the Second Framework Agreement and the Definitive Documents. Hong Kong stamp duty is payable in respect of the sale and purchase of the Second Property and Grandeur China shall pay such Hong Kong stamp duty as and when it becomes due.

The Third Framework Agreement

Introduction

The Third Framework Agreement contains similar terms and conditions to the First Framework Agreement and the Second Framework Agreement save for (i) the subject matter of the Third Framework Agreement is confined to the Third Property; and (ii) the intended purchaser of the Third Property is Joy Success.

Date: 9 February 2010 Parties: Vitar Insulation as the vendor and lessee (for the subsequent lease transaction)

Joy Success as the purchaser and lessor (for the subsequent lease transaction)

Joy Success is a wholly-owned subsidiary of Vitar Development, a controlling Shareholder of the Company and is therefore a connected person (as such term is defined under the Listing Rules) of the Company.

The transactions under the Third Framework Agreement

Vitar Insulation has agreed to sell, and Joy Success has agreed to purchase, the Third Property for a consideration of HK$3,150,000. The amount of consideration shall be settled by Joy Success from its own internal resources by cash upon Completion. The amount of consideration was determined with reference to the market value of the Third Property as of 31 December 2009 as appraised by the Property Valuer. Under the Third Framework Agreement, following Completion, Vitar Insulation shall lease back the Third Property from Joy Success at the current market rent for a period of three years following Completion. It is proposed that the main terms of the Lease Agreement for the Third Property be as follows:

Term: Three years commencing from the date of Completion Monthly rent: HK$11,000 Yearly rent: HK$132,000

The monthly rent is determined with reference to the current market rental value of the Third Property as valued by the Property Valuer on 31 December 2009.

– 9 –

LETTER FROM THE BOARD

Other terms of the Third Framework Agreement

The Third Framework Agreement may only be terminated in the event that approval from the Independent Shareholders is not obtained at the EGM. In such event, the Third Framework Agreement shall be terminated with immediate effect. Each party to the Third Framework Agreement shall bear its own costs and expenses in relation to the negotiations and preparation of the Third Framework Agreement and the Definitive Documents. Hong Kong stamp duty is payable in respect of the sale and purchase of the Third Property and Joy Success shall pay such Hong Kong stamp duty as and when it becomes due.

The Fourth Framework Agreement

Introduction

The Fourth Framework Agreement contains similar terms and conditions to the First Framework Agreement, the Second Framework Agreement and the Third Framework Agreement save for (i) the subject matter of the Fourth Framework Agreement is confined to the Fourth Property; and (ii) the intended purchaser of the Fourth Property is Major Business.

Date:

9 February 2010

Parties: Vitar Insulation as the vendor and lessee (for the subsequent lease transaction)

Major Business as the purchaser and lessor (for the subsequent lease transaction)

Major Business is a wholly-owned subsidiary of Vitar Development, a controlling Shareholder of the Company and is therefore a connected person (as such term is defined under the Listing Rules) of the Company.

The transactions under the Fourth Framework Agreement

Vitar Insulation has agreed to sell, and Major Business has agreed to purchase, the Fourth Property for a consideration of HK$3,060,000. The amount of consideration shall be settled by Major Business from its own internal resources by cash upon Completion. The amount of consideration was determined with reference to the market value of the Fourth Property as of 31 December 2009 as appraised by the Property Valuer.

– 10 –

LETTER FROM THE BOARD

Under the Fourth Framework Agreement, following Completion, Vitar Insulation shall lease back the Fourth Property from Major Business at the current market rent for a period of three years following Completion. It is proposed that the main terms of the Lease Agreement for the Fourth Property be as follows:

Term: Three years commencing from the date of Completion Monthly rent: HK$12,500 Yearly rent: HK$150,000

The monthly rent is determined with reference to the current market rental value of the Fourth Property as valued by the Property Valuer on 31 December 2009.

Other terms of the Fourth Framework Agreement

The Fourth Framework Agreement may only be terminated in the event that approval from the Independent Shareholders is not obtained at the EGM. In such event, the Fourth Framework Agreement shall be terminated with immediate effect. Each party to the Fourth Framework Agreement shall bear its own costs and expenses in relation to the negotiations and preparation of the Fourth Framework Agreement and the Definitive Documents. Hong Kong stamp duty is payable in respect of the sale and purchase of the Fourth Property and Major Business shall pay such Hong Kong stamp duty as and when it becomes due.

Completion of the Transactions under each of the Framework Agreements are subject to the same conditions as set forth in the paragraph headed “the Transactions under the First Framework Agreement” in this circular. There is no inter-conditional requirement for Completion under each of the Framework Agreements. Hence, the four agreements may be completed independently.

FINANCIAL IMPACT OF THE TRANSACTIONS ON THE GROUP

As a condition to the completion of the Transactions, the Company will secure the release of the charges/mortgages created on the Properties.

The Directors confirm that the Group has sufficient working capital to finance the release of the charges/mortgages and that the release of the charges/mortgages will have no significant impact on the Group’s financial position.

REASONS FOR ENTERING INTO THE TRANSACTIONS

The Directors (excluding the independent non-executive Directors) consider that the Transactions, if completed, will provide the Group with additional financial resources without any adverse impact on the business operations of the Group. The Group will continue to use the Second Property, the Third Property and the Fourth Property as its offices, warehouses and staff quarters in Hong Kong.

– 11 –

LETTER FROM THE BOARD

The Directors (excluding the independent non-executive Directors) are of the view that the terms of the Transactions are fair and reasonable and in the interests of the Shareholders as a whole. The independent non-executive Directors will provide their views after advice from the Independent Financial Adviser.

PROPOSED USE OF PROCEEDS DERIVED FROM THE TRANSACTIONS

Following Completion, the Directors expect that the Group will receive net proceeds of approximately HK$30.7 million and will record a gain on disposal of approximately HK$13.1 million. The Directors intend to apply the net proceeds from the Transactions as general working capital of the Group.

GENERAL INFORMATION ON THE PARTIES

The Group

The Group is principally engaged in the provision of insulation and heat-resistance products broadly classified into fibre-glass sleeving, silicon-based tubes and high-temperature electric wires and mica sheets. The Group specializes in the production, design and sale of insulation and heat-resistance materials selling to customers in Hong Kong, China and selected overseas markets.

Vitar Insulation

Vitar Insulation is a wholly-owned subsidiary of the Company, incorporated under the laws of Hong Kong and is engaged in the production and sale of insulation and heat-resistance materials for the Group’s business.

New Ocean

New Ocean is a company wholly-owned by Vitar Development and incorporated under the laws of Hong Kong with limited liability as an investment holding company.

Grandeur China

Grandeur China is a company wholly-owned by Vitar Development and incorporated under the laws of Hong Kong with limited liability as an investment holding company.

Joy Success

Joy Success is a company wholly-owned by Vitar Development and incorporated under the laws of Hong Kong with limited liability as an investment holding company.

Major Business

Major Business is a company wholly-owned by Vitar Development and incorporated under the laws of Hong Kong with limited liability as an investment holding company.

– 12 –

LETTER FROM THE BOARD

IMPLICATIONS UNDER THE LISTING RULES

As the applicable percentage ratios in respect of the Transactions are above 5% but below 25%, the Transactions, in aggregate, shall constitute a discloseable transaction and are subject to the announcement requirements under the Listing Rules. In addition, as New Ocean, Grandeur China, Joy Success and Major Business are connected persons (as such term is defined under the Listing Rules) of the Company, the Transactions in aggregate shall also constitute a non-exempt connected transaction (as such term is defined under the Listing Rules) for the Company.

The Transactions are therefore subject to the approval of the Independent Shareholders at the EGM. Vitar Development, the sole owner of each of New Ocean, Grandeur China, Joy Success and Major Business is the controlling Shareholder of the Company and owned by Mr. LEUNG Chau Hiu, Mr. LEUNG Kai Wing, Ms. TSANG Chi Yung, Ms. LEUNG Chun Yin, all executive Directors of the Company, Mr. YIP Sai Keung and Ms. WONG Lai Mui as to 35%, 32.5%, 10%, 10%, 7.5% and 5%. Accordingly, Vitar Development and its respective associates shall abstain from voting at the EGM pursuant to the requirements under the Listing Rules. The Lease Agreements fall within the de minimis threshold set forth in rule 14A.33(3)(b) of the Listing Rules and hence, will be exempted from the reporting, announcement and Independent Shareholders’ approval requirements set forth in the Listing Rules.

THE EGM

The EGM for the purpose of proposing the ordinary resolution to the Independent Shareholders to consider and, if thought fit, approve the Transactions will be held on Thursday, 18 March 2010 at 10:00 a.m.. The Notice is set forth on pages 37 to 39 in this circular.

A form of proxy for use at the EGM is enclosed. Whether or not you are able to attend the meeting in person, you are requested to complete and return the accompanying form of proxy to the Company’s share registrar in Hong Kong, Tricor Investor Services Limited, at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong as soon as possible and in any event not less than 48 hours before the time for holding the EGM or adjourned meeting (as the case may be). Completion and return of the form of proxy shall not preclude you from attending and voting in person at the EGM should you so wish.

GENERAL

The Independent Board Committee comprising all the independent non-executive Directors has been formed to advise the Independent Shareholders as to the fairness and reasonableness of the Transactions. Your attention is drawn to the letter from the Independent Board Committee set forth on page 15 of this circular.

The Company has appointed Kingsway Capital Limited as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders as to whether the terms of the Framework Agreements and the Transactions are fair and

– 13 –

LETTER FROM THE BOARD

reasonable, on normal commercial terms and are in the interests of the Company and the Shareholders as a whole. Your attention is drawn to its letter of advice set forth on pages 16 to 22 of this circular.

The property valuation report in respect of the Properties prepared by the Property Valuer is set forth in Appendix I to this circular.

RECOMMENDATION

The Board considers that the terms of the Transactions are on normal commercial terms and are fair and reasonable so far as the Independent Shareholders are concerned, and the Transactions are in the interests of the Company and the Shareholders as a whole. Accordingly, the Board recommends the Independent Shareholders and the Shareholders to vote in favour of the relevant ordinary resolution(s) regarding the Transactions to be proposed at the EGM.

By order of the Board VITAR INTERNATIONAL HOLDINGS LIMITED LEUNG Kai Wing Chief Executive Officer

– 14 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

The following is the text of the letter of recommendation from the Independent Board Committee which has been prepared for the purpose of inclusion in this circular:

==> picture [57 x 57] intentionally omitted <==

VITAR INTERNATIONAL HOLDINGS LIMITED

(Incorporated in the Cayman Islands with limited liability) (Stock Code: 195)

2 March 2010

To the Independent Shareholders

Dear Sir or Madam,

DISCLOSEABLE AND CONNECTED TRANSACTION

We refer to the circular dated 2 March 2010 issued by the Company (the “Circular”), of which this letter forms part. Terms defined in the Circular shall have the same meanings when used herein unless the context otherwise requires.

We have been appointed to advise the Independent Shareholders in relation to the Transactions. Kingsway Capital Limited has been appointed as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in this respect.

We are of the view that the terms of the Framework Agreements, after taking into account the advice of Kingsway Capital Limited as set forth on pages 16 to 22 of the Circular, are on normal commercial terms and are fair and reasonable so far as the Independent Shareholders are concerned, and that the Transactions 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 resolution(s) to be proposed at the EGM to approve the Transactions.

Yours faithfully,

Independent Board Committee MR. WONG HING TAT MR. CHENG HAU YAN MR. ZHONG WEI GUANG Independent Non-Executive Directors

– 15 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The following is the full text of a letter received from Kingsway Capital Limited setting out its advice to the Independent Board Committee and the Independent Shareholders in respect of the Transactions for inclusion in this circular.

Kingsway Capital Limited

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

2 March 2010

To the Independent Board Committee and the Independent Shareholders of Vitar International Holdings Limited

Dear Sirs,

DISCLOSEABLE AND CONNECTED TRANSACTIONS DISPOSAL OF THE PROPERTIES

INTRODUCTION

We refer to our appointment as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the Transactions, details of which are set out in the circular (the “ Circular ”) of the Company to the Shareholders dated 2 March 2010, of which this letter forms part. Unless otherwise defined, capitalized terms used in this letter shall have the same meanings as defined in the Circular.

Reference is made to the announcement of the Company on 9 February 2010 that on even date, Vitar Insulation entered into the Framework Agreements with New Ocean, Grandeur China, Joy Success and Major Business. Pursuant to the Framework Agreements, Vitar Insulation has agreed to sell and each of New Ocean, Grandeur China, Joy Success and Major Business (collectively known as the “ Purchasers ”) has agreed to purchase the Properties for a total consideration of HK$31.11 million.

As the applicable percentage ratios in respect of the Transactions are above 5% but below 25%, the Transactions, in aggregate, shall constitute a discloseable transaction and are subject to the announcement requirements under the Listing Rules. In addition, as the Purchasers are connected persons (as such term is defined under the Listing Rules) of the Company, the Transactions in aggregate shall also constitute a non-exempt connected transaction as defined under the Listing Rules. The Transactions shall therefore be subject to the approval of the Independent Shareholders at the EGM. The Purchasers are wholly-owned

– 16 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

subsidiaries of Vitar Development, the controlling shareholder of the Company and are therefore connected persons (as such term is defined under the Listing Rules) of the Company. Vitar Development and its associates shall abstain from voting at the EGM.

The Independent Board Committee has been established to consider the Transactions and to give recommendations to the Independent Shareholders as to how to vote on the resolution to be proposed at the EGM in relation to the Transactions. We have been appointed by the Independent Board Committee to advise the Independent Board Committee and the Independent Shareholders in this regard.

BASIS OF OUR OPINION

In formulating our view and recommendation to the Independent Board Committee and the Independent Shareholders in relation to the Transactions, we have relied on the information and representations provided to us by the Company, which the Company considered to be complete and relevant.

We have also relied on the information and representations contained in the Letter from the Board (the “ Letter from the Board ”) in the Circular and have assumed that all statements of belief, opinion and intention made by the Directors in the Circular were true, accurate and complete at the time they were made and continue to be true and accurate on the date of the Circular. We have assumed that all statements of belief, opinion and intention made by the Directors in the Letter from the Board in the Circular were reasonably made after due enquiry. We consider that we have reviewed sufficient information to reach an informed view and have no reason to doubt the truth, accuracy and completeness of the information and representations provided to us by the Company. We have been advised by the Company that no material facts have been withheld or omitted from the information provided and referred to in the Circular.

We have not, however, carried out any independent verification of the information provided by the management of the Company and the Directors, nor have we conducted any independent investigation into the business and affairs of the Group, the Purchasers and the Properties, or any of their respective subsidiaries, controlled entities, jointly controlled entities or associates.

– 17 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

PRINCIPAL REASONS AND FACTORS CONSIDERED

In arriving at our recommendation to the Independent Board Committee and the Independent Shareholders in respect of the Transactions, we have considered the following principal reasons and factors:

(i) The Framework Agreements

Pursuant to the Framework Agreements, Vitar Insulation has agreed to sell, and the Purchasers have agreed to purchase, the respective Properties for an aggregate consideration of HK$31.11 million and will be settled by cash. The amount of consideration for each of the Transactions was determined with reference to the market value of the relevant Properties as appraised by Jones Lang LaSalle Sallmanns Limited, an independent property valuer, as of 31 December 2009.

Under the Framework Agreements, following Completion, Vitar Insulation shall lease the Second Property, the Third Property and the Fourth Property from Grandeur China, Joy Success and Major Business respectively at the aggregate rental of HK$858,000 per year for a period of three years following the Completion. As each of the percentage ratios (other than the profits ratio) is on an annual basis equal to or more than 0.1% but less than 2.5% and the annual consideration is less than HK$1,000,000, the lease arrangements under the Framework Agreements fall within the de minimis threshold set forth in rule 14A.33(3)(b) of the Listing Rules and hence, will be exempted from the reporting, announcement and Independent Shareholders’ approval requirements set forth in the Listing Rules.

The Framework Agreements may only be terminated in the event that approval from the Independent Shareholders is not obtained at the EGM. In such event, the Framework Agreements shall be terminated with immediate effect. Each party to the Framework Agreements shall bear its own costs and expenses in relation to the negotiations and preparation of the Framework Agreements and the Definitive Documents. Hong Kong stamp duty is payable in respect of the sale and purchase of the Properties and the Purchasers shall pay the relevant stamp duty as and when it becomes due.

(ii) Reasons for entering into the Framework Agreements and use of proceeds

The Group is principally engaged in the provision of insulation and heat-resistance products broadly classified into fibre-glass sleeving, silicon-based tubes and high-temperature electric wires and mica sheets. The Group specializes in the production, design and sale of insulation and heat-resistance materials selling to customers in Hong Kong, China and selected overseas markets.

As stated in the Letter from the Board, the Directors consider that the Transactions, if completed, will provide the Group with additional financial resources without any adverse impact on the business operations of the Group. The Group will lease the Second Property, the Third Property and the Fourth Property upon Completion and continue to use them as its offices, warehouses and staff quarters in Hong Kong.

– 18 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Following Completion, the Directors expect that the Group will receive net proceeds of approximately HK$30.7 million and will record a gain on disposal of approximately HK$13.1 million. The Directors intend to apply the net proceeds from the Transactions as general working capital of the Group.

As stated in the annual report of the Group for the year ended 31 December 2008 that the year 2009 is another challenging year for the economy and many industries, while market visibility remains low in terms of sale and profitability. In view of the uncertainty in 2009, the investment and expansion plan would be carried out cautiously and on a stringent basis. Recognizing business conditions would remain extremely difficult in 2009, the Directors would adopt a cautious business strategy and focus on its core competencies in insulation and heat-resistance solution provider business.

The Directors are of the view that the operating environment of the Group is getting better and economic recovery is on the way but at a slower pace. Insulation and heat-resistance solution provider business remained as the Group’s core business and its growth will be relatively stable but slow, in line with the pace of recovery in the US and Europe markets. The Directors will continue to adopt a cautious business strategy in 2010.

The Directors also represented that there is no concrete proposal for any new investment or acquisition for the Group as at the Latest Practicable Date.

Save and except for the disposal of the First Property, which is an investment property, the disposals of the other three properties are not in the ordinary course of business of the Group. However, having taken into account that (i) the Transactions will provide the Group with additional financial resources without any adverse impact on the business operations of the Group; (ii) it is the Director’s intention to adopt a cautious business strategy; and (iii) the Transactions allow the Group to retain more working capital, we consider that the Transactions are in the interest of the Company and the Shareholders as a whole.

(iii) The valuation

As stated in the Letter from the Board, the amount of consideration for each of the Transactions was determined with reference to the market value of the relevant Properties as appraised by Jones Lang LaSalle Sallmanns Limited as of 31 December 2009, a copy of which is set out in Appendix I of the Circular.

We have performed the steps set out under note 1(d) to Rule 13.80 regarding the valuation report in respect of the Properties.

As stated in the valuation report, the market valuation of the Properties represents the estimated amount for which the Properties should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion. The Properties are valued by direct comparison approach assuming the

– 19 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

sale of the Properties is in their existing state with the benefit of immediate vacant possession and by making reference to comparable sale transactions as available in the relevant market.

Under the Framework Agreements, the Second Property, the Third Property and the Fourth Property will be leased back to Vitar Insulation at the aggregate rental of HK$858,000 per year for a period of three years following the Completion. As stated in the valuation report, the First Property has been leased to an independent third party for a term of 2 years at a monthly rent of HK$24,000 (i.e. approximately HK$288,000 per year) inclusive of management fee and car parking rates.

As stated in the valuation report, each of the Properties is subject to a mortgage to secure general bank facilities in favour of relevant banks. The release of relevant property charges/mortgages created on the Properties as security for the banking facilities granted to the Group is one of conditions precedent of the Completion, and the Directors represented that they are unable to identify any encumbrances for such release of mortgages.

Having taken into account that (i) the direct comparison approach is a commonly-adopted approach for property valuation; and (ii) the consideration for each of the Transactions is approximately equivalent to the value of the Properties as indicated in the valuation report, we are of the view that the consideration is in the interests of the Company and the Shareholders as a whole.

(iv) Financial effects of the Transactions

The following sets out the effect on the financial position of the Group upon Completion:

Net assets value

According to the interim report of the Group for the six months ended 30 June 2009, the unaudited net assets value of the Group was approximately HK$166.9 million as at 30 June 2009.

Upon completion of the Transactions, the net assets value of the Group is expected to increase by the premium of the consideration over the book value of the Properties and relevant expenses.

Earnings

The Group expects to realize an one-off gain of approximately HK$13.1 million (after relevant expenses) as a result of the Transactions at an aggregate consideration of HK$31.11 million.

The First Property currently generates an annual income of approximately HK$288,000. Upon Completion, Vitar Insulation will lease back the Second Property, the Third Property and the Fourth Property at the aggregate rental of

– 20 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

HK$858,000 per year for a period of three years following the Completion. It is expected that the Transactions will result in (i) a decrease in other income, being the rental income from the First Property upon Completion; (ii) an increase in rental expense, being the leaseback rental payments of the Second Property, the Third Property and the Fourth Property; and (iii) a decrease in depreciation expense, which results in an overall decrease in earnings. However, given that there is a gain on disposal of HK$13.1 million (after relevant expenses), we consider the decrease in income acceptable.

Gearing

According to the interim report of the Group for the six months ended 30 June 2009, the gearing ratio of the Group, calculated as a ratio of total bank borrowings to total assets, was 13.6% as at 30 June 2009.

Upon Completion, the gearing of the Group would decrease due to expected gain from the Transactions.

Cash position

According to the interim report of the Group for the six months ended 30 June 2009, the bank balances and cash of the Group was approximately HK$42.8 million as at 30 June 2009.

Upon Completion, it is expected that the cash position of the Group will be increased by the net proceeds of approximately HK$30.7 million (after relevant expense). However, Vitar Insulation will lease back the Second Property, the Third Property and the Fourth Property at the aggregate rental of HK$858,000 per year for a period of three years following the Completion.

It should be noted that the aforementioned analyses are for illustrative purpose only and does not purport to represent how the financial position of the Group will be upon Completion.

RECOMMENDATION

Taking into consideration the abovementioned principal factors, in particular:

• (i) the terms of the Framework Agreements are commercial terms negotiated between Vitar Insulation and the Purchasers and are common in sale and purchase negotiations;

• (ii) the reason for entering into the Framework Agreements is justifiable;

• (iii) the consideration for each of the Transactions is approximately equivalent to the value of the Properties as indicated in the valuation report; and

– 21 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

• (iv) the improvement in net assets value, gearing and cash position of the Group upon Completion as described in paragraph (iv) above,

we consider that the entering into of the Framework Agreements are on normal commercial terms, and the terms are fair and reasonable and in the interests of the Company and the Shareholders as a whole. Accordingly, we recommend the Independent Shareholders, and advise the Independent Board Committee to recommend the Independent Shareholders, to vote in favour of the relevant resolutions to be proposed at the EGM to approve the Transactions.

Yours faithfully, For and on behalf of Kingsway Capital Limited Chu Tat Hoi Liu Kam Yin Executive Director Director

– 22 –

PROPERTY VALUATION

APPENDIX I

The following is the text of a letter, summary of values and valuation certificates, prepared for the purpose of incorporation in this circular received from Jones Lang LaSalle Sallmanns Limited, an independent valuer, in connection with its valuation as at 31 December 2009 of the property interests of the Group.

Jones Lang LaSalle Sallmanns Limited 17/F Dorset House Taikoo Place 979 King’s Road Quarry Bay Hong Kong tel +852 2169 6000 fax +852 2169 6001 Licence No: C-030171

2 March 2010

The Board of Directors Vitar International Holdings Limited Flat 4-6, 3/F New Trade Plaza, Tower B 6 On Ping Street, Siu Lek Yuen Shatin, New Territories Hong Kong

Dear Sirs,

In accordance with your instructions to value the properties in which Vitar International Holdings Limited (the “Company”) and its subsidiaries (hereinafter together referred to as the “Group”) have interests in Hong Kong, we confirm that we have carried out inspections, made relevant enquiries and searches and obtained such further information as we consider necessary for the purpose of providing you with our opinion of the capital values of the property interests as at 31 December 2009 (the “date of valuation”).

Our valuation of the property interests represents the market value which we would define as intended to mean “the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently, and without compulsion”.

We have valued the property interests of property in Group I and II by direct comparison approach assuming sale of the property interest in its existing state with the benefit of immediate vacant possession and by making reference to comparable sales transactions as available in the relevant market.

No allowance has been made in our report for any charge, mortgage or amount owing on any of the property interests valued nor for any expense or taxation which may be incurred in effecting a sale. Unless otherwise stated, it is assumed that the properties are free from encumbrances, restrictions and outgoings of an onerous nature, which could affect their values.

In valuing the property interests, we have complied with all the requirements contained in Chapter 5 and Practice Note 12 to Rules Governing the Listing of Securities issued by The Stock Exchange of Hong Kong Limited; the RICS Valuation Standards (6th Edition)

– 23 –

APPENDIX I

PROPERTY VALUATION

published by the Royal Institution of Chartered Surveyors; and the HKIS Valuation Standards on Properties (1st Edition 2005) published by the Hong Kong Institute of Surveyors.

In valuing the property interests of the Group in Hong Kong held under the Government Leases expiring before 30th June, 1997, we have taken into account the stipulations contained in Annex III of the Joint Declaration of the Government of the United Kingdom and the Government of the People’s Republic of China on the question of Hong Kong and the New Territories Leases (Extension) Ordinance 1988 that such leases have been extended without premium until 30th June, 2047 and that a rent of three per cent of the then ratable value is charged per annum from the date of extension.

We have relied to a very considerable extent on the information given by the Group and have accepted advice given to us on such matters as tenure, planning approvals, statutory notices, easements, particulars of occupancy, lettings, and all other relevant matters.

We have not been provided with copies of title documents relating to the property interests and have caused searches to be made at the Hong Kong Land Registries. However, we have not searched the original documents to verify the ownership or to ascertain any amendment.

We have not carried out detailed measurements to verify the correctness of the areas in respect of the properties but have assumed that the areas shown on the title documents and official site plans handed to us are correct. All documents and contracts have been used as reference only and all dimensions, measurements and areas are approximations. No on-site measurement has been taken.

We have inspected the exterior and, where possible, the interior of the properties. However, we have not carried out investigation to determine the suitability of the ground conditions and services for any development thereon. Our valuation has been prepared on the assumption that these aspects are satisfactory. Moreover, no structural survey has been made, but in the course of our inspection, we did not note any serious defect. We are not, however, able to report whether the properties are free of rot, infestation or any other structural defect. No tests were carried out on any of the services.

We have had no reason to doubt the truth and accuracy of the information provided to us by the Group. We have also sought confirmation from the Group that no material factors have been omitted from the information supplied. We consider that we have been provided with sufficient information to arrive an informed view, and we have no reason to suspect that any material information has been withheld.

Unless otherwise stated, all monetary figures stated in this report are in Hong Kong Dollars (HKD).

– 24 –

PROPERTY VALUATION

APPENDIX I

Our valuation is summarized below and the valuation certificates are attached.

Yours faithfully, for and on behalf of Jones Lang LaSalle Sallmanns Limited Paul L. Brown

B.Sc. FRICS FHKIS

Director

Note: Paul L. Brown is a Chartered Surveyor who has 27 years’ experience in the valuation of properties in the PRC and 30 years of property valuation experience in Hong Kong, the United Kingdom and the Asia-Pacific region.

– 25 –

PROPERTY VALUATION

APPENDIX I

SUMMARY OF VALUES

Group I – Property interests owned and occupied by the Group in Hong Kong

No. Property 1. Workshop 12 on 7th Floor of Block A New Trade Plaza No. 6 On Ping Street Shatin New Territories Hong Kong 2. Workshop C on 26th Floor Shield Industrial Centre Nos. 84-92 Chai Wan Kok Street Tsuen Wan New Territories Hong Kong 3. Unit 3A on 3rd & 4th Floors including Roof and Car Parking Spaces Nos. 16 and 22 on Ground Floor of Block A Ascot Heights No. 21 Lok Lam Road Shatin New Territories Hong Kong Sub-total:

Capital value in existing state as at 31 December 2009 HKD 3,150,000 3,060,000 17,000,000

23,210,000

– 26 –

APPENDIX I

PROPERTY VALUATION

Group II – Property interest owned for investment by the Group in Hong Kong

No. Property 4. Flat H on 6th Floor of Block 5 and Car Parking Spaces Nos. 35 and 79 on basement Villa Concerto Symphony Bay No. 530 Sai Sha Road New Territories Hong Kong Sub-total: Total:	Capital value in existing state as at 31 December 2009 HKD 7,900,000
	7,900,000
	31,110,000

– 27 –

PROPERTY VALUATION

APPENDIX I

VALUATION CERTIFICATE

Group I – Property interests and occupied by the Group in Hong Kong

				Capital value
			Particulars of	in existing state as at
No.	Property	Description and tenure	occupancy	31 December 2009
				HKD
1.	Workshop 12 on	The property comprises a unit	The property is	3,150,000
	7th Floor of Block A	on the 7th floor of a 20-storey	currently occupied by
	New Trade Plaza	industrial building completed	the Group for office
	No. 6 On Ping Street	in about 1993.	and warehouse
	Shatin		purposes.
	New Territories	The property has a gross floor
	Hong Kong	area of approximately 1,473
		sq.ft.
	16/5612th shares of and
	in Sha Tin Town Lot	The property is held under a
	No. 372	New Grant No. 12340 for a
		term commencing from 11
		December 1990 and expiring
		on 30 June 2047 and subject
		to a payment of Government
		Rent which equals to 3% of
		the rateable value for the time
		being of the Lot. Current
		Government Rent payable is
		HKD927 per quarter.

Notes:

1. The registered owner of the property is Vitar Insulation Manufacturers Limited (“Vitar Insulation”), a wholly-owned subsidiary of the Company, vide Memorial No. 05122901720047 dated 30 November 2005 at a consideration of HK$1,950,000.

2. The property is subject to an Occupation Permit vide Memorial No. ST707276 dated 15 June 1993.

3. The property is subject to a Certificate of Compliance vide Memorial No. ST728117 dated 20 August 1993.

4. The property is subject to a Deed of Mutual Covenant and Management Agreement vide Memorial No. ST728119 dated 31 August 1993.

5. The property is subject to a Mortgage in favour of Dah Sing Bank Limited vide Memorial No. 07010800930021 dated 3 January 2007.

6. Pursuant to a Third Framework Agreement dated 9 February 2010, Vitar Insulation as the Vendor and lessess (for the subsequent lease transaction), and Joy Success Corporation Limited (“Joy Success”), as the purchaser and lessor (for the subsequent lease transaction), a connected party, has agreed to purchase, the property for a consideration of HKD3,150,000. Upon the completion of sales, Vitar Insulation shall lease back the property from Joy Success for a term of 3 years commencing from the date of Completion at monthly rent of HKD11,000.

– 28 –

PROPERTY VALUATION

APPENDIX I

VALUATION CERTIFICATE

• Capital value

• Particulars of in existing state as at

• No. Property Description and tenure occupancy 31 December 2009 HKD

• 1. Workshop C on The property comprises a unit The property is 3,060,000 26th Floor on the 26th floor of a currently occupied by Shield Industrial Centre 30-storey industrial building the Group for Nos. 84-92 Chai Wan completed in about 1982. warehouse purpose. Kok Street Tsuen Wan The property has a saleable New Territories area of approximately 2,560 Hong Kong sq.ft. 17/7000th shares of and The property is held under a in Tsun Wan Inland Lot Conditions of Sale No. 43 No. UB5192 for a term of 75 years commencing from 1 July 1898 renewable for further 24 years and thereafter statutorily extended until 30 June 2047 without premium but subject to a payment of Government Rent which equals to 3% of the rateable value for the time being of the lot. Current Government Rent payable is HKD981 per quarter.

Notes:

1. The registered owner of the property is Vitar Insulation Manufacturers Limited (“Vitar Insulation”), a wholly-owned subsidiary of the Company, vide Memorial No. UB5192848 dated 8 February 1992.

2. The property is subject to a Deed of Mutual Covenant and Management Agreement vide Memorial No. UB2341554 dated 29 October 1982.

3. The property is subject to an Agreement Supplemental to Deed of Mutual Covenant vide Memorial No. UB2341555 dated 29 October 1982.

4. The property is subject to a Mortgage to secure general banking facilities in favour of The Hongkong and Shanghai Banking Corporation Limited vide Memorial No. UB5192849 dated 8 February 1992.

5. Pursuant to a Fourth Framework Agreement dated 9 February 2010, Vitar Insulation as the Vendor and lessess (for the subsequent lease transaction), and Major Business Limited (“Major Business”), as the purchaser and lessor (for the subsequent lease transaction), a connected party, has agreed to purchase, the property for a consideration of HKD3,060,000. Upon the completion of sales, Vitar Insulation shall lease back the property from Major Business for a term of 3 years commencing from the date of Completion at monthly rent of HKD12,500.

– 29 –

PROPERTY VALUATION

APPENDIX I

VALUATION CERTIFICATE

Description and tenure

No. Property

1. Unit 3A on 3rd & 4th The property comprises a Floors duplex unit on the 3rd and 4th including Roof and Car floors (including roof) and 2 Parking Spaces car parking spaces on the Nos. 16 and 22 on ground floor of a 5-storey Ground Floor of Block A residential building completed Ascot Heights in about 1983. No. 21 Lok Lam Road Shatin The property has a saleable New Territories area of approximately 2,518 Hong Kong sq.ft. and a roof of approximately 1,141 sq.ft.

102/825th shares of and in Sha Tin Town Lot The property is held under a No. 58 New Grant No. 11416 for a term of 99 years commencing from 1 July 1898 and thereafter statutorily extended until 30 June 2047 without premium but subject to a payment of Government Rent which equals to 3% of the rateable value for the time being of the lot. Current Government Rent payable is HKD2,479 per quarter.

	Capital value
Particulars of	in existing state as at
occupancy	31 December 2009
	HKD
The property is	17,000,000
currently occupied by
the Group for staff
quarters and car
parking purposes.

Notes:

1. The registered owner of the property is Vitar Insulation Manufacturers Limited (“Vitar Insulation”), a wholly-owned subsidiary of the Company, vide Memorial No. ST1227425 dated 25 May 2001.

2. The property is subject to a Deed of Mutual Covenant vide Memorial No. ST249832 registered on 14 March 1984.

3. The property is subject to a Mortgage in favour of Dao Heng Bank Limited vide Memorial No. ST1227426 dated 25 May 2001.

4. Pursuant to a Second Framework Agreement dated 9 February 2010, Vitar Insulation as the Vendor and lessess (for the subsequent lease transaction), and Grandeur (China) Limited (“Grandeur China”), as the purchaser and lessor (for the subsequent lease transaction), a connected party, has agreed to purchase, the property for a consideration of HKD17,000,000. Upon the completion of sales, Vitar Insulation shall lease back the property from Grandeur China for a term of 3 years commencing from the date of Completion at monthly rent of HKD48,000.

– 30 –

PROPERTY VALUATION

APPENDIX I

VALUATION CERTIFICATE

Group II – Property interests owned for investment by the Group in Hong Kong

				Capital value
			Particulars of	in existing state as at
No.	Property	Description and tenure	occupancy	31 December 2009
				HKD
4.	Flat H on 6th Floor of	The Property comprises a unit	As at the date of	7,900,000
	Block 5 and	on the 6th floor of a 12-storey	valuation, the
	Car Parking Spaces	residential building and 2 car	residential unit and
	Nos. 35 and 79 on	parking spaces completed in	Car Parking Space
	basement	about 1998.	No. 35 were leased to
	Villa Concerto		an independent third
	Symphony Bay	The Property has a gross floor	party for a term of 2
	No. 530 Sai Sha Road	area of approximately 1,264	years commencing
	New Territories	sq.ft.	from 7 July 2008 and
	Hong Kong		expiring on 6 July
		The Property is held under a	2010 at a monthly
	283/324570th shares of	New Grant No. TP13189 for a	rent of HKD24,000
	and in The Remaining	term commencing from 27	inclusive of
	Portion of Tai Po Town	June 1996 and expiring on 30	management fees and
	Lot No. 146	June 2047. Current	rates whilst Car
		Government Rent payable is	Parking Space No. 79
		HKD1,519 per quarter.	was Vacant.

Notes:

1. The registered owner of the Property is Vitar Insulation Manufacturers Limited, a wholly-owned subsidiary of the Company, vide Memorial Nos. TP597462, TP610413 and TP616796 dated 12 February 1999, 19 July 1999 and 12 July 1999 respectively.

2. The Property is subject to an Occupation Permit No. NT68/98 vide Memorial No. TP591443 dated 13 July 1998.

3. The Property is subject to a Certificate of Compliance vide Memorial No. TP593068 dated 21 January 1999.

4. The Property is subject to a Deed of Mutual Covenant and Management Agreement vide Memorial No. TP594776 dated 29 January 1999.

5. The Property is subject to a Mortgage to secure general banking facilities in favour of The Hongkong and Shanghai Banking Corporation Limited vide Memorial Nos. TP597463 and TP616175 dated 12 February 1999.

– 31 –

GENERAL INFORMATION

APPENDIX II

1. RESPONSIBILITY STATEMENT

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

2. DISCLOSURE OF INTERESTS

Directors’ interests in Shares

As at the Latest Practicable Date, the interests and short positions, if any, of each Director and chief executive of the Company in the Shares, underlying Shares and debentures of the Company and 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 the Directors and chief executives were deemed or taken to have under such provisions of the SFO); or which were required to be and are recorded in the register required to be kept by the Company pursuant to Section 352 of the SFO; or as otherwise required to be notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Companies adopted by the Company (“ Model Code ”) were as follows:

			Percentage
			of the
			issued share
			capital of
			the
		Number of	Company
Name of director	Capacity	Shares held	(Note 3)
Mr. LEUNG Chau Hiu	Interest of a controlled	880,000,000	36.67%
(Note 1)	corporation
Mr. LEUNG Kai Wing	Interest of a controlled	880,000,000	36.67%
(Note 1)	corporation
Ms. LEUNG Chun Yin	Interest of a controlled	880,000,000	36.67%
(Note 1)	corporation
Ms. TSANG Chi Yung	Interest of a controlled	880,000,000	36.67%
(Note 1)	corporation
Mr. CHEUNG Wai Kuen	Interest of a controlled	560,000,000	23.33%
(Note 2)	corporation

Notes:

1. The interests of each of Mr. LEUNG Chau Hiu, Mr. LEUNG Kai Wing, Ms. LEUNG Chun Yin and Ms. TSANG Chi Yung is held through Vitar Development, which is owned by Mr. LEUNG Chau Hiu, Mr. LEUNG Kai Wing, Ms. TSANG Chi Yung, Ms. LEUNG Chun Yin, all executive Directors, Mr. YIP Sai Keung and Ms. WONG Lai Mui as to 35%, 32.5%, 10%, 10%, 7.5% and 5% respectively.

– 32 –

GENERAL INFORMATION

APPENDIX II

1. Mr. CHEUNG Wai Kuen’s interest in the Company is held through Wright Source Limited which is wholly-owned by Mr. CHEUNG Wai Kuen, an executive Director.

2. The percentage of the issued share capital of the Company is calculated based on the existing issued share capital as at the Latest Practicable Date, being 2,400,000,000 Shares.

3. The Company issued an announcement (the “ Announcement ”) on 26 February 2010 in respect of a placing (the “ Placing ”) of 480,000,000 Shares to not less than six placees who shall be independent third parties and not connected persons of the Company. Completion of the Placing is conditional upon the satisfaction of the conditions precedent set forth in the Announcement. Upon completion of the Placing, the shareholding of the Directors and substantial shareholders as disclosed in this appendix II of the circular shall be diluted as a result of the enlarged issued share capital following completion of the Placing.

As at Latest Practicable Date, none of the Directors had short position in the Shares or underlying shares of equity derivatives of the Company.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors, the chief executive of the Company nor their associates, had any other interests or short positions in the Shares, underlying Shares and debentures of the Company and 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 the Directors and chief executives were deemed or taken to have under such provisions of the SFO); or which were required to be and are recorded in the register required to be kept by the Company pursuant to Section 352 of the SFO; or as otherwise required to be notified to the Company and the Stock Exchange pursuant to the Model Code.

Substantial Shareholders

So far as the Directors are aware, as at the Latest Practicable Date, the following persons (other than a Director or chief executive of the Company) had interests or short positions in the shares and underlying shares of the Company 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 5% or more of the Company’s issued share capital.

			Percentage
			of the
			issued share
			capital of
			the
		Number of	Company
Name of shareholder	Capacity	Shares held	(Note 3)
Vitar Development	Beneficial owner	880,000,000	36.67%
(Note 1)
Wright Source Limited	Beneficial owner	560,000,000	23.33%
(Note 2)

– 33 –

GENERAL INFORMATION

APPENDIX II

Note:

1. Vitar Development, the controlling Shareholder, is owned by Mr. LEUNG Chau Hiu, Mr. LEUNG Kai Wing, Ms. TSANG Chi Yung, Ms. LEUNG Chun Yin, all executive Directors, Mr. YIP Sai Keung and Ms. WONG Lai Mui as to 35%, 32.5%, 10%, 10%, 7.5% and 5% respectively.

2. Wright Source Limited is wholly-owned by Mr. CHEUNG Wai Kuen, an executive Director.

3. The percentage of the issued share capital of the Company is calculated based on the existing issued share capital as at the Latest Practicable Date, being 2,400,000,000 Shares.

4. The Company issued an announcement (the “ Announcement ”) on 26 February 2010 in respect of a placing (the “ Placing ”) of 480,000,000 Shares to not less than six placees who shall be independent third parties and not connected persons of the Company. Completion of the Placing is conditional upon the satisfaction of the conditions precedent set forth in the Announcement. Upon completion of the Placing, the shareholding of the Directors and substantial shareholders as disclosed in this appendix II of the circular shall be diluted as a result of the enlarged issued share capital following completion of the Placing.

So far as the Directors are aware of, no persons had short positions in the Shares or underlying shares of equity derivatives of the Company as at the Latest Practicable Date.

Save as disclosed above, as at the Latest Practicable Date, the Directors and the chief executive of the Company were not aware of any person (other than a Director or chief executive of the Company) who had any other interests or short positions in the Shares or underlying Shares and debentures of the Company which would fall to be disclosed to the Company under Divisions 2 and 3 of Part XV of the SFO.

Save as disclosed above, as at the Latest Practicable Date, the Directors and the chief executive of the Company were not aware of any person (other than a Director or chief executive of the Company) who was, directly or indirectly, interested in 5% or more of the Company’s issued share capital.

3. DIRECTORS’ SERVICE CONTRACTS

As at the Latest Practicable Date, none of the directors of the Company had any existing or proposed service contracts with any member of the Group excluding contracts expiring or determinable by the Company within one year without payment of compensation (other than statutory compensation).

4. DIRECTORS’ INTERESTS IN THE GROUP’S ASSETS OR CONTRACTS OR ARRANGEMENTS SIGNIFICANT TO THE GROUP

On 9 February 2010, Vitar Insulation entered into the Framework Agreements, details of which are set forth in the section headed “Letter from the Board” in this circular. The purchasers under the Framework Agreements are New Ocean, Grandeur China, Joy Success and Major Business, all of which are Hong Kong incorporated companies owned by Vitar Development, the controlling Shareholder of the Company. Vitar Development is owned by Mr. LEUNG Chau Hiu, Mr. LEUNG Kai Wing, Ms. TSANG Chi Yung and Ms. LEUNG Chun Yin, our executive Directors and two other persons, namely Mr. YIP Sai Keung and

– 34 –

GENERAL INFORMATION

APPENDIX II

Ms. Wong Lai Mui. Following Completion of the Transactions, Vitar Development will be the sole owner of the Properties, of which the Second Property, the Third Property and the Fourth Property shall be lease backed by Vitar Insulation and continued to be used by the Group as its warehouses, office and staff quarters.

Save as disclosed, as at the Latest Practicable Date, none of the Directors or proposed Directors, directly or indirectly, had any interest in any assets which had since 31 December 2008 (being the date to which the latest published audited financial statements of the Group were made up) been acquired or disposed of by or leased to any member of the Group, or are proposed to be acquired or disposed of by or leased to any member of the Group. There is no contract or arrangement subsisting as at the Latest Practicable Date, in which any of the Directors was materially interested and which was significant to the business of the Group.

5. COMPETING INTERESTS

As at the Latest Practicable Date, none of the Directors and their respective associates had any interest in a business which competes or may compete with the businesses of the Group (as would be required to be disclosed under Rule 8.10 of the Listing Rules if each of them was a controlling shareholder).

6. MATERIAL ADVERSE CHANGE

Save as disclosed, the Directors are not aware of any material adverse change in the financial and trading position of the Group since 31 December 2008 (being the date to which the latest published audited financial statements of the Group were made up) and up to the Latest Practicable Date.

7. LITIGATION

As at the Latest Practicable Date, no member of the Group was engaged in any litigation or claims of material importance and, so far as the Directors are aware, no litigation or claim of material importance was pending or threatened against any member of the Group.

8. QUALIFICATION AND CONSENTS OF EXPERTS

The following are the qualification of the experts who have given opinion or advice which are contained in this circular:

Name		Qualification
Kingsway	Capital Limited	a licensed corporation		for type 1 (dealing in
		securities) and	type 6	(advising on	corporate
		finance) regulated activities under the SFO
JonesLang	LaSalle Sallmanns	an independent	qualified	property valuer
Limited

– 35 –

GENERAL INFORMATION

APPENDIX II

Each of the above experts has given and has not withdrawn its written consent to the issue of this circular with the inclusion of its letter, property valuation report and/or reference to its name or opinion in the form and context in which it appears.

As at the Latest Practicable Date, each of the experts above was not beneficially interested in the share capital of any member of the Group nor did they have any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group.

As at the Latest Practicable Date, each of the experts above did not, directly or indirectly, had any interest in any assets which had since 31 December 2008 (being the date to which the latest published audited financial statements of the Group were made up) been acquired or disposed of by or leased to any member of the Group, or are proposed to be acquired or disposed of by or leased to any member of the Group.

9. GENERAL

• (a) The registered office of the Company is at Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman KY1-1111, Cayman Islands.

• (b) The head office and principal place of business of the Company in Hong Kong is at Flat 4-6, 3rd Floor, New Trade Plaza, Tower B, 6 On Ping Street, Siu Lek Yuen, Shatin, New Territories, Hong Kong.

• (c) The company secretary of the Company is Mr. LEUNG Ka Wai.

• (d) In the event of any inconsistency, the English text of this circular shall prevail over the Chinese text.

10. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection during business hours at the head office and principal place of business of the Company at Flat 4-6, 3rd Floor, New Trade Plaza, Tower B, 6 On Ping Street, Siu Lek Yuen, Shatin, New Territories, Hong Kong from the date of this circular up to and including the date of EGM:

• (a) the Framework Agreements;

• (b) the letter from the Independent Board Committee;

• (c) the valuation report prepared by the Property Valuer;

• (d) the letter of advice from Kingsway Capital Limited; and

• (e) the written consents from the experts as referred to under the section headed “Qualification and Consents of Expert” in this appendix.

– 36 –

NOTICE OF EGM

==> picture [57 x 57] intentionally omitted <==

VITAR INTERNATIONAL HOLDINGS LIMITED

(Incorporated in the Cayman Islands with limited liability) (Stock Code: 195)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN THAT an extraordinary general meeting of Vitar International Holdings Limited (the “ Company ”) will be held at Unit 7, 26/F., Greenfield Town, Concordia Plaza, 1 Science Museum Road, Tsim Sha Tsui, Kowloon, Hong Kong on Thursday, 18 March 2010 at 10:00 a.m. for the purpose of considering and, if thought fit, passing with or without modifications the following resolutions of the Company:

ORDINARY RESOLUTIONS

• (a) “ THAT the sale of the following properties by Vitar Insulation Manufacturers Limited (“ Vitar Insulation ”), a wholly-owned subsidiary of the Company, to the respective purchasers be and is hereby approved in all respects:

• (i) the residential property situated at Flat H on 6th Floor of Block 5 and Car Parking Spaces Nos. 35 and 79 on basement, Villa Concerto, Symphony Bay, No. 530 Sai Sha Road, New Territories, Hong Kong (the “ First Property ”);

• (ii) the residential property situated at Unit 3A on 3rd & 4th Floors including Roof and Car Parking Spaces Nos. 16 and 22 on Ground Floor of Block A Ascot Heights, No. 21 Lok Lam Road, Shatin, New Territories, Hong Kong (the “ Second Property ”);

• (iii) the commercial property situated at Workshop 12 on 7th Floor of Block A, New Trade Plaza, No. 6 On Ping Street, Shatin, New Territories, Hong Kong (the “ Third Property ”); and

• (iv) the commercial property situated at Workshop C on 26th Floor, Shield Industrial Centre, Nos. 84-92 Chai Wan Kok Street, Tsuen Wan, New Territories, Hong Kong (the “ Fourth Property ”).”

• (b) “ THAT the framework agreement (the “ First Framework Agreement ”) dated 9 February 2010 entered into between New Ocean (China) Limited (“ New Ocean ”) and Vitar Insulation Manufacturers Limited (“ Vitar Insulation ”), pursuant to which Vitar Insulation agreed to sell and New Ocean agreed to purchase the First Property for a consideration of HK$7,900,000 and all transactions contemplated

– 37 –

NOTICE OF EGM

under the First Framework Agreement and any other agreements or documents in connection therewith be and are hereby approved, confirmed and/or ratified in all respects.”

• (c) “ THAT the framework agreement (the “ Second Framework Agreement ”) dated 9 February 2010 entered into between Grandeur (China) Limited (“ Grandeur China ”) and Vitar Insulation, pursuant to which Vitar Insulation agreed to sell and Grandeur China agreed to purchase the Second Property for a consideration of HK$17,000,000 and all transactions contemplated under the Second Framework Agreement and any other agreements or documents in connection therewith be and are hereby approved, confirmed and/or ratified in all respects.”

• (d) “ THAT the framework agreement (the “ Third Framework Agreement ”) dated 9 February 2010 entered into between Joy Success Corporation Limited (“ Joy Success ”) and Vitar Insulation, pursuant to which Vitar Insulation agreed to sell and Joy Success agreed to purchase the Third Property for a consideration of HK$3,150,000 and all transactions contemplated under the Third Framework Agreement and any other agreements or documents in connection therewith be and are hereby approved, confirmed and/or ratified in all respects.”

• (e) “ THAT the framework agreement (the “ Fourth Framework Agreement ”) dated 9 February 2010 entered into between Major Business Limited (“ Major Business ”) and Vitar Insulation, pursuant to which Vitar Insulation agreed to sell and Major Business agreed to purchase the Fourth Property for a consideration of HK$3,060,000 and all transactions contemplated under the Fourth Framework Agreement and any other agreements or documents in connection therewith be and are hereby approved, confirmed and/or ratified in all respects.”

• (f) “ THAT any one director of the Company (the “ Directors ”), or any two Directors if the affixation of the common seal is necessary, be and is/are hereby authorised for and on behalf of the Company to take all actions and to sign, execute and deliver all such agreements, instruments and deeds in their opinion that are necessary and appropriate to implement and/or give effect to the terms and all transactions contemplated under the First Framework Agreement, the Second Framework Agreement, the Third Framework Agreement and the Fourth Framework Agreement (including the entering into of the Definitive Documents (as defined in the circular of the Company dated 2 March 2010) and to agree such variations, amendments or waivers thereof as are, in the opinion of such Director, in the interests of the Company.”

By order of the Board VITAR INTERNATIONAL HOLDINGS LIMITED Leung Kai Wing Chief Executive Officer

Hong Kong, 2 March 2010

– 38 –

NOTICE OF EGM

Notes:

• (1) A form of proxy for the extraordinary general meeting of the Company to be held on Thursday, 18 March 2010 at 10:00 a.m. is enclosed.

• (2) Any member entitled to attend and vote at the extraordinary general meeting of the Company shall be entitled to appoint another person as his proxy to attend and vote instead of him. A member who is the holder of two or more shares may appoint more than one proxy to represent him and vote on his behalf at the extraordinary general meeting of the Company. A proxy need not be a member of the Company.

• (3) In order to be valid, the form of proxy completed in accordance with the instructions set forth therein, together with the power of attorney or other authority (if any) under which it is signed (or a certified copy of that power or authority) must be deposited at the Company’s Hong Kong share registrar, Tricor Investor Services Limited, at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong not less than 48 hours before the time appointed for holding the extraordinary general meeting of the Company or any adjournment thereof. Completion and return of the proxy form will not preclude you from attending and voting in person at the extraordinary general meeting or any adjournment thereof should you so wish.

• (4) In case of joint holders of any share of the Company, any one of such joint holders may vote at the extraordinary general meeting of the Company, 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 are present at the meeting in person or by proxy, then one of the said persons 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.

• (5) As at the date of this notice, the executive directors of the Company are Mr. LEUNG Chau Hiu (Chairman), Mr. LEUNG Kai Wing (Chief Executive Officer), Ms. TSANG Chi Yung, Ms. LEUNG Chun Yin, Mr. CHEUNG Wai Kuen, Mr. CHENG Pak Lung and Mr. CHANG Yong Tian, and the independent non-executive directors of the Company are Mr. WONG Hing Tat, Mr. CHENG Hau Yan and Mr. ZHONG Wei Guang.

– 39 –