hmvod Limited — Proxy Solicitation & Information Statement 2010

Sep 29, 2010

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 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 in Tai Shing International (Holdings) Limited , you should at once hand this circular together with the enclosed form of proxy to the purchaser or the transferee, or to the bank, stockbroker or other agent through whom the sale or transfer was effected, for transmission to the purchaser or the transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, makes 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.

This circular is for information purposes only and is not an offer to sell or a solicitation of an offer to buy any securities.

**Tai Shing International (Holdings) Limited *** 泰盛國際（控股）有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 8103)

(1) MAJOR TRANSACTION IN RELATION TO THE ACQUISITION OF THE ENTIRE ISSUED SHARE CAPITAL IN AND SHAREHOLDER’S LOAN TO FULLMARK MANAGEMENT LIMITED AND ISSUE OF CONSIDERATION SHARES; (2) PROPOSED GRANT OF SERVICE OPTION AND SPECIFIC MANDATE TO ISSUE THE SERVICE OPTION SHARES; AND

(3) NOTICE OF EGM

Financial adviser

CIMB Securities (HK) Limited

Capitalised terms used in this cover page have the same meaning as defined in this circular.

A notice convening the EGM to be held on 20 October 2010, at 10:30 a.m. at 1504, 15/F, The Center, 99 Queen’s Road Central, Hong Kong is set out on pages 68 to 70 of this circular.

A form of proxy is also enclosed. Whether or not you intend to attend and vote at the EGM, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon to the Company’s branch share registrar in Hong Kong, Computershare Hong Kong Investor Services Limited at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong as soon as practicable and in any event not less than 48 hours before the time appointed for holding of the EGM or any adjournment thereof (as the case may be). Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM, or any adjourned meeting thereof (as the case may be), should you so wish.

This circular will remain on the GEM website at www.hkgem.com on the “Latest Company Announcements” page for at least 7 days from the date of its publication.

30 September 2010

* For identification purpose only

CHARACTERISTICS OF GEM

GEM has been positioned as a market designed to accommodate companies to which a higher investment risk may be attached than other companies listed on the Exchange. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only after due and careful consideration. The greater risk profile and other characteristics of GEM mean that it is a market more suited to professional and other sophisticated investors.

Given the emerging nature of companies listed on GEM, there is a risk that securities traded on GEM may be more susceptible to high market volatility than securities traded on the Main Board of the Stock Exchange and no assurance is given that there will be a liquid market in the securities traded on GEM.

– i –

CONTENTS

		Page
DEFINITIONS..............................................................................................................................		1
LETTER FROM THE BOARD..................................................................................................		6
APPENDIX I	— FINANCIAL INFORMATION ON THE GROUP............................	23
APPENDIX II	— FINANCIAL INFORMATION ON THE TARGET GROUP..........	25
APPENDIX III	— UNAUDITED PRO FORMA FINANCIAL INFORMATION
	OF THE ENLARGED GROUP........................................................	53
APPENDIX IV	— GENERAL INFORMATION................................................................	60
NOTICE OF THE EGM..............................................................................................................		68

– ii –

DEFINITIONS

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

• “Acquisition”

• the proposed acquisition by the Purchaser of the Sale Share and the Sale Debt pursuant to the Agreement

• “Addendum” the addendum to the memorandum of understanding signed between the Company and the Vendor dated 11 February 2010, details of which are disclosed in the announcement of the Company dated 11 February 2010

• “Agreement” the conditional sale and purchase agreement entered into between the Purchaser and the Vendor on 14 June 2010 in relation to the Acquisition, as amended by the Supplemental Agreement

• “Announcements” the announcements of the Company dated 14 June 2010 and 28 September 2010 respectively in relation to, among others, the Acquisition

• “Articles of Association” the articles of association of the Company

• “associates” has the meaning ascribed to it under the GEM Listing Rules

• “Board” the board of Directors “Business Day” a day (other than Saturday, Sunday, public holidays and days on which a tropical cyclone warning No. 8 or above or a “black rainstorm warning signal” is hoisted in Hong Kong at any time between 9:00 a.m. and 5:00 p.m.) on which banks are open in Hong Kong for general banking business

• “Company” Tai Shing International (Holdings) Limited, a company incorporated in the Cayman Islands with limited liability and the issued Shares of which are listed on GEM

• “Completion” completion of the sale and purchase of the Sale Share and the Sale Debt pursuant to the Agreement

• “Completion Date” the date as may be agreed by the Vendor and the Purchaser falling within seven Business Days after the conditions set out in the Agreement have been fulfilled

• “Consideration” the aggregate consideration for the transfer of the Sale Share and the Sale Debt

– 1 –

DEFINITIONS

• “Consideration Share the authority to allot and issue the Consideration Shares to be Specific Mandate” sought at the EGM

• “Consideration Shares” 407,407,407 new Shares to be issued and allotted by the Company at Completion to settle part of the Consideration

• “Cooperation Agreement” the exclusive cooperation agreement dated 31 March 2010 entered into between Fullmark SH and Dongda Brokerage in relation to the development of the Chinese version of the InsureLink System and the licensing of such system

• “Deposit” the deposit payment of HK$25 million in cash as part of the Consideration, which amount has been paid by the Group pursuant to the Addendum as announced by the Company on 4 March 2010

• “Directors” the directors of the Company

• “Dongda Agency” 東大保險代理股份有限公司 (unofficial translation being Dongda Insurance Agency Company Limited), a company established in the PRC whose registered share capital is owned as to 24.9% by Fullmark SH and 75.1% by Dongda Brokerage

• “Dongda Brokerage” 東大保險經紀有限責任公司 (unofficial translation being Dongda Insurance Brokerage Company Limited), a company established in the PRC

• “EGM” the extraordinary general meeting of the Company to be held for the purposes of considering, and if thought fit, approving (i) the Agreement and the transactions contemplated thereunder including the allotment and issue of the Consideration Shares and (ii) the grant of the Service Option and the allotment and issue of the Service Option Shares, the notice of which is set out on pages 68 to 70 of this circular

• “Enlarged Group”

the Group and the Target Group

• “Fullmark HK”

• Fullmark Management Limited, a wholly-owned subsidiary of the Target incorporated in Hong Kong

• “Fullmark SH” 鑫約福(上海)貿易有限公司 (unofficial translation being Fullmark (Shanghai) Trading Company Limited), a whollyowned subsidiary of Fullmark HK established in the PRC

– 2 –

DEFINITIONS

“Galaxy Fund I”	Galaxy China Special Situations Fund SPC, for and on behalf
	of its segregated portfolio, Galaxy China Special Situations
	Segregated Portfolio 1
“Galaxy Fund II”	Galaxy China Deep Value Fund
“GEM”	the Growth Enterprise Market operated by the Stock Exchange
“GEM Listing Rules”	the Rules Governing the Listing of Securities on GEM
“Group”	the Company and its subsidiaries
“High Pacific”	High Pacific Limited, a company incorporated in the British
	Virgin Islands with limited liability on 15 June 2010
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong
“Hong Kong”	the Hong Kong Special Administrative Region of the PRC
“InsureLink System”	a system owned by Fullmark SH that links an insurance broker
	or agent’s front office seamlessly to its back office and then to
	the insurance providers, the current complete version of which
	is developed by Fullmark SH
“Last Trading Day”	14 June 2010, being the date of the Agreement
“Latest Practicable Date”	28 September 2010, being the latest practicable date prior to
	the printing of this circular for the purpose of ascertaining certain
	information for inclusion in this circular
“Long Stop Date”	30 November 2010 as extended (or such other dates as the parties
	may agree in writing)
“Mr. Wong”	Mr. Wong Chi Keung, a party to the Service Option Agreement
“Placing”	the placing of a maximum of 313,140,000 new Shares by SHKI,
	on a best effort basis, details of which are set out in the
	announcement of the Company dated 17 September 2010
“PRC”	the Peoples’ Republic of China, which for the purpose of this
	circular, excludes Hong Kong, the Macao Special Administrative
	Region of the People’s Republic of China and Taiwan

– 3 –

DEFINITIONS

“PRC GAAP”	the generally accepted accounting principles of the PRC
“Purchaser”	Trend Brilliant Limited, a company incorporated in Hong Kong
	with limited liability and a wholly-owned subsidiary of the
	Company
“RMB”	Renminbi, the lawful currency of the PRC
“Sale Debt”	all obligations, liabilities and debts owing or incurred by the
	Target Group to the Vendor and/or the Vendor’s subsidiaries as
	at Completion whether actual, contingent or deferred and
	irrespective of whether or not the same is due and payable on
	Completion, which amount shall not be less than HK$29,422,590
“Sale Share”	the entire issued share capital (being one (1) share of US$1) of
	the Target
“Service Option”	the option conditionally granted by the Company to the Service
	Option Grantee (as nominated by Mr. Wong) attached with it
	the right to subscribe for up to 60,000,000 Shares at the
	subscription price of HK$0.10 per Service Option Share, details
	of which are set out in the announcements of the Company dated
	24 February 2010, 23 April 2010 and 15 June 2010 respectively
“Service Option Agreement”	the agreement dated 24 February 2010 (as varied and
	supplemented by the supplemental agreement dated 23 April
	2010, the second supplemental agreement dated 15 June 2010
	and the third supplemental agreement dated 28 September 2010)
	entered into between the Company and Mr. Wong in relation to
	the grant of the Service Option
“Service Option Grantee”	Fantasy Top Limited, a company nominated by Mr. Wong to
	take up the Service Option
“Service Option Shares”	up to 60,000,000 Shares fall to be issued upon the exercise of
	the subscription rights attaching to the Service Option
“Service Option Specific Mandate”	the authority to allot and issue the Service Option Shares to be
	sought at the EGM
“SFC”	the Securities and Futures Commission
“SFO”	the Securities and Futures Ordinance (Chapter 571 of the laws
	of Hong Kong)

– 4 –

DEFINITIONS

“Shares”	shares of the Company of HK$0.005 each
“Shareholders”	holder(s) of the Share(s)
“SHKI”	Sun Hung Kai Investment Services Limited, a company
	incorporated in Hong Kong, which is a licensed corporation to
	carry on type 1 (dealing in securities) and type 4 (advising on
	securities) regulated activities under the SFO
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Supplemental Agreement”	the supplemental agreement entered into between the Purchaser
	and the Vendor on 28 September 2010 to amend and clarify
	certain terms and conditions of the Agreement
“Target”	Fullmark Management Limited, a company incorporated in the
	British Virgin Islands
“Target Group”	the Target and all its subsidiaries
“VC Brokerage”	VC Brokerage Limited, a company incorporated in Hong Kong
	with limited liability
“Wide Source”	Wide Source Group Ltd., a company wholly owned by Mr. Luk
	Yat Hung, a former executive Director
“US$”	United States dollars, the lawful currency of the United States
“Vendor”	Expertone Holdings Limited, a company incorporated in the
	British Virgin Islands, whose issued share capital is beneficially
	owned by Zhang He

– 5 –

LETTER FROM THE BOARD

**Tai Shing International (Holdings) Limited *** 泰盛國際（控股）有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 8103)

Executive Directors:

Mr. Wong Chung Wai, Eric (Chairman) Ms. Li Wenli Mr. Chan Yun Sang Mr. Ng Chi Wing

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

Independent non-executive Directors:

Professor Ip Ho Shing, Horace Mr. Yan Yonghong Mr. Tang Sze Lok Mr. Lee Kwok Yung

Head office and principal place of business in Hong Kong: 1504, 15/F The Center 99 Queen’s Road Central Hong Kong

30 September 2010

To the Shareholders

Dear Sir or Madam,

(1) MAJOR TRANSACTION IN RELATION TO THE ACQUISITION OF THE ENTIRE ISSUED SHARE CAPITAL IN AND SHAREHOLDER’S LOAN TO FULLMARK MANAGEMENT LIMITED AND ISSUE OF CONSIDERATION SHARES; AND (2) PROPOSED GRANT OF SERVICE OPTION AND SPECIFIC MANDATE TO ISSUE THE SERVICE OPTION SHARES

INTRODUCTION

Reference is made to the Announcements in which the Company announced that, on 14 June 2010 and on 28 September 2010, the Purchaser, a wholly-owned subsidiary of the Company, and the Vendor entered into the Agreement and the Supplemental Agreement respectively, pursuant to which the Purchaser has conditionally agreed to purchase and the Vendor has conditionally agreed to sell the Sale Share and the Sale Debt for an aggregate consideration of HK$180 million.

* For identification purpose only

– 6 –

LETTER FROM THE BOARD

Reference is also made to the announcements of the Company dated 24 February 2010, 23 April 2010, 15 June 2010 and 28 September 2010 in relation to the conditional grant of the Service Option to Mr. Wong pursuant to the Service Option Agreement.

The Sale Share represents the entire issued share capital of the Target. As at the Latest Practicable Date, the principal assets of the Target are the InsureLink System and its indirect holding of 24.9% equity interest in Dongda Agency, a company established in the PRC, which provides property and life insurance agency services and cash and bank balances.

The Acquisition constitutes a major transaction for the Company under Rule 19.07 of the GEM Listing Rules and is subject to the Shareholders’ approval. As no Shareholder has an interest in the Acquisition which is materially different from the other Shareholders, no Shareholder is required to abstain from voting on the resolution to be proposed at the EGM to approve the Agreement and the transactions contemplated thereunder.

The purpose of this circular is to provide you with further details of the Agreement required under the GEM Listing Rules and the details of the Service Option and to give you a notice of the EGM at which ordinary resolutions will be proposed and, if thought fit, passed to approve (i) the Agreement and the transactions contemplated thereunder; and (ii) the grant of the Service Option and the grant of the Service Option Specific Mandate.

THE AGREEMENT

• Date : 14 June 2010 (as amended by the Supplemental Agreement dated 28 September 2010, details of the amendments contemplated under the Supplemental Agreement are set out in the announcement of the Company dated 28 September 2010)

Parties

Purchaser : Trend Brilliant Limited, a wholly-owned subsidiary of the Company

• Vendor : Expertone Holdings Limited

To the best of the Directors’ knowledge, information and belief after having made all reasonable enquires, the Vendor is an investment holding company incorporated in the British Virgin Islands with limited liability and the Vendor and its ultimate beneficial owner are third parties independent of the Company and connected persons (as defined in the GEM Listing Rules) of the Company.

Assets to be acquired under the Agreement

The Sale Share, representing the entire issued share capital of the Target, and the Sale Debt, representing all the indebtedness owing by the Target Group to the Vendor and its subsidiaries as at the date of Completion. As at the Latest Practicable Date, the Sale Debt amounted to approximately HK$50.4 million.

– 7 –

LETTER FROM THE BOARD

Consideration

The Consideration for the Acquisition is HK$180 million which shall be satisfied as to HK$70 million in cash and as to the balance of HK$110 million by the allotment and issue of the Consideration Shares in the following manner:

• i. HK$25 million in cash as Deposit, which amount has been paid by the Group pursuant to the Addendum as announced by the Company on 4 March 2010;

• ii. a further payment of HK$10 million in cash shall be paid to the Vendor on Completion;

• iii. subject to the 2011 NPAT (as defined in the paragraph headed “Consideration Adjustment” below) is met, a further payment of HK$35 million (“Remaining Cash Consideration”) in cash shall be paid to the Vendor within 7 Business Days from the date on which the audited accounts of Fullmark SH (under PRC GAAP) for the year ending 31 December 2011 have been received by the Purchaser; and

• iv. the balance of HK$110 million shall be satisfied by the allotment and issue to the Vendor or its nominee the Consideration Shares, credited as fully paid, on Completion.

The full amount of the Remaining Cash Consideration shall only be paid to the Vendor as described above where the 2011 NPAT is met. Where the NPAT is less than RMB16,500,000 and the Remaining Cash Consideration exceeds the Compensation, the Remaining Cash Consideration shall be reduced by an amount which is equal to the amount of the Compensation and the reduced Remaining Cash Consideration shall be paid within 7 Business Days from the date on which the audited accounts of Fullmark SH (under PRC GAAP) for the year ending 31 December 2011 have been received by the Purchaser. Where 2011 NPAT is less than RMB16,500,000 and the Compensation exceeds the Remaining Cash Consideration, the Purchaser is not required to pay any of the Remaining Cash Consideration to the Vendor and the obligation of the Vendor to pay the Compensation shall be reduced by the full amount of the Remaining Cash Consideration.

For the avoidance of doubt, the Consideration will not be affected by the final amount of Sale Debt as at the Completion Date.

The Consideration was arrived at after arm’s length negotiations between the parties, taking into account a number of factors including:

• i. the business prospects of the insurance industry in the PRC as a whole and that of Dongda Agency. The Board considered that the growth of the insurance industry in the PRC had been and would be growing at a phenomenal rate. According to the China Insurance Regulatory Commission (“CIRC”), in terms of total revenue, the insurance industry in the PRC increased from approximately RMB579.3 billion in 2007 to approximately RMB916.1 billion in 2009, representing a compound annual growth rate (“CAGR”) of approximately 25.8%, and the insurance industry in Shanghai increased from approximately RMB48.3 billion in 2007 to approximately RMB66.5 billion in 2009, representing a CAGR of approximately 17.3%. The Board expects that the demand within the insurance industry in the PRC would remain strong in the foreseeable future, which would lead to a stronger demand for technology, such as the InsureLink System, to enhance operational efficiency and cost control;

• ii. the business prospects of Fullmark SH which has entered into the Cooperation Agreement, details of which are set out under the paragraph headed “The Cooperation Agreement” below. Dongda Brokerage, being a five star ranked market leader in the insurance brokerage business in Shanghai according to CIRC, has the capability to assist Fullmark SH in gaining market

– 8 –

LETTER FROM THE BOARD

recognition for the InsureLink System by promoting the InsureLink System to its wide network base. Fullmark SH is entitled to receive 75% of the revenue from the licensing of the InsureLink System for a period of 10 years under the Cooperation Agreement, and Dongda Brokerage guaranteed that the revenue received by Fullmark SH under the Cooperation Agreement shall be not less than RMB20,000,000 per annum. With Dongda Brokerage’s ability to successfully promote and license the InsureLink System to new customers within the insurance industry, the management of the Company is of the view that the Cooperation Agreement represents a good opportunity for the Target Group to leverage on its technological know-how by utilizing Dongda Brokerage’s status in the market and wide network base; and

• iii. the consideration adjustment mechanism as described in the paragraph headed “Consideration Adjustment” below.

Consideration Shares

The issue price of the Consideration Shares of HK$0.27 per Consideration Share represents:

• i. a discount of approximately 3.57% to the closing price of HK$0.28 per Share as quoted on the Stock Exchange on the Last Trading Day;

• ii. a discount of approximately 1.10% to the average closing price of approximately HK$0.273 per Share as quoted on the Stock Exchange for the last five consecutive trading days up to and including the Last Trading Day;

• iii. a discount of approximately 3.57% to the average closing price of approximately HK$0.28 per Share as quoted on the Stock Exchange for the last ten consecutive trading days up to and including the Last Trading Day;

• iv. a premium of approximately 5.88% to the closing price of HK$0.255 per Share as quoted on the Stock Exchange on the Latest Practicable Date;

• v. a premium of 250.65% over the consolidated net asset value attributable to the Shareholders per Share of approximately HK$0.077 (calculated based on the audited consolidated net asset value attributable to the Shareholders as at 31 March 2010 of HK$55,675,000 adjusted for the net proceeds of approximately HK$66,900,000 from the placement of an aggregate of 266,000,000 Shares since 28 April 2010 and the number of issued and outstanding Shares of 1,571,700,000 as at the Latest Practicable Date).

Upon Completion, the Company will allot and issue, credited as fully paid, an aggregate of 407,407,407 Consideration Shares, representing approximately:

• i. 25.92% of the issued share capital of the Company as at the Latest Practicable Date;

• ii. 20.59% of the issued share capital of the Company as enlarged by the issue of the Consideration Shares; and

• iii. 19.98% of the issued share capital of the Company as enlarged by the issue of the Consideration Shares and assuming the Service Option is exercised in full.

The Consideration Shares, which will be issued under the Consideration Share Specific Mandate, when issued, will rank pari passu with all other Shares in issue as at the date of their allotment. An application will be made by the Company to the Stock Exchange for the listing of, and permission to deal in, the Consideration Shares.

Neither Completion nor the issue of the Consideration Shares will result in any change of control of the Company.

– 9 –

LETTER FROM THE BOARD

Consideration Adjustment

Pursuant to the Agreement, if the audited consolidated net profit after tax of Fullmark SH (under PRC GAAP) for the year ending 31 December 2011 (“2011 NPAT”) is less than RMB16.5 million, which is determined with reference to (i) the business prospects of Fullmark SH which has entered into the Cooperation Agreement, in particular, the minimum annual revenue of RMB20,000,000 under such agreement as described under the paragraph headed “The Cooperation Agreement” below; and (ii) the business prospects of the insurance industry in the PRC as a whole and that of Dongda Agency, the Vendor will pay the Purchaser a compensation (“Compensation”) as calculated under the consideration adjustment mechanism (“Consideration Adjustment”) as set out below:

Compensation = (RMB16.5 million - 2011 NPAT) x 9.65 [Note]

Note: Being the implied price-earnings ratio of the Consideration of HK$180 million over the expected 2011 NPAT of RMB16.5 million based on the exchange rate of HK$1.1305 = RMB1.

Where the 2011 NPAT is a negative figure, the 2011 NPAT for the purpose of calculating the Compensation shall be deemed as zero (0).

The Compensation, if any, shall be paid by the Vendor to the Purchaser in cash within seven Business Days from the day on which the audited financial statements of Fullmark SH for the year ending 31 December 2011 has been received by the Vendor.

Except for the abovementioned Consideration Adjustment for the year of 2011, the Vendor will make no additional compensation to the Purchaser from 2012 onwards even if Fullmark SH cannot receive RMB20,000,000 per annum from Dongda Brokerage under the Cooperation Agreement.

Conditions precedent

Completion of the Agreement is conditional upon:

• (a) compliance with all requirements under the GEM Listing Rules, including but not limited to, the approval by the Shareholders at the EGM to approve the Agreement and the transactions contemplated under the Agreement;

• (b) the Purchaser being reasonably satisfied, from the date of the Agreement and at any time before Completion, that the Vendor’s warranties given under the Agreement remain true and accurate in all material respects and is not misleading and that there is no breach in any material respect of any Vendor’s warranties or other provisions of the Agreement by the Vendor;

• (c) the Stock Exchange having granted or having agreed to grant the listing of, and permission to deal in, the Consideration Shares;

• (d) (i) trading in the Shares on the Stock Exchange not having been suspended for a period of more than 10 consecutive trading days disregarding any suspension for the purposes of clearing any announcement and circular in relation to the transactions contemplated under the Agreement by the regulatory authorities; (ii) trading in the Shares on the Stock Exchange not being revoked or withdrawn at any time prior to Completion; and (iii) there being no indication from the Stock Exchange or the SFC that listing of the Shares will be revoked or withdrawn at any time after Completion, whether in connection with any of the transactions contemplated by the Agreement or otherwise; and

– 10 –

LETTER FROM THE BOARD

• (e) the Vendor being reasonably satisfied, from the date of the Agreement and at any time before Completion, that the Purchaser’s warranties given under the Agreement remain true and accurate in all material respects and is not misleading and that there is no breach in any material respect of any Purchaser’s warranties or other provisions of the Agreement by the Purchaser.

The Purchaser shall be entitled at its absolute discretion at any time by a notice in writing to the Vendor to waive conditions precedent (b) above, either in whole or in part. The Vendor shall be entitled at its absolute discretion at any time by a notice in writing to the Purchaser to waive any of conditions precedent (d) and (e), either in whole or in part.

If any of the above conditions has not been fulfilled or waived on or before the Long Stop Date, the Agreement shall automatically terminate and none of the parties to the Agreement shall have any claim against the other party.

As at the Latest Practicable Date, none of the conditions precedent referred to above has been fulfilled.

Upon termination of the Agreement, the Vendor shall refund the full amount of the Deposit, without interest, to the Company within ten Business Days from the date of termination of the Agreement.

INFORMATION OF THE TARGET GROUP

The Target is an investment holding company incorporated in the British Virgin Islands on 8 August 2008. As at the date of this circular, the principal assets of the Target Group are the InsureLink System, its equity interest in Dongda Agency of 24.9% and cash and bank balances.

On 23 February 2010, the Target Group acquired the core modules of the InsureLink System, a system that connects an insurance broker or agent’s front office seamlessly to its back office and then to the insurance providers by linking all the important business functions of an insurance intermediary into a real-time management system whereby important information could be available for staff, management and also insurance companies. The Target Group subsequently incorporated the core modules with various software in developing the English version of the InsureLink System. A distinct feature of InsureLink System is its capability to generate reports in a timely and efficient manner, which includes, among others, real-time sales reports, real-time claims reports, policy/content amendment reports, insurance premium payment reports and daily sales reports to insurance providers. Another distinct feature of the InsureLink System is that the system could be installed in multiple locations, which then allows real-time and efficient financial and management control. At present, the Target Group owns the license of the InsureLink System and the management of the Company believes that there are no other information management systems in the market that can match the comprehensive nature of the InsureLink System within the insurance intermediary market. The license of the InsureLink System is currently sold and distributed directly to brokers and insurance agents in the PRC by Dongda Brokerage. The license of the InsureLink System is sold by Dongda Brokerage instead of the Target Group because at present, Dongda Brokerage has a larger sales force of over 40 employees in promoting the InsureLink System. In addition, Dongda Brokerage was ranked number 1 and number 17 in Shanghai and in the PRC in 2009 respectively in terms of total revenue in the insurance brokerage market and therefore has a substantial market status and a much broader customer network. Continual upgrades of and trainings on the use of the InsureLink System would be provided

– 11 –

LETTER FROM THE BOARD

to the customers in the PRC jointly by Dongda Brokerage and Fullmark SH. At present, only the English version of the InsureLink System is available, and Fullmark SH is in the course of localizing and preparing the simplified Chinese version of the InsureLink System. Customers will pay an initial license fee and then pay an annual maintenance fee to Dongda Brokerage. It is the intention of the Target Group to provide a one stop solution to the insurance agency and brokerage sector.

Fullmark SH acquired 24.9% interest in Dongda Agency on 22 January 2010 from a third party independent of the Company and connected persons (as defined in the GEM Listing Rules) of the Company. Dongda Agency is a company established in the PRC and provides property and life insurance, professional insurance agency services (such as engineering insurance, cargo transportation liability insurance and group life insurance) and reinsurance agency service. At present, the insurance products and services provided by Dongda Agency are structured by various insurance companies and Dongda Agency sells these insurance products without any modifications to their structures.

The shareholding and group structure of the Target Group as the Latest Practicable Date is set out below.

==> picture [146 x 48] intentionally omitted <==

==> picture [146 x 304] intentionally omitted <==

As at the Latest Practicable Date, save for their direct or indirect interest in the InsureLink System, Dongda Agency and cash and bank balances, the Target, Fullmark HK, and Fullmark SH has no business nor material assets. As at 30 June 2010, the audited consolidated total assets and total liabilities of the Target were approximately HK$26.2 million (which principally consisted of the book cost of InsureLink system, the Target Group’s share of interest in Dongda Agency and cash and bank balances) and approximately HK$29.4 million (being the shareholder’s loan), respectively.

– 12 –

LETTER FROM THE BOARD

Set out below is the audited consolidated financial information of the Target for the period from 8 August 2008 (date of incorporation of the Target) to 30 June 2010, as extracted from Appendix II to this circular.

	For the period from
	8 August 2008
	(date of incorporation)	Six months ended
	to 31 December 2009	30 June 2010
	HK$	HK$
Turnover	—	—
Share of profit from an associated company	—	40,494_Note_
Loss before taxation	(450)	(3,211,227)
Loss after taxation	(450)	(3,211,227)

Note: Being the share of profit from Dongda Agency

THE COOPERATION AGREEMENT

On 31 March 2010, Fullmark SH, an indirect wholly-owned subsidiary of the Target, entered into the Cooperation Agreement with Dongda Brokerage, which is valid for 10 years. The principal terms of the Cooperation Agreement are summarised below:

• (i) Fullmark SH and Dongda Brokerage have agreed to jointly develop, based on the intellectual property rights of the InsureLink System, the Chinese version of the InsureLink System, and Fullmark SH shall bear all the expenses in the development of the Chinese version of the InsureLink System by providing technical staff, software and equipments;

• (ii) Fullmark SH shall assign Dongda Brokerage the right of use of the InsureLink System, and Fullmark SH will not receive any additional income from Dongda Brokerage for the right of use of the InsureLink System;

• (iii) Fullmark SH and Dongda Brokerage shall jointly promote the licensing of the InsureLink System to other insurance companies in the PRC (“Licensing Business”) and Dongda Brokerage shall bear all the expenses in relation to the promotion of the InsureLink System;

• (iv) Fullmark SH shall be entitled to receive 75% of the revenue from the Licensing Business. The revenue sharing ratio for the Licensing Business was arrived at after arm’s length negotiations between the parties after taking into consideration the fact that the intellectual property rights of the InsureLink System are owned by Fullmark SH, which will provide related technical support services to Dongda Brokerage and the end-users of the InsureLink System. Dongda Brokerage guaranteed that the revenue received by Fullmark SH under the Cooperation Agreement shall be not less than RMB20,000,000 per annum;

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LETTER FROM THE BOARD

• (v) The RMB20,000,000 per annum shall be paid by Dongda Brokerage to Fullmark SH in two installments each year, RMB10,000,000 in January and RMB 10,000,000 in September, for a period of 10 years. In the situation that 75% of Dongda Brokerage’s revenue from the licensing business exceeds RMB20,000,000 per annum, the remainder of the payment shall be made in March of the following year. If the payments are not made according to the Cooperation Agreement, a 5% interest will be charged daily on the amount owed from Dongda Brokerage to Fullmark SH; and

• (vi) Fullmark SH shall provide and bear all the expenses related to technical support services, system upgrades and training to Dongda Brokerage and the end-users of the InsureLink System, and Dongda Brokerage and the end-users of the InsureLink System will not need to pay additional fees to Fullmark SH in relation to the abovementioned support and maintenance services.

REASONS FOR AND FINANCIAL EFFECTS OF THE ACQUISITION

The principal activities of the Group are the provision of systems development and integration services, the sales of software and hardware products and provision of professional services.

As at the Latest Practicable Date, the principal assets of the Target Group were the InsureLink System, its equity interest in Dongda Agency of 24.9% and cash and bank balances. Dongda Agency is principally engaged in the provision of property and life insurance, professional insurance agency services (such as engineering insurance, cargo transportation liability insurance and group life insurance) and reinsurance agency service. On 31 March 2010, Fullmark SH, an indirect wholly owned subsidiary of the Target, entered into the Cooperation Agreement with Dongda Brokerage.

It has been the Company’s long term goal to maximize Shareholder’s value. In view of the intense market competition for the Group’s existing business particularly for the security and surveillance division, the Company has been exploring business opportunities to expand the Group’s operations and enhance its earnings. In this regard, the Company considers that there are good business prospects for the system provision, integration and software development market within the insurance and insurance brokering business sectors in the PRC as a result of the increased demand for update and efficient back and front office support systems and software to cater for the expansion in insurance products and services. Accordingly, the Directors consider that the Acquisition will not only provide an opportunity for the Group to expand its scope of IT consultancy services by participating in the insurance market in the PRC, which is expected to have a rising demand, through the Target’s interest in Dongda Agency, but also enable the Group to leverage on its existing expertise and experience in the IT consultancy sector, coupled with the intellectual property rights in respect of the InsureLink System owned by Fullmark SH, by cooperating with Dongda Brokerage pursuant to the Cooperation Agreement.

It is the intention of the Company to continue the Group’s existing business in the security and surveillance system and, leverage on its existing expertise and experience in the IT consultancy sector, expand its existing business into the insurance market in the PRC through the Target’s interest in Dongda Agency and cooperation with Dongda Brokerage pursuant to the Cooperation Agreement. As at the Latest Practicable Date, the Vendor did not have any nominee on the Board. The Company has confirmed with the Vendor that it has no present intention to nominate any person to become members of the Board upon Completion.

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LETTER FROM THE BOARD

Upon Completion, each of the Target, Fullmark HK and Fullmark SH will become a wholly-owned subsidiary of the Company and with its accounts to be consolidated with that of the Group. Fullmark SH’s shareholding in Dongda Agency is 24.9%, and therefore Dongda Agency will not be considered as a subsidiary or a joint venture, in the absence of any joint venture agreement, of the Group. According to Hong Kong Accounting Standards 28 - Interest in Associates, equity method will be used to account for the Group’s 24.9% interest in Dongda Agency. Dongda Agency will be accounted for as an associated company and the accounts of Dongda Agency will not be consolidated with that of the Group.

The Completion will result in an increase in the total assets and the total liabilities of the Group by approximately HK$145 million and HK$35 million respectively, details of which can be referred to in the unaudited pro forma statement of assets and liabilities of the Enlarged Group set out in Appendix III to this circular. As the Target Group will become wholly owned subsidiaries of the Group upon Completion, its financial results will be consolidated with those of the Group. According to the financial information of Target Group disclosed in Appendix II, the loss after taxation of Target Group for the period ended 31 December 2009 and six months ended 31 June 2010 were approximately HK$450 and HK$3,211,227 respectively. The actual financial effects of the Acquisition on the Group may or may not be the same upon Completion. Save as disclosed in this circular, the Completion will not result in any other material financial effects on the Group’s total assets, total liabilities and earnings.

The Directors consider that the terms of the Acquisition are fair and reasonable and in the interest of the Company and the Shareholders as a whole.

PROPOSED GRANT OF SERVICE OPTION AND SERVICE OPTION SPECIFIC MANDATE TO ISSUE THE SERVICE OPTION SHARES

As announced by the Company on 24 February 2010, the Company and Mr. Wong entered into the Service Option Agreement. The Company and Mr. Wong entered into three separate supplemental agreements to the Service Option Agreement on 23 April 2010, 15 June 2010 and 28 September 2010 to extend the last date on which the conditions precedent of the Service Option Agreement shall be fulfilled.

The details of the proposed grant of the Service Option to Mr. Wong under the Service Option Agreement are set out below.

Grant of Service Option

In consideration for the services of Mr. Wong, the Company has conditionally agreed to grant to the Service Option Grantee (as nominated by Mr. Wong) the Service Option to subscribe for up to 60,000,000 Shares at the exercise price of HK$0.10 per Service Option Share (adjusted for the subdivision of the Shares of the Company on 16 April 2010). To the best knowledge, information and belief of the Directors, the Service Option Grantee and its ultimate beneficial owners are independent of and not connected with the Company and its connected persons (as defined in the GEM Listing Rules).

The principal activity of the Service Option Grantee is investment holding. The issued share capital of the Service Option Grantee is beneficially owned by Mr. Wong.

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LETTER FROM THE BOARD

Service Option Shares

The maximum number of 60,000,000 Service Option Shares represent: (i) approximately 3.82% of the issued share capital of the Company as at the Latest Practicable Date; (ii) approximately 3.68% of the issued share capital of the Company as at the Latest Practicable Date as enlarged by the issue of the Service Option Shares; and (iii) approximately 2.94% of the issued share capital of the Company as at the Latest Practicable Date as enlarged by the issue of the Service Option Shares and the Consideration Shares.

The number of the Share Option Shares shall be subject to adjustment in the event that the issued share capital of the Company is altered as a result of any consolidation or sub-division of the share capital of the Company or bonus issue of shares of the Company. Any adjustment to the number of such Service Option Shares shall be made in accordance with the appendix to the letter dated 5 September 2005 issued by the Stock Exchange to all listed issuers regarding share option schemes (“Exchange Letter”).

Pursuant to the appendix to the Exchange Letter, in the event of any consolidation or sub-division of the share capital of the Company, the exercise price of, and the number of shares of the Company issuable under, the Service Option shall be adjusted according to the ratio of the share consolidation or share sub-division whereas in the event of bonus issue of the shares of the Company, the exercise price of the Service Option will be reduced with reference to the bonus issue proportion while the number of shares of the Company issuable under the Service Option will be increased with reference to the bonus issue proportion, in each case, with an intent that the intrinsic value of the Service Option remains unchanged before and after the relevant corporate action.

On 16 April 2010, each share of HK$0.05 of the Company has been subdivided into 10 shares of HK$0.005 (“Share Subdivision”) each after obtaining the approval from the Shareholders. Accordingly, the number of the Service Option Shares has been adjusted from a maximum of 6,000,000 shares of HK$0.05 each to 60,000,000 Shares of HK$0.005 each.

Exercise Price

The exercise price of HK$0.10 per Service Option Share was determined after arm’s length negotiation between the Company and Mr. Wong and represents:

• (i) a discount of approximately 20.63% to the adjusted closing price of HK$0.126 per Share as quoted on the Stock Exchange on 23 February 2010, being the last trading day prior to the date of the Service Option Agreement;

• (ii) a discount of approximately 10.55% to the average adjusted closing price of HK$0.1118 per Share as quoted on the Stock Exchange for the last five trading days immediately preceding the date of the Service Option Agreement;

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LETTER FROM THE BOARD

• (iii) a discount of approximately 60.78% to the closing price of HK$0.255 per Share as quoted on the Stock Exchange on the Latest Practicable Date; and

• (iv) a discount of approximately 62.96% to the average closing price of HK$0.27 per Share as quoted on the Stock Exchange for the last five trading days ended on and including the Latest Practicable Date.

The net price to the Company of each Service Option Share, which is calculated by dividing the net proceeds from the exercise of the subscription rights attached to the Service Option by the total number of Service Option Shares, is approximately HK$0.098.

Option Period

The option period will commence from the date on which the conditions set out in the “Conditions” below are satisfied and ending on 23 February 2013 (both dates inclusive). The Service Option is exercisable only during the said option period. In the event that the conditions set out in the “Conditions” below are not satisfied, the grant of the Service Option will not become unconditional and the Service Option will not become exercisable.

Conditions

The grant of the Service Option is subject to the approval of the Stock Exchange and is conditional upon:

• (a) the Stock Exchange granting the listing of, and permission to deal in, the Service Option Shares; and

• (b) the obtaining of the approval for the grant of the Service Option and the allotment and issue of the Service Option Shares by the Shareholders.

In the event that any of the conditions referred to above (“Option Grant Conditions”) is not fulfilled on or before the Long Stop Date, the Service Option Agreement shall lapse and cease to have any effect and no party shall have any claim against the other.

As disclosed in the announcement of the Company dated 24 February 2010, the Service Option is exercisable subject to the following:

• (i) after the Company’s issue of a confirmation in writing to the Vendor confirming that it is satisfied with the due diligence review in connection with the Acquisition, Mr. Wong may, prior to the expiry of the option period, exercise part of the Service Option to subscribe for up to 30,000,000 Service Option Shares at the exercise price of HK$0.10 per Service Option Share; and

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LETTER FROM THE BOARD

• (ii) after the Company (or its nominee) has signed a legally binding sale and purchase agreement with the Vendor in connection with the Acquisition, Mr. Wong may, (in addition to his right under paragraph (i) above) prior to the expiry of the option period, exercise part of the Service Option to subscribe for up to 30,000,000 Service Option Shares (adjusted for the Share Subdivision) at the exercise price of HK$0.10 per Service Option Share (adjusted for the Share Subdivision).

The Company confirms that the above two conditions have already been satisfied prior to the Latest Practicable Date. Subject to the satisfaction of the Option Grant Conditions, the Service Option is exercisable prior to the expiration of the Option Period.

Performance target

There is no performance target that must be achieved before the Service Option can be exercised.

Transfer

The Service Option is personal to the Service Option Grantee and shall not be transferable or assignable and Mr. Wong and the Grantee shall not in any way sell, transfer, charge, mortgage, encumber or otherwise dispose of or create any interest whatsoever in favour of any third party over or in relation to the Service Option or any part thereof or enter into any agreement so to do. Any breach of the foregoing shall entitle the Company to cancel the Service Option.

Ranking of the Service Option Shares

The Service Option Shares, when issued, will rank pari passu in all respects with all other Shares in issue at the date of issue and be entitled to all dividends and other distributions the record date of which falls on a date on or after the date of issue.

Voting

The Service Option Grantee will not be entitled to attend or vote at any meetings of the Company by reason only of it being the holder of the Service Option and will not be entitled to receive notice of any meetings of the Company.

Mandate

The Service Option Shares will be issued pursuant to the Service Option Specific Mandate to be sought at the EGM.

Application for listing

The Company will apply to the Stock Exchange for the listing of, and permission to deal in, the Service Option Shares.

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LETTER FROM THE BOARD

Use of proceeds

The net proceeds to be received by the Company upon the exercise of the Service Option in full are estimated to be about HK$5.9 million and are intended to be used by the Company as general working capital.

Reasons for the Service Option Agreement and the grant of the Service Option

As disclosed in the announcement of the Company dated 24 February 2010, the grant of the Service Option to the Service Option Grantee (as nominated by Mr. Wong) serves as remuneration to Mr. Wong for his provision of consultancy and advisory services to the Group in connection with the Acquisition.

Mr. Wong, aged 55, holds a master’s degree in business administration from the University of Adelaide in Australia. He is a fellow member of Hong Kong Institute of Certified Public Accountants and The Association of Chartered Certified Accountants and CPA Australia and; an associate member of The Institute of Chartered Secretaries and Administrators and The Chartered Institute of Management Accountants. Mr. Wong is also a responsible officer for asset management, advising on securities and advising on corporate finance for Sinox Fund Management Limited under the SFO.

Mr. Wong acted as the executive director, deputy general manager, group financial controller and company secretary of Yuexiu Property Company Limited (formerly known as Guangzhou Investment Company Limited), a company listed on the Stock Exchange, for over ten years. He is also an independent nonexecutive director and a member of the audit committee of Asia Orient Holdings Limited, Asia Standard International Group Limited, Century City International Holdings Limited, China Nickel Resources Holdings Company Limited, China Ting Group Holdings Limited, ENM Holdings Limited, First Natural Foods Holdings Limited (provisional liquidators appointed), FU JI Food and Catering Services Holdings Limited (provisional liquidators appointed), Golden Eagle Retail Group Limited, Ngai Lik Industrial Holdings Limited, PacMOS Technologies Holdings Limited, Paliburg Holdings Limited, Regal Hotels International Holdings Limited and TPV Technology Limited, all of these companies are listed on the Stock Exchange. Mr. Wong has over 33 years of experience in finance, accounting and management.

At the beginning of 2010, the Company began to explore ways and/or investment opportunities with the view to enhancing its long term growth prospect and profitability. In this regard, the Company consulted Mr. Wong, who has substantial experience in finance, asset management as well as experience in doing business in the PRC. Mr. Wong suggested the Company to invest in the insurance industry in the PRC which is considered to have high growth potential. Taking into account Mr. Wong’s recommendation and after conducting a preliminary study, the Company decided to pursue making an investment in the PRC insurance and its related industry. Mr. Wong then assisted the Company in identifying potential investment targets and opportunities. Through his connection, Mr. Wong came across the opportunity of investing in the Target Group, which was then referred to the Company. After studying the preliminary information of the Target Group, the Company considered that the Target Group has good business potential and was keen to invest in the Target Group. Given that the

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LETTER FROM THE BOARD

Company did not have any connection with the Target Group, the Company requested Mr. Wong to introduce the Target Group to the Company so that the parties could commence negotiation in relation the Acquisition. In addition, the Company requested Mr. Wong to provide the following services:

• (i) assisting the Company in negotiation with the Vendor on the terms of the Acquisition with the view of enabling the parties to enter into the Agreement;

• (ii) assisting the Company in performing due diligence on the Target Group, including the collection of the necessary information such as financial reports and industry information from the Target Group;

• (iii) assisting the Company in analyzing the due diligence materials collected from the Target Group;

• (iv) advising the Company on the risks related to the Acquisition;

• (v) assisting the Company in preparing the necessary information about the Target Group to be disclosed in the announcement and the circular in respect of the Acquisition;

• (vi) liasing with and explaining to the Target Group the regulatory requirements which the Company needs to comply with in relation the Acquisition, such as preparation of the accountants’ report on and the indebtedness statement of the Target Group; and

• (vii) assisting the auditors of the Company in liaising with the Target Group in preparation of the necessary financial information to be included in the circular in respect of the Acquisition.

Without the introduction by Mr. Wong, the Company would not have known about the investment opportunity relating to the Target Group. In addition, Mr. Wong has made significant contribution in assisting the Company and the Vendor to come into agreement regarding the terms of the Acquisition as well as in assisting the Company in completing the due diligence process regarding the Acquisition. Therefore, the Directors are of the view that Mr. Wong is essential to the Acquisition.

The grant of the Service Option as an incentive will not have any adverse impact on the cashflow of the Group while the shareholder base of the Company will be enlarged and the Company can receive subscription money upon exercise of the Service Option. The Directors believe that the terms of the Service Option Agreement (including the grant of the Service Option and the exercise price) are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

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LETTER FROM THE BOARD

SHAREHOLDING STRUCTURE

As at the Latest Practicable Date the authorised share capital of the Company is HK$200,000,000 divided into 40,000,000 Shares of HK$0.05 each, of which 1,571,700,000 Shares have been issued and are fully paid of credited as fully paid.

For illustration purpose, the following tables set out the shareholding structure of the Company (i) as at the Latest Practicable Date; (ii) immediately after issue of the Consideration Shares; (iii) immediately after the issue of the Service Option Shares; (iv) immediately after the issue of the Consideration Shares and the Service Option Shares; and (v) immediately after completion of the Placing and the issue of the Consideration Shares and the Service Option Shares:

Wide Source_(Note 1) Resuccess Investment Ltd (Note 2) Galaxy Fund I(Note 3) Galaxy Fund II(Note 3) Vendor Service Option Grantee Mr Wong Chung Wai Eric (Note 4) Mr Chan Yun Sang (Note 5)_ Public Total	Shareholding as at the Latest Practicable Date Approximate Number of percentage of Shares shareholding 215,424,760 13.71% 158,900,000 10.11% 110,000,000 7.00% 136,300,000 8.67% — 0.0% — 0.0% 2,000,000 0.13% 2,000,000 0.13% 947,075,240 60.25% 1,571,700,000 100.00%	Shareholding immediately after the issue of the Consideration Shares only Approximate Number of percentage of Shares shareholding 215,424,760 10.88% 158,900,000 8.03% 110,000,000 5.56% 136,300,000 6.89% 407,407,407 20.59% — — 2,000,000 0.10% 2,000,000 0.10% 947,075,240 47.85% 1,979,107,407 100.00%	Shareholding immediately after the issue of the Service Option Shares only Approximate Number of percentage of Shares shareholding% 215,424,760 13.20% 158,900,000 9.74% 110,000,000 6.74% 136,300,000 8.35% — — 60,000,000 3.68% 2,000,000 0.12% 2,000,000 0.12% 947,075,240 58.05% 1,631,700,000 100.00%	Shareholding immediately after the issue of the Consideration Shares and the Service Option Shares Approximate Number of percentage of Shares shareholding% 215,424,760 10.56% 158,900,000 7.79% 110,000,000 5.39% 136,300,000 6.68% 407,407,407 19.98% 60,000,000 2.94% 2,000,000 0.10% 2,000,000 0.10% 947,075,240 46.46% 2,039,107,407 100.00%	Shareholding immediately after completion of the Placing and the issue of the Consideration Shares and the Service Option Shares Approximate Number of percentage of Shares shareholding% 215,424,760 9.15% 158,900,000 6.76% 110,000,000 4.68% 136,300,000 5.79% 407,407,407 17.32% 60,000,000 2.55% 2,000,000 0.09% 2,000,000 0.09% 1,260,215,240 53.57% (note 6) 2,352,247,407 100.00%	Shareholding immediately after completion of the Placing and the issue of the Consideration Shares and the Service Option Shares Approximate Number of percentage of Shares shareholding% 215,424,760 9.15% 158,900,000 6.76% 110,000,000 4.68% 136,300,000 5.79% 407,407,407 17.32% 60,000,000 2.55% 2,000,000 0.09% 2,000,000 0.09% 1,260,215,240 53.57% (note 6) 2,352,247,407 100.00%
						100.00%

Notes:

1. The entire issued share capital of Wide Source is beneficially owned by Mr. Luk Yat Hung, a former executive Director.

2. Resuccess Investment Ltd. is wholly owned by Tongfang Co. Ltd., the shares of which are listed on the Shanghai Stock Exchange.

3. Galaxy Fund I and Galaxy Fund II are managed by the same fund manager, namely Galaxy Asset Management (H.K.) Ltd.

4. Mr. Wong Chung Wai, Eric is an executive Director.

5. Mr. Chan Yun Sang is an executive Director.

6. The Shares allotted and issued to the placees of the Placing are included.

7. Assuming a maximum of 313,140,000 Shares are placed under the Placing.

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LETTER FROM THE BOARD

THE EGM

The EGM will be held on 20 October 2010 at 10:30 a.m. at 1504, 15/F, The Center, 99 Queen’s Road Central, Hong Kong, the notice of which is set out on pages 68 to 70 of this circular. At the EGM, ordinary resolutions will be proposed to the Shareholders to consider and, if thought fit, (a) approve the Agreement and the transaction contemplated thereunder (including the allotment and issue of the Consideration Shares pursuant to the Consideration Share Specific Mandate); and (b) the grant of the Service Option and the allotment and issue of the Service Option Shares.

In compliance with the GEM Listing Rules, all resolutions will be voted on by way of a poll at the EGM. The Company has confirmed that no Shareholder is required to abstain from voting in favour of the resolution to approve the Agreement to be proposed at the EGM.

You will find enclosed a form of proxy for use at the EGM. Whether or not you are able to attend the EGM, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon as soon as possible and in any event not less than 48 hours before the time of the EGM to the office of the Company’s branch share registrar in Hong Kong, Computershare Hong Kong Investor Services Limited at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong. Completion and return of the form of proxy will not preclude you from attending and voting at the EGM in person should you so wish.

RECOMMENDATION

The Directors consider that (i) the terms of the Acquisition (including the issue of the Consideration Shares); (ii) the grant of the Service Option and the grant of the Service Option Specific Mandate are fair and reasonable and on normal commercial terms, and (i) the Acquisition (including the issue of the Consideration Shares); (ii) the grant of the Service Option and the grant of the Service Option Specific Mandate are in the interests of the Company and the Shareholders as a whole. Accordingly, the Directors recommend the Shareholders to vote for of the ordinary resolutions as set out in the notice of EGM.

ADDITIONAL INFORMATION

Your attention is also drawn to the additional information set out in the appendices to this circular.

Yours faithfully

For and on behalf of the Board

Tai Shing International (Holdings) Limited Wong Chung Wai, Eric Chairman

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FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

1. THREE-YEAR FINANCIAL INFORMATION

Financial information of the Group for each of the three years ended 31 March 2008, 2009 and 2010 are disclosed in the annual reports of the Company for the years ended 31 March 2008, 2009 and 2010 dated 30 June 2008, 5 June 2009 and 29 June 2010 respectively, which are published on the GEM website at www.hkgem.com and the Company’s website at www.ilinkfin.net/tai_shing.

2. WORKING CAPITAL

The Directors are satisfied after due and careful enquiry that after taking into account the Acquisition, existing banking and other borrowing facilities available, and the existing cash and bank balances, the Enlarged Group has sufficient working capital for its present requirements, that is for at least the next 12 months from the date of publication of this circular, in the absence of unforeseeable circumstances.

3. INDEBTEDNESS OF THE ENLARGED GROUP

Borrowings

As at the close of the business on 31 July 2010, being the latest practicable date for the purpose of this indebtedness statement prior to the printing of this circular, the Enlarged Group had outstanding borrowings of approximately HK$13.1 million which include (i) interest-bearing bank borrowings of approximately HK$11.5 million; and (ii) outstanding obligation under finance leases of approximately HK$1.6 million.

The Enlarged Group’s bank deposits of approximately HK$1,538,000 were pledged to bank for bank guarantees of approximately HK$1,538,000 issued to certain customers on the performance of contracts under systems development.

Contingent liabilities

As at the close of business on 31 July 2010, being the latest practicable date for the purpose of this indebtedness statement, the Enlarged Group had no material contingent liabilities outstanding.

Security

As at 31 July 2010, the Enlarged Group’s bank borrowings were secured by land and buildings owned by an independent third party .

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FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

Disclaimer

Save as referred to as above and apart from intra-Group liabilities and normal trade payables, the Enlarged Group did not have, as at 31 July 2010, any mortgages, charges, debentures or other loan capital or bank overdrafts, loan or other similar indebtedness or liabilities under acceptances (other than normal trade bills) or acceptance credit or hire purchase commitments or any guarantees or any material contingent liabilities.

Subsequent material changes

Save as disclosed above, the Directors have confirmed that there was no significant change in indebtedness and contingent liabilities of the Group from 31 July 2010 and up to the Latest Practicable Date.

Material adverse change

As at the Latest Practicable Date, the Directors were not aware of any material adverse change in the financial or trading position of the Group since 31 March 2010, the date to which the latest published audited financial statements of the Company were made up.

4. FINANCIAL AND TRADING PROSPECTS OF THE ENLARGED GROUP

The principal activities of the Group include the provision of systems development and integration services, the sales of software and hardware products, and provision of professional services.

In the years to come, market competition is expected to remain keen for the provision of systems development and integration services business, in particular the Group’s security and surveillance system division and the power plant management information system division. Hence, the Group is actively seeking opportunities to expand its business into other markets. As disclosed in the announcement of the Company dated 2 July 2010, the Directors consider that the acquisition of High Pacific represents an opportunity for the Group to expand its investment portfolio into the internet telecommunication business in Taiwan.

The proposed acquisition of the Target also highlights the Group’s intention to leverage on its existing expertise and experience in the IT consultancy sector by expanding into the insurance market in the People’s Republic of China through the Target’s interest in Dongda Agency and cooperation with Dongda Brokerage pursuant to the Cooperation Agreement. The prospects of the Target Group are set out under the paragraphs headed “Future Plans and Prospects” in Appendix II on page 51.

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APPENDIX II FINANCIAL INFORMATION ON THE TARGET GROUP

1. ACCOUNTANTS’ REPORT

The following is the text of an accountants’ report on the Target Group received from the independent reporting accountants, Cheng & Cheng Limited, Certified Public Accountants, Hong Kong, for inclusion in this circular.

30 September 2010

The Board of Directors Tai Shing International (Holdings) Limited Unit 1504, 15/F., The Center, 99 Queen’s Road Central, Hong Kong

Dear Sirs,

We set out below our report on the consolidated financial information (the “Consolidated Financial Information”) relating to Fullmark Management Limited (the “Target Company”) and its subsidiaries (collectively referred to as the “Target Group”), prepared on the basis set out in note 3.1 of the Consolidated Financial Information below, for the period from 8 August 2008 (date of incorporation) to 31 December 2009 and the six months ended 30 June 2010 (the “Relevant Periods”) for inclusion in the shareholders’ circular of Tai Shing International (Holdings) Limited (the “Company”) dated 30 September 2010 (the “Circular”) in relation to the proposed acquisition of the entire equity interest in the Target Company (the “Acquisition”).

The Target Company is a limited liability company incorporated in the British Virgin Islands (the “BVI”) on 8 August 2008 under the International Business Companies Ordinance of the BVI. The registered office is located at 2/F., Abbott Building, Road Town, Tortola, British Virgin Islands. The principal activity of the Target Company is investment holding.

No audited financial statements have been prepared for the Target Company since its date of incorporation as there are no statutory requirements for it to prepare audited financial statements. For the purpose of this report, the director of the Target Company has prepared the statement of financial position of the Target Company as at 31 December 2009 and 30 June 2010, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flow of the Target Group for the Relevant Periods and consolidated statement of financial position of the Target Group as at 31 December 2009 and 30 June 2010, together with the notes thereto, set out in this report in accordance with Hong Kong Financial Reporting Standards (“HKFRSs”) (which include all Hong Kong Financial Reporting Standards, Hong Kong Accounting Standards (“HKASs”) and Interpretations) issued by the Hong Kong Institute of Certified Public Accountants (the “HKICPA”) and accounting principles generally accepted in Hong Kong.

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APPENDIX II FINANCIAL INFORMATION ON THE TARGET GROUP

The directors of the Target Company are responsible for the preparation of the Consolidated Financial Information which gives a true and fair view. The directors of the Company are responsible for the contents of the Circular in which this report is included. In preparing the Consolidated Financial Information which gives a true and fair view, it is fundamental that appropriate accounting policies are selected and applied consistently, that judgements and estimates made are reasonable, and that the reasons for any significant departure from applicable accounting standards are stated.

Procedures performed in respect of the Relevant Periods Consolidated Financial Information

For the purpose of this report, we have carried out independent audit procedures on the Relevant Periods Consolidated Financial Information in accordance with Hong Kong Standards on Auditing (“HKSAs”) issued by the HKICPA, and have carried out such additional procedures as are necessary in accordance with Auditing Guideline 3.340 Prospectuses and the Reporting Accountant issued by the HKICPA. It is our responsibility to form an independent opinion, based on our procedures, on the Relevant Periods Consolidated Financial Information and to report our opinion thereon.

Opinion

In our opinion, the Relevant Periods Consolidated Financial Information gives, for the purpose of this report, a true and fair view of the state of affairs of the Target Company as at 31 December 2009 and 30 June 2010, of the consolidated results and cash flows of the Target Group for the Relevant Periods, and of the state of affairs of the Target Group as at 31 December 2009 and 30 June 2010.

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APPENDIX II FINANCIAL INFORMATION ON THE TARGET GROUP

I. FINANCIAL INFORMATION

(a) Consolidated statement of comprehensive income

Notes Turnover 8 Other revenue 8 Share of profits less losses of an associate 15 Administrative expenses 10 Loss before taxation Income tax 11 Loss for the period 12 Other comprehensive income for the period Exchange differences on translation of — financial statements of foreign operations Total comprehensive income for the period Loss for the period attributable to equity holders of the Target Company Total comprehensive income attributable to equity holders of the Target Company

Period from 8 August 2008 Six months (date of ended incorporation) 30 June to 31 December 2010 2009 HK$ HK$ — — 2,702 — 40,494 — (3,254,423) (450) (3,211,227) (450) — — (3,211,227) (450) (32,130) — (3,243,357) (450) (3,211,227) (450) (3,243,357) (450)

– 27 –

APPENDIX II FINANCIAL INFORMATION ON THE TARGET GROUP

(b) Consolidated statement of financial position

Notes Non-current assets Intangible assets 14 Investment in an associate 15 Current assets Prepayments Cash and bank balances 17 Current liabilities Amounts due to ultimate holding company 18 Net current liabilities Total assets less current liabilities Capital and reserves Share capital 20 Reserves Total equity	As at 30 June 2010 HK$ 15,684,463 2,899,556 18,584,019 500,000 7,094,772 7,594,772 29,422,590 29,422,590 (21,827,818) (3,243,799) 8 (3,243,807) (3,243,799)	As at 31 December 2009 HK$ — — — — — — 442 442 (442) (442) 8 (450) (442)

– 28 –

APPENDIX II FINANCIAL INFORMATION ON THE TARGET GROUP

(c) Statement of financial position

Notes Non-current assets Investment in subsidiaries 21 Current assets Amounts due from ultimate holding company 18 Current liabilities Amount due to a subsidiary 19 Net current assets Total assets less current liabilities Capital and reserves Share capital 20	As at 30 June 2010 HK$ 1 1 7 — 7 8 8	As at 31 December 2009 HK$ 1
		1
		8 1
		7
		8
		8

– 29 –

APPENDIX II FINANCIAL INFORMATION ON THE TARGET GROUP

(d) Consolidated statement of changes in equity

Changes in equity: Issue of share capital Total comprehensive income for the period At 31 December 2009 and 1 January 2010 Total comprehensive income for the period At 30 June 2010	Share capital HK$ 8 — 8 — 8	Translation Accumulated reserve losses HK$ HK$ — — — (450) — (450) (32,130) (3,211,227) (32,130) (3,211,227)	Total equity HK$ 8 (450) (442) (3,243,357) (3,243,799)

– 30 –

APPENDIX II FINANCIAL INFORMATION ON THE TARGET GROUP

(e) Consolidated statement of cash flow

Notes Cash flows from operating activities Loss before taxation Adjustments for: Amortisation Interest income Share of profits less losses of an associate Operating loss before changes in working capital Increase in prepayment Increase in amounts due to ultimate holding company Cash generated from operations Tax paid Net cash generated from operating activities Cash flows from investing activities Purchase of intangible assets Interest received Acquisition of an associate Net cash used in investing activities Cash flows from financing activities Proceeds from issue of ordinary share capital Net cash generated from financing activities Net increase in cash and cash equivalents Effect of foreign exchange rate changes Cash and cash equivalents at end of the period 17

Period from 8 August 2008 Six months (date of ended incorporation) 30 June to 31 December 2010 2009 HK$ HK$ (3,211,227) (450) 198,537 — (2,702) — (40,494) — (3,055,886) (450) (500,000) — 29,422,148 442 25,866,262 (8) — — 25,866,262 (8) (15,883,000) — 2,702 — (2,859,062) — (18,739,360) — — 8 — 8 7,126,902 — (32,130) — 7,094,772 —

– 31 –

APPENDIX II FINANCIAL INFORMATION ON THE TARGET GROUP

II. NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION

1. GENERAL

The Target Company is incorporated in the British Virgin Islands as an exempted company with limited liability. The registered office address of the Target Company is 2/F., Abbott Building, Road Town, Tortola, British Virgin Islands.

The Consolidated Financial Information are presented in Hong Kong dollars (“HK$”). Other than the subsidiary established in the People’s Republic of China (the “PRC”) whose functional currency is Renminbi (“RMB”), the functional currency of the Target Company and its subsidiaries (the “Target Group”) is HK$.

The principal activity of the Target Company is investment holding and the principal activities of its principal subsidiaries are set out in Note 20.

2. APPLICATION OF NEW AND REVISED HONG KONG FINANCIAL REPORTING STANDARDS (“HKFRS”)

In the current period, the Target Group has applied the following new and revised standards, amendments to standards and interpretations (“new and revised HKFRSs”) issued by the Hong Kong Institute of Certified Public Accountants (the “HKICPA”).

Hong Kong Accounting Standard Presentation of Financial Statements (“HKAS”) 1 (Revised 2007) HKAS 23 (Revised 2007) Borrowing Costs HKAS 32 and HKAS 1 Puttable Financial Instruments and Obligations (Amendments) Arising on Liquidation HKFRS 1 and HKAS 27 Cost of an Investment in a Subsidiary, Jointly (Amendments) Controlled Entity or Associate HKFRS 2 (Amendment) Vesting Conditions and Cancellations HKFRS 7 (Amendment) Improving Disclosures about Financial Instruments HKFRS 8 Operating Segments HK (IFRIC) - Interpretation (“Int”) 9Embedded Derivatives and HKAS 39 (Amendments) HK (IFRIC) — Int 13 Customer Loyalty Programmes HK (IFRIC) — Int 15 Agreements for the Construction of Real Estate HK (IFRIC) — Int 16 Hedges of a Net Investment in a Foreign Operation HK (IFRIC) — Int 18 Transfers of Assets from Customers HKFRSs (Amendments) Improvements to HKFRSs issued in 2008, except for the amendment to HKFRS 5 that is effective for annual periods beginning on or after 1st July 2009 HKFRSs (Amendments) Improvements to HKFRSs issued in 2009 in relation to the amendment to paragraph 80 of HKAS 39

Except as described below, the adoption of the above new and revised HKFRSs had no material effect on the Consolidated Financial Information of the Target Group for the current or prior accounting periods.

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APPENDIX II FINANCIAL INFORMATION ON THE TARGET GROUP

New and revised HKFRSs affecting presentation and disclosure only

HKAS 1 (Revised 2007) “Presentation of Financial Statements”

HKAS 1 (Revised 2007) has introduced terminology changes (including revised titles for the Consolidated Financial Information) and changes in the format and content of the Consolidated Financial Information.

HKFRS 8 “Operating Segments”

HKFRS 8 is a disclosure standard. The adoption of HKFRS 8 has not resulted in a re-designation of the Target Group’s reportable segments nor changes in basis of measurement of segment profit or loss, segment assets and segment liabilities.

Improving Disclosures about Financial Instruments (Amendments to HKFRS 7 “Financial Instruments: Disclosures”)

The amendments to HKFRS 7 expand the disclosures required in relation to fair value measurements in respect of financial instruments which are measured at fair value. The amendments also expand and amend the disclosures required in relation to liquidity risk. The Target Group has not provided comparative information for the expanded disclosures in accordance with the transitional provision set out in the amendments.

The Target Group has not early applied the following new and revised standards, amendments or interpretations that have been issued but are not yet effective.

HKFRSs (Amendments)	Amendment to HKFRS 5 as part of improvements to
	HKFRSs 20081
HKFRSs (Amendments)	Improvements to HKFRSs 20092
HKFRSs (Amendments)	Improvements to HKFRSs 20103
HKAS 24 (Revised)	Related Party Disclosures7
HKAS 27 (Revised)	Consolidated and Separate Financial Statements1
HKAS 32 (Amendment)	Classification of Rights Issues5
HKAS 39 (Amendment)	Eligible Hedged Items1
HKFRS 1 (Revised)	First-time Adoption of HKFRSs1
HKFRS 1 (Amendment)	Additional Exemptions for First-time Adopters4
HKFRS 1 (Amendment)	Limited Exemptions from Comparative HKFRS 7
	Disclosures for First-time Adopters6
HKFRS 2 (Amendment)	Group Cash settled Share-based Payment
	Transactions4
HKFRS 3 (Revised)	Business Combinations1
HKFRS 9	Financial Instruments8
HK(IFRIC) — INT 14 (Amendment)	Prepayments of a Minimum Funding Requirement7
HK(IFRIC) — INT 17	Distributions of Non-cash Assets to Owners1
HK(IFRIC) — INT 19	Extinguishing Financial Liabilities with Equity
	Instruments6

1 Effective for annual periods beginning on or after 1st July 2009.

2 Effective for annual periods beginning on or after 1st July 2009 and 1st January 2010, as appropriate.

3 Effective for annual periods beginning on or after 1st July 2010 and 1st January 2011, as appropriate.

4 Effective for annual periods beginning on or after 1st January 2010.

5 Effective for annual periods beginning on or after 1st February 2010.

6 Effective for annual periods beginning on or after 1st July 2010.

7 Effective for annual periods beginning on or after 1st January 2011.

8 Effective for annual periods beginning on or after 1st January 2013.

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FINANCIAL INFORMATION ON THE TARGET GROUP

APPENDIX II

The application of HKFRS 3 (Revised) may affect the accounting for business combination for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after 1st July 2009. HKAS 27 (Revised) will affect the accounting treatment for changes in a parent’s ownership interest in a subsidiary.

The directors of the Target Company anticipate that the application of the other new revised standards, amendments or interpretations will have no material impact on the Consolidated Financial Information.

3. SIGNIFICANT ACCOUNTING POLICIES

The Consolidated Financial Information has been prepared on the historical cost basis except for certain financial instruments, which are measured at fair values, as explained in the accounting policies set out below.

The Consolidated Financial Information has been prepared in accordance with HKFRSs issued by the HKICPA.

3.1 Basis of consolidation

The Consolidated Financial Information incorporates the Financial Information of the Target Company and entities controlled by the Target Company (its subsidiaries). Control is achieved where the Target Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

The results of subsidiaries acquired or disposed of during the year are included in the consolidated statement of comprehensive income from the effective date of acquisition or up to the effective date of disposal, as appropriate.

Where necessary, adjustments are made to the Financial Information of subsidiaries to bring their accounting policies into line with those used by other members of the Target Group.

All intra-group transactions, balances, income and expenses are eliminated on consolidation.

3.2 Business combinations

The acquisition of businesses is accounted for using the purchase method. The cost of the acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Target Group in exchange for control of the acquiree, plus any costs directly attributable to the business combination. The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under HKFRS 3 “Business Combinations” are recognised at their fair values at the acquisition date.

Goodwill arising on acquisition is recognised as an asset and initially measured at cost, being the excess of the cost of the business combination over the Target Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised. If, after reassessment, the Target Group’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities exceeds the cost of the business combination, the excess is recognized immediately in profit or loss.

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FINANCIAL INFORMATION ON THE TARGET GROUP

APPENDIX II

3.3 Goodwill

Goodwill arising on an acquisition of a business is carried at cost less any accumulated impairment losses and is presented separately in the consolidated statement of financial position.

For the purposes of impairment testing, goodwill arising from an acquisition is allocated to each of the relevant cash-generating units, or groups of cash-generating units, that are expected to benefit from the synergies of the acquisition. A cash-generating unit to which goodwill has been allocated is tested for impairment annually, and whenever there is an indication that the unit may be impaired. For goodwill arising on an acquisition in a financial year, the cash-generating unit to which goodwill has been allocated is tested for impairment before the end of that financial year. When the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated to reduce the carrying amount of any goodwill allocated to the unit first, and then to the other assets of the unit pro rata on the basis of the carrying amount of each asset in the unit. Any impairment loss for goodwill is recognised directly in profit or loss. An impairment loss for goodwill is not reversed in subsequent periods.

On disposal of the relevant cash-generating unit, the attributable amount of goodwill capitalized is included in the determination of the amount of profit or loss on disposal.

3.4 Investments in subsidiaries

Investments in subsidiaries are included in the Target Company’s statement of financial position at cost less any identified impairment loss.

3.5 Investments in associates

An associate is an entity over which the investor has significant influence and that is neither a subsidiary nor an interest in a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.

The results and assets and liabilities of associates are incorporated in this Consolidated Financial Information using the equity method of accounting. Under the equity method, investments in associates are carried in the consolidated statement of financial position at cost as adjusted for post-acquisition changes in the Target Group’s share of the net assets of the associates, less any identified impairment loss. When the Target Group’s share of losses of an associate equals or exceeds its interest in that associate (which includes any long-term interests that, in substance, form part of the Target Group’s net investment in the associate), the Target Group discontinues recognizing its share of further losses. An additional share of losses is provided for and a liability is recognized only to the extent that the Target Group has incurred legal or constructive obligations or made payments on behalf of that associate.

Where a group entity transacts with an associate of the Target Group, profits and losses are eliminated to the extent of the Target Group’s interest in the relevant associate.

3.6 Intangible assets

Intangible assets other than expenditure on research activities, that are acquired by the Company are stated in the consolidated statement of financial position at cost less accumulated amortisation (where the estimated useful life is finite) and impairment losses.

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FINANCIAL INFORMATION ON THE TARGET GROUP

APPENDIX II

Amortisation of intangible assets with finite useful lives is charged to profit or loss on a straight-line basis over the assets’ estimated useful lives.

Intangible assets are not amortised while their useful lives are assessed to be indefinite. Any conclusion that the useful life of an intangible asset is indefinite is reviewed annually to determine whether events and circumstances continue to support the indefinite useful life assessment for that asset. If they do not, the change in the useful life assessment from indefinite to finite is accounted for prospectively from the date of change and in accordance with the policy for amortisation of intangible assets with finite lives as set out above.

3.7 Plant and equipment

Plant and equipment are stated at cost less subsequent accumulated depreciation and accumulated impairment losses.

Depreciation is provided to write off the cost of items of plant and equipment over their estimated useful lives and after taking into account of their estimated residual value, using the straightline method.

An item of plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the item) is included in profit or loss in the period in which the item is derecognised.

3.8 Financial instruments

Financial assets and financial liabilities are recognised on the consolidated statement of financial position when a group entity becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Subsequent to initial recognition, loans and receivables (including trade and other receivables, deposit paid for acquisition of a subsidiary, pledged bank deposits and bank balances and cash) are carried at amortised cost using the effective interest method, less any identified impairment losses (see accounting policy on impairment loss on financial assets below).

Impairment loss on financial assets

Financial assets, other than those at fair value through profit or loss, are assessed for indicators of impairment at the end of each reporting period. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the financial assets have been affected.

– 36 –

APPENDIX II

FINANCIAL INFORMATION ON THE TARGET GROUP

For financial assets, objective evidence of impairment could include:

• significant financial difficulty of the issuer or counterparty; or

• default or delinquency in interest or principal payments; or

• it becoming probable that the borrower will enter bankruptcy or financial reorganisation.

For certain categories of financial asset, such as trade and other receivables and retention receivables, assets that are assessed not to be impaired individually are subsequently assessed for impairment on a collective basis. Objective evidence of impairment for a portfolio of receivables could include the Target Group’s past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the credit period, observable changes in national or local economic conditions that correlate with default on receivables.

For financial assets carried at amortised cost, an impairment loss is recognised in profit or loss when there is objective evidence that the asset is impaired, and is measured as the difference between the asset’s carrying amount and the present value of the estimated future cash flows discounted at the original effective interest rate.

For financial assets carried at cost, the amount of the impairment loss is measured as the difference between the asset’s carrying amount and the present value of the estimated future cash flows discounted at the current market rate of return for a similar financial asset. Such impairment loss will not be reversed in subsequent periods.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade and other receivables and retention receivables, where the carrying amount is reduced through the use of an allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss. When a trade and other receivable or retention receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited to profit or loss.

For financial assets measured at amortised cost, if, in a subsequent period, the amount of impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment losses was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent that the carrying amount of the asset at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.

Other financial liabilities

Other financial liabilities including amount due to ultimate holding company are subsequently measured at amortised cost, using the effective interest method.

Derecognition

Financial assets are derecognised when the rights to receive cash flows from the assets expire or, the financial assets are transferred and the Target Group has transferred substantially all the risks and rewards of ownership of the financial assets. On derecognition of a financial asset, the difference between the asset’s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognised in other comprehensive income is recognised in profit or loss.

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APPENDIX II

FINANCIAL INFORMATION ON THE TARGET GROUP

Financial liabilities are derecognised when the obligation specified in the relevant contract is discharged, cancelled or expires. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised in profit or loss.

3.9 Provisions

Provisions are recognised when the Target Group has a present obligation as a result of a past event, and it is probable that the Target Group will be required to settle that obligation. Provisions are easured at the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (where the effect is material).

3.10 Impairment losses on tangible and intangible assets other than goodwill (see the accounting policy in respect of goodwill above)

At the end of the reporting period, the Target Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss, if any. In addition, intangible assets not yet available for use are tested for impairment annually, and whenever there is an indication that they may be impaired. If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately.

Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognized as income immediately.

3.11 Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable in the normal course of business, net of sales related taxes.

Interest income

Interest income from a financial asset (including financial assets at fair value through profit or loss) is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts the estimated future cash receipts through the expected life of the financial assets to that assets net carrying amount on initial recognition.

3.12 Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

– 38 –

FINANCIAL INFORMATION ON THE TARGET GROUP

APPENDIX II

The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the consolidated statement of comprehensive income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Target Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax base used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary difference to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries and associates except where the Target Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset is realised, based on tax rate (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Target Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. Deferred tax is recognised in to profit or loss, except when it relates to items that are recognised in other comprehensive income or directly in equity, in which case the deferred tax is also recognised in other comprehensive income or directly in equity, respectively.

3.13 Foreign currencies

In preparing the financial statements of each individual group entity, transactions in currencies other than the functional currency of that entity (foreign currencies) are recorded in the respective functional currency (i.e. the currency of the primary economic environment in which the entity operates) at the rates of exchanges prevailing on the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences arising on the settlement of monetary items, and on the translation of monetary items, are recognised in profit or loss in the period in which they arise. Exchange differences arising on the retranslation of non-monetary items carried at fair value are included in profit or loss for the period.

– 39 –

FINANCIAL INFORMATION ON THE TARGET GROUP

APPENDIX II

For the purposes of presenting the consolidated financial statements, the assets and liabilities of the Target Group’s foreign operations are translated into the presentation currency of the Target Group (i.e. HK$) at the rate of exchange prevailing at the end of the reporting period, and their income and expenses are translated at the average exchange rates for the year, unless exchange rates fluctuate significantly during the period, in which case, the exchange rates prevailing at the dates of transactions are used. Exchange differences arising, if any, are recognised in other comprehensive income and accumulated in equity (the exchange translation reserve).

4. CAPITAL RISK MANAGEMENT

The Target Group manages its capital to ensure that entities in the Target Group will be able to continue as a going concern while maximising the return to shareholders through optimisation of the debt and equity balance.

The capital structure of the Target Group consists of debt which includes amount due to ultimate holding company as disclosed in Note 17, bank balances and cash as disclosed in Note 16 and equity attributable to owners of the Target Company, comprising issued share capital and reserves. The directors of the Target Company review the capital structure on a regular basis. As part of this review, the directors of the Target Company consider the cost of capital and the risks associated with each class of capital, and take appropriate actions to adjust the Target Group’s capital structure. The overall strategy of the Target Group remains unchanged from prior periods.

5. FINANCIAL INSTRUMENTS

Categories of financial instruments

	As at	As at
	30 June 2010	31 December 2009
	HK$	HK$
Loans and receivables
(including bank balances and cash)	7,594,772	—

6. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Target Group’s major financial instruments include prepayments, bank balances and cash and amount due to a ultimate holding company are disclosed in respective notes. The risks associated with these financial instruments include market risk (currency risk, interest rate risk and other price risk), credit risk and liquidity risk. The policies on how to mitigate these risks are set out below. The management manages and monitors these exposures to ensure appropriate measures are implemented on a timely and effective manner.

Currency risk

Currency risk refers to the risk associated with movements in foreign currency rates which will affect the Target Group’s financial results and its cashflow. The management considers the Target Group is not exposed to significant foreign currency risk as the directors do not expect the appreciation of the RMB against the HK$ to have any material adverse effect on the operation of the Target Group.

– 40 –

APPENDIX II FINANCIAL INFORMATION ON THE TARGET GROUP

Interest rate risk

The Target Group’s bank deposits are short-term in nature and the exposure of the interest rate risk is minimal and no sensitivity to interest rate risk is presented.

The Target Group’s exposure to interest rates on financial liabilities is detailed in the liquidity risk management section of this note. The Target Group’s cash flow interest rate risk is mainly concentrated on the fluctuation of the base rate published by the People’s Bank of China arising from the Target Group’s RMB bank deposits.

Sensitivity analysis

A change in interest rates at the end of reporting period would not affect profit or loss.

Credit risk

At 30 June 2010, the Target Group’s maximum exposure to credit risk which will cause a financial loss to the Target Group due to failure to discharge an obligation by the counterparties is arising from the carrying amount of the respective recognised financial assets as stated in the consolidated statement of financial position.

In order to minimise the credit risk, the management of the Target Group has delegated a team responsible for determination of credit limits, credit approvals and other monitoring procedures to ensure that follow-up action is taken to recover overdue debts. In addition, the Target Group reviews the recoverable amount of each individual trade debt at the end of reporting period to ensure that adequate impairment losses are made for irrecoverable amounts. In this regard, the directors of the Target Company consider that the Target Group’s credit risk is significantly reduced.

The credit risk on liquid funds is limited because the counterparties are banks in Hong Kong with high credit ratings assigned by international credit rating agencies and authorised banks in the PRC with high credit ratings.

None of the Target Group’s financial assets are secured by collateral or other credit enhancements.

Liquidity risk

In the management of the liquidity risk, the Target Group monitors and maintains a level of cash and cash equivalents deemed adequate by the management to finance the Target Group’s operations and mitigate the effects of fluctuations in cash flows.

The following table details the Target Group’s remaining contractual maturity for its non-derivative financial liabilities based on the agreed repayment terms. The table has been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Target Group can be required to pay. The table includes both interest and principal cash flows. To the extent that interest flows are floating rate, the undiscounted amount is derived from interest rate curve at the end of reporting period.

– 41 –

FINANCIAL INFORMATION ON THE TARGET GROUP

APPENDIX II

Non-derivative financial liabilities Amounts due to ultimate holding company Non-derivative financial liabilities Amounts due to ultimate holding company	As at 30 June 2010 With 1year or on demand and total undiscounted Carrying amount cash flows HK$ HK$ 29,422,590 29,422,590 As at 31 December 2009 With 1year or on demand and total undiscounted Carrying amount cash flows HK$ HK$ 442 442

The amounts included above for variable interest rate instruments for non-derivative financial liabilities is subject to change if changes in variance interest rates differ to those estimates of interest rates determined at the end of the reporting period.

7. FAIR VALUE

The fair value of financial assets and financial liabilities are determined as follows:

• the fair value of financial assets with standard terms and conditions and traded in active liquid markets are determined with reference to quoted market bid prices and ask prices respectively; and

• the fair value of other financial assets and financial liabilities (excluding derivate instruments) is determined in accordance with generally accepted pricing models based on discounted cash flow analysis using prices from observable current market transactions and dealer quotes for similar instrument.

The directors of the Target Company consider that the carrying amounts of financial assets and financial liabilities recorded at amortised cost in the consolidated financial information approximate to their fair values due to their short-term maturities.

– 42 –

FINANCIAL INFORMATION ON THE TARGET GROUP

APPENDIX II

8. TURNOVER AND OTHER OPERATING INCOME

The Target Company is principally engaged in investment holding. No turnover arose from the Target Group’s principal activity during the Relevant Periods.

An analysis of the Target Group’s other revenue for the period is as follows:

			Period from
			8 August 2008
	Six months		(date of
		ended	incorporation) to
	30	June 2010	31 December 2009
		HK$	HK$
Other revenue
Interest income		2,702	—

9. SEGMENT INFORMATION

No separate segment information is prepared as no turnover is generated during the Relevant Periods.

10. ADMINISTRATIVE EXPENSE

Bank charges Business registration fee Consulting fee Legal and professional fee Amortization of intangible asset	Period from 8 August 2008 Six months (Date of ended incorporation) to 30 June 2010 31 December 2009 HK$ HK$ 3,019 — — 450 1,000,000 — 2,052,867 — 198,537 — 3,254,423 450	Period from 8 August 2008 Six months (Date of ended incorporation) to 30 June 2010 31 December 2009 HK$ HK$ 3,019 — — 450 1,000,000 — 2,052,867 — 198,537 — 3,254,423 450
		450

Administrative expenses mainly represented consulting fees and legal and professional fees incurred.

– 43 –

FINANCIAL INFORMATION ON THE TARGET GROUP

APPENDIX II

11. INCOME TAX EXPENSE

No provision for profits tax in the British Virgin Islands, Hong Kong and PRC has been made as the Target Group which incorporated and domiciled in these countries, has no income assessable for profits tax for the period in their respective jurisdictions.

The income tax expense for the period can be reconciled to the loss before taxation per the consolidated statement of comprehensive income as follows:

Loss before tax Tax at the applicable tax rate of 16.5% (2009: 16.5%) Effect of different tax rates of subsidiaries operating in other jurisdictions Tax effect of expenses not deductible for tax purposes Tax effect of tax losses not recognised Income tax expense 12. LOSS FOR THE PERIOD Staff costs Wages, salaries and other benefits Retirement benefits scheme contributions Auditor’s remuneration	Period from 8 August 2008 Six months (date of ended incorporation) to 30 June 2010 31 December 2009 HK$ HK$ (3,211,227) (450) (529,853) (74) (43,373) — 445,259 — 127,967 74 — — Period from 8 August 2008 Six months (date of ended incorporation) to 30 June 2010 31 December 2009 HK$ HK$ — — — — — —

13. DIVIDEND

No dividend was paid or proposed during the period ended 30 June 2010, nor has any dividend been proposed since the end of the reporting date (2009: Nil).

– 44 –

APPENDIX II FINANCIAL INFORMATION ON THE TARGET GROUP

14. INTANGIBLE ASSET

Cost Addition and at 30 June 2010 Accumulated amortisation Amortisation for the period and at 30 June 2010 Net carrying values As at 30 June 2010 As at 31 December 2009	Computer software HK$ 15,883,000 198,537
	15,684,463
	—

The balance of HK$15,684,463 as at 30 June 2010 wholly represented the acquisition cost of the InsureLink System.

15. INTERESTS IN AN ASSOCIATE

Share of net assets Goodwill_(Note 15)_	As at As at 30 June 2010 31 December 2009 HK$ HK$ 1,943,872 — 955,684 — 2,899,556 —	As at As at 30 June 2010 31 December 2009 HK$ HK$ 1,943,872 — 955,684 — 2,899,556 —
		—

上海東大保險代理有限公司 (“Dongda Agency”) became an associate of the Target Group on 22 January 2010 which were engaged in agency of selling insurance products, receiving insurance premium and inspection of insurance claims.

The summarised Financial Information in respect of the Target Group’s associate is set out below:

Total assets Total liabilities Net assets Target Group’s share of net assets of an associate Revenue Profit for the period Target Group’s share of results of an associate for the period	As at As at 30 June 2010 31 December 2009 HK$ HK$ 7,850,194 — 43,483 — 7,806,711 — 24.9% — 516,698 — 162,628 — 40,494 —	As at As at 30 June 2010 31 December 2009 HK$ HK$ 7,850,194 — 43,483 — 7,806,711 — 24.9% — 516,698 — 162,628 — 40,494 —
		—
		—
		—
		—
		—

– 45 –

APPENDIX II FINANCIAL INFORMATION ON THE TARGET GROUP

16. GOODWILL

(a)

	As at	As at
	30 June 2010	31 December 2009
	HK$	HK$
Cost and carrying value
Additions through acquisition of
an associate_(Note 15)_	955,684	—

(b) IMPAIRMENT TESTING ON GOODWILL

For the purpose of impairment testing, goodwill set out above has been allocated to one cash generating unit (2009: Nil). The directors of the Target Company have made due assessment of the future viability of Dongda Agency. It was considered that there was no impairment on the carrying amount of goodwill arising on acquisition of Dongda Agency during the period ended 30 June 2010.

17. BANK BALANCES AND CASH

At 30 June 2010, bank balances and cash comprise of cash held by the Target Group and short-term bank deposits of approximately HK$7,094,772 (2009: HK$Nil).

At 30 June 2010, the Target Group’s bank balances and cash denominated in RMB amounted to approximately HK$6,821,000 (2009: HK$Nil). Conversion of RMB into foreign currencies is subject to the PRC’s Foreign Exchange Control Regulations and Administration of Settlement, Sale and Payment of Foreign Exchange Regulations.

18. AMOUNTS DUE FROM/(TO) ULTIMATE HOLDING COMPANY

The Target Group and the Target Company

The amounts due from/(to) ultimate holding company, Expertone Holdings Limited. (“Expertone”) is unsecured, noninterest bearing and repayable on demand.

19. AMOUNT DUE TO A SUBSIDIARY

The Target Company

The amount is unsecured, non-interest bearing and repayable on demand.

– 46 –

APPENDIX II FINANCIAL INFORMATION ON THE TARGET GROUP

20. SHARE CAPITAL

The Target Group and the Target Company

Ordinary shares of US$1 each Authorised: As at 31 December 2009 and 30 June 2010 Issue of share capital upon incorporation At 31 December 2009 and 30 June 2010	Number of shares 50,000 1 1	HK$ 389,000
		8
		8

21. COMMITMENTS

Capital commitment

At the end of the reporting period, the Target Group had the following capital commitment:

	US$
Contract but not provided for	7,636,341

The Target Group has to pay up the remaining registered capital of Fullmark SH not later than 29 August 2012.

22. PRINCIPAL SUBSIDIARIES

Details of the principal subsidiaries held by the Target Company as at 30 June 2010 and 31 December 2009 are as follows:

						Attributable
				Issued share		equity
	Place of			capital/		interest of
	incorporation/	Place of	Class of	registered	Kind of	the Target	Principal
Name of subsidiary	establishment	operations	shares held	capital	legal entity	Group	activities
Fullmark Management	Hong Kong	Hong Kong	Ordinary shares	HK$1	Limited	100%	Investment holding
Limited					liability
					company
鑫約福(上海)貿易有限公司	PRC	PRC	Contributed	US$2,363,659	Wholly owned	100%	Sales of electronic
(Fullmark (Shanghai) Trading			capital		foreign		hardware and
Company Limited)					enterprise		software

– 47 –

APPENDIX II FINANCIAL INFORMATION ON THE TARGET GROUP

23. RELATED PARTY TRANSACTIONS

The balances with related parties at the end of the Relevant Periods are disclosed elsewhere in the Consolidated Financial Information.

24. EVENT AFTER REPORTING PERIOD

There were no significant events that took place up to the date of this report.

III. SUBSEQUENT FINANCIAL STATEMENTS

No audited Financial Information of the Target Group has been prepared in respect of any period subsequent to 30 June 2010.

Yours faithfully, Cheng & Cheng Limited

Certified Public Accountants (Practising)

Cheng Hong Cheung

Practising Certificate Number P01802 10/F., Allied Kajima Building, 138 Gloucester Road, Wanchai, Hong Kong

– 48 –

APPENDIX II FINANCIAL INFORMATION ON THE TARGET GROUP

2. MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Business Review

The Target is a company incorporated in the British Virgin Islands on 8 August 2008 and is wholly owned by the Vendor as at the Latest Practicable Date. The Target is principally engaged in investment holding. As at 30 June 2010, the principal assets of the Target Group are the InsureLink system, its equity interest in Dongda Agency of 24.9% and cash and bank balances.

For the period from 8 August 2008 (date of incorporation) to 31 December 2009

Operational review

Since the Target Group was dormant prior to 31 December 2009, the Target Group did not generate any revenue from 8 August 2008 (date of incorporation) to 31 December 2009. For the period from 8 August 2008 to 31 December 2009, the audited loss of the Target Group was HK$450, which was attributed to general and administrative expenses incurred in the period.

Liquidity and financial resources

As at 31 December 2009, the Target Group had no current assets and the total liabilities was HK$442 which represented an amount due to the ultimate holding company. As at 31 December 2009, the gearing ratio (total borrowings to total assets) of the Target Group was nil because Target Group did not have any borrowings as at 31 December 2009.

Capital structure

As at 31 December 2009, the issued share capital of the Target Group was US$1 (equivalent to approximately HK$8), comprising 1 issued and fully paid ordinary share of US$1.

Significant investment, material acquisition and disposals

The Target Group did not have any significant investments, material acquisition or disposals for the period from 8 August 2008 to 31 December 2009.

Employee information

Since the Target Group was dormant prior to 31 December 2009, the Target Group had no employees as at 31 December 2009.

Charge on group assets

As at 31 December 2009, no asset of the Target Group was pledged.

– 49 –

APPENDIX II FINANCIAL INFORMATION ON THE TARGET GROUP

Contingent liabilities

As at 31 December 2009, the Target Group had no significant contingent liabilities.

For the six months ended 30 June 2010

Operational review

The Target Group acquired the core modules of the InsureLink System from an independent third party on 23 February 2010 and subsequently incorporated various software in developing the InsureLink System. The Target Group also acquired 24.9% interest in Dongda Agency on 22 January 2010. For the six months ended 30 June 2010, the audited loss of the Target Group was HK$3,211,227, which was mainly attributed to the consulting fees and legal and professional fees incurred in the period. The Target Group had share of profits from an associate amounting to HK$40,494 for the six months ended 30 June 2010. This was attributed to the share of profits from the Target Group’s interest of 24.9% in Dongda Agency.

Liquidity and financial resources

As at 30 June 2010, the Target Group had current assets amounted to HK$7,594,772 which comprised mainly of the bank balances and the total liabilities was HK$29,422,590 which represented the amount due to the ultimate holding company. As at 30 June 2010, the gearing ratio (total borrowings to total assets) of the Target Group was nil because Target Group did not have any interest bearing debts as at 30 June 2010.

Capital structure

As at 30 June 2010, the issued share capital of the Target Group was US$1 (equivalent to approximately HK$8), comprising 1 issued and fully paid ordinary share of US$1.

Significant investment, material acquisition and disposals

The Target Group acquired the core modules of the InsureLink System from an independent third party on 23 February 2010 and 24.9% interest in Dongda Agency on 22 January 2010. Save as disclosed above, the Target Group did not have any significant investments, material acquisition or disposals as at 30 June 2010.

Employee information

In order to facilitate the marketing of the InsureLink System to insurance brokers and agents, the Target Group commenced the recruitment of employees during the period. The Target Group has two senior directors and two mid-level managers as at the Latest Practicable Date.

Charge on group assets

As at 30 June 2010, no asset of the Target Group was pledged.

Contingent liabilities

As at 30 June 2010, the Target Group had no significant contingent liabilities.

– 50 –

APPENDIX II FINANCIAL INFORMATION ON THE TARGET GROUP

Future Plans and Prospects

The Target is an investment holding company incorporated in the British Virgin Islands on 8 August 2008. As at the date of this circular, the principal assets of the Target Group are the InsureLink System, its equity interest in Dongda Agency of 24.9% and cash and bank balances.

On 23 February 2010, the Target Group acquired the core modules of the InsureLink System, a system that connects an insurance broker or agent’s front office seamlessly to its back office and then to the insurance providers by linking all the important business functions of an insurance intermediary into a real-time management system whereby important information could be available for staff, management and also insurance companies. The Target Group subsequently incorporated the core modules with various software in developing the English version of the InsureLink System. A distinct feature of InsureLink System is its capability to generate reports in a timely and efficient manner, which includes, among others, real-time sales reports, realtime claims reports, policy/content amendment reports, insurance premium payment reports and daily sales reports to insurance providers. Another distinct feature of the InsureLink System is that the system could be installed in multiple locations, which then allows real-time and efficient financial and management control. At present, the Target Group owns the license of the InsureLink System and there are no other information management systems in the market that can match the comprehensive nature of the InsureLink System within the insurance intermediary market. The license of the InsureLink System is currently sold and distributed directly to brokers and insurance agents in the PRC by Dongda Brokerage. The license of the InsureLink System is sold by Dongda Brokerage instead of the Target Group because at present, Dongda Brokerage has a larger sales force of over 40 employees in promoting the InsureLink System. In addition, Dongda Brokerage was ranked number 1 and number 17 in Shanghai and in the PRC in 2009 respectively in terms of total revenue in the insurance brokerage market and therefore has a substantial market status and a much broader customer network. Continual upgrades of and trainings on the use of the InsureLink System would be provided to the customers in the PRC jointly by Dongda Brokerage and Fullmark SH. At present, only the English version of the InsureLink System is available, and Fullmark SH is in the course of localizing and preparing the simplified Chinese version of the InsureLink System. Customers will pay an initial license fee and then pay an annual maintenance fee to Dongda Brokerage. It is the intention of the Target to provide a one stop solution to the insurance agency and brokerage sector.

On 31 March 2010, Fullmark SH, an indirect wholly-owned subsidiary of the Target, entered into the Cooperation Agreement with Dongda Brokerage, which is valid for 10 years, pursuant to following key contract terms:

• (i) Fullmark SH and Dongda Brokerage have agreed to jointly develop, based on the intellectual property rights of the InsureLink System, the Chinese version of the InsureLink System, and Fullmark SH shall bear all the expenses in the development of the Chinese version of the InsureLink System by providing technical staff, software and equipments;

• (ii) Fullmark SH shall assign Dongda Brokerage the right of use of the InsureLink System;

• (iii) Fullmark SH and Dongda Brokerage shall jointly promote the licensing of the InsureLink System to other insurance companies in the PRC and Dongda Brokerage shall bear all the expenses in relation to the promotion of the InsureLink System;

– 51 –

APPENDIX II FINANCIAL INFORMATION ON THE TARGET GROUP

• (iv) Fullmark SH shall be entitled to receive 75% of the revenue from such licensing business. The revenue sharing ratio from the licensing business was arrived at after arm’s length negotiations between the parties after taking into consideration the fact that the intellectual property rights of the InsureLink System are owned by Fullmark SH, which will provide related technical support services to Dongda Brokerage and the end-users of the InsureLink System. Dongda Brokerage guaranteed that the revenue received by Fullmark SH under the Cooperation Agreement shall be not less than RMB20,000,000 per annum;

• (v) The RMB20,000,000 per annum shall be paid by Dongda Brokerage to Fullmark SH in two installments each year, RMB10,000,000 in January and RMB 10,000,000 in September, for a period of 10 years. In the situation that 75% of Dongda Brokerage’s revenue from the licensing business exceeds RMB20,000,000 per annum, the remainder of the payment shall be made in March of the following year. If the payments are not made according to the Cooperation Agreement, a 5% interest will be charged daily on the amount owed from Dongda Brokerage to Fullmark SH; and

• (vi) Fullmark SH shall provide related technical support services, system upgrades and training to Dongda Brokerage and the end-users of the InsureLink System, and Dongda Brokerage and the end-users of the InsureLink System will not need to pay additional fees to Fullmark SH in relation to the abovementioned support and maintenance services.

The Target Group has commenced its operation in the marketing of the InsureLink System to insurance brokers and agents. To facilitate the marketing campaign, two senior directors and two mid-level managers have been recruited to join the Target Group. The Target Group is in the final stages of negotiation with a Hong Kong based insurance broker to install the InsureLink System as their operating system. It is expected that the contract will be signed and concluded by October 2010. At present, there are no other contracts signed by the Target Group. However, five insurance intermediaries are closely looking at the InsureLink System and the Target Group expects to draw up specifications for them very soon. The target customers of the Target Group mainly include insurance intermediaries that require the InsureLink System to enhance their technologies and operational efficiencies. The customer base of the Target Group can potentially expand into other industries in the foreseeable future as the InsureLink System is a very flexible software.

The InsureLink System therefore represents a platform for the Target Group to grow on as the simplified Chinese version of the InsureLink System, which is in the course of development, should be able to attract new customers in the local PRC. Pursuant to the Cooperation Agreement, the Target Group will also be guaranteed a steady stream of revenue of at least RMB20,000,000 per annum for a period of 10 years, and this will provide the Target Group with resources to improve and expand on its current operations and products.

On 22 January 2010, Fullmark SH acquired 24.9% interest in Dongda Agency. Dongda Agency is a company established in the PRC and at present, Dongda Agency is engaged in providing traditional property and life insurance, professional insurance agency services (such as engineering insurance, cargo transportation insurance, liability insurance and group life insurance), and reinsurance agency services.

Due to the intense competition of the traditional insurance market in China, Dongda Agency devoted a significant amount of resources in the first half of year 2010 to develop and promote four new insurance products which have the potential to yield higher profit margins in comparison to Dongda Agency’s current insurance products. These new insurance products include overseas kidnap and random insurance, Tibet and Highland travel insurance, clinical trial insurance and migrant worker insurance. It is expected that these new insurance products will generate new revenue streams for Dongda Agency and will benefit Dongda Agency financially in the long run.

– 52 –

APPENDIX III UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

1. INTRODUCTION

The following is the unaudited pro forma statement of assets and liabilities of the Enlarged Group prepared in accordance with Rule 7.31 of the Rules Governing the Listing of Securities on the Growth Enterprise Market of The Stock Exchange of Hong Kong Limited for the purpose of illustrating the effect of the Acquisition as if it had been completed on 31 March 2010.

The unaudited pro forma consolidated statement of assets and liabilities of the Enlarged Group is prepared based on the audited consolidated statement of financial position of the Group as at 31 March 2010 extracted from the published annual report of the Group for the year ended 31 March 2010 and the audited consolidated statement of financial position of the Target Group as at 30 June 2010 as extracted from the accountants’ reports as set out in Appendix II to this circular after making appropriate pro forma adjustments that are considered necessary as if the Acquisition had been completed on 31 March 2010.

The unaudited pro forma statement of assets and liabilities of the Enlarged Group is based on certain assumptions, estimates, uncertainties and other currently available financial information, and is provided for illustrative purposes only and it does not purport to describe the actual financial position of the Enlarged Group that would have been attained had the Acquisition been completed on 31 March 2010. The unaudited pro forma statement of assets and liabilities does not purport to predict the future financial position of the Enlarged Group.

The unaudited pro forma financial information of the Enlarged Group should be read in conjunction with the published financial information of the Group as set out in Appendix I to this circular, the audited consolidated financial information of the Target Group as set out in Appendix II to this circular and other financial information included elsewhere in this circular.

– 53 –

APPENDIX III UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

2. UNAUDITED PRO FORMA STATEMENT OF ASSETS AND LIABILITIES OF THE ENLARGED GROUP

The Target The Group Group as at as at 31 March 30 June Pro forma 2010 2010 adjustments HK$’000 HK$’000 HK$’000 Notes Non-current assets Plant and equipment 1,887 — Intangible asset — 15,684 Interest in an associate — 2,900 Goodwill — — 153,821 1 Deposit paid for acquisition of plant and equipment 300 — 2,187 18,584 Current assets Trade and other receivables 51,955 500 Deposit for acquisition of a subsidiary 25,000 — (25,000) 3 Amounts due from customers for contract work 24,014 — Financial assets at fair value through profit or loss 529 — Pledged bank deposits 1,106 — Bank balances and cash 25,857 7,095 (10,000) 1 128,461 7,595 Total assets 130,648 26,179	Pro forma Enlarged Group HK$’000 1,887 15,684 2,900 153,821 300
	174,592
	52,455 — 24,014 529 1,106 22,952
	101,056
	275,648

– 54 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

APPENDIX III

The Target The Group Group as at as at 31 March 30 June Pro forma 2009 2010 adjustments HK$’000 HK$’000 HK$’000 Notes Current liabilities Trade and other payables 36,207 — 35,000 1 Amounts due to customers for contract work 8,044 — Receipts in advance 7,308 — Warranty provision 947 — Amount due to a substantial shareholder 9,152 29,423 (29,423) 1 Income tax payable 1,866 — Bank borrowings 11,449 — 74,973 29,423 Net current assets 53,488 (21,828) Total assets and liabilities 55,675 (3,244) Capital and reserves Share capital 6,529 — 2,037 2 Reserves 49,146 (3,244) 107,963 2 32 1 3,212 1 Total equity 55,675 (3,244)

Pro forma Enlarged Group HK$’000 71,207 8,044 7,308 947 9,152 1,866 11,449 109,973 (8,917) 165,675 8,566 157,109 165,675

– 55 –

APPENDIX III UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

NOTES TO THE UNAUDITED PRO FORMA STATEMENT OF ASSETS AND LIABILITIES OF THE ENLARGED GROUP

• (1) On 14 June 2010, Trend Brilliant Limited (the “Company”) entered into a sales and purchase agreement with the vendor to acquire the entire equity interests in the issued share capital of Fullmark BVI, which directly or indirectly holds 100% equity interests in Fullmark HK, Fullmark SH and 24.9% equity interests in DIA.

Upon completion of the Acquisition, the identifiable assets and liabilities of the Target Group will be accounted for in the consolidated financial statements of the Group at fair value under the acquisition method of accounting in accordance with Hong Kong Financial Reporting Standard 3 (Revised) “Business Combination”.

• (i) The unaudited pro forma adjustment of HK$153,821,000 represented goodwill arising from the Acquisition.

Carrying values of net liabilities of the Target Group Sale Debt Goodwill Represented by: Cash consideration Consideration Shares	HK$’000 (3,244) 29,423 153,821 180,000 70,000 110,000 180,000

Sale Debt of approximately HK$29,423,000 represented all obligations, liabilities and debt owing or incurred by the Target Group to Expertone Holdings Limited as at 30 June 2010.

For the purposes of the presentation of the unaudited pro forma financial information, the fair value of the identified assets and liabilities of the Target Group are assumed to be equal to their carrying amounts as at 30 June 2010. On completion of the Acquisition, the fair values of the identifiable assets and liabilities at the completion date will be assessed. As a result of the assessment, the amount of goodwill may be different from the amount estimated based on the basis stated above for the purpose of preparation of the unaudited pro forma statement of assets and liabilities. Accordingly, the actual goodwill arising from the Acquisition may be different from the estimated amount as shown above.

(ii) The total consideration is to be settled in the following manner:

• (a) Company had paid to the Vendors HK$25,000,000 in cash before signing of the sales and purchases agreement and shall pay to the Vendors HK$10,000,000 in cash at Completion.

The remaining balance of HK$35,000,000 will be paid within 7 Business Days from the date on which the audited accounts of the Target Group have been received by the Company.

• (b) Company shall issue to the Vendor 407,407,407 shares at an issue price of HK$0.27 per share.

– 56 –

APPENDIX III UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

• (iii) The fair value of HK$0.27 is used for the Consideration Shares of 407,407,407 shares to be issued for the illustrative purpose of the unaudited Pro Forma Statement of Assets and Liabilities of the Enlarged Group. The actual fair value will be based on the market price of the shares upon completion of the Acquisition which may be different from the above amount.

• (2) The adjustment represented the issue of the Consideration Shares (as defined in the circular), which resulted additional share capital of approximately HK$2,037,000 and share premium of approximately HK$107,963,000, for the acquisition of the Target Group as if the Acquisition had taken place on 31 March 2010. The fair value of the Consideration Shares is estimated to be approximately HK$110,000,000 based on the closing price of HK$0.27 per share of the Company as at 11 June 2010.

The fair value of the shares of the Company was HK$0.255 as at the Latest Practicable Date. If the consideration was based on the fair value of the shares of the Company as at the Latest Practicable Date, it would have been approximately HK$174,000,000.

• (3) The adjustment represented the partial settlement of the consideration payable by setting-off against the deposit of HK$25,000,000 paid by the Group before signing of the sales and purchase agreement.

– 57 –

APPENDIX III UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

3. ACCOUNTANTS’ REPORT ON UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

The following is the text of an accountants’ report dated 30 September 2010, prepared for the sole purpose of inclusion in this circular, received from the independent reporting accountants, Cheng & Cheng Limited, Certified Public Accountants, Hong Kong, in respect of the unaudited pro forma financial information of the Enlarged Group.

30 September 2010

The Board of Directors Tai Shing International (Holdings) Limited Unit 1504, 15/F., The Center, 99 Queen’s Road Central, Hong Kong

Dear Sirs,

We report on the unaudited pro forma financial information of Tai Shing International (Holdings) Limited (the “Company”) and its subsidiaries (hereinafter collectively referred to as the “Group”), Fullmark Management Limited and its subsidiaries (the “Target Group”) (together with the Group hereinafter referred to as the “Enlarged Group”), which has been prepared by the directors of the Company, solely for illustrative purposes only, to provide information about how the proposed acquisition of the entire issued capital in the Target Group by the Company (the “Acquisition”), might have affected the financial information presented, as set out on pages 25 to 52 of the Company’s circular dated 30 September 2010 (the “Circular”). The basis of preparation of the unaudited pro forma financial information is set out in the section under the heading of “Unaudited Pro Forma Financial Information of the Enlarged Group” (the “Pro Forma Financial Information”) in Appendix III to the Circular.

Respective Responsibilities of Directors of the Company and Reporting Accountants

It is the responsibility solely of the directors of the Company to prepare the unaudited Pro Forma Financial Information in accordance with paragraph 7.31 of the Rules Governing the Listing of Securities on the Growth Enterprise Market of The Stock Exchange of Hong Kong Limited (the “GEM Listing Rules”) and with reference to Accounting Guideline 7 “Preparation of Pro Forma Financial Information for Inclusion in Investment Circulars” issued by the Hong Kong Institute of Certified Public Accountants (the “HKICPA”).

It is our responsibility to form an opinion, as required by paragraph 7.31(7) of the GEM Listing Rules, on the unaudited Pro Forma Financial Information and to report our opinion to you. We do not accept any responsibility for any reports previously given by us on any financial information used in the compilation of the unaudited Pro Forma Financial Information beyond that owed to those to whom those reports were addressed by us at the respective dates of their issue.

– 58 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

APPENDIX III

Basis of opinion

We conducted our engagement in accordance with Hong Kong Standard on Investment Circular Reporting Engagements 300 “Accountants’ Reports on Pro Forma Financial Information in Investment Circulars” issued by the HKICPA. Our work consisted primarily of comparing the unadjusted financial information with the source documents, considering the evidence supporting the adjustments and discussing the unaudited Pro Forma Financial Information with the directors of the Company. This engagement did not involve independent examination of any of the underlying financial information.

We planned and performed our work so as to obtain the information and explanations we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the unaudited Pro Forma Financial Information has been properly compiled by the directors of the Company on the basis stated, that such basis is consistent with the accounting policies of the Group and that the adjustments are appropriate for the purposes of the unaudited Pro Forma Financial Information as disclosed pursuant to paragraph 7.31(1) of the GEM Listing Rules.

The unaudited Pro Forma Financial Information is for illustrative purposes only, based on the judgments and assumptions of the directors of the Company, and, because of its hypothetical nature, it does not provide any assurance or indication that any event will take place in the future and may not be indicative of the financial position of the Enlarged Group as at 31 March 2010 or any future date.

Opinion

In our opinion:

• (a) the unaudited Pro Forma Financial Information has been properly compiled by the directors of the Company on the basis stated;

• (b) such basis is consistent with the accounting policies of the Group; and

• (c) the adjustments are appropriate for the purposes of the unaudited Pro Forma Financial Information as disclosed pursuant to paragraph 7.31(1) of the GEM Listing Rules.

Yours faithfully,

Cheng & Cheng Limited

Certified Public Accountants (Practising)

Cheng Hong Cheung Practising Certificate Number P01802 10/F., Allied Kajima Building, 138 Gloucester Road, Wanchai, Hong Kong

– 59 –

GENERAL INFORMATION

APPENDIX IV

1. RESPONSIBILITY STATEMENT

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

2. DISCLOSURE OF INTERESTS OF DIRECTORS

As at the Latest Practicable Date, save as mentioned below, none of the Directors and chief executive has any interest or short position in the shares, underlying shares and debentures of the Company and its associated corporations (within the meaning of Part XV of the SFO) which are required to be (i) 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 he is taken or deemed to have taken under such provisions of the SFO); or (ii) entered in the register kept by the Company pursuant to section 352 of the SFO; or (iii) notified to the Company and the Stock Exchange pursuant to Rules 5.46 to 5.67 of the GEM Listing Rules:

Long positions in Shares:

				Approximate
		Long or short	Number of	percentage of
Name	Capacity	position	Shares	issued capital
Mr. Wong Chung Wai,	Beneficial owner	Long position	10,000,000	0.64%
Eric_(Note 1)_
Mr. Chan Yun Sang_(Note 2)_	Beneficial owner	Long position	10,000,000	0.64%

Note:

1. As at the Latest Practicable Date, Mr. Wong Chung Wai, Eric was the beneficial owner of 2,000,000 issued Shares upon exercise of the option and had an interest in an option to subscribe for up to 8,000,000 Shares at the exercise price of HK$0.28 per Share during the period from 5 July 2010 to 4 July 2015.

2. As at the Latest Practicable Date, Mr. Chan Yun Sang was the beneficial owner of 2,000,000 issued Shares and had an interest in an option to subscribe for up to 8,000,000 Shares at the exercise price of HK$0.28 per Share during the period from 5 July 2010 to 4 July 2015.

– 60 –

GENERAL INFORMATION

APPENDIX IV

3. SUBSTANTIAL SHAREHOLDERS

So far as is known to the Directors or chief executive of the Company, as at the Latest Practicable Date, the person other than a director or chief executive of the Company who has an interest or short position 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 who is, directly or indirectly, to be interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other member of the Group, were as follows:

Long positions in the Shares

			Approximately
		Number of	percentage of
Name of Shareholder	Capacity	Shares	shareholding
		(note 8)
Galaxy Asset Management	Investment manager	246,300,000 (L)	15.67%
(H.K.) Ltd.(Note 1)
Wide Source_(Note 2)_	Beneficial owner	215,424,760 (L)	13.71%
Mr. Luk Yat Hung_(Note 2)_	Interest of controlled	215,424,760 (L)	13.71%
	corporation
Resuccess Investments Ltd.(Note 3)	Beneficial owner	158,900,000 (L)	10.11%
Tongfang Co. Ltd.(Note 4)	Interest of controlled	158,900,000 (L)	10.11%
	corporation
Tsinghua Holdings Co. Ltd.	Interest of controlled	158,900,000 (L)	10.11%
(Note 5)	corporation
Deutsche Bank Aktiengesellschaft	Person having a	275,500,000 (L)	17.53%
(Note 6)	security interest
		137,750,000 (S)	8.76%
UBS AG_(Note 7)_	Person having a	110,000,000 (L)	7.00%
	security interest

Note:

1. Galaxy Fund I and Galaxy Fund II (which are managed by the same fund manager, Galaxy Asset Management (H.K.) Ltd.) in aggregate, were interested in 246,300,000 Shares, comprising 110,000,000 Shares held by Galaxy Fund I and 136,300,000 Shares held by Galaxy Fund II.

2. Wide Source is a company incorporated in the British Virgin Islands with limited liability and is ultimately and beneficially owned as to 100% by Mr. Luk Yat Hung, a former executive Director, who is deemed to be interested in 215,424,760 Shares in which Wide Source is interested.

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GENERAL INFORMATION

APPENDIX IV

1. Resuccess Investments Ltd. is a company incorporated in the British Virgin Islands with limited liability and is owned by Tongfang Co. Ltd.

2. Tongfang Co. Ltd. is deemed to be interested in 158,900,000 Shares by virtue of it being beneficially interested in 100% of the issued share capital of Resuccess Investments Ltd.

3. Tsinghua Holdings Co. Ltd. is deemed to be interested in 158,900,000 Shares by virtue of it being beneficially interested in 33.06% of the issued share capital of Tongfang Co. Ltd.

4. Deutsche Bank Aktiengesellschaft is interested in 275,500,000 Shares in long position and 137,750,000 Shares in short position in its capacity as person having a security interest in shares (other than an exempt security interest).

5. UBS AG is interested in 110,000,000 Shares in its capacity as person having a security interest in shares (other than an exempt security interest).

6. “S” denotes short position and “L” denotes long position.

4.

MATERIAL CONTRACTS

The following contracts, not being contracts entered into in the ordinary course of business, have been entered by members of the Enlarged Group after the date falling two years prior to the issue of this circular and up to the Latest Practicable Date and which are or may be material:

• (i) the underwriting agreement entered into between the Company and Wide Source dated 1 April 2009 in relation to the rights issue of 218,380,000 new shares of HK$0.05 each of the Company (each, a “Pre-Sub-divided Share”) at a subscription price of HK$0.10 per rights share on the basis of two rights shares for every existing share held on 7 July 2009 payable in full on acceptance;

• (ii) the supplemental underwriting agreement dated 17 June 2009 made between the Company and Wide Source to extend various dates referred to in the underwriting agreement entered into between the Company and Wide Source dated 1 April 2009;

• (iii) the placing agreement dated 23 February 2010 entered into between Wide Source, the Company and VC Brokerage in relation to the placing of 16,380,000 Pre-Sub-divided Shares by Wide Source to the placees at a placing price of HK$1.01 per Pre-Sub-divided Share;

• (iv) the subscription agreement dated 23 February 2010 entered into between Wide Source and the Company in relation to the subscription of 16,380,000 new Pre-Sub-divided Shares by Wide Source at the subscription price of HK$1.01 per Pre-Sub-divided Share;

• (v) the placing agreement dated 1 March 2010 entered into between Wide Source, the Company and VC Brokerage in relation to the placing of 5,000,000 Pre-Sub-divided Shares by Wide Source to the placees at a placing price of HK$1.60 per Pre-Sub-divided Share;

• (vi) the subscription agreement dated 1 March 2010 entered into between Wide Source and the Company in relation to the subscription of 5,000,000 new Pre-Sub-divided Shares by Wide Source at the subscription price of HK$1.60 per Pre-Sub-divided Share;

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GENERAL INFORMATION

APPENDIX IV

• (vii) the placing agreement dated 23 April 2010 entered into between Wide Source, the Company and VC Brokerage in relation to the placing of 130,000,000 Shares by Wide Source to the placees at a placing price of HK$0.265 per Share;

• (viii) the subscription agreement dated 23 April 2010 entered into between Wide Source and the Company in relation to the subscription of 130,000,000 new Shares by Wide Source at the subscription price of HK$0.265 per Share;

• (ix) the placing agreement between the Company and VC Brokerage dated 28 April 2010 in relation to the placing of 130,000,000 Shares by the Placing Agent to the placees at a placing price of HK$0.265 per Share;

• (x) the supplemental placing agreement between the Company and VC Brokerage dated 5 May 2010 whereas the number of Shares to be placed by the Placing Agent under the placing agreement between the Company and VC Brokerage dated 28 April 2010 be reduced to 30,000,000 Shares at a placing price of HK$0.265 per Share;

• (xi) the subscription agreement between the Company, Galaxy Fund I and VC Brokerage dated 5 May 2010 in relation to the subscription of 40,000,000 Shares by Galaxy Fund I at the subscription price of HK$0.265 per Share;

• (xii) the subscription agreement between the Company, Galaxy Fund II and VC Brokerage dated 5 May 2010 in relation to the subscription of 60,000,000 Shares by Galaxy Fund II at the subscription price of HK$0.265 per Share;

• (xiii) the agreement dated 1 July 2010 entered into between the Purchaser and Poon Chi Keung Sammy in relation to the sale and purchase of the entire issued share capital of High Pacific at a consideration of HK$27,000,000;

• (xiv) the placing agreement between the Company and SHKI dated 17 September 2010 in relation to the placing of a maximum of 313,140,000 Shares by Sun Hung Kai Investment Services Limited to the placees at a placing price of HK$0.271 per Share;

• (xv) the memorandum of understanding signed between the Company and the Vendor dated 11 February 2010 in relation to the Acquisition and the addendum in relation thereto;

• (xvi) the Agreement and the Supplemental Agreement; and

• (xvii) the Service Option Agreement and the three related supplemental agreements dated 23 April 2010, 15 June 2010 and 28 September 2010 respectively.

Save as disclosed above, none of the members of the Enlarged Group had entered into any contracts after the date falling two years prior to the issue of this circular and up to the Latest Practicable Date which are not in the ordinary course of business and which are or may be material.

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GENERAL INFORMATION

APPENDIX IV

5. DIRECTORS’ SERVICE CONTRACTS

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

6. EXPERT AND CONSENT

The following is the qualification of the expert who has been named in this circular or has given opinions, letter or advice contained in this circular:

Name Qualification

Cheng & Cheng Limited Certified Public Accountants

Cheng & Cheng Limited has given and has not withdrawn its written consent to the issue of this circular with the inclusion therein of its letter and/or reference to its name, in the form and context in which they appear.

As at the Latest Practicable Date, Cheng & Cheng Limited was not beneficially interested in the share capital of any member of the Group nor had any right, whether legally enforceable or not, to subscribe for or to nominate persons to subscribe for securities in any member of the Group, nor did it have any interest, either directly or indirectly, in the assets which have been acquired or disposed of by or leased to any members of the Group since 31 March 2010, being the date to which the latest published audited consolidated financial statements of the Group were made up.

7. LITIGATION

On 19 April 2006, a High Court Action No.858 of 2006 was commenced by Chan Kar Kui, Wong Calvin Ting Chi, Chan Wai Phan, Chan Man Wan and Kwok King Chuen (“Plaintiffs”) against the Company for specific performance of the agreement entered between the Plaintiffs and the Company’s former director, To Cho Kei, on behalf of the Company, in around May/ June 2000 to purchase from the Plaintiffs all their shareholdings in Epplication.Net Limited (“Epplication.Net”) at a consideration of HK$6,800,000 being twice of the actual amount that the Plaintiffs expended on Epplication.Net by way of transfer or allotment of the shares of the Company of the equivalent value, or alternatively, damages with interests and costs. The Company has filed a defence denying the allegation as the Company has no record of any agreement for the purchase of the Plaintiffs’ shareholdings in Epplication.Net and the Plaintiffs have not produced any documentary evidence to support their claim. The Directors believe that the Company has strong defence in this action.

Save as disclosed above, as at the Latest Practicable Date, no member of the Enlarged Group was engaged in any litigation or arbitration of material importance and there was no litigation or claim of material importance known to the Directors to be pending or threatened against any member of the Enlarged Group.

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GENERAL INFORMATION

APPENDIX IV

8. MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, the Directors were not aware of any material adverse change in the financial or trading position of the Group since 31 March 2010, the date to which the latest published audited financial statements of the Company were made up.

9. DIRECTORS’ COMPETING INTERESTS

To the best knowledge of the Directors, as at the Latest Practicable Date, none of the Directors or their respective associates had any interests in a business, which competes or is likely to compete either directly or indirectly with the business of the Group which would be required to be disclosed under Rule 11.04 of the GEM Listing Rules, if the Directors were controlling Shareholders.

10. DIRECTORS’ INTERESTS IN CONTRACTS

Save as disclosed herein, the Directors confirm that there was no contract or arrangement subsisting as at the Latest Practicable Date in which a Director was materially interested which was significant in relation to the business of the Group.

11. DIRECTORS’ INTERESTS IN ASSETS

As at the Latest Practicable Date, none of the Directors had any interest, direct or indirect, in any assets which had been, since 31 March 2010, being the latest published audited consolidated financial statements of the Company were made up, 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.

12. 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 1504, 15/F, The Center, 99 Queen’s Road Central, Hong Kong.

• (c) The company secretary of the Company is Mr. Young Wai Ching. Mr. Young is a practising member of Hong Kong Institute of Certified Public Accountants and a member of Chartered Association of Certified Accountants of the United Kingdom.

• (d) The compliance officer of the Company is Mr. Wong Chung Wai, Eric.

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GENERAL INFORMATION

APPENDIX IV

• (e) As at the Latest Practicable Date, the audit committee of the Company consisted of the following members: (i) Mr. Tang Sze Lok (as chairman); (ii) Professor Ip Ho Shing, Horace; and (iii) Mr. Yan Yonghong.

Mr. Tang Sze Lok holds a business administration degree and is a fellow member of Hong Kong Institute of Certified Public Accountants and the Association of Chartered Certified Accountants. Mr. Tang has over 14 years’ experience in auditing, financial accounting and implementation of internal, financial, operational and compliance control and financial reporting system. He also has experience in mergers and acquisitions and financial due diligence review.

Professor Ip Ho Shing, Horace joined the Group as an independent non-executive director in July 2003 and he is a member of the audit committee of the Company. Professor Ip graduated from the University of London with a bachelor of science degree in applied physics and a doctorate degree in image processing. He is the chair professor of the Department of Computer Science and a director of the Centre for Innovative Applications of Internet and Multimedia Technologies - AIMtech Centre of the City University of Hong Kong.

Mr. Yan Yonghong joined the Group in September 2004. Mr. Yan graduated from Tsinghua University with a bachelor of science degree in electronic engineering and holds a doctorate degree in computer science and engineering with Oregon Graduate Institute of Science and Engineering, the United States of America. He had been a principal engineer of Intel Corporation and an associate professor of Oregon Health and Science University. Currently, he is appointed by the Chinese Academy of Sciences as a professor and an instructor of doctorate students. He is also appointed by the Chinese government as a member of the vetting committee of National Science Foundation of China.

As at the Latest Practicable Date, the members of the audit committee did not hold any directorships (and past directorships) of other companies listed on GEM, the Main Board of the Stock Exchange or other exchanges.

The audit committee of the Company reviews the internal accounting procedures, considers and reports to the Board with respect to other auditing and accounting matters, including selection of independent auditors, fees to be paid to the independent auditors and the performance of the independent auditors.

• (f) The Company’s branch share registrar and transfer office in Hong Kong is Computershare Hong Kong Investor Services Limited at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong.

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

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GENERAL INFORMATION

APPENDIX IV

13. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection during normal business hours from 9:00 a.m. to 6:00 p.m. on any weekday (except Saturdays and public holidays) at the head office and principal place of business of the Company in Hong Kong at 1504, 15/F The Center, 99 Queen’s Road Central, Hong Kong, from the date of this circular, up to and including the date of the EGM:

• (a) the memorandum of association of the Company and the Articles of Association;

• (b) the letter from the Board, the text of which is set out on pages 6 to 22 of this circular;

• (c) the material contracts referred to in the section headed “Material contracts” in this Appendix;

• (d) the written consent of the expert referred to in the section headed “Expert and consent” in this Appendix;

• (e) the accountant’s report of the Target Group for the period from 8 August 2008 (date of incorporation) to 31 December 2009 and the six months ended 30 June 2010, as set out in Appendix II to this circular;

• (f) the report from Cheng & Cheng Limited in respect of the unaudited pro forma financial information of the Enlarged Group as set out in Appendix III to this circular;

• (g) the annual reports of the Company for the two years ended 31 March 2010;

• (h) the circular of the Company dated 9 June 2010 in relation to the issue of new Shares to Galaxy Fund I and Galaxy Fund II; and

• (i) this circular.

– 67 –

NOTICE OF THE EGM

**Tai Shing International (Holdings) Limited *** 泰盛國際（控股）有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 8103)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that the extraordinary general meeting of Tai Shing International (Holdings) Limited (“Company”) will be held at 1504, 15/F, The Center, 99 Queen’s Road Central, Hong Kong at 10:30 a.m. on 20 October 2010, for the purpose of considering and, if thought fit, passing the following resolutions as ordinary resolutions (with or without modifications):

1. “(a) THAT the conditional sale and purchase agreement dated 14 June 2010 and the supplemental conditional sale and purchase agreement dated 28 September 2010 entered into between Expertone Holdings Limited (“Expertone”) and Trend Brilliant Limited in relation to the Acquisition (as defined in the circular of the Company dated 30 September 2010 (“Circular”), a copy of which marked “A” and signed by the chairman of the meeting for identification purpose has been tabled at the meeting) (“Agreement”) (a copy of the Agreement marked “B” and signed by the chairman of the meeting for identification purpose has been tabled at the meeting) and the transactions contemplated thereunder be and are hereby approved, confirmed and ratified;

2. (b) THAT subject to completion of the Acquisition, the directors of the Company (“Directors”) be and are hereby specifically authorised to allot and issue, credited as fully paid, 407,407,407 shares of HK$0.005 each of the Company (collectively, the “Consideration Shares”) to Expertone in settlement of part of the consideration for the Acquisition in accordance with the terms and conditions of the Agreement; and

3. (c) THAT all other transactions contemplated under the Agreement be and are hereby approved and the Directors or a duly authorised committee of the board of Directors be and are/is authorised to do all such acts and things, to sign and execute such documents or agreements or deeds on behalf of the Company and to do such other things and to take all such actions as they consider necessary, appropriate, desirable and expedient for the purposes of giving effect to or in connection with the Agreement, the Acquisition, the allotment and issue of the Consideration Shares, and to agree to such variation, amendments or waiver or matters relating thereto (including any variation, amendments or waiver of such documents or any terms thereof, which are not fundamentally different from those as provided in the Agreement) as are, in the opinion of the Directors or the duly authorised committee, in the interest of the Company and its shareholders as a whole.”

* For identification purpose only

– 68 –

NOTICE OF THE EGM

1. “ THAT subject to and conditional upon The Stock Exchange of Hong Kong Limited granting the listing of, and permission to deal in, the Service Option Shares (as defined below):

2. (a) the service agreement dated 24 February 2010 (as varied and supplemented by the supplemental agreement dated 23 April 2010 and the second supplemental agreement dated 15 June 2010 and the third supplemental agreement dated 28 September 2010) entered into between the Company and Mr. Wong Chi Keung (“Mr. Wong”), a copy of which marked “C’ and signed by the chairman of the meeting for identification purpose has been tabled at the meeting (“Service Option Agreement”) in relation to the grant of right (“Service Option”) to Fantasy Top Limited (a company nominated by Mr. Wong) to subscribe for up to 60,000,000 shares of HK$0.005 each of the Company (“Service Option Shares”) at the issue price of HK$0.10 per Service Option Share be and is hereby approved;

3. (b) the grant of the Service Option to Fantasy Top Limited be and is hereby approved, confirmed and ratified;

4. (c) upon exercise of the Service Option by Fantasy Top Limited, the Directors be and are hereby specifically authorised to allot and issue such number of Service Option Shares to Fantasy Top Limited; and

5. (d) all other transactions contemplated under the Service Option Agreement be and are hereby approved and the Directors or a duly authorised committee of the board of Directors be and are/is authorised to do all such acts and things, to sign and execute such documents or agreements or deeds on behalf of the Company and to do such other things and to take all such actions as they consider necessary, appropriate, desirable and expedient for the purposes of giving effect to or in connection with the Service Option Agreement, the grant of the Service Option, the allotment and issue of the Service Option Shares, and to agree to such variation, amendments or waiver or matters relating thereto (including any variation, amendments or waiver of such documents or any terms thereof, which are not fundamentally different from those as provided in the Service Option Agreement) as are, in the opinion of the Directors or the duly authorised committee, in the interest of the Company and its shareholders as a whole.”

By order of the Board Tai Shing International (Holdings) Limited Wong Chung Wai, Eric Chairman

Hong Kong, 30 September 2010

– 69 –

NOTICE OF THE EGM

Registered office: Head office and principal place of Cricket Square business in Hong Kong: Hutchins Drive 1504, 15/F P.O. Box 2681 The Center Grand Cayman KY1-1111 99 Queen’s Road Central Cayman Islands Hong Kong

Notes:

1. Any member of the Company entitled to attend and vote at the meeting may appoint one or more than one proxy to attend and to vote on his behalf. A proxy need not be a member of the Company.

2. Where there are joint registered holders of any share, any one of such persons may vote at the meeting, either personally 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 the said persons so present whose name stands first on the register of members of the Company in respect of such share shall alone be entitled to vote in respect thereof.

3. To be valid, the form of proxy duly completed and signed in accordance with the instructions printed thereon together with the power of attorney or other authority, if any, under which it is signed or a certified copy thereof must be delivered to the office of the branch share registrar of the Company, Computershare Hong Kong Investor Services Limited at Shop 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof.

4. Whether or not you propose to attend the meeting in person, you are strongly urged to complete and return the form of proxy in accordance with the instructions printed thereon. Completion and return of the form of proxy will not preclude you from attending the meeting and voting in person if you so wish. In the event that you attend the meeting after having lodged the form of proxy, it will be deemed to have been revoked.

5. In compliance with the Rules Governing the Listing of Securities on the Growth Enterprise Market of The Stock Exchange of Hong Kong Limited, all resolutions to be proposed at the meeting convened by this notice will be voted on by way of poll.

As at the date of this notice, the Board comprises the following Directors:

Executive Directors:

Mr. Wong Chung Wai, Eric (Chairman) Ms. Li Wenli Mr. Chan Yun Sang Mr. Ng Chi Wing

Independent non-executive Directors: Professor Ip Ho Shing, Horace Mr. Yan Yonghong Mr. Tang Sze Lok Mr. Lee Kwok Yung

– 70 –