Imperium Financial Group Limited - Proxy Solicitation & Information Statement 2007

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

I f you are in any doubt as to any aspect about this circular or as to the action to be taken, you should consult a licensed securities dealer, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Wing Hong (Holdings) Limited, you should at once hand this circular, together with the accompanying form of proxy, to the purchaser or transferee or to the bank, licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

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

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(Stock code: 745)

PLACING OF CONVERTIBLE NOTES AND SUBSCRIPTION OF CONVERTIBLE NOTES CONSTITUTING A CONNECTED TRANSACTION

Financial adviser to Wing Hong (Holdings) Limited

(formerly known as VXL Financial Services Limited)

Independent financial adviser to the Independent Board Committee and Independent Shareholders

The notice convening the extraordinary general meeting of Wing Hong (Holdings) Limited to be held at Room 901, 9th Floor, Hong Kong Scout Centre, Scout Path, Austin Road, Kowloon, Hong Kong on Wednesday, 19 September 2007 at 9:00 a.m. is set out on pages 35 to 36 of this circular. Whether or not you intend to attend the meeting, you are requested to complete the accompanying form of proxy for use at the extraordinary general meeting in accordance with the instructions printed thereon and return the same to the Company’s share registrar, Tricor Investor Services Limited at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for holding of the meeting or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the meeting if you so wish.

3 September 2007

* For identification purpose only

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
The Placing Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
The Subscription Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
Principle terms of the Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Reasons for the Placing and the Subscription and use of proceeds . . . . . . . . . . . . .	9
Shareholding structure of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
Dilution effect on Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
Fund raising activities in the past twelve months . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
Listing Rules implications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
Increase in authorised share capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
Procedures for demanding a poll . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12
Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	13
Letter from the Independent Board Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	14
Letter from Taifook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	15
Appendix — General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	28
Notice of EGM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	35

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DEFINITIONS

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

“Announcement”	the announcement of the Company dated 16 August 2007 in
	relation to the Placing Agreement and the Subscription
	Agreement
“associate”	the meaning given to it under the Listing Rules
“Board”	the board of Directors
“Company”	Wing Hong (Holdings) Limited, a company incorporated in
	the Cayman Islands with limited liability and the issued Shares
	of which are listed on the main board of the Stock Exchange
“Conversion Shares”	new Shares which will be issued upon conversion of the Notes
	with principal amount of up to HK$296,000,000 at the Initial
	Conversion Price
“Directors”	the directors of the Company
“EGM”	the extraordinary general meeting of the Company to be held
	on 19 September 2007
“Group”	the Company and its subsidiaries
“Independent Board	an independent board committee constituted to advise the
Committee”	Independent Shareholders regarding the Subscription Agreement
	and the Subscription Notes
“Independent Shareholders”	Shareholders other than Rich Place and its associates
“Independent Third	third parties who are independent of the Company and its
Party(ies)”	connected person(s)
“Initial Conversion Price”	the initial conversion price of the Placing Notes and the
	Subscription Notes of HK$0.80 per Conversion Share (subject
	to adjustments)
“Latest Practicable Date”	31 August 2007, being the latest practicable date prior to the
	printing of this circular for ascertaining certain information
	included in this circular
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock
	Exchange
“Maturity Date”	the day preceding the third anniversary of the date of issue of
	the Notes
“Noteholders”	holders of the Notes
“Notes”	the series of zero coupon convertible notes in aggregate
	principal amount of up to HK$296,000,000 to be issued by the
	Company
“Placing”	the offer by way of private placement of the Placing Notes by
	the Placing Agent on a best effort basis on the terms and
	conditions set out in the Placing Agreement

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	DEFINITIONS
“Placing Agent”	President Securities (Hong Kong) Limited, a corporation
	licensed to carry on type 1 (dealing in securities), 4 (advising
	on securities), 6 (advising on corporate finance) and 9 (asset
	management) regulated activities under the SFO
“Placing Agreement”	the placing agreement dated 16 August 2007 entered into
	between the Company and the Placing Agent in relation to the
	Placing
“Placing Notes”	the Notes with principal amount of up to HK$148,000,000
	proposed to be issued by the Company pursuant to the Placing
“Placing Period”	the period between the date immediately following the date of
	satisfaction of the conditions precedent of the Placing
	Agreement described in the paragraph headed “Conditions of
	the Placing Agreement” in this circular and three months
	following such date, both dates inclusive
“Rich Place”	Rich Place Investment Limited, a company incorporated in the
	British Virgin Islands and the controlling shareholder of the
	Company
“SFO”	Securities and Futures Ordinance (Chapter 571 of the laws of
	Hong Kong)
“Share(s)”	the ordinary share(s) of HK$0.10 each in the share capital of
	the Company
“Shareholder(s)”	holder(s) of the Share(s)
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Subscribers”	the subscribers of the Placing Notes to be procured by the
	Placing Agent under the Placing
“Subscription”	the proposed subscription of the Subscription Notes by Rich
	Place pursuant to the terms and conditions of the Subscription
	Agreement
“Subscription Agreement”	the subscription agreement dated 16 August 2007 entered into
	between the Company and Rich Place pursuant to which the
	Company has agreed to issue the Subscription Notes in the
	aggregate principal amount of up to HK$148,000,000 to Rich
	Place
“Subscription Notes”	the Notes up to the aggregate principal amount of
	HK$148,000,000 which may be issued under the Subscription
	Agreement
“Taifook”	Taifook Capital Limited, a licensed corporation under the SFO
	to carry on type 6 (advising on corporate finance) regulated
	activity and the independent financial adviser appointed to
	advise the Independent Board Committee and the Independent
	Shareholders in respect of the Subscription Agreement and the
	Subscription Notes
“Tranche”	up to twelve tranches of the Placing Notes or the Subscription
	Notes to be issued by the Company
“HK$”	Hong Kong dollars

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LETTER FROM THE BOARD

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(Stock code: 745)

Executive Directors: Mr. Hui Chi Yung (Chairman) Mr. Yiu Kai Yeuk, Raphael Mr. Hui Kau Mo

Independent Non-Executive Directors: Mr. Liu Kwong Sang Mr. Sit Hing Wah Dr. Hu Chung Kuen, David

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

Head Office and Principal Place of Business in Hong Kong: 13th Floor, OTB Building 259-265 Des Voeux Road Central Hong Kong

3 September 2007

To the Shareholders

Dear Sir or Madam,

PLACING OF CONVERTIBLE NOTES AND SUBSCRIPTION OF CONVERTIBLE NOTES CONSTITUTING A CONNECTED TRANSACTION

INTRODUCTION

On 16 August 2007, the Company announced that it had entered into the Placing Agreement with the Placing Agent in relation to the Placing by the Placing Agent, on a best effort basis, of up to HK$148,000,000 principal amount of the Placing Notes. The Placing Notes will be issued in up to twelve Tranches during the Placing Period. The Placing Notes are convertible into new Shares at the Initial Conversion Price of HK$0.80 each (subject to adjustments). Upon exercise in full of the Placing Notes with principal amount of HK$148,000,000 at the Initial Conversion Price, a total of 185,000,000 Conversion Shares will fall to be issued, representing 152.79% of the existing issued share capital of the Company as at the date of the Placing Agreement and 37.67% of the issued share capital as enlarged by the issue of the Conversion Shares.

* For identification purpose only

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LETTER FROM THE BOARD

On the same date, the Company also entered into the Subscription Agreement with Rich Place, pursuant to which the Company has conditionally agreed to issue to Rich Place or its nominee the Subscription Notes at the principal amount of the Subscription Notes of up to HK$148,000,000. Rich Place is required to subscribe for the Subscription Notes equal to the aggregate principal amount of the Placing Notes at each Tranche.

Rich Place, the controlling Shareholder, is interested in approximately 50.22% of the issued share capital of the Company as at the Latest Practicable Date, and is therefore a connected person of the Company. Accordingly, the transactions contemplated under the Subscription Agreement, including the issue of the Conversion Shares upon exercise of the conversion rights attached to the Subscription Notes, constitute a connected transaction of the Company under Chapter 14A of the Listing Rules.

To facilitate the issue of the Conversion Shares, the Company also proposed to increase the authorised share capital of the Company from HK$20,000,000 comprising 200,000,000 Shares to HK$100,000,000 comprising 1,000,000,000 Shares.

The purpose of this circular is to provide you with, among other things, (i) details of the Placing Agreement and the Placing Notes; (ii) details of the Subscription Agreement and the Subscription Notes; (iii) details of the increase in authorised share capital; (iv) a letter of recommendation from the Independent Board Committee to the Independent Shareholders; (v) a letter of advice from Taifook to the Independent Board Committee and the Independent Shareholders on the Subscription Agreement and the Subscription Notes; and (vi) the notice of the EGM.

THE PLACING AGREEMENT

Date

16 August 2007

Parties to the Placing Agreement

Issuer: the Company

Placing Agent: President Securities (Hong Kong) Limited

President Securities (Hong Kong) Limited provides a broad range of financial advisory and related services including securities underwriting, stockbroking services, margin financing, online trading, corporate finance advisory services, and asset management to clients in Hong Kong and China. To the best of the knowledge, information and belief of the Directors and having made all reasonable enquiries, the Placing Agent and its ultimate beneficial owners are Independent Third Parties.

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LETTER FROM THE BOARD

Securities to be placed

Subject to fulfilment of the conditions precedent to the Placing Agreement, the Placing Agent agrees to procure, during the Placing Period on a best effort basis, the Subscribers to subscribe for up to HK$148,000,000 principal amount of the Placing Notes. The Placing Agent will use all reasonable endeavours, exercise due care and make reasonable enquiries to ensure that the Subscribers and their ultimate beneficial owners are Independent Third Parties. The Placing Agent proposes to approach potential Subscribers only after Shareholders’ approval for the issue of the Placing Notes is obtained, which is when the Placing Period commences. The Company is therefore not in a position to ascertain now whether or not as a result of the issue and conversion of the Placing Notes to be placed in the future would result in any one person becoming a substantial Shareholder under the Listing Rules. If it comes to the notice of the Company on completion of the Placing that such circumstance will arise, the Company will make a further announcement in that regard.

The Placing Agent may, during the Placing Period, require that the Placing Notes to be issued by the Company to the Subscribers in up to twelve separate Tranches in such amounts as notified by the Placing Agent in writing to the Company, provided the aggregate principal amount of the Placing Notes for all Tranches shall not exceed HK$148,000,000.

Placing commission

2.5% of the aggregate principal amount of the Placing Notes for which the Placing Agent has procured the Subscribers to subscribe in each Tranche.

Conditions of the Placing Agreement

The obligations of the parties in relation to the Placing of the Notes under the Placing Agreement is conditional upon the passing by the Shareholders, who are permitted to vote under the Listing Rules, of a resolution to approve the issue of the Notes and any Conversion Shares at the EGM of the Company in accordance with the Listing Rules and a resolution to increase the authorised share capital of the Company to HK$100,000,000 comprising 1,000,000,000 Shares. Rich Place and its associate will abstain from voting on the resolutions to approve the issue of the Notes and the Conversion Shares.

If the above conditions precedent are not fulfilled on or before 31 October 2007 (or such later date as may be agreed between the Placing Agent and the Company), the Placing Agreement shall thereupon lapse and become null and void and the parties will be released from all obligations hereunder, save for any liability arising out of any antecedent breaches hereof.

Conditions for each Tranche and completion

In addition to the fulfilment of the conditions described above, completion of each Tranche of the Placing Notes shall be conditional upon:

(i) the Listing Committee of the Stock Exchange having granted (either unconditionally or subject only to conditions to which the Company does not reasonably object) listing of and permission to deal in the Conversion Shares in respect of such Tranche of the Placing Notes;

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LETTER FROM THE BOARD

(ii) the Company not having received any objection from the Stock Exchange to the issue of such Tranche of the Placing Notes; and
(iii) (except for the last Tranche of the Placing Notes to be issued) the aggregate principal amount of Placing Notes to be issued pursuant to that Tranche is not less than HK$10,000,000.

Completion of each Tranche of the Placing Notes shall take place on the third business day after the date of fulfilment of the conditions for such Tranche of the Placing Notes above. Further announcement will be made upon completion of each Tranche of the Placing Notes.

THE SUBSCRIPTION AGREEMENT

Date

16 August 2007

Parties to the Subscription Agreement

Issuer: the Company Subscriber: Rich Place

The Company has conditionally agreed to issue the Subscription Notes to Rich Place or its nominee at the principal amount of the Subscription Notes of up to HK$148,000,000.

Rich Place is required to subscribe for the Subscription Notes equal to the aggregate principal amount of the Placing Notes at each Tranche.

Conditions of the Subscription Agreement

Completion of the Subscription Agreement is conditional upon the passing by the Shareholders, who are permitted to vote under the Listing Rules, of a resolution to approve the issue of the Notes and any Conversion Shares at the EGM of the Company in accordance with the Listing Rules and a resolution to increase the authorised share capital of the Company to HK$100,000,000 comprising 1,000,000,000 Shares.

If the above conditions precedent are not fulfilled on or before 31 October 2007 (or such later date as may be agreed between Rich Place and the Company), the Subscription Agreement shall thereupon lapse and become null and void and the parties will be released from all obligations hereunder, save for any liability arising out of any antecedent breaches hereof.

Conditions for each Tranche and completion

In addition to the fulfilment of the conditions described above, completion of each Tranche of the Subscription Notes shall be conditional upon:

(i) the Listing Committee of the Stock Exchange having granted (either unconditionally or subject only to conditions to which the Company does not reasonably object) listing of and permission to deal in the Conversion Shares in respect of such Tranche of the Subscription Notes;

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LETTER FROM THE BOARD

(ii) the Company not having received any objection from the Stock Exchange to the issue of such Tranche of the Subscription Notes; and
(iii) the issue immediately before such completion of the Placing Notes in the same Tranche.

Subject to the fulfilment of the conditions for each Tranche of the Subscription Notes above, it is intended that completion of each Tranche of the Subscription Notes shall take place on the same date as completion of the Placing Notes in the same Tranche. Further announcement will be made upon completion of each Tranche of the Subscription Notes.

PRINCIPAL TERMS OF THE NOTES

The terms of the Placing Notes and the Subscription Notes are substantially the same as each other.

Aggregate principal amount: up to HK$296,000,000

Maturity:

The day preceding the third anniversary from the date of issue of each Tranche of the Notes.

Interest rate:

Nil

Initial Conversion Price:

HK$0.80 per Share, subject to usual anti-dilution adjustments in certain events such as share consolidation, share subdivision, capitalisation issue, capital distribution, rights issue and other equity or equity derivatives issues. The Initial Conversion Price represents:

a discount of approximately 5.88% to the closing price of HK$0.85 per Share as quoted on the Stock Exchange immediately before trading of the Shares was suspended from 10:00 a.m. on 14 August 2007 pending the release of the Announcement;
a discount of approximately 2.44% to the closing price of HK$0.82 per Share as quoted on the Stock Exchange on 13 August 2007, being the last full trading day immediately before trading in the Shares was suspended from 10:00 a.m. on 14 August 2007; and
a discount of approximately 13.98% to the average closing price of HK$0.93 per Share as quoted on the Stock Exchange for the last five consecutive trading days up to and including 13 August 2007; and
a discount of approximately 38.46% to the closing price of HK$1.30 per Share as quoted on the Stock Exchange on the Latest Practicable Date.

The Initial Conversion Price was determined after arm’s length negotiations between the Company and the Placing Agent and between the Company and Rich Place with reference to the market price of the Shares.

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LETTER FROM THE BOARD

Redemption:

No early redemption unless as a result of change of control or event of default. When a change of control or an event of default occurs, the Noteholders may by notice in writing to the Company requiring the Company to redeem the Notes. Change of control occurs when (i) any person or person(s) acquires control of the Company or (ii) the Company consolidates with or merges into or sells or transfers all or substantially all of the Company’s assets to another person or person(s) acquiring control over the Company or the successor entity. Control has the meaning as defined in the Hong Kong Code on Takeovers and Mergers. An event of default occurs when the Company fails to comply with certain material terms of the Notes or the Company or any of its subsidiaries fall into insolvency.
Conversion period: The Noteholders shall have the right to convert during the period on and excluding the 7th day after the issue day of the Notes and up to and including the day which is 7 days prior to the Maturity Date, the whole or any part (in an amount or integral multiple of HK$10,000,000 except for the last Tranche of the Notes to be issued) of the principal amount of the Notes into Shares at the then prevailing conversion price.
Conversion shares: Assuming a maximum of HK$296,000,000 in aggregate principal amount of the Notes are placed, upon full conversion of the Notes at the Initial Conversion Price, an aggregate of 370,000,000 Conversion Shares will be issued by the Company, representing approximately 305.58% of the existing issued share capital of the Company and approximately 75.34% of the issued share capital of the Company as enlarged by the issue of the Conversion Shares.
Ranking: The Notes will rank pari passu with all other present and future unsecured and un-subordinated obligations of the Company. The Conversion Shares to be issued as a result of the exercise of the conversion rights attached to the Notes will rank pari passu in all respects with all other Shares in issue at the date on which the conversion rights attached to the Notes are exercised.
Transferability: The Notes may be transferred only with the prior written consent of the Company.
Voting: A Noteholder will not be entitled to receive notice of, attend or vote at any general meetings of the Company by reason only of it being a Noteholder.
Listing: No application will be made for the listing of the Notes on the Stock Exchange or any other stock exchange. An application will be made by the Company for the listing of, and permission to deal in, the Conversion Shares to be issued as a result of the exercise of the conversion rights attached to the Notes.

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LETTER FROM THE BOARD

REASONS FOR THE PLACING AND THE SUBSCRIPTION AND USE OF PROCEEDS

The Group is principally engaged in a broad spectrum of construction works, including building construction, renovation and fitting out works for both public and private sectors in Hong Kong.

During the year ended 31 March 2007, the Group recorded audited turnover of approximately HK$64.4 million, representing a drop of approximately 57.8% from that of HK$152.7 million for the year ended 31 March 2006. The Directors are considering to seek for strategic partners to explore business opportunities to improve the Group’s prospects. Assuming a maximum principal amount of HK$296 million of the Notes are issued, the proceeds from the Placing and Subscription (after deduction of expenses) amount to approximately HK$287 million. The Directors intend that the proceeds will be used for future investment and general working capital purposes. The Company has been considering various investment opportunities in China. Nevertheless, as at the Latest Practicable Date, no definite agreement has been entered into with respect to any investment target.

The Directors consider that the Placing and the Subscription will strengthen the financial position of the Group and equip the Company with readily available funds to take up investment opportunities as and when they arise. The Directors also consider that the issue of the Placing Notes and the Subscription Notes provides a less costly way of financing for the Company. The Directors do not consider there is any material disadvantages of the Placing and Subscription for the Company.

Based on the above, the Directors consider that the Placing and the Subscription are in the interests of the Company and its Shareholders as a whole and the terms of the Placing Agreement and the Subscription Agreement are fair and reasonable as far as the Shareholders are concerned.

SHAREHOLDING STRUCTURE OF THE COMPANY

Name of Shareholder Notes Rich Place 1 Million Honest Limited 2 United Century Limited 3 The Subscribers Public Shareholders	As at the Latest Practicable Date No. of Shares 60,811,856 50.22% 6,805,344 5.62% 4,862,800 4.02% 72,480,000 59.86% — — 48,603,000 40.14% 121,083,000 100.00%	Assuming a maximum amount of HK$296 million of the Notes are issued and upon full conversion of the Notes No. of Shares 245,811,856 50.06% 6,805,344 1.38% 4,862,800 0.99% 257,480,000 52.43% 185,000,000 37.67% 48,603,000 9.90% 491,083,000 100.00%	Assuming a maximum amount of HK$296 million of the Notes are issued and upon full conversion of the Notes No. of Shares 245,811,856 50.06% 6,805,344 1.38% 4,862,800 0.99% 257,480,000 52.43% 185,000,000 37.67% 48,603,000 9.90% 491,083,000 100.00%
			52.43% 37.67% 9.90%
			100.00%

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LETTER FROM THE BOARD

Notes:

These Shares are held by Rich Place, an investment holding company, which is wholly owned by RBTT Trust Cooperation (“RBTT”). RBTT is the trustee of The Wing Hong Trust, a discretionary trust whose beneficiaries are the family members of Mr. Hui Kau Mo (an executive Director). Mr. Hui Chi Yung is one of the beneficiaries of the Wing Hong Trust and a son of Mr. Hui Kau Mo.
These Shares are held by Million Honest Limited, the entire issued share capital of which is held by Mr. Yiu Kai Yeuk, Raphael (an executive Director).
These Shares are held by United Century Limited, the entire issued share capital of which is held by Mr. Hui Chi Yang, the brother of Mr. Hui Chi Yung (an executive Director and Chairman of the Company).

DILUTION EFFECT ON SHAREHOLDERS

In view of the potential dilution effect on existing Shareholders on exercise of conversion rights attaching to the Notes, for so long as any of the Notes are outstanding, the Company will keep Shareholders informed of the level of dilution and details of conversion as follows:

(i) the Company will make a monthly announcement (the “Monthly Announcement”) on the website of the Stock Exchange. Such announcement will be made on or before the fifth business day following the end of each calendar month and will include the following details in a table form:
(a) whether there is any conversion of the Notes during the relevant month. If yes, details of the conversion(s), including the conversion date, number of new Shares issued, conversion price for each conversion. If there is no conversion during the relevant month, a negative statement to that effect;
(b) the outstanding principal amount of the Notes after the conversion, if any;
(c) the total number of new Shares issued pursuant to other transactions during the relevant month, including new Shares issued pursuant to exercise of options under any share option scheme(s) of the Company;
(d) the total issued share capital of the Company as at the commencement and the last day of the relevant month; and
(ii) in addition to the Monthly Announcement, if the cumulative amount of new Shares issued pursuant to the conversion of the Notes reaches 5% of the issued share capital of the Company as disclosed in the last Monthly Announcement or any subsequent announcement made by the Company in respect of the Notes (and thereafter in a multiple of such 5% threshold), the Company will as soon as practicable but in any event no later than the fifth business day thereafter make an announcement on the website of the Stock Exchange including details as stated in (i) above for the period commencing from the date of the last Monthly Announcement or any subsequent announcement made by the Company in respect of the Notes, up to the date on which the total amount of Shares issued pursuant to the conversion amounts to 5% of the issued share capital of the Company as disclosed in the last Monthly Announcement or any subsequent announcement made by the Company in respect of the Notes.

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LETTER FROM THE BOARD

FUND RAISING ACTIVITIES IN THE PAST TWELVE MONTHS

On 20 December 2006, 146,830,000 ordinary shares of HK$0.01 each were issued at a price of HK$0.041 each by way of a top-up placing. The net proceeds from the placing were approximately HK$5,900,000. These proceeds were intended to be used for general working capital of the Group and have been fully utilised to pay general operating and administrative expenses.

Save for the above, the Company has not conducted any other fund raising activities in the past twelve months before the date of the Announcement.

LISTING RULES IMPLICATIONS

Rich Place, who is the controlling Shareholder with its interest in approximately 50.22% of the issued share capital of the Company as at the Latest Practicable Date, is a connected person of the Company. Accordingly, the transactions contemplated under the Subscription Agreement, including the issue of the Conversion Shares upon exercise of the conversion rights attached to the Subscription Notes, will constitute a connected transaction of the Company under the Listing Rules.

The issue of the Placing Notes and the Subscription Notes and the issue of the Conversion Shares upon exercise of the conversion rights attached to the Placing Notes and the Subscription Notes as contemplated under the Placing Agreement and the Subscription Agreement are subject to, among other things, the approval of the Independent Shareholders by way of a poll at the EGM of the Company where Rich Place and its associates will be required to abstain from voting. An Independent Board Committee has been established by the Company to advise the Independent Shareholders and Taifook has been appointed by the Company to advise the Independent Board Committee and the Independent Shareholders as regards the terms of the Subscription Agreement and the Subscription Notes.

INCREASE IN AUTHORISED SHARE CAPITAL

In order to facilitate the issue of Conversion Shares upon an exercise of the conversion rights attached to the Notes, the Company proposes to increase its existing authorised share capital from HK$20,000,000 comprising 200,000,000 Shares to HK$100,000,000 comprising 1,000,000,000 Shares.

The increase in authorised share capital is conditional on the approval of the Shareholders by way of an ordinary resolution.

EGM

The EGM will be convened by the Company at Room 901, 9th Floor, Hong Kong Scout Centre, Scout Path, Austin Road, Kowloon, Hong Kong on Wednesday, 19 September 2007 at 9:00 a.m. at which ordinary resolutions will be proposed to seek approval of (i) the issue of the Placing Notes and the Subscription Notes and the issue of the Conversion Shares upon exercise of the conversion rights attached to the Placing Notes and the Subscription Notes as contemplated under the Placing Agreement and the Subscription Agreement; and (ii) the increase in authorised share capital. Rich Place and its associates will abstain from voting on the resolution (i).

— 11 —

LETTER FROM THE BOARD

There is a form of proxy for use at the EGM accompanying this circular. If you are not able to attend the EGM, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return it to the Company’s share registrar, Tricor Investor Services Limited at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Hong Kong as soon as possible and in any event not later than forty-eight (48) hours before the time appointed for holding the EGM. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM or any adjournment thereof if you so wish.

An announcement will be made by the Company following the conclusion of the EGM to inform you of the results thereof.

PROCEDURES FOR DEMANDING A POLL

Under paragraph 66 of the Articles of Association of the Company, a resolution put to the vote of a meeting shall be decided on a show of hands unless voting by way of a poll is required by the Listing Rules or (before or on the declaration of the result of the show of hands or on the withdrawal of any other demand for a poll) a poll is demanded:

(i) by the chairman of the meeting; or
(ii) by at least three Shareholders present in person (or in the case of a Shareholder being a corporation by its duly authorised representative) or by proxy for the time being entitled to vote at the meeting; or
(iii) by a Shareholder or Shareholders present in person (or in the case of a Shareholder being a corporation by its duly authorised representative) or by proxy and representing not less than one-tenth of the total voting rights of all Shareholders having the right to vote at the meeting; or
(iv) by a Shareholder or Shareholders present in person (or in the case of a Shareholder being a corporation by its duly authorised representative) or by proxy and holding Shares in the Company conferring a right to vote at the meeting being Shares on which an aggregate sum has been paid up equal to not less than one-tenth of the total sum paid up on all Shares conferring that right; or
(v) if required by the Listing Rules, by any Director or Directors who, individually or collectively, hold proxies in respect of Shares representing five per cent. (5%) or more of the total voting rights at such meeting.

A demand by a person as proxy for a member or in the case of a member being a corporation by its duly authorised representative shall be deemed to be the same as a demand by a member.

RECOMMENDATIONS

The Independent Board Committee, comprising all the independent non-executive Directors, namely Mr. Liu Kwong Sang, Mr. Sit Hing Wah and Dr. Hu Chung Kuen, David, have been appointed to give recommendation to the Independent Shareholders in respect of the Subscription Agreement (including the issue of the Subscription Notes).

— 12 —

LETTER FROM THE BOARD

Taifook has been appointed as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders regarding the terms of the Subscription Agreement (including the issue of the Subscription Notes).

The Independent Board Committee having considered the advice of Taifook, consider that the Subscription is in the interest of the Company and the Shareholders as a whole and the terms of the Subscription Agreement are fair and reasonable so far as the Independent Shareholders are concerned. Accordingly, the Independent Board Committee recommend the Independent Shareholders to vote in favour of the resolution to be proposed at the EGM to approve the Subscription Agreement (including the issue of the Subscription Notes).

All Directors consider the Subscription, the Placing and the increase in authorised share capital are in the interests of the Company and the Shareholders as a whole and accordingly recommend the Shareholders or the Independent Shareholders (as the case may be) to vote in favour of the resolutions to be proposed at the EGM to approve the Subscription and the Placing and the increase in authorised share capital.

Your attention is drawn to the letters from the Independent Board Committee and Taifook set out on page 14 and pages 15 to 27 of this circular.

GENERAL

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

Yours faithfully, For and on behalf of the Board Wing Hong (Holdings) Limited Hui Chi Yung Chairman

— 13 —

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

==> picture [209 x 111] intentionally omitted <==

(Stock code: 745)

3 September 2007

To the Independent Shareholders

Dear Sir or Madam,

SUBSCRIPTION OF CONVERTIBLE NOTES CONSTITUTING A CONNECTED TRANSACTION

We refer to the circular of the Company dated 3 September 2007 (the “Circular”), of which this letter forms part. Terms used herein have the same meanings as those defined in the Circular unless the context otherwise requires.

We have been appointed as the Independent Board Committee to consider the terms of the Subscription Agreement (including the issue of the Subscription Notes), and to advise you as to whether, in our opinion, such terms are fair and reasonable so far as the Company and the Independent Shareholders are concerned and the Subscription (including the issue of the Subscription Notes) are in the interests of the Company and the Shareholders as a whole.

Taifook has been appointed as the independent financial adviser to advise us and you regarding the terms of the Subscription (including the issue of the Subscription Notes). Details of its advice, together with the principal factors and reasons it has taken into consideration in giving its advice, are set out in its letter on pages 15 to 27 of the Circular. Your attention is also drawn to the letter from the Board and the additional information set out in the appendix to the Circular.

Having considered the terms of the Subscription Agreement (including the issue of the Subscription Notes) together with the independent advice of Taifook, we consider that the terms of the Subscription Agreement (including the issue of the Subscription Notes) are fair and reasonable so far as the Company and the Independent Shareholders are concerned, and the Subscription (including the issue of the Subscription Notes) are in the interests of the Company and the Shareholders as a whole. On this basis, we recommend the Independent Shareholders to vote in favour of the ordinary resolution to be proposed at the EGM to approve the Subscription (including the issue of the Subscription Notes).

Yours faithfully, Independent Board Committee Liu Kwong Sang Sit Hing Wah Hu Chung Kuen, David

* For identification purpose only

— 14 —

LETTER FROM TAIFOOK

The following is the text of a letter from Taifook to the Independent Board Committee and the Independent Shareholders regarding the terms of the Subscription Agreement (including the issue of the Subscription Notes), which is prepared for inclusion in this circular.

25th Floor New World Tower 16-18 Queen’s Road Central Hong Kong 3 September 2007

To the Independent Board Committee and the Independent Shareholders

Dear Sirs,

SUBSCRIPTION OF CONVERTIBLE NOTES CONSTITUTING A CONNECTED TRANSACTION

INTRODUCTION

We refer to our appointment as the independent financial adviser to the Independent Board Committee and the Independent Shareholders with respect to the terms of the Subscription Agreement and the Subscription Notes, details of which are set out in the letter from the Board (the “Letter”) contained in the circular of the Company dated 3 September August 2007 (the “Circular”), of which this letter forms part. Terms used in this letter shall have the same meanings as defined in the Circular unless the context otherwise requires.

As referred to in the Letter, on 16 August 2007, the Company entered into the Placing Agreement with the Placing Agent in relation to the placing by the Placing Agent, on a best effort basis, of the Placing Notes with principal amount up to HK$148,000,000 to the Subscribers. The Placing Agent will use reasonable endeavours, exercise due care and make reasonable enquiries to ensure that the Subscribers and their ultimate beneficial owners are Independent Third Parties. The Placing Notes may be issued in up to twelve Tranches during the Placing Period. Moreover, on 16 August 2007, the Company entered into the Subscription Agreement with Rich Place, pursuant to which, the Company has conditionally agreed to issue to Rich Place or its nominee the Subscription Notes at the principal amount of up to HK$148,000,000. Rich Place is required to subscribe for the Subscription Notes equal to the aggregate principal amount of the Placing Notes at each Tranche. The obligations of the parties in relation to the Placing of the Placing Notes under the Placing Agreement and completion of the Subscription Agreement are conditional on, among other things, the passing by the Shareholders (who are permitted to vote under the Listing Rules) of a resolution to approve the issue of the Notes and any Conversion Shares at the EGM. Completion of the issue of each Tranche of the Subscription Notes is conditional upon, among other things, the issue immediately before such completion of the Placing Notes in the same Tranche. The terms of the Subscription Notes are in all material aspects the same as the Placing Notes.

— 15 —

LETTER FROM TAIFOOK

As Rich Place is the controlling Shareholder of the Company holding approximately 50.22% of the total issued share capital of the Company as at the Latest Practicable Date, it is a connected person of the Company. Accordingly, the transactions contemplated under the Subscription Agreement, including the issue of the Conversion Shares upon exercise of the conversion rights attached to the Subscription Notes, will constitute a connected transaction of the Company under Chapter 14A of the Listing Rules.

The issue of the Subscription Notes and the issue of the Conversion Shares upon exercise of the conversion rights attached to the Subscription Notes as contemplated under the Subscription Agreement are subject to, among other things, the approval of the Independent Shareholders by way of a poll at an EGM of the Company where Rich Place and its associates will be required to abstain from voting.

In our capacity as the independent financial adviser to the Independent Board Committee and the Independent Shareholders, our role is to provide the Independent Board Committee and the Independent Shareholders with an independent opinion and recommendation as to whether the terms of the Subscription Agreement and the Subscription Notes are fair and reasonable so far as the Independent Shareholders are concerned and the entering into of the Subscription Agreement is in the interest of the Company and the Shareholders as a whole.

BASIS OF OUR OPINION

In formulating our recommendation, we have relied on the information, financial information and facts supplied to us and representations expressed by the Directors and/or the management of the Company and have assumed that all such information, financial information and facts and any representations made to us, or referred to in the Circular, in all material aspects, are true, accurate and complete as at the time they were made and as at the date of the Circular, has been properly extracted from the relevant underlying accounting records (in the case of financial information) and made after due and careful inquiry by the Company and/or the management of the Company. The Directors and/or the management of the Company have confirmed that, having made all reasonable enquiries and to the best of their knowledge and belief, all relevant information has been supplied to us and that no material facts have been omitted from the information supplied and representations expressed to us. We have also relied on certain information available to the public and have assumed such information to be accurate and reliable. We have no reason to doubt the completeness, truth or accuracy of the information and facts provided and we are not aware of any facts or circumstances which would render such information provided and representations made to us untrue, inaccurate or misleading.

We considered we have reviewed sufficient information to reach an informed view and to provide a reasonable basis for our opinion. We have not, however, conducted any independent verification of the information nor have we conducted any form of in-depth investigation into the businesses, affairs, financial position or prospects of the Group.

— 16 —

LETTER FROM TAIFOOK

PRINCIPAL FACTORS AND REASONS CONSIDERED

In arriving at our recommendation in relation to the terms of the Subscription Agreement and the Subscription Notes, we have considered the following principal factors and reasons:

Information and background of the Group and reasons for the issue of the Subscription Notes

The Group is principally engaged in a broad spectrum of construction works, including building construction, renovation and fitting out works for both public and private sectors in Hong Kong.

As stated in the Company’s annual report for the year ended 31 March 2007, the Group recorded audited turnover of approximately HK$64.4 million, representing a decrease of approximately 57.8% as compared to that of last year, and loss attributable to equity holders of the Company of approximately HK$20.4 million which was approximately 36.0% less than that of last year, whereas the consolidated net assets attributable to equity holders of the Company decreased from approximately HK$126.2 million as at 31 March 2006 to approximately HK$112.5 million as at 31 March 2007. It is noted from the Company’s annual report for the year ended 31 March 2007 that the Company’s auditors had issued a disclaimer of opinion on the financial statements of the Company for the year ended 31 March 2007 on the basis that there were significant uncertainty and limitation of audit scope relating to recoverability of accounts receivable, other receivable and arbitrations, and significant uncertainties relating to the going concern basis of the Group. As stated in the report of the auditors and the notes to the financial statements set out in the Company’s annual report for the year ended 31 March 2007, the financial statements for the year ended 31 March 2007 were prepared on a going concern basis, the validity of which depends upon the outcomes of the arbitrations and recoverability of accounts receivable and other receivable, and the successful outcome of the Group’s measures to satisfy its working capital needs and to improve its liquidity position.

It was further stated in the notes to the Company’s financial statements for the year ended 31 March 2007 that in order to maintain working capital of the Group, two of the major shareholders of the Company provided continual financial support to the Group in the form of shareholders’ loan of which approximately HK$33.7 million and HK$3.6 million of the loans had been made to the Group by Rich Place and Million Honest Limited respectively. Such loans from Rich Place and Million Honest Limited are unsecured, bear interest at prime rate minus 2% per annum and are repayable in October 2008. In the opinion of the Directors, in light of the continual financial support from these major shareholders, the Group would have sufficient financial resources to satisfy its working capital needs for the foreseeable future.

Assuming a maximum principal amount of HK$296 million of the Notes are issued, the net proceeds from the Placing and the Subscription would be approximately HK$287 million. As stated in the Letter, the Company intends to apply the aforesaid net proceeds from the Placing and Subscription for future investment and general working capital of the Group. The Company has been considering various investment opportunities in China. However, no definite agreement has been entered into with respect to any investment target as at the Latest Practicable Date.

— 17 —

LETTER FROM TAIFOOK

As further advised by the Directors, Rich Place, as the controlling shareholder of the Company, supports the decision of the Directors that the Company should continue its cost control policy while raising additional new capital for its future investment and developments, with a view to improving its assets base, liquidity position, capital structure and broaden its earnings base. The issue of the Subscription Notes, as a less costly way of financing, will enable the Company to obtain additional funding on top of the Placing Notes and allow the Company to negotiate for better and more attractive investment terms that may be taken up by the Company in the future.

In view of (i) completion of the issue of each Tranche of the Subscription Notes is conditional upon, among other things, the issue immediately before such completion of the Placing Notes in the same Tranche so as to allow Rich Place to top-up the proceeds to be received by the Company from the Placing (whether in small or substantial amount) by way of the Subscription which is considered to be beneficial to the Group as the terms of the Subscription Notes are substantially the same as that of the Placing Notes and are considered fair and reasonable as discussed below; and (ii) Rich Place has been the controlling shareholder of the Company before the entering into of the Placing Agreement and the Subscription Agreement and its past contribution and support to the Group was important to the operation of the Group, we consider that there is a strong commercial rationale to enter into the Subscription Agreement and the entering into of the Subscription Agreement is in the interests of the Company and its Shareholders as a whole.

Alternative financing methods

In order to obtain funds for the Group to strengthen the financial position of the Group and equip the Company with readily available funds to take up investment opportunities as and when they arise as detailed in the paragraph headed “Information and background of the Group and reasons for the issue of the Subscription Notes” above, the Directors have considered various alternative means of financing.

Debt financing

Based on the published audited consolidated balance sheet as at 31 March 2007, the Group had a gearing ratio of approximately 33.2% (being the Group’s total shareholders’ loan of approximately HK$37.4 million divided by the Group’s consolidated net assets attributable to equity holders of the Company of approximately HK$112.5 million) and the Company’s auditors had expressed in its auditors’ report that there are significant uncertainties relating to the going concern basis of the Group for the year ended 31 March 2007. As such, the Group might not easily borrow funds of similar amount as the maximum principal amount of the Notes from banks. Moreover, the Notes bear no interest whereas the interest rate of the Group’s shareholders’ loan is at approximately prime rate minus 2% per annum. Accordingly, as compared to the issue of Subscription Notes, the Directors consider that the interest expenses which might have to be incurred from bank borrowings or further shareholders’ loan may create greater pressure on the cashflow of the Group in the short run. Based on the above, we concur with the view of the Directors that bank borrowings or further shareholders’ loan are not appropriate for or beneficial to the Group under current circumstances and the issue of the Subscription Notes provides a relatively less costly way of financing the Company.

— 18 —

LETTER FROM TAIFOOK

Other equity financing

The Directors have considered other equity financing as follows:

A placing of new Shares will have an immediate dilution effect on the shareholding interest of existing Shareholders whereas, in normal circumstances, an issue of Subscription Notes does not create an immediate dilution effect on the existing shareholders unless and until the conversion rights under the Subscription Notes are exercised. Moreover, we note that in a placing of new shares, the placing price is usually set at a discount to market price. Since the Subscription Notes do not bear any interest and will be redeemed at the principal amount without any premium, we are of the view that the discount represented by the Initial Conversion Price to the market price of the Shares as at the last full trading day (the “Last Trading Day”) immediately before trading in the Shares was suspended prior to the issue of the Announcement was acceptable; and
The average daily trading volume of the Shares for the trading days during the past 12 months ended on 13 August 2007, being the Last Trading Day, is approximately 2,976,510 Shares per trading day, representing merely approximately 2.5% of the total number of the Shares in issue and approximately 6.1% of the number of the Shares in public hands as at the Latest Practicable Date. Due to the fact that the trading volume of the Shares is relatively thin, the Directors consider that if the Company raises the necessary funds by way of a rights issue or an open offer instead of the issue of the Subscription Notes, it might have to be set at a high offer ratio and the subscription price for which would have to be set at significant discounts to the prevailing market price of the Shares and the underlying net assets value so as to attract subscription by the Shareholders. In addition, underwriting uncertainty and market risk associated with a rights issue or an open offer is normally higher as it would take a longer time to complete a rights issue or an open offer and any arm’s length underwriting is normally subject to standard force majeure clause in favour of the underwriter. In light of the fact that a significant discount rate to the prevailing market price of the Shares might have to be offered in order for a rights issue or an open offer to be fully underwritten by independent underwriter(s) and a longer period of completion time will be required by a rights issue or an open offer, we consider that a rights issue or an open offer is a less appropriate means of financing than the issue of the Subscription Notes at the prevailing time.

Accordingly, as compared to debt financing from bank borrowings and further shareholders’ loan and other equity financing, we consider that the issue of the Subscription Notes is an appropriate financing method under the current circumstances.

Principal terms of the Subscription Agreement and the Subscription Notes

Pursuant to the Subscription Agreement, Rich Place has conditionally agreed to subscribe for the Note by cash to be issued by the Company with a principal amount of up to HK$148,000,000. Rich Place is required to subscribe for the Subscription Notes equal to the aggregate principal amount of the Placing Notes at each Tranche.

— 19 —

LETTER FROM TAIFOOK

As stated in the Letter, pursuant to the terms of the Subscription Notes, Rich Place shall have the right to convert during the period on and excluding the 7th day after the day of issue of Subscription Notes and up to and including the day which is 7 days prior to the Maturity Date, the whole or any part (in an amount or integral multiple of HK$10,000,000 except for the last Tranche of the Subscription Notes to be issued) of the principal amount of the Subscription Notes into Shares at the then prevailing conversion price.

(a) Conversion price

The Initial Conversion Price of HK$0.80 per Share, subject to usual anti-dilution adjustments in certain events such as share consolidation, share subdivision, capitalisation issue, capital distribution, rights issue and other equity or equity derivatives issues by the Company, was determined after arm’s length negotiations between the Company and Rich Place with reference to the prevailing market prices of the Shares.

The Initial Conversion Price of HK$0.80 per Share represents:

		Price/value	Premium/
		per Share	(discount)
		approximately	approximately
		HK$	%
(i)	Closing price as quoted on the Stock Exchange
	immediately before trading of the Shares was
	suspended from 10:00 am on 14 August 2007	0.85	(5.88)
(ii)	Closing price as quoted on the Stock Exchange
	on 13 August 2007, being the Last Trading Day	0.82	(2.44)
(iii)	Average closing price per Share as quoted on
	the Stock Exchange for the last 5 consecutive
	trading days up to and including
	the Last Trading Day	0.93	(13.98)
(iv)	The consolidated net assets value per Share
	of the Group as at 31 March 2007 (based on
	the audited consolidated net assets attributable to
	the equity holders of the Company as at 31 March
	2007 of approximately HK$112.5 million divided
	by 121,083,000 issued Shares as at the Latest
	Practicable Date)	0.93	(13.98)

— 20 —

LETTER FROM TAIFOOK

(1) Share price performance

Set out below are the month/period end closing prices and average daily closing prices of the Shares for each month during the period from 1 August 2006 to the Latest Practicable Date:

	Month/		Average
	period end		daily
	closing price	closing price
	approximately	approximately
	HK$		HK$
2006
August(*)	0.32		0.32
September(*)	0.29		0.33
October(*)	0.27		0.27
November(*)	0.53		0.37
December(*)	0.44		0.48
2007
January(*)	0.42		0.40
February(*)	0.72		0.57
March(*)	1.03		0.64
April(*)	0.77		0.92
May	0.80		0.77
June	0.83		0.91
July	1.17		0.99
August (up to the Latest Practicable Date)	1.30		1.12

(*) The share prices of the Company for the period from 1 August 2006 to 27 April 2007 have been adjusted to account for the effect of the consolidation of shares on the basis of 10 then existing ordinary shares of the Company into 1 new Share.

Source: The website of the Stock Exchange

The average daily closing prices of the Shares had been in a range of HK$0.27 to HK$1.12 during the period from 1 August 2006 to the Latest Practicable Date. The closing price of the Shares hit a high of HK$1.44 on 25 July 2007 and a low of HK$0.25 on 3 October 2006, 17 October 2007 and 18 October 2007.

— 21 —

LETTER FROM TAIFOOK

(2) Comparables

In order to assess the fairness and reasonableness of the terms of the Subscription Notes, we consider that it would be more appropriate to look into the issue of convertible notes with principal amount of not more than HK$500 million by companies listed on the Main Board of the Stock Exchange which were announced for the period from 15 July 2007 to 15 August 2007, being the one-month period immediately before the date of the Subscription Agreement (i.e. 16 August 2007). The key terms of these market comparables are set out in the following table:

							Premium/	Premium/
							(discount) of
							conversion
							price	over/to
						Redemption	last	5-day
Date of						price at	trading	average
Announcement	Company	Principal	Interest		Maturity	maturity	price		price
		million	%		Years	%	%		%
16-Jul-07	Mascotte Holdings Limited	HK$500	0		3.3	100	(20.0)		(23.7)
25-Jul-07	Venture International	HK$120	0		3	100	n.a.		n.a.
	Investment Holdings
	Limited
25-Jul-07	China Elegance	HK$160	0		2	104	(30.6)		(12.9)
	(Holdings) Limited
31-Jul-07	China Water Industry	HK$385	0.25		5	159.3976	17.4		17.7
	Group Limited
31-Jul-07	Midas International	HK$130	1.5		3	100	(6.5)		4.6
	Holdings Limited
6-Aug-07	Leroi Holdings Limited	HK$190	3		5	100	(59.3)		(63.8)
6-Aug-07	Interchina Holdings	HK$133	3.5		2	110	(12.1)		0.5
	Company Limited
6-Aug-07	G-Prop (Holdings)	HK$180	0		3	100	(92.2)		(92.4)
	Limited
7-Aug-07	Riche Multi-media	HK$447	0		10	100	29.9		22.0
	Holdings Limited
8-Aug-07	New Smart Energy	HK$250	0		5	100	(19.4)		(37.5)
	Group Limited
15-Aug-07	China Rich Holdings	HK$384		0	5	100	(56.04)	(57.17)
	Limited
High			3.5		10.0	159.3976	29.9		22.0
Low			0.0		2.0	100.0	(30.6)		(37.5)
Average			0.7		4.2	109.2	(5.9)		(4.2)
The Company			0.0		3.0	100.0	(5.9)*		(14.0)

* a discount to the closing price of HK$0.82 per Share as quoted on the Stock Exchange on 13 August 2007

Source: The website of the Stock Exchange

— 22 —

LETTER FROM TAIFOOK

Given that the discount represented by the conversion prices of the convertible notes issued by Leroi Holdings Limited, G-Prop (Holdings) Limited and China Rich Holdings Limited respectively significantly deviate from those issued during the one-month period immediately before the date of the Subscription Agreement as listed above, we have chosen not to include them as part of the market comparables (the “Comparables”) in the calculation of the high, low and average figures of the Comparables and in the following analysis. Moreover, the conversion price of the convertible notes issued by Venture International Investment Holdings Limited (“Venture”) as consideration of an acquisition by Venture was determined with reference to the average of 5 days closing prices prior to and including the date of completion of such acquisition by Venture rather than with reference to closing prices prior to the entering into of the relevant agreement, we have also chosen not to include it as part of the Comparables in the calculation of the high, low and average conversion price of the Comparables and in the following analysis in relation to the conversion price.

As indicated above, the conversion prices of the Comparables ranged from (i) a discount of approximately 30.6% to a premium of approximately 29.9% to the closing price of the last trading day immediately prior to the respective date of announcement; and (ii) from a discount of approximately 37.5% to a premium of approximately 22.0% to the average closing price for the last 5 trading days up to and including the last trading day immediately prior to the respective date of announcement. The discount of the Initial Conversion Price of the Subscription Notes to the closing price on the Last Trading Day of approximately 5.9% and to the average closing price for the last 5 trading days up to and including the Last Trading Day of approximately 14.0% are within the range of the Comparables respectively. In addition, in light of the fact that the Subscription Notes bear no interest and will be redeemed at 100% of the principal outstanding amount on the maturity date, we are of the view that the slight discount represented by the Initial Conversion Price to the closing price on the Last Trading Day and the average closing price for the last 5 trading days up to and including the Last Trading Day is acceptable.

(b) Interest rate

The Subscription Notes carry no interest which is favorable to the Company and is better than the average of the Comparables of approximately 0.7%.

(c) Redemption

Unless previously converted, upon presentation of the original of the Notes to the Company at its own expense during normal business hours, the Company shall redeem the Notes on the maturity date at the redemption amount which is 100% of the principal amount of the Notes then outstanding.

The Subscription Notes will be redeemed at maturity at 100.0% of the principal amount without any premium whereas the Comparables are redeemable at maturity at an average premium of 109.2%. Thus, we are of the view that the redemption at principal amount of the Subscription Notes is favorable to the Company.

— 23 —

LETTER FROM TAIFOOK

(d) Maturity, transferability, voting and ranking

The Subscription Notes have a maturity period of three years from the date of issue of each Tranche of the Subscription Notes and they may transferred only with the prior written consent of the Company.

A Noteholder will not be entitled to receive notice of, attend or vote at any general meetings of the Company by reason only of it being a Noteholder.

The Subscription Notes will rank pari passu with all other present and future unsecured and un-subordinated obligations of the Company. The Conversion Shares to be issued as a result of the exercise of the conversion rights attached to the Subscription Notes will rank pari passu in all respects with all other Shares in issue at the date on which the conversion rights attached to the Subscription Notes are exercised.

We consider that the terms of the Subscription Agreement in relation to the maturity (i.e. within the range of the maturity period from 2 to 10 years of the Comparables as shown above), transferability, voting and ranking are normal for debt securities of similar kind.

(e) Issue in tranches

Pursuant to the Subscription Agreement, Rich Place is required to subscribe for the Subscription Notes equal to the aggregate principal amount of the Placing Notes at each Tranche. The Placing Notes issued by the Company shall be issued in up to twelve separate Tranches during the Placing Period in which amounts as notified by the Placing Agent in writing to the Company provided that the principal amount of each Tranche is not less than HK$10,000,000 (except for the last Tranche of the Placing Notes to be issued). We concur with the view of the Directors that given the substantial size of the Subscription Notes (approximately 143.8% of the market capitalisation of the Company as at the date of the Subscription Agreement assuming all Subscription Notes of an aggregate principal amount of HK$148 million were issued), such an arrangement ensure that Rich Place has to subscribe for the Subscription Notes in separate tranches during the Placing Period depending on the prevailing market conditions so that Company can receive proceeds from the issue of the Subscription Notes throughout the Placing Period.

Having considered: (i) the background to and reasons for the granting of the Subscription Notes and entering into of the Subscription Agreement as described in the paragraph headed “Information and background of the Group and reasons for the issue of the Subscription Notes” above; (ii) the discount of the Initial Conversion Price of Subscription Notes under the Subscription Agreement to the closing price on the Last Trading Day and the average closing price for the last 5 trading days up to and including the Last Trading Day are within the range of the Comparables respectively and is considered acceptable in light of the fact that the Subscription Notes bear no interest and will be redeemed at the face value without any premium; (iii) the Subscription Notes bear no interest whereas the Comparables bear an average interest rate of approximately 0.7%; (iv) the terms in relation to the maturity (within the range of the maturity period from 2 to 10 years of the Comparables), transferability, voting and ranking are normal for debt securities of similar kind; and (v) the issue of the Placing Notes in Tranches ensure that Rich Place has to subscribe for the Subscription Notes

— 24 —

LETTER FROM TAIFOOK

in separate Tranches during the Placing Period depending on the prevailing market conditions so that Company can receive proceeds from the issue of the Subscription Notes throughout the Placing Period; we are of the view that the terms of the Subscription Agreement are fair and reasonable and the entering into of the Subscription Agreement as a whole benefits the Company and is in the interests of the Company and the Independent Shareholders as a whole.

Possible financial effects

The following analysis on the effect on the working capital, net assets value and gearing position of the Group as a result of the issue of the Subscription Notes and its subsequent conversion into Conversion Shares is for illustration purpose only assuming that there will not be any changes to the issued share capital of the Company as at the Latest Practicable Date other than, having regard to the fact that in substance, the issue of each Tranche of the Subscription Notes is conditional on the issue immediately before such completion of the Placing Notes in the same Tranche, the issue of the Conversion Shares upon full conversion of the Notes at the Initial Conversion Price, and Notes with an aggregate principal amount of HK$296 million is issued.

Working capital

Based on the audited financial statements of the Group for the year ended 31 March 2007, the Group had a working capital of approximately HK$147.5 million, comprising current assets of approximately HK$212.6 million, including cash and bank balances of approximately HK$32.2 million and pledged time deposits of approximately HK$5.1 million, and current liabilities of approximately HK$65.1 million. Assuming the factors which may affect working capital position remain unchanged, the Group’s working capital will be enhanced as a result of the increase in its cash and bank balances of approximately HK$287 million received from the net proceeds of the completion of the Placing and the subscription of the Subscription Notes. Therefore, we are of the view that the issue of the Subscription Notes is favourable to the working capital position of the Group.

Net assets value

Based on the number of Shares in issue as at the Latest Practicable Date of 121,083,000 Shares, and the Group’s consolidated net assets attributable to the equity holders of the Company of HK$112.5 million, the consolidated net assets attributable to the equity holders of the Company per Share is approximately HK$0.93.

Assuming the Notes are converted in full at the Initial Conversion Price, a maximum of 370,000,000 Shares will fall to be issued and the total principal amount of HK$296 million (assuming all Placing Notes of an aggregate principal amount of HK$148 million were successfully placed and all Subscription Notes of an aggregate principal amount of HK$148 million were subscribed for and issued) will be contributed to the total equity and the net assets value of the Group will be increased by the aggregate net proceeds from the placing of the Placing Notes and the issue of the Subscription Notes of approximately HK$287 million. Therefore, the consolidated net assets attributable to the equity holders of the Company will be increased whereas the consolidated net assets attributable to the equity holders of the Company per Share will be decreased slightly immediately upon full conversion of the Placing Notes and the Subscription Notes at the Initial Conversion Price.

— 25 —

LETTER FROM TAIFOOK

Given that the net assets attributable to the equity holders of the Company will be enhanced upon full conversion of the Placing Notes and the Subscription Notes and the working capital position of the Group will be enhanced as a result of the issue of the Placing Notes and the Subscription Notes which are favorable for the Group’s future investment and development, we are of the view that the slight decrease in the consolidated net assets attributable to the equity holders of the Company per Share is acceptable.

Gearing position

Based on the audited consolidated balance sheet of the Group as at 31 March 2007, the Group had a gearing ratio of approximately 33.2% (being the Group’s total shareholders’ loan of approximately HK$37.4 million divided by the Group’s consolidated net assets attributable to the equity holders of the Company of approximately HK$112.5 million).

We understand from the Company that due to the convertible feature of the Notes, the accounting treatments for the Notes include the initial recognition of the fair value of the liability component and the equity component of the Notes upon the issue of the Notes. Due to the increase in the liability component of the Placing Notes and the Subscription Notes of the Group and equity of the Group attributable to the Shareholders as a result of the issue of the Placing Notes and the Subscription Notes, the gearing ratio of the Group upon completion of the Placing Agreement and the Subscription Agreement and before any conversion of the Placing Notes and the Subscription Notes respectively would be increased. However, the gearing ratio of the Group will decrease gradually from time to time during the term of the Placing Notes and the Subscription Notes upon conversion. Immediately upon full conversion of the Placing Notes and the Subscription Notes, the total principal amount of the Placing Notes and the Subscription Notes will be contributed to the equity of the Company and increase the total equity attributable to equity holders of the Company.

After considering the reasons for the entering into the Subscription Agreement as stated in the paragraph headed “Information and background of the Group and reasons for the issue of the Subscription Notes” above, the funds raised from the issue of the Subscription Notes will further strengthen the financial position of the Group and equip the Company with readily available funds to take up investment opportunities as and when they arise, the Subscription Notes bear no interest and will be redeemed at maturity at principal amount without any premium, we consider that the increase in the gearing ratio of the Group upon completion of the Subscription Agreement as aforesaid is justifiable in so far as the Independent Shareholders are concerned.

Dilution in shareholding

Based on the shareholding structure of the Company as set out in the Letter, as at the Latest Practicable Date, 48,603,000 Shares were held by public Shareholders, representing approximately 40.14% of the issued share capital of the Company. Upon exercise of the conversion rights attaching to the Placing Notes and the Subscription Notes, such corresponding shareholding will be diluted to approximately 9.90%. The Shareholders should note that dilution effect on earnings per Share and shareholding is inevitable if the Subscription Notes are converted. Shareholders would face a similar level of dilution if a placing as well as a rights issue or an open offer of the similar size of the Subscription Notes is proceeded instead of the issue of the Subscription Notes and they do not subscribe for the shares in full (under the rights issue or the open offer). Nevertheless, as discussed in the section headed “Alternative

— 26 —

LETTER FROM TAIFOOK

financing methods” above, a rights issue or an open offer is not an appropriate alternative to the Company at the prevailing time. Having considered that (i) the use of proceeds from the issue of the Subscription Notes as described in the paragraph headed “Information and background of the Group and reasons for the issue of the Subscription Notes” above; and (ii) the issue of the Subscription Notes is an appropriate means of financing compared with all other alternative means of financing as discussed in the paragraph headed “Alternative financing methods” above, we consider that the dilution effects on the shareholdings are inevitable if the Subscription Notes are converted and therefore acceptable, though on its own is not favourable, so far as the Independent Shareholders are concerned.

RECOMMENDATION

Having considered (i) the above principal factors and reasons; and (ii) the terms of the Subscription Agreement and the Subscription Notes, we consider that the terms of the Subscription Agreement and the Subscription Notes are fair and reasonable so far as the Company and the Independent Shareholders are concerned and the entering into of the Subscription Agreement is in the interests of the Company and the Shareholders as a whole. We advise the Independent Board Committee and the Independent Shareholders to vote in favour of the ordinary resolution to be proposed at the EGM to approve the Subscription Agreement.

Yours faithfully, For and on behalf of Taifook Capital Limited Derek C.O. Chan April Chan Managing Director Executive Director

— 27 —

GENERAL INFORMATION

APPENDIX

1. RESPONSIBILITY STATEMENT

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

2. DISCLOSURE OF INTERESTS OF DIRECTORS AND CHIEF EXECUTIVE

As at the Latest Practicable Date, the interests and short positions of each Director and chief executive of the Company in the Shares, underlying shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which required notification 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 was deemed or taken to have under such provisions of the SFO) or which were required, pursuant to Section 352 of the SFO, to be entered in the register referred to therein, or which were required pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers to be notified to the Company and the Stock Exchange were as follows:

	Company/name		Number and class of
	of associated		securities/approximate
Name of Director	corporation	Capacity	shareholding percentage
			(Note 1)
Mr. Hui Chi Yung	Company	Settlor/Founder of The	60,811,856 Shares/
		Wing Hong Trust_(Note 2)_	50.22% (L)
	Rich Place	Settlor/Founder of The	1 ordinary share
	Investment Limited	Wing Hong Trust_(Note 3)_	100% (L)
Mr. Yiu Kai Yeuk	Company	Corporate interest_(Note 4)_	6,805,344 Shares/
Raphael			5.62%(L)
	Beatrice	Beneficial owner	96,000 ordinary shares/
	Construction Limited		10%(L)
Mr. Hui Kau Mo	Company	Settlor/Founder of The	60,811,856 Shares/
		Wing Hong Trust_(Note 2)_	50.22% (L)
	Rich Place	Settlor/Founder of The	1 ordinary share
	Investment Limited	Wing Hong Trust_(Note 3)_	100% (L)

Notes:

The letter “L” denotes the Director’s long position in such securities.
These shares are held by Rich Place Investment Limited which is wholly owned by RBTT Trust Cooperation (“RBTT”). RBTT is the trustee of The Wing Hong Trust, a discretionary trust whose beneficiaries are the family members of Mr. Hui Kau Mo. Mr. Hui Chi Yung is one of the beneficiaries of the Wing Hong Trust and a son of Mr. Hui Kau Mo.
The share is held by RBTT. RBTT is the trustee of The Wing Hong Trust, a discretionary trust whose beneficiaries are the family members of Mr. Hui Kau Mo.
These shares are held by Million Honest Limited, the entire issued share capital of which is held by Mr. Yiu Kai Yeuk, Raphael.

— 28 —

GENERAL INFORMATION

APPENDIX

Save as disclosed above, none of the Directors was a director or employee of a company which had an interest or short position in the Shares and underlying shares which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO.

3. SUBSTANTIAL SHAREHOLDERS

So far as is known to any Director or chief executive of the Company, and as at the Latest Practicable Date the following persons, other than the Directors or chief executive of the Company as disclosed above, had interests or short positions in the Shares or underlying shares which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or who had direct or indirect interest in the issued share capital carrying rights to vote in all circumstances at general meetings of any other member of the Group and the amount of each such person’s interest in such securities, together with particulars of any options in respect of such capital:

			Number and class of
	Company/Group		securities/approximate
Name	Member	Capacity	shareholding percentage
			(Note 1)
The Wing Hong Trust	Company	Beneficial owner	60,811,856 Shares/
		(Note 2)	50.22%(L)
Chin Ivan	Company	Beneficial owner	10,492,000 Shares/
			8.67%(L)
Million Honest Limited	Company	Beneficial owner	6,805,344 Shares/
		(Note 3)	5.62% (L)

Notes:

The letter “L” denotes the long position in such securities.
These shares are held by Rich Place Investment Limited. The entire issued share capital of Rich Place Investment Limited is held by RBTT, acting in its capacity as the trustee of The Wing Hong Trust, a discretionary trust whose beneficiaries are the family members of Mr. Hui Kau Mo.
The entire issued share capital of Million Honest Limited is beneficially owned by Mr. Yiu Kai Yeuk, Raphael.

4. EXPERT AND CONSENT

The following is the qualification of the expert who has given opinion or advice contained in this circular:

Name	Qualification
Taifook	a licensed corporation under the SFO to carry on
	type 6 (advising on corporate finance) regulated
	activity

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GENERAL INFORMATION

APPENDIX

Taifook has given and has not withdrawn its written consent to the issue of this circular with the inclusion of its letter and references to its name in the form and context in which they appear respectively.

As at the Latest Practicable Date, Taifook was not beneficially interested in the share capital of any member of the Group, nor did it have any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group, nor did they have any interest, either direct or indirect, in any assets which had been since 31 March 2007 (being the date to which the latest published audited financial statements of the Company were made up) acquired or disposed of by or leased to or were proposed to be acquired or disposed of by or leased to any member of the Group.

5. COMPETING INTERESTS

As at the Latest Practicable Date, none of the Directors or their respective associates was considered to have an interest in a business which competes or is likely to compete, either directly or indirectly, with the business of the Group pursuant to Rule 8.10 of the Listing Rules.

6. LITIGATION

The Group is involved in the following litigation cases as at the Latest Practicable Date:

(a) In the normal course of business, the Group is subject to claims for liquidated damages by relevant employers due to delays in completion of certain phases of construction contracts. The Group has filed extension of time claims.
(b) On 7 August 2002, a High Court action had been commenced by a subcontractor against a subsidiary of the Group in respect of (i) a claim for subcontracting fees and material costs of approximately HK$31,300,000; and (ii) a compensation claim for approximately HK$191,200,000 for the improper termination of a subcontracting contract. On 13 September 2002, an agreement was reached between the relevant subsidiary of the Group and the subcontractor resulting in the High Court action being withdrawn and all the dispute being referred to arbitration. In the statement of claim for the arbitration, the subcontractor revised the claim for subcontracting fees and material costs and compensation claim to approximately HK$42,600,000 and HK$84,400,000, respectively. On 9 July 2005, a writ of summons was issued and the proceedings were transferred to the Court of First Instance. The subcontractor further revised the claim for subcontracting fees and material costs and compensation claim to approximately HK$56,000,000 and HK$278,100,000 respectively.

As at the Latest Practicable Date, no decision had been made in relevant the arbitration and court proceedings.

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GENERAL INFORMATION

APPENDIX

(c) On 31 May 2004, 19 August 2004, 23 August 2005, 7 February 2006, 19 July 2006 and 4 September 2006 two District Court actions and four High Court actions had commenced by six employees against subsidiaries of the Group and the other respondents in respect of claims for employees’ compensation under common law for personal injuries sustained by the employees in accidents arising in and out of the course of their employments and personal injury, loss and damage arising out of the negligence.

Settlement has not been reached and no judgments have been made against the subsidiaries of the Group in respect of the above actions.

(d) On 13 September 2004, a subsidiary of the Group received a notice of arbitration from a nominated subcontractor in respect of a claim against the subsidiary of the Group in relation to payment being withheld in respect of subcontracting work delays and defects caused by the nominated subcontractor regarding works performed in a residential development project in Kowloon Tong, Hong Kong. The amount of claim was approximately HK$26,000,000.

On 5 May 2005, the subsidiary of the Group and the nominated subcontractor agreed to enter into a moratorium period of six months in relation to the arbitration. On 13 April 2006, the subsidiary of the Group and the nominated subcontractor further agreed to suspend the arbitration proceedings for another three months subject to the rights to re-active the proceedings upon three days written notice to the subsidiary of the Group. As at the Latest Practicable Date, the subsidiary has not received any notice to re-activate the case for the relevant subcontractor and there has been no further development on this case.

(e) On 26 July 2005, a High Court action was commenced by a subcontracted party of a subcontractor of the Group (the “Subcontracted Party”) against a subsidiary of the Group and the subcontractor, which is in liquidation, in respect of a claim for subcontracting fees and material costs of approximately HK$20,500,000 relating to a maintenance term contract. On 25 April 2006, the subcontracted party substantially revised its statement of claim and the total amount of claim was revised to approximately HK$14,241,000.
(f) On 23 August 2005, a subsidiary of the Group commenced arbitration proceedings against a subcontractor of the Group to recover an amount of approximately HK$12,886,000 due from the subcontractor, representing the costs incurred by the subsidiary on behalf of the subcontractor due to the subcontractor’s unsatisfactory performance in relation to a civil engineering works contract granted by the Civil Engineering Department of the HKSAR Government to the subsidiary. The subcontractor counterclaimed the subsidiary outstanding payment in the sum of HK$2,531,000. The parties had exchanged claims submission and there has been no further development on this case.
(g) On 7 December 2006, a subsidiary of the Group received a notice of arbitration from a subcontractor in respect of a claim against a subsidiary of the Group in respect of subcontracting works performed in a residential development project in Kowloon Tong, Hong Kong. The amount of claim was approximately

— 31 —

GENERAL INFORMATION

APPENDIX

HK$5,629,000. On 24 February 2007, the subsidiary of the Group sought to counterclaim against the subcontractor for approximately HK$8,062,000. As at the Latest Practicable Date, no ruling had been made in relation to the arbitration.

(h) On 28 March 2007, a subsidiary of the Group received a notice of arbitration from a nominated subcontractor in respect of a claim against the subsidiary of the Group in respect of subcontracting works performed in a residential development project in Kowloon Tong, Hong Kong. The amount of claim was approximately HK$3,253,000. On 29 June 2007, the subsidiary of the Group sought to counterclaim against the subcontractor for approximately HK$232,000 together with an order for indemnity for a sum amounting to approximately HK$4,389,000. As at the Latest Practicable Date, no ruling had been made in the arbitration. Saved as disclosed above as at the Latest Practicable Date, there is no litigation or arbitration of material importance pending or threatened against the Group.

Save as disclosed above, no litigation or claim of material importance was known to the Directors to be pending or threatened against any members of the Group as at the Latest Practicable Date.

7. MATERIAL ADVERSE CHANGES

The Directors are not aware of any material adverse change in the financial or trading position of the Group since 31 March 2007, the date to which the latest audited financial statements of the Company were made up.

8. MISCELLANEOUS

(a) Each of the executive Directors has entered into a service agreement with the Company for an initial term of three years commencing from 1 September 2004. Each of the executive Directors is entitled to the respective basic salaries set out below (subject to an annual increment after each completed year of service at a rate to be determined at the sole and absolute discretion of the board of Directors). In addition, the executive Directors are also entitled to a discretionary bonus as the board of Directors may in its absolute discretion determine having regard to the performance of the executive Director and the operating results of the Group in respect of any financial year of the Company. An executive Director may not vote on any resolution of the Directors regarding the amount of the bonus payable to him. Furthermore, the executive Directors are entitled to all reasonable medical expenses as provided under the Group’s medical benefits scheme. In addition, the executive Directors may, at the sole and absolute discretion of the board of Directors, be eligible to participate in any share option scheme from time to time adopted by the Company in accordance with the terms and conditions of such share option scheme. The current basic monthly salaries of the executive Directors are as follows:

Name	Amount
	HK$
Mr. Hui Chi Yung	68,800
Mr. Yiu Kai Yeuk, Raphael	139,800

— 32 —

GENERAL INFORMATION

APPENDIX

The independent non-executive Directors have been appointed for a term of 1 year commencing from 1 September 2006. The Company intends to pay a director’s fee of HK$20,000 per annum to each of the independent non-executive Directors. Save for the Director’s fee, none of the independent non-executive Director is expected to receive any other remuneration for holding their office as an independent non-executive Director.

Apart from the foregoing, no Director proposed for re-election at the forthcoming annual general meeting has a service contract with the Company which is not determinable by the Company within one year without payment of compensation, other than statutory compensation.

(b) As at the Latest Practicable Date, save for the Subscription Agreement, no Director had a material interest in any contract or arrangement which is subsisting at the Latest Practicable Date and is significant in relation to the business of the Group.
(c) None of the Directors has any direct or indirect interest in any assets which had been acquired, disposed of or leased to, or which are proposed to be acquired, disposed of or leased to, the Company or any of its subsidiaries since 31 March 2007 (the date to which the latest published audited financial statements of the Company were made up).
(d) The secretary of the Company is Mr. Shea Chun Lok, who is a fellow member of the CPA Australia and an associate member of the Hong Kong Institute of Certified Public Accountants. The qualified accountant of the Company is Mr. Tam Ping Kuen Daniel, who is a fellow member of the Association of Chartered Certified Accountants and an associate member of the Hong Kong Institute of Certified Public Accountants.
(e) The registered office of the Company is located at Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman KY1-1111, Cayman Islands.
(f) The head office and principal place of business of the Company in Hong Kong is located at 13th Floor, OTB Building, 259-265 Des Voeux Road Central, Hong Kong.
(g) The branch share registrar of the Company in Hong Kong is Tricor Investor Services Limited.
(h) The English texts of this circular and the accompanying form of proxy shall prevail over their respective Chinese texts.

9. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection during normal business hours (Saturdays and public holidays excepted) at the head office and principal place of business of the Company in Hong Kong at 13th Floor, OTB Building, 259-265 Des Voeux Road Central, Hong Kong from the date of this circular up to and including Wednesday, 19 September 2007 and at the EGM:

(a) the memorandum of association and articles of association of the Company;

— 33 —

GENERAL INFORMATION

APPENDIX

(b) the annual reports of the Company for each of the two years ended 31 March 2006 and 2007;
(c) the letter from the Independent Board Committee, the text of which is set out on page 14 of this circular;
(d) the letter from Taifook, the text of which is set out on pages 15 to 27 of this circular;
(e) the written consent referred to in the paragraph headed “Expert and consent” in this appendix;
(f) the Placing Agreement dated 16 August 2007;
(g) the Subscription Agreement dated 16 August 2007; and
(h) a copy of each of the circulars issued by the Company pursuant to the requirements set out in Chapters 14 and/or 14A of the Listing Rules which has been issued since the date of the latest published audited accounts of the Company.

— 34 —

NOTICE OF EXTRAORDINARY GENERAL MEETING

==> picture [209 x 111] intentionally omitted <==

(Stock code: 745)

NOTICE IS HEREBY GIVEN that an extraordinary general meeting of Wing Hong (Holdings) Limited (the “Company”) will be held at Room 901, 9th Floor, Hong Kong Scout Centre, Scout Path, Austin Road, Kowloon, Hong Kong on Wednesday, 19 September 2007 at 9:00 a.m. for the purpose of considering and, if thought fit, passing the following resolutions as ordinary resolution of the Company:

ORDINARY RESOLUTIONS

1. “ THAT

(i) the terms of the (i) placing agreement dated 16 August 2007 entered between the Company and President Securities (Hong Kong ) Limited (the “Placing Agent”) pursuant to which the Placing Agent agreed amongst other things to procure, on a best efforts basis, placees to subscribe in cash for up to HK$148,000,000 in principal amount of convertible notes (the “Placing Notes”) entitling the holders thereof to convert the principal amount thereof into shares of the Company (the “Conversion Shares”) at an initial conversion price of HK$0.80 per Conversion Share (subject to adjustment) and (ii) subscription agreement dated 16 August 2007 (the “Subscription Agreement”) between the Company and Rich Place Investment Limited (the “Subscriber”) pursuant to which the Company has agreed amongst other things to issue the convertible notes up to HK$148,000,000 in principal amount (the “Subscription Notes”) entitling the holders thereof to convert the principal amount thereof into Conversion Shares at an initial conversion price of HK$0.80 per Conversion Share (subject to adjustment), details of the Placing Agreement and the Subscription Agreement are described in the circular of the Company dated 3 September 2007, be and are hereby approved;
(ii) the issue by the Company of the Placing Notes and the Subscription Notes in accordance with the Placing Agreement and Subscription Agreement be and is hereby approved;
(iii) the allotment and issue by the Company of the Conversion Shares upon the exercise of any of the conversion rights attaching to the Placing Notes and the Subscription Notes by the holders thereof in accordance with the terms of the Placing Notes and the Subscription Notes be and is hereby approved;
(iv) the directors of the Company (the “Directors”) be and are hereby authorized to exercise all the powers of the Company and take all steps as might in their opinion be desirable or necessary in connection with the Placing Agreement and the Subscription Agreement including without limitation to:

* For identification purpose only

— 35 —

NOTICE OF EXTRAORDINARY GENERAL MEETING

  - (a) the execution, amendment, supplement, delivery, submission and implementation of any further documents or agreements with the Placing Agent and/or the Subscriber or any other parties in relation to the issue and allotment of the Convertible Notes;

  - (b) the issue of the Placing Notes and the Subscription Notes and the issue and allotment of the Conversion Shares;

  - (c) the taking of all necessary actions to implement the transaction contemplated under the Placing Agreement and Subscription Agreement.”

“ THAT
(i) the authorized share capital of the Company be increased from HK$20,000,000 divided into 200,000,000 shares (each a “Share”) of HK$0.10 each to HK$100,000,000 divided into 1,000,000,000 Shares by the creation of an additional 800,000,000 unissued Shares; and
(ii) the Directors be and are hereby authorized to do all such acts and things and execute all such documents which they consider necessary or expedient to give effect to the increase in the authorized share capital of the Company.”

By order of the board of directors of Wing Hong (Holdings) Limited Hui Chi Yung Chairman

3 September 2007

Head Office and Principal Place of Business in Hong Kong:

13th Floor, OTB Building 259-265 Des Voeux Road Central Hong Kong

As at the date hereof, the Board of Directors comprises Mr. Hui Chi Yung, Mr. Yiu Kai Yeuk, Raphael and Mr. Hui Kau Mo as Executive Directors and Mr. Liu Kwong Sang, Mr. Sit Hing Wah and Dr. Hu Chung Kuen, David as Independent Non-Executive Directors.

— 36 —

AI assistant

Imperium Financial Group Limited — Proxy Solicitation & Information Statement 2007

51224_rns_2007-09-02_85a5569d-ad8f-4ddb-a64b-9f7430a18de4.pdf

PLACING OF CONVERTIBLE NOTES AND SUBSCRIPTION OF CONVERTIBLE NOTES CONSTITUTING A CONNECTED TRANSACTION

CONTENTS

DEFINITIONS

PLACING OF CONVERTIBLE NOTES AND SUBSCRIPTION OF CONVERTIBLE NOTES CONSTITUTING A CONNECTED TRANSACTION

INTRODUCTION

LETTER FROM THE BOARD

THE PLACING AGREEMENT

Date

Parties to the Placing Agreement

Securities to be placed

Placing commission

Conditions of the Placing Agreement

Conditions for each Tranche and completion

THE SUBSCRIPTION AGREEMENT

Date

Parties to the Subscription Agreement

Conditions of the Subscription Agreement

Conditions for each Tranche and completion

PRINCIPAL TERMS OF THE NOTES

LETTER FROM THE BOARD

REASONS FOR THE PLACING AND THE SUBSCRIPTION AND USE OF PROCEEDS

SHAREHOLDING STRUCTURE OF THE COMPANY

LETTER FROM THE BOARD

DILUTION EFFECT ON SHAREHOLDERS

FUND RAISING ACTIVITIES IN THE PAST TWELVE MONTHS

LISTING RULES IMPLICATIONS

INCREASE IN AUTHORISED SHARE CAPITAL

EGM

LETTER FROM THE BOARD

PROCEDURES FOR DEMANDING A POLL

RECOMMENDATIONS

LETTER FROM THE BOARD

GENERAL

SUBSCRIPTION OF CONVERTIBLE NOTES CONSTITUTING A CONNECTED TRANSACTION

LETTER FROM TAIFOOK

SUBSCRIPTION OF CONVERTIBLE NOTES CONSTITUTING A CONNECTED TRANSACTION

INTRODUCTION

LETTER FROM TAIFOOK

BASIS OF OUR OPINION

LETTER FROM TAIFOOK

PRINCIPAL FACTORS AND REASONS CONSIDERED

Information and background of the Group and reasons for the issue of the Subscription Notes

LETTER FROM TAIFOOK

Alternative financing methods

Debt financing

Other equity financing

Principal terms of the Subscription Agreement and the Subscription Notes

LETTER FROM TAIFOOK

(a) Conversion price

LETTER FROM TAIFOOK

(1) Share price performance

LETTER FROM TAIFOOK

(2) Comparables

LETTER FROM TAIFOOK

(b) Interest rate

(c) Redemption

LETTER FROM TAIFOOK

(d) Maturity, transferability, voting and ranking

(e) Issue in tranches

LETTER FROM TAIFOOK

Possible financial effects

Working capital

Net assets value

LETTER FROM TAIFOOK

Gearing position

Dilution in shareholding

LETTER FROM TAIFOOK

RECOMMENDATION

1. RESPONSIBILITY STATEMENT

2. DISCLOSURE OF INTERESTS OF DIRECTORS AND CHIEF EXECUTIVE

3. SUBSTANTIAL SHAREHOLDERS

4. EXPERT AND CONSENT

5. COMPETING INTERESTS

6. LITIGATION

APPENDIX

7. MATERIAL ADVERSE CHANGES

8. MISCELLANEOUS

Imperium Financial Group Limited Proxy Solicitation & Information Statement 2007