Jolimark Holdings Limited — Proxy Solicitation & Information Statement 2006

Apr 21, 2006

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

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

If you have sold or transferred all your shares in Jolimark Holdings Limited (‘‘Company’’), you should at once hand this circular with the accompanying form of proxy to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission.

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JOLIMARK HOLDINGS LIMITED

(Incorporated in the Cayman Islands with limited liability)

(stock code: 2028)

PROPOSALS FOR RE-ELECTION OF DIRECTORS AND GENERAL MANDATES TO ISSUE AND REPURCHASE SECURITIES

The notice convening the annual general meeting (‘‘AGM’’) of the Company to be held at 11: 00 on 15 May 2006 at Room 3701, Tower II, Lippo Centre, 89 Queensway, Admiralty, Hong Kong is set out on pages 10 to 13 of this circular. A form of proxy for the AGM is also enclosed with this circular. Whether or not you are able to attend the AGM, you are requested to complete the form of proxy in accordance with the instructions printed thereon and return it to the office of the Hong Kong branch share registrar and transfer office of the Company, Computershare Hong Kong Investor Services Limited, at Shops 1712–16, 17th Floor, Hopewell Centre, 183 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 the AGM or any adjourned meeting thereof. Completion and return of the form of proxy shall not preclude you from attending and voting in person at the AGM or any adjourned meeting thereof should you so desire.

21 April 2006

CONTENTS

		Page
DEFINITIONS	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		3
Introduction . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
Re-election of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		3
General mandates to issue and repurchase securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		4
AGM . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		5
APPENDIX I	— DETAILS OF DIRECTORS PROPOSED TO BE
	RE-ELECTED AT THE AGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
APPENDIX II	— EXPLANATORY STATEMENT FOR GENERAL
	MANDATE TO REPURCHASE SECURITIES . . . . . . . . . . . . . . . . . . . . .	7

— i —

DEFINITIONS

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

• ‘‘2005 Annual Report’’ The annual report of the Company published on 31 March 2006 containing, inter alia, the audited financial statements of the Company for the year ended 31 December 2005

• ‘‘AGM’’ The annual general meeting of the Company to be held at Room 3701, Tower II, Lippo Centre, 89 Queensway, Admiralty, Hong Kong on 15 May 2006 at 11: 00a.m.

• ‘‘AGM Notice’’ The notice convening the AGM as set out in the 2005 Annual Report of the Company, a copy of which is dispatched together with this circular

• ‘‘Articles of Association’’ The articles of association of the Company ‘‘Board’’ The board of Directors

• ‘‘Capitalisation Issue’’ It has the same meaning as defined in the Prospectus

• ‘‘Director(s)’’ The director(s) of the Company

• ‘‘Group’’ The Company and its subsidiaries

• ‘‘Hong Kong’’ The Hong Kong Special Administrative Region of the People’s Republic of China

• ‘‘HK$’’ Hong Kong dollars, the lawful currency of Hong Kong

• ‘‘Jolimark Holdings A company incorporated in Cayman Islands with limited liability, the Limited Shares of which are listed on the Stock Exchange ’’

• ‘‘Latest Practicable Date’’ 18 April 2006, being the latest practicable date prior to the printing of this circular for ascertaining certain information in this circular

• ‘‘Listing Rules’’ The Rules Governing the Listing of Securities on the Stock Exchange

• ‘‘Over-allotment Option’’ It has the same meaning as defined in the Prospectus

• ‘‘PRC’’ The People’s Republic of China

• ‘‘Prospectus’’ The prospectus of the Company dated 20 June 2005

• ‘‘SFO’’ The Securities and Futures Ordinance, Chapter 571 of the Laws of Hong Kong

‘‘Share(s)’’ Ordinary share(s) of HK$0.01 each in the share capital of the Company ‘‘Share Offer’’ It has the same meaning as defined in the Prospectus ‘‘Shareholder(s)’’ Holder(s) of the Share(s)

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DEFINITIONS

‘‘Stock Exchange’’	The Stock Exchange of Hong Kong Limited
‘‘Takeovers Code’’	The Hong Kong Code on Takeovers and Mergers
‘‘%’’	Percent.

For the purpose of this circular, certain English translation of Chinese name or words are included for information purpose only and should not be relied upon as the official translation of such Chinese names or words.

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LETTER FROM THE BOARD

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JOLIMARK HOLDINGS LIMITED

(Incorporated in the Cayman Islands with limited liability)

(stock code: 2028)

Executive Directors:

Mr. Au Pak Yin (Chairman) Mr. Au Kwok Lun Mr. Ou Guo Liang Mr. Ng Shu Kai

Registered Office: Clifton House 75 Fort Street PO Box 1350 GT George Town, Grand Cayman Cayman Islands

Independent Non-executive Directors:

Mr. Lai Ming, Joseph Mr. Meng Yan Mr. Xu Guangmao

Principal place of business in Hong Kong: Room 3701, Tower II Lippo Centre, 89 Queensway Admiralty Hong Kong

21 April 2006

To the Shareholders

Dear Sir or Madam,

PROPOSALS FOR RE-ELECTION OF DIRECTORS AND

GENERAL MANDATES TO ISSUE AND REPURCHASE SECURITIES

INTRODUCTION

The purpose of this circular is to provide you with information regarding resolutions to be proposed at the AGM relating to (i) the re-election of Directors; and (ii) the grant of general mandates to the Directors for the issue and the repurchase of the Company’s securities up to 20% and 10% respectively of the aggregate nominal amount of the Company’s issued share capital as at the date of passing of such resolutions, and the extension of the general mandate to the Directors to issue shares to include the aggregate nominal amount of such securities repurchased under the repurchase mandate.

RE-ELECTION OF DIRECTORS

As at the Latest Practicable Date, the Board consisted of seven Directors, namely Mr. Au Pak Yin, Mr. Au Kwok Lun, Mr. Ou Guo Liang, Mr. Ng Shu Kai, Mr Lai Ming, Joseph, Mr. Meng Yan and Mr. Xu Guangmao.

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LETTER FROM THE BOARD

Pursuant to Article 108(a) of the Articles of Association, at each of the annual general meeting, one third of the Directors for the time being, or, if their number is not 3 or a multiple of 3, then the number nearest to but not less than one-third, shall retire from office by rotation provided that every Director shall be subject to retirement by rotation at least once every 3 years. Accordingly, two of the existing Directors, being Directors appointed by the Board, will hold office only until the AGM and, being eligible, will offer themselves for re-election at the AGM.

Article 113 of the Articles of Association provides that no person, other than a retiring Director, shall, unless recommended by the Board for election, be eligible for election as a Director at any general meeting, unless notice in writing of the intention to propose that person for election as a Director and notice in writing by that person of his willingness to be elected shall have been lodged at the head office or at the registration office. The period for lodgment of the notices required will commence no earlier than the day after the despatch of the notice of the general meeting appointed for such election and end no later than 7 days prior to the date of such general meeting and the minimum length of the period during which such notices to the Company may be given will be at least 7 days.

Accordingly, if a Shareholder wishes to nominate a person to stand for election as a Director at the AGM, notice of his intention to propose such person for election as a Director and the notice executed by the nominee of his willingness to be elected must be validly served at the Hong Kong branch share registrar and transfer office of the Company, Computershare Hong Kong Investor Services Limited, at Shops 1712–16, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Hong Kong on or before 28 April 2006.

Biographical details of the retiring Directors are set out in Appendix I to this circular. If a valid notice from a Shareholder to propose a person to stand for election as a Director at the AGM is received after the printing of this circular, the Company will issue a supplementary circular to inform Shareholders of the details of the additional candidate proposed.

GENERAL MANDATES TO ISSUE AND REPURCHASE SECURITIES

On 13 June 2005, resolutions in writing were passed by the Shareholders to approve, inter alia, the grant of (i) a general unconditional mandate authorising the Directors to allot, issue and deal with Shares with an aggregate nominal value not exceeding the sum of 20% of aggregate nominal amount of the share capital of the Company in issue immediately following completion of the Share Offer and the Capitalisation Issue (excluding any Shares which may be issued upon the exercise of the Over-allotment Option or options which may be granted under the Share Option Scheme) (‘‘Existing Issue Mandate’’); and (ii) a general unconditional mandate authorising the Directors to repurchase Shares not exceeding 10% of the aggregate nominal amount of the share capital of the Company in issue immediately following completion of the Share Offer and the Capitalisation Issue (excluding any Shares which may be issued upon the exercise of the Over-allotment Option or options which may be granted under the Share Option Scheme) (‘‘Existing Repurchase Mandate’’).

The Existing Issue Mandate and the Existing Repurchase Mandate will expire upon conclusion of the AGM dated 15 May 2006.

New general mandates to allot, issue and deal with the Shares up to a maximum of 20% and to repurchase Shares up to a maximum of 10% (‘‘Repurchase Mandate’’) respectively of the aggregate nominal amount of the issued share capital of the Company as at the date of passing of the resolutions as set out in Resolutions 6A and 6B respectively of the AGM Notice will be proposed at the AGM. Resolution authorising the extension of the general mandate to the Directors to issue Shares to include the aggregate nominal amount of such securities (if any) repurchased under the Repurchase Mandate as set out in Resolution 6C of the AGM Notice will be proposed at the AGM.

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LETTER FROM THE BOARD

With reference to the proposed new general mandates, the Directors wish to state that they have no immediate plans to issue or repurchase any new Shares pursuant to the relevant mandates as at the date of this circular.

An explanatory statement containing the particulars required by the Listing Rules to enable the Shareholders to make an informed decision on whether to vote for or against Resolution 6B to be proposed at the AGM in relation to the proposed Repurchase Mandate is set out in Appendix II to this circular.

AGM

The AGM Notice is set out on pages 10 to 13 of this circular. At the AGM, in addition to the ordinary business of the AGM, resolutions will be proposed to Shareholders to consider and, if thought fit, approve, among other things, the proposed re-election of Directors, the proposed grant of the general and unconditional mandates to issue and repurchase the Shares.

A form of proxy for the AGM is also enclosed with this circular. Whether or not you are able to attend the AGM or any adjourned meeting thereof, you are requested to complete the form of proxy in accordance with the instructions printed thereon and return it to the office of the Hong Kong branch share registrar and transfer office of the Company, Computershare Hong Kong Investor Services Limited, at Shops 1712–16, 17th Floor, Hopewell Centre, 183 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 the AGM or any adjourned meeting thereof. Completion and return of the form of proxy shall not preclude you from attending and voting in person at the AGM or any adjourned meeting thereof should you so desire.

Pursuant to Article 72 of the Articles of Association, at any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands unless (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 two 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 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.

RECOMMENDATION

The Directors consider that the proposed re-election of Directors and the proposed grant of general mandates to issue and repurchase securities are each in the best interests of the Company and the Shareholders as a whole, and accordingly, recommend all Shareholders to vote in favour of the resolutions set out in the notice of the AGM.

Yours faithfully For and on behalf of the Board Jolimark Holdings Limited Au Pak Yin Chairman

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DETAILS OF DIRECTORS PROPOSED TO BE RE-ELECTED AT THE AGM

APPENDIX I

LIST OF DIRECTORS FOR RE-ELECTION

The biographical and other details of the Directors standing for re-election at AGM are set out below.

Mr. Meng Yan ( ) (‘‘Mr. Meng’’), aged 50, obtained a doctorate degree in economics by the Financial Science Research Centre of the Ministry of Finance ( ) in 1997 and has been appointed as a consultant to the Accounting Standard Committee of the Ministry of Finance ( ) for two years from September 2002 to September 2004. From 2001 to 2003, Mr. Meng has also been appointed as a member of the Listing Committee of the China Securities Regulatory Commission ( ). Mr. Meng has over 7 years experience in tertiary education of accountancy in the PRC. Mr. Meng is currently the dean of the School of Accountancy of the Central University of Finance and Economics ( ). Mr. Meng was appointed as an independent non-executive Director of the Company on 8 March 2005.

As at the Latest Practicable Date, Mr. Meng did not have any interests in the securities of the Company within the meaning of Part XV of the SFO, nor had he any relationship with any directors, senior management or substantial or controlling shareholders of the Company as at the Latest Practicable Date. He entered into a service agreement with the Company for a term of three years commencing from 8 March 2005 and his current basic annual salary is RMB120,000 per annum. His emoluments are determined by the Board with reference to the prevailing market practice, the Company’s remuneration policy, his duties and responsibilities within the Group and his contribution to the Group. Mr. Meng is not aware of any matters that need to be brought to the attention of the holders of securities of the Company.

Mr. Xu Guangmao ( ) (‘‘Mr. Xu’’), aged 59, graduated in 1968 from the department of automation of Tsinghua University majoring in computer science. Mr. Xu has over 20 years of experience in computer software development, marketing and management. He has served the then PRC Computer Industry Bureau ( ) (now known as Mechanical and Electronic Industry Bureau ( ) and the CCID PRC Electronic Information Industry Development Research Centre ( ) in management and research positions. He has also been a director of Beijing CCID Information Industry Limited ( ) and standing member of the China Software Industry Association. Mr. Xu was appointed as an independent non-executive Director of the Company on 8 March 2005.

As at the Latest Practicable Date, Mr. Xu did not have any interests in the securities of the Company within the meaning of Part XV of the SFO, nor had he any relationship with any directors, senior management or substantial or controlling shareholders of the Company as at the Latest Practicable Date. He entered into a service agreement with the Company for a term of three years commencing from 8 March 2005 and his current basic annual salary is RMB120,000 per annum. His emoluments are determined by the Board with reference to the prevailing market practice, the Company’s remuneration policy, his duties and responsibilities within the Group and his contribution to the Group. Mr. Xu is not aware of any matters that need to be brought to the attention of the holders of securities of the Company

Save as disclosed above, the Board of Directors of the Company is not aware of any matters relating to the proposed re-election of the above Directors that need to be brought to the attention of the shareholders of the Company or any other information need to be disclosed pursuant to any of the requirements of Rule 13.51(2) of the Listing Rules.

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EXPLANATORY STATEMENT FOR GENERAL MANDATE TO REPURCHASE SECURITIES

APPENDIX II

This Appendix contains the particulars that are required by the Listing Rules to be included in an explanatory statement to enable the Shareholders to make an informed view on whether to vote for or against the resolution to be proposed at the AGM in relation to the proposed Repurchase Mandate.

SHARE CAPITAL

As at the Latest Practicable Date, the Company had 500,000,000 Shares in issue or an issued share capital of HK$ 5,000,000. Subject to the passing of the resolution granting the proposed mandate to repurchase its own securities and on the basis that no further Shares are issued or repurchased before the AGM, the Company will be allowed to repurchase a maximum of 50,000,000 Shares, representing 10% of the issued share capital of the Company as at the date of passing of the resolution, during the period ending on the earlier of the conclusion of the next annual general meeting of the Company or the date by which the next annual general meeting of the Company is required to be held by law or the date upon which such authority is revoked or varied by a resolution of the Shareholders in general meeting.

REASONS FOR REPURCHASES

The Directors believe that it is in the best interests of the Company and the Shareholders as a whole for the Directors to have a general authority from the Shareholders to enable the Company to repurchase its securities in the market. Such repurchases may, depending on market conditions and funding arrangements at the time, lead to an enhancement of the net asset value of the Company and/or earnings per Share and will only be made when the Directors believe that such repurchases will benefit the Company and the Shareholders as a whole.

FUNDING OF REPURCHASES

Any repurchase of securities of the Company made pursuant to the proposed Repurchase Mandate would be made out of funds which are legally available for the purpose in accordance with the memorandum and articles of association of the Company, the Listing Rules and the applicable Cayman Islands laws. Under the Cayman Islands law, repurchases by the Company may only be made out of profits of the Company or out of the proceeds of a fresh issue of shares made for the purpose of the repurchase or, subject to the statutory test of solvency, out of capital. The premium, if any, payable on the repurchase, shall be provided for out of profits of the Company or from sums standing to the credit of the share premium account of the Company or, subject to the statutory test of solvency, out of capital.

FINANCIAL IMPACT

The Directors have no present intention to repurchase any Shares and they would only exercise the power to repurchase in circumstances where they consider that the repurchase would be in the best interests of the Company and the Shareholders and in circumstances where they consider that the Shares can be repurchased on terms favourable to the Company. The Directors anticipate that if the general mandate to repurchase securities were to be exercised in full at the currently prevailing market value, it may have a material adverse impact on the working capital and gearing level of the Company by referring to the audited financial statements of the Company as at 31 December 2005. The Directors do not propose to exercise the mandate to repurchase securities to such an extent as

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APPENDIX II

EXPLANATORY STATEMENT FOR GENERAL MANDATE TO REPURCHASE SECURITIES

would, in the circumstances, have a material adverse effect on the working capital requirements of the Company or the gearing levels which in the opinion of the Directors are from time to time appropriate for the Company.

SHARE PRICE

The following table shows the highest and lowest prices at which the Shares have been traded on the Stock Exchange in each of the previous 9 months prior to the Latest Practicable Date (the Company was listed on the Stock Exchange on 29 June 2005):

	Price Per	Share
	Highest	Lowest
	(HK$)	(HK$)
2005
July	1.15	1.10
August	1.15	0.85
September	1.11	0.85
October	1.16	0.99
November	1.08	0.90
December	0.95	0.81
2006
January	1.13	0.92
February	1.58	0.92
March	1.39	1.23
April (up to the Latest Practicable Date)	1.46	1.20

TAKEOVERS CODE CONSEQUENCES

If as a result of a repurchase of Shares, a Shareholder’s proportionate interest in the voting rights of the Company increases, such increase will be treated as an acquisition for the purposes of the Takeovers Code. Accordingly, a Shareholder, or a group of Shareholders acting in concert, depending on the level of increase of the Shareholders’ interest, could obtain or consolidate control of the Company and become obliged to make a mandatory offer in accordance with Rule 26 of the Takeovers Code as a result of any such increase.

— 8 —

APPENDIX II

EXPLANATORY STATEMENT FOR GENERAL MANDATE TO REPURCHASE SECURITIES

As at the Latest Practicable Date, to the best of the knowledge and belief of the Directors, the following Shareholders were interested in 5% or more of the issued Shares as recorded in the register of interests and short positions of the Company under section 366(1) of Part XV of the SFO:

			Approximately
		Approximate	percentage of
		percentage of	shareholding if
		shareholding as	Repurchase
	Number of	at the Latest	Mandate is
Shareholder	Share held	Practical Date	exercised in full
Kytronics Holdings Limited	338,695,533(L)	67.74	75.27
Mr. Au Pak Yin (Note 2)	338,695,533(L)	67.74	75.27
Ms. Tai Noi Kit (Note 2)	338,695,533(L)	67.74	75.27

Note:

1. The letter ‘‘L’’ denotes the person’s long position in such securities.

2. The 338,695,533 shares were owned by Kytronics Holdings Limited. The issued share capital of Kytronics Holdings Limited is owned as to 20% each of Ms. Tai Noi Kit and her spouse Mr. Au Pak Yin. Ms. Tai Noi Kit deemed to be interested in these Shares by virtue her interests Kytronics Holding Limited pursuant to Part XV of the SFO and the increase in the shareholding of above Shareholders will not give rise to an obligation to make a mandatory offer under Rule 26 of the Takeovers Code.

In the event that the above Shareholders did not dispose of his/her/its Shares and if the Repurchase Mandate was exercised in full, the total interests of the above Shareholders would be increased to approximately the respective percentages shown in the last column above and the increase in the shareholding of above Shareholders will not give rise to an obligation to make a mandatory offer under Rule 26 of the Takeovers Code.

In the event that the Repurchase Mandate was exercised in full, the number of the relevant class of securities of the Company held by the public would fall below 25% of the total number of that class of securities then in issue. However, the Directors do not intend to exercise the Repurchase Mandate so as to reduce the issued share capital of the Company in public hands to less than 25%.

GENERAL

To the best of their knowledge and having made all reasonable enquiries of Directors, none of the Directors or any of their associates currently intends to sell Shares to the Company or its subsidiaries. The Directors have undertaken to the Stock Exchange that, so far as the same may be applicable, they will exercise the proposed Repurchase Mandate in accordance with the Listing Rules and applicable Cayman Islands laws.

No connected persons of the Company, as defined in the Listing Rules, have notified the Company that he has a present intention to sell Shares held by them to the Company, or have undertaken not to do so in the event that the Company is authorised to make repurchases of the Shares.

In the six months preceding the Latest Practicable Date, the Company has not repurchased any Shares on the Stock Exchange or otherwise.

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NOTICE OF ANNUAL GENERAL MEETING

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JOLIMARK HOLDINGS LIMITED

(Incorporated in the Cayman Islands with limited liability)

(stock code: 2028)

NOTICE IS HEREBY GIVEN THAT the Annual General Meeting (‘‘Meeting’’) of Jolimark Holdings Limited (‘‘Company’’) will be held at Room 3701, Tower II, Lippo Centre, 89 Queensway, Admiralty, Hong Kong on 15 May 2006 at 11: 00 a.m. for the following purposes:

1. To receive and adopt the audited consolidated financial statements of the Company and its subsidiaries and the reports of the directors and auditors for the year ended 31 December 2005.

2. A. To re-elect Mr. Meng Yan as an Independent Non-Executive Director. B. To re-elect Mr. Xu Guangmao as an Independent Non-Executive Director.

3. To authorise the board of Directors to fix the Directors’ remuneration.

4. To re-appoint PricewaterhouseCoopers as auditors and to authorise the board of Directors to fix their remuneration.

5. To declare a final dividend for the year ended 31 December 2005.

6. As special business, to consider and if thought fit, pass the following resolutions as Ordinary Resolutions:

ORDINARY RESOLUTION

• A. ‘‘THAT:

• (a) subject to sub-paragraph (c) of this resolution, the exercise by the Directors of the Company (‘‘Directors’’) during the Relevant Period (as hereinafter defined) of all the powers of the Company to allot, issue or otherwise deal with additional shares of the Company (‘‘Shares’’) or securities convertible into Shares, options, warrants or similar rights to subscribe for any Shares, and to make or grant offers, agreements and options which might require the exercise of such powers be and is hereby generally and unconditionally approved;

• (b) the approval given in sub-paragraph (a) above shall authorise the Directors during the Relevant Period to make or grant offers, agreements and options which might require the exercise of such powers after the end of the Relevant Period;

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NOTICE OF ANNUAL GENERAL MEETING

• (c) the aggregate nominal amount of the share capital allotted or agreed conditionally or unconditionally to be allotted (whether pursuant to an option or otherwise) by the Directors pursuant to the approval given in sub-paragraph (a) of this resolution, otherwise than pursuant to:

• (i) a Rights issue (as hereinafter defined);

• (ii) the exercise of rights of subscription or conversion under the terms of any warrants issued by the Company or any securities which are convertible into Shares;

• (iii) the exercise of the subscription rights under any option scheme or similar arrangement for the time being adopted for the grant or issue to eligible persons of Shares or rights to acquire shares of the Company; or

• (iv) any scrip dividend or similar arrangement providing for the allotment of Shares in lieu of the whole or part of a dividend on Shares in accordance with the articles of association of the Company,

shall not exceed twenty per cent of the aggregate nominal amount of the issued share capital of the Company as at the date of the passing of this resolution, and the said approval shall be limited accordingly; and

• (d) for the purpose of this resolution:

‘‘Relevant Period’’ means the period from the passing of this Resolution until whichever is the earliest of:

• (i) the conclusion of the next annual general meeting of the Company;

• (ii) the expiration of the period within which the next annual general meeting of the Company is required by the articles of association of the Company or any applicable laws to be held; and

• (iii) the date on which the authority set out in this resolution is revoked or varied by way of ordinary resolution in general meeting of the Company.

‘‘Rights Issue’’ means the allotment, issue or grant of Shares pursuant to an offer of Shares open for a period fixed by the Directors to holders of Shares whose names stand on the register of members of the Company on a fixed record date in proportion to their then holdings of such Shares (subject to such exclusion or other arrangements as the Directors may deem necessary or expedient in relation to fractional entitlements or having regard to any restrictions or obligations under the laws of, or the requirements of any recognized regulatory body or any stock exchange in, any territory applicable to the Company).’’

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NOTICE OF ANNUAL GENERAL MEETING

• B. ‘‘THAT:

• (a) subject to sub-paragraph (b) of this Resolution, the exercise by the Directors during the Relevant Period (as hereinafter defined) of all the powers of the Company to repurchase its own Shares on The Stock Exchange of Hong Kong Limited (‘‘Stock Exchange’’) or any other stock exchange on which the securities of the Company may be listed and recognised for this purpose by the Securities and Futures Commission of Hong Kong and the Stock Exchange under the Hong Kong Code on Share Repurchases, subject to and in accordance with all applicable laws and regulations, be and is hereby generally and unconditionally approved;

• (b) the aggregate nominal amount of Shares which may be repurchased by the Company pursuant to sub-paragraph (a) of this Resolution during the Relevant Period shall not exceed 10 per cent of the issued share capital of the Company at the date of the passing of this Resolution and the approval granted under paragraph (a) of this Resolution should be limited accordingly; and

• (c) for the purpose of this resolution, ‘‘Relevant Period’’ means the period from the passing of this resolution until whichever is the earliest of:

  • (i) the conclusion of the next annual general meeting of the Company;

  • (ii) the expiration of the period within which the next annual general meeting of the Company is required by the articles of association of the Company or any applicable laws to be held; and

  • (iii) the date on which the authority set out in this resolution is revoked or varied by way of ordinary resolution in general meeting of the Company.’’

• C. ‘‘THAT, conditional upon the passing of the resolutions 6A and 6B in the notice convening the Meeting, the general mandate granted to the Directors to exercise the powers of the Company to allot, issue or otherwise deal with additional securities of the Company pursuant to resolution 6A as set out in the notice convening the Meeting be and is hereby extended by the addition thereto an amount representing the aggregate nominal amount of the share capital of the Company repurchased by the Company under the authority granted pursuant to resolution 6B as set out in the notice convening the Meeting provided that such amount shall not exceed 10 per cent of the aggregate nominal amount of the issued share capital of the Company at the date of the passing of this resolution.’’

On behalf of the Board Au Pak Yin Chairman

Hong Kong, 21 April 2006

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NOTICE OF ANNUAL GENERAL MEETING

Notes:

• (1) Any member entitled to attend and vote at the meeting is entitled to appoint one or more proxies to attend and, on the poll, vote in his stead. A proxy need not be a member of the Company.

• (2) To be valid, a form of proxy, together with the power of attorney (if any) or other authority (if any) under which it is signed or a notarially certified copy of that power attorney or authority must be delivered to the Company’s share registrars, Computershare Hong Kong Investor Services Limited, at Shops 1712–16, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Hong Kong not less than 48 hours before the time appointed for holding the meeting.

• (3) The register of members will be closed from Tuesday, 25 April 2006 to Friday, 28 May 2006 (both days inclusive) during which period no transfer of shares will be effected. In order to qualify for the proposed final dividend and attending the Meeting, all transfer documents, accompanied by the relevant share certificates, must be lodged with the Company’s share registrars, Computershare Hong Kong Investor Services Limited, at Shops 1712–16, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Hong Kong not later than 4: 00 p.m. on Monday, 24 April 2006.

• (4) Where there are joint registered holders of any share, any one of such persons may vote at the Meeting, either personal or by proxy, in respect of such share as if he were solely entitled thereto; but if more than one of such joint holders be present at the meeting, the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders, and for the purpose seniority shall be determined by the order in which name stand in the register of members in respect of the joint holdings.

• (5) Please refer to Appendix I of the Circular dated 21 April 2006 for the detail of retiring Directors subject to re-election at the Meeting.

• (6) An explanatory statement regarding the general mandate of the repurchase of Shares sought in the above Resolution 6B is set out in Appendix II of the Circular dated 21 April 2006.

• (7) As at the date of the notice, the Executive Directors are Mr. Au Pak Yin, Mr. Au Kwok Lun, Mr. Ou Guo Liang and Mr. Ng Shu Kai; Independent Non-Executive Directors are Mr. Lai Ming, Joseph, Mr. Meng Yan and Mr. Xu Guangmao.

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