Kingdom Holdings Limited — Proxy Solicitation & Information Statement 2007

May 2, 2007

IMPORTANT

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

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

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

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KINGDOM HOLDINGS LIMITED

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 528)

PROPOSALS FOR GENERAL MANDATE TO ISSUE SHARES AND TO REPURCHASE SHARES, RE-ELECTION OF DIRECTORS AND NOTICE OF ANNUAL GENERAL MEETING

A notice convening the Annual General Meeting of the Company to be held at Room 3203, 32/F, Admiralty Centre I, 18 Harcourt Road, Hong Kong on 28 May 2007 at 2:30 p.m. is set out on pages 9 to 12 of this circular. Whether or not you intend to be present and vote at the Annual General Meeting, you are requested to complete the enclosed form of proxy in accordance with the instructions printed thereon and return it to the Company’s Hong Kong branch registrar, Tricor Investor Services Limited, at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for holding the Annual General Meeting or any adjourned meeting. The completion of a form of proxy will not preclude you from attending and voting at the Annual General Meeting in person should you so wish. If you attend and vote at the Annual General Meeting, the authority of your proxy will be revoked.

30 April 2007

DEFINITIONS

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

“Annual General Meeting”	the annual general meeting of the Company to be held at
	Room 3203, 32/F, Admiralty Centre I, 18 Harcourt Road,
	Hong Kong on Monday, 28 May 2007 at 2:30 p.m.
“Board”	the Board of Directors of the Company
“Articles of Association”	the articles of association of the Company as amended from
“Company”	time to time Kingdom Holdings Limited ( ), an exempted
	company incorporated in the Cayman Islands with limited
	liability and the shares of which are listed on the Stock
	Exchange
“Director(s)”	the director(s) of the Company
“Latest Practicable Date”	26 April 2007, 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
“RMB”	Renminbi, the lawful currency of the People’s Republic of
	China
“SFO”	the Securities and Futures Ordinance (Chapter 571 of the
	Laws of Hong Kong)
“Share(s)”	share(s) of HK$0.01 each in the capital of the Company
“Shareholder(s)”	holder(s) of the Share(s)
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Takeovers Code”	The Hong Kong Code on Takeovers and Mergers

The English names of the PRC entities mentioned in this circular marked with “*” are translations from their Chinese names. If there is any inconsistency, the Chinese name shall prevail.

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LETTER FROM THE BOARD

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KINGDOM HOLDINGS LIMITED

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 528)

Executive Directors:

Mr. REN Wei Ming (Chairman) Mr. SHEN Yueming Mr. ZHANG Hong Wen

Non-executive Directors:

Registered Office:

Cricket Square Hutchins Drive P.O. Box 2681 GT Grand Cayman KY1-1111 Cayman Islands

Mr. NGAN Kam Wai Albert

Mr. John Michael MAY Mr. YANG Donghui Mr. YU Chongwen Mr. LAU Ying Kit*

• Independent Non-executive Director

Place of Business in Hong Kong:

Unit 12, 27th Floor Seapower Tower Concordia Plaza No. 1 Science Museum Road Kowloon, Hong Kong

30 April 2007

To: the Shareholders of the Company

Dear Sir or Madam

PROPOSALS FOR GENERAL MANDATE TO ISSUE SHARES AND TO REPURCHASE SHARES AND RE-ELECTION OF DIRECTORS

INTRODUCTION

The purpose of this circular is to provide you with information regarding resolutions to be proposed at the Annual General Meeting relating to the general mandates to allot, issue and deal with the Shares and to repurchase Shares and the re-election of Directors.

GENERAL MANDATES TO ISSUE SHARES AND TO REPURCHASE SHARES

Ordinary resolutions will be proposed at the Annual General Meeting to grant to the Directors a general mandate to issue Shares up to the aggregate of (i) 20 per cent. of the issued share capital of the Company as at the date of passing the resolution, which shall be equivalent to 124,500,000 Shares (based on a total of 622,500,000 Shares in issue as at the Latest Practicable Date and assuming

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LETTER FROM THE BOARD

no change in the number of issued Shares between the Latest Practicable Date and the date of passing the said resolution) and, subject to the passing of a separate ordinary resolution, (ii) the number of Shares repurchased by the Company, which is up to a maximum equivalent of 10 per cent. of the issued share capital of the Company as at the date of passing the resolution.

A general mandate authorising the Directors to repurchase Shares up to a maximum of 10 per cent. of the issued share capital of the Company as at the date of passing the relevant resolution will also be sought from the Shareholders by way of an ordinary resolution at the Annual General Meeting.

An explanatory statement containing the information required by the Listing Rules to enable the Shareholders to make an informed decision on the ordinary resolution regarding the general mandate to repurchase Shares is set out in Appendix I to this circular.

RE-ELECTION OF DIRECTORS

In accordance with Articles 86 to 88 of the Articles of Association, Mr. REN Wei Ming, Mr. SHEN Yueming, Mr. ZHANG Hong Wen and Mr. NGAN Kam Wai Albert will retire by rotation, and being eligible, offer themselves for re-election as Directors at the Annual General Meeting.

The biographical details of such re-electing Directors as required to be disclosed under the Listing Rules are set out in Appendix II to this circular. Mr. REN Wei Ming holds approximately 76.38% of the issued share capital of Kingdom Investment Holdings Limited (“ Kingdom Investment (BVI) ”), he therefore holds a controlling interest in Kingdom Investment (BVI) and is deemed under the SFO to be interested in 273,600,000 Shares held by Kingdom Investment (BVI). Mr. NGAN Kam Wai Albert holds approximately 51% of the issued share capital of Millionfull International Co., Ltd. (“ Millionfull ”), he therefore holds a controlling interest in Millionfull and is deemed under the SFO to be interested in 64,800,000 Shares held by Millionfull. The relationships of the re-electing Directors with any Directors, senior management, substantial shareholders or controlling shareholders of the Company are provided in the section headed “Report of the Directors — Directors’ and Chief Executives’ Interests and Short Positions in Shares, Underlying Shares and Debentures” in the 2006 Annual Report of the Company. Save as disclosed, none of the Directors to be re-elected has any interests in Shares within the meaning of Part XV of the SFO or any relationship with any Directors, senior management, substantial shareholders or controlling shareholders (as defined in the Listing Rules) of the Company.

Each of the abovementioned Directors has entered into a service agreement with the Company for an initial term of three years commencing from 13 November 2006 with an annual remuneration of RMB120,000. In addition, each of the executive Directors will be entitled to a discretionary bonus to be calculated based on individual performance.

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LETTER FROM THE BOARD

RECOMMENDATION

The Directors consider that the grant of general mandate to issue new Shares and repurchase Shares and the re-election of the Directors are in the best interests of the Company and its Shareholders. Accordingly, the Directors recommend that the Shareholders to vote in favour of the relevant resolutions to be proposed at the Annual General Meeting.

Yours faithfully By Order of the Board Mr. REN Wei Ming Chairman

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EXPLANATORY STATEMENT

APPENDIX I

This Appendix contains the information that is required to be sent to shareholders under the Listing Rules in connection with the proposed general mandate for the repurchase of shares.

1. All share repurchases on the Stock Exchange by a company with its primary listing on the Stock Exchange must be approved in advance by an ordinary resolution of shareholders, either by way of a general mandate or by a specific resolution in relation to specific transactions.

2. The shares proposed to be repurchased must be fully paid up. A maximum of 10 per cent. of the outstanding share capital as at the date of the resolution authorising the repurchase may be repurchased on the Stock Exchange.

3. It is proposed that the Company may repurchase up to 10 per cent. of the Shares in issue as at the date of passing the resolution approving the general mandate on share repurchase. Based on a total of 622,500,000 Shares in issue as at the Latest Practicable Date and assuming no change in the number of issued Shares between the Latest Practicable Date and the date of the said resolution, such general mandate for share repurchase will authorise the Directors to repurchase up to 62,250,000 Shares.

4. The repurchase of Shares by the Company may benefit the Shareholders in certain circumstances. Depending on the conditions in the stock market and the availability of funds, such repurchases could improve the net assets and/or earnings per share of the Company. The general mandate on share repurchase will give the Directors more flexibility to make share repurchase beneficial to the Shareholders when there are suitable circumstances.

5. The funds required for share repurchase will be derived from those funds of the Company which are legally permitted to be used in this connection in accordance with the Company’s Memorandum and Articles of Association and the laws of the Cayman Islands, and shall include capital paid up on the Shares to be repurchased, profits otherwise available for distribution and sums standing to either the share premium accounts or contributed surplus account of the Company.

6. In the event that the proposed purchase of Shares is to be carried out in full at any time during the proposed purchase period, the adverse impact on the working capital or gearing position as compared with the position shown on the audited balance sheet at 31 December 2006 might be material. However, the Directors intend to exercise the general mandate only insofar as there is adequate working capital for normal operation and the gearing position remains below a level acceptable to the Directors.

7. To the best of the knowledge of the Directors, none of the Directors nor their respective associates (as defined in the Listing Rules) has at present an intention, in the event that the general mandate for share repurchase is granted by the Shareholders, to sell Shares to the Company.

8. The Directors have undertaken to the Stock Exchange to exercise the power of the Company to make purchases pursuant to the general mandate for share repurchase in accordance with the Listing Rules and the laws of the Cayman Islands.

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APPENDIX I

EXPLANATORY STATEMENT

1. To the best of the knowledge and belief of the Company, Kingdom Investment (BVI), a controlling shareholder of the Company and a company beneficially owned as to approximately 76.38 per cent. by Mr. REN Wei Ming, the Chairman of the Company, holds approximately 43.95 per cent. of the issued share capital of the Company as at the Latest Practicable Date. In the event that the Directors should exercise in full the power to repurchase the Shares which is proposed to be granted pursuant to the general mandate for share repurchase, the shareholdings of Kingdom Investment (BVI) would be increased to approximately 48.84 per cent. of the then issued share capital of the Company and such increase would give rise to an obligation to make a mandatory offer under the Takeovers Code. However, the Company has no intention to effect share repurchase to such an extent that it would give rise to an obligation to make a mandatory offer under the Takeovers Code.

2. No connected persons of the Company (as defined in the Listing Rules) have notified the Company that they have a present intention to sell Shares to the Company or have undertaken not to sell any of the Shares held by them to the Company in the event that the general mandate for share repurchase is granted by the Shareholders.

3. The highest and lowest prices at which the Shares have traded on the Stock Exchange during the period from 12 December 2006 (the date of listing of the Shares on the Stock Exchange) up to the Latest Practicable Date are as follows:

	Highest	Lowest
	HK$	HK$
2006
December	2.74	1.68
2007
January	2.14	1.73
February	2.05	1.73
March	1.93	1.70
April (up to the Latest Practicable Date)	1.88	1.74

1. No repurchase of Shares has been made by the Company from the date of listing of the Shares on the Stock Exchange to the Latest Practicable Date, which is approximately four months preceding the date of this circular.

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DETAILS OF THE DIRECTORS TO BE RE-ELECTED

APPENDIX II

Mr. REN Wei Ming ( ), aged 47, is the chairman of the Group and an executive Director. Mr. Ren is responsible for the overall management of the Group and making decisions on the business development strategy of the Group. He has been in the silk industry since 1979. He has been the chairman and general manager of ( ) (Zhejiang Kingdom Creative Co., Ltd.) (“ Kingdom Creative ”) since 2000. He started to engage in the linen yarn manufacturing business through ( ) (Haiyan Ziwei Flax Co., Ltd.) (“ Haiyan Ziwei ”) in December 2001 as its director. He joined the Group in March 2003 when the first operating member of the Group, ( )(Zhejiang Jinyuan Flax Co., Ltd.) (“ Zhejiang Jinyuan ”) was established. He obtained various awards including “ ” (National Township Entrepreneur awarded by the Agriculture Department). He is currently the vice-director of (China Bast and Leaf Fibers Textile Association), the vice-president of The Hong Kong General Chamber of Textiles and (Representative of the 10th National People’s Congress of Zhejiang Province). He is also a director of Kingdom Investment (BVI) which has discloseable interests in Shares under Part XV of the SFO.

Mr. SHEN Yueming ( ), aged 45, is an executive Director. He is also a director and general manager of Zhejiang Jinyuan and a director and general manager of ( ) (Jiangsu Jinyuan Flax Co., Ltd.) (“ Jiangsu Jingyuan* ”). Mr. Shen is responsible for the day-to-day operation and management of the Group and also takes part in the decision making of the Group. He was appointed as director of Haiyan Ziwei in December 2001, before joining the Group in March 2003. He then joined Kingdom Creative and he has been a director of Kingdom Creative since April 2000.

Mr. ZHANG Hong Wen ( ), aged 40, is an executive Director. He is the financial controller of Zhejiang Jinyuan and a director and financial controller of Jiangsu Jinyuan. Before joining the Group in 2003, he was the assistant to the general manager and the head of capital clearing division of Kingdom Creative from 2000 to 2002.

Mr. NGAN Kam Wai Albert ( ), aged 57, is a non-executive Director. He is the chairman of Millionfull Company Limited, a company incorporated in Hong Kong engaging in the trading of linen and linen mixture fabrics. He has been a member of (membership of the Fujian Provincial People’s Political Consultative Conference) since 2003 and a director of Po Leung Kuk since 2004. He was appointed as the executive vice president of The Hong Kong General Chamber of Textiles Ltd. in 2005 and a director of (HuaQiao University*) in 2002. He joined the Group in September 2004. He is also a director of Millionfull which has discloseable interests in Shares under Part XV of the SFO.

Save as disclosed above, the Company confirms that there is no information to be disclosed pursuant to the requirements of Rule 13.51(2)(h) to (v) of the Listing Rules and there are no other matters with respect to the Directors to be re-elected at the Annual General Meeting that need to be brought to the attention to the Shareholders.

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POLL PROCEDURE

APPENDIX III

Article 66 of the Articles of Association sets out the procedures under which a poll may be demanded.

At any general meeting a resolution put to the vote of the 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 members present in person or in the case of a member being a corporation by its duly authorised representative or by proxy for the time being entitled to vote at the meeting; or

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

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

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NOTICE OF ANNUAL GENERAL MEETING

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KINGDOM HOLDINGS LIMITED

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 528)

NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the Annual General Meeting of Kingdom Holdings Limited (the “ Company ”) will be held at Room 3203, 32/F, Admiralty Centre I, 18 Harcourt Road, Hong Kong on Monday, 28 May 2007 at 2:30 p.m. for the following purposes:

1. To receive and adopt the audited consolidated financial statements and the reports of the Directors and the Auditors for the year ended 31 December 2006;

2. To declare a final dividend in respect of the year ended 31 December 2006;

3. To re-elect the following Directors:

4. (a) Mr. REN Wei Ming as executive Director;

5. (b) Mr. SHEN Yueming as executive Director;

6. (c) Mr. ZHANG Hong Wen as executive Director; and

7. (d) Mr. NGAN Kam Wai Albert as non-executive Director.

8. To authorise the Board of Directors to fix the Directors’ remuneration;

9. To re-appoint KPMG as auditors of the Company and authorise the Board of Directors to fix their remuneration;

10. As special business, to consider and, if thought fit, pass the following resolution as an ordinary resolution:

“THAT:

• (a) subject to paragraph (c), the exercise by the Directors during the Relevant Period (as hereinafter defined) of all the powers of the Company to allot, issue and deal with additional shares in the capital of the Company 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;

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NOTICE OF ANNUAL GENERAL MEETING

• (b) the approval in paragraph (a) 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;

• (c) the aggregate nominal amount of 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 in paragraph (a), otherwise than pursuant to (i) a Rights Issue (as hereinafter defined); (ii) the exercise of subscription rights under any option scheme or similar arrangement of shares or rights to acquire shares of the Company; or (iii) any scrip dividend or similar arrangement providing for the allotment of shares in lieu of the whole or part of a dividend on shares of the Company in accordance with the Articles of Association of the Company, shall not exceed the aggregate of (aa) 20 per cent. of the aggregate nominal amount of the share capital of the Company in issue on the date of passing this resolution plus (bb) (if the Directors are so authorised by a separate ordinary resolution of the shareholders of the Company) the nominal amount of share capital of the Company repurchased by the Company subsequent to the passing of this resolution (up to a maximum equivalent to 10 per cent. of the aggregate nominal amount of the share capital of the Company in issue on the date of passing this resolution), and the said approval shall be limited accordingly; and

• (d) for the purposes 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 revocation or variation of the authority given under this resolution by ordinary resolution of the shareholders in general meeting; and

“ Rights Issue ” means an offer of shares open for a period fixed by the Directors to holders of ordinary shares 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 regulatory body or any stock exchange in, any territory outside Hong Kong).”;

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NOTICE OF ANNUAL GENERAL MEETING

1. As special business, to consider and, if thought fit, pass the following resolution as an ordinary resolution:

“ THAT:

• (a) subject to paragraph (b) below, the exercise by the Directors during the Relevant Period (as hereinafter defined) of all the powers of the Company to repurchase shares of the Company, subject to and in accordance with all applicable laws, be and is hereby generally and unconditionally approved;

• (b) the aggregate nominal amount of shares which may be repurchased on The Stock Exchange of Hong Kong Limited (the “ Stock Exchange ”) or any other stock exchange 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 pursuant to the approval in paragraph (a) above shall not exceed 10 per cent. of the aggregate nominal amount of the share capital of the Company in issue on the date of passing this resolution, and the said approval shall be limited accordingly; and

• (c) for the purposes 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 revocation or variation of the authority given under this resolution by ordinary resolution of the shareholders in general meeting.”;

• As special business, to consider and, if thought fit, pass the following resolution as an ordinary resolution:

“ THAT the Directors be and is hereby authorised to exercise the powers of the Company referred to in paragraph (a) of the resolution set out as resolution 6 in the notice of this meeting in respect of the share capital of the Company referred to in sub-paragraph (bb) of paragraph (c) of such resolution.”

By Order of the Board Mr. REN Wei Ming Chairman

Hong Kong, 30 April 2007

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NOTICE OF ANNUAL GENERAL MEETING

Notes:

• (1) A member entitled to attend and vote at the above meeting may appoint one or, if he holds two or more shares, more proxies to attend and vote instead of him. A proxy need not be a member of the Company.

• (2) In order 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 thereof shall be deposited at the Company’s Hong Kong share registrar, Tricor Investor Services Limited, at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong not less than 48 hours before the time for holding the meeting or any adjourned meeting. The proxy form will be published on the website of The Stock Exchange of Hong Kong Limited.

• (3) The register of members of the Company will be closed from 22 May 2007 to 28 May 2007 (both days inclusive) during which period no transfer of shares will be registered. In order to qualify for the final dividend, all transfers accompanied by the relevant share certificates must be lodged with the Company’s Hong Kong branch share registrar, Tricor Investor Services Limited, at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong for registration not later than 4:30 p.m. on 21 May 2007.

• (4) A circular containing, inter alia, further details of the proposed general mandates to issue and repurchase shares of the Company, and information on the retiring Directors who are proposed to be re-elected at the annual general meeting, are sent to shareholders of the Company together with the 2006 Annual Report.

“Please also refer to the published version of this announcement in The Standard.”

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