Luen Thai Holdings Limited — Proxy Solicitation & Information Statement 2006

Apr 3, 2006

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your shares in the Company, you should at once hand this circular, together with the enclosed form of proxy, to the purchaser or other transferee or to the bank, stockbroker 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 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.

LUEN THAI HOLDINGS LIMITED (Incorporated in the Cayman Islands with limited liability) (Stock Code: 311)

DISCLOSEABLE TRANSACTION

3 April 2006

DEFINITIONS

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

• “Acquired Company”

On Time International Limited, a private company incorporated under the laws of the British Virgin Islands;

• “Acquired Group”

the Acquired Company and its subsidiaries;

• “Acquired Share”

• a share of US$1.00 each in the capital of the Acquired Company;

• “associated company”

• shall have the same meaning as ascribed to it in Part XV of the SFO;

• “Business Day”

• a day on which banks are generally open in Hong Kong (excluding Saturdays and Sundays);

• “Company”

• Luen Thai Holdings Limited, the shares of which are listed on the Stock Exchange;

• “Completion”

• completion of the Sale and Purchase Agreement in accordance with its terms;

• “Connected Person”

• shall have the meaning as ascribed to it under the Listing Rules;

• “Consideration”

• the consideration to be determined, and paid by the Purchaser, in accordance with the terms of the Sale and Purchase Agreement;

• “Directors”

• directors of the Company for the time being;

• “First Call Option”

• a call option granted by the Vendor to the Purchaser under the First Option Agreement, in respect of the purchase of a further 10% interest in the Acquired Company;

• “First Put Option”

• a put option granted by the Purchaser to the Vendor under the Second Option Agreement, in respect of the sale of a 20% interest in the Acquired Company;

• “First Option Agreement”

• an option agreement dated 10 March 2006 entered into between the Vendor and the Purchaser in relation to an option to purchase a further 10% interest in the Acquired Company;

• “Group”

the Company and its subsidiaries;

• “Guarantor”

Luen Thai Overseas Limited, a company incorporated under the laws of Bahamas which is a wholly-owned subsidiary of the Company and the immediate holding company of the Purchaser;

– 1 –

DEFINITIONS

“HKGAAP”

Hong Kong generally accepted accounting principles;

“Hong Kong” the Hong Kong Special Administrative Region of the People’s Republic of China; “Independent Third Party” a third party which, to the best of the Directors’ knowledge, information and belief after having made all reasonable enquiries, is independent of the Company and its Connected Persons;

“Latest Practicable Date” 27 March 2006; “Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange;

• “Purchaser” Fortune Investment Overseas Limited, a company incorporated under the laws of the British Virgin Islands and a wholly-owned subsidiary of each of the Guarantor and the Company;

• “Sale and Purchase Agreement” a sale and purchase agreement dated 10 March 2006 entered into between, inter alia, the Vendor and the Purchaser in relation to the Transaction;

• “Second Call Option” a call option granted by the Vendor to the Purchaser under the Second Option Agreement, in respect of the purchase of a 40% interest in the Acquired Company;

• “Second Put Option” a put option granted by the Purchaser to the Vendor under the Second Option Agreement, in respect of the sale of a 20% interest in the Acquired Company;

• “Second Option Agreement” an option agreement dated 10 March 2006 entered into between the Vendor and the Purchaser in relation to the Second Call Option and the First and Second Put Options;

• “SFO”

• the Securities and Future Ordinance, Cap. 571 of the Laws of Hong Kong;

• “Share”

• a share of US$0.01 each in the capital of the Company;

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

• “Transaction”

• the acquisition of a 50% interest in the issued capital of the Acquired Company, the acquisition of the First and Second Call Options and the granting of the First and Second Put Options; and

“Vendor”

Mr. Frank Fleischer.

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LETTER FROM THE BOARD

LUEN THAI HOLDINGS LIMITED

(Incorporated in the Cayman Islands with limited liability) (Stock Code: 311)

Executive Directors:

Mr. Tan Siu Lin (Chairman) Mr. Tan Henry Mr. Tan Willie Mr. Tan Cho Lung, Raymond Ms. Mok Siu Wan, Anne

Registered Office:

Century Yard, Cricket Square Hutchins Drive, PO Box 2681GT George Town, Grand Cayman Cayman Islands British West Indies

Independent non-executive Directors:

Mr. Chan Henry Mr. Cheung Siu Kee Mr. Seing Nea Yie

Head office and Principal place of business in Hong Kong:

5/F. Nanyang Plaza 57 Hung To Road Kwun Tong, Kowloon Hong Kong

Hong Kong, 3 April 2006

To the Shareholders

Dear Sir or Madam,

DISCLOSEABLE TRANSACTION

INTRODUCTION

As stated in the announcement of the Company dated 16 March 2006, the Purchaser, a whollyowned subsidiary of the Company, has entered into the Sale and Purchase Agreement on 10 March 2006, pursuant to which the Purchaser has agreed to acquire a 50% interest in the issued and fully paid share capital of the Acquired Company from the Vendor, an Independent Third Party, for a cash consideration to be determined pending the audited and consolidated financial statements of the Acquired Company for the three years ending on 31 December 2008 subject to a minimum of US$19,250,000 (equivalent to approximately HK$150,150,000) and a maximum of US$33,000,000 (equivalent to approximately HK$257,400,000). Also as stated in the announcement of the Company dated 16 March 2006, the Purchaser has also entered into the First and Second Option Agreements with the Vendor on 10 March 2006 in respect of a further 10% interest and the remaining 40% interest in the issued share capital of the Acquired Company.

The Transaction (assuming the First and Second Put Options had been fully exercised for the purposes of Rule 14.74 of the Listing Rules) constitutes a discloseable transaction for the Company under the Listing Rules. The purpose of this circular is to provide you with details regarding the Transaction.

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LETTER FROM THE BOARD

THE SALE AND PURCHASE AGREEMENT

Date: 10 March 2006

Parties: (1) The Vendor

• (2) The Purchaser – Fortune Investment Overseas Limited (a wholly-owned subsidiary of the Company)

• (3) The Guarantor – Luen Thai Overseas Limited (a wholly-owned subsidiary of the Company)

Pursuant and subject to the Sale and Purchase Agreement dated 10 March 2006, the Vendor has agreed to sell, and the Purchaser has agreed to purchase, 250 Acquired Shares in the share capital of the Acquired Company, representing 50% of the entire issued and fully paid share capital of the Acquired Company. Upon Completion, the Acquired Company will become an associated company (but not a subsidiary) of the Company.

Pursuant to the Sale and Purchase Agreement, the Guarantor (a wholly-owned subsidiary of the Company) has agreed to guarantee the performance of all obligations of the Purchaser, its wholly-owned subsidiary, arising under the Sale and Purchase Agreement, the principal of which is the timely payment of the Consideration. In the event that the Purchaser should fail to pay any part of the Consideration, the Guarantor will be liable to pay for such amounts.

The Vendor, introduced to the Company through business acquaintances, has more than 25 years of experience in the wholesale trade and apparel business, and is the founder of the Acquired Group. The Company values the Vendor’s knowledge of production capabilities of garment manufacturers in the Asia Pacific regions as well as with his strong sense and understanding of fashion trends and customer needs. To the best knowledge, information and belief of the Directors, having made all reasonable enquiries, the Vendor is an Independent Third Party. Upon Completion, the Vendor will continue to take a key role in the management of the Acquired Group as its chief executive officer. Pursuant to a shareholders’ agreement dated 10 March 2006 and made between the Purchaser, the Vendor and the Acquired Company, each of the Purchaser and the Vendor shall have the right to nominate three directors to the board of the Acquired Company immediately upon Completion.

Consideration:

The Consideration, negotiated on an arm’s length basis between the parties, shall be to the multiple of the following, pro-rated for the 50% interest being acquired:

• (a) the average of the consolidated net profit after tax of the Acquired Company for the three years ending on 31 December 2008; and

• (b) a price-earnings multiple of 5.5 in respect of the Acquired Company (which is within the prevailing industry average of 5-7 times).

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LETTER FROM THE BOARD

Although the exact amount of Consideration cannot currently be determined, it is subject to a minimum of US$19,250,000 (equivalent to approximately HK$150,150,000) and a maximum of US$33,000,000 (equivalent to approximately HK$257,400,000), being the range agreed between the parties after arm’s length negotiations. On the basis of a price-earnings multiple that is within the prevailing industry average and the track record profitability and business prospects of the Acquired Company and its subsidiaries, the Directors are of the view that the Consideration and the basis for its calculation are fair and reasonable, and are in the interests of the Group and the Company’s shareholders as a whole.

Payment of the Consideration shall be made in cash and funded by the internal resources of the Group and shall be made in four instalments as follows:

• (a) the first non-refundable instalment of US$19,250,000 (equivalent to approximately HK$150,150,000) shall be paid upon Completion;

• (b) the second instalment shall be paid within 30 days after the Purchaser’s receipt of the audited and consolidated financial statement of the Acquired Company for the year ending on 31 December 2006 and shall be calculated as follows:

(50% x 75% x price-earnings ratio of 5.5 x consolidated net profit of the Acquired Company for the year ending on 31 December 2006) less the first instalment;

• (c) the third instalment shall be paid within 30 days after the Purchaser’s receipt of the audited and consolidated financial statement of the Acquired Company for the year ending on 31 December 2007 and shall be calculated as follows:

(50% x 80% x price-earnings ratio of 5.5 x averaged consolidated net profit of the Acquired Company for the two years ending on 31 December 2007) less the first and second instalments; and

• (d) the final instalment shall be the remaining balance of the unpaid Consideration (calculated in accordance with the formula as described above, but less the first, second and third instalments).

Conditions precedent:

Completion is conditional upon the satisfaction of a number of conditions precedent, the major ones being: (a) the conducting of due diligence to the satisfaction of the Purchaser; (b) completion of a series of corporate restructuring in order to place the relevant subsidiaries under the common ownership of the Acquired Company for a more streamlined corporate structure; (c) the execution of certain ancillary agreements to the Transaction (including the First and Second Option Agreements and a shareholders’ agreement in connection with the management of the Acquired Company); (d) all necessary approval, permits, consents and authorisations having been obtained for the Transaction; and (e) no warranty under the Sale and Purchase Agreement having been breached or otherwise having become untrue or misleading. All such conditions must be fulfilled on or before 29 April 2006, failing which the Purchaser may elect to

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LETTER FROM THE BOARD

(i) waive any unfulfilled condition; (ii) postpone Completion by 30 days; or (iii) rescind the Sale and Purchase Agreement in which event the Sale and Purchase Agreement shall be null and void and none of the parties thereto shall have any claims against the other parties thereunder (save and except in respect of certain obligations such as confidentiality restrictions).

Subject to the foregoing, Completion is expected to take place within 5 Business Days after all such conditions have been fulfilled or otherwise waived by the Purchaser. The Purchaser currently does not intend to waive any such condition.

FIRST OPTION AGREEMENT

Date: 10 March 2006

Parties: (1) The Vendor

• (2) The Purchaser – Fortune Investment Overseas Limited

Pursuant and subject to the First Option Agreement dated 10 March 2006, in consideration of HK$1,000 and the Purchaser entering into the Sale and Purchase Agreement, the Vendor has granted the First Call Option to the Purchaser in respect of the purchase of a further 10% interest in the Acquired Company, conditional upon Completion.

Subject to Completion, the First Call Option may be exercised by the Purchaser at any time after six calendar months from the date of the First Option Agreement, for a period of 18 months upon the expiry of which the First Call Option shall lapse.

The exercise price of the First Call Option, negotiated on an arm’s length basis between the parties, shall be determined using the same formula as that used for the Consideration, pro-rated for the 10% interest being acquired, but subject to a minimum of US$3,850,000 (equivalent to approximately HK$30,030,000) and a maximum of US$6,600,000 (equivalent to approximately HK$51,480,000), being the range agreed between the parties after arm’s length negotiations.

Payment of such exercise price shall be made in cash and funded by the internal resources of the Group and shall be made in four instalments as follows:

• (a) the first instalment of US$3,850,000 (equivalent to approximately HK$30,030,000) shall be paid upon completion of the purchase of the underlying Shares of the First Call Option;

• (b) the second instalment shall be paid within 30 days after the Purchaser’s receipt of the audited and consolidated financial statement of the Acquired Company for the year ending on 31 December 2006 or (if such financial statement shall be available at the time of the first instalment) at the same time as the first instalment is paid, and shall be calculated as follows:

(10% x 75% x price-earnings ratio of 5.5 x consolidated net profit of the Acquired Company for the year ending on 31 December 2006) less the first instalment;

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LETTER FROM THE BOARD

• (c) the third instalment shall be paid within 30 days after the Purchaser’s receipt of the audited and consolidated financial statement of the Acquired Company for the year ending on 31 December 2007 and shall be calculated as follows:

(10% x 80% x price-earnings ratio of 5.5 x averaged consolidated net profit of the Acquired Company for the two years ending on 31 December 2007) less the first and second instalments; and

• (d) the final instalment shall be the remaining balance of the unpaid exercise price (calculated in accordance with the formula as described above, but less the first, second and third instalments).

Upon the exercise of the First Call Option, the Purchaser will become a majority shareholder of the Acquired Company holding a 60% interest and the Acquired Company will become a subsidiary of the Purchaser. The exercise of the First Call Option may constitute a discloseable transaction for the Company, in which case the Company will continue to comply with applicable provisions of the Listing Rules at the relevant time.

SECOND OPTION AGREEMENT

Date: 10 March 2006

Parties: (1) The Vendor

• (2) The Purchaser – Fortune Investment Overseas Limited

Pursuant and subject to the Second Option Agreement dated 10 March 2006, for value received, the Vendor has granted the Second Call Option to the Purchaser whereas the Purchaser has granted the First Put Option and the Second Put Option to the Vendor, in each case conditional upon Completion. Given the exchange of options, no monetary consideration is paid under the Second Option Agreement.

Subject to Completion, the Second Call Option may be exercised by the Purchaser at any time after six calendar months from the date of the Second Option Agreement, for a period of 10 years upon the expiry of which the Second Call Option will lapse.

The First Put Option may be exercised by the Vendor at any time over a period of 10 years from the date of the Second Option Agreement provided that the following conditions have been met:

• Completion has taken place;

• two calendar years have elapsed since the final payment of the Consideration under the Sale and Purchase Agreement;

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LETTER FROM THE BOARD

• the Acquired Company must have had employed a new chief executive officer in succession to the Vendor, with such experience and qualifications and who has performed his/her duties to the reasonable satisfaction of the Purchaser (including the achievement of certain financial and business performance targets) on such employment terms as may be reasonably acceptable to the Purchaser during the two consecutive financial years immediately preceding the exercise of the First Put Option and whose employment with the Acquired Company has an unexpired term of more than 12 months (subject to earlier termination in accordance with the terms of such employment); and

• there is no material or otherwise abnormal business commitments of the Acquired Company and its subsidiaries made as a result of any gross negligence, wilful default or fraud on the part of the Vendor and that remain subsisting and unresolved between the Vendor and the Purchaser at as the date of exercise of the First Put Option.

Subject to Completion, the Second Put Option may be exercised by the Vendor over a period of 10 years from the date of the Second Option Agreement subject further to and upon the occurrence of either of the following (whichever is earlier):

• two calendar years have elapsed since the exercise of the First Put Option; or

• the Vendor is involuntarily removed from the board of directors of the Acquired Company.

The exercise of the Second Call Option and the exercise of both the First and Second Put Options is mutually exclusive. The exercise of any of the Second Call Option and the First and Second Put Option is not dependent or conditional upon the exercise of the First Call Option granted under the First Option Agreement.

The exercise price of each of the Second Call Option, the First Put Option and the Second Put Option, negotiated on an arm’s length basis between the parties, shall be the multiple of the following, pro-rated for the percentage interest being acquired (hence similar to the formula used for the Consideration and the exercise price of the First Call Option):

• (a) the average of the consolidated net profit after tax of the Acquired Company for the two financial years immediately preceding the exercise of such option; and

• (b) a price-earnings multiple of 5.5 of the Acquired Company (which is within the prevailing industry average of 5-7 times).

No minimum or maximum exercise price has been determined. Upon the exercise of the Second Call Option or both the First and Second Put Options, the Acquired Company shall become a whollyowned subsidiary of the Purchaser. The exercise of the Second Call Option, the First and Second Put Options may constitute a discloseable transaction for the Company, in which case the Company will continue to comply with applicable provisions of the Listing Rules at the relevant time.

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LETTER FROM THE BOARD

INFORMATION ON THE ACQUIRED COMPANY

As at the date of this announcement, the Acquired Company is a private company duly incorporated under the laws of the British Virgin Islands on 13 February 2006 having an authorised share capital of US$50,000 divided into 50,000 Acquired Shares, 500 of which have been issued and are fully paid up in favour of the Vendor. Out of the 500 issued Acquired Shares, 250 Acquired Shares (representing 50% of the entire issued capital of the Acquired Company) shall be sold to the Purchaser pursuant to the Sale and Purchase Agreement. The remaining 250 issued Acquired Shares (representing 50% of the entire issued capital of the Acquired Company) shall be held by the Vendor. The Acquired Company, through its wholly-owned subsidiaries, is principally engaged in the design, sourcing and distribution on a worldwide basis of garments and other textile products. The business of the Acquired Group, headquartered in Hong Kong with offices in the Asia Pacific region, has been in existence since as early as the 1990s.

The unaudited and consolidated total assets and net asset value of all wholly-owned subsidiaries of the Acquired Company as at 31 December 2005 amounted to approximately HK$126,822,000 and HK$86,000,000 respectively. The unaudited and consolidated revenue of all wholly-owned subsidiaries of the Acquired Company for the year ended 31 December 2005 amounted to approximately HK$797,000,000. For the year ended 31 December 2004, the unaudited and consolidated net profit before and after taxation of the wholly-owned subsidiaries of the Acquired Company amounted to approximately HK$64,227,000 and HK$63,147,000 respectively. For the year ended 31 December 2005, the unaudited and consolidated net profit before and after taxation of the wholly-owned subsidiaries of the Acquired Company amounted to approximately HK$66,600,000 and HK$65,662,000 respectively.

REASONS FOR THE TRANSACTION

The Directors believe that the Transaction is in line with the Group’s multi-product strategy to expand its apparel product categories and geographical coverage by way of selective acquisitions and joint ventures. Upon Completion, the Transaction will further consolidate the Group’s leading position in the apparel industry. The Group’s experience in acquiring and managing GJM (its sleepwear division), Tomwell Limited (the ladies career wear division) and Partner Joy Group Limited shows the Group’s proven track record as an industry leader and consolidator.

On the basis that the Transaction was negotiated on arm’s length basis and that the price-earnings ratio used in the calculation of the Consideration to be paid is in line with industry average, the Directors consider that the Transaction is made on normal commercial terms, that its terms are fair and reasonable, and that the Transaction and its terms are in the interests of the Group and the Company’s shareholders as a whole. The Directors are also of the view that the Transaction will not create any materially adverse impact on the Group’s working capital position. The Directors are also of the view that the Transaction should, in the absence of any unforeseen factors, result in a corresponding increase in the Group’s earnings and assets in the foreseeable near future whilst the Group will be exposed to the liabilities of the Acquired Group in accordance with HKGAAP.

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LETTER FROM THE BOARD

GENERAL

The Group is principally engaged in the manufacturing and trading of garment and textile products, the provision of freight forwarding and logistics services. The Purchaser is principally engaged in investment holding.

Pursuant to Rule 14.74 of the Listing Rules, for the purposes of determining the applicable percentage ratios under Chapter 14 of the Listing Rules, the First and Second Put Options should be treated as if they had been exercised. On the hypothesis that the First and Second Put Options had been exercised as of the current date, the Company therefore considers that the highest possible exercise price of the First and Second Put Options should be determined by reference to the Acquired Group’s net profit after tax for the 2004 and 2005 financial years, in accordance with the formula stipulated in the Second Option Agreement. On that basis, the Transaction (assuming the First and Second Put Options had been fully exercised for the purposes of Rule 14.74 of the Listing Rules) constitutes a discloseable transaction for the Company, and is therefore subject only to the reporting, announcement and disclosure requirements under Rules 14.34 and 14.38 of the Listing Rules. The Company considers that all the material terms of the Sale and Purchase Agreement, and the First and Second Option Agreements have been disclosed above. The actual exercise of any of the First Call Option, Second Call Option, First Put Option and Second Put Option may constitute a discloseable transaction for the Company, in which case the Company will continue to comply with applicable provisions of the Listing Rules at the relevant time. If the actual exercise prices of any of such options shall fall within a higher classification of notifiable transaction, the Company will also comply with the applicable provision of the Listing Rules at the relevant time (including the issue of further announcement(s)).

ADDITIONAL INFORMATION

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

Yours faithfully, For and on behalf of

Luen Thai Holdings Limited Henry Tan

Executive Director & Chief Executive Officer

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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 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

• (a) As at the Latest Practicable Date, the interests and short positions of the Directors and the chief executive of the Company in the shares, underlying shares and debentures of the Company or its associated corporations which were required (a) to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they were taken or deemed to have under such provisions of the SFO); (b) pursuant to Section 352 of the SFO, to be entered in the register referred to therein; or (c) pursuant to the Model Code for Securities Transactions by Directors of Listed Companies, to be notified to the Company and the Stock Exchange, were as follows:

Long positions in the Shares

			Approximate
			percentage of
			interest in
Name of Director	Capacity	Number of Shares	Company
Tan Siu Lin	Trustee	675,774,000	68.09%
	(Note 1)
Tan Henry	Beneficiary of trust	614,250,000	61.89%
	(Notes 2 and 3)
	Beneficial owner	400,000	0.04%
	(Note 6)
Tan Willie	Beneficiary of trust	614,250,000	61.89%
	(Notes 2 and 4)
	Beneficial owner	1,000,000	0.10%
	(Notes 6 and 7)
Tan Cho Lung,	Beneficiary of trust	614,250,000	61.89%
Raymond	(Notes 2 and 5)
	Beneficial owner	300,000	0.03%
	(Note 6)
Mok Siu Wan,	Beneficial owner	750,000	0.08%
Anne	(Note 6)

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GENERAL INFORMATION

APPENDIX

Notes:

1. Mr. Tan Siu Lin is the settlor and trustee of each of the Tan Family Trust of 2004, the Pak Kim Lam Tan Trust of 2004, the HJ Trust, the WR5C Trust, the LS Trust, the RC Trust, the JL Trust and the ST Trust (collectively referred to as the “Trusts”). As the settlor and trustee of the Trusts, all of which are revocable discretionary trusts, Mr. Tan Siu Lin is deemed under Part XV of the SFO to be interested in the aggregate shareholdings of Tan Holdings Corporation and Helmsley Enterprises Limited (“Helmsley”) held in the Company, representing approximately 68.09% of the issued share capital of the Company as at the date of this circular.

2. Pursuant to a shareholders’ agreement dated 12 June 2004 and entered into between Mr. Tan Siu Lin as trustee for each of the Trusts and Helmsley, each of the Trusts have agreed to adhere to certain preemptive arrangements concerning the transfer of shares in Helmsley. For the purposes of Part XV of the SFO, each of the Trusts is therefore deemed to have effective voting power in respect of the interests of Helmsley in the Company.

3. Mr. Tan Henry is one of the beneficiaries of the HJ Trust, which is a revocable discretionary trust. He is therefore deemed under Part XV of the SFO to be interested in the interests of the HJ Trust in the Company.

4. Mr. Tan Willie is one of the beneficiaries of the WR5C Trust, which is a revocable discretionary trust. He is therefore deemed under Part XV of the SFO to be interested in the interests of the WR5C Trust in the Company.

5. Mr. Tan Cho Lung, Raymond is one of the beneficiaries of the RC Trust, which is a revocable discretionary trust. He is therefore deemed under Part XV of the SFO to be interested in the interests of the RC Trust in the Company.

6. Each of Mr. Tan Henry, Mr. Tan Willie, Mr. Tan Cho Lung, Raymond and Ms. Mok Siu Wan, Anne is a grantee of the respective share options granted by the Company on 28 December 2004 and 26 January 2006 respectively.

7. Mr. Tan Willie acquired a total of 500,000 Shares in September and October 2005.

Long positions in the shares of associated corporations of the Company (as defined in the SFO)

				Approximate
				percentage of
	Name of			attributable
Name of	Associated		Number	interest in
Director	Corporation	Capacity	of shares	corporation
Tan Siu Lin	Helmsley	Trustee	5,000	100%
	(Note 1)	(Note 4)
	Capital Glory Limited	Trustee	1	100%
	(Note 2)	(Note 4)
	Justintime Development	Trustee	1	100%
	Limited_(Note 3)_	(Note 4)
	Tripletrio International	Trustee	42,500	100%
	Limited_(Note 3)_	(Note 4)
	Newtex International	Trustee	2	100%
	Limited_(Note 3)_	(Note 4)

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GENERAL INFORMATION

APPENDIX

				Approximate
				percentage of
	Name of			attributable
Name of	Associated		Number	interest in
Director	Corporation	Capacity	of shares	corporation
Tan Siu Lin	Torpedo Management	Trustee	1	100%
	Limited	(Note 4)
	(Note 3)
	Integrated Solutions	Trustee	1	100%
	Technology Inc.	(Note 4)
	(a Cayman Islands
	corporation)
	(Note 3)
	Eldex Del Golfo,	Trustee	11,819	100%
	SA de CV	(Note 4)
	(Note 3)
	Servicios Textiles	Trustee	50	100%
	Mexicanos, SA	(Note 4)
	(Note 3)
	Hanium Industries	Trustee	1	100%
	Limited_(Note 3)_	(Note 4)
	Integrated Solutions	Trustee	2	100%
	Technology Inc.	(Note 4)
	(a HK corporation)
	(Note 3)
	Integrated Solutions	Trustee	1	100%
	Technology Inc.	(Note 4)
	(a BVI corporation)
	(Note 3)
	Integrated Solutions	Trustee	1	100%
	Technology Inc.	(Note 4)
	(a Philippines
	corporation)
	(Note 3)

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GENERAL INFORMATION

APPENDIX

				Approximate
				percentage of
	Name of			attributable
Name of	Associated		Number	interest in
Director	Corporation	Capacity	of shares	corporation
Tan Henry	Helmsley	Beneficiary	5,000	100%
	(Note 1)	of trust
		(Note 5)
	Capital Glory Limited	Beneficiary	1	100%
	(Note 2)	of trust
		(Note 5)
	Justintime Development	Beneficiary	1	100%
	Limited_(Note 3)_	of trust
		(Note 5)
	Tripletrio International	Beneficiary	42,500	100%
	Limited_(Note 3)_	of trust
		(Note 5)
	Newtex International	Beneficiary	2	100%
	Limited_(Note 3)_	of trust
		(Note 5)
	Torpedo Management	Beneficiary	1	100%
	Limited_(Note 3)_	of trust
		(Note 5)
	Integrated Solutions	Beneficiary	1	100%
	Technology Inc.	of trust
	(a Cayman Islands	(Note 5)
	corporation)
	(Note 3)
	Eldex Del Golfo,	Beneficiary	11,819	100%
	SA de CV	of trust
	(Note 3)	(Note 5)
	Servicios Textiles	Beneficiary	50	100%
	Mexicanos, SA	of trust
	(Note 3)	(Note 5)

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GENERAL INFORMATION

APPENDIX

				Approximate
				percentage of
	Name of			attributable
Name of	Associated		Number	interest in
Director	Corporation	Capacity	of shares	corporation
Tan Henry	Hanium	Beneficiary	1	100%
	Industries Limited	of trust
	(Note 3)	(Note 5)
	Integrated Solutions	Beneficiary	2	100%
	Technology Inc.	of trust
	(a HK corporation)	(Note 5)
	(Note 3)
	Integrated Solutions	Beneficiary	1	100%
	Technology Inc.	of trust
	(a BVI corporation)	(Note 5)
	(Note 3)
	Integrated Solutions	Beneficiary	1	100%
	Technology Inc.	of trust
	(a Philippines	(Note 5)
	corporation)
	(Note 3)
Tan Willie	Helmsley	Beneficiary	5,000	100%
	(Note 1)	of trust
		(Note 6)
	Capital Glory Limited	Beneficiary	1	100%
	(Note 2)	of trust
		(Note 6)
	Justintime	Beneficiary	1	100%
	Development	of trust
	Limited	(Note 6)
	(Note 3)
	Tripletrio International	Beneficiary	42,500	100%
	Limited_(Note 3)_	of trust
		(Note 6)
	Newtex International	Beneficiary	2	100%
	Limited_(Note 3)_	of trust
		(Note 6)

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GENERAL INFORMATION

APPENDIX

				Approximate
				percentage of
	Name of			attributable
Name of	Associated		Number	interest in
Director	Corporation	Capacity	of shares	corporation
Tan Willie	Torpedo Management	Beneficiary	1	100%
	Limited_(Note 3)_	of trust
		(Note 6)
	Integrated Solutions	Beneficiary	1	100%
	Technology Inc.	of trust
	(a Cayman Islands	(Note 6)
	corporation)
	(Note 3)
	Eldex Del Golfo,	Beneficiary	11,819	100%
	SA de CV	of trust
	(Note 3)	(Note 6)
	Servicios Textiles	Beneficiary	50	100%
	Mexicanos, SA	of trust
	(Note 3)	(Note 6)
	Hanium Industries	Beneficiary	1	100%
	Limited	of trust
	(Note 3)	(Note 6)
	Integrated Solutions	Beneficiary	2	100%
	Technology Inc.	of trust
	(a HK corporation)	(Note 6)
	(Note 3)
	Integrated Solutions	Beneficiary	1	100%
	Technology Inc.	of trust
	(a BVI corporation)	(Note 6)
	(Note 3)
	Integrated Solutions	Beneficiary	1	100%
	Technology Inc.	of trust
	(a Philippines	(Note 6)
	corporation)
	(Note 3)

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GENERAL INFORMATION

APPENDIX

				Approximate
				percentage of
	Name of			attributable
Name of	Associated		Number	interest in
Director	Corporation	Capacity	of shares	corporation
Tan Cho Lung,	Helmsley	Beneficiary	5,000	100%
Raymond	(Note 1)	of trust
		(Note 7)
	Capital Glory Limited	Beneficiary	1	100%
	(Note 2)	of trust
		(Note 7)
	Justintime Development	Beneficiary	1	100%
	Limited_(Note 3)_	of trust
		(Note 7)
	Tripletrio International	Beneficiary	42,500	100%
	Limited_(Note 3)_	of trust
		(Note 7)
	Newtex International	Beneficiary	2	100%
	Limited	of trust
	(Note 3)	(Note 7)
	Torpedo Management	Beneficiary	1	100%
	Limited	of trust
	(Note 3)	(Note 7)
	Integrated Solutions	Beneficiary	1	100%
	Technology Inc.	of trust
	(a Cayman Islands	(Note 7)
	corporation)
	(Note 3)
	Eldex Del Golfo,	Beneficiary	11,819	100%
	SA de CV	of trust
	(Note 3)	(Note 7)
	Servicios Textiles	Beneficiary	50	100%
	Mexicanos, SA	of trust
	(Note 3)	(Note 7)

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GENERAL INFORMATION

APPENDIX

				Approximate
				percentage of
	Name of			attributable
Name of	Associated		Number	interest in
Director	Corporation	Capacity	of shares	corporation
Tan Cho Lung,	Hanium Industries	Beneficiary	1	100%
Raymond	Limited	of trust
	(Note 3)	(Note 7)
	Integrated Solutions	Beneficiary	2	100%
	Technology Inc.	of trust
	(a HK corporation)	(Note 7)
	(Note 3)
	Integrated Solutions	Beneficiary	1	100%
	Technology Inc.	of trust
	(a BVI corporation)	(Note 7)
	(Note 3)
	Integrated Solutions	Beneficiary	1	100%
	Technology Inc.	of trust
	(a Philippines	(Note 7)
	corporation)
	(Note 3)

Notes:

1. Helmsley is the holding company of Capital Glory Limited, which is, in turn, the holding company of the Company. Helmsley is therefore an associated corporation of the Company as defined under Part XV of the Company.

2. Capital Glory Limited is the holding company of the Company. It is therefore an associated corporation of the Company.

3. This is a subsidiary of Helmsley. It is therefore an associated corporation of the Company.

4. Mr. Tan Siu Lin is the settlor and trustee of each of the Trusts. As the settlor and trustee of the Trusts, all of which are revocable discretionary trusts, Mr. Tan Siu Lin is deemed under Part XV of the SFO to be interested in the aggregate interests of the Trusts in each of Helmsley and its subsidiaries respectively.

5. Mr. Tan Henry is one of the beneficiaries of the HJ Trust, which is a revocable discretionary trust. By virtue of the shareholders’ agreement dated 12 June, 2004 (as described above), he is therefore deemed under Part XV of the SFO to be interested in the aggregate interests of the Trusts in each of Helmsley and its subsidiaries respectively.

6. Mr. Tan Willie is one of the beneficiaries of the WR5C Trust, which is a revocable discretionary trust. By virtue of the shareholders’ agreement dated 12 June, 2004 (as described above), he is therefore deemed under Part XV of the SFO to be interested in the aggregate interests of the Trusts in each of Helmsley and its subsidiaries respectively.

7. Mr. Tan Cho Lung, Raymond is one of the beneficiaries of the RC Trust, which is a revocable discretionary trust. By virtue of the shareholders’ agreement dated 12 June, 2004 (as described above), he is therefore deemed under Part XV of the SFO to be interested in the aggregate interests of the Trusts in each of Helmsley and its subsidiaries respectively.

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GENERAL INFORMATION

APPENDIX

Save as disclosed above, as at the Latest Practicable Date, none of the Directors and the chief executive of the Company had any interests or short positions in the shares, underlying shares and debentures of the Company and its associated corporations which are required (a) to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they were taken or deemed to have under such provisions of the SFO); (b) pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (c) pursuant to the Model Code for Securities Transactions by Directors of Listed Companies, to be notified to the Company and Stock Exchange.

• (b) As at the Latest Practicable Date, none of the Directors had entered into any service agreement with any member of the Group which was not terminable by the employer within one year without payment of compensation other than statutory compensation.

3. SUBSTANTIAL SHAREHOLDERS

As at the Latest Practicable Date, so far as was known to the Directors, the following persons, not being Directors or chief executive of the Company had, or were deemed to have, interests or short positions in the Shares, underlying Shares and debentures of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO; or who was, directly or indirectly, interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any member of the Group or held any option in respect of such capital:

			Approximate
			percentage
Name	Capacity	Number of Shares	of shareholding
Capital Glory Limited	Beneficial owner	614,250,000	61.89%
(Note 1)
Helmsley_(Note 1)_	Interest of controlled	614,250,000	61.89%
	corporation
Tan Family Trust of	Interest of controlled	675,774,000	68.09%
2004_(Notes 2 and 3)_	corporation
Trusts (other than the Tan	Interest of controlled	614,250,000	61.89%
Family Trust of 2004)	corporation
(Note 3)

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GENERAL INFORMATION

APPENDIX

Notes:

1. Capital Glory Limited is a wholly-owned subsidiary of Helmsley. Helmsley is therefore deemed to be interested in the interests of Capital Glory Limited held in the Company.

2. The Tan Family Trust of 2004 is interested in the entire issued share capital of Tan Holdings Corporation and 30% of the issued share capital of Helmsley. For the purposes of Part XV of the SFO, it is deemed to be interested in the Shares held by both Tan Holdings Corporation and Helmsley.

3. Pursuant to a shareholders’ agreement dated 12 June 2004 and entered into between Mr. Tan Siu Lin as trustee for each of the Trusts and Helmsley, each of the Trusts has agreed to enter into a pre-emptive arrangement concerning the transfer of shares in Helmsley. For the purposes of Part XV of the SFO, each of the Trusts is therefore deemed to have effective voting power in respect of the shareholding of Helmsley in the Company, representing 61.89% of the issued share capital of the Company as at the date of this circular.

Save as disclosed above, as at the Latest Practicable Date, the Directors were not aware of any other person, other than the Directors and the chief executive of the Company, who had, or was deemed to have, interests or short positions in the Shares, underlying Shares and debentures of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO; or who was, directly or indirectly, interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any member of the Group or held any option in respect of such capital.

4. DIRECTORS’ INTERESTS IN COMPETING BUSINESSES

As at the Latest Practicable Date, none of the Directors or any of their respective associates had any interest in any business which causes or may cause any significant competition with the business of the Group or any significant conflicts with the interests of the Group, save as disclosed in the section headed “Relationship with controlling shareholder” in the Company’s prospectus dated 30 June 2004.

5. LITIGATION

As at the Latest Practicable Date, so far as the Directors were aware, neither the Company nor any of its subsidiaries was engaged in any litigation or arbitration of material importance and there was no litigation or claim of material importance known to the Directors to be pending or threatened against the Company or any of its subsidiaries.

– 20 –

GENERAL INFORMATION

APPENDIX

6. MISCELLANEOUS

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

• (b) The company secretary of the Company is Mr. Chiu Chi Cheung, Associate Member of The Hong Kong Institute of Certified Public Accountants.

• (c) The qualified accountant of the Company is Mr. Chiu Chi Cheung, Associate Member of The Hong Kong Institute of Certified Public Accountants.

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

– 21 –