Matrix Holdings Limited — Proxy Solicitation & Information Statement 2008

Apr 29, 2008

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold all your shares in Matrix Holdings Limited , you should at once hand this circular to the purchaser or to the bank, stockbroker or other agent through whom the sale was effected for transmission to the purchaser.

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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MATRIX HOLDINGS LIMITED 美力時集團有限公司[*]

(Incorporated in Bermuda with limited liability)

(Stock Code: 1005)

PROPOSAL INVOLVING GENERAL MANDATES TO ISSUE SHARES AND REPURCHASE SHARES REFRESHMENT OF THE SHARE OPTION SCHEME LIMIT AND RE-ELECTION OF RETIRING DIRECTORS

A notice convening the Annual General Meeting of Matrix Holdings Limited (the “Company”) to be held at Fountains Room 1-3, LG Floor, Hotel Nikko Hong Kong, 72 Mody Road, Tsimshatsui East, Kowloon, Hong Kong on Thursday, 29th May, 2008, at 2:30 p.m. is set out in the 2007 Annual Report of the Company sent together with this circular.

Whether or not you propose to attend the Annual General Meeting, you are requested to complete the accompanying proxy form in accordance with the instructions printed thereon and return the same to the Company’s Branch Share Registrar in Hong Kong, Tricor Secretaries Limited at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong as soon as possible and in any event not later than 48 hours before the time appointed for holding of the meeting or the adjourned meeting (as the case may be). Completion and return of a proxy form will not preclude shareholders from attending and voting at the general meeting if they so wish.

30th April, 2008

* For identification purpose only

CONTENT

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Share Issue Mandate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Share Repurchase Mandate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Extension to the Share Issue Mandate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Refreshment of the Share Option Scheme Limit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
Directors Proposed to be re-elected . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Action to be Taken . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
Responsibility Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
Appendix I – Explanatory Statement to the Share Repurchase Mandate . . . . . . . . .	9
Appendix II – Biographical Details of Directors proposed
to be re-elected at the Annual General Meeting. . . . . . . . . . . . . . . . .	12
Appendix III – Procedure for Voting by Poll at General Meetings. . . . . . . . . . . . . . . . .	15

– i –

DEFINITIONS

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

“AGM”	the Annual General Meeting of the Company to be held on
	Thursday, 29th May, 2008 at 2:30 p.m.
“AGM Notice”	the notice convening the AGM, which is set out in the 2007 Annual
	Report sent together with this circular
“Board”	the board of Directors
“Bye-Laws”	the bye-laws of the Company
“Company”	Matrix Holdings Limited, an exempted company incorporated in
	Bermuda with limited liability, the Shares of which are listed on
	the Stock Exchange
“Directors”	the directors of the Company
“Existing Issue Mandate”	a general mandate granted to the Directors at the annual general
	meeting of the Company held on 29th May, 2007 to allot, issue
	and deal with Shares not exceeding 20 per cent. of the aggregate
	number of Shares comprised in the share capital of the Company
	in issue as at 29th May, 2007
“Existing Repurchase	a general mandate granted to the Directors at the annual general
Mandate”	meeting of the Company held on 29th May, 2007 to repurchase
	Shares not exceeding 10 per cent. of the aggregate number of
	Shares comprised in the share capital of the Company in issue as
	at 29th May, 2007
“Group”	the Company and its subsidiaries from time to time
“HK$” and “cents”	Hong Kong dollars and cents, the lawful currency of Hong Kong
“Hong Kong”	the Hong Kong Special Administrative Region of the People’s
	Republic of China

– 1 –

DEFINITIONS

“Latest Practicable Date”	25th April, 2008, 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 of Hong Kong Limited
“Ordinary Resolutions”	the ordinary resolutions to be proposed and passed at the AGM
	for the matters as set out in the AGM Notice
“Repurchase Resolution”	the proposed ordinary resolution as referred to in resolution no. 5B
	of the AGM Notice
“SFO”	the Securities and Futures Ordinance (Chapter 571) of the laws of
	Hong Kong, as amended from time to time
“Share Option Scheme”	the share option scheme adopted by the Company on 17th
	December, 2002
“Share Option Scheme Limit”	the maximum number of Shares which may be issued upon the
	exercise of all share options granted or to be granted under the
	Share Option Scheme and any other share option scheme(s) as
	may from time to time be adopted by the Company as permitted
	under the Listing Rules, being 10% of the issued share capital of
	the Company as at the date of the approval of the refreshment of
	such limit.
“Share(s)”	ordinary share(s) of HK$0.10 each in the share capital of the
	Company
“Shareholder(s)”	holder(s) of Share(s)
“Share Issue Mandate”	a general mandate proposed to be granted to the Directors at the
	AGM to allot, issue and deal with Shares of up to 20 per cent. of
	the aggregate nominal amount of the issued share capital of the
	Company as at the date of passing of the relevant resolution
	granting such mandate

– 2 –

DEFINITIONS

“Share Repurchase Mandate”	a general mandate proposed to be granted to the Directors at the
	AGM to repurchase Shares not exceeding 10 per cent. of the
	aggregate nominal amount of the issued share capital of the
	Company as at the date of passing of the relevant resolution
	granting such mandate
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Takeover Code”	The Hong Kong Code on Takeovers and Mergers

– 3 –

LETTER FROM THE BOARD

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MATRIX HOLDINGS LIMITED 美力時集團有限公司[*]

(Incorporated in Bermuda with limited liability)

(Stock Code: 1005)

Directors:

Executive Directors:

Cheng Yung Pun (Chairman) Arnold Edward Rubin (Vice-Chairman) Yu Sui Chuen Cheng Wing See, Nathalie

Independent Non-Executive Directors: Loke Yu alias Loke Hoi Lam Mak Shiu Chung, Godfrey Wan Hing Pui

Registered Office:

Canon’s Court 22 Victoria Street Hamilton HM 12 Bermuda

Principal Place of Business:

Room No. 1008, 10/F. Tsim Sha Tsui Centre 66 Mody Road Tsim Sha Tsui East Kowloon, Hong Kong

30th April, 2008

To the Shareholders of the Company

Dear Sir or Madam,

PROPOSAL INVOLVING

GENERAL MANDATES TO ISSUE SHARES AND REPURCHASE SHARES REFRESHMENT OF THE SHARE OPTION SCHEME LIMIT AND RE-ELECTION OF RETIRING DIRECTORS

INTRODUCTION

The purpose of this circular is to provide you with the information in respect of the Ordinary Resolutions to be proposed at the AGM for, amongst other things:–

• (i) granting to the Directors the Share Issue Mandate;

• (ii) granting to the Directors the Share Repurchase Mandate;

• For identification purpose only

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LETTER FROM THE BOARD

• (iii) extending the Share Issue Mandate by adding to it the aggregate number of the issued Shares repurchased under the Share Repurchase Mandate;

• (iv) the refreshment of Share Option Scheme Limit; and

• (v) the re-election of the retiring Directors.

SHARE ISSUE MANDATE

An ordinary resolution will be proposed at the AGM for the purpose of renewing the Existing Issue Mandate granted to Directors to allot, issue and otherwise deal with the Shares. The Existing Issue Mandate will expire at the conclusion of the AGM. The Share Issue Mandate is subject to a limit up to 20 per cent. of the aggregate nominal amount of the share capital of the Company in issue at the date of passing the resolution.

SHARE REPURCHASE MANDATE

The Repurchase Resolution will be proposed for the purpose of renewing the Existing Repurchase Mandate granted to the Directors to repurchase Shares. The Existing Repurchase Mandate will expire at the conclusion of the AGM. The Share Repurchase Mandate is subject to a limit up to 10 per cent. of the issued share capital of the Company as at the date of passing the resolution. An explanatory statement to the Share Repurchase Mandate as required under the Listing Rule is set out in the Appendix I to this circular.

EXTENSION TO THE SHARE ISSUE MANDATE

Subject to the passing at the AGM of the proposed resolution regarding the Share Issue Mandate and the Repurchase Resolution, an ordinary resolution will be proposed at the AGM to approve the addition of the number of Shares that may be repurchased under the Share Repurchase Mandate up to the 20 per cent. Share Issue Mandate.

Shareholders are referred to the AGM Notice, set out in the 2007 Annual Report of the Company sent together with this circular, for details of the Ordinary Resolutions. With reference to these resolutions, the Board wishes to state that it has no immediate plans to repurchase any Shares or to issue any new Shares, whether for cash or otherwise, pursuant to the relevant mandates.

– 5 –

LETTER FROM THE BOARD

REFRESHMENT OF THE SHARE OPTION SCHEME LIMIT

Pursuant to the ordinary resolution passed at the special general meeting of the Company convened on 17th December, 2002, the new Share Option Scheme was adopted. The purpose of the Share Option Scheme is to enable the Company to attract, retain and motivate Eligible Participants to strive for future developments and expansions of the Group.

Since the adoption of the Share Option Scheme, the Company has granted options carry rights to subscribe for 29,701,333 Shares, in which 5,846,000 Shares has been lapsed. As such, the outstanding options carry rights to subscribe for 23,855,333 Shares (representing 3.55% of the Shares in issue) at the Latest Practicable Date.

Under the Share Option Scheme, the Directors were authorized to grant options to subscribe for Shares thereunder and to allot, issue and deal with Shares pursuant to the exercise of the options granted. The Company may grant options up to the limit imposed under the Share Option Scheme, i.e. 10% (equivalent to 32,272,000 Shares) of the issued share capital (322,720,000 Shares) of the Company as at the date of adoption of the Share Option Scheme.

Apart from the Share Option Scheme, the Company has no other share option scheme currently in force. The Directors consider that the Company should refresh the limit under the Share Option Scheme so that the Company could have more flexibility to provide incentives to those Eligible Participants of the Share Option Scheme by way of granting share options to them.

In accordance with Listing Rules 17.03(3) note 1 and 2, the Group may seek approval by its shareholders in general meeting for ‘refreshing’ the 10% limit under the Scheme. However, the total number of securities which may be issued upon exercise of all options to be granted under all of the schemes of the Group (or the subsidiary) under the limit as ‘refreshed’ must not exceed 10% of the relevant class of securities in issue as at the date of approval of the limit. Options previously granted under the schemes (including those outstanding, cancelled, lapsed in accordance with the scheme or exercised options) will not be counted for the purpose of calculating the limit as ‘refreshed’. However, the limit on the number of securities which may be issued upon exercise of all outstanding options granted and yet to be exercised under the scheme and any other schemes must not exceed 30% of the relevant class of securities of the Group (or the subsidiary) in issue from time to time. No options may be granted under any schemes of the Group (or the subsidiary) if this will result in the limit being exceeded.

If the refreshment of the Share Option Scheme mandate limit is approved at the AGM, based on 672,855,350 Shares in issue as at the Latest Practicable Date and assume no further Shares are issued or repurchased after the Latest Practicable Date and up to the date of the AGM, the Company will be allowed to grant further options under the Share Option Scheme for subscription of up to a total of 67,285,535 Shares, representing 10% of the issued share capital (672,855,350 Shares) of the Company as at the date of the AGM.

– 6 –

LETTER FROM THE BOARD

The Directors consider that the refreshment of the limit under the Share Option Scheme is in the interests of the Group and the shareholders as a whole because it enables the Company to reward and motivate its Employees and other Eligible Participants under the Share Option Scheme.

The refreshment of the Limit under the Share Option Scheme is conditional upon:

• (a) the passing of ordinary resolution at the AGM; and

• (b) the Listing Committee of the Stock Exchange granting the listing of, and permission to deal in, any new Shares which may fall to be allotted and issued upon the subscription rights attaching to the options that may be granted under the refreshed limit of the Share Option Scheme up to 10% of the issued share capital of the Company as at the date of passing of the relevant ordinary resolution at the AGM.

Application will be made by the Company to the Listing Committee of the Stock Exchange for the grant of the listing of, and permission to deal in, any new Shares which may fall to be allotted and issued upon the subscription rights attaching to the options that may be granted under the refreshed limit of the Share Option Scheme up to 10% of the issued share capital of the Company as at the date of passing of the relevant ordinary resolution at the AGM.

DIRECTORS PROPOSED TO BE RE-ELECTED

In accordance with clause 99 of the Bye-laws of the Company, Ms. Cheng Wing See, Nathalie and Dr. Loke Yu alias Loke Hoi Lam will retire by rotation at the AGM. In accordance with clause 91 of the Bye-laws of the Company, Mr. Arnold Edward Rubin will retire by rotation at the AGM. These three directors retiring, being eligible, offer themselves for re-election. The particulars of these three Directors which are required to be disclosed by the Listing Rules are set out in Appendix II to this circular.

ANNUAL GENERAL MEETING

The AGM Notice is set out in the 2007 Annual Report of the Company sent together with this circular.

The Register of Members of the Company will be closed from Friday, 23rd May, 2008 to Thursday, 29th May, 2008, both days inclusive, during which period no transfer of shares will be registered. In order to be eligible to attend and vote at the AGM of the Company, all transfers accompanied by the relevant share certificates must be lodged with the Company’s Branch Share Registrar in Hong Kong, Tricor Secretaries Limited, at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong, not later than 4:00 p.m. on 22nd May, 2008.

– 7 –

LETTER FROM THE BOARD

ACTION TO BE TAKEN

A proxy form for use at the AGM is enclosed with this circular and such form of proxy is also published on the website of the Stock Exchange (www.hkex.com.hk). Whether or not you intend to attend the AGM, you are requested to complete the proxy form and return it to the abovementioned Branch Share Registrar of the Company in Hong Kong not less than 48 hours before the time appointed for holding of the meeting or the adjourned meeting (as the case may be). Completion and return of a proxy form will not preclude shareholders from attending and voting at the general meeting if they so wish.

RECOMMENDATION

The Directors consider that proposals of the Share Issue Mandate, the Share Repurchase Mandate, the extension to the Share Issue Mandate, Refreshment of the Share Option Scheme Limit and Re-election of Retiring Directors are in the best interests of the Company and its Shareholders. Accordingly, the Directors recommend all the Shareholders should vote in favour of these resolutions as set out in the AGM Notice to be proposed at the AGM. The procedure by which the shareholders may demand a poll at the AGM pursuant to the current Bye-laws is set out in Appendix III to this circular.

Suncorp Investments Group Limited, the controlling shareholder of the Company as defined in the Listing Rules, which holds 59.45% shareholding of the Company as at the Latest Practicable Date, has indicated that they intend to vote in favour of these resolutions in respect of their holding of Shares.

RESPONSIBILITY STATEMENT

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

As at the date of hereof, the Board comprises Mr. Cheng Yung Pun, Mr. Arnold Edward Rubin, Mr. Yu Sui Chuen and Ms. Cheng Wing See, Nathalie as executive Directors and Dr. Loke Yu alias Loke Hoi Lam, Mr. Mak Shiu Chung, Godfrey and Mr. Wan Hing Pui as independent nonexecutive Directors.

By Order of the Board

Cheng Yung Pun

Chairman

– 8 –

APPENDIX I EXPLANATORY STATEMENT TO SHARE REPURCHASE MANDATE

This Appendix serves as an explanatory statement as required under the Listing Rules to provide you with the information necessary for your consideration of the Share Repurchase Mandate.

1. SHARE CAPITAL

As at the Latest Practicable Date, the issued share capital of the Company comprised 672,855,350 Shares.

Exercise in full of the Repurchase Mandate, on the basis that no further Shares are issued or repurchased between the Latest Practicable Date and the date of the approval of the Share Repurchase Mandate, the Company would be allowed under the Repurchase Resolution to repurchase a maximum of 67,285,535 Shares representing not more than 10% of the issued share capital of the Company as at the date of the Resolution.

2. REASONS FOR REPURCHASE

The Directors believe that the Share Repurchase Mandate is in the best interests of the Company and its Shareholders. Such purchases may, depending on market conditions and funding arrangements at the time, lead to an enhancement of the net assets and/or and/or its earnings per Share and will only be made when the Directors believe that such a purchase will benefit the Company and its Shareholders.

3. FUNDING OF REPURCHASES

In repurchasing Shares, the Company may only apply funds entirely from the Company’s available cashflow or working capital facilities which will be funds legally available in accordance with the provisions of the Bye-laws of the Company and the Bermuda laws for the purpose. It is envisaged that the funds required for any repurchase would be derived from those funds of the Company, legally permitted to be utilised in this connection, including capital paid up on the Shares to be repurchased, profits otherwise available for distribution and sums standing to either the share premium account or contributed surplus account of the Company.

On the basis of the consolidated financial position of the Company as at 31st December, 2007 (being the date to which the latest published audited financial statements of the Company have been made up) and in particular the working capital position of the Company at that time and the number of Shares now in issue, the Directors consider that there might be a material adverse impact on the working capital position or the gearing position of the Company in the event that purchase of all the Shares the subject of the Share Repurchase Mandate were to be carried out in full during the Share Repurchase Mandate period. No purchase would be made in circumstances that would have a material adverse impact on the working capital position or the gearing position of the Company (as compared with the position disclosed in the latest published audited financial statements).

– 9 –

APPENDIX I EXPLANATORY STATEMENT TO SHARE REPURCHASE MANDATE

4. SHARE PRICES

The highest and lowest market prices at which the Shares have traded on the Stock Exchange in each of the twelve months preceding the Latest Practicable Date are as follows:–

	Shares
	Highest	Lowest
	(HK$)	(HK$)
2007
April	2.100	1.880
May	2.250	1.880
June	2.090	1.850
July	2.000	1.850
August	1.930	1.580
September	1.850	1.710
October	2.090	1.700
November	2.200	1.500
December	1.760	1.600
2008
January	1.700	1.410
February	1.620	1.450
March	1.550	1.200
April (up to the latest practicable date)	1.390	1.100

5. UNDERTAKING

The Directors have undertaken to the Stock Exchange, so far as the same may be applicable, to exercise the power of the Company to repurchases pursuant to the Repurchase Resolution and in accordance with the Listing Rules and the applicable laws of Bermuda.

None of the Directors nor, to the best of their knowledge and belief having made all reasonable enquiries, any of their respective associates (as defined in the Listing Rules), have any present intention, if the Share Repurchase Mandate is approved, to sell any Shares to the Company or its subsidiaries.

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 do so, if the Share Repurchase Mandate is approved by Shareholders.

– 10 –

APPENDIX I EXPLANATORY STATEMENT TO SHARE REPURCHASE MANDATE

6. TAKEOVER CODE

If as a result of a share repurchase a Shareholder’s proportionate interest in the voting rights of the Company increases, such increase will be treated as an acquisition for the purpose of the Rule 32 of the Takeover Code. Accordingly, a Shareholder or a group of Shareholders acting in concert (within the meaning of the Takeover Code) depending on the level of increase of the Shareholder’s interest, could obtain or consolidate control of the Company and become obliged to make a mandatory offer in accordance with Rule 26 of the Takeover Code as a result of such increase.

As at the Latest Practicable Date, according to the Register kept by the Company pursuant to Section 336 of the SFO, Suncorp Investments Group Limited controlled approximately 59.45% of the entire issued share capital of the Company. On the basis that the issued share capital of the Company remains unchanged up to the date of the Annual General Meeting, if the Repurchase Mandate is exercised in full, the controlling interests of Suncorp Investments Group Limited in the Company will increase to approximately 66.06% of the issued capital of the Company. The Directors are not aware of any Shareholders or group of Shareholders acting in concert who will become obliged to make a mandatory offer in accordance with Rule 26 of the Takeover Code as a result of repurchase of Shares. The Directors will also have no present intention to exercise the power to repurchase shares on the Stock Exchange pursuant to the repurchase Mandate to such an extent as to result in the number of Shares held by the public falling below 25%.

7. REPURCHASES OF SHARES MADE BY THE COMPANY

No repurchases of Shares have been made by the Company (whether on the Stock Exchange or otherwise) in the six months preceding the Latest Practicable Date.

– 11 –

APPENDIX II BIOGRAPHICAL DETAILS OF DIRECTORS PROPOSED TO BE RE-ELECTED AT THE ANNUAL GENERAL MEETING

This Appendix set out the details of directors who will retire at the conclusion of the AGM and will be proposed to be re-elected at AGM of the Company

Ms. Cheng Wing See, Nathalie, aged 34

Ms. Cheng, is an executive Director of the Company. She is responsible in managing of procurement of the Group. She has over 10 years’ extensive experience in procurement in the plastic toys field. Ms. Cheng is a daughter of Mr. Cheng Yung Pun, Chairman of the Company. She joined the Company in the year 2000. She holds approximately 0.10% interest in the issued share capital of the Company as at the latest practicable date.

There is no service agreement entered into between the Company and of Ms. Cheng. The appointment of Ms. Cheng has no fixed term, but her term of office is subject to retirement by rotation and re-election in accordance with the Company’s Bye-Laws. Ms. Cheng will be entitled to emoluments as determined by the Remuneration Committee and the Board (except determining her own remuneration) from time to time subject to the authorization granted by the Shareholders in the general meeting of the Company, currently being HK$586,000 (including salary and allowances and contribution to Mandatory Provident Funds Scheme) for the year 2007.

Ms. Cheng is also a director of some of the subsidiaries of the Company. Save as disclosed above, Ms. Cheng does not have any relationship with any other directors, senior management, substantial shareholders (as defined in the Listing Rules) or controlling shareholders (as defined in the Listing Rules) of the Company nor any interest or deemed interest in the shares of the Company within the meaning of Part XV of the SFO and there is no information which is disclosable nor is/ was she involved in any matters required to be disclosed pursuant to any of the requirements of the provisions under the Listing Rule 13.51(2)(h) to 13.51(2)(w).

There are no other matters concerning Ms. Cheng that need to be brought to the attention of the Shareholders.

– 12 –

APPENDIX II BIOGRAPHICAL DETAILS OF DIRECTORS PROPOSED TO BE RE-ELECTED AT THE ANNUAL GENERAL MEETING

Dr. Loke Yu alias Loke Hoi Lam, aged 58

Dr. Loke was appointed an independent non-executive director and the chairman of the audit committee and remuneration committee of the Company. He has over 35 years of experience in accounting and auditing for private and public companies; financial consultancy; and corporate management. He holds a Master of Business Administration Degree from Universiti Teknologi Malaysia and a Doctor of Business Administration Degree from University of South Australia. Dr. Loke is a fellow of The Institute of Chartered Accountants in England and Wales; Hong Kong Institute of Certified Public Accountants; and The Hong Kong Institute of Directors. He is also an Associate member of The Institute of Chartered Secretaries and Administrators and a member of Malaysian Institute of Accountants. He is currently the Chairman of MHL Consulting Limited and serves as an independent non-executive director of several companies listed on the Stock Exchange of Hong Kong. He joined the Company in the year 2004.

There is no service agreement entered into between the Company and of Dr. Loke. The appointment of Dr. Loke has no fixed term, but his term of office is subject to retirement by rotation and re-election in accordance with the Company’s bye laws. Dr. Loke will be entitled to emoluments as determined by the Board (except determining his own remuneration) subject to the authorization granted by the Shareholders in the general meeting of the Company, currently being HK$72,000 as director’s fee for year 2007.

Save as disclosed above, Dr. Loke does not hold any position in any subsidiaries of the Company and does not have any relationship with any other directors, senior management, substantial shareholders (as defined in the Listing Rules) or controlling shareholders (as defined in the Listing Rules) of the Company. As at the latest practicable date, Dr. Loke has no interest or deemed interest in the shares of the Company within the meaning of Part XV of the SFO. and there is no information which is disclosable nor is/was he involved in any matters required to be disclosed pursuant to any of the requirements of the provisions under the Listing Rule 13.51(2)(h) to 13.51(2)(w).

There are no other matters concerning Dr. Loke that need to be brought to the attention of the Shareholders.

– 13 –

APPENDIX II BIOGRAPHICAL DETAILS OF DIRECTORS PROPOSED TO BE RE-ELECTED AT THE ANNUAL GENERAL MEETING

Mr. Arnold Edward Rubin, aged 60

Mr. Rubin is responsible for marketing development and assisting the Chairman in overall strategies, management and operations of the Group as a Vice Chairman. Mr. Rubin has over thirty-five years extensive experience in toy industry. He is the past chairman of Toy Industry Association and the current chairman of the Toy Industry Foundation and a director of International Counsil of Toy Industries in USA. He joined the Company in the year 2007. He holds approximately 0.94% interest (6,300,000 underlying shares in respect of share option granted) in the issued share capital of the Company. He does not hold any directorship in any other listed companies in the past three years.

There is no service contract entered into between the Company and him for being director and vice chairman of the Company. However, an employment agreement was executed between Funrise, Inc., the wholly-owned subsidiary of the Company, and him for a date commencing from 8th June, 2007 and continuing for a period of three years thereafter regarding his appointment as a president of Funrise, Inc. (the “Employment Agreement”). According to the Employment Agreement, he is entitled to an annual initial base gross salary of US$600,000 (exclusive of annual cash bonus based on the performance of the shares in capital of the Company and other entitlements from various benefit plans of the Company). The amount of his salary and allowances and other benefits for the year 2007 since his appointment as President of Funrise, Inc is in total amount of HK$4,667,000. In addition, if he is elected as a director of Funrise, Inc. or as a director or officer of any of its affiliates, he will fulfill the duty as this director or officer without additional compensation.

Save as disclosed above, he does not have any relationship with any other directors, senior management, substantial shareholders (as defined in the Listing Rules) or controlling shareholders (as defined in the Listing Rules) of the Company nor any interest or deemed interest in the shares of the Company within the meaning of Part XV of the SFO and that there is no information which is disclosable nor is/was he involved in any matters required to be disclosed pursuant to any of the requirements of the provisions under the Listing Rule 13.51(2)(h) to 13.51(2)(w).

There are no other matters concerning Mr. Rubin that need to be brought to the attention of the Shareholders.

– 14 –

PROCEDURE FOR VOTING BY POLL AT GENERAL MEETINGS

APPENDIX III

The following paragraphs set out the procedure by which the Shareholders may demand a poll at a general meeting of the Company (including the Annual General Meeting) pursuant to the current Bye-Laws.

According to clause 69 of the current Bye-Laws, subject to the rules prescribed by the Designated Stock Exchange from time to time, at any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands, unless a poll is (before or on the declaration of the result of the show of hands) demanded by:

• (i) the chairman;

• (ii) at least 3 members present in person or by proxy or authorized corporate representative for the time being entitled to vote at the meeting;

• (iii) the member or members present in person or by proxy or authorized representative and holding between them not less than one-tenth of the total voting rights of all the members having the right to vote at the meeting; or

• (iv) any member or members present in person or by proxy or authorized representative and holding shares in the Company conferring a right to attend and 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 the shares conferring that right.

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