MS Group Holdings Limited — Proxy Solicitation & Information Statement 2007

Mar 20, 2007

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 or other licensed securities dealer, bank manager, solicitor, professional accountant or other professional adviser.

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

U-RIGHT INTERNATIONAL HOLDINGS LIMITED ���������� *

(Incorporated in Bermuda with limited liability)

(Stock Code: 627)

PROPOSED REFRESHMENT OF GENERAL MANDATE TO ALLOT AND ISSUE SHARES PROPOSED RE-ELECTION OF THE RETIRING DIRECTOR AND NOTICE OF SPECIAL GENERAL MEETING

Independent financial adviser to the Independent Board Committee and the Independent Shareholders

A letter from the independent board committee of U-RIGHT International Holdings Limited is set out on page 9 of this circular. A letter from Veda Capital Limited, the independent financial adviser to the independent board committee and the independent shareholders of U-RIGHT International Holdings Limited, is set out on pages 10 to 14 of this circular.

A notice convening the SGM to be held at Montparnasses Room I-II, 2/F, Regal Kowloon Hotel, 71 Mody Road, Tsimshatsui, Kowloon, Hong Kong on Wednesday, 11 April 2007 at 10:00 a.m. is set out on pages 17 to 19 of this circular. A form of proxy for use at the SGM is also enclosed with this circular.

Whether or not you are able to attend the SGM, you are advised to read the notice and to complete and return the enclosed form of proxy, in accordance with the instructions printed thereon, to the branch share registrar of the Company in Hong Kong, Tengis Limited, at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for the holding of the SGM or any adjourned meeting. The completion and return of the form of proxy will not preclude you from attending and voting at the SGM or any adjourned meeting in person if you so wish.

20 March 2007

* For identification purposes only

CONTENTS

		Page
DEFINITIONS..............................................................................................................................		1
LETTER	FROM THE BOARD
I.	Introduction ................................................................................................................	3
II.	General mandate refreshment....................................................................................	4
III.	Special general meeting.............................................................................................	6
IV.	Procedures for demanding a poll ..............................................................................	7
V.	Independent board committee ...................................................................................	7
VI.	Recommendation........................................................................................................	7
VII.	Responsibility statement............................................................................................	8
LETTER	FROM THE INDEPENDENT BOARD COMMITTEE........................................	9
LETTER	FROM VEDA CAPITAL............................................................................................	10
APPENDIX — INFORMATION ON THE RETIRING DIRECTOR..................................		15
NOTICE OF SGM........................................................................................................................		17

– i –

DEFINITIONS

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

“AGM”	the annual general meeting of the Company held on 5 September
	2006 in which the shareholders had approved, among other
	matters, the Current General Mandate;
“associates”	has the meaning ascribed to it under the Listing Rules;
“Board”	the board of Directors, including all independent non-executive
	Directors;
“Bye-laws”	the bye laws of the Company;
“Company”	U-RIGHT International Holdings Limited, a company
	incorporated in Bermuda with limited liability and the Shares
	of which are listed on the Stock Exchange;
“Companies Act”	the Companies Act 1981 of Bermuda (as amended);
“Current General Mandate”	the general mandate approved at the AGM to grant to the
	Directors the authority to allot and issue Shares of up to 20% of
	the issued share capital of the Company as at the date of the
	passing of the relevant ordinary resolution;
“Director(s)”	director(s) of the Company;
“Group”	the Company and its subsidiaries;
“Hong Kong”	the Hong Kong Special Administrative Region of the People’s
	Republic of China;
“Independent Board Committee”	an independent committee of the Board, comprising all the
	independent non-executive Directors;
“Independent Shareholders”	Shareholders other than the controlling Shareholders and their
	associates;
“Latest Practicable Date”	16 March 2007, being the latest practicable date prior to the
	printing of this circular for ascertaining certain information in
	this circular;
“Listing Rules”	Rules Governing the Listing of Securities on the Stock
	Exchange;

– 1 –

DEFINITIONS

“New General Mandate”	the general mandate proposed to be granted to the Directors at
	the SGM to allot, issue and deal with additional Shares not
	exceeding 20% of the share capital of the Company in issue as
	at the date of the SGM;
“SFO”	Securities and Futures Ordinance (Chapter 571 of the Laws of
	Hong Kong);
“SGM”	the special general meeting of the Company to be convened
	and held at Montparnasses Room I-II, 2/F, Regal Kowloon Hotel,
	71 Mody Road, Tsimshatsui, Kowloon, Hong Kong on
	Wednesday, 11 April 2007 at 10:00 a.m. to consider and, if
	appropriate, to approve the proposed grant of the New General
	Mandate and proposed re-election of the retiring director;
“Share(s)”	ordinary share(s) of HK$0.10 each in the share capital of the
	Company;
“Shareholder(s)”	holder(s) of Share(s);
“Stock Exchange”	The Stock Exchange of Hong Kong Limited;
“Veda Capital”	Veda Capital Limited, a licensed corporation to carry out type
	6 (advising on corporate finance) regulated activities as defined
	under the SFO, being the independent financial adviser to the
	Independent Board Committee and the Independent
	Shareholders in relation to the proposed grant of New General
	Mandate
“HK$”	Hong Kong dollars, the lawfully currency of Hong Kong;
“%”	per cent.

– 2 –

LETTER FROM THE BOARD

U-RIGHT INTERNATIONAL HOLDINGS LIMITED ���������� *

(Incorporated in Bermuda with limited liability)

(Stock Code: 627)

Executive Directors: Mr. Leung Ngok (Chairman) Mr. Leung Shing (Deputy Chairman) Mr. Leung Siu Kan, Stephen

Registered office: Clarendon House 2 Church Street Hamilton HM 11 Bermuda

Independent Non-Executive Directors:

Mr. Jia Luqiao Mr. Wong Kong Hon Mr. Yang Dong Hui Mr. Wong Kai Cheong

Head office and principal place of business in Hong Kong: 32nd Floor, Billion Plaza 8 Cheung Yue Street Cheung Sha Wan Kowloon Hong Kong

20 March 2007

To the Shareholders

Dear Sir or Madam,

PROPOSED REFRESHMENT OF GENERAL MANDATE TO ALLOT AND ISSUE SHARES PROPOSED RE-ELECTION OF THE RETIRING DIRECTOR AND NOTICE OF SPECIAL GENERAL MEETING

I. INTRODUCTION

The purpose of this circular is to provide you with the information relating to (i) the proposed grant of the New General Mandate; (ii) the recommendation from the Independent Board Committee to the Independent Shareholders on the proposed grant of the New General Mandate; (iii) the recommendation from Veda Capital to the Independent Board Committee and the Independent Shareholders on the proposed grant of the New General Mandate; (iv) reelection of the retiring director and (v) the notice of SGM.

* For identification purposes only

– 3 –

LETTER FROM THE BOARD

II. GENERAL MANDATE REFRESHMENT

Current General Mandate

At the AGM, the Shareholders approved, among other things, an ordinary resolution to grant to the Directors the Current General Mandate to allot and issue not more than 535,939,650 Shares, being 20% of the aggregate nominal amount of the issued share capital of the Company of 2,679,698,250 Shares as at the date of passing of the resolution.

During the period from the grant of the Current General Mandate to the Latest Practicable Date, the Current General Mandate had been utilized as to a maximum of 535,777,778 Shares, being approximately 99.97% of the aggregate number of Shares which may be allotted and issued under the Current General Mandate. Only 161,872 new Shares remain unutilized under the Current General Mandate. The breakdown of the usage of the Current General Mandate is as follows:

• (i) as to a maximum of 277,777,778 Shares upon conversion of the zero coupon bonds (the “Bonds”), details of which were set out in the announcement of the Company dated 9 October 2006. As at the Latest Practicable Date, none of the Bonds have been converted. The net proceeds from the issue of the Bonds of approximately HK$56,800,000 is intended and has actually been used for general working capital purposes of the Group, including the marketing and research and development; and

• (ii) as to 258,000,000 Shares in association with the placing of new Shares (the “Placing”), details of which were set out in the announcement of the Company dated 13 February 2007. As at the Latest Practicable Date, the net proceeds of approximately HK$72,850,000 from the Placing has not been used and is intended to be used for general working capital and/or possible investment in the future.

Proposed Grant of New General Mandate

The Company will be convening the SGM at which ordinary resolution will be proposed to the Independent Shareholders that:

• (i) the Directors be granted the New General Mandate to allot and issue Shares not exceeding 20% of the share capital of the Company in issue as at the date of passing the relevant ordinary resolution; and

• (ii) the New General Mandate be extended to Shares repurchased by the Company pursuant to the repurchase mandate granted to the Directors at the AGM.

The Company has not refreshed the Current General Mandate since the AGM. The New General Mandate will last until whichever is the earliest of:

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

– 4 –

LETTER FROM THE BOARD

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

• (iii) the passing of an ordinary resolution by the Shareholders in general meeting revoking or varying the authority given to the Directors under the New General Mandate.

As at the Latest Practicable Date, the Company had an aggregate of 2,937,698,250 Shares in issue. On the basis that no further Shares are issued and/or repurchased by the Company between the Latest Practicable Date and the date of the SGM, the Company would be allowed under the New General Mandate to allot and issue up to 587,539,650 Shares representing 20% of the share capital of the Company in issue at the date of SGM.

Reasons for the New General Mandate

The Group is principally engaged in the design, manufacture, distribution and sales of men and ladies casual wear for the PRC market and in Hong Kong. The Board believes that the grant of the New General Mandate is in the best interests of the Company and the Shareholders as a whole by maintaining the financial flexibility necessary for the Group’s future business development.

The Board considers equity financing to be an important avenue of resources to the Group since it does not create any interest paying obligations on the Group. In appropriate circumstances, the Group will also consider other financing methods such as debt financing or internal cash resources to fund its future business development. While the Board has no concrete funds raising proposal, the Board is now proposing to seek the approval of Independent Shareholders at the SGM of the New General Mandate such that should funding needs arise or attractive terms for investment in the Shares become available from potential investors, the Board will be able to respond to the market and such investment opportunities promptly because fund raising exercise pursuant to a general mandate provides the Company a more simple and less lead time process than other types of fund raising exercises and to avoid the uncertainties in such circumstances that specific mandate may not be obtained in a timely manner.

Other than the issue of the Bonds as stated in the announcement of the Company dated 9 October 2006 and the placing of 258,000,000 new Shares as stated in the announcement of the Company dated 13 February 2007, no fund raising activity has been conducted by the Company since the AGM.

In view of the above, the Directors consider the grant of the New General Mandate, which may or may not be utilised, is in the best interests of the Company and the Shareholders as a whole.

– 5 –

LETTER FROM THE BOARD

III. SPECIAL GENERAL MEETING

(i) New General Mandate

Pursuant to the Listing Rules, the New General Mandate requires the approval of the Independent Shareholders at the SGM at which any of the controlling Shareholders and their associates or, where there are no controlling Shareholders, Directors (excluding independent non-executive Directors) and the chief executive of the Company and their respective associates shall abstain from voting in favour of the relevant resolution(s). The controlling Shareholder, ACE Target Inc. and its associates shall abstain from voting in favour of the relevant resolutions to approve the New General Mandate. Pursuant to the Listing Rules, any vote of the Independent Shareholders at the SGM will be taken by poll and a results announcement will be made after the SGM.

(ii) Re-election of Director

Pursuant to A.4.2 of the provisions of Appendix 14 of the Listing Rules, the appointment of Mr. Leung Siu Kan, Stephen is subject to re-election by Shareholder at the SGM.

Mr. Leung Siu Kan, Stephen, appointed by the Board on 5 September 2006 to fill a casual vacancy, shall retire at the SGM. He, being eligible, will offer himself for reelection at the SGM. Pursuant to Rule 13.74 of the Listing Rules, a listed issuer shall disclose the details required under Rule 13.51(2) of the Listing Rules of any director(s) proposed to be re-elected or proposed new director in the notice or accompanying circular to its shareholders of the relevant general meeting, if such re-election or appointment is subject to shareholders’ approval at that relevant general meeting. The details of Mr. Leung Siu Kan, Stephen are set out in the Appendix of this circular.

(iii) Notice of Special General Meeting

The notice convening the SGM is set out on pages 17 to 19 of this circular. At the SGM, ordinary resolutions will be proposed to approve the proposed grant of the New General Mandate and an ordinary resolution will be proposed to re-elect Mr. Leung Siu Kan, Stephen onto the Board. A form of proxy for use at the SGM is also enclosed with this circular. To be valid, the enclosed form of proxy, together with any power of attorney or other authority under which it is signed must be completed in accordance with the instructions printed thereon and delivered to the branch share registrar of the Company in Hong Kong, Tengis Limited at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong, as soon as possible but in any event not less than 48 hours before the time appointed for the holding of the SGM or any adjourned meeting. The completion and return of the form of proxy will not preclude you from attending and voting at the SGM or any adjourned meeting in person if you so wish.

– 6 –

LETTER FROM THE BOARD

IV. PROCEDURES FOR DEMANDING A POLL

Pursuant to Bye-law 66 of the Bye-laws, a resolution put to the vote of a general meeting shall be decided on a show of hands unless (before or on the declaration of the result of the show of hands or on the withdrawal of any other demand for a poll) a poll is demanded:

• (i) by the chairman of the meeting; or

• (ii) by at least three Shareholders present in person (or in the case of a Shareholder being a corporation by its duly authorised representative) or by proxy for the time being entitled to vote at the meeting; or

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

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

V. INDEPENDENT BOARD COMMITTEE

The Independent Board Committee comprises Mr. Jia Luqiao, Mr. Wong Kong Hon, Mr. Yang Dong Hui and Mr. Wong Kai Cheong, all being independent non-executive Directors. The Independent Board Committee has been established to advise the Independent Shareholders on the grant of the New General Mandate.

Veda Capital has been appointed as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the grant of the New General Mandate.

VI. RECOMMENDATION

The Directors consider the grant of the New General Mandate is in the interest of the Company and the Shareholders as a whole and accordingly recommend the Independent Shareholders to vote in favour of the relevant resolutions to be proposed at the SGM for approving the grant of the New General Mandate.

The Independent Board Committee, having taken into account the advice of Veda Capital, considers that the grant of the New General Mandate is fair and reasonable so far as the Independent Shareholders are concerned and accordingly recommends the Independent Shareholders to vote in favour of the relevant resolutions to be proposed at the SGM for approving the grant of the New General Mandate.

– 7 –

LETTER FROM THE BOARD

Your attention is drawn to the letter of advice from the Veda Capital set out on pages 10 to 14 of this circular which contains its advice to the Independent Board Committee and the Independent Shareholders in connection with the grant of the New General Mandate and the letter from the Independent Board Committee set out on page 9 of this circular which contains its recommendation to the Independent Shareholders in relation to the grant of the New General Mandate.

VII. RESPONSIBILITY STATEMENT

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

Yours faithfully On behalf of the Board Leung Ngok Chairman

– 8 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

U-RIGHT INTERNATIONAL HOLDINGS LIMITED ���������� *

(Incorporated in Bermuda with limited liability)

(Stock Code: 627)

20 March 2007

To the Independent Shareholders

Dear Sir or Madam,

REFRESHMENT OF GENERAL MANDATE TO ALLOT AND ISSUE SHARES

We refer to the circular of the Company dated 20 March 2007 (the “ Circular ”) of which this letter forms part. Unless the context requires otherwise, capitalised terms used herein shall have the same meanings as defined in the Circular.

We have been appointed by the Board to advise the Independent Shareholders in connection with the proposed grant of the New General Mandate. Veda Capital has been appointed as the independent financial adviser to advise us in this respect.

Having considered the principal reasons and factors considered by, and the advice of Veda Capital as set out in its letter of advice to us on pages 10 to 14 of the Circular, we are of the opinion that the proposed grant of the New General Mandate is fair and reasonable and is in the interests of the Company and the Shareholders as a whole. Accordingly, we recommend the Independent Shareholders to vote in favour of the relevant ordinary resolutions to be proposed at the SGM to approve the grant of the New General Mandate by way of poll.

Yours faithfully,

Independent Board Committee Jia Luqiao Wong Kong Hon Yang Dong Hui Wong Kai Cheong Independent Independent Independent Independent non-executive non-executive non-executive non-executive Director Director Director Director

* For identification purposes only

– 9 –

LETTER FROM VEDA CAPITAL

The following is the full text of the letter from Veda Capital setting out the advice to the Independent Board Committee and the Independent Shareholders for inclusion in this circular.

==> picture [109 x 39] intentionally omitted <==

Veda Capital Limited

Suite 11-12, 13/F, Nam Fung Tower, 173 Des Voeux Road Central Hong Kong

20 March 2007

To the Independent Board Committee

and the Independent Shareholders of U-Right International Holdings Limited

Dear Sirs,

PROPOSED REFRESHMENT OF GENERAL MANDATE TO ALLOT AND ISSUE SHARES

INTRODUCTION

We refer to the circular dated 20 March 2007 issued by the Company to the Shareholders of which this letter forms part (the “Circular”) and our appointment as independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the proposed granting of the New General Mandate, details of which are set out in the letter from the Board contained in the Circular (the “Board Letter”). Capitalised terms used in this letter, unless the context otherwise requires, shall have the same meaning ascribed to them in the Circular.

Pursuant to the Listing Rules, the granting of the New General Mandate is subject to the approval of the Independent Shareholders by way of poll at the SGM. The controlling Shareholders and their associates or, where there are no controlling Shareholders, Directors (excluding the independent non-executive Directors) and the chief executive and their respective associates shall abstain from voting in favour of the relevant resolutions at the SGM. As at the Latest Practicable Date, ACE Target Inc., being the controlling Shareholder, and its associates were in aggregate interested in 1,135,778,179 Shares, representing 38.66% of the issued share capital of the Company as at the Latest Practicable Date. ACE Target Inc. and its associates will abstain from voting in favour of the relevant resolutions to approve the New General Mandate at the SGM. The Independent Board Committee has been established to advise whether the proposed granting of the New General Mandate is in the interests of the Company and the Shareholders as a whole.

– 10 –

LETTER FROM VEDA CAPITAL

BASIS OF OUR ADVICE

In formulating our opinion, we have relied on the information, facts and representations contained or referred to in the Circular and the information, facts and representations provided by, and the opinions expressed by the Directors, the Company and its management. We have assumed that all statements, information, facts, opinions and representations made to us or referred to in the Circular were true, accurate and complete at the time when they were made and continued to be true, accurate and complete as at the date of the Circular. We have no reason to doubt the truth, accuracy and completeness of the statements, information, facts, opinions and representations provided to us by the Directors, the Company and its management. The Directors have confirmed to us that no material facts have been omitted from the information supplied and opinions expressed. We consider that we have been provided with sufficient information to reach an informed view to provide a reasonable basis for our opinion.

All the Directors jointly and severally accept full responsibility for the accuracy of the information contained in the Circular and confirm, having made all reasonable enquiries, that, to the best of their knowledge, opinions expressed in the Circular have been arrived at after due and careful consideration and that there are no other facts not contained in the Circular the omission of which would make any statement in the Circular misleading. We have relied on such information and opinions and have not, however, conducted any independent investigation into the business, financial conditions and affairs or the future prospects of the Group.

PRINCIPAL FACTORS AND REASONS CONSIDERED

In arriving at our opinion in respect of the proposed granting of the New General Mandate, we have taken the following principal factors and reasons into consideration:

Background

The Group is principally engaged in the design, manufacture, distribution and sales of men and ladies casual wear for the PRC market and in Hong Kong.

At the AGM, the Directors were granted the Current General Mandate to allot and issue up to 535,939,650 new Shares, representing 20% of the aggregate nominal amount of the issued share capital of the Company of 2,679,698,250 Shares then in issue. The Current General Mandate has almost been fully utilized as to a maximum of 535,777,778 Shares (as to a maximum of 277,777,778 Shares upon conversion of the Bonds, details of which were set out in the announcement of the Company dated 9 October 2006 and as to 258,000,000 Shares in association with the placing of new Shares, details of which were set out in the announcement of the Company dated 13 February 2007). Only 161,872 new Shares remain unutilized under the Current General Mandate.

To maintain the financial flexibility necessary for the Group’s future business development, the Directors therefore propose to seek the approval of the Independent Shareholders at the SGM for the granting of the New General Mandate.

– 11 –

LETTER FROM VEDA CAPITAL

The Company had an aggregate of 2,937,698,250 Shares in issue as at the Latest Practicable Date. On the basis that no further Shares are issued and/or repurchased by the Company between the Latest Practicable Date and the date of the SGM, the Company would be allowed under the New General Mandate to allot and issue up to 587,539,650 Shares representing 20% of the share capital of the Company in issue on the date of SGM.

Reasons for the New General Mandate

As stated in the Board Letter, the Directors consider that equity financing to be an important avenue of resources to the Group since it does not create any interest paying obligations on the Group. While the Board considers that there is no immediate funding need for the Group’s current operations and that there is currently no concrete proposal presented by potential investors for investment in Shares, the Board proposes to seek approval of the Independent Shareholders at the SGM of the New General Mandate such that should future funding needs arise or attractive terms for investment in Shares become available from potential investors, the Board will be able to respond to the market and such investment opportunities promptly.

Continued expansion of the Group’s businesses and flexibility in financing alternatives

As stated in the interim report 2006/2007 of the Company (the “Interim Report”), the Group will continue to develop its retail and wholesale business in the second and third-tier districts in the PRC with good potential by adopting the proven marketing strategy of franchising, as well as increasing self-managed stores as to consolidate the sales network of “U-Right” in the PRC. In further expanding its coverage, (i) the Group opened the first “U-Right” retail shop in Macau in November 2006, embarking its formal appearance in the fashion garments retail segment in Macau where the retail business is promising with the booming tourism industry. The Group has set up a clear development blueprint to cultivate the Macau market with an aim to capturing a share in Macau’s fashion garments retail industry; (ii) the Group will continue to expand its sales network to reinforce the leadership of “U-Right” in men and women’s leisure wears and allocate more resources to the retailing and wholesaling of products of the Group; (iii) in October 2006, the Group opened a new sales complex and a multi-brand fashion garments retail shop named “SEVENDAYS” in Beijing and Shanghai and the Group expects to set up 12 image shops in first-tier cities and another 30 brand specialty shops in the PRC; and (iv) the Group created a new brand “PEZZX” and formally launched in Shanghai in October 2006 and expects to open 10 specialty shops and 10 specialty counters in department stores in first-tier PRC cities.

Given the Current General Mandate has almost been fully utilised, may any investment opportunities arise that would lead to issuance of new Shares and specific mandate may have to be sought in this respect, the Directors are uncertain as to whether the requisite approval from the Independent Shareholders could be obtained in a timely manner. In addition, the New General Mandate offers an opportunity for the Directors to capture a favourable equity market condition to raise funds by issuing new Shares.

– 12 –

LETTER FROM VEDA CAPITAL

Notwithstanding the fact that the Group had no immediate funding need for its current operations and there is currently no concrete proposal presented by potential investors for investment in Shares, the Directors believe that the New General Mandate would offer the Group higher flexibility to capture investment opportunities which may arise at any time and require prompt investment decision by the Group. The Directors also consider that the New General Mandate would provide the Company with the maximum flexibility to raise additional capital for any future investment or as working capital of the Group.

In light of the above, we are of the opinion that the New General Mandate would provide the Company with the necessary flexibility essential for fulfilling any possible funding needs for future business development and/or investment decisions in a timely manner. As such, we are of the view that the granting of the New General Mandate will be in the interest of the Company and the Shareholders as a whole.

Other financing alternative

As stated in the Board Letter, in appropriate circumstances, the Group will also consider other financing methods such as debt financing or internal cash resources to fund its future business development. While sufficient for its present requirements, there is no certainty that such cash resources will be adequate or other financing alternatives will be available for appropriate investment that may be identified by the Company in the future.

In addition, as debt financing may incur interest burden to the Group, the Directors consider that equity financing such as issuance of new Shares for cash or equity swaps may be an appropriate mean to fund such investments and/or acquisitions and provide additional working capital for the future development and expansion of the Group, given the Group’s financial position, capital structure, cost of funding and the then financial market condition.

We consider that the granting of the New General Mandate will provide the Company with an additional alternative and it is reasonable for the Company to have the flexibility in deciding the financing methods for its future development, including equity issuance. As such, we are of the view that the granting of the New General Mandate will be in the interest of the Company and the Shareholders as a whole.

Potential dilution to shareholdings of the Independent Shareholders

Set out below is a table showing (i) the shareholdings of the Company as at the Latest Practicable Date; and (ii) for illustrative purpose, the potential dilution effect upon full utilisation of the New General Mandate, assuming none of the Bonds are converted and no other Shares are issued or repurchased by the Company.

– 13 –

LETTER FROM VEDA CAPITAL

Shareholders ACE Target Inc.(Note) Leung Ngok Independent Shareholders Shares issued under New General Mandate Total	As at the Latest Practicable Date Shares % 1,026,557,179 34.94 109,221,000 3.72 1,801,920,071 61.34 0 0.00 2,937,698,250 100.00	Upon full utilisation of the New General Mandate Shares % 1,026,557,179 29.12 109,221,000 3.10 1,801,920,071 51.11 587,539,650 16.67 3,525,237,900 100.00	Upon full utilisation of the New General Mandate Shares % 1,026,557,179 29.12 109,221,000 3.10 1,801,920,071 51.11 587,539,650 16.67 3,525,237,900 100.00
			100.00

Note: ACE Target Inc. is the trustee of The Target Unit Trust, a unit trust of which all of the units in issue are owned by Trident Trust Company (B.V.I.) Limited (the surviving company after the merger with Trident Corporate Services (B.V.I.) Limited) as trustee of The Leung Ngok Family Trust, a discretionary trust of which the objects include Mr. Leung Ngok’s family members.

As illustrated in the table above, assuming none of the Bonds are converted and no other Shares are issued and/or repurchased by the Company, the aggregate shareholding of the Independent Shareholders will decrease from approximately 61.34% to approximately 51.11% upon full utilisation of the New General Mandate. Taking into account the benefits of the New General Mandate as discussed above and the fact that the shareholdings of all Shareholders will be diluted proportionately, we consider such dilution or potential dilution of shareholding to be reasonable.

RECOMMENDATION

Having considered the factors and reasons as stated above, we are of the view that the granting of the New General Mandate is in the interest of the Company and Shareholders as a whole. Accordingly, we advise the Independent Board Committee to recommend the Independent Shareholders to vote in favour of the ordinary resolutions in relation to the granting of the New General Mandate to be proposed at the SGM. Independent Shareholders are however advised to take note of the possible dilution effect on their shareholding interests in the Company when and if the New General Mandate is utilised.

Yours faithfully, For and on behalf of Veda Capital Limited Hans Wong Julisa Fong Managing Director Director

– 14 –

INFORMATION ON THE RETIRING DIRECTOR

APPENDIX

Pursuant to the Listing Rules, the details of the Directors who will retire at the SGM according to the Bye-laws and will be proposed to be re-elected at the SGM are provided below:

MR LEUNG SIU KAN, STEPHEN, AGED 59

Position & experience

Mr. Leung Siu Kan, Stephen (“Mr Leung”) is an executive Director and a member of the Executive Committee of the Company. He is currently the Group’s PRC Business Operation Manager and is responsible for managing business operations in the PRC. Mr. Leung has over twenty years of retail and management experience in the apparel and garment industry. He is also a director of certain subsidiaries of the Group. Save as aforesaid, Mr. Leung does not hold any other positions with the Company and other members of the Group. Further, Mr. Leung has not held any other directorships in any listed companies in the last three years.

Length of service

Mr. Leung entered into a service agreement with the Company for a fixed term of three years commencing from 5 September 2006. He is subject to retirement by rotation and re-election at the annual general meeting of the Company in accordance with the Bye-laws. The provisions of the Byelaws in respect of such directors’ retirement by rotation and re-election have been set out in paragraph III of the Letter from the Board in this circular.

Interests in Shares

As far as the Directors are aware, as at the Latest Practicable Date, Mr Leung Siu Kan, Stephen holds 25,000,000 share options of the Company entitling him to subscribe for a total of 25,000,000 shares of the Company. Save as disclosed above, Mr Leung did not have or deem to have any other interests in the Shares or underlying Shares pursuant to Part XV of the SFO.

Relationships

Mr. Leung does not have any relationships 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.

Director’s emoluments

Pursuant to the service agreement entered into between Mr. Leung and the Company on 5 September 2006, Mr. Leung is entitled to receive, from the commencement of his employment, an annual remuneration of HK$600,000 payable on a 12-month basis together with discretionary bonus based on the Company’s performance.

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INFORMATION ON THE RETIRING DIRECTOR

APPENDIX

Such director’s emoluments were agreed by the Remuneration Committee of the Company and the Board with reference to Mr. Leung’s qualification and experience, responsibilities to be undertaken, and the prevailing market level of remuneration of similar positions. In addition, Mr. Leung is eligible to participate in the Company’s share option scheme.

Information need to be disclosed and matters need to be brought to the attention of the Shareholders

Save as disclosed above, there is no information which is discloseable nor is/was Mr. Leung involved in any of the matters required to be disclosed pursuant to any of the requirement under Rules 13.51(2)(h) to 13.51(2)(v) of the Listing Rules; and there are no other matters concerning Mr. Leung that need to be brought to the attention of the Shareholders.

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NOTICE OF SGM

U-RIGHT INTERNATIONAL HOLDINGS LIMITED ���������� *

(Incorporated in Bermuda with limited liability)

(Stock Code: 627)

NOTICE IS HEREBY GIVEN that a special general meeting (the “ SGM ”) of U-RIGHT International Holdings Limited (the “ Company ”) will be held at Montparnasses Room I-II, 2/F, Regal Kowloon Hotel, 71 Mody Road, Tsimshatsui, Kowloon, Hong Kong, on Wednesday, 11 April 2007 at 10:00 a.m. for the purpose of considering and, if thought fit, passing with or without amendments, the following resolutions which will be proposed as ordinary resolutions of the Company:

ORDINARY RESOLUTIONS

1. “ THAT

2. (a) the general mandate granted to the directors of the Company (the “ Directors ”) to exercise the powers of the Company to allot issue and deal with the shares in the capital of the Company as approved by the shareholders of the Company at the annual general meeting (the “ AGM ”) of the Company held on 5 September 2006 be and is hereby revoked (without prejudice to any valid exercise of such general mandate prior to the passing of this resolution);

3. (b) subject to paragraph (d) below, 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, (including warrants, bonds and debentures convertible into shares of the Company), which might require the exercise of such powers be and the same is hereby generally and unconditionally approved;

4. (c) the Directors be and are authorised during the Relevant Period to make or grant offers, agreements and options (including warrants, bonds and debentures convertible into shares of the Company) which might require the exercise of such powers during or after the end of the Relevant Period;

5. (d) 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 paragraphs (b) and (c) above, otherwise than pursuant to (i) a Rights Issue (as hereinafter defined); or (ii) the exercise of any options granted under the share option scheme adopted by the Company; or (iii) an issue of shares in lieu of the whole or part of a dividend on shares or any scrip dividend scheme or similar arrangements in accordance with the bye-laws

* For identification purposes only

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NOTICE OF SGM

(the “ Bye-laws ”) of the Company in force from time to time; or (iv) an issue of shares upon the exercise of rights of subscription or conversion under the terms of any warrants of the Company or any securities which are convertible into Shares, shall not exceed the aggregate of 20 per cent. of the aggregate nominal amount of the share capital of the Company in issue as at the date of the passing of this resolution and the said approval shall be limited accordingly.

• (e) for the purpose of this resolution:

“ Relevant Period ” means the period from the date of 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 Bye-laws, the Companies Act 1981 of Bermuda or any other applicable law of Bermuda to be held; or

• (iii) the passing of an ordinary resolution by the shareholders of the Company in general meeting revoking or varying the authority given to the Directors by this resolution;

“ Rights Issue ” means an offer of shares open for a period fixed by the Directors to holders of shares on the register on a fixed record date in proportion to their then holdings of such shares as at that date (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, or the expense or delay which may be involved in determining the existence or extent of any restrictions or obligations under the laws of, or the requirements of, any jurisdiction outside Hong Kong or any recognised regulatory body or any stock exchange outside Hong Kong).”

1. “ THAT conditional upon the passing of resolution no. 1 set out in the notice convening this meeting (“Notice”), the general mandate referred to in resolution no. 1 set out in the Notice be and is hereby extended by the addition to the aggregate nominal amount of shares which may be repurchased by the Company pursuant to such general mandate of an amount which shall not exceed 10% of the aggregate nominal amount of the share capital of the Company in issue on the date of the passing of this resolution.”

2. To re-elect Mr. Leung Siu Kan, Stephen as Director.

On behalf of the Board Leung Ngok Chairman

Hong Kong, 20 March 2007

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NOTICE OF SGM

Notes:

1. A member entitled to attend and vote at the SGM is entitled to appoint one or more than one proxy to attend and, subject to the provisions of the Bye-laws, to vote on his behalf. A proxy need not be a member of the Company but must be present in person at the SGM to represent the member. If more than one proxy is so appointed, the appointment shall specify the number and class of shares in respect of which each such proxy is so appointed.

2. A form of proxy for use at the SGM is enclosed. Whether or not you intend to attend the SGM in person, you are encouraged to complete and return the enclosed form of proxy in accordance with the instructions printed thereon. Delivery of the form of proxy shall not preclude a member of the Company from attending and voting in person at the meeting and, in such event, the instrument appointing a proxy shall be deemed to be revoked.

3. In order to be valid, the form of proxy, together with a power of attorney or other authority, if any, under which it is signed, or a certified copy of such power or authority, must be deposited at the Company’s branch share registrar of the Company in Hong Kong, Tengis Limited at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong not less than 48 hours before the time appointed for holding the SGM or any adjournment thereof.

4. In the case of joint holders of shares, any one of such holders may vote at the SGM, either personally or by proxy, in respect of such share as if he was solely entitled thereto, but if more than one of such joint holder are present at the SGM personally or by proxy, that one of the said persons so present whose name stands first on the register of members of the Company in respect of such shares shall alone be entitled to vote in respect thereof.

5. Pursuant to the Listing Rules, the voting on ordinary resolution number one and two at the SGM will be conducted by way of poll and only Independent Shareholders could vote.

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