New Focus Auto Tech Holdings Limited — Proxy Solicitation & Information Statement 2009

Nov 3, 2009

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your shares in New Focus Auto Tech Holdings Limited, you should at once hand this circular 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 transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make 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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NEW FOCUS AUTO TECH HOLDINGS LIMITED 新焦點汽車技術控股有限公司[*]

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 360)

REFRESHMENT OF GENERAL MANDATE TO ISSUE SHARES AND NOTICE OF EXTRAORDINARY GENERAL MEETING

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

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A letter from the Independent Board Committee is set out on page 7 of this circular and a letter from Wallbanck Brothers, the independent financial adviser to the Independent Board Committee and the Independent Shareholders, is set out on pages 8 to 16 of this circular.

A notice convening an extraordinary general meeting of the Company to be held at 35th Floor, Central Plaza, 18 Harbour Road, Wanchai, Hong Kong on 23 November 2009 at 9:30 a.m. is set out on pages 17 to 19 of this circular. A form of proxy for use at the extraordinary general meeting is enclosed with this circular. Whether or not you are able to attend the extraordinary meeting, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and deposit the same at the Company’s branch share registrar in Hong Kong, Computershare Hong Kong Investor Services Limited, 46/F., Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for the holding of the extraordinary general meeting or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the extraordinary general meeting or any adjournment thereof should you so wish.

4 November 2009

* For identification purpose only

CONTENTS

		Page
DEFINITIONS	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
**LETTER FROM **	THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
**LETTER FROM **	THE INDEPENDENT BOARD COMMITTEE . . . . . . . . . . . . . . .	7
**LETTER FROM **	WALLBANCK BROTHERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
NOTICE OF THE EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		17

– i –

DEFINITIONS

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

• “2009 AGM” the annual general meeting of the Company held on 3 June 2009

• “associate” has the meaning ascribed thereto under the Listing Rules

• “Board” the board of Directors

• “Company” New Focus Auto Tech Holdings Limited, a company incorporated in the Cayman Island with limited liability, the shares of which are listed on the Stock Exchange

• “Director(s)” director(s) of the Company

• “Controlling Shareholder” has the meaning ascribed thereto under the Listing Rules

• “EGM” the extraordinary general meeting of the Company to be convened for the purpose of approving the Refreshed Issue Mandate

• “Existing Issue Mandate” the general mandate granted to the Directors at the 2009 AGM to allot, issue and otherwise deal with up to 20% of the aggregate nominal amount of the issued share capital of the Company as at the date of the 2009 AGM

• “Group” the Company and its subsidiaries

• “HK$” Hong Kong dollars, the lawful currency of Hong Kong

• “Hong Kong” the Hong Kong Special Administrative Region of the PRC

• “Independent Shareholders” Shareholders other than the Controlling Shareholders and their associates

• “Independent Board Committee”

• An independent committee of the Board established by the Board to advise the Independent Shareholders in respect of the refreshment of Existing Issue Mandate

– 1 –

DEFINITIONS

• “Latest Practicable Date”

• “Listing Rules”

• “PRC”

• “Refreshed Issue Mandate”

• “RMB”

• “SFO”

• “Shares”

• “Shareholder(s)”

• “Stock Exchange”

• “TDR Issue”

• “Wallbanck Brothers”

“%”

• 30 October 2009 being the last practicable date prior to the printing of this circular for ascertaining certain information contained in this circular

• the Rules Governing the Listing of Securities on the Stock Exchange

• the People’s Republic of China

• the general mandate proposed to be sought at the EGM to authorize the Directors to exercise power of the Company to issue, allot and deal with Shares not exceeding 20% of the issued share capital of the Company as at the date of the EGM

Renminbi yuan, the lawful currency of PRC

• the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)

• ordinary share(s) of HK$0.10 each in the share capital of the Company

holder(s) of Shares

The Stock Exchange of Hong Kong Limited

• the issue of 90 million units of Taiwan deposit receipt (comprising 90 million new Shares as underlying securities) by the Company in October 2009

• Wallbanck Brothers Securities (Hong Kong) Limited, a licensed corporation under the SFO licensed to carry out types 4, 6 and 9 regulated activities (advising on securities, advising on corporate finance and asset management) under the SFO and the independent financial adviser to the Independent Board Committee and the Independent Sharheolders on the refreshment of the Existing Issue Mandate

per cent

– 2 –

LETTER FROM THE BOARD

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NEW FOCUS AUTO TECH HOLDINGS LIMITED 新焦點汽車技術控股有限公司[*]

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 360)

Executive Directors: Hung Wei-Pi, John (Chairman) Wu Kwan-Hong Hung Ying-Lien Lu Yuan Cheng Douglas Charles Stuart Fresco Norman L. Matthew

Registered offices: Cricket Square Hutchins Drive P.O. Box 2681 Grand Cayman KY1-1111 Cayman Islands

Non-executive Directors: Low Hsiao-Ping Irene Shih Independent non-executive Directors: Du Haibo Zhou Tai-Ming Uang Chii-Maw

Principal place of business in Hong Kong: Unit 1201 Holly Plaza 610 Nathan Road Kowloon Hong Kong

4 November 2009

To the Shareholders

Dear Sir and Madam,

REFRESHMENT OF GENERAL MANDATE TO ISSUE SHARES AND NOTICE OF EXTRAORDINARY GENERAL MEETING

INTRODUCTION

The purpose of this circular is to provide you with, among other things, (i) details of the refreshment of the Existing Issue Mandate; (ii) a letter of recommendation from the Independent Board Committee to the Independent Shareholders in respect of the refreshment of the Existing Issue Mandate; (iii) a letter of recommendation from Wallbanck Brothers to the Independent Board Committee and the Independent Shareholders in respect of the refreshment of the Existing Issue Mandate; and (iv) the notice of EGM at which resolutions will be proposed to be considered and if thought fit, approve the refreshment of the Existing Issue Mandate.

• For identification purpose only

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LETTER FROM THE BOARD

REFRESHMENT OF ISSUE MANDATE

At 2009 AGM, the Shareholders granted, among other things, the Existing Issue Mandate to the Directors to allot up to 89,982,566 Shares, being 20% of the aggregate nominal value of the share capital of the Company in issue as at 3 June 2009, to be extended by an amount representing the aggregate nominal amount of the share capital of the Company repurchased by the Company during the relevant period of the Existing Issue Mandate, which shall not exceed 10% of the aggregate nominal amount of the share capital of the Company in issue as at the date of 2009 AGM. During the period from between 2009 AGM and 8 October 2009, the Company had repurchased on the Stock Exchange 1,132,000 Shares. Therefore, the Directors can allot and issue up to 91,114,556 Shares under the Existing General Mandate on 8 October 2009.

On 8 October 2009, the Company issued 90,000,000 Shares under the Existing Issue Mandate as underlying shares for the TDR Issue. The net proceeds raised from the TDR Issue was approximately HK$144.8 million and such proceeds will be applied in the following manner:

• (a) as to approximately RMB83 million for repayment of certain existing bank loans of the Group;

• (b) as to approximately RMB6 million for increasing the investment in the Company’s subsidiary New Focus Richahaus Co., Ltd; and

• (c) the balance of approximately RMB38.4 million for use as general working capital of the Group.

The Existing Issue Mandate has been substantially utilized after the TDR Issue. In order to maintain the Company’s flexibility for any possible fund raising activities, including but not limited to further placing of Shares, for purpose of funding future investment project(s) or acquisitions through the issue of new Shares, it is proposed that the Board should seek the approval from the Independent Shareholders for the refreshment of the Existing Issue Mandate at the EGM to authorize the Directors to issue Shares not exceeding 20% of the issued share capital of the Company as at the date of the EGM. Before coming to the above proposal, the Directors have considered the dilution effect to public Shareholders after the TDR Issue and the issue of Shares under the Refreshed Issue Mandate. The Directors consider that equity financing does not create any interest payment obligations on the Company and thus equity funding to be an important source of fund raising. Apart from equity financing, the Directors have also considered debt financing, such as bank borrowings, being one of the possible fund raising alternative available to the Company, which however may be subject to lengthy due diligence and negotiation with banks. Besides, the Directors have also considered the alternative of rights issue as a possible fund raising alternative available. After due consideration of the various alternatives, the Directors are of the view that debt financing and rights issue to be relatively uncertain, impracticable and time-consuming as compared to equity financing through the issue of new Shares for purpose of funding future investment project(s) or acquisitions for the Company. The Directors consider that the proposed refreshment of Existing Issue Mandate to be the fair and reasonable fund

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LETTER FROM THE BOARD

raising method which will enhance the flexibility for the Company to manage its business and therefore is in the interests of the Company and the Shareholders as a whole despite of the possible dilution effect to Shareholders.

As at the Latest Practicable Date, the Company had an aggregate of 538,780,831 Shares in issue. Assuming that no Shares will be issued or repurchased by the Company on or before the EGM and subject to the passing of the ordinary resolutions for the approval of the refreshment of the Existing Issue Mandate, the Company would be allowed under the Refreshed Issue Mandate to allot, issue or otherwise deal with up to 107,756,166 new Shares, representing approximately 20% of the issued share capital of the Company as at the Latest Practicable Date.

The Refreshed Issue Mandate, if granted, will expire at the earliest of: (a) the conclusion of the next annual general meeting of the Company; (b) the end of the period within which the next annual general meeting of the Company is required by any applicable law or the articles of association of the Company to be held; and (c) the passing of an ordinary resolution of the Shareholders in a general meeting revoking or varying the authority granted.

The Independent Board Committee, comprising all the independent non-executive Directors, has been established to give recommendations to the Independent Shareholders in respect of the proposed refreshment of the Existing Issue Mandate.

THE EGM

Approvals from the Independent Shareholders at the EGM are required for the refreshment of the Existing Issue Mandate. Pursuant to Rule 13.36(4)(a) of the Listing Rules, in respect of the refreshment of the Existing Issue Mandate, any 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 resolutions to approve the refreshment of the Existing Issue Mandate at the EGM.

Sharp Concept Industrial Limited which holds and is entitled to control 177,256,120 Shares, representing approximately 32.90% of the voting rights in the Company, will abstain from voting in favour at the EGM on the resolutions to approve the Refreshed Issue Mandate. To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, the Company does not have any other Controlling Shareholder other than Sharp Concept Industrial Limited. Sharp Concept Industrial Limited does not have any associates who is also a Shareholder.

A notice convening the EGM to be held at 35th Floor, Central Plaza, 18 Harbour Road, Wanchai, Hong Kong on 23 November 2009 at 9:30 a.m. is set out on pages 17 to 19 of this circular for the purpose of considering and, if thought fit, passing, with or without amendments, the resolutions in respect of the refreshment of the Existing Issue Mandate. A form of proxy for use by the Independent Shareholders at the EGM is enclosed. Whether or not you intend to attend the EGM, you are requested to complete and return the accompanying form of proxy in accordance with the instructions printed thereon to the

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LETTER FROM THE BOARD

Company’s branch share registrar in Hong Kong, Computershare Hong Kong Investor Services Limited, 46/F., Hopewell Central, 183 Queen’s Road East, Wanchai, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for holding the EGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM or any adjournment thereof should you so wish.

Pursuant to Rule 13.39(4) of the Listing Rules, any vote of shareholders at a general meeting must be taken by poll. Therefore, all resolutions proposed at the EGM will be voted by poll.

RECOMMENDATION

The Directors are of the opinion that the refreshment of the Existing Issue Mandate is fair and reasonable and in the interests of the Company and the Shareholders as a whole. Accordingly, the Directors recommend the Independent Shareholders to vote in favour of the resolutions to be proposed at the EGM.

GENERAL

Your attention is drawn to the letter from the Independent Board Committee, the letter from Wallbanck Brothers and the notice of the EGM as set out in this circular.

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 facts the omission of which would make any statement herein misleading.

Yours faithfully,

For and on behalf of the Board New Focus Auto Tech Holdings Limited Hung Wei-Pi, John Chairman

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LETTER FROM THE INDEPENDENT BOARD COMMITTEE

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NEW FOCUS AUTO TECH HOLDINGS LIMITED 新焦點汽車技術控股有限公司[*]

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 360)

4 November 2009

To the Independent Shareholders

Dear Sir and Madam,

REFRESHMENT OF GENERAL MANDATE TO ISSUE SHARES AND NOTICE OF EXTRAORDINARY GENERAL MEETING

We have been appointed as members of the Independent Board Committee to advise you in connection with the proposed refreshment of the Existing Issue Mandate, details of which are set out in the letter from the Board contained in the circular (the “Circular”) of the Company dated 4 November 2009. Terms defined in the Circular shall have the same meanings herein, unless the context otherwise requires.

Having taken into account the advice and recommendation of Wallbanck Brothers, the independent financial adviser of the Company, as set out in their letter of recommendation from pages 8 to 16 of the Circular, we are of the opinion that the proposed refreshment of the Existing Issue Mandate is fair and reasonable and in the interests of the Company and the Shareholders as a whole. We therefore recommend the Independent Shareholders to vote in favour of the ordinary resolutions to be proposed at the EGM to approve the proposed refreshment of the Existing Issue Mandate.

Yours faithfully,

DU Haibo

Zhou Tai-Ming Uang Chii-Maw Independent Board Committee

* For identification purpose only

– 7 –

LETTER FROM WALLBANCK BROTHERS

The following is the full text of a letter of advice from Wallbanck Brothers, the independent financial adviser to the Independent Board Committee and the Independent Shareholders regarding the refreshment of the Existing Issue Mandate, for the purpose of incorporation into this circular.

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2310, Tower 2, Lippo Centre, 89 Queensway, Central, Hong Kong

4 November 2009

To the independent board committee and the independent shareholders of New Focus Auto Tech Holdings Limited

Dear Sirs,

REFRESHMENT OF GENERAL MANDATE TO ISSUE SHARES

INTRODUCTION

We refer to our appointment as independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the refreshment of the Existing Issue Mandate, details of which are set out in the letter from the Board (the “Letter from the Board”) contained in the circular to the Shareholders dated 4 November 2009 (the “Circular”), of which this letter forms part. Terms used in this letter shall have the same meanings as those defined in the Circular unless the context requires the otherwise.

Pursuant to the Listing Rules, the refreshment of the Existing Issue Mandate is subject to the approval of the Independent Shareholders at the EGM by way of poll. Accordingly, the Independent Board Committee (comprising Mr. Du Haibo, Mr. Zhou Tai Ming and Mr. Uang Chii-Maw, being all the independent non-executive Directors) has been established to advise on the refreshment of the Existing Issue Mandate, and we have been appointed as the independent financial adviser to the Independent Board Committee and the Independent Shareholders to advise on the refreshment of the Existing Issue Mandate.

– 8 –

LETTER FROM WALLBANCK BROTHERS

BASIS OF OUR OPINION

In formulating our opinion and recommendations, we have relied on the accuracy of the information, opinions and representations provided to us by the Directors and management of the Company, and have assumed that all information, opinions and representations contained or referred to in this circular were true and accurate at the time when they were made and will continue to be accurate at the Latest Practicable Date. We have also assumed that all statements of belief, opinion and intention made by the Directors in this circular were reasonably made after due enquiry. We have no reasons to doubt that any relevant information has been withheld, nor are we aware of any fact or circumstance which would render the information provided and representations and opinions made to us untrue, inaccurate or misleading. We consider that we have received sufficient information to enable us to reach an informed view and to justify reliance on the accuracy of the information contained in this circular to provide a reasonable basis for our opinions and recommendations. Having made all reasonable enquiries, the Directors have further confirmed that, to the best of their knowledge, they believe there are no other facts or representations the omission of which would make any statement in this circular, including this letter, misleading. We have not, however, carried out any independent verification of the information provided by the Directors and management of the Company, nor have we conducted an independent investigation into the business and affairs of the Company.

In formulating our opinion, we have relied on the financial information provided by the Company, particularly, on the accuracy and reliability of financial statements and other financial data of the Company. We have not audited, compiled nor reviewed the said financial statements and financial data. We shall not express any opinion or any form of assurance on them. We have had no reason to doubt the truth and accuracy of the information provided to us by the Company. The Directors have also advised us that no material facts have been omitted from the information to reach an informed view, and we have no reason to suspect that any material information has been withheld. We have not carried out any feasibility study on any past, and forthcoming investment decision, opportunity or project undertaken or be undertaken by the Company. Our opinion has been formed on the assumption that any analysis, estimation, forecast, anticipation, condition and assumption provided by the Company are valid and sustainable. Our opinions shall not be constructed as to give any indication to the validity, sustainability and feasibility of any past, existing and forthcoming investment decision, opportunity or project undertaken or to be undertaken by the Company.

In formulating our opinion, we have not considered the taxation implications on the Independent Shareholders arising from the refreshment of the Existing Issue Mandate as these are particular to the individual circumstances of each Shareholder. It is emphasized that we will not accept responsibility for any tax effect on or liability of any person resulting from his or her decision to the refreshment of the Existing Issue Mandate. In particular, the Independent Shareholders who are overseas residents or are subject to overseas taxation or Hong Kong taxation on securities dealings should consult their own tax positions, and if in any doubt, should consult their own professional advisers.

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LETTER FROM WALLBANCK BROTHERS

Our opinions are necessarily based upon the financial, economic, market, regulatory and other conditions as they existed on, and the facts, information, representations, and opinions made available to us as of, the Latest Practicable Date. We disclaim any undertaking or obligation to advise any person of any change in any fact or matter affecting the opinion expressed herein which may come or be brought to our attention before and after the EGM.

Our opinions are formulated only and exclusively for the purpose of the refreshment of the Existing Issue Mandate and shall not be used for any other purpose in any circumstance nor for any comparable purpose with any other opinions.

PRINCIPAL FACTORS AND REASONS CONSIDERED

In arriving at our opinion to the Independent Board Committee in respect of the refreshment of the Existing Issue Mandate, we have taken into consideration the following principal factors and reasons:

1. Background to the Refreshment of the Existing Issue Mandate

The Group is principally engaged in manufacture and sales of electronic and power-related automotive parts and accessories and the provision of automobile repair, maintenance and restyling services and retail distribution of merchandise goods.

As stated in the announcement of the Company dated 23 September 2009 (the “Announcement”), by a resolution of the Shareholders passed at the 2009 AGM, the Shareholders granted the Existing Issue Mandate to the Directors to allot and issue up to 89,982,566 Shares, being 20% of the aggregate nominal value of the share capital of the Company at issue as at 3 June 2009, to be extended by an amount representing the aggregate nominal amount of the share capital of the Company repurchased by the Company during the relevant period of the Existing Issue Mandate. During the period from the date of grant of the Existing Issue Mandate to the date of the Announcement, the Company had repurchased 1,132,000 Shares. Therefore, as of the date of the Announcement, the Directors can allot and issue up to 91,114,566 Shares under the Existing Issue Mandate.

According to the announcement of the Company dated 9 October 2009 in relation to the proposed offering and listing of 90,000,000 units of Taiwan depository receipts (“TDRs”), representing 90,000,000 new shares of the Company, on the Taiwan Stock Exchange, the TDRs would list on the Taiwan Stock Exchange on 12 October 2009 and trading of the TDRs on the Taiwan Stock Exchange would commence at 9:00 a.m. on even date.

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LETTER FROM WALLBANCK BROTHERS

Since all of such new Shares of the TDR Issue were issued under the Existing Issue Mandate, the Existing Issue Mandate has been utilised as to 90,000,000 Shares, representing approximately 98.78% of the Existing Issue Mandate. The net proceeds from the TDR Issue of approximately HK$144.8 million were intended to be used for the repayment of bank loans, increasing the investment in New Focus Richahaus Co., Ltd and as general working capital of the Group.

As there has not been any refreshment of the Existing Issue Mandate since the 2009 AGM, if the Refreshed Issue Mandate is not granted, only 1,114,566 new Shares may be further issued and allotted by the Directors under the Existing Issue Mandate. Given that the Existing Issue Mandate has been largely utilized as a result of the TDR Issue, the Board proposes to seek approval of the Independent Shareholders for the granting of the Refreshed Issue Mandate such that the Directors will be granted the authority to issue, allot and deal with new Shares not exceeding 20% of the total issued share capital of the Company as at the date of passing the relevant resolution(s) at the EGM.

As at the Latest Practicable Date, the Company had 538,780,831 Shares in issue. On the basis that no Share would be issued and/or repurchased by the Company from the Latest Practicable Date up to the date of the EGM, the granting of the Refreshed Issue Mandate would allow the Directors to issue, allot and deal with up to 107,756,166 new Shares, representing 20% of the aforesaid total issued share capital of the Company.

2. Reasons for the Refreshment of Existing Issue Mandate

According to the Letter from the Board, the Existing Issue Mandate has been substantially utilized after the TDR Issue. In order to maintain the Company’s flexibility for any possible fund raising activities, including but not limited to further placing of Shares, for purpose of funding future investment project(s) or acquisitions, it is proposed that the Board should seek the approval from the Independent Shareholders for the refreshment of the Existing Issue Mandate at the EGM to authorize the Directors to issue Shares not exceeding 20% of the issued share capital of the Company as at the date of the EGM.

The Refreshed Issue Mandate is proposed to the Shareholders prior to the Company’s next annual general meeting, and therefore, under Rule 13.36(4) of the Listing Rules, the refreshment of the Existing Issue Mandate will be subject to the Independent Shareholders’ approval at the EGM.

3. Fund raising activities of the Company in the past twelve months

According to the Letter from the Board, on 8 October 2009, the Company issued 90,000,000 Shares under the Existing Issue Mandate as underlying shares for the TDR Issue. The net proceeds raised from the TDR Issue was approximately HK$144.8 million and such proceeds will be applied in the following manner:

• (a) as to approximately RMB83 million for repayment of certain existing bank loans of the Group;

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LETTER FROM WALLBANCK BROTHERS

• (b) as to approximately RMB6 million for increasing the investment in the Company’s subsidiary New Focus Richahaus Co., Ltd; and

• (c) the balance of approximately RMB38.4 million for use as general working capital of the Group.

As at the Latest Practicable Date, the net proceeds have not been utilized.

According to the interim report of the Company for the six months ended 30 June 2009, we note that the cash and cash equivalents and the total liabilities of the Group amounted to approximately RMB74,797,000 and RMB317,650,000 as at 30 June 2009 respectively.

We consider that it is not unreasonable for the Directors to propose the refreshment of the Existing Issue Mandate in the EGM in order to give the Company greater flexibility in the issuance of new Shares and/or convertible instruments in future as and when the Company considers desirable for the benefit of the development of the Company.

4. Status of Utilization of the Existing Issue Mandate

According to the Letter from the Board, the Existing Issue Mandate was granted on the date of the 2009 AGM and has not been refreshed since the 2009 AGM.

The Company had in issue an aggregate of 538,780,831 Shares as at the Latest Practicable Date. Subject to the passing of the proposed resolution for the approval of the refreshment of the Existing Issue Mandate and on the basis that no Shares would be issued and/or repurchased by the Company from the Latest Practicable Date up to the date of the EGM, the Refreshed Issue Mandate would allow the Directors to allot and issue up to a maximum of 107,756,166 Shares, representing 20% of the aggregate nominal amount of the issued Shares at the EGM.

The Refreshed Issue Mandate, if granted, will expire at the earliest of: (a) the conclusion of the next annual general meeting of the Company; (b) the end of the period within which the next annual general meeting of the Company is required by any applicable law or the articles of association of the Company to be held; and (c) the passing of an ordinary resolution of the Shareholders in a general meeting revoking or varying the authority granted.

– 12 –

LETTER FROM WALLBANCK BROTHERS

5. Financial Flexibility

Given that equity financing is interest free and security free by nature, the Directors consider that equity financing serves as a cost effective means of raising additional capital for the Group as general working capital and to fund any additional investment requirements of existing or other new project development opportunities that may be identified in the future. In addition, the Directors are of the view that equity financing has merits over bank/debt financing to fund the Group’s capital needs as the former could broaden the shareholder base of the Company without creating any additional interest burden to the Company. When comparing various equity financing methods, the Directors perceive that placing of new Shares would enable the Company to raise funds in a more commercially expedient time frame and would preserve shareholders’ value due to the relatively small dilution effect on shareholdings of exiting Shareholders.

6. Other Alternatives of Financing

We are represented that it is the Directors’ belief that the grant of Refreshed Issue Mandate will provide the Company with an additional alternative of equity funding when there is funding requirement or when any business opportunities arise in the future. It is reasonable to suggest that the Refreshed Issue Mandate could enhance the financing flexibility of the Company to raise equity funds, if and when required, by way of the issuance of new Shares and/or convertible instruments for further development of the Group.

Although a new general mandate would be granted at the forthcoming annual general meeting to be held by the Company, having considered (i) the current optimistic market sentiment; (ii) the Refreshed Issue Mandate enhance the financing flexibility of the Company to raise equity funds for the Group’s future business development and opportunities of funding which may arise at any time; and (iii) fund raising via placing of new Shares pursuant to the Refreshed Issue Mandate is less costly and time-consuming than by way of rights issue or open offer, it is fair and reasonable to infer that the grant of the Refreshed Issue Mandate is in the interests of the Company and the Shareholders as a whole.

The Refreshed Issue Mandate would provide the Group with higher degree of flexibility as allowed under the Listing Rules to issue new Shares and/or convertible instruments to raise capital and strengthen the capital base of the Company as consideration or otherwise for such potential investments and/or acquisitions in the future as and when such opportunities arise.

On the above basis, we hold the view that there are reasonable grounds for the Directors to propose the refreshment of the Existing Issue Mandate at the EGM.

– 13 –

LETTER FROM WALLBANCK BROTHERS

7. Potential dilution to shareholding interests of the Independent Shareholders

Based on information available from public source and from the Directors, we set out below a table setting out the shareholding structure of the Company as at the Latest Practicable Date and upon full utilization of the Refreshed Issue Mandate:

Shareholders Sharp Concept Industrial Limited_(Note 1) Golden Century Industrial Limited(Note 2) Directors(Note 3)_ Shares issued under the Refreshed Issue Mandate Public Shareholders Total	As at the Latest Practicable Date# (No. of Shares) (%) 177,256,120 32.90 53,590,690 9.95 25,983,580 4.82 – – 281,950,441 52.33 538,780,831 100.00	Upon full utilization of the Refreshed Issue Mandate (No. of Shares) (%) 177,256,120 27.42 53,590,690 8.29 25,983,580 4.02 107,756,166 16.67 281,950,441 43.60 646,536,997 100.00	Upon full utilization of the Refreshed Issue Mandate (No. of Shares) (%) 177,256,120 27.42 53,590,690 8.29 25,983,580 4.02 107,756,166 16.67 281,950,441 43.60 646,536,997 100.00
			100.00

Notes:

1. Sharp Concept Industrial Limited is wholly and beneficially owned by Mr. Hung Wei-Pi, John, a director and Chairman of the Company.

2. Golden Century Industrial Limited is wholly and beneficially owned by Mr. Douglas Charles Stuart Fresco, a director of the Company.

3. Excluding the interests of Mr. Hung Wei-Pi, John and Mr. Douglas Charles Stuart Fresco.

#Source: the record from the Company and the website of the Stock Exchange.

Assuming that (i) the refreshment of Existing Issue Mandate will be approved at the EGM; (ii) no Shares will be repurchased and no new Shares will be issued from the Latest Practicable Date up to the date of the EGM (both dates inclusive); and (iii) upon full utilization of the Refreshed Issue Mandate, 107,756,166 Shares are to be issued, representing 20% and approximately 16.67% of the existing issued share capital as at the Latest Practicable Date and the enlarged issued share capital of the Company respectively. The aggregate shareholding of the existing public Shareholders will be diluted from approximately 52.33% to approximately 43.60% upon full utilization of the Refreshed Issue Mandate.

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LETTER FROM WALLBANCK BROTHERS

Taking into consideration that the Refreshed Issue Mandate will increase the amount of capital which may be raised thereunder and provides more options to the Group for financing further development of its business as well as other investments/acquisitions as and when such opportunities arise and the fact that the shareholding of all the Shareholders will be diluted to the same extent upon any utilization of the Refreshed Issue Mandate, we consider that the potential dilution to the shareholding of the Shareholders is acceptable.

8. Terms of the Refreshed Issue Mandate

Pursuant to Rule 13.36(4)(a) of the Listing Rules, any 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 resolutions to approve the refreshment of the Existing Issue Mandate at the EGM.

Sharp Concept Industrial Limited which holds and is entitled to control 177,256,120 Shares, representing approximately 32.90% of the voting rights in the Company, will abstain from voting in favour at the EGM on the resolutions to approve the Refreshed Issue Mandate. To the best of the Directors’ knowledge, information, belief and having made all reasonable enquiries, the Company does not have any other Controlling Shareholder other than Sharp Concept Industrial Limited.

Pursuant to Rule 13.39(4)(b) of the Listing Rules, the vote of the Independent Shareholders in respect of the Refreshment of General Mandate at the EGM will be taken by way of poll.

In view of the said stringent provisions and requirements of the Listing Rules, we have reasons to believe that there to be sufficient control and measures to guide the refreshment of the Existing Issue Mandate and the continuity of the Refreshed Issue Mandate. In this respect, we hold the view that the terms of the refreshment of Existing Issue Mandate are fair and reasonable so far as the Independent Shareholders are concerned.

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LETTER FROM WALLBANCK BROTHERS

RECOMMENDATION

Having considered the above principal factors and reasons and Directors’ representations, on balance, we are of the opinion that in such circumstance the refreshment of Existing Issue Mandate are fair and reasonable so far as the Independent Shareholders are concerned and the refreshment of Existing Issue Mandate is in the interest of the Company and the Shareholders as a whole. Accordingly, we advise the Independent Shareholders, and also recommend the Independent Board Committee to advise the Independent Shareholders, to vote in favour of the resolution approving the refreshment of Existing Issue Mandate at the EGM.

Yours faithfully, For and on behalf of WALLBANCK BROTHERS Securities (Hong Kong) Limited Phil Chan Chief Executive Officer

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NOTICE OF THE EGM

==> picture [116 x 45] intentionally omitted <==

NEW FOCUS AUTO TECH HOLDINGS LIMITED 新焦點汽車技術控股有限公司[*]

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 360)

NOTICE IS HEREBY GIVEN that an extraordinary general meeting of New Focus Auto Tech Holdings Limited (the “ Company ”) will be held at 35th Floor, Central Plaza, 18 Harbour Road, Wanchai, Hong Kong on 23 November 2009 at 9:30 a.m. for the purposes of considering, if thought fit, pass with or without amendments the following resolutions as ordinary resolutions:

ORDINARY RESOLUTIONS

1. “ THAT :

2. (a) the general mandate granted to the Directors of the Company 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 of the Company held on 3 June 2009 be and is hereby revoked (without prejudice to any valid exercise of such mandate prior to the passing of this resolution);

3. (b) subject to paragraph (d) below, the exercise by the Directors of the Company 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 to subscribe for shares, which might require the exercise of such powers be and is hereby generally and unconditionally approved;

4. (c) the approval in paragraph (b) above shall be in addition to any other authorization given to the Directors of the Company and shall authorise the Directors of the Company during the Relevant Period to make or grant offers, agreements and options, including warrants to subscribe for shares, which might require the exercise of such powers 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 of the Company pursuant to the approval in paragraph (b) above, otherwise than pursuant to a Rights Issue (as hereinafter defined) or any issue of shares of the Company on the exercise of the subscription rights attaching to any warrants which may be issued by the Company from time to time or on the exercise of any options granted under

* For identification purpose only

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NOTICE OF THE EGM

the share option scheme of the Company or an issue of shares in lieu of the whole or part of a dividend on shares in accordance with the articles of association of the Company, shall not exceed 20 per cent. of the aggregate nominal amount of the share capital of the Company in issue at the date of passing this resolution, and the said approval shall be limited accordingly; and

• (e) for the purposes of this resolution: “Relevant Period” means the period from the passing of this resolution until whichever is the earliest of:

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

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

  • (iii) the passing of an ordinary resolution of the Company in general meeting revoking or varying the authority set out in this resolution.

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

• “ THAT conditional upon the passing of the resolution numbered 1 above, the general mandate granted to the Directors of the Company to exercise the powers of the Company pursuant to resolution numbered 1 above be and is hereby extended by the addition thereto of an amount representing the aggregate nominal amount of the share capital of the Company repurchased by the Company pursuant to and in accordance with the general mandate to repurchase shares in the capital of the Company granted to the Directors of the Company at the annual general meeting of the Company held on 3 June 2009 since the passing of resolution numbered 1 above, provided that such amount shall not exceed 10% of the aggregate nominal amount of the issued share capital of the Company in issue as at the date of such annual general meeting.”

By Order of the Board Hung Wei-Pi, John Chairman of the Board

Hong Kong, 4 November 2009

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NOTICE OF THE EGM

Registered Office:

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

Principal place of business in Hong Kong:

Unit 1201, Hollywood Plaza 610 Nathan Road Kowloon Hong Kong

Notes:

1. Any member of the Company entitled to attend and vote at the above meeting is entitled to appoint a proxy to attend and vote instead of him. A proxy need not be a member of the Company. A member who is holding two or more shares of the Company is entitled to appoint more than one proxy to attend and vote in his stead. If more than one proxy is appointed, the appointment shall specify the number and class of shares in respect of which each such proxy is so appointed.

2. To be valid, the form of proxy, together with the power of attorney or other authority, if any, under which it is signed, or a notarially certified copy of that power or authority must be deposited at the Hong Kong branch share registrar and transfer office of the Company, Computershare Hong Kong Investor Services Limited at 46/F., Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong not less than 48 hours before the time appointed for the holding of the meeting or any adjourned meeting. Completion and return of the form of proxy will not preclude any member from attending the meeting or any adjournment thereof and voting in person if he so wishes and in such event, the form of proxy will be deemed to be revoked.

3. As at the date hereof, the directors of the Company are: executive directors – Hung Wei-Pi, John, Wu Kwan-Hong, Hung Ying-Lien, Lu Yuan Cheng, Douglas Charles Stuart Fresco and Norman L. Matthew; non-executive director – Low Hsiao-Ping, Irene Shih; and independent non-executive directors – Du Haibo, Zhou Tai-Ming and Uang Chii-Maw.

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