Novautek Technologies Group Limited — Proxy Solicitation & Information Statement 2009

Jun 29, 2009

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

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

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 disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

KONG SUN HOLDINGS LIMITED 江山控股有限公司

(Incorporated in Hong Kong with limited liability)

(Stock Code: 295)

PROPOSED CAPITAL REDUCTION AND CHANGE IN BOARD LOT SIZE

A notice convening the EGM (as defined herein) of Kong Sun Holdings Limited (the “Company”) to be held at Unit C, 10/F., Wings Building, 110-116 Queen’s Road Central, Hong Kong on 22 July 2009 (Wednesday) at 11:00 a.m. is set out on pages 14 to 15 of this circular.

Whether or not you are able to attend the EGM, you are requested to complete the accompanying form of proxy for use at the EGM in accordance with the instructions printed thereon and return the same to the Company’s share registrar and transfer office in Hong Kong, Computershare Hong Kong Investor Services Limited at Shops 1712-1716, 17th Floor, 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 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 adjourned meeting thereof should you so wish.

29 June 2009

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 contained in this circular misleading.

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CONTENTS

	Pages
Definitions..........................................................................................................................	1
Expected timetable.............................................................................................................	4
Letter from the Board........................................................................................................	6
Notice of EGM...................................................................................................................	14

• ii -

DEFINITIONS

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

• “Accumulated Losses”

• the permanent portion of the audited/unaudited and unconsolidated accumulated losses of the Company as approved by the Court

• “Articles of Association” the articles of association of the Company from time to time

• “Board” the board of Directors

• “Bonus Shares”

the Shares fall to be issued upon exercise of the conversion rights by the holders of the Placing Convertible Bonds

• “Capital Reduction” the proposed reduction of the share capital of the Company by cancelling the issued and paid up capital to the extent of HK$0.09 on each of the Shares in issue and by reducing the nominal value of all the unissued Shares from HK$0.10 each to HK$0.01 each

• “Capital Reduction the capital reduction reserve account(s) of the Company to be Reserve Account(s)” set up as the Court may approve upon the Capital Reduction becoming effective

• “CCASS” the Central Clearing and Settlement System operated by HKSCC

• “Change in Board Lot Size” the proposed change in the board lot size of the Shares for trading on the Stock Exchange from 2,000 Shares to 20,000 New Shares

• “Companies Ordinance” the Companies Ordinance, Chapter 32 of the Laws of Hong Kong

• “Companies Registrar” the Registrar of Companies in Hong Kong

• “Company”

Kong Sun Holdings Limited, a company incorporated in Hong Kong with limited liability, the issued shares of which are listed on the main board of the Stock Exchange

• “Court”

The Court of First Instance of the High Court of Hong Kong

• “Director(s)”

• director(s) of the Company

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DEFINITIONS

“Effective Date”	the date upon which the Capital Reduction becomes unconditional
	and effective when all the conditions to which it is subject are
	satisfied and the date upon which the Change in Board Lot
	Size becomes effective, which is tentatively expected to be 18
	September 2009. Further announcement will be made in the
	event of any changes
“EGM”	the extraordinary general meeting of the Company to be held on
	22 July 2009 (Wednesday) at 11:00 a.m. at Unit C, 10/F., Wings
	Building, 110-116 Queen’s Road Central, Hong Kong for the
	Shareholders to consider and, if thought fit, approve the Capital
	Reduction
“Group”	the Company and its subsidiaries
“HKSCC”	the Hong Kong Securities Clearing Company Limited
“Hong Kong”	the Hong Kong Special Administrative Region of the People’s
	Republic of China
“Latest Practicable Date”	25 June 2009, being the latest practicable date prior to the
	printing of this circular for the purposes of ascertaining the
	information contained herein
“Listing Committee”	the Listing Committee of the Stock Exchange
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock
	Exchange
“New Share(s)”	ordinary share(s) of HK$0.01 each in the share capital of the
	Company upon the Capital Reduction becoming effective
“Placing Convertible Bonds”	the unsecured convertible bonds with principal value of
	HK$100,000,000 and HK$25,000,000 respectively issued by the
	Company on 16 December 2008, details of which can be found
	in the circulars issued by the Company dated 31 December 2007
	and 6 June 2008 respectively and the announcement issued by
	the Company dated 3 October 2008
“Registrar”	Computershare Hong Kong Investor Services Limited, being the
	Company’s share registrar and transfer office in Hong Kong

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DEFINITIONS

“Share(s)” ordinary share(s) of HK$0.10 each in the share capital of the Company prior to the Capital Reduction becoming effective “Shareholder(s)” holder(s) of the Share(s) or New Share(s) (as the case may be) “Stock Exchange” The Stock Exchange of Hong Kong Limited “Tree Convertible Bonds” the convertible bonds in principal amount of HK$40,000,000 issued by the Company to Brightpower Assets Management Limited, details of which can be found in the circular issued by the Company dated 31 December 2007 and the announcement issued by the Company dated 3 October 2008 “HK$” Hong Kong dollars, the lawful currency of Hong Kong “%” per cent.

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EXPECTED TIMETABLE

2009 Last time for lodging form of proxy in respect of the EGM (Note 1) ............................................................................................11:00 a.m. 20 July EGM (Note 1) .....................................................................................................11:00 a.m. 22 July Announcement of the result of the EGM to be published ......................................................22 July Notice of the hearing date of the petition published in the newspapers (Note 2) ....................................................................................... 2 September Hearing of the petition to confirm the Capital Reduction (Note 2) .............................. 15 September Announcement of the result of hearing of the petition to confirm the Capital Reduction and the Effective Date to be published (Note 2) ............................................................. 16 September Registration of the order of the Court to confirm the Capital Reduction and the minute thereof with the Companies Registrar (Note 3) .................................................................... 18 September Effective Date (Note 3) .......................................................................after 4:00 p.m. 18 September First day of free exchange of the existing Share certificates for the New Share certificates ............................................................... 21 September Dealings in the New Shares commence ........................................................ 9:30 a.m. 21 September First day for designated broker to stand in the market to provide matching service for selling and buying of odd lots of New Shares .......................................... 9:30 a.m. 21 September Latest time for designated broker to stand in the market to provide matching service for selling and buying of odd lots of New Shares ..............................................4:00 p.m. 27 October Last day of free exchange of the existing Share certificates for the New Share certificates ................................................................... 29 October

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EXPECTED TIMETABLE

Notes:

1. The forms of proxy and, if required by the Company, the power of attorney or other authority (if any) under which it is signed or a notarially certified copy or office copy of such power or authority, shall be deposited at the Registrar at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 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 the EGM and taking the poll therein or the adjourned meeting thereof. Completion and return of a form of proxy for the EGM will not preclude a Shareholder from attending and voting in person at the EGM or any adjournment thereof should the Shareholder so wish. In such event, the returned form of proxy will be deemed to have been revoked.

2. The date of hearing of the petition is subject to the availability of the date for the Court to confirm the Capital Reduction and is subject to change. Further announcement(s) will be made as and when appropriate.

3. The Capital Reduction and the Change in Board Lot Size will become effective when the Capital Reduction is confirmed by the Court and a copy of the order of the Court and a minute of order approved by the Court containing the particulars required under the Companies Ordinance are delivered to the Companies Registrar for registration, which is expected to take place on 18 September 2009.

If there is any change in this expected timetable, the Company will make further announcement.

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LETTER FROM THE BOARD

KONG SUN HOLDINGS LIMITED 江山控股有限公司

(Incorporated in Hong Kong with limited liability)

(Stock Code: 295)

Executive Directors: Registered Office and Tse On Kin Principal Place of Business: Chan Chi Yuen Unit C, 10/F Yu Pak Yan, Peter Wings Building 110-116 Queen’s Road Central Hong Kong

Independent Non-executive Directors:

Lau Man Tak Wong Yun Kuen Man Kwok Leung

29 June 2009

• To the Shareholders and, for information only,

• holder(s) of the outstanding convertible bonds of the Company

Dear Sir or Madam,

PROPOSED CAPITAL REDUCTION AND CHANGE IN BOARD LOT SIZE

INTRODUCTION

Reference is made to the announcement of the Company dated 19 June 2009. The Board proposes to reduce the share capital of the Company by cancelling the issued and paid up capital to the extent of HK$0.09 on each of the Shares in issue as at the Latest Practicable Date and any further Shares which may be issued prior to the date on which the petition for the confirmation of the Capital Reduction is heard by the Court and by reducing the nominal value of all the issued and unissued Shares from HK$0.10 to HK$0.01 each. The Board also proposes that, upon the Capital Reduction becoming effective, the board lot size of the Shares for trading on the Stock Exchange be changed from 2,000 Shares to 20,000 New Shares.

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LETTER FROM THE BOARD

The purpose of this circular is to give the Shareholders further information on the Capital Reduction and the Change in Board Lot Size and to give notice of the EGM to the Shareholders at which a resolution will be proposed to consider and, if thought fit, to approve the Capital Reduction.

CAPITAL REDUCTION

The Board proposes to put forward to the Shareholders a proposal to effect the Capital Reduction pursuant to the Companies Ordinance and the Articles of Association. As at the Latest Practicable Date, the authorised share capital of the Company was HK$4,000,000,000 divided into 40,000,000,000 Shares, of which 5,225,166,921 Shares have been issued and are fully paid.

The Board proposes to reduce the authorised share capital of the Company from HK$4,000,000,000 divided into 40,000,000,000 Shares to HK$400,000,000 divided into 40,000,000,000 New Shares by cancelling the issued and paid up capital to the extent of HK$0.09 on each of the Shares in issue as at the Latest Practicable Date and any further Shares which may be issued prior to the date on which the petition for the confirmation of the Capital Reduction is heard by the Court and by reducing the nominal value of all the issued and unissued Shares from HK$0.10 to HK$0.01 each.

Assuming that no new Shares will be issued after the Latest Practicable Date and prior to the Capital Reduction becoming effective, a credit of approximately HK$470,265,023 will arise as a result of the Capital Reduction. Subject to the approval of and to the extent permitted by the Court, the credit arising from the Capital Reduction will be utilised to set off the Accumulated Losses. After setting off the Accumulated Losses, all or part of the balance of the credit arising from the Capital Reduction will be transferred to the Capital Reduction Reserve Account(s) and/or such other account(s) of the Company in such ways as the Court may direct. The amount standing to the credit of the Capital Reduction Reserve Account(s) and/or such other account(s) of the Company will be dealt with and applied in accordance with such directions and subject to such conditions as the Court may impose (if any), and/or in such manners as the Board considers appropriate.

CONDITIONS OF THE CAPITAL REDUCTION

The implementation of the Capital Reduction is conditional upon, among other things:

• (i) the passing of a special resolution by the Shareholders approving the Capital Reduction at the EGM;

• (ii) the Listing Committee granting approval of the listing of, and permission to deal in, the New Shares in issue upon the Capital Reduction becoming effective;

• (iii) the Court making an order confirming the Capital Reduction pursuant to sections 58 to 60 of the Companies Ordinance;

• (iv) the registration by the Companies Registrar of a copy of the order of the Court confirming the Capital Reduction and a copy of the minute containing the particulars required under section 61 of the Companies Ordinance duly approved by the Court; and

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LETTER FROM THE BOARD

• (v) the compliance with any conditions as may be imposed by the Court in relation to the Capital Reduction.

Assuming that all the above conditions are fulfilled, the Capital Reduction will become effective on the registration of the court order and the minute as referred to in condition (iv) above.

As the Effective Date will depend upon the timetable of the Court, it is not ascertainable at present and the dates indicated in the section headed “Expected Timetable” are for reference only and are subject to change. It is tentatively anticipated that the Capital Reduction would become effective on 18 September 2009. An application will be made to the Court for the approval of the Capital Reduction as soon as practicable after the same is approved by the Shareholders by way of a special resolution at the EGM. Further announcement(s) (if any) will be made to inform the Shareholders of the progress of the matter as and when appropriate.

EFFECTS OF THE CAPITAL REDUCTION

Business

The business and management of the Company and the Group will not be changed as a result of the implementation of the Capital Reduction.

Financial position

Implementation of the Capital Reduction will not alter the business and the underlying assets/liabilities or financial position of the Company and the Group, other than the payment of professional expenses relating thereto.

Rights of the Shareholders

Implementation of the Capital Reduction will not affect the Shareholders’ proportionate interests and voting rights in the Company. The New Shares will rank pari passu in all respects with each other.

Share options and convertible bonds

The Company adopted the share option scheme of the Company on 30 June 2003 (the “ Scheme ”). As at the date of this announcement, there are no outstanding share options granted by the Company under the Scheme.

The Company has also issued the Tree Convertible Bonds and the Placing Convertible Bonds of an aggregate amount of HK$165 million (the Tree Convertible Bonds and the Placing Convertible Bonds together are referred to as the “ Convertible Bonds ”). Implementation of the Capital Reduction will not have any effect on the conversion price or the number of New Shares fall to be issued upon exercise of the conversion rights attached to the Convertible Bonds or any other rights of the Company or the holder(s) of the Convertible Bonds under the Convertible Bonds.

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LETTER FROM THE BOARD

Save as the aforesaid, the Company has no other outstanding convertible securities, options or warrants in issue which confer any right to subscribe for, convert or exchange into Shares as at the Latest Practicable Date.

Share Capital

The following table sets out the effect of the Capital Reduction on the share capital of the Company, that is, before and after the implementation of the Capital Reduction:

				Share capital
			Amount of the	immediately after
			share capital	the Capital
		Share capital	reduced as	Reduction
		before the	a result of	becoming
	Number of	Capital	the Capital	effective
	Shares	Reduction	Reduction	(Note)
		HK$	HK$	HK$
Par value		0.10	0.09	0.01
Authorised
share capital	40,000,000,000	4,000,000,000	3,600,000,000	400,000,000
Issued and fully
paid share
capital	5,225,166,921	522,516,692	470,265,023	52,251,669

Note: The issued share capital immediately after the Capital Reduction becoming effective is presented on the assumption that no further Shares would be issued or repurchased between the Latest Practicable Date and the date of the EGM.

REASONS FOR THE CAPITAL REDUCTION

To facilitate future fund raising exercise of the Company

Since 2003, the Shares have generally been traded below its par value of HK$0.10 per Share. Under section 50 of the Companies Ordinance, the Company is not permitted to issue new Shares at a discount to the par value of the Shares, unless, among other things, the issue is authorised by a resolution of the Shareholders and is sanctioned by the Court. Moreover, section 58 of the Companies Ordinance further provides that a company, the net assets of which are less than its paid-up share capital, may not effect a capital reduction to re-designate the nominal value of its shares unless, among other things, the capital reduction is sanctioned by the Court. These statutory requirements, coupled with the fact that the Shares have generally been traded below its par value of HK$0.10 per Share, create difficulty for the Company to raise and to issue new equity capital as and when needed unless the Company proceeds with and obtains the sanction of the Court for the Capital Reduction.

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LETTER FROM THE BOARD

Although recently, the market price per Share has been quite volatile and raised to a price above the par value per Share, there is no guarantee that such a price could be maintained. The completion of the Capital Reduction will reduce the par value of the Shares to HK$0.01 per New Share and will therefore provide the Company with greater flexibility in pricing the New Shares which may be issued in any future equity fund raising exercise.

In the circumstances, the Directors consider that the Capital Reduction is the most appropriate means of preparing the Company’s capital structure for potential future fund raising exercises, although no specific fund raising arrangements by way of issuing of New Shares have been formulated by the Directors at this stage.

To eliminate the Accumulated Loss

As at 31 December 2008, being the date to which the last audited accounts of the Company were drawn up, the total amount of the unconsolidated accumulated losses of the Company, consisting of losses of both permanent and non-permanent in nature, was approximately HK$596,411,000. The Capital Reduction will enable the Company to write off its Accumulated Losses. As a result of such writing-off of Accumulated Losses, the Company’s capital and reserves will more closely reflect the available net assets of the Company and would give the Company a capital structure that should, subject to performance, permit the payment of dividends as and when the Directors consider it appropriate in the future. The Directors, therefore, consider that the Capital Reduction is in the interest of the Company and the Shareholders as a whole.

To facilitate the issue of bonus shares

After setting off the Accumulated Losses, the surplus of credit arising from the Capital Reduction will be transferred to the Capital Reduction Reserve Account(s) and/or such other account(s) of the Company in such ways as the Court may direct. Subject to such conditions as the Court may impose, such surplus or a part thereof can be used to pay up the unissued shares of the Company that may be issued to the Shareholders as fully paid bonus shares including, but not limited to, the Bonus Shares that may be issued under the Placing Convertible Bonds. The Directors consider that the Capital Reduction will provide the Company with sufficient capital reserve to issue bonus shares to its Shareholders and this will give the Company greater flexibility to attract and obtain funding from existing and new shareholders/investors of the Company.

CHANGE IN BOARD LOT SIZE

The Shares are currently traded in board lots of 2,000 Shares. The Board proposes that upon the Capital Reduction becoming effective, the board lot size of the Shares for trading on the Stock Exchange be changed from 2,000 Shares to 20,000 New Shares. It is intended that the Change in Board Lot Size will become effective on the Effective Date. Further announcement will be made as to the effective date of the Change in Board Lot Size as and when appropriate.

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LETTER FROM THE BOARD

The Directors consider that the cost of handling the Shares is relatively high due to the low market value for each existing board lot of the Shares and the Directors believe that the proposed Change in Board Lot Size will reduce the number of board lots in the market and hence the transaction costs for the Shareholders and the administrative expenses of the Company will be correspondingly lower. Having taken into account the aforesaid reasons, the Directors are of the view that the proposed Change in Board Lot Size is in the interests of the Company and its Shareholders as a whole. The Change in Board Lot Size will not affect any of the Shareholders’ rights.

LISTING AND DEALINGS

Application will be made to the Listing Committee for the granting of the listing of, and permission to deal in, the New Shares arising from the Capital Reduction.

No part of the share capital of the Company is listed or dealt in on any other stock exchanges and no such listing or permission to deal is being or is proposed to be sought.

The New Shares will be identical in all respects and rank pari passu in all respects with each other as to all future dividends and distributions which are declared, made or paid. Subject to the granting of the listing of, and permission to deal in, the New Shares on the Stock Exchange, the New Shares will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect from the commencement date of dealings in the New Shares on the Stock Exchange or such other date as determined by HKSCC. Settlement of transactions between participants of the Stock Exchange on any trading day is required to take place in CCASS on the second trading day thereafter. All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time.

DEALINGS IN NEW SHARES AND THE FREE EXCHANGE OF SHARE CERTIFICATE

Arrangements will be made so that subject to the Capital Reduction becoming effective, the Shareholders may submit their existing certificates for the Shares, which are blue in colour, to the Registrar at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong during business hours in exchange for certificates for the New Shares, which are orange in colour, free of charge from 21 September 2009 to 29 October 2009. After the expiry of such period, certificates for the Shares will be accepted for exchange only on payment of a fee of HK$2.50 per share certificate (or such higher amount as allowed by the Stock Exchange from time to time) for each certificate issued or cancelled, whichever is higher.

It is expected that new certificates for the New Shares will be available for collection within a period of 10 business days or so from the date of submission of the existing certificates of the Shares to the Registrar for exchange. The existing certificates of the Shares will cease to be good for delivery but will continue to be good evidence of legal title to the New Share, valid for trading, settlement and registration purposes and may be exchanged for certificate for the New Share at any time.

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LETTER FROM THE BOARD

ODD LOT ARRANGEMENTS

In order to facilitate the trading of odd lots (if any) which might arise as a result of the Change in Board Lot Size, the Company has appointed Kingston Securities Limited as an agent to arrange for the sale and purchase of odd lots on behalf of the Shareholders and potential investors on a ‘best effort” basis. During the period from 21 September 2009 to 27 October 2009 (both dates inclusive), holders of the New Shares who wish to take advantage of this facility either to dispose of their odd lots or to top them up to a full board lot may contact Ms. Rosita Kiu during the aforesaid period as follows:

Contact person	Address	Telephone number
Ms. Rosita Kiu	Suite 2801, 28th Floor,	(852) 2298 6265
	One International Finance Centre,
	1 Harbour View Street, Central,
	Hong Kong

Holders of the New Shares in odd lots should note that the matching of odd lots is not guaranteed.

Shareholders are recommended to consult their professional advisers if they are in any doubt as to the above procedures.

EXTRAORDINARY GENERAL MEETING

The notice of the EGM convened for the purpose of considering and, if thought fit, passing the special resolution in respect of the Capital Reduction is set out on pages 14 to 15 of this circular. A form of proxy for use by the Shareholders at the EGM is enclosed. Whether or not you are able to attend the EGM, you are requested to complete and return the form of proxy enclosed with this circular in accordance with the instructions printed thereon to the Registrar at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong as soon as possible, but in any event, not later than 48 hours before the time appointed for holding the EGM and taking the poll or the adjourned meeting 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 13.39(4) of the Listing Rules, all votes at the EGM will be taken by poll and the Company will announce the results of the poll in the manner set out in Rule 13.39(5) of the Listing Rules. No Shareholder is required to abstain from voting at the EGM.

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LETTER FROM THE BOARD

RECOMMENDATION

The Directors believe that the Capital Reduction is in the best interests of the Company and the Shareholders as a whole. Accordingly, the Directors recommend the Shareholders to vote in favour of the resolution as set out in the notice of the EGM.

Yours faithfully,

For and on behalf of the Board Kong Sun Holdings Limited Tse On Kin Chairman

• 13 -

NOTICE OF EGM

KONG SUN HOLDINGS LIMITED 江山控股有限公司

(Incorporated in Hong Kong with limited liability)

(Stock Code: 295)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that an extraordinary general meeting of the shareholders (the “EGM”) of Kong Sun Holdings Limited (the “Company”) will be held at Unit C, 10/F., Wings Building, 110-116 Queen’s Road Central, Hong Kong on 22 July 2009 (Wednesday) at 11:00 a.m. for the purpose of considering and, if thought fit, passing the following resolution as a special resolution of the Company:

SPECIAL RESOLUTION

“ THAT , subject to and conditional upon (i) the Court of First Instance of the High Court of the Hong Kong Special Administrative Region (the “ Court ”) making an order confirming the Capital Reduction (as defined below) pursuant to sections 58 to 60 of the Companies Ordinance (Chapter 32 of the Laws of Hong Kong) (the “ Companies Ordinance ”); (ii) the registration by the Registrar of Companies in Hong Kong of a copy of the order of the Court confirming the Capital Reduction and a copy of the minute containing the particulars required under section 61 of the Companies Ordinance duly approved by the Court; (iii) the Listing Committee of the Stock Exchange of Hong Kong Limited granting approval of the listing of, and permission to deal in, the new shares of the Company in issue immediately following the Capital Reduction becoming effective; and (iv) the compliance with any conditions as may be imposed by the Court in relation to the Capital Reduction:

• (a) the authorised share capital of the Company be reduced from HK$4,000,000,000 divided into 40,000,000,000 shares of HK$0.10 each to HK$400,000,000 divided into 40,000,000,000 shares of HK$0.01 each and that such reduction be effected by cancelling the capital paid up or credited as paid up to the extent of HK$0.09 upon each of the shares of the Company in issue as of the date on which the petition for confirmation of the Capital Reduction is heard by the Court and by reducing the nominal value of all the issued and unissued shares of the Company from HK$0.10 to HK$0.01 per share (the “ Capital Reduction ”);

• (b) subject to the approval of the Court and to the extent permitted by the Court, the credit arising as a result of the Capital Reduction be utilised to set off the permanent portion of the audited/unaudited and unconsolidated accumulated losses of the Company as approved by the Court (the “ Accumulated Losses ”), and all or part of the balance of the credit arising from the Capital Reduction after setting off the Accumulated Losses be transferred to the capital reduction reserve account(s) of the Company (the “ Capital Reduction Reserve Account(s) ”) and/or such other account(s) of the Company in such

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NOTICE OF EGM

ways as the Court may direct, and such amount standing to the credit of the Capital Reduction Reserve Account(s) and/or such other account(s) of the Company be dealt with and applied in accordance with such directions and subject to such conditions as the Court may impose (if any) and/or in such manners as the directors of the Company consider appropriate; and

• (c) the directors of the Company be and are hereby authorised generally to do all acts, deeds and things, and to approve, sign and execute any documents as they shall, in their absolute discretion, consider necessary, desirable or expedient to carry into effect or to give effect to the Capital Reduction, setting off of the Accumulated Losses and utilisation of the balance standing to the credit of the Capital Reduction Reserve Account(s) and/or such other account(s) of the Company.”

By order of the Board Kong Sun Holdings Limited Tse On Kin Chairman

Hong Kong, 29 June 2009

Registered Office and

Principal Place of Business: Unit C, 10/F Wings Building 110-116 Queen’s Road Central Hong Kong

Notes:

1. A member of the Company entitled to attend and vote at the EGM is entitled to appoint one or more proxies to attend and vote in his/her stead. A proxy need not be a member of the Company.

2. A form of proxy for use at the EGM is enclosed with this circular. In order to be valid, the form of proxy must be duly completed and signed in accordance with the instructions printed thereon together with a power of attorney or other authority (if any) under which it is signed, or a certified copy of that power or authority, must be deposited at the Company’s share registrar and transfer office in Hong Kong, Computershare Hong Kong Investor Services Limited at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong not less than 48 hours before the time appointed for holding the EGM or any adjournment thereof.

3. Completion and return of the form of proxy will not preclude members from attending and voting in person at the EGM or any adjournment thereof and, in such event, the instrument appointing a proxy shall be deemed to be revoked.

4. Where there are joint holders of any share of the Company, any one of such holders may vote at the EGM either personally or by proxy in respect of such share as if he/she were solely entitled thereto, but if more than one of such holders be present at the EGM personally or by proxy, then one of such holders whose name stands first on the register of members of the Company in respect of such share shall alone be entitled to vote in respect thereof. Several executors or administrators of a deceased member in whose name any share stands shall for this purpose be deemed joint holders thereof.

5. As at the date of this notice, the board of directors of the Company comprises three executive Directors, Mr. Tse On Kin, Mr. Chan Chi Yuen and Mr. Yu Pak Yan, Peter; and three independent non-executive Directors, Mr. Lau Man Tak, Dr. Wong Yun Kuen and Mr. Man Kwok Leung.

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