Phoenitron Holdings Limited — Proxy Solicitation & Information Statement 2010

Dec 30, 2010

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 licensed securities dealer 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 Phoenitron Holdings Limited, you should at once hand this circular and the accompanying form of proxy to the purchaser or transferee or to the bank, licensed securities dealer or other agent through whom the sale or the 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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PHOENITRON HOLDINGS LIMITED 品創控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 8066)

(1) PROPOSED CHANGE OF AUDITORS; (2) PROPOSED SHARE SUBDIVISION; AND

(3) NOTICE OF EXTRAORDINARY GENERAL MEETING

A notice dated 31 December 2010 convening the extraordinary general meeting of Phoenitron Holdings Limited to be held at Unit 302, Seapower Centre, 73 Lei Muk Road, Kwai Chung, New Territories, Hong Kong, on 17 January 2011 at 2:00 p.m. is set out on pages 8 to 9 of this circular. Whether or not you intend to attend such meeting, please complete and return the enclosed form of proxy in accordance with the instructions printed thereon and return it to the branch share registrar of the Company in Hong Kong, Tricor Tengis Limited at 26th Floor, Tesbury Centre, 28 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 of the meeting or any adjournment thereof. Completion and return of the form of proxy will not prelude shareholders from attending and voting at the meeting or any adjourned meeting if they so wish.

31 December 2010

CHARACTERISTICS OF GEM

GEM has been positioned as a market designed to accommodate companies to which a higher investment risk may be attached than other companies listed on the Stock Exchange. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only after due and careful consideration. The greater risk profile and other characteristics of GEM mean that it is a market more suited to professional and other sophisticated investors.

Given the emerging nature of companies listed on GEM, there is a risk that securities traded on GEM may be more susceptible to high market volatility than securities traded on the main board of the Stock Exchange and no assurance is given that there will be a liquid market in the securities traded on GEM.

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CONTENTS

	page
CHARACTERISTICS OF GEM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	i
EXPECTED TIMETABLE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	iii
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
Proposed Change of Auditors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Proposed Share Subdivision. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
GEM listing rules requirement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
NOTICE OF EXTRAORDINARY GENERAL MEETING. . . . . . . . . . . . . . . . . . .	8

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EXPECTED TIMETABLE

The expected timetable for the implementation of the Share Subdivision is set out below.

Latest time for lodging proxy forms for the EGM . . . . . . . . . . . . . . . . . . . . . . . .2:00 p.m., on 15 January 2011 Date and time of the EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2:00 p.m., on 17 January 2011

The following events are conditional on the fulfilment of the conditions for the implementation of the Share Subdivision

The Share Subdivision becomes effective . . . . . . . . .	.	. . . . . . . . . . . . . . . .18 January 2011
Dealings in the Subdivided Shares commence . . . . .	.	. . . . . . . .9:30 a.m., 18 January 2011
Original counter for trading in existing Shares in board		lots
of 5,000 Shares temporarily closes . . . . . . . . . . . .	.	. . . . . . . .9:30 a.m., 18 January 2011
Free exchange of existing certificates for the Shares for
new certificates (“New Share Certificates”) for the
Subdivided Shares commences . . . . . . . . . . . . . . . .	.	. . . . . . . . . . . . . . . .18 January 2011
Temporary counter for trading in board lots of
25,000 Subdivided Shares (in the form of certificates
of existing Shares (“Existing Share Certificates”) opens . . . .9:30 a.m., 18 January 2011
Original counter for trading in Subdivided Shares
in board lots of 5,000 Subdivided Shares
(in the form of New Share Certificates) reopens . .	.	. . . . . . . .9:30 a.m., 1 February 2011
Parallel trading in the Shares and Subdivided
Shares commences . . . . . . . . . . . . . . . . . . . . . . . .	.	. . . . . . . .9:30 a.m., 1 February 2011
Temporary counter for trading in Subdivided Shares
in board lots of 25,000 Subdivided Shares
(in the form of Existing Share Certificates) closes	.	. . . . . . .4:00 p.m., 23 February 2011
Parallel trading ends . . . . . . . . . . . . . . . . . . . . . . . . .	.	. . . . . . .4:00 p.m., 23 February 2011
Free exchange of existing certificates for the Shares
for new certificates for the Subdivided Shares ends		. . . . . . .4:00 p.m., 25 February 2011

Note: All times and dates refer to Hong Kong local times and dates

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DEFINITIONS

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

• “BDO” BDO Limited “Board” the board of directors of the Company “CCASS” the Central Clearing and Settlement System established and operated by Hong Kong Securities Clearing Company Limited

• “Company” Phoenitron Holdings Limited, a company incorporated in the Cayman Islands with limited liability and the issued Shares of which are listed on GEM

• “Director(s)” the director(s) of the Company from time to time

• “EGM” the extraordinary general meeting of the Company to be held at Unit 302, Seapower Centre, 73 Lei Muk Road, Kwai Chung, New Territories, Hong Kong on 17 January 2011 at 2:00 p.m. and any adjourned meeting for the purpose of, among other matters, considering and, if thought fit, approving (i) the appointment of auditors and (ii) the Share Subdivision

• “Existing Share Certificate(s)” has the meaning ascribed thereto in the section headed “Expected Timetable” of this circular

• “GEM” the Growth Enterprise Market of the Stock Exchange

• “GEM Listing Rules” The Rules Governing the Listing of Securities on GEM

• “GTHK”

Grant Thornton Hong Kong

• “Hong Kong”

• the Hong Kong Special Administrative Region of the People’s Republic of China

• “Latest Practicable Date” 29 December 2010, being the latest practicable date prior to the printing of this circular for ascertaining certain information referred to in this circular

• “New Share Certificate(s)” has the meaning ascribed thereto in the section headed “Expected Timetable” of this circular

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DEFINITIONS

• “Share(s)” or “Existing Share(s)” ordinary share(s) of HK$0.10 each in the capital of the Company

• “Shareholder(s)” Shareholder(s) of the Company

• “Share Option(s)” share option(s) granted or to be granted under the Share Option Scheme entitling the holders thereof to subscribe for Share(s)

• “Share Option Scheme” the share option scheme of the Company adopted on 8 January 2008

• “Share Subdivision” the proposed subdivision of every existing share (both issued and unissued) of par value of HK$0.10 into five new shares of par value of HK$0.02 each

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

• “Subdivided Share(s)” new ordinary share(s) of HK$0.02 each in the share capital of the Company following the Share Subdivision

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

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LETTER FROM THE BOARD

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PHOENITRON HOLDINGS LIMITED 品創控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 8066)

Executive Directors: Ms. Lily Wu (Chairman and Chief Executive Officer) Ms. Leung Quan Yue Mr. Chang Wei Wen

Independent Non-Executive Directors: Ms. Wong Ka Wai, Jeanne Mr. Leung Ka Kui, Johnny Mr. Chan Siu Wing, Raymond

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

Principal place of business in Hong Kong: Unit 302, Seapower Centre 73 Lei Muk Road Kwai Chung New Territories Hong Kong

31 December 2010

To the Shareholders

Dear Sir or Madam,

PROPOSED CHANGE OF AUDITORS AND PROPOSED SHARE SUBDIVISION

(A) INTRODUCTION

The Company announced on 17 December 2010 that GTHK have resigned as auditors of the Company with effect from 17 December 2010. The Board proposes to appoint BDO Limited as auditors of the Company to fill the casual vacancy following the resignation of GTHK and to hold office until the conclusion of the next annual general meeting of the Company subject to the approval by the Shareholders at the EGM.

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LETTER FROM THE BOARD

In addition, the Company announced on 22 December 2010 that it proposed to subdivide each existing issued and unissued Share of HK$0.10 each into five (5) Subdivided Shares of HK$0.02 each.

The purpose of this circular is to provide the Shareholders with information in respect of the resolutions to be proposed at the EGM for the change of auditors and the proposed Share Subdivision.

(B) PROPOSED CHANGE OF AUDITORS

The Board received a letter from GTHK dated 10 December 2010 informing the Company that they would merge their practice with that of BDO Limited and would resign as the Company’s auditors with effect from 17 December 2010. GTHK has confirmed in its resignation letter that there were no circumstances connected with its resignation which it considered should be brought to the attention of the Shareholders or the creditors of the Company.

At a meeting of the Board held on 17 December 2010, the Board has resolved to convene a EGM to propose to the Shareholders that BDO Limited be appointed by an ordinary resolution as the new auditors of the Company to hold office until the conclusion of the next annual general meeting of the Company and the Board is authorized to fix the remuneration of the auditors.

It was noted that GTHK (now known as “JBPB & Co”) merged their practice with that of BDO Limited, and will continue business under the name BDO Limited. The Board has been assured by BDO Limited that all the terms in respect of the provision of services to the Company by the merged practices will remain substantially unchanged. Based on this assurance, the Board has proposed to appoint BDO Limited as auditors of the Company.

The Board confirms that there are no matters in respect of the proposed change of auditors of the Company, which it considers should be brought to the attention of the Shareholders and creditors of the Company.

(C) PROPOSED SHARE SUBDIVISION

As at the Latest Practicable Date, the authorised share capital of the Company was HK$100,000,000 divided into 1,000,000,000 Shares of HK$0.10 each, of which 551,920,000 Shares have been issued and are fully paid or credited as fully paid. Save for the 1,500,000 Share Options, the Company has no outstanding warrants, convertibles, options or derivatives and conversion rights or other similar rights which are convertible or exchangeable into Shares as at the Latest Practicable Date.

The Board proposes to subdivide each existing issued and unissued Share of HK$0.10 into five Subdivided Shares of HK$0.02 each. Upon the Share Subdivision becoming effective, the authorised share capital of the Company will be HK$100,000,000 divided into

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LETTER FROM THE BOARD

5,000,000,000 Subdivided Shares, of which 2,759,600,000 Subdivided Shares will be in issue and fully paid or credited as fully paid, assuming that no further Shares will be issued or repurchased after the Latest Practicable Date and prior to the Share Subdivision becoming effective.

The Subdivided Shares will rank pari passu in all respects with each other. An application will be made to the Stock Exchange for the listing of, and permission to deal in, the Subdivided Shares which will be in issue and any Subdivided Shares to be issued pursuant to the exercise of any Share Options which may be granted under the Share Option Scheme upon the Share Subdivision becoming effective. All necessary arrangements will be made for the Subdivided Shares to be admitted into CCASS.

Subject to the granting of the listing of, and permission to deal in, the Subdivided Shares on the Stock Exchange, the Subdivided Shares will be accepted as eligible securities by Hong Kong Securities Clearing Company Limited for deposit, clearance and settlement in CCASS with effect from the commencement date of dealings in the Subdivided Shares on the Stock Exchange or such other date as may be determined by Hong Kong Securities Clearing Company Limited. 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.

None of the securities of the Company is listed or dealt in on any other stock exchange other than the Stock Exchange and no such listing or permission to deal is being or is proposed to be sought.

Conditions of the Share Subdivision

The Share Subdivision is conditional on:

• (a) the passing by the Shareholders at the EGM of an ordinary resolution approving the Share Subdivision; and

• (b) the Listing Committee of the Stock Exchange granting the listing of, and permission to deal in, the Subdivided Shares.

Exchange of share certificates

Subject to the Share Subdivision becoming effective, Shareholders may submit their Existing Share Certificates to the Company’s branch share registrar in Hong Kong, Tricor Tengis Limited at 26/F, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong, in exchange for the New Share Certificates free of charge between 9:00 a.m. and 4:00 p.m. on any business day from 18 January 2011 to 25 February 2011 (both dates inclusive). It is expected that New Share Certificates will be available for collection within 10 business days after the submission of the Existing Share Certificates to Tricor Tengis Limited for exchange.

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LETTER FROM THE BOARD

From 26 February 2011 onwards, exchange of Existing Share Certificates for New Share Certificates can only be made at a cost of HK$2.50 (or such higher amount as may be allowed by the Stock Exchange from time to time) for each Existing Share Certificate cancelled or each New Share Certificate issued, whichever number of share certificates involved is higher.

The Existing Share Certificates will only be valid for delivery, trading and settlement purposes for the period up to 4:00 p.m., 23 February 2011 and thereafter will not be accepted for delivery, trading and settlement purposes. However, all Existing Share Certificates will continue to be good evidence of legal title to such equivalent number of Subdivided Shares.

The New Share Certificates will be issued in blue colour in order to distinguish them from Existing Share Certificates which are in green colour.

Trading arrangements for the Subdivided Shares

Subject to the Share Subdivision becoming effective, dealings in the Subdivided Shares are expected to commence on 18 January 2011. Parallel trading in the Subdivided Shares (in the form of existing share certificates and new share certificates) will be operated from 1 February 2011 to 23 February 2011 (both days inclusive). Full details of the expected timetable and trading arrangements of the Shares and the Subdivided Shares are set out on page iii of this circular.

Reason for the Share Subdivision

The proposed Share Subdivision will decrease the nominal value and trading price of each Share and increase the total number of Shares in issue. The Directors are of the view that the increase in number of Shares as a result of the Share Subdivision will improve the liquidity in trading of the Subdivided Shares, thereby enabling the Company to attract more investors and broaden its Shareholders’ base eventually. The implementation of the Share Subdivision is in the interests of the Company and its Shareholders as a whole and would not have any adverse effect on the financial position of the Company.

Other than the expenses to be incurred (including printing charges and professional fees) by the Company in relation to the Share Subdivision, the implementation thereof will not, by itself, affect the underlying assets, business operations, management or financial position of the Group or the interests of Shareholders as a whole.

(D) EGM

The notice of EGM is set out on pages 8 to 9 of this circular. At the EGM, resolutions will be proposed to approve (i) the change of auditors and (ii) the Share Subdivision.

A form of proxy for use at the EGM is enclosed with this circular. Whether or not you intend to attend such meeting, please complete and return the enclosed form of proxy in accordance with the instructions printed thereon and return it to the branch share registrar of

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LETTER FROM THE BOARD

the Company in Hong Kong, Tricor Tengis Limited at 26/F, Tesbury Centre, 28 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 such meeting. Completion and return of the form of proxy will not preclude Shareholders from attending and voting at the EGM if they do wish. In such event, the form of proxy previously submitted shall deem to be revoked.

(E) GEM LISTING RULES REQUIREMENT

According to Rule 17.47(4) of the GEM Listing Rules, any vote of Shareholders at a general meeting must be taken by poll. Therefore, all the resolutions put to the vote at the EGM will be taken by way of poll.

(F) RECOMMENDATION

The Board is of the opinion that the proposed change of auditors and the proposed Share Subdivision is in the best interests of the Company and the Shareholders as a whole, and therefore recommend you to vote in favour of the resolutions to be proposed at the EGM.

(G) GENERAL

As at the Latest Practicable Date, none of the Directors, controlling Shareholder or their respective associates (as defined under the GEM Listing Rules) was interested in any business apart from the Group’s business which competes or is likely to compete, either directly or indirectly, with the business of the Group.

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the GEM Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this document misleading.

Yours faithfully, For and on behalf of Phoenitron Holdings Limited Chang Wei Wen Executive Director

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NOTICE OF EXTRAORDINARY GENERAL MEETING

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PHOENITRON HOLDINGS LIMITED 品創控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 8066)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN THAT an extraordinary general meeting of the members of Phoenitron Holdings Limited (the “ Company ”) will be held Unit 302, Seapower Centre, 73 Lei Muk Road, Kwai Chung, New Territories, Hong Kong, on 17 January 2011 at 2:00 p.m. for the purpose of, among other matters, considering and, if thought fit, passing the following resolutions:

ORDINARY RESOLUTIONS

1. “ THAT BDO Limited be and is hereby appointed as the auditors of the Company to fill the vacancy occasioned by the resignation of Grant Thornton Hong Kong, to hold office until the conclusion of the next annual general meeting of the Company and the board of directors of the Company be and is hereby authorised to fix the remuneration of the auditors of the Company.”

2. “ THAT conditional on The Stock Exchange of Hong Kong Limited granting the listing of, and permission to deal in, the subdivided shares of HK$0.02 each in the issued share capital of the Company, each of the issued and unissued share of HK$0.10 in the share capital of the Company be sub-divided into five new shares of HK$0.02 each (“ Share Subdivision ”) with effect from the business day immediately following the day on which this resolution is passed so that the authorised share capital of the Company will be HK$100,000,000 divided into 5,000,000,000 shares of HK$0.02 each immediately following the Share Subdivision, and any director of the Company be and is hereby authorised to sign and execute such documents and do all such acts and things incidental to any of the foregoing as he considers necessary, desirable or expedient in connection with the implementation of or giving effect to any of the foregoing and the transactions contemplated thereunder.’’

By Order of the Board of Phoenitron Holdings Limited Chang Wei Wen Executive Director

Hong Kong, 31 December 2010

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NOTICE OF EXTRAORDINARY GENERAL MEETING

Principal Office: Unit 302, Seapower Centre 73 Lei Muk Road Kwai Chung New Territories Hong Kong

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

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 in his stead and any member who is the holder of 2 or more shares in the Company is entitled to appoint more than one proxy to attend and vote in his stead. A proxy need not be a member of the Company.

2. To be valid, a form of proxy and the 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, Tricor Tengis Limited, at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong and in any event not less than 48 hours before the time appointed for holding the Extraordinary General Meeting or any adjournment thereof. Completion and return of the proxy form will not preclude you from attending the meeting should you so wish. In such event, the form of proxy previously submitted shall deem to be revoked.

3. As at the date of this notice, the Board comprises three executive Directors, Ms. Lily Wu (Chairman and Chief Executive Officer), Ms. Leung Quan Yue, Michelle and Mr. Chang Wei Wen, and three independent non-executive Directors, Ms. Wong Ka Wai, Jeanne, Mr. Leung Ka Kui, Johnny and Mr. Chan Siu Wing, Raymond.

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