Qian Xun Technology Limited — Proxy Solicitation & Information Statement 2005

Apr 29, 2005

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 a stockbroker, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in CNT Group Limited, you should at once hand this circular with the enclosed form of proxy to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale was effected for transmission to the purchaser or transferee.

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this circular, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

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CNT GROUP LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 701)

PROPOSALS FOR RE-ELECTION OF DIRECTORS AND

GENERAL MANDATES TO ISSUE AND REPURCHASE SHARES AND NOTICE OF ANNUAL GENERAL MEETING

A notice convening the Annual General Meeting of the Company to be held at 31st Floor, CNT Tower, 338 Hennessy Road, Wanchai, Hong Kong on Wednesday, 25 May 2005 at 11:30 a.m. at which the above proposals will be considered, is appended to this circular. Whether or not you are able to attend the Annual General Meeting, you are requested to complete the form of proxy in accordance with the instructions printed thereon and return it to the Company’s registrar in Hong Kong, Tengis Limited at Ground Floor, Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for the holding of the meeting. Completion and return of the form of proxy will not prevent shareholders from attending and voting at the meeting if they so wish.

29 April 2005

CONTENTS

		Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1
Letter from the Chairman
1.	Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2
2.	Re-election of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
3.	General mandates to issue and repurchase Shares . . . . . . . . . . . . . . . . . . . . . . . . . .	3
4.	Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
5.	Right to demand poll . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
6.	Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
**Appendix **	— Explanatory statement for the repurchase mandate . . . . . . . . . . . . . . . . . . . .	5
**Notice of **	Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8

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DEFINITIONS

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

“Annual General Meeting”	the annual general meeting of the Company to be held on
	Wednesday, 25 May 2005, at 11:30 a.m., the notice of which
	is appended to this circular, or any adjournment thereof
“Company”	CNT Group Limited, a company incorporated in Bermuda
	with limited liability, the securities of which are listed on the
	Stock Exchange
“Directors”	directors of the Company
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong
“Latest Practicable Date”	21 April 2005, being the latest practicable date prior to the
	printing of this circular for ascertaining certain information
	referred to in this circular
“Listing Rules”	Rules Governing the Listing of Securities on the Stock
	Exchange
“Share”	the ordinary share in the capital of the Company with a par
	value of HK$0.1 each (or such other prevailing par value from
	time to time)
“Shareholder(s)”	shareholder(s) of the Company
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Takeover Code”	Hong Kong Code on Takeovers and Mergers
“%”	per cent.

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LETTER FROM THE CHAIRMAN

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CNT GROUP LIMITED

(Incorporated in Bermuda with limited liability)

Directors: Registered office: Tsui Tsin Tong (Honorary Chairman) Clarendon House Lam Ting Ball, Paul (Chairman) 2 Church Street Sir David Akers-Jones (Deputy Chairman) Hamilton HM11 Tsui Ho Chuen, Philip (Executive Deputy Chairman) Bermuda Tsui Yam Tong, Terry (Managing Director) Lau Wong Fat Principal place of business: Li Hui Yan 31st Floor Hung Ting Ho, Richard CNT Tower Danny T Wong 338 Hennessy Road Wanchai * independent non-executive director Hong Kong

** non-executive director

29 April 2005

To the Shareholders

Dear Sir or Madam,

PROPOSALS FOR RE-ELECTION OF DIRECTORS AND

GENERAL MANDATES TO ISSUE AND REPURCHASE SHARES AND NOTICE OF ANNUAL GENERAL MEETING

1. INTRODUCTION

The purpose of this circular is to provide you with the notice of the Annual General Meeting and information on certain matters to be dealt with at the Annual General Meeting which will be held on Wednesday, 25 May 2005 at 11:30 a.m.. They are: (i) re-election of Directors who are due to retire at the Annual General Meeting and (ii) granting of general mandates to issue and repurchase Shares.

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LETTER FROM THE CHAIRMAN

2. RE-ELECTION OF DIRECTORS

In accordance with the Company’s bye-laws, Messrs. Lau Wong Fat, Li Hui Yan and Danny T Wong will retire from office at the Annual General Meeting and, being eligible, will offer themselves for re-election. Their biographical details and interests in the Shares within the meaning of Part XV of the Securities and Futures Ordinance are provided in the “Report of the directors” in the Company’s 2004 annual report.

3. GENERAL MANDATES TO ISSUE AND REPURCHASE SHARES

The existing general mandates granted to the Directors to issue and repurchase Shares will expire at the conclusion of the Annual General Meeting. To renew these general mandates, ordinary resolutions are proposed at the Annual General Meeting that: (i) the Directors be granted a general mandate to allot and issue new Shares up to an amount of not exceeding 20% of the aggregate nominal amount of the share capital of the Company in issue and fully paid-up at the date of passing of such resolution; (ii) the Directors be granted a general mandate to exercise all the powers of the Company to repurchase Shares up to a maximum of 10% of the aggregate nominal amount of the share capital of the Company in issue and fully paid-up at the date of passing of such resolution; and (iii) the allotment mandate be extended by adding the nominal amount of all the Shares repurchased by the Company pursuant to the repurchase mandate to the aggregate nominal amount of the share capital of the Company to be issued and allotted pursuant to the allotment mandate.

The Directors wish to state that, as at the date hereof, they have no immediate plans to issue any new Share or to repurchase any existing Share.

An explanatory statement as required under the Listing Rules to provide the requisite information concerning the repurchase mandate is set out in the Appendix to this circular.

4. ANNUAL GENERAL MEETING

A notice convening the Annual General Meeting to be held on Wednesday, 25 May 2005 at 11:30 a.m. at 31st Floor, CNT Tower, 338 Hennessy Road, Wanchai, Hong Kong is appended to this circular.

A form of proxy for use at the Annual General Meeting is enclosed. The form of proxy, in order to be valid, must be deposited in accordance with the instructions printed thereon not less than 48 hours before the time for holding the Annual General Meeting. Completion and delivery of the form of proxy will not prevent the Shareholders from attending and voting at the Annual General Meeting if they wish.

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LETTER FROM THE CHAIRMAN

5. RIGHT TO DEMAND POLL

Pursuant to bye-law 66 of the bye-laws of the Company, every resolution submitted to a general meeting shall be determined in the first instance by a show of hands of the Shareholders present in person or by proxy, but a poll may be demanded (before or on the declaration of the results of the show of hands or on the withdrawal of any other demand for a poll) by the Chairman of such meeting or by:

• (a) at least three Shareholders present in person or by proxy for the time being entitled to vote at the meeting; or

• (b) a Shareholder or Shareholders present in person or by proxy and representing not less than one-tenth of the total voting rights of all Shareholders having the right to vote at the meeting; or

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

6. RECOMMENDATION

The Directors consider that the re-election of Directors and the granting of general mandates to issue and repurchase Shares are in the interests of the Company and the Shareholders as a whole, and accordingly recommend the Shareholders to vote in favour of each of the ordinary resolutions in respect of the above proposals on terms set out in the notice of the Annual General Meeting.

Yours faithfully, Lam Ting Ball, Paul Chairman

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APPENDIX EXPLANATORY STATEMENT FOR THE REPURCHASE MANDATE

This Appendix serves as an explanatory statement required by the Listing Rules to provide you with the information reasonably necessary to enable you to make an informed decision on whether to vote for or against the repurchase mandate.

1. SHARE CAPITAL

As at the Latest Practicable Date, the issued share capital of the Company comprised 1,532,970,193 Shares.

Subject to the passing of the relevant resolution and on the basis that no further Share is issued or repurchased prior to the Annual General Meeting, the Company would be allowed under the repurchase mandate to repurchase a maximum of 153,297,019 Shares representing 10% of the Shares in issue as at the date of the Annual General Meeting. The Shares proposed to be repurchased by the Company must be fully-paid up.

The repurchase mandate may continue in force until the earliest of: (i) the conclusion of the next annual general meeting of the Company for the year of 2006; (ii) the expiration of the period within which the next annual general meeting of the Company is required by law to be held; and (iii) the revocation or variation of the repurchase mandate by ordinary resolution of the Shareholders in general meeting.

2. REASONS FOR REPURCHASES

The Directors believe that the repurchase mandate is in the interests of the Company and the Shareholders as a whole. Such repurchases may, depending on market conditions and funding arrangements at the time, lead to an enhancement of the net assets and/or earnings per Share and will only be made when the Directors believe that such a repurchase will benefit the Company and the Shareholders as a whole.

3. FUNDING OF REPURCHASES

In repurchasing Shares, the Company may only apply funds legally available for such purpose in accordance with the memorandum of association and bye-laws of the Company and the laws of Bermuda. It is presently proposed that any repurchase under the repurchase mandate would be repurchased out of the capital paid up on the repurchased Shares, the profits of the Company which would otherwise be available for dividend, the Company’s share premium account and/or contributed surplus account in each case to the extent as permitted by the laws of Bermuda.

There might be material adverse impact on the working capital or gearing position of the Company as compared with the position disclosed in the audited consolidated accounts contained in the Company’s most recently published annual report for the year ended 31 December 2004 in the event that the repurchase mandate was to be carried out in full at any time during the proposed repurchase period. However, the Directors do not propose to exercise the repurchase mandate to such extent as would, in the circumstances, have a material adverse effect on the working capital requirements of the Company or the gearing levels of the Company which in the opinion of the Directors are from time to time appropriate for the Company.

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APPENDIX EXPLANATORY STATEMENT FOR THE REPURCHASE MANDATE

4. SHARE PRICES

The highest and lowest prices at which the Shares were traded on the Stock Exchange during each of the previous twelve months before the printing of this circular were as follows:

	**Share **	price
	Highest	Lowest
	HK$	HK$
2004
April	0.290	0.230
May	0.275	0.233
June	0.265	0.195
July	0.200	0.190
August	0.216	0.180
September	0.181	0.157
October	0.191	0.158
November	0.190	0.160
December	0.173	0.140
2005
January	0.180	0.136
February	0.173	0.158
March	0.178	0.160
April (up to the Latest Practicable Date)	0.178	0.150

5. UNDERTAKING

The Directors have undertaken to the Stock Exchange that they will exercise the powers of the Company to make repurchases in accordance with the Listing Rules and the applicable laws of Bermuda so far as the same may be applicable and in accordance with the regulations set out in the memorandum of association and bye-laws of the Company.

None of the Directors nor, to the best of their knowledge having made all reasonable enquiries, their associates (as defined in the Listing Rules) have any present intention to sell Shares to the Company under the repurchase mandate if such is approved by the Shareholders.

No connected person (as defined in the Listing Rules) of the Company has notified the Company that he has a present intention to sell Shares to the Company, nor has undertaken not to do so, in the event that the repurchase mandate is approved by the Shareholders.

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APPENDIX EXPLANATORY STATEMENT FOR THE REPURCHASE MANDATE

6. TAKEOVER CODE

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

As at the Latest Practicable Date, to the best knowledge and belief of the Directors, Rapid Growth Ltd. (“RGL”) is the single largest shareholder of the Company beneficially interested in 337,473,906 Shares, representing approximately 22.01% of the issued share capital of the Company. In the event that the repurchase mandate is exercised in full and no further share is issued during the proposed repurchase period, the beneficial interest of RGL in the issued share capital of the Company will increase to approximately 24.46%. Accordingly, the Directors are not aware of any consequences which would arise under the Takeover Code as a result of any repurchase of Shares pursuant to the repurchase mandate.

7. SHARE REPURCHASES MADE BY THE COMPANY

The Company has not repurchased any of the Shares (whether on the Stock Exchange or otherwise) in the six months prior to the printing of this circular.

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NOTICE OF ANNUAL GENERAL MEETING

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CNT GROUP LIMITED

(Incorporated in Bermuda with limited liability)

NOTICE IS HEREBY GIVEN that the Annual General Meeting of CNT Group Limited (the “Company”) will be held at 31st Floor, CNT Tower, 338 Hennessy Road, Wanchai, Hong Kong on Wednesday, 25 May 2005 at 11:30 a.m. for the following purposes:

Ordinary business

1. To receive and consider the audited financial statements and the reports of the directors and auditors for the year ended 31 December 2004.

2. To re-elect directors and to authorise the directors to fix the directors’ remuneration.

3. To re-appoint auditors and to authorise the directors to fix their remuneration.

Special business

1. To consider and, if thought fit, pass with or without amendments, the following resolution as an ordinary resolution:

“ THAT :

• (a) subject to paragraph (c) below, the exercise by the board of directors of the Company (the “Board”) during the Relevant Period of all the powers of the Company to allot, issue and otherwise deal with additional shares in the capital of the Company and to make or grant offers, agreements and options which might require the exercise of such powers be and is hereby generally and unconditionally approved;

• (b) the approval in paragraph (a) above shall authorise the Board during the Relevant Period to make or grant offers, agreements and options which might require the exercise of such powers after the end of the Relevant Period;

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NOTICE OF ANNUAL GENERAL MEETING

• (c) 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 Board pursuant to the approval in paragraph (a) above, otherwise than pursuant to (i) a Rights Issue; or (ii) the exercise of rights of subscription or conversion under the terms of any warrant or other securities issued by the Company carrying a right to subscribe for shares of the Company; or (iii) the exercise of subscription rights under any share option scheme of the Company; or (iv) an issue of shares as scrip dividends pursuant to the bye-laws of the Company from time to time, shall not exceed the aggregate of (i) 20% of the nominal amount of the share capital of the Company in issue as at the date of this resolution; and (ii) subject to the passing of resolution 6 below, all those number of shares which may from time to time be repurchased by the Company pursuant to the general mandate granted under resolution 5 below, and the said approval shall be limited accordingly; and

• (d) for the purpose of this resolution:

• “Relevant Period” means the period from the passing of this resolution until 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 law to be held; and

• (iii) the revocation or variation of this resolution by an ordinary resolution of the shareholders of the Company in general meeting.

“Rights Issue” means the allotment, issue or grant of shares of the Company pursuant to an offer open for a period fixed by the Board to holders of shares or any class thereof on the register of members of the Company on a fixed record date pro rata to their then holdings of such shares or class thereof (subject to such exclusions or other arrangements as the Board may deem necessary or expedient in relation to fractional entitlements or having regard to any restriction or obligation under the laws of, or the requirements of any recognised regulatory body of any stock exchange in any territory outside Hong Kong).”

1. To consider and, if thought fit, pass with or without amendments, the following resolution as an ordinary resolution:

“ THAT :

• (a) subject to paragraph (b) below, the exercise by the board of directors of the Company during the Relevant Period of all the powers of the Company to purchase shares in the capital of the Company on The Stock Exchange of Hong Kong Limited (“Stock Exchange”) or on any other stock exchange recognised for this purpose by the Securities and Futures Commission and the Stock Exchange, subject to and in accordance with all applicable laws and requirements of the Rules Governing the Listing of Securities on the Stock Exchange as amended from time to time, be and is hereby generally and unconditionally approved;

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NOTICE OF ANNUAL GENERAL MEETING

• (b) the aggregate nominal amount of shares of the Company to be purchased by the Company pursuant to the approval in paragraph (a) above shall not exceed 10% of the aggregate nominal amount of the shares of the Company in issue at the date of this resolution, and the said approval shall be limited accordingly; and

• (c) for the purpose of this resolution, “Relevant Period” means the period from the passing of this resolution until 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 law to be held; and

  • (iii) the revocation or variation of this resolution by an ordinary resolution of the shareholders of the Company in general meeting.”

• To consider and, if thought fit, pass with or without amendments, the following resolution as an ordinary resolution:

“ THAT the board of directors of the Company be and is hereby given a general mandate to add all those shares in the capital of the Company which may from time to time be repurchased by the Company pursuant to the approval granted under resolution 5 above to the general mandate granted under resolution 4 above.”

By order of the board Ma Lai King Company Secretary

Hong Kong, 29 April 2005

Notes:

1. Any member entitled to attend and vote at the meeting is entitled to appoint another person as his proxy to attend and vote instead of him. A proxy need not be a member of the Company.

2. The instrument appointing a proxy and the power of attorney or other authority (if any) under which it is signed or a certified copy of such power of attorney or authority shall be delivered to the Company’s registrar in Hong Kong, Tengis Limited at Ground Floor, Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong not less than 48 hours before the time appointed for holding the meeting at which the person named in the instrument proposes to vote.

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