RemeGen Co., Ltd. — AGM Information 2006

Apr 19, 2006

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 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 Huali Holdings (Group) Limited (the “Company”), you should at once hand this circular with the enclosed form of proxy to the purchaser or transferee or to the bank, licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser or the transferee.

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

HUALI HOLDINGS (GROUP) LIMITED

(incorporated in the Cayman Islands with limited liability)

(Stock Code: 3366)

RENEWAL OF GENERAL MANDATES TO ISSUE NEW SHARES AND REPURCHASE SHARES

APPOINTMENT OF DIRECTOR

AND

NOTICE OF ANNUAL GENERAL MEETING

A notice convening an annual general meeting of the Company to be held on 11th May 2006 at 11:00 AM at Function Room — Cypress, InterContinental Hong Kong, 18 Salisbury Road, Kowloon, Hong Kong, is set out on pages 11 to 14 of this circular. Whether or not you are able to attend the annual general meeting, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon to the Company’s principal place of business at Suite 3203-3204, Tower 6, The Gateway, Harbour City, Canton Road, Tsim Sha Tsui, Kowloon, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for holding the annual general meeting. Completion and return of the form of proxy will not preclude you from attending and voting in person at the annual general meeting, or any adjournment thereof, should you so wish.

19 April 2006

CONTENTS

	Page
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
APPENDIX — EXPLANATORY STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
NOTICE OF ANNUAL GENERAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11

— i —

DEFINITIONS

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

“AGM”	the annual general meeting of the Company to be held on
	11th May 2006 at 11:00 AM at Function Room — Cypress,
	InterContinental Hong Kong, 18 Salisbury Road, Kowloon,
	Hong Kong;
“AGM Notice”	the notice convening the AGM set out on pages 11 to 14 of
	this circular;
“Articles”	the articles of association of the Company;
“associates”	has the same meaning as defined in the Listing Rules;
“Board”	the board of Directors;
“Company”	Huali Holdings (Group) Limited, a company incorporated in
	the Cayman Islands with limited liability and the shares of
	which are listed on the Stock Exchange;
“connected person”	has the same meaning as defined in the Listing Rules;
“Directors”	the directors of the Company;
“Group”	the Company and its subsidiaries;
“Hong Kong”	the Hong Kong Special Administrative Region of the People’s
	Republic of China;
“Issue Mandate”	a general and unconditional mandate proposed to be granted
	to the Directors to exercise all powers of the Company to allot
	and issue Shares set out as resolution no. 5 in the AGM
	Notice;
“Latest Practicable Date”	12 April 2006, being the latest practicable date prior to the
	printing of this circular for ascertaining certain information
	for inclusion in this circular;
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock
	Exchange;
“Repurchase Mandate”	a general and unconditional mandate proposed to be granted
	to the Directors to exercise all powers of the Company to
	repurchase Shares set out as resolution no. 6 in the AGM
	Notice;
“SFO”	Securities and Futures Ordinance (Chapter 571) of the Laws
	of Hong Kong;

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	DEFINITIONS
“Share(s)”	ordinary shares of HK$0.10 each in the capital of the
	Company;
“Shareholder(s)”	holder(s) of (a) Share(s);
“Stock Exchange”	The Stock Exchange of Hong Kong Limited;
“Takeovers Code”	The Hong Kong Code on Takeovers and Mergers; and
“HK$”	Hong Kong dollar, the lawful currency of Hong Kong.

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LETTER FROM THE BOARD

HUALI HOLDINGS (GROUP) LIMITED

(incorporated in the Cayman Islands with limited liability)

(Stock Code: 3366)

Executive Directors: Mr. Zheng Fan (Chairman) Mr. Ni Zheng Mr. Zhou Guangneng

Non-executive Director:

Ms. Xie Mei

Registered Office:

Clifton House 75 Fort Street PO Box 1350 GT George Town Grand Cayman Cayman Islands

Independent non-executive Directors:

Mr. Lee Kit Wah Mr. Chen Xiangdong Mr. Xiao Yongping

Head Office and

Principal Place of Business: Suite 3203-3204, Tower 6 The Gateway, Harbour City Canton Road Tsim Sha Tsui Kowloon, Hong Kong

19 April 2006

To the Shareholders

Dear Sir or Madam,

RENEWAL OF GENERAL MANDATES TO ISSUE NEW SHARES AND REPURCHASE SHARES

APPOINTMENT OF DIRECTOR

AND

NOTICE OF ANNUAL GENERAL MEETING

INTRODUCTION

The purpose of this circular is to: (i) provide you with details of the proposed Issue Mandate and the proposed Repurchase Mandate; (ii) furnish you details of the proposed appointment of director; (iii) set out an explanatory statement regarding the Repurchase Mandate; and (iv) give you notice of the AGM.

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LETTER FROM THE BOARD

GENERAL MANDATES TO ISSUE NEW SHARES AND REPURCHASE SHARES

The Company’s existing mandate to issue and repurchase Shares was approved by its Shareholders on 12 October 2005. Unless otherwise renewed, the existing mandate to issue and repurchase Shares will lapse at the conclusion of the AGM.

Ordinary resolutions will be proposed at the AGM to grant to the Directors new general mandates:

• (i) to allot, issue and otherwise deal with new Shares with an aggregate nominal amount not exceeding 20% of the aggregate nominal amount of the issued share capital of the Company as at the date of passing the proposed resolution at the AGM; and

• (ii) to repurchase Shares with an aggregate nominal amount not exceeding 10% of the aggregate nominal amount of the issued share capital of the Company as at the date of passing the proposed resolution at the AGM.

In addition, a separate ordinary resolution will be proposed at the AGM to add to the Issue Mandate those Shares repurchased by the Company pursuant to the Repurchase Mandate (if granted to the Directors at the AGM).

The Directors have no present intention to exercise the Issue Mandate or the Repurchase Mandate (if granted to the Directors at the AGM).

An explanatory statement containing information regarding the Repurchase Mandate is set out in the Appendix to this circular.

APPOINTMENT OF DIRECTOR

At the AGM, an ordinary resolution will be put forward to the Shareholders in relation to the proposed appointment of Mr. Liu Danlin as executive Director. Pursuant to Rule 13.74 of the Listing Rules, details of Mr. Liu Danlin are set out below.

Mr. Liu Danlin

Mr. Liu Danlin, aged 38, is the deputy general manager of Overseas Chinese Town (HK) Company Limited since March 2004. Mr. Liu has joined the Group since March 2004 and has been involved in the general administration of the Group. Mr. Liu was the chief representative of Beijing Representative Office of Overseas Chinese Town Group Company (“OCT Group”, the ultimate controlling shareholder of the Company) from 2000 to 2004. He was the deputy general manager of Planning Department of OCT Group between 1997 and 2000 and the deputy general manager of Investment Department of OCT Group between 1996 and 1997. He was the deputy general manager of Jinli Silk Co., Ltd. from 1994 to 1996. Mr. Liu graduated from the Computer Science Department of Beijing University of Aeronautics And Astronautics in 1990. Since 2002, Mr. Liu has been an independent director of Beijing Bitech Corp., Ltd., a listed company in the PRC.

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LETTER FROM THE BOARD

Mr. Liu’s director emolument comprises an annual salary of HK$172,800, which is determined with reference to his responsibilities and the market rate and which will be reviewed annually by the Board. Mr. Liu will enter into a service contract with the Company for a term of three years commencing on the date of AGM and subject to retirement by rotation and re-election at annual general meeting of the Company in accordance with the Articles.

As at the Latest Practicable Date, Mr. Liu holds a share option to subscribe for 1,700,000 Shares. Save as disclosed, Mr. Liu does not have any interest in the Shares within the meaning of Part XV of the SFO.

Mr. Liu does not have any relationship with any directors, senior management, substantial shareholders and controlling shareholders of the Company.

Save as disclosed above, the Company considers that in relation to the appointment of Mr. Liu as a Director of the Company, there is no information which is discloseable nor is/was he involved in any of the matters required to be disclosed pursuant to any of the requirements of the provisions under paragraphs 13.51(2) of the Listing Rules, and there is no other matter which needs to be brought to the attention of the Shareholders.

ANNUAL GENERAL MEETING

A notice convening the AGM to be held on 11th May 2006 (Thursday) at 11:00 AM at Function Room — Cypress of the InterContinental Hong Kong, 18 Salisbury Road, Kowloon, Hong Kong is set out on pages 11 to 14 of this circular for the purpose of considering and, if thought fit, passing the resolutions set out therein.

You will find enclosed a proxy form for use at the AGM. Whether or not you are able to attend the AGM, you are requested to complete and return the enclosed proxy form in accordance with the instructions printed thereon to the Company’s principal place of business at Suite 3203-3204, Tower 6, The Gateway, Harbour City, Canton Road, Tsim Sha Tsui, Kowloon, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for holding the AGM. Completion and return of the form of proxy will not preclude you from attending and voting in person at the AGM, or any adjournment thereof, should you so wish.

PROCEDURES FOR DEMANDING A POLL BY SHAREHOLDERS

Pursuant to Article 72 of the Articles, a resolution put to the vote of a general meeting shall be decided on a show of hands unless (before or on the declaration of the result of the show of hands or on the withdrawal of any other demand for a poll) a poll is demanded by: (i) the chairman of such meeting; or (ii) at least two shareholders present in person (or in the case of a shareholder being a corporation by its duly authorised representative) or by proxy for the time being entitled to vote at the meeting; or (iii) any shareholder or shareholders present in person (or in the case of a shareholder being a corporation by its duly authorized representative) or by proxy and representing not less than one-tenth of the total voting rights of all the shareholders having the right to vote at the meeting; or

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LETTER FROM THE BOARD

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

Pursuant to Article 73 of the Articles, unless a poll is demanded and the demand is not withdrawn, a declaration by the chairman of the general meeting that a resolution has on a show of hands been carried, or carried unanimously, or by a particular majority, or lost, and an entry to that effect made in the book containing the minutes of the proceedings of the Company, shall be conclusive evidence of the facts without proof of the number or proportion of the votes recorded for or against the resolution.

RECOMMENDATION

The Directors consider that the granting of the Issue Mandate, the Repurchase Mandate and the extension to the Issue Mandate and the appointment of Mr. Liu Danlin as an executive Director of the Company are in the best interests of the Company and the Shareholders. Accordingly, the Directors recommend that the Shareholders vote in favour of the relevant resolutions as set out in the AGM Notice at the forthcoming AGM.

Yours faithfully ZHENG Fan Chairman

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EXPLANATORY STATEMENT

APPENDIX

This appendix includes an explanatory statement required by the Stock Exchange to be presented to Shareholders concerning the Repurchase Mandate proposed to be granted to the Directors.

1. STOCK EXCHANGE RULES FOR REPURCHASES OF SHARES

The Listing Rules permit companies with a primary listing on the Stock Exchange to repurchase their shares on the Stock Exchange subject to certain restrictions.

The Listing Rules provide that all proposed repurchases of shares by a company with a primary listing on the Stock Exchange must be approved by shareholders in advance by an ordinary resolution in a general meeting, either by way of a general mandate or by a specific approval of a particular transaction and that the shares to be repurchased must be fully paid up.

2. FUNDING AND IMPACT OF REPURCHASES

Any repurchase will be made out of funds which are legally available for the purpose in accordance with the memorandum and articles of association of the Company, the Listing Rules and the applicable laws of the Cayman Islands. As compared with the financial position of the Company as at 31st December 2005 (being the date to which the latest audited accounts of the Company have been made up), the Directors consider that there would not be a material adverse impact on the working capital and on the gearing position of the Company in the event the proposed repurchases were to be carried out in full during the proposed repurchase period.

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 of the Company or the gearing position which in the opinion of the Directors are from time to time appropriate for the Company.

3. REASONS FOR REPURCHASES

The Directors believe that it is in the best interests of the Company and the Shareholders to have a general authority from the Shareholders to enable the Directors to repurchase Shares on the market. Such repurchases may, depending on market conditions and funding arrangements at the time, lead to an enhancement of the net asset value of the Company and/or its earning per Share and will only be made when the Directors believe that such repurchases will benefit the Company and the Shareholders.

4. SHARE CAPITAL

As at the Latest Practicable Date, the issued share capital of the Company comprised 200,000,000 Shares.

Subject to the passing of the relevant ordinary resolutions to approve the general mandates to issue and repurchase Shares and on the basis that no further Shares are issued or repurchased between the Latest Practicable Date and the AGM, the Directors would be authorised to exercise the powers of the Company to repurchase a maximum of 20,000,000 Shares.

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EXPLANATORY STATEMENT

APPENDIX

5. UNDERTAKING OF THE DIRECTORS

The Directors have undertaken to the Stock Exchange to exercise the Repurchase Mandate in accordance with the Listing Rules, the applicable laws of the Cayman Islands and in accordance with the memorandum and articles of association of the Company.

6. EFFECT OF THE TAKEOVERS CODE

If as a result of a repurchase of 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 for the purpose of the Takeovers Code. As a result, a shareholder or a group of shareholders acting in concert (as that term is defined in the Takeovers Code), depending on the level of increase of the shareholder’s interest, could obtain or consolidate control of the Company and become obliged to make a mandatory offer in accordance with Rule 26 of the Takeovers Code.

As at the Latest Practicable Date, to the best of the knowledge and belief of the Directors, the substantial shareholders having interests in 10% or more of the issued share capital of the Company and the persons (not being a Director or chief executive of the Company) who had interests in Shares which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO were:

		**Approximately **	**Approximately **	%
		shareholding
		As at	If Repurchase
	Number of	the Latest	Mandate is
Name of Shareholder	Shares held	Practicable Date	exercised in full
Pacific Climax Limited	134,370,000	67.185%		74.65%
Overseas Chinese Town (HK) Company
Limited (Note 1)	134,370,000	67.185%		74.65%
Overseas Chinese Town Group
Company (Note 2)	134,370,000	67.185%		74.65%
Polyfairz Group Limited (formerly
known as Polyfair Limited)	15,630,000	7.815%		8.683%
Zhang Zhi Lin (Note 3)	15,630,000	7.815%		8.683%
Noor Financial Investment Company
KSC	12,542,000	6.271%		6.968%

Notes:

• (1) Overseas Chinese Town (HK) Company Limited is the beneficial owner of all the issued share capital in Pacific Climax Limited and therefore Overseas Chinese Town (HK) Company Limited is deemed, or taken to be interested in the 134,370,000 Shares which are beneficially owned by Pacific Climax Limited for the purposes of the SFO.

(2) Overseas Chinese Town Group Company is the beneficial owner of all the issued share in Overseas Chinese Town (HK) Company Limited (Overseas Chinese Town Group Company holds 454,999,998 shares in Overseas Chinese

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EXPLANATORY STATEMENT

APPENDIX

Town (HK) Company Limited in its own name. Mr. Zheng Fan, an executive Director, and Mr. Guo Yubin hold one share each in Overseas Chinese Town (HK) Company Limited on trust for Overseas Chinese Town Group Company) and which is in turn the beneficial owner of all the issued share capital in Pacific Climax Limited and therefore Overseas Chinese Town Group Company is deemed, or taken to be, interested in the 134,370,000 Shares which are beneficially owned by Pacific Climax Limtied for the purposes of the SFO.

• (3) Polyfairz Group Limited (formerly known as Polyfair Limited) is beneficially owned as to 90% by Mr. Zhang Zhi Lin and thus a controlled corporation of Mr. Zhang Zhi Lin, and Mr. Zhang Zhi Lin is deemed, or taken to be, interested in the 15,630,000 shares which are beneficially owned by Polyfairz Group Limited (formerly known as Polyfair Limited) for the purposes of the SFO.

In the event the Directors exercise in full the power to repurchase Shares which is proposed to be granted pursuant to the Repurchase Mandate, the interests of each of the above Shareholders in the Company would be increased to approximately the percentages as set out opposite their respective names in the table above. On the basis of the aforesaid increase of shareholding held by the Shareholders set out above, the Directors are not aware of any consequences of such repurchases of Shares that would result in the Shareholder, or group of Shareholders acting in concert, becoming obliged to make a mandatory offer under Rule 26 of the Takeovers Code if the Repurchase Mandate were exercised in full. Moreover, the Directors do not intend to exercise the power to repurchase Shares to an extent which would render the aforesaid Shareholders or any Shareholder or group of Shareholders obliged to make a mandatory offer under Rule 26 of the Takeovers Code. As the exercise of the Repurchase Mandate in full would result in insufficient public float of the Company, the Directors have no intention to exercise the Repurchase Mandate to such an extent that results in a public shareholding of less than the minimum public float requirement of 25% of the total issued share capital of the Company.

7. DIRECTORS, THEIR ASSOCIATES AND CONNECTED PERSONS

None of the Directors nor, to the best of the knowledge and belief of the Directors, having made all reasonable enquiries, any of their respective associates has any present intention, in the event that the proposed Repurchase Mandate is granted, to sell Shares to the Company. No connected person of the Company has notified the Company that he/she/it has a present intention to sell Shares to the Company nor has he/she/it undertaken not to sell any of the Shares held by him/her/it to the Company in the event that the Company is authorised to make repurchases of Shares.

8. SHARE REPURCHASE MADE BY THE COMPANY

No repurchase of Shares has been made by the Company (whether on the Stock Exchange or otherwise) during the six months ended on the Latest Practicable Date.

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EXPLANATORY STATEMENT

APPENDIX

9. SHARE PRICES

The highest and lowest prices at which the Shares have traded on the Stock Exchange in each of the months since the date of listing of the Shares on the Stock Exchange (i.e. 2 November 2005) and up to the Latest Practicable Date were as follows:

	Shares
	Highest	Lowest
	HK$	HK$
2005
November (from the date of listing of the Shares on
the Stock Exchange)	1.63	1.31
December	2.25	1.46
2006
January	2.10	1.42
February	2.30	1.34
March	2.95	2.25
April (till the Latest Practicable Date)	2.95	2.625

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NOTICE OF ANNUAL GENERAL MEETING

HUALI HOLDINGS (GROUP) LIMITED

(incorporated in the Cayman Islands with limited liability)

(Stock Code: 3366)

NOTICE IS HEREBY GIVEN that an annual general meeting (the “Meeting”) of Huali Holdings (Group) Limited (the “Company”) will be held on 11th May 2006 at 11:00 AM at Function Room — Cypress, InterContinental Hong Kong, 18 Salisbury Road, Kowloon, Hong Kong for considering and, if thought fit, passing, with or without amendments, the following resolutions as ordinary resolutions of the Company:

ORDINARY RESOLUTIONS

1. To receive and consider the audited consolidated accounts and reports of the directors and auditors of the Company and its subsidiaries for the year ended 31st December 2005.

2. To declare a final dividend for the year ended 31st December 2005.

3. To re-appoint KPMG as auditors and to authorise the Board of Directors to fix their remuneration.

4. To appoint Mr. Liu Danlin as an executive director of the Company and authorise the Board of Directors to fix Mr. Liu’s remuneration.

5. “ THAT :

6. (A) subject to paragraph (C) of this resolution below, the exercise by the directors of the Company (the “Directors”) during the Relevant Period (as hereinafter defined) of all the powers of the Company to allot, issue and deal with additional shares in the capital of the Company and to make or grant offers, agreements and options (including warrants, bonds and debentures convertible into shares of the Company) which might require the exercise of such powers be and is hereby generally and unconditionally approved;

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

8. (C) the aggregate nominal amount of share capital allotted or agreed conditionally or unconditionally to be allotted (whether pursuant to an option or otherwise) and issued by the Directors pursuant to the approval in paragraphs (A) and (B) of this resolution above, otherwise than pursuant to (i) a Rights Issue (as hereinafter defined); or (ii) the exercise of any options granted under the share option scheme adopted by the Company or similar arrangement for the time being adopted for the grant or issue to

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NOTICE OF ANNUAL GENERAL MEETING

officers and/or employees of the Company and/or any of its subsidiaries of shares or rights to subscribe for shares in the Company; or (iii) any scrip dividend scheme or similar arrangement providing for the allotment of shares in the Company in lieu of the whole or part of a dividend in accordance with the Articles of the Company from time to time, shall not exceed 20% of the aggregate nominal amount of the share capital of the Company in issue at the time of passing this resolution and the said approval shall be limited accordingly; and

• (D) for the purposes of this resolution:

“Relevant Period” means the period from the time of the passing of this resolution until whichever is the earliest of:

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

• (ii) the expiration of the period within which the next annual general meeting of the Company is required by the laws of the Cayman Islands or the Company’s Articles to be held; or

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

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

1. “ THAT :

2. (A) subject to paragraph (C) of this resolution below, the exercise by the directors of the Company (the “Directors”) during the Relevant Period (as hereinafter defined) of all powers of the Company to repurchase issued shares in the capital of the Company on The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) or any other stock exchange on which the shares of the Company may be listed and recognised by the Securities and Futures Commission of Hong Kong and the Stock Exchange for this purpose, and that the exercise by the Directors of all powers of the Company to repurchase such shares are subject to and in accordance with all applicable laws and the requirements of the Rules Governing the Listing of Securities on the Stock Exchange, be and is hereby, generally and unconditionally approved;

3. (B) the approval in paragraph (A) of this resolution above shall be in addition to any other authorisation given to the Directors and shall authorise the Directors on behalf of the Company during the Relevant Period to procure the Company to repurchase its shares at a price determined by the Directors;

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NOTICE OF ANNUAL GENERAL MEETING

• (C) the aggregate nominal amount of share capital of the Company repurchased or agreed conditionally or unconditionally to be repurchased by the Company pursuant to the approval in paragraph (A) of this resolution above during the Relevant Period shall not exceed 10% of the aggregate nominal amount of the issued share capital of the Company as at the time of passing this resolution and the said approval shall be limited accordingly; and

• (D) for the purposes of this resolution:

  • “Relevant Period” means the period from the time of the passing of this resolution until whichever is the earliest of:

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

  • (ii) the expiration of the period within which the next annual general meeting of the Company is required by the laws of the Cayman Islands or the Company’s Articles to be held; or

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

• “ THAT conditional upon the passing of ordinary resolution nos. 5 and 6 in the notice convening the annual general meeting of the Company, the aggregate nominal amount of the share capital of the Company which are repurchased by the Company pursuant to and in accordance with the said ordinary resolution no. 6 shall be added to the aggregate nominal amount of the share capital of the Company that may be allotted or agreed conditionally or unconditionally to be allotted by the directors of the Company pursuant to and in accordance with the said ordinary resolution no. 5.”

By Order of the Board FONG Fuk Wai Company Secretary

Hong Kong, 19 April 2006

Notes:

1. Any member of the Company entitled to attend and vote at the Meeting shall be entitled to appoint another person as his proxy to attend and vote instead of him. A member who is the holder of two or more shares may appoint more than one proxy to represent him and vote on his behalf at the Meeting. A proxy need not be a member of the Company. On a poll, votes may be given either personally or by proxy.

2. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing or, if the appointor is a corporation, either under its seal or under the hand of an officer, attorney or other person authorized to sign the same.

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NOTICE OF ANNUAL GENERAL MEETING

1. The instrument appointing a proxy and (if required by the Board) the power of attorney or other authority (if any) under which it is signed, or a notarially certified copy of such power or authority, shall be delivered to the principal place of business of the Company at Suite 3203-3204, Tower 6, The Gateway, Harbour City, Canton Road, Tsim Sha Tsui, Kowloon, Hong Kong not less than 48 hours before the time appointed for holding the Meeting or any adjournment thereof at which the person named in the instrument proposes to vote or, in the case of a poll taken subsequently to the date of the Meeting or any adjournment thereof, not less than 24 hours before the time appointed for the taking of the poll and in default the instrument of proxy shall not be treated as valid.

2. No instrument appointing a proxy shall be valid after expiration of 12 months from the date named in it as the date of its execution, except at an adjourned meeting or on a poll demanded at the Meeting or any adjournment thereof in cases where the Meeting was originally held within 12 months from such date.

3. Where there are joint holders of any shares, any one of such joint holder may vote at the Meeting, either in person or by proxy, in respect of such share as if he/she were solely entitled thereto, but if more than one of such joint holders be present at the Meeting, the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders, and for this purpose, seniority shall be determined by the order in which the names stand in the Register of Members of the Company in respect of the joint holding.

4. Completion and delivery of an instrument appointing a proxy shall not preclude a member from attending and voting in person at the Meeting if the member so wish and in such event, the instrument appointing a proxy should be deemed to be revoked.

5. An explanatory statement containing the information necessary to enable the members to make an informed decision as to whether to vote for or against Ordinary Resolution 6 as set out in this notice is enclosed.

6. The transfer books and Register of Members of the Company will be closed from 9th May 2006 to 11th May 2006, both days inclusive. During such period, no share transfers will be effected. In order to qualify for the proposed final dividend and attending the annual general meeting, all transfer documents, accompanied by the relevant share certificates, must be lodged with the Company’s branch share registrars in Hong Kong, Computershare Hong Kong Investor Services Limited whose share registration public offices are located at Shops 1712-16, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Hong Kong for registration no later than 4:00 p.m. on 8th May 2006.

7. Details of Mr. Liu Danlin are set out in the Letter from the Board in this circular.

8. A form of proxy for use at the Meeting is enclosed.

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