Silkwave Inc — Audit Report / Information 2005

Dec 20, 2005

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SOUTH CHINA HOLDINGS LIMITED

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 265)

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SOUTH CHINA INDUSTRIES LIMITED

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 413)

CHANGE OF AUDITORS

The board of directors (the “Board”) of South China Holdings Limited and South China Industries Limited (the “Companies”) announce that Deloitte Touche Tohmatsu have resigned as auditors of the Companies and their subsidiaries with effect from 15 December 2005 as the Companies and Deloitte Touche Tohmatsu could not reach consensus on the audit fees for the financial year ending 31 December 2005. In their notices of resignation, Deloitte Touche Tohmatsu have confirmed that there are no matters in relation to their resignation which they consider should be brought to the attention of the respective members of the Companies.

The Board hereby further announce that Ernst & Young have been appointed to fill the casual vacancies in the offices of auditors of the Companies with effect from 20 December 2005 until the conclusion of the next annual general meeting of the Companies.

By Order of the Board By Order of the Board South China Holdings Limited South China Industries Limited Cheung Choi Ngor Cheung Choi Ngor Director Director

Hong Kong, 20 December 2005

As at the date of this announcement, the board of directors of South China Holdings Limited comprises (1) Mr. Ng Hung Sang, Mr. Richard Howard Gorges, Ms. Cheung Choi Ngor and Mr. Ng Yuk Fung, Peter as executive directors; (2) Ms. Ng, Jessica Yuk Mui and Mr. David Michael Norman as nonexecutive directors; and (3) Mr. David John Blackett, Ms. Wong Siu Yin, Elizabeth and Mr. Cheng Hong Kei as independent non-executive directors.

As at the date of this announcement, the board of directors of South China Industries Limited comprises (1) Mr. Ng Hung Sang, Mr. Richard Howard Gorges, Ms. Cheung Choi Ngor and Mr. Ng Yuk Fung, Peter as executive directors; (2) Ms. Ng, Jessica Yuk Mui as non-executive director; and (3) Mr. Lee Wai Choi, Albert, Mr. Chiu Sin Chun, Ms. Wong Siu Yin, Elizabeth and Ms. Li Yuen Yu, Alice as independent non-executive directors.

A copy of this announcement can be obtained from our website www.sctrade.com

Please also refer to the published version of this announcement in The Standard.

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