Silkwave Inc — Proxy Solicitation & Information Statement 2006

May 12, 2006

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 you should take, 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 South China Holdings Limited, you should at once hand this circular and the accompanying proxy form 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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SOUTH CHINA HOLDINGS LIMITED

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 265)

GENERAL MANDATES TO ISSUE AND REPURCHASE SHARES, RE-ELECTION OF DIRECTORS AND NOTICE OF ANNUAL GENERAL MEETING

A notice convening the Annual General Meeting of South China Holdings Limited (the “Company”) to be held at 28th Floor, Bank of China Tower, 1 Garden Road, Central, Hong Kong on Tuesday, 30 May 2006 at 12:00 noon 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 advised to read the notice and requested to complete and return the enclosed proxy form, in accordance with the instructions printed thereon, to the Company’s share registrar, Union Registrars Limited at 311-312 Two Exchange Square, Central, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for the holding of the Annual General Meeting or any adjournment thereof. Completion and return of the proxy form will not preclude you from attending, and voting in person at, the Annual General Meeting or any adjournment thereof should you so wish.

28 April 2006

CONTENTS

	Page
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
General Mandates and Repurchase Mandate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Re-election of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Right to demand a poll . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
APPENDIX I EXPLANATORY STATEMENT FOR THE REPURCHASE
MANDATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
APPENDIX II BIOGRAPHICAL DETAILS OF RETIRING DIRECTORS . . . . . . . .	9
NOTICE OF THE ANNUAL GENERAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11

— i —

DEFINITIONS

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

“AGM”	the annual general meeting of the Company to be convened
	and held at 28th Floor, Bank of China Tower, 1 Garden Road,
	Central, Hong Kong on Tuesday, 30 May 2006 at 12:00 noon,
	notice of which is set out on pages 11 to 14 of this circular
“Articles of Association”	the articles of association of the Company as may be amended
	from time to time
“Board”	the Company’s Board of Directors
“Companies Law”	the Companies Law, Cap. 22 (Law 3 of 1961, as consolidated
	and revised) of the Cayman Islands
“Company”	South China Holdings Limited, an exempted company
	incorporated in the Cayman Islands with limited liability, the
	shares of which are listed on the main board of the Stock
	Exchange
“Director(s)”	the director(s) of the Company
“General Mandates”	the general and unconditional mandates proposed under
	ordinary resolutions numbered 4(A) and 4(C) in the notice of
	the AGM set out on pages 11 to 13 of this circular to be
	granted to the Directors to (i) allot and issue shares of the
	Company up to an aggregate nominal amount not exceeding
	20% of the aggregate nominal value of the issued share
	capital of the Company on the date of the passing of the said
	ordinary resolution; (ii) to extend the mandate in (i) above by
	an amount representing the aggregate nominal amount of the
	Shares repurchased by the Company made pursuant to and in
	accordance with the Repurchase Mandate
“Group”	the Company and its subsidiaries
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong
“Hong Kong”	the Hong Kong Special Administrative Region of The
	People’s Republic of China
“Latest Practicable Date”	24 April 2006, being the latest practicable date prior to the
	printing of this circular for ascertaining certain information
	contained herein
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock
	Exchange

— 1 —

DEFINITIONS

“Memorandum”	the memorandum of association of the Company, as	may	be
	amended from time to time
“Repurchase Mandate”	the general and unconditional mandate proposed	under
	ordinary resolution numbered 4(B) in the notice of the AGM
	set out on pages 12 to 13 of this circular to be granted to		the
	Directors to repurchase the Company’s shares up	to	an
	aggregate nominal amount not exceeding 10%	of	the
	aggregate nominal value of the issued share capital	of	the
	Company on the date of the passing of the said ordinary
	resolution
“SFO”	the Securities and Futures Ordinance (Chapter 571	of	the
	Laws of Hong Kong)
“Share(s)”	ordinary share(s) of HK$0.025 each in the share capital of		the
	Company
“Shareholder(s)”	holder(s) of Share(s)
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Takeovers Code”	the Codes on Takeovers and Mergers and Share Repurchases
“%”	per cent.

— 2 —

LETTER FROM THE BOARD

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SOUTH CHINA HOLDINGS LIMITED

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 265)

Executive Directors:

Mr. Ng Hung Sang (Chairman)

Mr. Richard Howard Gorges Ms. Cheung Choi Ngor

Mr. Ng Yuk Fung, Peter

Non-executive Directors:

Registered office:

Offshore Incorporations (Cayman) Limited Scotia Centre 4th Floor, P.O. Box 2804 George Town Grand Cayman Cayman Islands

Mr. David Michael Norman

Ms. Ng Yuk Mui, Jessica

Independent Non-executive Directors:

Mr. David John Blackett

Ms. Wong Siu Yin, Elizabeth

Mr. Cheng Hong Kei

Head Office and Principal Place of Business in Hong Kong:

28th Floor Bank of China Tower 1 Garden Road Central Hong Kong 28 April 2006

To the Shareholders

Dear Sir or Madam

GENERAL MANDATES TO ISSUE AND REPURCHASE SHARES, RE-ELECTION OF DIRECTORS

AND

NOTICE OF ANNUAL GENERAL MEETING

INTRODUCTION

The purpose of this circular is to provide you with the information regarding the proposed granting of the General Mandates and the Repurchase Mandate, the re-election of Directors and to give you notice of the AGM at which resolutions will be proposed to consider, and if thought fit, approve at the AGM, among other matters, the granting of the General Mandates and the Repurchase Mandate and the re-election of Directors.

— 3 —

LETTER FROM THE BOARD

GENERAL MANDATES AND REPURCHASE MANDATE

At an annual general meeting of the Company held on 25 May 2005, resolutions were passed by the Shareholders giving general unconditional mandates to the Directors to issue and allot Shares and to exercise the powers of the Company to repurchase its own Shares in accordance with the Listing Rules. These general mandates will lapse at the conclusion of the AGM.

It is therefore necessary to renew the General Mandates and the Repurchase Mandate at the AGM and ordinary resolutions will be proposed to seek the Shareholders’ approval for granting of the General Mandates and the Repurchase Mandate at such meeting. Details of the aforesaid resolutions are set out in ordinary resolutions numbered 4 in the notice of the AGM.

The General Mandates and the Repurchase Mandate, if approved at the AGM, will continue in force until the conclusion of the next annual general meeting of the Company or the expiration of the period within which the next annual general meeting of the Company is required by the Articles of Association of the Company or any applicable laws of the Cayman Islands to be held or until revoked or varied by ordinary resolution by the Shareholders in general meeting, whichever occurs first.

An explanatory statement as required by the Listing Rules to provide the Shareholders with all the information reasonably necessary for them to make an informed decision on the proposed resolution for the granting of the Repurchase Mandate is set out in the Appendix I to this circular.

RE-ELECTION OF DIRECTORS

At the AGM, ordinary resolutions will also be proposed to re-elect Mr. Ng Yuk Fung, Peter, Ms. Ng Yuk Mui, Jessica and Mr. David Michael Norman as Directors of the Company in accordance with the Articles of Association. To enable Shareholders to make an informed decision on the re-election of these retiring Directors, the biographical details of the retiring Directors, as required under Chapter 13 of the Listing Rules, are set out in the Appendix II to this circular for the information of Shareholders.

ANNUAL GENERAL MEETING

A notice convening the AGM is set out on pages 11 to 14. At the AGM, relevant resolutions will be proposed to approve the granting of the General Mandates and the Repurchase Mandate and the re-election of Directors.

There is enclosed with this circular a proxy form for use at the AGM. Whether or not you intend to attend the AGM or any adjournment, you are requested to complete the proxy form in accordance with the instructions printed thereon and return the same to the Company’s share registrar, Union Registrars Limited at 311-312 Two Exchange Square, Central, Hong Kong as soon as possible and in any event not less than 48 hours before the time fixed for holding the AGM or any adjournment thereof. Completion and return of the proxy form will not preclude you from attending and voting in person at the AGM or any adjournment thereof should you so wish. In the event that a Shareholder having lodged a proxy form attends the AGM, his proxy form will be deemed to have been revoked.

— 4 —

LETTER FROM THE BOARD

RIGHT TO DEMAND A POLL

Pursuant to the Articles of Association of the Company, 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 duly demanded. A poll may be demanded by:

• (i) the Chairman of the meeting; or

• (ii) at least five members present in person or by proxy and entitled to vote or who represent in the aggregate not less than one-tenth of the total voting rights of all members having the right to attend and vote at the meeting; or

• (iii) any member or members present in person or by proxy and holding shares conferring a right to attend and vote at the meeting on which there have been paid up sums in the aggregate equal to not less than one-tenth of the total sum paid up on all shares conferring that right.

Unless a poll is so demanded and not withdrawn, a declaration by the Chairman 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 in the Company’s book containing the minutes of proceedings of meetings of the Company shall be conclusive evidence of the fact without proof of the number or proportion of the votes recorded in favour of or against such resolution.

RECOMMENDATION

The Directors consider that the adoption of the General Mandates and the Repurchase Mandate and the re-election of Directors are in the best interests of the Company, the Group and the Shareholders as a whole and so recommend the Shareholders to vote in favour of the resolutions to be proposed at the AGM. The Directors will vote all their shareholdings in favour of the resolutions.

Yours faithfully For and on behalf of the Board Ng Hung Sang Chairman

— 5 —

APPENDIX I EXPLANATORY STATEMENT FOR THE REPURCHASE MANDATE

This serves as an explanatory statement, as required to be sent to all Shareholders under the Listing Rules, to provide the relevant information in connection with the Repurchase Mandate.

1. EXERCISE OF THE REPURCHASE MANDATE

As at the Latest Practicable Date, the number of Shares of the Company in issue was 1,823,401,376.

Subject to the passing of the resolution in relation to the Repurchase Mandate and on the basis that no further Shares are issued or repurchased by the Company prior to the AGM, the Company would be allowed under the Repurchase Mandate to repurchase a maximum of 182,340,137 Shares (representing 10% of the issued share capital of the Company) during the period from the date of the passing of the ordinary resolution numbered 4(B) in the notice of the AGM set out on pages 12 to 13 of this circular up to (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 Articles of Association or any applicable laws of the Cayman Islands to be held; or (iii) the revocation or variation of the Repurchase Mandate by ordinary resolution of the Shareholders in general meeting, whichever occurs first.

2. REASONS FOR THE REPURCHASE

The Directors believe that the Repurchase Mandate is in the best interests of the Company and the Shareholders. 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 earnings per Share and will only be made when the Directors believe that such a repurchase will benefit the Company and the Shareholders.

3. FUNDING OF REPURCHASES

In repurchasing Shares, the Company may only apply funds legally available for such purpose in accordance with the Memorandum and Articles of Association, the Listing Rules and the applicable laws and regulations of the Cayman Islands. The Company is empowered by its Articles of Association to repurchase its Shares. Under the Cayman Islands law, the capital portion payable on repurchase by the Company may be paid out of the profits of the Company or out of the proceeds of a fresh issue of shares made for the purpose of the repurchase or, subject to the Companies Law, out of the capital and, in the case of any premium payable on a repurchase, such premium may be paid out of the profits of the Company or from sums standing to the credit of the share premium account of the Company or, subject to the Companies Law, out of capital.

4. GENERAL

There may not have a material adverse impact on the working capital or gearing position of the Company (as compared with the position disclosed in the audited accounts contained in the annual report of the Company for the financial year ended 31 December 2005) in the event that the Repurchase Mandate was to be exercised in full at any time during the proposed repurchase period.

— 6 —

APPENDIX I EXPLANATORY STATEMENT FOR THE REPURCHASE MANDATE

5. UNDERTAKING

The Directors have undertaken to the Stock Exchange that, so far as the same may be applicable, they will exercise the Repurchase Mandate only in accordance with the Listing Rules, the Memorandum and Articles of Association of the Company and the applicable laws of the Cayman Islands.

None of the Directors nor, to the best of their knowledge having made all reasonable enquiries, any of their associates (as defined in the Listing Rules) have any present intention, in the event that the Repurchase Mandate is approved by the Shareholders, to sell any securities to the Company or its subsidiaries.

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.

6. TAKEOVERS CODE

If as a result of a repurchase of Shares, a Shareholder’s proportionate interest in the voting rights of the Company increases, such increase will be treated as an acquisition for the purposes of Rule 32 of the Takeovers Code. As a result, a shareholder or a group of shareholders acting in concert (as interpreted according to the Takeovers Code), depending on the level of the increase of the shareholder’s interest, could obtain or consolidate control of the Company and become(s) obliged to make a mandatory offer in accordance with Rule 26 of the Takeovers Code.

As at the Latest Practicable Date, the substantial shareholders of the Company who were directly, or indirectly, interested in 5% or more of the issued share capital of the Company were as follows:

Name of Shareholder	Capacity	Number of		Percentage
		Shares held	Note	holding
Earntrade Investments Limited	Beneficial owner
(“Earntrade”)		487,949,760	(a)	26.76%
Bannock Investment Limited	Beneficial owner
(“Bannock”)		237,303,360	(a)	13.01%
Parkfield Holdings Limited	Beneficial owner
(“Parkfield”)		371,864,000		20.39%
Fung Shing Group Limited	Beneficial owner
(“Fung Shing”)		396,050,252		21.72%
Mr. Ng Hung Sang	Beneficial interests
	and Interest of
	controlled
	corporations	1,344,181,812	(b)	73.72%

Notes:

• (a) Earntrade is the holding company of Bannock. The 487,949,760 Shares referred to above include the 237,303,360 Shares held by Bannock. Mr. Ng Hung Sang, Mr. Richard Howard Gorges and Ms. Cheung Choi Ngor have beneficial interests in Earntrade.

— 7 —

APPENDIX I EXPLANATORY STATEMENT FOR THE REPURCHASE MANDATE

• (b) Mr. Ng Hung Sang, a Director of the Company, through Parkfield, Fung Shing, Ronastar Investments Limited, Bannock and Earntrade, holds a total of 1,344,181,812 Shares, being 73.72% shareholdings in the Company. Mr. Ng is taken to be interested in 1,344,181,812 Shares by virtue of the SFO.

• (c) All interests disclosed above represent long positions in the Shares.

Mr. Ng Hung Sang through his indirect interests in the Company, was taken to be interested in the 1,344,181,812 Shares of the Company. In the event that the Directors exercise the proposed Repurchase Mandate in full, then (if the present shareholdings otherwise remained the same), the shareholding in the Company held by Mr. Ng would be increased to approximately 81.91% of the issued share capital of the Company and such increase would not give rise to an obligation to make a mandatory offer under Rule 26 of the Takeovers Code but will reduce the amount of Shares held by the public to less than 25% of the total issued share capital of the Company. The Directors have no intention to repurchase Shares to such an extent which will result in the amount of Shares held by the public being reduced to less than 25%.

7. SHARE REPURCHASE MADE BY THE COMPANY

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

8. SHARES PRICES

The highest and lowest prices at which Shares have been traded on the Stock Exchange during each of the previous twelve months preceding the Latest Practicable Date were as follows:

	**Price **	**per **	Share
	Highest		Lowest
	(HK$)		(HK$)
2005
April	0.320		0.270
May	0.285		0.285
June*	N/A		N/A
July	0.265		0.228
August	0.250		0.220
September	0.218		0.218
October	0.210		0.200
November	0.200		0.199
December	0.200		0.150
2006
January	0.260		0.210
February	0.280		0.236
March	0.360		0.260

(* There was no transaction on the Shares recorded for the month.)

— 8 —

APPENDIX II BIOGRAPHICAL DETAILS OF RETIRING DIRECTORS

To enable Shareholders to make an informed decision on the re-election of the retiring Directors, we set out below the biographical details of the retiring Directors for the information of Shareholders.

1. Mr. Ng Yuk Fung, Peter, Executive Director

Aged 26, is an Executive Director of South China Industries Limited (“South China Industries”), Wah Shing International Holdings Limited (“Wah Shing”), Jessica Publications Limited (“Jessica”) and Capital Publications Limited (“Capital”). He holds a Bachelor’s Degree in Law from King’s College London, University of London in the United Kingdom. He was appointed as an Executive Director of the Company in September 2003. Save as disclosed above, Mr. Ng does not hold any directorships in any other listed public companies currently or in the last three years.

Mr. Ng does not have any interest in any shares of the Company within the meaning of Part XV of SFO. He has not entered into a service contract with the Company and is subject to retirement by rotation and re-election in accordance with the Articles of Association. Mr. Ng is a son of Mr. Ng Hung Sang, the Chairman and the controlling shareholder of the Company and a brother of Ms. Ng Yuk Mui, Jessica, a Non-executive Director of the Company. Mr. Ng received a director’s emolument of HK$642,000 for the year ended 31 December 2005 which is determined by reference to his skills, knowledge, involvement and performance in the Company, with reference also to the Company’s performance and profitability, as well as industry practice. Save as disclosed above, Mr. Ng does not have any other relationships with any directors, senior management, management shareholders, substantial shareholders or controlling shareholders of the Company.

2. Ms. Ng Yuk Mui, Jessica, Non-executive Director

Aged 27, is a Non-executive Director of South China Industries, Capital and Jessica. She holds a Bachelor’s Degree in Law from King’s College London, University of London in the United Kingdom. Ms. Ng is an associate member of the Chartered Institute of Management Accountants and a member of the Chinese People’s Political Consultative Conference Tianjin Provincial Committee. She was appointed as an Executive Director of the Company in September 2003 and redesignated as a Non-executive Director of the Company with effect from 1 July 2005. Save as disclosed above, Ms. Ng does not hold any directorships in any other listed public companies currently or in the last three years.

Ms. Ng does not have any interest in any shares of the Company within the meaning of Part XV of SFO. She has not entered into a service contract with the Company and is subject to retirement by rotation and re-election in accordance with the Articles of Association. Ms. Ng is the daughter of Mr. Ng Hung Sang, the Chairman and the controlling shareholder of the Company and the sister of Mr. Ng Yuk Fung, Peter, an Executive Director of the Company. Ms. Ng received a director’s emolument of HK$60,000 for the year ended 31 December 2005 which is determined by reference to her skills, knowledge, involvement and performance in the Company, with reference also to the Company’s performance and profitability, as well as industry practice. Save as disclosed above, Ms. Ng does not have any other relationships with any directors, senior management, management shareholders, substantial shareholders or controlling shareholders of the Company.

— 9 —

BIOGRAPHICAL DETAILS OF RETIRING DIRECTORS

APPENDIX II

3. Mr. David Michael Norman, Non-executive Director

Age 50, is a partner of the Hong Kong office of an international law firm, Richards Butler. He studied philosophy and psychology at Oxford University in the United Kingdom and was admitted as a solicitor in the United Kingdom in 1981 and in Hong Kong in 1984 respectively. He was appointed as a Non-executive Director of the Company in January 1995. Save as disclosed above, Mr. Norman does not hold any directorships in any other listed public companies currently or in the last three years.

Mr. Norman does not have any interest in any shares of the Company within the meaning of Part XV of SFO. He has not entered into any service contract with the Company and is subject to retirement by rotation and re-election in accordance with the Articles of Association. He received a director’s emolument of HK$120,000 for the year ended 31 December 2005 which is determined by reference to his skills, knowledge, involvement and performance in the Company, with reference also to the Company’s performance and profitability, as well as industry practice. Save as disclosed above, Mr. Norman does not have any other relationships with any directors, senior management, management shareholders, substantial shareholders or controlling shareholders of the Company.

Other than those disclosed above, each of the above retiring Director confirmed that there is no information to be disclosed pursuant to any of the requirements of Rule 13.51(2)(h)-(v) of the Listing Rules.

Save as disclosed above, there are no other matters that need to be brought to the attention of the Shareholders of the Company in connection with their re-election.

— 10 —

NOTICE OF ANNUAL GENERAL MEETING

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SOUTH CHINA HOLDINGS LIMITED

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 265)

NOTICE IS HEREBY GIVEN that an Annual General Meeting of South China Holdings Limited (the “Company”) will be held at 12:00 noon on Tuesday, 30 May 2006 at 28th Floor, Bank of China Tower, 1 Garden Road, Central, Hong Kong for the purpose of transacting the following business:

ORDINARY BUSINESS

1. To consider and adopt the audited financial statements together with the Reports of the Directors and Auditors for the year ended 31 December 2005.

2. To re-elect Directors and to authorise the Board of Directors to fix the Directors’ remuneration.

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

SPECIAL BUSINESS

1. To consider and, if thought fit, to pass with or without modification the following resolutions as ordinary resolutions:

ORDINARY RESOLUTIONS

(A). “THAT:

• (a) subject to sub-paragraph (c) of this Resolution, the exercise by the Directors of the Company during the Relevant Period (as defined below) of all the powers of the Company to allot, issue and deal with additional shares or securities convertible into shares, or options, warrants or similar rights to subscribe for any shares 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 sub-paragraph (a) of this Resolution shall authorise the Directors of the Company 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;

• (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 Directors of the Company pursuant to the approval in sub-paragraph (a) of this

— 11 —

NOTICE OF ANNUAL GENERAL MEETING

Resolution, otherwise than pursuant to (i) a Rights Issue as hereinafter defined, or (ii) an issue of shares upon the exercise of rights of subscription or conversion under the terms of any warrants issued by Company or any securities which are convertible into shares of the Company, or (iii) the exercise of options granted under any option scheme or similar arrangement for the time being adopted for the grant or issue to officers and/or employees of the Company and/or any of its subsidiaries of shares or rights to acquire shares of the Company or (iv) an issue of shares as scrip dividend or similar arrangement providing for the allotment of shares in lieu of the whole or part of a dividend on shares of the Company in accordance with the Articles of Association of the Company, shall not exceed 20 per cent. of the aggregate nominal amount of the share capital of the Company in issue as at the date 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 passing of this Resolution until whichever is the earlier 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 Articles of Association of the Company or any other applicable laws of the Cayman Islands to be held; and

• (iii) the date on which the authority set out in this Resolution is revoked or varied by an ordinary resolution of the shareholders in general meeting.

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

(B) “THAT:

• (a) subject to sub-paragraph (b) of this Resolution, the exercise by the Directors of the Company during the Relevant Period (as defined below) of all the 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 on any other exchange on which the securities of the Company may be listed and recognised for this purpose by The Securities and Futures Commission of Hong Kong and the Stock Exchange

— 12 —

NOTICE OF ANNUAL GENERAL MEETING

• (“Recognised Stock Exchange”) subject to and in accordance with all applicable laws and the requirements of the Listing Rules as amended from time to time or that of any other Recognised Stock Exchange, be and is hereby generally and unconditionally approved;

• (b) the aggregate nominal amount of the shares which may be repurchased pursuant to the approval in sub-paragraph (a) of this Resolution, shall not exceed 10 per cent. of the aggregate nominal amount of the share capital of the Company in issue as at the date of passing this Resolution and the said approval shall be limited accordingly; and

• (c) for the purposes of this Resolution:

“Relevant Period” means the period from the passing of this Resolution until whichever is the earlier 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 Articles of Association of the Company or any other applicable law to be held; and

• (iii) the date on which the authority set out in this Resolution is revoked or varied by an ordinary resolution of the shareholders in general meeting.”

• (C) “THAT conditional upon the Resolutions Nos. 4(A) and 4(B) set out in the notice convening this Meeting being passed, the aggregate nominal amount of the number of shares which are repurchased by the Company after the date of the passing of this Resolution (up to a maximum of 10 per cent. of the aggregate nominal amount of the share capital of the Company in issue as at the date of passing of this Resolution) shall be added to the aggregate nominal amount of share capital that may be allotted or agreed conditionally or unconditionally to be allotted by the Directors of the Company pursuant to Resolution No. 4(A) set out in the notice convening this Meeting.”

• To transact any other ordinary business.

On behalf of the Board

Cheung Choi Ngor Director

Hong Kong, 28 April 2006

— 13 —

NOTICE OF ANNUAL GENERAL MEETING

Notes:

1. A member entitled to attend and vote at the annual general meeting is entitled to appoint one or more proxies to attend and on a poll vote instead of him. A proxy need not be a member of the Company.

2. In order to be valid, a form of proxy and the power of attorney or other authority (if any) under which it is signed, or a notarially certified copy of such power of authority, must be deposited at the Company’s Share Registrar, Union Registrars Limited of 311-312 Two Exchange Square, Central, Hong Kong, not less than 48 hours before the time fixed for holding the Meeting or any adjourned meeting thereof. Completion and return of the form of proxy will not preclude any member from attending and voting in person at the annual general meeting or any adjourned meeting thereof should he so wishes.

3. In case of joint shareholdings, the vote of the senior joint shareholder who tenders a vote, whether in person or by proxy, will be accepted to the exclusion of the votes of the other joint shareholder(s) and for this purposes seniority will be determined by the order in which the names stand in the Register of Members of the Company in respect of the joint shareholding.

4. In relation to Resolution No. 4(B), an explanatory statement (as required by the Listing Rules) is set out in Appendix I to this circular.

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