Skyworth Group Limited — Proxy Solicitation & Information Statement 2007

Dec 7, 2007

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular, you should consult your licensed securities dealer, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Skyworth Digital Holdings Limited, you should at once hand this circular to the purchaser or transferee or to the bank or licensed securities dealer or other agent through whom the sale or transfer 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.

SKYWORTH DIGITAL HOLDINGS LIMITED ( )[*]

(Incorporated in Bermuda with limited liability)

(Stock code: 0751)

DISCLOSEABLE TRANSACTION

Disposal of 16% equity interest

in

Skyworth Digital Technology (Shenzhen) Company Limited

* For identification purpose only

10 December 2007

CONTENTS

	Page
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
APPENDIX – GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10

−i −

DEFINITIONS

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

“Announcement”	the announcement of the Company dated 21 November
	2007 in relation to the disposal of 16% of the equity
	interest in SDT pursuant to the Definitive Agreements
“Board”	the board of Directors
“Company”	Skyworth Digital Holdings Limited, a company
	incorporated in Bermuda with limited liability, the Shares
	of which are listed on the Main Board of the Stock
	Exchange
“Definitive Agreements”	the sale and purchase agreement dated 29 September
	2007 entered into between RGB and Mr. Li Pu and two
	sale and purchase agreements both dated 20 November
	2007 entered into between RGB and Mr. Ye Xiao Bin and
	Shenzhen Lingyou, respectively, and the three
	supplemental agreements dated 20 November 2007 and
	entered into between RGB and each of the Purchasers,
	respectively, all in relation to the sale and purchase of, in
	aggregate, 16% of the equity interest in SDT
“Directors”	the directors of the Company
“Disposal”	the disposal of, in aggregate, 16% of the equity interest in
	SDT to the Purchasers by RGB pursuant to the Definitive
	Agreements
“Group”	the Company and its subsidiaries
“HK$”	Hong Kong dollar, the lawful currency of Hong Kong
“Hong Kong”	the Hong Kong Special Administration Region of the
	PRC
“Latest Practicable Date”	6 December 2007, being the latest practicable date prior
	to the printing of this circular for the purpose of
	ascertaining certain information contained in this circular
“Listing Rules”	The Rules Governing the Listing of Securities on the
	Stock Exchange

−1 −

DEFINITIONS

“PRC” The People’s Republic of China	“PRC” The People’s Republic of China
“Previous Disposal” the disposal of, in aggregate, 12% of the equity interest in
SDT by RGB as detailed in the circular of the Company
dated 10 October 2007
“Purchasers” three purchasers, namely Mr. Li Pu, Mr. Ye Xiao Bin and
Shenzhen Linyou under the Definitive Agreements
“RGB”	-RGB (Shenzhen Chuangwei-
RGB Electronics Co., Ltd), a sino-foreign equity joint
venture registered in the PRC which is an indirect 100%
owned subsidiary of the Company
“RMB” Reminbi, the lawful currency of the PRC “SDT” (Skyworth Digital
Technology (Shenzhen) Company Limited), a limited
liability company established in the PRC
“Share(s)” share(s) of HK$0.1 each in the capital of the Company
“Shareholder(s)” holder(s) of the Shares
“Shenzhen Lingyou”	(Shenzhen Lingyou Investment
Company Limited), being one of the Purchasers and a
limited liability company established in the PRC
“Stock Exchange” The Stock Exchange of Hong Kong Limited
“%” per	cent.

In this circular, amounts denominated in RMB have been converted into HK$ at the rate of RMB0.97 = HK$1.

−2 −

LETTER FROM THE BOARD

SKYWORTH DIGITAL HOLDINGS LIMITED ( )[*]

(Incorporated in Bermuda with limited liability)

(Stock code: 0751)

Executive Directors: Mr. Zhang Xuebin (Executive Chairman & Chief Executive Officer) Ms. Ding Kai Mr. Leung Chi Ching, Frederick Ms. Lin Wei Ping Mr. Yang Dongwen

Independent non-executive Directors: Mr. So Hon Cheung, Stephen Mr. Li Weibin Mr. Xie Zhengcai

Registered office: Clarendon House 2 Church Street Hamilton HM11 Bermuda

Principal place of business: Rooms 1601-04 Westlands Centre 20 Westlands Road Quarry Bay Hong Kong

10 December 2007

To the Shareholders

Dear Sir or Madam,

DISCLOSEABLE TRANSACTION

Disposal of 16% equity interest

in

Skyworth Digital Technology (Shenzhen) Company Limited

INTRODUCTION

Reference is made to the announcements of the Company dated 19 September 2007 and 24 September 2007 and the circular of the Company dated 10 October 2007, which detailed the Previous Disposal involving a disposal of, in aggregate, 12% of the equity interest in SDT by a 100% indirectly owned subsidiary of the Company (i.e. RGB) to the senior management and staff of SDT. Completion of the Previous Disposal took place on 27 November 2007.

* For identification purpose only

−3 −

LETTER FROM THE BOARD

On 21 November 2007, the Board announced that on 29 September 2007 (for the sale and purchase agreement with Mr. Li Pu) and 20 November 2007, RGB, a wholly owned subsidiary of the Company, entered into the Definitive Agreements with each of the Purchasers, pursuant to which RGB has agreed to dispose of, in aggregate, 16% of the equity interest in SDT to the Purchasers at an aggregate consideration of approximately RMB118.0 million (equivalent to approximately HK$121.7 million). The Disposal constitutes a discloseable transaction under the Listing Rules.

The purpose of this circular is to provide you with, among other things, further information in relation to the Disposal.

THE DEFINITIVE AGREEMENTS

Date

All dated 20 November 2007 except for the sale and purchase agreement entered into with Mr. Li Pu which was dated 29 September 2007

Parties

Vendor: RGB, an indirect wholly-owned subsidiary of the Company Purchasers: the Purchasers, namely Mr. Li Pu, Mr. Ye Xiao Bin and Shenzhen Lingyou. To the best of the knowledge, information and belief of the Directors having made all reasonable enquiries, the Purchasers and their respective ultimate beneficial owners are not connected persons to the Company (as defined in the Listing Rules)

Pursuant to the Definitive Agreements, RGB has agreed to sell 2%, 3% and 11% of the equity interest in SDT to the Purchasers, namely Mr. Li Pu, Mr. Ye Xiao Bin and Shenzhen Lingyou, respectively.

Consideration

The aggregate consideration for the 16% of the equity interest in SDT is RMB118.0 million (equivalent to approximately HK$121.7 million). Each of the Purchasers has agreed to pay to the Group 20% of the consideration within 10 days from 20 November 2007 and 80% of the consideration on or before 31 December 2007.

The consideration under the Definitive Agreements was arrived at after arm’s length negotiations between the parties thereto. The consideration represents a price-earning ratio of approximately (i) 6.89 times (for the disposal to Mr. Li Pu and Mr. Ye Xiao Bin); and (ii) 10.05 times (for the disposal to Shenzhen Lingyou) of the audited consolidated net profit of SDT for the year ended 31 December 2006 prepared in accordance with the generally accepted accounting principles in the PRC and after deducting certain adjustments (in relation to notional interest and rental costs to be imposed on the shareholder’s loan and office/factory spaces provided by the Group to SDT) as agreed by the parties to the Definitive Agreements.

−4 −

LETTER FROM THE BOARD

Buy back

RGB has undertaken to the Purchasers that after completion of the Definitive Agreements and if the shares of SDT are not listed on any stock exchange within 28 months after 20 November 2007, it will buy back from the Purchasers the equity interest which proposed to be acquired by the Purchasers under the Definitive Agreements. The consideration for the buy back will be the sum of:

• (a) the original amount of consideration for the equity interest under the Definitive Agreements; and

• (b) the Purchasers’ share of the accumulated distributable profits in SDT which are not distributed from 1 December 2007 to the date until the transfers of the equity interest pursuant to the buy back are registered in the Industrial and Commercial Bureau in the PRC, provided that, if the annual return of the Purchasers after taking into account of the cash dividends for each year plus their respective share of the aforesaid accumulated distributable profits is less than 10% of the original amount of consideration for the equity interest under the Definitive Agreements, RGB would have to pay any shortfall in cash to the Purchasers.

Board representation

According to the Definitive Agreements entered into between RGB and Shenzhen Lingyou, the latter will appoint one of its representatives to be a director out of the six members of the board of directors of SDT. The remaining five directors were appointed by the Company.

The Definitive Agreements with Mr. Li Pu and Mr. Ye Xiao Bin are silent on the issue of board representation.

No competition

The Purchasers have undertaken that they will not invest in any other companies with businesses which are competing with the business of SDT.

Effective date and completion

The Definitive Agreements became effective upon the signing of the same.

Completion of the Definitive Agreements took place on 27 November 2007 upon the transfers of the equity interest in SDT by RGB to the Purchasers were registered in the Industrial and Commercial Bureau of the PRC.

−5 −

LETTER FROM THE BOARD

INFORMATION ON SDT

SDT is principally engaged in manufacture and sales of set-top boxes or TV boxes for connection of broadcasting signals and providing value added services to the system integrators.

Based on its audited consolidated accounts prepared in accordance with the generally accepted accounting principles in the PRC, the net profit before and after taxation for the year ended 31 December 2005 of SDT were approximately RMB18.7 million (equivalent to approximately HK$19.3 million) and RMB17.4 million (equivalent to approximately HK$17.9 million) respectively; while its net profit before and after taxation for the year ended 31 December 2006 were approximately RMB94.0 million (equivalent to approximately HK$96.9 million) and RMB87.3 million (equivalent to approximately HK$90.0 million) respectively. Based on the audited consolidated accounts of SDT prepared in accordance with the generally accepted accounting principles in the PRC, its net asset value as at 31 May 2007 was RMB151.0 million (equivalent to approximately HK$155.7 million).

INFORMATION OF THE PURCHASERS

Shenzhen Lingyou

Shenzhen Lingyou is a limited liability company incorporated in Shenzhen, PRC. It and its parent company, (Beijing Lingyou Capital Investment Management Company Limited) are both investment companies focusing on investing in digital television and related businesses (such as design and manufacturing of chips, conditional access systems, digital terminals and cable television network operators).

Mr. Ye Xiao Bin

Mr. Ye is a PRC citizen specialising in printed circuit board business. He has extensive contacts in the electronics industry. One of his companies is a supplier of SDT in printed circuit boards.

Mr. Li Pu

Mr. Li is an expert in software development, system integration, value-added services in broadband network. His past employers include various international well-known software development companies.

As stated above, to the best of the knowledge, information and belief of the Directors having made all reasonable enquiries, the Purchasers and their respective ultimate beneficial owners are not connected persons to the Company (as defined in the Listing Rules).

−6 −

LETTER FROM THE BOARD

SHAREHOLDING STRUCTURE

Set out below is the equity structure before and after completion of the Disposal:

Before completion of the Disposal

==> picture [259 x 180] intentionally omitted <==

----- Start of picture text -----

The Company
100%
Senior management
RGB
and staff of SDT
12% 88%
SDT
----- End of picture text -----

After completion of the Disposal

==> picture [401 x 180] intentionally omitted <==

----- Start of picture text -----

The Company
100%
Senior management
RGB The Purchasers
and staff of SDT
12% 72% 16%
SDT
----- End of picture text -----

USE OF PROCEEDS

The Company estimates that the net proceeds from the Disposal would be approximately HK$120.0 million and the Board intends to apply such proceeds for general working capital of the Group.

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LETTER FROM THE BOARD

REASONS FOR AND EFFECT OF THE DISPOSAL

The Group is principally engaged in manufacture and sales of consumer electronic products and upstream accessories and property holding. As set out in the 2007 annual report of the Company, the sales of set-top boxes in the PRC for the year ended 31 March 2007 represented more than a two-fold increase as compared to the same for the year ended 31 March 2006; while the sales of set-top boxes in the overseas markets accounted for approximately 14% of total overseas turnover of the Group for the year ended 31 March 2007. The Directors consider that the introduction of the three strategic investors into SDT could bring in long-term benefits to the Group by enabling the Group to develop additional sales and new products, and enhancing the exposures of the Group to new markets for existing and future businesses.

Pursuant to the term of the Definitive Agreements, RGB has agreed to dispose of in aggregate 16% of the equity interest in SDT to the Purchasers. Based on the audited consolidated accounts of SDT for the five months ended 31 May 2007, it is estimated that the Group would record a gain from the Disposal of approximately HK$95.8 million (being the difference between the net proceeds from the Disposal of HK$120.0 million and the audited consolidated net asset value of SDT attributable to the 16% equity interest as at 31 May 2007 of approximately HK$24.2 million). The exact amount of gain on the Disposal would be calculated on the basis of the relevant figures as at completion of each of the Definitive Agreements and therefore would be different from the above amount. It is expected that the gain on the Disposal would be reflected in the consolidated accounts of the Group for the year ending 31 March 2008. Following completion of the Disposal on 27 November 2007, the Group, through RGB, holds 72% equity interest of SDT, and SDT therefore remains as a subsidiary of the Group.

As mentioned in the announcement of the Company dated 19 September 2007, the Board has taken steps to implement a plan to spin off SDT’s business by way of a separate listing. The Previous Disposal and the Disposal are a part of the steps to facilitate the proposed separate listing. However, Shareholders and public investors should note that the Board has not finalised a timetable for the proposed separate listing, and the Company or SDT has not submitted any application to any stock exchange (including the Stock Exchange) for obtaining the necessary approval for the proposed separate listing. The proposed separate listing of SDT may or may not proceed. Shareholders and public investors are advised to exercise caution when dealing in the shares of the Company. Further announcement on this matter will be made if and when required.

The Directors are of the view that the Disposal is conducted on normal commercial terms. The Directors also consider that the terms of the Definitive Agreements are fair and reasonable so far as the Company and the Shareholders are concerned and in the interests of the Company and the Shareholders as a whole.

−8 −

LETTER FROM THE BOARD

GENERAL

Pursuant to Rule 14.22 of the Listing Rules, the Disposal is to be aggregated with the Previous Disposal. The two disposals, in aggregate, constitute a discloseable transaction of the Company under Chapter 14 of the Listing Rules. The Disposal constitutes a discloseable transaction of the Company under Chapter 14 of the Listing Rules.

Further information in respect of the Company is set out in the Appendix.

Yours faithfully, For and on behalf of the Board Skyworth Digital Holdings Limited Leung Chi Ching, Frederick Executive Director

−9 −

GENERAL INFORMATION

APPENDIX

1. RESPONSIBILITY STATEMENT

This circular includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Group. The Directors collectively and individually accept full responsibility for the accuracy of the information contained in this circular and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts the omission of which make any statement herein misleading.

2. DISCLOSURE OF INTERESTS

(a) Directors’ and chief executives’ interests and short positions in shares, underlying shares and debentures of the Company or any of its associated corporations

As at the Latest Practicable Date, the interests and short positions of the Directors and chief executive of the Company in the shares, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which (i) were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they were taken or deemed to have under such provisions of the SFO); or (ii) were required, pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (iii) were required to be notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers (the “Model Code”) contained in the Listing Rules were as follows:

Long position

• (i) Shares of the Company

Name of Director Capacity Lin Wei Ping Beneficial owner Held by trust (note a) Held by spouse (note b)	Number of Shares held 3,061,611 847,382,922 51,405,612 901,850,145	Approximate percentage of the issued share capital of the Company 0.13% 36.96% 2.24%
		39.33%

−10 −

GENERAL INFORMATION

APPENDIX

			Approximate
			percentage
			of the issued
			share capital
		Number of	of the
Name of Director	Capacity	Shares held	Company
Ding Kai	Beneficial owner	11,000,000	0.48%
Yang Dongwen	Beneficial owner	3,000,000	0.13%
Zhang Xuebin	Beneficial owner	4,200,600	0.18%
So Hon Cheung,
Stephen	Beneficial owner	100,000	0.00%

Note a: These Shares are held by Target Success Group Limited in its capacity as trustee of the Skysource Unit Trust, all of the units in which are held by HSBC International Trustee Limited in its capacity as trustee of Skysource Trust. Ms. Lin Wei Ping and her children are the discretionary beneficiaries of the Skysource Trust. Accordingly, Ms. Lin Wei Ping is deemed to be interested in 847,382,922 Shares.

• Note b: Ms. Lin Wei Ping is deemed to be interested in 51,405,612 Shares being the interests held beneficially by her spouse, Mr. Wong Wang Sang, Stephen.

• Note c: Mr. Wong Wang Sang, Stephen is deemed to be interested in 901,850,145 Shares being the interests held by his spouse, Ms. Lin Wei Ping.

(ii) Options to subscribe for Shares

					Approximate
				Number	percentage
				of Shares	of the issued
				entitled to	share capital
Name of		Exercise		subscribe	of the
Director	Date of grant	price	Exercisable period	for	Company
		HK$
Zhang Xuebin	5 October 2002	0.840	5 October 2004 to	2,000,000	0.09%
			28 August 2012
			5 October 2005 to	2,000,000	0.09%
			28 August 2012
			5 October 2006 to	2,000,000	0.09%
			28 August 2012
	16 October 2003	1.660	16 October 2004 to	1,500,000	0.07%
			28 August 2012
			16 October 2005 to	1,500,000	0.07%
			28 August 2012
			16 October 2006 to	2,000,000	0.09%
			28 August 2012
			16 October 2007 to	5,000,000	0.22%
			28 August 2012
			16 October 2008 to	5,000,000	0.22%
			28 August 2012
	11 May 2007	1.048	11 May 2008 to	2,500,000	0.11%
			28 August 2012
			11 May 2009 to	2,500,000	0.11%
			28 August 2012
			11 May 2010 to	2,500,000	0.11%
			28 August 2012
			11 May 2011 to	2,500,000	0.11%
			28 August 2012

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GENERAL INFORMATION

APPENDIX

					Approximate
				Number	percentage
				of Shares	of the issued
				entitled to	share capital
Name of		Exercise		subscribe	of the
Director	Date of grant	price	Exercisable period	for	Company
		HK$
Ding Kai	11 October 2004	2.225	11 October 2005 to	250,000	0.01%
			28 August 2012
			11 October 2006 to	250,000	0.01%
			28 August 2012
			11 October 2007 to	250,000	0.01%
			28 August 2012
			11 October 2008 to	250,000	0.01%
			28 August 2012
	11 May 2007	1.048	11 May 2008 to	1,500,000	0.07%
			28 August 2012
			11 May 2009 to	1,500,000	0.07%
			28 August 2012
			11 May 2010 to	1,500,000	0.07%
			28 August 2012
			11 May 2011 to	1,500,000	0.07%
			28 August 2012
Yang	5 October 2002	0.840	5 October 2005 to	2,000,000	0.09%
Dongwen			28 August 2012
			5 October 2006 to	2,000,000	0.09%
			28 August 2012
	25 January 2006	1.136	25 January 2007 to	3,750,000	0.16%
			28 August 2012
			25 January 2008 to	3,750,000	0.16%
			28 August 2012
			25 January 2009 to	3,750,000	0.16%
			28 August 2012
			25 January 2010 to	3,750,000	0.16%
			28 August 2012
	11 May 2007	1.048	11 May 2008 to	1,500,000	0.07%
			28 August 2012
			11 May 2009 to	1,500,000	0.07%
			28 August 2012
			11 May 2010 to	1,500,000	0.07%
			28 August 2012
			11 May 2011 to	1,500,000	0.07%
			28 August 2012
So Hon	28 July 2004	2.275	28 July 2004 to	500,000	0.02%
Cheung,			28 August 2012
Stephen
Li Weibin	28 July 2004	2.275	28 July 2004 to	500,000	0.02%
			28 August 2012
Lin Wei Ping	11 May 2007	1.048	11 May 2008 to	500,000	0.02%
			28 August 2012
			11 May 2009 to	500,000	0.02%
			28 August 2012
			11 May 2010 to	500,000	0.02%
			28 August 2012
			11 May 2011 to	500,000	0.02%
			28 August 2012

−12 −

GENERAL INFORMATION

APPENDIX

					Approximate
				Number	percentage
				of Shares	of the issued
				entitled to	share capital
Name of		Exercise		subscribe	of the
Director	Date of grant	price	Exercisable period	for	Company
		HK$
Leung Chi	11 May 2007	1.048	11 May 2008 to	1,500,000	0.07%
Ching,			28 August 2012
Frederick			11 May 2009 to	1,500,000	0.07%
			28 August 2012
			11 May 2010 to	1,500,000	0.07%
			28 August 2012
			11 May 2011 to	1,500,000	0.07%
			28 August 2012

Save as disclosed above, as at the Latest Practicable Date, none of the Directors or chief executive of the Company had any interests or short positions in the shares, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which (i) were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which the Directors and chief executives were taken or deemed to have under the provisions of the SFO); or (ii) were required, pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (iii) were required to be notified to the Company and the Stock Exchange pursuant to the Model Code contained in the Listing Rules.

(b) Substantial Shareholders’ interests and short positions in Shares or underlying Shares

As at the Latest Practicable Date, so far as was known to any Directors or chief executive of the Company, the following persons (other than a Director or chief executive of the Company) had interests or short positions in the Shares or underlying Shares which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or, who was, directly or indirectly, interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other member of the Group or had any options in respect of such capital:

		Approximate
		percentage of
		the issued
		shares capital
		of the
Name	No. of Shares	Company
Target Success Group Limited	847,382,922 (note a)	36.96%
HSBC International Trustee Limited	847,382,922	36.96%
Wong Wang Sang, Stephen	901,850,145 (note b)	39.33%
Winnington Capital Limited	229,592,000	10.01%

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GENERAL INFORMATION

APPENDIX

Note a: Target Success Group Limited holds the Shares of the Company in the capacity as trustee of the Skysource Unit Trust, all of the units in which are held by HSBC International Trustee Limited in its capacity as trustee of Skysource Trust.

Note b: Mr. Wong Wang Sang, Stephen is deemed to be interested in 850,444,533 Shares being the interests held by his spouse, Ms. Lin Wei Ping, while the remaining 51,405,612 Shares are held by himself.

Save as disclosed above, as at the Latest Practicable Date, so far as was known to any Directors or chief executive of the Company, no other persons (not being a Director or chief executive of the Company) had any interests or short positions in the Shares or underlying Shares which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or who was, directly or indirectly, interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other member of the Group or had any options in respect of such capital.

3. COMPETING INTERESTS

As at the Latest Practicable Date, none of the Directors has any interest in any business which competes or is likely to compete, either directly or indirectly, with the business of the Group.

4. DIRECTORS’ SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors has any service contract with any member of the Group which will not expire or is not determinable within one year without payment of compensation (other than statutory compensation).

5. LITIGATION

As at the Latest Practicable Date, neither the Company nor any of its subsidiaries is engaged in any litigation or arbitration of material importance and no litigation or claim of material importance is known to the Directors to be pending or threatened against the Company or any of its subsidiaries.

6. MATERIAL ADVERSE CHANGES

As at the Latest Practicable Date, the Directors are not aware of any material adverse changes in the financial or trading position of the Company since 31 March 2007, being the date to which the latest published audited accounts of the Company have been made up.

7. DIRECTORS’ INTERESTS IN CONTRACTS

None of the Directors is materially interested, directly or indirectly, in any contract or arrangement entered into by any member of the Group subsisting at the date of this circular and which is significant in relation to the business of the Group.

−14 −

GENERAL INFORMATION

APPENDIX

8. DIRECTORS’ INTERESTS IN ASSETS

As at the Latest Practicable Date, no Director has any interest, direct or indirect, in any assets which have been acquired, or disposed of by, or leased to any member of the Group, or was proposed to be acquired, or disposed of by, or leased to any member of the Group since 31 March 2007, the date to which the latest published audited accounts of the Group were made up.

9. MISCELLANEOUS

• (i) The registered office of the Company is at Clarendon House, 2 Church Street, Hamilton, HM 11, Bermuda.

• (ii) The Hong Kong branch registrars and transfer office of the Company in Hong Kong is Hong Kong Registrars Limited, Rooms 1712-16, Hopewell Centre, 183 Queen’s Road East, Hong Kong.

• (iii) The qualified accountant and company secretary of the Company is Mr. Leung Chi Ching, Frederick. Mr. Leung possesses professional membership of the American Institute of Certified Public Accountants, the Hong Kong Institute of Certified Public Accountants and the Hong Kong Securities Institute.

• (iv) In case of inconsistency, the English text of this circular shall prevail over the Chinese text.

10. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection during normal business hours at the registered office in Hong Kong of the Company or any weekday (except public holidays) up to and including 24 December 2007:

• (a) the Definitive Agreements; and

• (b) this circular.

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