Ta Yang Group Holdings Limited — Proxy Solicitation & Information Statement 2010

Oct 25, 2010

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 to be taken, you should consult a licensed securities dealer, bank manager, solicitor, professional accountant, or other professional adviser.

If you have sold or transferred all your shares in Ta Yang Group Holdings Limited (the “Company”), you should at once hand this circular and the accompanying proxy form 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 transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim 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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TA YANG GROUP HOLDINGS LIMITED 大洋集團控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1991)

PROPOSALS FOR GENERAL MANDATES TO ISSUE AND REPURCHASE SHARES RE-ELECTION OF RETIRING DIRECTORS FINAL DIVIDEND AND NOTICE OF ANNUAL GENERAL MEETING

A notice convening the annual general meeting of the Company to be held at Rooms 1 and 2, United Conference Centre, 10/F., United Centre, 95 Queensway, Admiralty, Hong Kong on 25 November 2010 at 10:00 a.m. is set out on page 16 to 19 of this circular of the Company.

A form of proxy for the annual general meeting is enclosed with this circular. If you do not intend to attend and vote at the annual general meeting in person, you are requested to complete and return the enclosed form of proxy to the Company’s branch share registrar in Hong Kong, Tricor Investor Services Limited, at 26/F, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for the holding of the meeting or any adjournment thereof. The completion and delivery of a 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.

26 October 2010

CONTENTS

		Page
Definitions	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from	the Board
1.	Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
2.	Proposed General Mandate to Issue and Repurchase Shares . . . . . . . . . . . . . . . .	5
3.	Re-election of Retiring Directors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
4.	Final Dividend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
5.	Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
6.	Poll Vote at Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
7.	Responsibility Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
8.	Recommendation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
9.	General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Appendix I	– Explanatory Statement of the Share Repurchase Mandate. . . . . . . . . . .	8
Appendix II – Details of Retiring Directors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		13
Notice of Annual General Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		16

• i -

DEFINITIONS

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

“Acuwake” Acuwake Enterprises Limited, a limited liability company incorporated in the British Virgin Islands which is wholly owned by Bluebell “AGM” the annual general meeting of the Company to be convened and held at Rooms 1 and 2, United Conference Centre, 10/F., United Centre, 95 Queensway, Admiralty, Hong Kong on 25 November 2010 at 10:00 a.m. “AGM Notice” Notice of the AGM “Articles of Association” the articles of association of the Company, as amended and restated from time to time “Bluebell” Bluebell Global Enterprises Limited is wholly owned by Hang Seng Bank Trustee “Board” the board of Director(s) “BVI” British Virgin Islands “Company” Ta Yang Group Holdings Limited, a company incorporated in the Cayman Islands with limited liability, the Shares of which are listed on the Stock Exchange “Director(s)” director(s) of the Company “Group” the Company and its subsidiaries “Hang Seng” Hang Seng Bank Limited is owned as to approximately 62.14% by HSBC “Hang Seng Bank Trustee” Hang Seng Bank Trustee International Limited is a wholly owned subsidiary of Hang Seng “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 “HSBC” The Hong Kong and Shanghai Banking Corporation is wholly owned subsidiary HSBC Asia Holdings BV which is a wholly owned subsidiary of HSBC Asia Holdings (UK) Limited. HSBC Asia Holdings (UK) Limited is wholly owned by HSBC Holdings BV which in turn is wholly-owned by HSBC Finance (Netherlands). HSBC Finance (Netherlands) is wholly owned subsidiary of HSBC Holdings plc.

• 1 -

DEFINITIONS

• “Issue Mandate”

• the proposed issue mandate to be granted to the Directors at the AGM to exercise all the powers of the Company to allot, issue and otherwise deal with Shares not exceeding 20% of the aggregate nominal amount of the issued share capital of the Company as at the date of passing of such resolution

• “Latest Practicable Date” 19 October 2010, 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

• “Post-IPO Share Option Scheme” the post-IPO share option scheme adopted by the Company on 16th May, 2007, the principle terms of which are summarized in the section headed “Post-IPO Share Option Scheme” in Appendix VI of the prospectus of the Company dated 28th May, 2007

• “PRC” The People’s Republic of China, excluding (except where the context requires) Hong Kong, Macau and Taiwan

• “Pre-IPO Share Option Scheme” the Pre-IPO share option scheme adopted by the Company on 16 May 2007, the principle terms of which are summarized in the section headed “Pre-IPO Share Option Scheme” in Appendix VI of the prospectus of the Company dated 28th May, 2007

• “Repurchase Mandate” the proposed repurchase mandate to be granted to the Directors at the AGM to exercise the powers of the Company to repurchase Shares not exceeding 10% of the aggregate nominal amount of the issued share capital of the Company as at the date of passing of such resolution

• “Repurchase Period” the period starting the date of passing of the relevant resolution granting the Repurchase Mandate and ending on the earliest of the date of the next annual general meeting of the Company, or the date by which the next annual general meeting of the Company is required by law to be held, or the date upon which the Repurchase Mandate is revoked or varied

• “SFO”

• the Securities and Futures Ordinance, chapter 571 of the laws of Hong Kong

• “Share(s)” ordinary share(s) of HK$0.10 each in the share capital of the Company

• 2 -

DEFINITIONS

“Shareholder(s)” holder(s) of Share(s) “Stock Exchange” The Stock Exchange of Hong Kong Limited “Sunshiny Trust” A discretionary trust whose beneficiaries are family members of Mr. Huang Sheng-Shun, the chairman and an executive Director of the Company “Takeover Code” The Hong Kong Code on Takeovers and Mergers “%” Per cent

• 3 -

LETTER FROM THE BOARD

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TA YANG GROUP HOLDINGS LIMITED 大洋集團控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1991)

Executive Directors: Huang Sheng-Shun (Chairman) Wu Ih Chen (Chief Executive Officer) Lin Hung-Ming Wong Tak Leung Huang Te-Wei

Registered Office: Cricket Square Hutchins Drive P.O. Box 2681 Grand Cayman, KY1-1111 Cayman Islands

Non-Executive Director: Kirk Yang

Independent Non-Executive Directors: Hsieh Yu Jou Yow-Jen Yeung Chi Tat

Principal Place of Business in Hong Kong: Flat 28, 23rd Floor Metro Centre II 21 Lam Hing Street Kowloon Bay, Kowloon Hong Kong

26 October 2010

To the Shareholders

Dear Sir or Madam,

PROPOSALS FOR GENERAL MANDATES TO ISSUE AND REPURCHASE SHARES RE-ELECTION OF RETIRING DIRECTORS FINAL DIVIDEND AND NOTICE OF ANNUAL GENERAL MEETING

1. INTRODUCTION

The purpose of this circular is to provide you with information regarding resolutions to be proposed at the AGM for the approval of (i) the granting of the Issue Mandate; (ii) the granting of the Repurchase Mandate; (iii) the extension of the Issue Mandate by addition thereto of the number of Shares repurchased pursuant to the Repurchase Mandate; (iv) the re-election of the retiring Directors (v) the payment of final dividend and (vi) the re-election of auditors.

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LETTER FROM THE BOARD

2. PROPOSED GENERAL MANDATE TO ISSUE AND REPURCHASE SHARES

At the AGM, separate ordinary resolutions will be proposed to seek for approval of the Shareholders to grant to the Directors:–

• (i) the Issue Mandate to allot and issue and deal with further Shares up to a maximum of 20% of the aggregate nominal amount of the issued share capital of the Company as at the date of passing of such resolutions;

• (ii) the Repurchase Mandate to repurchase Shares up to a maximum of 10% of the aggregate nominal amount of the issued share capital of the Company as at the date of passing of such resolutions; and

• (iii) subject to the passing of the aforesaid ordinary resolutions approving the Issue Mandate and the Repurchase Mandate, the general mandate to extend the Issue Mandate by the addition to the aggregate nominal amount of the share capital of the Company which may be allotted or agreed conditionally or unconditionally to be allotted and issued Shares in an amount not exceeding the aggregate nominal amount of the Shares purchased pursuant to the Repurchase Mandate.

Each of the Issue Mandate, the Repurchase Mandate and the Extension Mandate will expire (a) at the conclusion of the next annual general meeting of the Company following the Annual General Meeting; or (b) at the end of the period within which the next annual general meeting of the Company is required by the Companies Law or the Articles to be held; or (c) when the authority given to the Directors thereunder is revoked or varied by an ordinary resolution of the Shareholders in a general meeting prior to the next annual general meeting of the Company, whichever is the earliest.

An explanatory statement containing information relating to the Repurchase Mandate and as required pursuant to the Listing Rules is set out in Appendix 1 to this circular. This explanatory statement contains information reasonably necessary to enable Shareholders to make an informed decision on whether to vote for or against the resolution relating to the Repurchase Mandate at the AGM.

As at the Latest Practicable, the issued share capital of the Company comprised 775,841,000 Shares. Assuming that there is no change in the issued share capital of the Company between the period from the Latest Practicable Date and the date of passing the resolution approving the Repurchase Mandate and the Issue Mandate, the maximum number of Shares which may be repurchased pursuant to the Repurchase Mandate on the date of passing the resolution approving the Repurchase Mandate will be 77,584,100 Shares and the maximum number of Shares which may be issued pursuant to the Issue Mandate on the date of passing the resolution approving the Issue Mandate will be 155,168,200 Shares.

• 5 -

LETTER FROM THE BOARD

3. RE-ELECTION OF RETIRING DIRECTORS

In relation to the ordinary resolution number 3 set out in the notice of the AGM regarding the re-election of retiring Directors, Mr. Huang Sheng-Shun, Mr. Huang Te-Wei and Mr. Hsieh Yu shall retire as Directors by rotation at the AGM pursuant to article 87(1) of the Articles of Association. Being eligible, Mr. Huang Sheng-Shun, Mr. Huang Te-Wei and Mr. Hsieh Yu will offer themselves for re-election at the AGM.

Biographical details of each of the retiring Directors who offer themselves for re-election are set out in Appendix II to this circular.

Save as disclosed in this circular, there is no other matters in relation to the proposed re-election of Directors that need to be brought to the attention of the Shareholders.

4. FINAL DIVIDEND

On 18 October 2010, the Board recommended that subject to Shareholders’ approval in the AGM, the Company shall declare and distribute a final dividend of HK6 cents per Share for the financial year ended 31 July 2010 to those Shareholders whose names appear on the register of members of the Company at the close of business on 23 November 2010.

The Board further resolved that the register of members of the Company shall be closed from 23 November 2010 to 25 November 2010, both days inclusive, during which period no transfer of Shares will be registered for the purpose of ascertaining the Shareholders entitled to vote in the AGM and to the final dividend to be approved at the AGM.

5. ANNUAL GENERAL MEETING

The AGM Notice is set out on page 16 to 19 of this circular. At the AGM, resolutions will be proposed to approve, among other matters, the granting of the Issue Mandate, Repurchase Mandate, the extension of the Issue Mandate by the addition thereto of the number of Shares repurchased pursuant to the Repurchase Mandate, the re-election of retiring Directors.

A form of proxy for the AGM is enclosed with this circular and such form of proxy is also published on the website of the Stock Exchange (www.hkex.com.hk). If you do not intend to attend and vote at the AGM in person, you are requested to complete and return the form of proxy to the Company’s branch share registrar in Hong Kong, Tricor Investor Services Limited, at 26/F, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong in accordance with the instructions printed thereon not less than 48 hours before the time fixed for the meeting or the adjournment thereof. The completion of a form of proxy will not preclude you from attending and voting at the meeting in person at the AGM or any adjournment thereof should you wish.

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LETTER FROM THE BOARD

6. POLL VOTING AT ANNUAL GENERAL MEETING

Pursuant to Rule 13.39(4) of the Listing Rules, any vote of Shareholders at a general meeting must be taken by poll. Accordingly, at the Annual General Meeting, the Chairman of the Meeting will exercise his power under Article 66 of the Article of Association to put each of the resolutions set out in the notice of Annual General Meeting to be voted by way of poll.

7. RESPONSIBILITY STATEMENT

This circular includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. 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 would make any statement herein misleading.

8. RECOMMENDATION

The Directors are of the opinion that the proposed resolutions referred in this circular and the AGM Notice are in the best interests of the Company and the Shareholders as a whole. The Directors recommend the Shareholders to vote in favour of all the resolutions as set out in the AGM Notice.

9. GENERAL INFORMATION

Your attention is drawn to the additional information set out in the Appendices to this circular.

Yours faithfully, On behalf of the Board

Ta Yang Group Holdings Limited Huang Sheng-Shun Chairman

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EXPLANATORY STATEMENT OF THE SHARE REPURCHASE MANDATE

APPENDIX I

This Appendix contains the particulars required by the Listing Rules to be included in an explanatory statement to enable Shareholders to make an informed view on whether to vote for or against the resolution to be proposed at the AGM in relation to the Repurchase Mandate.

(1) GENERAL MANDATE TO REPURCHASE SHARES

At the AGM, an ordinary resolution will be proposed that the Directors be given a general and unconditional mandate to exercise all the powers of the Company to repurchase Shares up to 10% of the issued share capital of the Company as at the date of passing of the resolution to approve the granting to the Directors the Repurchase Mandate. The Repurchase Mandate will continue to be in force until the conclusion of the next annual general meeting of the Company is required to be held by the Companies Law and the Articles or any earlier date as referred to in paragraph (c) of resolution 7 as set out in the Notice.

(2) EXERCISE OF THE REPURCHASE MANDATE

As at the Latest Practicable Date, the issued ordinary share capital of the Company comprised 775,841,000 Shares. Subject to the passing of the resolution granting the Repurchase Mandate and on the basis that no further Shares are issued or repurchased before the AGM, the Company would be allowed to repurchase a maximum of 77,584,100 Shares during the period ending on the earlier of the conclusion of the next annual general meeting of the Company, or the date by which the next annual general meeting of the Company is required to be held by law or the Articles of Association, or the date on which such authority is revoked or varied by an ordinary resolution of the Shareholders in general meeting.

(3) SOURCE OF FUNDS

Repurchases must be funded out of funds legally available for the purpose and in accordance with the Company’s constitutive documents and the laws of the jurisdiction in which the Company is incorporated or otherwise established.

(4) REASONS FOR REPURCHASES

The Directors believe that it is in the best interests of the Company and the Shareholders as a whole to seek a general authority from Shareholders to enable the Company to repurchase its Shares on the Stock Exchange. 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 earnings per Share and will only be made when the Directors believe that such a repurchase will benefit the Company and the Shareholders as a whole.

• 8 -

EXPLANATORY STATEMENT OF THE SHARE REPURCHASE MANDATE

APPENDIX I

The Directors have no present intention to repurchase any Shares and they would only exercise the power to repurchase in circumstances where they consider that the repurchase would be in the best interests of the Company. The Directors consider that there might be a material adverse impact on the working capital or gearing position of the Company (as compared with the position disclosed in the consolidated financial position of the Company as at 31 July 2010, being the date to which the latest published audited financial statements of the Company have been made up) in the event that the Repurchase Mandate is exercised in full. The Directors do not propose to exercise the Repurchase Mandate to such an extent as would, in the circumstances, have a material adverse effect on the working capital of the Company or its gearing levels which in the opinion of the Directors are from time to time appropriate for the Company.

(5) SHARE PRICES

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

		Shares
	Highest		Lowest
	HK$		HK$
2009
October	0.84		0.68
November	0.89		0.78
December	1.16		0.86
2010
January	1.46		1.00
February	1.43		1.19
March	1.46		1.33
April	1.47		1.27
May	1.41		1.05
June	1.20		1.00
July	1.20		0.97
August	1.29		1.15
September	1.31		1.16
October (up to the Latest Practicable Date)	1.35		1.18

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EXPLANATORY STATEMENT OF THE SHARE REPURCHASE MANDATE

APPENDIX I

(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 the Takeovers Code. Accordingly, a Shareholder, or group of Shareholders acting in concert, depending on the level of increase of the Shareholders’ 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.

At the Latest Practicable Date, 413,940,000 issued Shares representing approximately 53.34% shareholding of the Company. are directly held by Sunshiny Trust through the following seven British Virgin Island companies (“ 7 BVI Companies ”) in aggregate as follows.

Name of the 7 BVI Companies Ace Chain Investments Corporation China Gain Holdings Limited Highwise Investment Group Corporation Join Success Business Inc. Jumbo Regent Investment Limited Master Rich Business Limited Million Era Holding Corporation Total	No. of Shares held 149,100,000 103,560,000 57,600,000 34,560,000 34,560,000 28,800,000 5,760,000 413,940,000	Approximately percentage of issued share1 capital of the Company 19.22% 13.35% 7.42% 4.45% 4.45% 3.71% 0.74%
		53.34%

The 7 BVI Companies are respectively 100% owned subsidiaries of Acuwake. Acuwake is wholly owned by Bluebell. Bluebell is wholly-owned by Hang Seng Bank Trustee as trustee of Sunshiny Trust. Mr. Huang Sheng-Shun, the chairman of the Company and an Executive Director, is the settlor of Sunshiny Trust. Mr. Huang Te-Wei, the son of Mr. Huang Sheng-Shun, is a beneficiary of Sunshiny Trust. In the event that the Repurchase Mandate is exercised in full and no further Shares are issued during the Repurchase Period, the percentage of shareholding of Hang Seng Bank Trustee as trustee of Sunshiny Trust, Acuwake and the 7 BVI Companies respectively would be increased to approximately 59.28% of the issued share capital of the Company, and such an increase will not give rise to an obligation to make a mandatory offer under Rule 26 of the Takeover Code.

Apart from the abovementioned 413,940,000 Shares which Mr. Huang Sheng-Shun as a settlor of Sunshiny Trust is taken to be interested, Mr. Huang Sheng-Shun is also beneficially interested in 7,500,000 Shares and 1,300,000 Shares options which are exercisable pursuant to the options granted to him under the Pre-IPO Share Option Scheme and Post-IPO Share Option Scheme. In the event that the Repurchase Mandate is exercised in full and no further Shares are issued during the Repurchase Period, the percentage of shareholding of Mr. Huang Sheng-Shun would be increased to approximately 60.54% of the issued share capital of the Company, and such an increase will not give rise to an obligation to make a mandatory offer under Rule 26 of the Takeover Code.

Note 1: It is based on 775,841,000 Shares of the Company in issue as at the Latest Practicable Date.

• 10 -

EXPLANATORY STATEMENT OF THE SHARE REPURCHASE MANDATE

APPENDIX I

Apart from the abovementioned 413,940,000 Shares which Mr. Huang Te-Wei as a beneficiary of Sunshiny Trust is taken to be interested, Mr. Huang Te-Wei is also beneficially interested in 240,000 Shares and 830,000 shares options which are exercisable pursuant to the options granted to him under the Pre-IPO Share Option Scheme and Post-IPO Share Option Scheme. In the event that the Repurchase Mandate is exercised in full and no further Shares are issued during the Repurchase Period, the percentage of shareholding of Mr. Huang Te-Wei would be increased to approximately 59.44% of the issued share capital of the Company, and such an increase will not give rise to an obligation to make a mandatory offer under Rule 26 of the Takeover Code.

Save as disclosed in above, the Directors are not aware of any other consequences which may arise under Rules 26 and 32 of the Takeovers Code. The Directors do not intend to exercise the Repurchase Mandate to an extent which would, in the circumstances, trigger any potential consequences under the Takeovers Code.

(7) SHARE PURCHASE MADE BY THE COMPANY

In the six months preceding the Latest Practicable Date, the Company had repurchase its Shares on the Stock Exchange as follows:–

		Price per Shares	Price per Shares
Date of Repurchases	Number of Shares	Highest	Lowest
		HK$	HK$
21 April 2010	684,000	$1.40	$1.34
22 April 2010	10,000	$1.36	$1.36
23 April 2010	90,000	$1.36	$1.36
26 April 2010	672,000	$1.35	$1.33
27 April 2010	20,000	$1.34	$1.34
28 April 2010	20,000	$1.33	$1.33
30 April 2010	172,000	$1.33	$1.31
3 May 2010	1,364,000	$1.40	$1.33
14 May 2010	378,000	$1.20	$1.15
17 May 2010	1,018,000	$1.20	$1.19
18 May 2010	190,000	$1.20	$1.18
20 May 2010	314,000	$1.18	$1.07
28 June 2010	60,000	$1.00	$1.00
29 June 2010	100,000	$1.02	$1.01
2 July 2010	20,000	$1.02	$1.02
5 July 2010	48,000	$1.02	$1.02

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APPENDIX I

EXPLANATORY STATEMENT OF THE SHARE REPURCHASE MANDATE

			Price per Shares	Price per Shares
Date of	Repurchases	Number of Shares	Highest	Lowest
			HK$	HK$
	12 July 2010	4,000	$1.10	$1.10
	13 July 2010	46,000	$1.10	$1.10
	15 July 2010	100,000	$1.16	$1.11
	19 July 2010	20,000	$1.14	$1.14
	21 July 2010	90,000	$1.12	$1.11
	23 July 2010	156,000	$1.12	$1.12
	26 July 2010	162,000	$1.14	$1.12
	27 July 2010	370,000	$1.14	$1.13
	28 July 2010	60,000	$1.15	$1.13
	29 July 2010	74,000	$1.15	$1.12
3	August 2010	126,000	$1.22	$1.20
4	August 2010	142,000	$1.20	$1.19
6	August 2010	98,000	$1.22	$1.21
9	August 2010	60,000	$1.24	$1.24
10	August 2010	120,000	$1.23	$1.23
11	August 2010	128,000	$1.24	$1.23
12	August 2010	182,000	$1.25	$1.23
13	August 2010	88,000	$1.27	$1.24
16	August 2010	40,000	$1.28	$1.28
17	August 2010	120,000	$1.29	$1.27
	Total	7,346,000

Save as disclosed above, the Company had not purchased any of its shares (whether on the Stock Exchange or otherwise) in the six months preceding 19 October 2010 (being the Latest Practicable Date prior to the printing of this circular)

GENERAL

To the best of the knowledge of the Directors, having made all reasonable enquiries, none of the Directors nor any of their respective associates (as defined in the Listing Rules) has any present intention to sell any Shares to the Company in the event that the Repurchase Mandate is approved.

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

No connected person, as defined in the Listing Rules, has notified the Company that he has a present intention to sell any Shares to the Company, or has undertaken not to do so, in the event that the Repurchase Mandate is approved.

The Listing Rules prohibit a company from making repurchase on the Stock Exchange if the result of the repurchase would be that less than 25% (or such other prescribed minimum percentage as determined by the Stock Exchange) of the issued share capital would be in public hands. The Directors do not propose to repurchase Shares which would result in less than the prescribed minimum percentage of Shares in public hands.

• 12 -

DETAILS OF RETIRING DIRECTORS

APPENDIX II

The details of the retiring directors proposed to be re-elected at the AGM are set out as follows:–

Mr. Huang Sheng-Shun

Mr. Huang Sheng-Shun, aged 56, is the Chairman and Executive Director of the Company. He is responsible for the development of our general corporate strategy, operation management, planning and decision making. Mr. Huang, together with Mr. Wu Ih Chen, founded the Group on 7 May 1991. Prior to the establishment of the Group, he was the operation manager of a chemical company between June 1978 and May 1982. Afterwards, he worked at Ta Yang Oil N Fat Industrial Co., Ltd. (大洋油脂 工業股份有限公司), a private company, and since 1986 became the company’s general manager until 2005. Mr. Huang and his family members have been the shareholders of Ta Yang Oil N Fat Industrial Co., Ltd. until Ta Yang Oil N Fat Industrial Co., Ltd., ceased operations and was wound up in April 2006. Save as disclosed above, there is no relationship between Ta Yang Oil N Fat Industrial Co., Ltd. and each of the Group’s companies, its directors, its substantial shareholders and their respective associates.

Mr. Huang has also been a non-executive director of Formosan Union Chemical Corp., a company listed on the Taiwan Stock Exchange Corporation, from 1 July 1987 to 30 June 1996 and from 1 July 2002 to present. He has over 30 years of experience in management positions in the chemical manufacturing industry. Mr. Huang graduated from the Faculty of Law, National Taiwan University in 1976. Mr. Huang is also a director of various subsidiaries of the Group. Save as disclosed above, Mr. Huang does not hold other directorship in any public listed companies in the last three years.

Mr. Huang is the father of Mr. Huang Te-Wei, an executive Director of the Company. Save as disclosed above, Mr. Huang does not have any relationship with any directors, senior management, substantial shareholders or controlling shareholders of the Company.

As at the Latest Practicable Date, Mr. Huang has a personal interest of 7,500,000 Shares and 1,300,000 underlying shares of the Company attached to the options granted to him under the Pre-IPO Share Option Scheme and Post-IPO Share Option Scheme by the Company. Save as disclosed above, Mr. Huang did not have any other interests in the Shares and underlying shares of the Company within the meaning of Part XV of the SFO as at the Latest Practicable Date.

Mr. Huang Sheng-Shun has entered into a service contract with the Company for a term of three years commencing from 16 May 2010, subject to termination by the Company giving to him not less than three months’ advance written notice of termination. Under the service contract, Mr. Huang Sheng-Shun is entitled a monthly salary of HK$100,000 for 12 months of a year, a discretionary bonus of one extra month’s salary at the discretion of the Board and a discretionary management bonus at the absolute discretion of the Board. His director’s salary was determined by the Board having regard to Mr. Huang’s experience, duties and responsibilities.

• 13 -

DETAILS OF RETIRING DIRECTORS

APPENDIX II

Mr. Huang Te-Wei

Mr. Huang Te-Wei, aged 30, is an Executive Director and the general manager of the Group. He is the head of our control department with responsibilities to overseeing the Group’s compliance and internal control matters. From 2008 onwards, Mr. Huang was also responsible for the supervision of the daily operation of the Group factories in PRC and strategic planning. Mr. Huang graduated from the Industrial Administration stream, Department of Business Administration, National Taiwan University and has undergone military training in Taiwan. Mr. Huang is also a director of various subsidiaries of the Group. Saved as disclosed above, Mr. Huang did not hold directorships in any other public companies listed in Hong Kong or overseas in the last three years.

Mr. Huang is the eldest son of Mr. Huang Sheng-Shun, the Chairman and the Executive Director of the Group. Save as disclosed above, Mr. Huang does not have any relationship with any directors, senior management, substantial shareholders or controlling shareholders of the Company.

As at the Latest Practicable Date, Mr. Huang has a personal interest of 240,000 Shares and 830,000 underlying shares of the Company attached to the options granted to him under the Pre-IPO Share Option Scheme and Post-IPO Share Option Scheme by the Company. Save as disclosed above, Mr. Huang did not have any other interests in the Shares and underlying shares of the Company within the meaning of Part XV of the SFO as at the Latest Practicable Date.

Mr. Huang Te-Wei has entered into a service contract with the Company for a term of three years commencing from 16th May 2010, subject to termination by the Company giving to him not less than three months’ advance written notice of termination. Under the service contract, Mr. Huang is entitled to a monthly salary of HK$60,000 for 12 months of a year, a discretionary bonus of one extra month’s salary at the discretion of the Board and a discretionary management bonus at the absolute discretion of the Board. His director’s salary was determined by the Board having regard to Mr. Huang’s experience, duties and responsibilities.

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DETAILS OF RETIRING DIRECTORS

APPENDIX II

Mr. Hsieh Yu

Mr. Hsieh Yu, aged 62, is an Independent Non-Executive Director of the Company. He obtained a certificate for solicitor in Taiwan in 1977 and jointed the Taipei Bar Association immediately as a practicing Attorney-at-Law. He is the responsible officer of 聯德法律事務所. He had been the legal consultant for various corporations and organizations. Mr. Hsieh graduated from the Faculty of Law, National Taiwan University in 1976. Save as disclosed above, Mr. Hsieh did not hold other directorship in any public listed companies in the last three years and he does not hold any position in the Group.

Mr. Hsieh does not have any relationship with any other directors, senior management, substantial shareholders or controlling shareholders of the Company.

As at the Latest Practicable Date, Mr. Hsieh has a personal interest of 100,000 underlying shares of the Company attached to the options granted to him under the Post-IPO Share Option Scheme by the Company. Save as disclosed above, Mr. Hsieh did not have any other interests in the Shares and underlying shares of the Company within the meaning of Part XV of the SFO as at the Latest Practicable Date.

Mr. Hsieh entered into a formal appointment letter with the Company for a term of three years commencing from 16th May, 2008 subject to termination by either party giving not less than one month’s prior written notice without payment of compensation (other than statutory compensation). Pursuant to the appointment letter, Mr. Hsieh is entitled to a yearly fee of HK$120,000. His director’s fee (but not entitled any other bonus) is determined by the Board having regard to Mr. Hsieh’s experience, duties and responsibilities.

Save as disclosed in above, the Board is not aware of any matter in relation to the aforementioned Directors proposed to be re-elected at the AGM that is required to be disclosed pursuant to paragraphs (h) to (v) of Rule 13.51(2) of the Listing Rules or any other matter that needs to be brought to the attention of Shareholders in relation to their respectively re-election.

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NOTICE OF ANNUAL GENERAL MEETING

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TA YANG GROUP HOLDINGS LIMITED 大洋集團控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1991)

NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that an annual general meeting (“ AGM ”) of Ta Yang Group Holdings Limited (the “Company”) will be held at Rooms 1 and 2, United Conference Centre, 10/F., United Centre, 95 Queensway, Admiralty, Hong Kong on 25 November 2010 at 10:00 a.m. for the following purposes:

1. to receive and consider the audited consolidated financial statements and the reports of the directors and auditors of the Company for the year ended 31 July 2010;

2. to declare a final dividend for the year ended 31 July 2010;

3. to consider the re-elect the retiring Directors, each as separate resolution;

4. to authorize the board of directors to fix the remuneration of the Directors;

5. to re-appoint auditors and authorize the board of directors to fix their remuneration;

and as special business, to consider and, if thought fit, pass with or without alterations, the following resolution as an ordinary resolution:

1. “ THAT

2. (a) subject to paragraph (c) below, the exercise by the directors of the Company during the Relevant Period (as hereinafter defined) of all the powers of the Company to allot, issue and deal with additional shares in the share capital of the Company or securities convertible into shares of the Company, or options, warrants or similar rights to subscribe for shares of the Company or such convertible securities, and to make or grant offers, agreements and options which would or might require the exercise of such powers be and is hereby generally and unconditionally approved;

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NOTICE OF ANNUAL GENERAL MEETING

• (b) the approval in paragraph (a) above shall be in addition to any other authorisation given to the directors of the Company and shall authorise the directors of the Company during the Relevant Period to make or grant offers, agreements and options (including bonds, warrants, debentures and other securities convertible into shares of the Company) which would or 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) and issued by the Directors pursuant to the approval in paragraph (a) of this Resolution, otherwise than pursuant to (i) a Rights Issue (as defined below); or (ii) the exercise of any options granted under any option scheme or similar arrangement for the time being adopted by the Company and/or any of its subsidiaries for the grant or issue to eligible participants thereunder or rights to acquire shares in the capital of the Company; or (iii) any 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 in force from time to time, shall not exceed 20% of the aggregate nominal amount of the share capital of the Company in issue as at the date of the passing of this Resolution and the said approval shall be limited accordingly; and

• (d) for the purpose of this Resolution:

“Relevant Period” means the period from the passing of this Resolution until 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 applicable laws of the Cayman Islands to be held; and

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

“ Rights Issue ” means the allotment, issue or grant of shares or securities convertible into shares of the Company pursuant to an offer of shares of the Company open for a period fixed by the directors of the Company to the holders of shares or of such securities or any class thereof on the register on a fixed record date in proportion to their then holdings of such shares or of such securities or any class thereof as at that date (subject to such exclusions 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 any relevant jurisdiction, or the requirements of any recognized regulatory body or any stock exchange applicable to the Company).”

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NOTICE OF ANNUAL GENERAL MEETING

1. “ THAT

2. (a) subject to paragraph (c) below, the exercise by the directors of the Company during the Relevant Period (as hereinafter defined) of all the powers of the Company to purchase its shares on The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) or on any other stock exchange on which the Shares may be listed and recognised by the Securities and Futures Commission of Hong Kong and the Stock Exchange for this purpose, and, subject to and in accordance with all applicable laws and regulations, be and is hereby generally and unconditionally approved; and

3. (b) the total nominal amount of shares of the Company to be purchased pursuant to the approval in paragraph (a) above of this Resolution during the Relevant Period shall not exceed 10% of the total nominal amount of the share capital of the Company in issue on the date of this Resolution and the said approval shall be limited accordingly; and

4. (c) for the purpose 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 applicable laws to be held; and

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

5. “ THAT conditional upon Resolutions nos. (6) and (7) above being passed, the general mandate granted to the directors of the Company to exercise the powers of the Company to allot, issue and deal with shares of the Company and to make or grant offers, agreements and options which would or might require the exercise of such powers pursuant to Resolutions no. (6) be and is hereby extended by the total nominal amount of shares in the capital of the Company repurchased by the Company since the granting of a general mandate to the directors of the Company to exercise the powers of the Company to purchase such shares pursuant to Resolution no. (7) above, provided that such amount shall not exceed 10% of the total nominal amount of the share capital of the Company in issue on the date of this Resolution.”

By Order of the Board Huang Sheng-Shun Chairman

Hong Kong, 26 October 2010

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NOTICE OF ANNUAL GENERAL MEETING

Principal Place of Business in Hong Kong: Flat 28, 23rd Floor Metro Centre II 21 Lam Hing Street Kowloon Bay, Kowloon Hong Kong

As at the date hereof, the Board of the Company has five executive directors namely Mr. Huang Sheng-Shun, Mr. Wu Ih Chen, Mr. Lin Hung-Ming, Mr. Wong Tak Leung, Mr. Huang Te-Wei, one non-executive director namely Mr. Kirk Yang and three independent non-executive directors namely Mr. Hsieh Yu, Professor Jou Yow-Jen and Mr. Yeung Chi Tat.

Notes:

1. A shareholder of the Company entitled to attend and vote at the AGM is entitled to appoint one or more proxy(ies) (if he/she/it is the holder of two or more shares) to attend and on a poll, vote instead of him/her at the AGM that the appointment shall specify the number and class of shares in respect of which such proxy is so appointed. A proxy need not be a member of the Company.

2. In order to be valid, the instrument appointing a 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 lodged with the Company’s branch share registrar in Hong Kong, Tricor Investor Services Limited at 26/F, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong not less than 48 hours before the time appointed for holding the AGM or any adjournment thereof.

3. Completion and return of the form of proxy will not preclude members from attending and voting in person at the meeting or at any adjourned meeting thereof (as the case may be) should they so wish, and in such event, the form of proxy shall be deemed to be revoked.

4. Where there are joint registered holders of any shares, any one of such joint holders may vote, either in person or by proxy in respect of such shares as if he/she was solely entitled thereto, but if more one of such joint holders are present at the meeting, whether in person or by proxy, the joint registered holder present whose name stands first on the register of members of the Company in respect of the shares shall be accepted to the exclusion of the votes of the other registered holders.

5. For the purpose of ascertaining entitlement to the final dividend, the register of members of the Company will be closed from 23 November 2010 to 25 November 2010, both days inclusive, during which period no transfer will be effected. In order to qualify for voting at AGM and the final dividend to be approved at the AGM, all transfers accompanied by the relevant share certificates must be lodged with the branch share registrar of the Company in Hong Kong, Tricor Investor Services Limited at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Hong Kong for registration not later than 4:00 p.m. on 22 November 2010.

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