Talent Property Group Limited — Proxy Solicitation & Information Statement 2004

Jan 20, 2004

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 your licensed securities dealer, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all of your shares in Tomorrow International Holdings Limited, you should at once hand this circular 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.

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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Tomorrow International Holdings Limited 明日國際集團有限公司

(incorporated in Bermuda with limited liability)

DISCLOSEABLE TRANSACTION

19th January, 2004

CONTENTS

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
The Sale and Purchase Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
The Option Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
Shareholding structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
Reasons for entering into the Sale and
Purchase Agreement and the Option Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
Information on Swank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
Information on Rich Global, Kingsway Lion and SW Kingsway . . . . . . . . . . . . . . . .	12
Possible mandatory general offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12
Additional information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	13
Appendix – General information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	14

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DEFINITIONS

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

• “associate(s)”

has the meaning ascribed to it in the Listing Rules

• “Board”

• the board of Directors

• “Directors”

the directors of Tomorrow

• “Fortune Dynamic”

• Fortune Dynamic Group Corp., a wholly owned subsidiary of Tomorrow holding the entire issued share capital of Probest

• “Hong Kong”

• the Hong Kong Special Administrative Region of the People’s Republic of China

• “Kingsway Lion”

• Kingsway Lion Spur Technology Limited, a whollyowned subsidiary of SW Kingsway

• “Latest Practicable Date”

• 15th January, 2004, being the latest practicable date prior to the printing of this circular for the purpose of ascertaining certain information for inclusion in this circular

• “Listing Rules”

• the Rules Governing the Listing of Securities on the Stock Exchange

• “SFO”

• the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)

• “Loan Settlement Agreement”

• the conditional agreement dated 3rd September, 2003 entered into between Swank and Probest for the settlement of an unsecured loan in the principal sum of HK$250 million owing by Swank to Probest

• “Open Offer”

proposed issue of the new Shares on the basis of 13 offer shares for every Share held by way of an open offer as set out in the joint announcement of Tomorrow and Swank dated 9th September, 2003

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DEFINITIONS

• “Option” an option granted by Fortune Dynamic to Rich Global for the purchase of the Option Share under the Option Agreement

• “Option Agreement” an agreement entered into between Fortune Dynamic, Rich Global and Tomorrow dated 16th December, 2003 in relation to the granting of the Option by Fortune Dynamic to Rich Global

• “Option Share” 50% of all the issued shares of Probest at the time of exercise of the Option to be purchased by Rich Global upon exercise of the Option

• “Placing” the placing of Placing Shares by the Placing Agent pursuant to the Placing Agreement on a best effort basis as set out in the joint announcement of Tomorrow and Swank dated 29th December, 2003

• “Placing Agent” Kingsway Financial Services Group Limited, a whollyowned subsidiary of SW Kingsway

• “Placing Agreement” the placing agreement entered into between Probest and the Placing Agent dated 16th December, 2003 in relation to the Placing

• “Placing Shares” 412,794,000 existing Shares previously held by Probest and placed to placees by the Placing Agent pursuant to the Placing Agreement

• “Probest”

• Probest Holdings Inc., a company incorporated in the British Virgin Islands which is interested in approximately 51.0% of the existing issued shares of Swank and a wholly-owned subsidiary of Tomorrow, also the underwriter of the Open Offer

• “Profitown”

• Profitown Investment Corporation, a company formed in the British Virgin Islands with limited liability and owned as to 70% by Swank and as to 30% by Probest

• “Profitown Loan”

• the entire amount of shareholder’s loan due from Profitown to Swank at the Latest Practicable Date

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DEFINITIONS

• “Promissory Note” the unsecured promissory note in the sum of HK$163 million issued by Swank pursuant to the Loan Settlement Agreement, details of which were disclosed in the circular of Swank dated 30th September, 2003

• “Rich Global” Rich Global Investments Limited, a wholly-owned subsidiary of SW Kingsway

• “Sale and Purchase Agreement” the sale and purchase agreement entered into between Probest, Rich Global and Kingsway Lion dated 16th December, 2003 in relation to the sale of 593,724,000 Shares by Probest to Rich Global and Kingsway Lion

• “Share(s)” share(s) of HK$0.01 each in the issued capital of Swank

• “Shareholder(s)” holders of the Shares

• “Stock Exchange” The Stock Exchange of Hong Kong Limited

• “SW Kingsway” SW Kingsway Capital Holdings Limited, a company incorporated in Bermuda with limited liability, the shares of which are listed on the Stock Exchange

• “Swank” Swank International Manufacturing Company Limited, a company incorporated in Hong Kong with limited liability, the shares of which are listed on the Stock Exchange and is owned as to approximately 51.0% by Probest, as to approximately 10.0% by Rich Global and as to approximately 9.0% by Kingsway Lion

• “Swank Group” Swank and its subsidiaries

• “Tomorrow” Tomorrow International Holdings Limited, a company incorporated in Bermuda with limited liability, the shares of which are listed on the Stock Exchange

• “Tomorrow Group” Tomorrow and its subsidiaries other than the Swank Group

• “HK$” Hong Kong Dollars, the lawful currency of Hong Kong

• “%” per cent.

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LETTER FROM THE BOARD

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Tomorrow International Holdings Limited 明日國際集團有限公司

(incorporated in Bermuda with limited liability)

Executive Directors: Yau Tak Wah, Paul (Chairman) Tam Ping Wah Louie Mei Po Wong Shin Ling, Irene Tam Wing Kin

Independent non-executive Directors: Ng Wai Hung Cheung Chung Leung, Richard

Registered Office: Clarendon House Church Street Hamilton HM11 Bermuda

Head Office and Principal Place of Business: 27th Floor Henley Building 5 Queen’s Road Central Hong Kong

19th January, 2004

To the Shareholders

Dear Sir or Madam,

DISCLOSEABLE TRANSACTION

INTRODUCTION

On 29th December, 2003, Tomorrow and Swank jointly announced that, on 16th December, 2003, Probest entered into a sale and purchase agreement with Rich Global and Kingsway Lion, both wholly-owned subsidiaries of SW Kingsway, pursuant to which Probest agreed to sell and Rich Global and Kingsway Lion agreed to purchase a total of 593,724,000 Shares, representing approximately 19.0% of the entire issued share capital of Swank, at a total consideration of HK$15,971,175.60, or HK$0.0269 per Share. Out of the 593,724,000 Shares, 312,486,000 Shares, representing approximately 10.0% of the entire current issued share capital of Swank, was to be purchased by Rich Global, and 281,238,000 Shares, representing approximately 9.0% of the entire current issued share capital of Swank, was to be purchased by Kingsway Lion.

On 16th December, 2003, Fortune Dynamic, a wholly-owned subsidiary of Tomorrow, and Tomorrow (as warrantor of Fortune Dynamic) entered into the Option Agreement with Rich Global, pursuant to which Fortune Dynamic agreed to grant the Option to Rich Global to

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LETTER FROM THE BOARD

purchase 50.0% of the entire issued shares of Probest at the time of exercise of the Option within a period of 15 months from the date of the Option Agreement at a consideration of HK$15,666,000, or approximately HK$0.0197 per Share based on the shareholding of Probest in Swank of 1,593,599,230 Shares immediately upon completion of the Sale and Purchase Agreement and the Placing (assuming all Placing Shares being sold). The grant of the Option under the Option Agreement is conditional upon the completion of the Sale and Purchase Agreement. Completion of the Sale and Purchase Agreement is conditional on, among other matters, execution of the Option Agreement.

On 16th December 2003, Probest also entered into the conditional Placing Agreement with Kingsway Financial Services Group Limited, a wholly owned subsidiary of SW Kingsway, as the Placing Agent pursuant to which the Placing Agent agreed to place on a best effort basis 412,794,000 existing Placing Shares, representing approximately 13.2% of the entire issued share capital of Swank, to not fewer than six independent investors. Completion of the Placing took place on 30th December, 2003.

The entering into of the Sale and Purchase Agreement and the Option Agreement constitutes a discloseable transaction of Tomorrow under the Listing Rules. The purpose of this circular is to provide you with, among other matters, details of the Sale and Purchase Agreement and the Option Agreement.

THE SALE AND PURCHASE AGREEMENT

Date

16th December, 2003

Parties

The Purchasers : Kingsway Lion and Rich Global, both wholly-owned subsidiaries of SW Kingsway The Vendor : Probest

All of Kingsway Lion, Rich Global and SW Kingsway, together with their respective ultimate beneficial owners, are independent of and not connected with the directors, chief executive and the existing substantial shareholders of Tomorrow and Swank and their respective subsidiaries or any of their respective associates.

Terms of the Sale and Purchase Agreement

The Purchasers agreed to purchase and the Vendor agreed to sell an aggregate of 593,724,000 Shares, representing approximately 19.0% of the entire issued share capital of Swank as at the date of the Sale and Purchase Agreement, at a consideration of HK$15,971,175.60, or HK$0.0269 per Share. Out of the 593,724,000 Shares, 312,486,000

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LETTER FROM THE BOARD

Shares, representing approximately 10.0% of the entire issued share capital of Swank, was to be purchased by Rich Global and 281,238,000 Shares, representing approximately 9.0% of the entire issued share capital of Swank, was to be purchased by Kingsway Lion. The consideration was determined at arm’s length basis between the parties and represents (i) a discount of approximately 51.9% to the closing price of HK$0.056 per Share as quoted on the Stock Exchange on 4th November, 2003, being the last trading day immediately prior to the suspension of trading; (ii) a discount of approximately 56.7% to the average closing price of approximately HK$0.0622 per Share as quoted on the Stock Exchange for the last 10 trading days up to and including 4th November, 2003. The consideration represents a discount of approximately 46.2% to the closing price of HK$0.05 per Share as quoted on the Stock Exchange on the Latest Practicable Date.

There was no lock-up period of the abovementioned 593,724,000 Shares under the Sale and Purchase Agreement.

Having considered the recent market price of the Shares, the subscription price of HK$0.013 of the Shares by Probest pursuant to the Open Offer, the relatively low liquidity of the Shares over the last six months, the unaudited pro forma adjusted net liability of the Swank Group of approximately HK$39,500,000 or approximately HK$0.0126 per Share as disclosed in the circular of Swank dated 30th September, 2003 in relation to the Open Offer and the fact that trading of the Shares had been suspended for more than one month, the Directors are of the view that, despite the over 51% discount to the closing price of the Shares immediately prior to the suspension of trading, the consideration of the Sale and Purchase Agreement is fair and reasonable so far as the shareholders of Tomorrow and the Tomorrow Group (including the Swank Group) as a whole are concerned.

The Sale and Purchase Agreement is conditional upon (i) the completion of the Placing which took place on 30th December, 2003 and (ii) the execution of the Option Agreement. Completion of the sale and purchase of the 281,238,000 Shares with Kingsway Lion took place on 31st December, 2003, and completion of the sale and purchase of the 312,486,000 Shares with Rich Global took place on 2nd January, 2004.

THE OPTION AGREEMENT

Date

16th December, 2003

Parties

The Grantor : Fortune Dynamic The Grantee : Rich Global Warrantor of Grantor : Tomorrow

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LETTER FROM THE BOARD

Terms of the Option Agreement

Fortune Dynamic agrees to grant to Rich Global the Option to purchase 50.0% of the entire issued shares of Probest at the time of exercise of the Option at a consideration of HK$15,666,000. Such consideration is determined after arm’s length negotiation between the parties with reference to Probest’s interest in the Swank Group which recorded an unaudited pro forma adjusted net liability of approximately HK$39,500,000 or approximately HK$0.0126 per Share as disclosed in the circular of Swank dated 30th September, 2003 in relation to the Open Offer and the fact that Probest is a private company. The Option may be exercised by Rich Global within a period of 15 months from the date of the Option Agreement. If the Option is not exercised within the said 15-month period, the Option shall lapse and the Option Agreement shall be of no further force and effect. The benefit of the Option is exerciseable by Rich Global only and may not be transferred by Rich Global without any prior written consent of Fortune Dynamic and Tomorrow provided that if such transfer is to be made by Rich Global to another wholly-owned subsidiary of SW Kingsway such consent shall not be unreasonably withheld or delayed.

Under the Option Agreement, Fortune Dynamic and Tomorrow have jointly and severally undertaken to Rich Global that, inter alia, (i) upon completion of the sale and purchase of the Option Share, the same number of persons as the then current number of directors comprising the board of directors of Probest as Rich Global may nominate shall be appointed as directors of Probest; (ii) Fortune Dynamic shall procure that on or before the completion of the sale and purchase of the Option Share, the Promissory Note shall be duly novated or assigned or transferred to a subsidiary of Swank; and (iii) from the date of the Option Agreement and until the Option is exercised or lapses, Fortune Dynamic shall not reduce its shareholding percentage in Probest and shall procure Probest not to transfer, dispose, pledge or charge the Shares currently held by it (other than the transactions contemplated under the Sale and Purchase Agreement and the Placing Agreement).

The grant of the Option is conditional on the completion of the Sale and Purchase Agreement and the completion of the Placing. The grant of the Option subsequently became unconditional on 2nd January, 2004.

Upon completion of the sale and purchase of the Option Share pursuant to the exercise of the Option, Fortune Dynamic, Probest, Rich Global, Tomorrow (as guarantor of Probest for its performance of obligations under such shareholders’ agreement as mentioned hereinbelow in this paragraph) and SW Kingsway (as guarantor of Rich Global for its performance of obligations under such shareholders’ agreement as mentioned hereinbelow in this paragraph) will enter into a shareholders’ agreement pursuant to which Fortune Dynamic shall have the right to nominate up to three directors of Probest and Rich Global shall have the right to nominate up to three directors of Probest. Such arrangement was made having considered their proportionate shareholding in Probest upon the sale and purchase of the Option Share. Furthermore, Probest shall use its best endeavour to procure (i) the maximum number of

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LETTER FROM THE BOARD

directors in Swank shall be six, all of whom shall be nominated by Probest; and (ii) out of the six directors nominated by Probest, one director nominated by Rich Global shall be appointed as the chairman of the board of directors of Swank.

The board of directors of Probest currently consists of five directors, all of which are nominated by Fortune Dynamic. Under the abovementioned arrangements and agreements, upon completion of the sale and purchase of the Option Share, it is expected that the board of directors of Probest will consist of six directors, out of which three of them will be nominated by Fortune Dynamic and three of them will be nominated by Rich Global, and Probest will be controlled equally by Fortune Dynamic and Rich Global.

Currently the board of directors of Swank consists of six executive directors, out of which five are nominated by Probest, and two independent non-executive directors. Upon completion of the sale and purchase of the Option Share, the board of directors of Swank will remain to be controlled by Probest, and Probest is expected to nominate all of its then directors into the board of directors of Swank. As there would be an expected change in the board of directors of Probest following the completion of the sale and purchase of the Option Share, the board of directors of Swank is therefore expected to be changed as a result. Further announcement will be made in accordance with the Listing Rules as and when necessary.

Assuming (i) the completion of the sale and purchase of the Option Share pursuant to the exercise of the Option; and (ii) that there is no disposal of the Shares by Rich Global or Kingsway Lion in the meantime, SW Kingsway, through Rich Global and Kingsway Lion, will hold 19.0% in Swank and through Rich Global will hold 50.0% in Probest. Prior to all these transactions, SW Kingsway does not have any interest in either of Swank or Probest. Effective interest of Tomorrow, through Fortune Dynamic, in Probest will be decreased from 100.0% to 50.0%.

In order to avoid any potential competing business issues, Rich Global and SW Kingsway will, upon completion of the sale and purchase of the Option Share, undertake to Fortune Dynamic and Tomorrow that, for so long as Fortune Dynamic and any subsidiary of Tomorrow holds shares in Probest and Probest holds shares in Swank, SW Kingsway itself shall not, and SW Kingsway shall procure its subsidiaries other than Probest shall not, be engaged in the design, manufacture and sale of optical products.

Save and except the above arrangements, Fortune Dynamic, Tomorrow, Rich Global and SW Kingsway all have no present intention to change the management, operation, business or the employment of staff of the Swank Group.

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LETTER FROM THE BOARD

SHAREHOLDING STRUCTURE

The following table sets out the changes in shareholding structure of Swank after completion of the Placing Agreement and the Sale and Purchase Agreement:

Probest Mr. Cheung Wah Hing Rich Global Kingsway Lion Public TOTAL	Immediately prior to the completion of the Sale and Purchase Agreement and the Placing Shares % 2,600,117,230 83.21 358,400 0.01 – – – – 524,387,104 16.78 3,124,862,734 100.00	On completion of the Sale and Purchase Agreement and the Placing Shares % 1,593,599,230 51.00 358,400 0.01 312,486,000 10.00 281,238,000 9.00 937,181,104 29.99 3,124,862,734 100.00	On completion of the Sale and Purchase Agreement and the Placing Shares % 1,593,599,230 51.00 358,400 0.01 312,486,000 10.00 281,238,000 9.00 937,181,104 29.99 3,124,862,734 100.00
			100.00

Followings are the group structure charts illustrating the effect of the transactions contemplated under the Placing Agreement, the Sale and Purchase Agreement and the Option Agreement, respectively:

On completion of the Placing Agreement and the Sale and Purchase Agreement:

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

Tomorrow SW Kingsway
100.00% 100.00%
Fortune Dynamic
100.00%
Director Probest Rich Global Kingsway Lion Public
0.01% 51.00% 10.00% 9.00% 29.99%
Swank
----- End of picture text -----

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LETTER FROM THE BOARD

Assuming full exercise of the Option by Rich Global pursuant to the Option Agreement:

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

Tomorrow SW Kingsway
100.00% 100.00%
Fortune Dynamic
50.00% Rich Global
Director Probest 50.00% Kingsway Lion Public
0.01% 51.00% 10.00% 9.00% 29.99%
Swank
----- End of picture text -----

REASONS FOR ENTERING INTO THE SALE AND PURCHASE AGREEMENT AND THE OPTION AGREEMENT

The Tomorrow Group is mainly engaged in the design, development, manufacture and sale of electronic products, the manufacture and sale of printed circuit boards, the trading and distribution of electronic parts and components, the trading of listed equity investment, and the provision of loan financing.

The Directors consider that the entering into of the Sale and Purchase Agreement and the Option Agreement will provide an opportunity for the Tomorrow Group to realise part of its investment in the Swank Group. At the same time, the Directors consider the introduction of SW Kingsway as a new substantial shareholder will be beneficial to the Swank Group as a whole. As disclosed in the circular of Swank dated 30th September, 2003 in relation to, inter alia, the Open Offer, the Swank Group has been under a tight cashflow position and recorded a net liability. The Swank Group may require additional capital in order to expand. At this juncture, SW Kingsway, being an experienced expert in the financial field, may facilitate the Swank Group to obtain outside financings and/or invite strategic investors in the future, which the Directors consider will provide additional financial flexibility to the Swank Group. At the same time, Swank will examine and explore possible cooperative opportunities with other existing investments of SW Kingsway and its subsidiaries with a view to generate synergy so as to create value to the shareholders of Swank.

Under the Option Agreement, Fortune Dynamic shall procure that on or before the completion of the sale and purchase of the Option Share, all of the obligations including but not limited to the financial obligations under the Promissory Note shall be duly novated or transferred to a subsidiary of Swank. Such arrangement was initiated by Rich Global and

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LETTER FROM THE BOARD

accepted by Fortune Dynamic, which was agreed after arm’s length negotiations between the parties as Rich Global considers it to be beneficial to the overall financial position of the Swank Group and at the same time, the novation/transfer can provide additional flexibility for the Swank Group in obtaining possible future financing. As stated in the circular of Swank dated 30th September, 2003, the directors of Swank expect that the financial obligations of Swank pursuant to the Promissory Note shall be settled by the internal resources of Profitown generated from the operating activities of its subsidiaries and associated companies and distributed to Swank by way of repayment of the Profitown Loan or advances by Profitown to Swank. Upon the novation/transfer of the Promissory Note from Swank to a subsidiary of Swank, the directors of Swank expect that the Promissory Note shall continue to be settled by the internal resources of Profitown generated from the operating activities of its subsidiaries and associates and distributed to Swank. Pursuant to an undertaking by Profitown to Swank dated 3rd September, 2003, any surplus cash generated from the businesses carried out by Profitown’s subsidiaries and associated companies, shall, after appropriating a sum for operating expenses, be applied to repay the Profitown Loan or to make advances to Swank on the same terms as the Profitown Loan for the purposes of facilitating Swank to repay the amounts due under the Promissory Note. Such undertaking will remain in effect regardless of the Sale and Purchase Agreement and the Option Agreement. As such, the Directors are of the view that the interest of Tomorrow, as the ultimate creditor of the Promissory Note, will not be materially affected as a result of such novation/transfer. As such the Directors consider the abovementioned arrangement would not have material impact on the financial and/or trading position of the Tomorrow Group.

After completion of the Sale and Purchase Agreement, Tomorrow still indirectly owns 51.0% of the then issued share capital in Swank through Probest. Upon exercise of the Option by Rich Global pursuant to the Option Agreement, indirect shareholding of Tomorrow in Probest will be reduced to 50.0% and Swank will then cease to be a subsidiary of Tomorrow. Save as disclosed herein, Tomorrow has no present intention to dispose of its remaining interests in Swank. The Board intends that the sale proceeds will be used for working capital of Tomorrow. Probest is expected to record a gain of approximately HK$6,200,000 on disposal of the 19% interest in Swank pursuant to the Sale and Purchase Agreement, representing the total net proceeds of approximately HK$15,700,000 from the disposal of the 19% interest on Swank minus the book value of such 19% interest in Swank of approximately HK$9,500,000 as at 30th November, 2003.

INFORMATION ON SWANK

The Swank Group is primarily engaged in the design, manufacture and marketing of frames, sunglasses and lenses. Its production facilities are located in Dongguan and Shenzhen of the PRC. Products of the Swank Group are mainly exported to the United States, Europe and Australia.

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LETTER FROM THE BOARD

According to the consolidated audited accounts of Swank as at 31st December, 2002, its financial information is summarised as below:

	For the year ended	For the year ended
	31st December, 2002	31st December, 2001
Profit/(loss) before tax	10,763,000	(58,815,000)
Profit/(loss) after tax	10,141,000	(58,889,000)
(Net liability)	(89,942,000)	(398,607,000)

INFORMATION ON RICH GLOBAL, KINGSWAY LION AND SW KINGSWAY

SW Kingsway is an investment holding company incorporated in Bermuda and the shares of which are listed on the main board of the Stock Exchange. The subsidiaries of SW Kingsway are principally engaged in securities investment and in the provision of securities and futures brokerage, asset and fund management, financial advisory services, money lending and other securities related financial services.

Rich Global is an investment holding company incorporated in the British Virgin Islands and is wholly owned by SW Kingsway. Since its incorporation in November 2003 and up to the Latest Practicable Date, Rich Global has not conducted any business other than holding the Shares pursuant to the Sale and Purchase Agreement and the Option Agreement.

Kingsway Lion, a company incorporated in the British Virgin Islands in September 1999, is principally engaged in securities investment and is wholly owned by SW Kingsway.

POSSIBLE MANDATORY GENERAL OFFER

If upon the exercise of the Option, Rich Global and parties acting in concert with it acquire the Shares such that their aggregate holding of voting rights in Swank increases to 30% or more, Rich Global and the parties acting in concert with it (including Probest) will be required under Rule 26 of the Code on Takeovers and Mergers to make a mandatory general offer to acquire all the Shares other than those already owned/agreed to be acquired by Rich Global and the parties acting in concert with it.

GENERAL

The entering into of the Sale and Purchase Agreement and the Option Agreement constitutes a discloseable transaction of Tomorrow under the Listing Rules.

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LETTER FROM THE BOARD

ADDITIONAL INFORMATION

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

Yours faithfully, By order of the board of

Tomorrow International Holdings Limited Yau Tak Wah, Paul

Chairman

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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 Tomorrow. 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.

2. DISCLOSURE OF INTERESTS

(i) Interests of Directors

As at the Latest Practicable Date, the interests of the Directors and Tomorrow’s chief executive in any underlying shares or debentures of, or has a short position in the relevant share capital of, Tomorrow or any of its associated corporation (within the meaning of Part XV of the SFO) which (a) were notified to Tomorrow 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 provision of the SFO); or (b) were required, pursuant to Section 352 of the SFO, to be entered in the register referred to therein; or (c) were notified to Tomorrow and the Stock Exchange pursuant to the Model Code for Securities Share Transactions by Directors of Listed Companies contained in the Listing Rules, were as follows:

		Nature of	Number of	Approximate
Directors	Note	interest	shares	percentage
Mr. Yau Tak Wah, Paul	1	Corporate	14,847,400	5.2%
Mr. Tam Ping Wah	2	Corporate	8,000	0.003%

Notes:

1. These Shares were held through Pacific Shore Profits Limited, a company beneficially wholly owned by Mr. Yau Tak Wah, Paul.

2. These Shares were held through Strong Trend International Limited, a company beneficially wholly owned by Mr. Tam Ping Wah.

Save as disclosed above, as at the Latest Practicable Date, to the knowledge of Tomorrow, none of the Directors and chief executive of Tomorrow or their respective associates had any personal, family, corporate or other interest or short position in the shares, underlying shares or debentures of Tomorrow or any of its associated corporations (within the meaning of Part XV of the SFO) which (a) were notified to Tomorrow and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the

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GENERAL INFORMATION

APPENDIX

SFO (including interests and short positions which they are taken or deemed to have under such provisions of the SFO); or (b) were required, pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (c) were notified to Tomorrow and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listing Companies contained in the Listing Rules.

(ii) Interests of Substantial Shareholders

As at the Latest Practicable Date, according to the register of interests in shares and short positions kept by Tomorrow pursuant to section 336 of the SFO and so far as is known to, or can be ascertained after reasonable enquiries by the Directors, the following company and/or person was directly or indirectly interested in 5% or more of the issued share capital of Tomorrow:

		Number of	Approximate
	Note	ordinary Shares	Percentage
Winspark	1	165,835,963	58.0%
Mr. Yau Tak Wah, Paul	2	14,847,400	5.2%

Notes:

1. Winspark Venture Limited is wholly beneficially owned by Mr. Chan Yuen Ming.

2. These Shares were held through Pacific Shore Profits Limited, a company beneficially wholly owned by Mr. Yau Tak Wah, Paul.

Save as disclosed herein, the Directors are not aware of any company and/or person who was directly or indirectly interested in 5% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of Tomorrow or in any options in respect of such capital as at the Latest Practicable Date.

3. LITIGATION

(a) Hanmy (Holding) Limited and its related companies (collectively ‘‘Hanmy’’)

The Swank Group commenced legal proceedings against Hanmy in February 1999 to recover the amounts owed by Hanmy to the Swank Group of approximately HK$96 million, in relation to certains loans and other advances by the Swank Group to Hanmy, which included issuance of writ and petitions for winding-up. The Swank Group has not yet obtained a judgement due to Hanmy’s defence. Legal proceedings are still in progress and the Swank Group is currently seeking legal opinion regarding the merits of continuing the case. The board of directors of Swank is currently of the view that it may not be cost effective to proceed further with the claim.

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GENERAL INFORMATION

APPENDIX

(b) Litigation against Mr. Lam Yin Sang and Ms. Chan Hoi Wo

The Swank Group instigated legal proceedings in October 1999 against Mr. Lam Yin Sang and Ms. Chan Hoi Wo for the losses of HK$385,800,000 sustained as a result of various alleged breaches of fiduciary and other duties while acting formerly as directors of the Swank Group. Legal proceedings are still in progress and the Swank Group is currently seeking legal opinion regarding the merits of continuing the case. The board of directors of Swank is currently of the view that it may not be cost effective to proceed further with the claim.

Save as disclosed above, neither Tomorrow 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 by or against Tomorrow or any of its subsidiaries.

4. SERVICE CONTRACT

There is no service contract between any proposed Directors and members of the Tomorrow Group which does not expire or is not determinable by the employer within one year without payment of compensation other than statutory compensation.

5. MATERIAL ADVERSE CHANGE

The Directors are not aware of any material adverse change in the financial or trading position of the Tomorrow Group since 31st December, 2002, the date to which the latest published audited financial statements of Tomorrow were made up.

6. GENERAL

• (a) The registered office of Tomorrow is at Clarendon House, Church Street, Hamilton HM11, Bermuda. The head office and principal place of business of Tomorrow is at 27th Floor, Henley Building, 5 Queen’s Road Central, Hong Kong.

• (b) The secretary of Tomorrow is Mr. Ma Wing Kuen, Ricky, FCCA, AHKSA.

• (c) The English text of this circular shall prevail over the Chinese text.

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