Tristate Holdings Limited - Proxy Solicitation & Information Statement 2008

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt about this circular or as to the action to be taken, you should consult your stockbroker, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Yeebo (International Holdings) Limited, you should at once hand this circular and the accompanying form of proxy to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale was effected for transmission to the purchaser or transferee.

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this circular, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

YEEBO (INTERNATIONAL HOLDINGS) LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 259)

MAJOR AND CONNECTED TRANSACTION

DEEMED DISPOSAL OF KUNSHAN VISIONOX DISPLAY CO LTD

Independent financial adviser to the Independent Board Committee and the Shareholders

CIMB-GK Securities (HK) Limited

A letter from the Board of Directors, a letter of recommendation from the Independent Board Committee and a letter of advice from CIMB-GK Securities (HK) Limited are set out on pages 6 to 29 of this circular.

The notice convening the Special General Meeting of Yeebo (International Holdings) Limited (the “Company”) to be held at Crystal Room IV, 3/F Panda Hotel, 3 Tsuen Wah Street, Tsuen Wan, Hong Kong on Thursday, 6 November 2008 at 10:00 a.m. is set out on pages 42 and 43 of this circular.

A form of proxy for the Special General Meeting is also enclosed with this circular. Whether or not you intend to attend the meeting, you are requested to complete the form of proxy in accordance with the instructions printed thereon and return the same to the Company’s Branch Share Registrars in Hong Kong, Tricor Secretaries Limited, at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Hong Kong, as soon as possible but in any event not less than 48 hours before the time appointed for the holding of the meeting or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting at the meeting if you so wish.

21 October 2008

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
Letter from the Independent Board Committee. . . . . . . . . . . . . . . . . . . . . . . . . . .	21
Letter from CIMB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	22
Appendix I − Financial Information on the Group. . . . . . . . . . . . . . . . . .	30
Appendix II − General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	37
Notice of Special General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	42

– i –

DEFINITIONS

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|||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
|“Ascalade”|Ascalade|Communication|Inc,|a|company|previously|
|listed|in|the|Toronto|Stock|Exchange|
|“Board”|The|board|of|directors|of|the|Company|
|“BJ|Visionox”|Beijing|Visionox|Technology|Co.|Limited|
|(|),|a|limited|liability|company|
|incorporated|in|the|PRC|in|which|the|Company|had|an|
|effective|interest|of|34.45%|interest|in|the|registered|
|capital|immediately|prior|to|the|entering|of|the|
|Restructuring|Agreement|
|“CIMB”|CIMB-GK|Securities|(HK)|Limited,|a|licensed|
|corporation|to|conduct|type|1|(securities|dealing),|type|4|
|(advising on securities) and type 6 (advising on corporate|
|finance)|regulated|activities|under|the|SFO,|the|
|independent|financial|adviser|to|the|Independent|Board|
|Committee|and|Shareholders|
|“Company”|Yeebo|(International|Holdings)|Limited,|a|company|
|incorporated|in|Bermuda,|the|shares|of|which|are|listed|
|on|the|Stock|Exchange|
|“Crown|Capital”|Crown|Capital|Holdings|Limited|(|),|a|
|company|incorporated|in|the|British|Virgin|Islands|with|
|limited|liability|in|which|the|Company|directly|holds|
|47.05%|of|the|total|issued|share|capital|whose|principal|
|activity|immediately|prior|to|the|entering|of|the|
|Restructuring|Agreement|was|the|holding|of|the|
|investment|in|BJ|Visionox|
|“Director(s)”|Director(s)|of|the|Company|
|“Faith|Crown”|Faith|Crown|International|Limited|(|),|
|a|company|incorporated|in|the|British|Virgin|Islands|and|
|a|wholly|owned|subsidiary|of|the|Company|whose|
|principal|activity|is|the|holding|of|the|investment|in|
|Kunshan|Visionox|
|“First|Option|Agreement”|The|option|agreement|dated|7|March|2006|between|the|
|Company,|Faith|Crown,|Kunshan|Venture|Capital|and|
|Shenzhen|Leaguer|pursuant|to|which|Kunshan|Venture|
|Capital|granted|Faith|Crown|the|option|to|acquire|its|
|equity|interest|in|Kunshan|Visionox|

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– 1 –

DEFINITIONS

“First Option Cancellation	The agreement dated 22 September 2008 between Faith
Agreement”	Crown and Kunshan Venture Capital pursuant to which
	the option previously granted by Kunshan Venture
	Capital to Faith Crown to acquire its equity interest in
	Kunshan Visionox was cancelled
“Group”	The Company and its subsidiaries
“Heibe Tsinghua”	Heibe Tsinghua Holdings Hongyi Technology Co Ltd ( ), a limited liability
	company incorporated in the PRC which, immediately
	prior to the entering of the Restructuring Agreement, had
	an equity interest of 15.53% in the registered capital of
	BJ Visionox and whose principal activities include the
	promotion and incubation of enterprises engaged in
	high-tech business as well as the investment in and
	management of start-up businesses
“Hong Kong”	Hong Kong Special Administrative Region of PRC
“HK$”	Hong Kong dollar(s), the lawful currency of the Hong
	Kong
“Independent Board Committee”	The committee of Directors comprises the three
	independent non-executive directors of the Company
	formed to advise the Shareholders of the terms of the
	Transaction
“Independent Third Parties”	Parties who is/are independent of the directors, chief
	executive officer and substantial shareholders of the
	Company and of their respective associates, or its
	nominees
“IRICO”	IRICO Group Corporation ( ), a limited liability company incorporated in the PRC principally
	engaged in the manufactures of colour picture tube and
	colour picture tube components which, immediately prior
	to the entering of the Restructuring Agreement, had an
	equity interest of 11.25% in the registered capital of BJ
	Visionox

– 2 –

DEFINITIONS

“Jiangmen Yeebo” Jiangmen Yeebo Semiconductor Co., Limited ( ), a wholly-owned foreign enterprise in the PRC in which the Company has a 100% interest whose principal activity is the manufacture of LCD products
“JV Agreement” The joint venture and operations agreement entered into between Faith Crown, Kunshan Venture Capital and Shenzhen Leaguer on 7 March 2006 for the setting up of Kunshan Visionox
“Kunshan Industrial” Kunshan Industrial Assets Management Company Limited ( ), a limited liability company incorporated in the PRC and an investment arm of the municipal government of Kunshan, Jiangsu Province, PRC which, on 8 June 2006, took over an equity interest of RMB120 million in the registered capital of Kunshan Visionox from Kunshan Venture Capital
“Kunshan Venture Capital” Kunshan Venture Capital and Investment Company Limited ( ), a company incorporated in the PRC, an investment arm of the municipal government of Kunshan, Jiangsu Province, PRC and one of the founding equity investors in Kunshan Visionox which, on 8 June 2006 transferred its equity interest of RMB120 million in the registered capital of Kunshan Visionox to Kunshan Industrial
“Kunshan Visionox” Kunshan Visionox Display Co., Limited ( ) a limited liability company incorporated in the PRC
“Latest Practicable Date” 17 October 2008, being the latest practicable date prior to the printing of this circular for the purpose of ascertaining certain information contained in this circular
“LCD” Liquid crystal displays “LCM” Liquid crystal displays module “Listing Rules” The Rules Governing the Listing of Securities of the Stock Exchange of Hong Kong Limited

– 3 –

DEFINITIONS

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|||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
|“Loan|Agreement”|The|loan|agreement|dated|7|March|2006|between|
|Jiangmen Yeebo,|RITUS|and|Shenzhen|Leaguer|pursuant|
|to|which|Jiangmen|Yeebo|agreed|to|advance|a|sum|of|
|RMB90|million|to|RITUS|
|“Loan|Cancellation|Agreement”|The|agreement|dated|22|September|2008|between|
|Jiangmen Yeebo,|RITUS|and|Shenzhen|Leaguer|pursuant|
|to|which|the|Loan|Agreement|was|unwind|
|“Nantong|Jianghai”|Nantong|Jianghai|Capacitor|Company|Ltd.|
|(|),|a|jointly|controlled|
|entity|incorporated|in|the|PRC|in|which|the|Group|has|an|
|equity|interest|of|50%|and|whose|principal|activities|are|
|the|manufacture|and|trading|of|aluminum|electrolytic|
|capacitors|
|“OLED”|Organic|Light|Emitted|Display|
|“PRC”|People’s|Republic|of|China|other|than|the|territories|of|
|Hong|Kong,|Macau|and|Taiwan|
|“Restructuring|Agreement”|The|agreement|dated|22|September|2008|entered|into|
|between|Faith|Crown,|Shenzhen|Leaguer,|Kunshan|
|Industrial,|Crown|Capital,|Hebei|Tsinghua,|IRICO|and|
|Kunshan|Visionox|for|the|restructuring|and|increase|in|
|registered|capital|of|Kunshan|Visionox|
|“RITUS”|Research|Institute|of|Tsinghua|University|in|Shenzhen|
|(|),|a|body|corporate|incorporated|in|
|the PRC which is the controlling shareholder of Shenzhen|
|Leaguer|and|mainly|engaged|in|the|commercialization|of|
|high-tech|products|
|“RMB”|Renminbi,|the|lawful|currency|of|PRC|
|“Second|Option|Agreement”|The|option|agreement|dated|7|March|2006|between|Faith|
|Crown,|Jiangmen|Yeebo,|RITUS,|Shenzhen|Leaguer|and|
|Kunshan|Venture|Capital|pursuant|to|which|Shenzhen|
|Leaguer|granted|Faith|Crown|the|option|to|acquire|its|
|equity|interest|in|Kunshan|Visionox|
|“Second|Option|Cancellation|The|agreement|dated|22|September|2008|between|Faith|
|Agreement”|Crown,|Jiangmen|Yeebo,|RITUS|and|Shenzhen|Leaguer|
|pursuant|to|which|the|option|previously|granted|by|
|Shenzhen|Leaguer|to|Faith|Crown|to|acquire|its|equity|
|interest|in|Kunshan|Visionox|was|cancelled|

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– 4 –

DEFINITIONS

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||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
|“Set|Up|Date”|The|date|on|which|the|business|registration|certificate|
|(|)|is|issued|to|Kunshan|Visionox|on|its|
|incorporation|
|“SFO”|Securities|and|Futures|Ordinance,|Chapter|571|of|the|
|Laws|of|Hong|Kong|
|“SGM”|A|special|general|meeting|of|the|Company|to|be|
|convened|for|the|purpose|of|considering|and,|if|thought|
|fit,|approving|the|Transaction|
|“Shareholders”|Shareholders|of|the|Company|
|“Shares”|Ordinary|shares|of|the|Company|
|“Shenzhen|Leaguer”|Shenzhen|Leaguer|Venture|Capital|Co.,|Limited|
|(|)|(formerly|known|as|
|“Shenzhen|Tsinghua|Leaguer|Venture|Capital|Co.,|
|Limited|(|)”),|a|limited|
|liability|company|incorporated|in|the|PRC|principally|
|acting as an incubator of enterprises engaged in high-tech|
|research|business|
|“Stock|Exchange”|The|Stock|Exchange|of|Hong|Kong|Limited|
|“Transaction”|The|series|of|transactions|as|stipulated|under|the|
|Restructuring|Agreement,|the|First|Option|Cancellation|
|Agreement,|the|Loan|Cancellation|Agreement|and|the|
|Second|Option|Cancellation|Agreement|

----- End of picture text -----

Unless otherwise specified in this circular and for the purpose of illustration only, RMB is translated to HK$ at the following rates:

RMB1.00 = HK$1.0101 at 31 March 2007 RMB1.00 = HK$1.1094 at 31 March 2008 RMB1.00 = HK$1.1390 at 31 August 2008 and 22 September 2008

No representation is made that any amounts in RMB have been or could be converted at the above rates or at any other rates or at all.

– 5 –

LETTER FROM THE BOARD

YEEBO (INTERNATIONAL HOLDINGS) LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 259)

Directors: FANG Hung, Kenneth, GBS, JP LI Kwok Wai, Frankie LEUNG Tze Kuen TIEN Pei Chun, James, GBS, JP * CHU Chi Wai, Allan LAU Yuen Sun, Adrian

Independent Non-executive Director

Registered Office: Canon’s Court 22 Victoria Street Hamilton HK12 Bernuda

Principal Office in Hong Kong: 7th Floor On Dak Industrial Building 2-6 Wah Sing Street Kwai Chung New Territories Hong Kong

21 October 2008

To the Shareholders

Dear Sir or Madam,

MAJOR AND CONNECTED TRANSACTION

DEEMED DISPOSAL OF KUNSHAN VISIONOX DISPLAY CO LTD

1. INTRODUCTION

On 30 September 2008, the Company announced that on 22 September 2008:

(i) the Group through Faith Crown entered into the Restructuring Agreement for the restructuring and increase in the registered capital of Kunshan Visionox. The other parties to the Restructuring Agreement are Shenzhen Leaguer, Kunshan Industrial, Crown Capital, Hebei Tsinghua, IRICO and Kunshan Visionox. Upon completion of the Restructuring Agreement, Faith Crown’s interest in the registered capital of Kunshan Visionox will decrease from 47.50% to 34.59%. On the other hand, Crown Capital, a 47.05% owned associated company of the Group, will acquire a 12.66% in the registered capital of Kunshan Visionox through the exchange of its entire holding of 73.22% in the registered capital of BJ Visionox.

– 6 –

LETTER FROM THE BOARD

(ii) the Group through Faith Crown and Jiangmen Yeebo also entered into the First Option Cancellation Agreement and the Second Option Cancellation Agreement. Pursuant to the First Option Cancellation Agreement and the Second Option Cancellation Agreement, the options granted to Faith Crown to acquire from Kunshan Venture Capital and Shenzhen Leaguer their respective equity interests in Kunshan Visionox; and the rights granted to Kunshan Venture Capital and Shenzhen Leaguer to transfer their respective equity interests in Kunshan Visionox to Faith Crown, will be cancelled.
(iii) the Group through Jiangmen Yeebo also entered into the Loan Cancellation Agreement pursuant to which the rights and obligations of all parties under the Loan Agreement will be terminated. According to the Loan Agreement, Jiangmen Yeebo has agreed to advance a sum of RMB90 million to RITUS for the purpose of investing in the registered capital of Kunshan Visionox by RITUS/Shenzhen Leaguer. RITUS has not drawn any amount of the advance as stipulated in the Loan Agreement, and neither RITUS nor Shenzhen Leaguer has contributed any amount of the registered capital of Kunshan Visionox.

The Transaction constitutes a major transaction under Chapter 14 of the Listing Rules. Since Kunshan Industrial is a connected person of the Company as defined in the Listing Rules by virtue of the fact that it is a substantial shareholder of Kunshan Visionox, a subsidiary of the Company, the Transaction also constitutes a connected transaction under Chapter 14A of the Listing Rules. The Transaction is subject to the approval of Shareholders. The SGM will be convened for the Shareholders to consider and, if thought fit, to approve the Transaction. To the best of the Directors’ knowledge, none of Shenzhen Leaguer, Kunshan Industrial, Crown Capital, Hebei Tsinghua, IRICO, Kunshan Venture Capital and RITUS has any shareholding in the Company. Moreover, none of the Shareholders has a material interest in the Transaction except in their capacity as a Shareholder. Hence no Shareholder is required to abstain from voting in the SGM.

The purpose of this circular is to provide you with, inter alia, (i) further information on the Transaction and other information as required by the Listing Rules; (ii) the letter from CIMB containing its advice to the Independent Board Committee and the Shareholders on the Transaction; (iii) the recommendation of the Independent Board Committee to the Shareholders regarding the Transaction; and (iv) the notice of the SGM.

– 7 –

LETTER FROM THE BOARD

2. AGREEMENTS ENTERED INTO BY THE GROUP

The Restructuring Agreement

Date: 22 September 2008

Parties:

Faith Crown, Shenzhen Leaguer, Kunshan Industrial, Crown Capital, Hebei Tsinghua, IRICO and Kunshan Visionox

Restructuring and Increase in Registered Capital of Kunshan Visionox

Immediately prior to the entering of the Restructuring Agreement, the registered capital of Kunshan Visionox was as follows:

Equity Holders Faith Crown Kunshan Industrial Shenzhen Leaguer	Registered Capital Owned Status RMB’000 % 190,000 47.50 Paid up 120,000 30.00 Paid up 90,000 22.50 Unpaid 400,000 100.00

Pursuant to the Restructuring Agreement, the registered capital of Kunshan Visionox will be restructured as follows:

Faith Crown will contribute a further RMB40 million (equivalent to approximately HK$46 million) in cash for an equal amount in the registered capital of Kunshan Visionox. Such amount shall be paid within 10 days after all conditions as set out under the section “Conditions Precedent” below have been fulfilled.
Kunshan Industrial will contribute a further RMB200 million (equivalent to approximately HK$228 million) in cash for an equal amount in the registered capital of Kunshan Visionox. Part of the contribution amounted to RMB100 million is to be paid within 10 days after all the necessary approvals of the Restructuring Agreement by the relevant government regulatory authorities have been granted. The remaining RMB100 million is to be paid when all the equity holders of Kunshan Visionox are of the opinion that payment is deemed necessary, but in any event not later than one year from the date of the Restructuring Agreement.
Shenzhen Leaguer will rescind from the JV Agreement. Shenzhen Leaguer will give up all its rights, and the other equity holders of Kunshan Visionox will release it from all its obligations, in the JV Agreement.

– 8 –

LETTER FROM THE BOARD

Crown Capital will inject its holding of 73.22% in the registered capital of BJ Visionox in exchange for RMB84,200,000 in the registered capital of Kunshan Visionox.
Hebei Tsinghua will inject its holding of 15.53% in the registered capital of BJ Visionox in exchange for RMB17,860,000 in the registered capital of Kunshan Visionox.
IRICO will inject its holding of 11.25% in the registered capital of BJ Visionox in exchange for RMB12,940,000 in the registered capital of Kunshan Visionox.

Upon completion of the Restructuring Agreement, BJ Visionox will become a whollyowed subsidiary of Kunshan Visionox. The equity holding of the respective parties in the registered capital of Kunshan Visionox will be as follows:

Equity Holders Kunshan Industrial Faith Crown Crown Capital Hebei Tsinghua IRICO	Registered Capital Owned RMB’000 % 320,000 48.12 230,000 34.59 84,200 12.66 17,860 2.69 12,940 1.94 665,000 100.00	Registered Capital Owned RMB’000 % 320,000 48.12 230,000 34.59 84,200 12.66 17,860 2.69 12,940 1.94 665,000 100.00
		100.00

To the best of the Directors’ knowledge, information and belief having made all reasonable enquiry, Kunshan Industrial, Shenzhen Leaguer, Hebei Tsinghua and IRICO as well as their ultimate beneficial owners are Independent Third Parties and have no prior relationship (including business relationship) with the Group, save for their equity interests in Kunshan Visionox or BJ Visionox.

The Consideration

The consideration in exchange for the registered capital in Kunshan Visionox was arrived at after arm’s length negotiations between the parties to the Restructuring Agreement.

The value of registered capital allocated to Crown Capital, Heibe Tsinghua and IRICO was based on their respective holding in BJ Visionox immediately before the entering of the Restructuring Agreement. For this purpose, BJ Visionox as a whole has been assigned a value of RMB115 million which is also the basis in which Crown Capital acquired its 73.22% in the registered capital of BJ Visionox in 2004.

– 9 –

LETTER FROM THE BOARD

The principal activities of BJ Visionox are the development, manufacture and marketing of OLED. The following financial information were extracted from the unaudited management accounts of BJ Visionox, prepared in accordance with Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants:

	As at 31 March 2008	As at 31 March 2008	As at 31 March 2007	As at 31 March 2007
	RMB’000	HK$’000	RMB’000	HK$’000
Net assets	46,902	52,033	61,311	61,930
	Year ended 31 March 2008		Year ended 31 March 2007
	RMB’000	HK$’000	RMB’000	HK$’000
Loss before and after
tax	(14,409)	(15,985)	(16,069)	(16,231)

Based on the latest management accounts of BJ Visionox, its net assets as at 31 August 2008 were RMB41 million (equivalent to approximately HK$47 million).

The loss incurred by BJ Visionox in the past few years was mainly due to the research and development expenditure incurred and the amortization of intangible assets which, according to the accounting standards, have to be charged to the profit and loss account. This by no means undermines the value of the knowledge and technology developed by BJ Visionox which could best be recognized when a partner with mass production capacity in OLED, such as Kunshan Visionox, is identified. Hence the Directors believe that assigning RMB115 million as the value of BJ Visionox (which is also the basis when Crown Capital acquired its 73.22% in the registered capital of BJ Visionox) for the purpose of the Transaction is fair and reasonable.

Conditions Precedent

Completion of the Restructuring Agreement is conditional upon the fulfillment or waiver by all parties (if appropriate) of the following conditions:

Obtaining of all necessary approval procedures by the equity holders of Kunshan Visionox (including the Company being a holding company of Faith Crown) and BJ Visionox for the entering into the Restructuring Agreement.
Obtaining of all necessary approval procedures from the relevant regulatory authorities by Kunshan Visionox and BJ Visionox for the change in registered capital and equity holders.
Signing of the revised joint venture agreement and revised company’s bye-laws by the respective equity holders of Kunshan Visionox and BJ Visionox and filing of the same with the relevant regulatory authorities.

Timing of Capital Injection

The RMB40 million to be injected by Faith Crown shall be paid within 10 days after all conditions as set out under the section “Conditions Precedent” above have been fulfilled.

– 10 –

LETTER FROM THE BOARD

Of the amount to be injected by Kunshan Industrial, RMB100 million shall be paid within 10 days after all conditions as set out under the section “Conditions Precedent” above have been fulfilled. The remaining RMB100 million shall be paid when all the equity holders of Kunshan Visionox are of the opinion that payment is deemed necessary, but in any event not later than one year from the date of the Restructuring Agreement.
Crown Capital, Hebei Tsinghua and IRICO shall cause their respective equity holdings in BJ Visionox to be transferred to Kunshan Visionox within 90 days after all conditions as set out under the section “Conditions Precedent” above have been fulfilled.

The timing of capital injection has been agreed upon after commercial negotiation taking into account the cash flow requirement of Kunshan Visionox. It is anticipated that Kunshan Visionox would have adequate cash flows for the foreseeable future after the initial cash injection of RMB100 million and RMB40 million by Kunshan Industrial and Faith Crown, respectively. The timing of the injection of capital would not have any effect to the percentage holding in the registered capital of Kunshan Visionox by the respective equity holders.

Nomination of Directors

Upon completion of the Restructuring Agreement, the board of directors of Kunshan Visionox will consist of 9 members to be nominated by the holders of equity interests as follows:

Number of directors to be nominated

Kunshan Industrial	3
Faith Crown	2
Crown Capital	1
Hebei Tsinghua	2
IRICO	1

The First Option Cancellation Agreement

Date:	22 September 2008
Parties:	Faith Crown and Kunshan Venture Capital

To the best of the Directors’ knowledge, information and belief having made all reasonable enquiry, Kunshan Venture Capital as well its ultimate beneficial owners are Independent Third Parties and have no prior relationship (including business relationship) with the Group save for their interests in Kunshan Visionox.

– 11 –

LETTER FROM THE BOARD

Cancellation of Options Granted

According to the terms of the First Option Agreement:

(i) Kunshan Venture Capital has granted Faith Crown the option to acquire its equity holding of RMB120 million in the registered capital of Kunshan Visionox within 3 years from the Set Up Date at a consideration of RMB120 million plus interest on such amount accrued at prevailing PRC commercial bank’s lending rate; and
(ii) Faith Crown has granted Kunshan Venture Capital the right to transfer its equity interest in Kunshan Visionox at a consideration equivalent to 1.05 times of the amount contributed by Kunshan Venture Capital to the registered capital of Kunshan Visionox if Kunshan Visionox goes into liquidation within 36 months of the Set Up Date.

Neither Faith Crown nor Kunshan Venture Capital has exercised any option or right in the First Option Agreement.

Both parties now agreed to unwind the First Option Agreement, and that:

(i) the rights given to the parties in the First Option Agreement be cancelled; and
(ii) the obligations on both parties arising from the First Option Agreement be released.

No compensation is to be paid or received by Faith Crown or Kunshan Venture Capital for entering into the First Option Cancellation Agreement.

The Loan Cancellation Agreement

Date: 22 September 2008 Parties: Jiangmen Yeebo, RITUS and Shenzhen Leaguer

To the best of the Directors’ knowledge, information and belief having made all reasonable enquiry, RITUS as well its ultimate beneficial owners are Independent Third Parties and have no prior relationship (including business relationship) with the Group.

Cancellation of Loan Agreed to be Granted

According to the terms of the Loan Agreement, Jiangmen Yeebo has agreed to advance a sum of RMB90 million to RITUS for the purpose of investing in the registered capital of Kunshan Visionox by RITUS/Shenzhen Leaguer. RITUS has not drawn any amount of the advance as stipulated under the Loan Agreement and neither RITUS nor Shenzhen Leaguer has contributed any amount of the registered capital of Kunshan Visionox.

– 12 –

LETTER FROM THE BOARD

The parties to the Loan Cancellation Agreement now agreed to unwind the Loan Agreement, and that the rights and obligations of all parties under the Loan Agreement be terminated.

No compensation is to be paid or received by Jiangmen Yeebo, RITIS or Shenzhen Leaguer for entering into the Loan Cancellation Agreement.

The Second Option Cancellation Agreement

Date: 22 September 2008 Parties: Faith Crown, Jiangmen Yeebo, RITUS and Shenzhen Leaguer

Cancellation of Options Granted

According to the terms of the Second Option Agreement:

(i) Shenzhen Leaguer has granted Faith Crown the option to acquire:
a. its equity holding of RMB60 million in the registered capital of Kunshan Visionox within 3 years from the Set Up Date at a consideration of RMB60 million and,
b. unless Shenzhen Leaguer has confirmed in the first two years immediately after the Set Up Date that it will retain its equity interest of RMB30 million in the registered capital of Kunshan Visionox, a further RMB30 million in the registered capital of Kunshan Visionox in the third year from the Set Up Date at a consideration of RMB30 million.
(ii) Faith Crown has granted Shenzhen Leaguer the right to transfer its equity interest equivalent to RMB90 million in the registered capital of Kunshan Visionox at a consideration of RMB90 million, such amount shall be deemed to have been paid by RITUS to Jiangmen Yeebo as repayment of the loan due by RITUS to Jiangmen Yeebo under the Loan Agreement.

Shenzhen Leaguer has not injected any amount as contribution to the registered capital of Kunshan Visionox and neither Faith Crown nor Shenzhen Leaguer has exercised any option or right in the Second Option Agreement.

The parties to the Second Option Cancellation Agreement now agreed to unwind the Second Option Agreement, and that:

(i) the rights given to the parties in the Second Option Agreement be cancelled; and
(ii) the obligations on all parties arising from the Second Option Agreement be released.

No compensation is to be paid or received by Faith Crown, Jianmen Yeebo, RITUS and Shenzhen Leaguer for entering into the Second Option Cancellation Agreement.

– 13 –

LETTER FROM THE BOARD

3. INFORMATION ON KUNSHAN VISIONOX

Kunshan Visionox was formed pursuant to the JV Agreement entered into by various parties on 7 March 2006. The principal activities of Kunshan Visionox are the development, manufacture and marketing of electronic components, devices and equipment relating to display devices, including OLED. The construction of its first phase plant in Kunshan, Jiangsu Province, PRC has been completed. The procurement of production equipment and installation of machinery has been completed, and pilot run will commence soon. The factory will be equipped with the facilities to produce mono, color, area color and full color OLED products. The application will cover both consumer electronics and industrial instruments segment.

The following financial information were extracted from the unaudited management accounts of Kunshan Visionox, prepared in accordance with Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants:

	As at 31 March 2008	As at 31 March 2008	As at 31 March 2007	As at 31 March 2007
	RMB’000	HK$’000	RMB’000	HK$’000
Net assets	296,027	328,412	311,430	314,575
	Year ended 31 March 2008		Year ended 31 March 2007
	RMB’000	HK$’000	RMB’000	HK$’000
(Loss)/Profit before and
after tax	(15,403)	(17,088)	1,188	1,200

The loss incurred by Kunshan Visionox in the year ended 31 March 2008 was mainly due to (i) the exchange loss recorded on its foreign currency deposits (the unutilized funds to be used for the acquisition of plant and equipment); and (ii) the pre-operating expenses incurred.

4. EFFECT TO THE GROUP

Immediately prior to the Transaction:

(i) the Group had an equity interest of 47.50% in the registered capital of Kunshan Visionox. Since the Group also had the potential power to control the board and operations of Kunshan Visionox by holding two options to acquire the remaining 52.50% in the registered capital of Kunshan Visionox, Kunshan Visionox has been accounted for as a subsidiary of the Group.
(ii) Crown Capital, a 47.05% owned associated company of the Group, owned 73.22% of the registered capital of BJ Visionox. Crown Capital (together with its then subsidiary BJ Visionox) has been treated as an associated company of the Group and its results and net assets has been equity accounted for in the consolidated financial statements of the Group.

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LETTER FROM THE BOARD

Upon completion of the Transaction:

(i) the Group, through Faith Crown, will hold an equity interest of 34.59% of the registered capital of Kunshan Visionox. In addition, Crown Capital, a 47.05% owned associated company of the Company, will hold a further equity interest of 12.66% of the registered capital of Kunshan Visionox. Thus the Group will have a combined effective interest of 40.55% in the registered capital of Kunshan Visionox.
(ii) since the options granted by Kunshan Venture Capital and Shenzhen Leaguer to Faith Crown to acquire their respective equity interests in Kunshan Visionox will be cancelled by the First Option Cancellation Agreement and the Second Option Cancellation Agreement, the Group will no longer have the power to control the board and operations of Kunshan Visionox. Therefore Kunshan Visionox will no longer be accounted as a subsidiary of the Group. Instead, Kunshan Visionox will be accounted for as an associated company and its results and net assets will be equity accounted for in the consolidated financial statements of the Group.
(iii) BJ Visionox will become a wholly-owned subsidiary of Kunshan Visionox (and hence accounted for as an associated company of the Group).
(iv) Crown Capital will continue to be accounted for as an associated company of the Group.

The existing structure of the Group and the proposed structure upon completion of the Transaction, so far as it relates to its investments in Kunshan Visionox and BJ Visionox, is as follows:

Existing structure

==> picture [360 x 119] intentionally omitted <==

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

The Company
100% 47.05%
Shenzhen Leaguer Faith Crown Kunshan Industrial Crown Capital
22.50% 47.50% 30.00% Heibei Tsinghua IRICO
Kunshan Visionox 15.53% 73.22% 11.25%
BJ Visionox
----- End of picture text -----

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LETTER FROM THE BOARD

Proposed structure

==> picture [304 x 249] intentionally omitted <==

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

The Company
100%
47.05%
Kunshan
Faith Crown Industrial Heibei Tsinghua IRICO Crown Capital
34.59% 481.2% 6.29% 19.4% 126.6%
Kunshan Visionox
100%
BJ Visionox
----- End of picture text -----

At present the Group does not have any intention to dispose of its remaining equity interest in Kunshan Visionox after the completion of the Transaction.

As a result of the Transaction, based on the decrease in the Group’s effective equity interest of 6.95% in Kunshan Visionox from 47.50% to 40.55% and the fact that Kunshan Visionox would no longer be consolidated in the Group’s financial statements:

(i) the decrease in the total assets of the Group would be approximately RMB205 million (equivalent to approximately HK$227 million) which represents the combined effect of:
a. the elimination from the Group’s balance sheet of the total assets of Kunshan Visionox; and
b. the restatement of 40.55% of the net assets of Kunshan Visionox as it would be equity accounted for in the Group’s consolidated financial statements;

based on Kunshan Visionox’ total assets and net assets of approximately RMB325 million and RMB296 million, respectively, as at 31 March 2008;

(ii) the decrease in the total liabilities of the Group would be approximately RMB29 million (equivalent to approximately HK$32 million) based on Kunshan Visionox’ total liabilities of approximately RMB29 million as at 31 March 2008;

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LETTER FROM THE BOARD

(iii) the decrease in minority interests would be approximately HK$125 million which represents the share of net assets of Kunshan Visionox by its minority equity holders as reflected in the Group’s consolidated balance sheet as at 31 March 2008; and
(iv) the decrease in the Group’s share of loss before and after taxation of Kunshan Visionox would be approximately RMB1 million (equivalent to approximately HK$1 million) based on Kunshan Visionox’ loss before and after taxation of approximately RMB15 million for the year ended 31 March 2008.

The Transaction constitutes a deemed disposal of Kunshan Visionox by the Group under the Listing Rules. The gain on deemed disposal is estimated to be around HK$5 million. This is based on:

a. the difference between the aggregate of the Group’s share of net assets in Kunshan Visionox and BJ Visionox (a) as included in the Group’s audited consolidated balance sheet as at 31 March 2008; and (b) immediately after the completion of the Transaction;
b. the exclusion of the Group’s unrealized portion of Crown Capital’s gain on disposal of BJ Visionox to Kunshan Visionox; and
c. the release of the portion of the Group’s translation reserve arising from the decrease in its effective interest in Kunshan Visionox.

5. INFORMATION ON THE GROUP

The Company is an investment holding company. The principal activities of the Group are the manufacture and sale of LCD and other display products.

6. REASONS AND BENEFITS OF THE TRANSACTION

It is the long term strategy of the Group to extend its business coverage to OLED products. The Group’s investment in BJ Visionox in 2004 was its initial investment in OLED undertaking and has now recompensed the Group with knowhow and capability to proceed with mass production of commercial OLED products. In 2006, the Group jointly with Kunshan Venture Capital and Shenzhen Leaguer, companies affiliated with the municipal government of Kunshan City in PRC and Beijing Tsinghua University respectively, set up Kunshan Visionox to design, manufacture and market commercial OLED products on a large scale.

With the completion of the first phase of the production plant in Kunshan, Jiangsu Province, PRC, Kunshan Visionox has the capability to mass produce OLED products for commercial use. BJ Visionox, on the other hand, holds various patents for the design, development and manufacture of OLED products. As a result of the Transaction, Kunshan Visionox and BJ Visionox will work seamlessly together to generate the greatest return for their investors as they are now under common control. To the Group which has already invested in both Kunshan Visionox and BJ Visionox before the Transaction, there is additional benefit as its investments in OLED would become more streamlined.

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LETTER FROM THE BOARD

To capture a bigger portion of the market of the OLED products and to achieve economy of scale, it is believed that Kunshan Visionox should expand its capital base. The amount of RMB240 million cash raised after the completion of the Transaction will be used to enhance production capacity and efficiency; and for working capital purposes, though there is no detailed plan for the allocation of the proceeds to different uses. As Kunshan Industrial, being affiliated to the municipal government of the Kunshan, Jiangsu Province, PRC, is willing to put up additional capital for the capital investment of Kunshan Visionox, the Board believes that it is to the best interest of the development of Kunshan Visionox if Kunshan Industrial is to become the single largest equity investor, as Kunshan Industrial will be able to provide crucial advice and assistance in recruiting skilled labours, coordinating with government and regulatory organizations. The entering of the First Option Cancellation Agreement, the Loan Cancellation Agreement and the Second Option Cancellation Agreement was incidental to the restructuring of Kunshan Visionox.

The Board is of the opinion that the benefits of the Transaction to the Group outweigh the cost of giving up the options to become the majority equity holder of Kunshan Visionox. Accordingly, the Board considers that the terms of the Transaction are fair and reasonable and in the best interests of the Shareholders as a whole.

7. LISTING RULES IMPLICATIONS

8. SGM

The Company will convene the SGM for the purpose of considering and, if deemed appropriate, approving the Transaction by way of a poll. To the best of the Directors’ knowledge, none of Shenzhen Leaguer, Kunshan Industrial, Crown Capital, Hebei Tsinghua, IRICO, Kunshan Venture Capital and RITUS has any shareholding in the Company. Moreover, none of the Shareholders has a material interest in the Transaction except in their capacity as a Shareholder. Hence no Shareholder is required to abstain from voting in the SGM.

– 18 –

LETTER FROM THE BOARD

Notice of the SGM is set out on pages 42 to 43 of this circular. A proxy form for appointing proxy is dispatched with this circular and published on the website of the Stock Exchange (www.hkexnews.hk). Whether or not you intend to attend the SGM, you are requested to complete the proxy and return it to the Company’s Branch Share Registrars in Hong Kong, Tricor Secretaries Limited, at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Hong Kong not less than 48 hours before the time appointed for the holding of the SGM or the adjourned meeting. Completion and return of a proxy form will not preclude you from attending and voting at the meeting and at any adjournment thereof if you so wish.

9. PROCEDURES FOR DEMANDING A POLL

Pursuant to Bye-law 66 of the Bye-laws, a resolution put to the vote of a meeting shall be decided on a show of hands unless (before or on the declaration of the result of the show of hands or on the withdrawal of any other demand for a poll) a poll is demanded by:

(a) the chairman of such meeting; or
(b) at least three Shareholders present in person or in the case of a Shareholder being a corporation by its duly authorized representative or by proxy for the time being entitled to vote at the meeting; or
(c) a Shareholder or Shareholders present in person or, in the case of a Shareholder being a corporation, by its duly authorized representative or by proxy and representing not less than one tenth of the total voting rights of all Shareholders having the right to vote at the meeting; or
(d) a Shareholder or Shareholders present in person or in the case of a Shareholder being a corporation by its duly authorized representative or by proxy and holding Shares conferring a right to vote at the meeting being shares on which an aggregate sum has been paid up equal to not less than one-tenth of the total sum paid up on all shares conferring that right.

10. RECOMMENDATIONS

Based on the reasons as set out under the section ‘Reasons and Benefits of the Transaction’ above, the executive Directors are of the opinion that the terms of the Transaction are fair and reasonable and in the best interests of the Shareholders as a whole. Accordingly, the executive Directors recommend the Shareholders to vote in favour of the resolution to be proposed at SGM.

The Independent Board Committee, comprising all the independent non-executive Directors namely Mr. Tien Pei Chun, James, Mr. Chu Chi Wai, Allan and Mr. Lau Yuen Sun, Adrian has been established to advise the Shareholders whether the terms of the Transaction are fair and reasonable. All members of the Independent Board Committee do not have any interest in the Transaction. CIMB has been appointed as the independent financial adviser to advise the Independent Board Committee and the Shareholders in this regard.

– 19 –

LETTER FROM THE BOARD

Your attention is drawn to the letter from the Independent Board Committee set out on page 21 of this circular which contains the recommendation of the Independent Board Committee to the Shareholders. Your attention is also drawn to the letter from CIMB as set out on pages 22 to 29 of this circular containing its advise to the Independent Board Committee and the Shareholders in this regard.

The Independent Board Committee, having taken into account the advice of CIMB, is of the opinion that the terms of the Transaction are in the interests of the Company and the Shareholders as a whole and are fair and reasonable so far as the Company and the Shareholders are concerned. Accordingly, the Independent Board Committee recommends the Shareholders to vote in favour of the resolution to be proposed at SGM.

11. FURTHER INFORMATION

Your attention is drawn to the appendices to this circular which contain certain additional information in relation to the Company.

Yours faithfully, For and on behalf of Yeebo (International Holdings) Limited Fang Hung, Kenneth Chairman

– 20 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

YEEBO (INTERNATIONAL HOLDINGS) LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 259)

21 October 2008

To the Shareholders

Dear Sir or Madam,

MAJOR AND CONNECTED TRANSACTION

DEEMED DISPOSAL OF KUNSHAN VISIONOX DISPLAY CO LTD

We refer to the circular of the Company dated 21 October 2008 (the “Circular”) to the Shareholders, of which this letter forms part. Terms defined in the Circular bear the same meanings in this letter unless the context otherwise requires.

We have been appointed as the members of the Independent Board Committee to consider and advise the Shareholders in respect of the terms under the Transaction, details of which are set out in the Circular.

We wish to draw your attention to the letter from the Board and the letter of advice from CIMB set out on pages 6 to 20 and pages 22 to 29 of the Circular respectively.

Having taken into account of the advice of CIMB, the independent financial adviser, we consider that the Transaction is in the interests of the Company and the Shareholders as a whole and the terms thereof are fair and reasonable so far as the Company and the Shareholders are concerned. Accordingly, we recommend the Shareholders to vote in favour of the resolution to be proposed at the SGM in respect of the Transaction.

Yours faithfully, Independent Board Committee

Tien Pei Chun, James	Chu Chi Wai, Allan	Lau Yuen Sun, Adrian
Independent Non-executive	Independent Non-executive	Independent Non-executive
Director	Director	Director

– 21 –

LETTER FROM CIMB

==> picture [113 x 41] intentionally omitted <==

25/F., Central Tower 28 Queen’s Road Central Hong Kong

21 October 2008

To the Independent Board Committee and the Shareholders of Yeebo (International Holdings) Limited

Dear Sirs,

MAJOR AND CONNECTED TRANSACTION IN RELATION TO THE DEEMED DISPOSAL OF KUNSHAN VISIONOX DISPLAY CO LTD

We refer to our engagement as the independent financial adviser to advise the Independent Board Committee and the Shareholders in respect of the Transaction, details of which are set out in the letter from the Board as contained in the circular of the Company to the Shareholders dated 21 October 2008 (the “Circular”), of which this letter forms part. Capitalised terms used in this letter shall have the same meanings as those defined in the Circular unless the context otherwise requires.

An independent board committee comprising Mr. Tien Pei Chun, James, GBS, JP, Mr. Chu Chi Wai, Allan and Mr. Lau Yuen Sun, Adrian, being the independent non-executive Directors, has been formed to advise the Shareholders in relation to the Transaction. Any vote of the Shareholders at the SGM shall be taken by poll. No Shareholder is required to abstain from voting in relation to the resolution(s) approving the Transaction.

In formulating our recommendation, we have relied on the information and facts contained or referred to in the Circular. We have also assumed that the information and representations contained or referred to in the Circular were true and accurate at the time they were made and continue to be so at the date of the dispatch of the Circular. We consider that we have reviewed sufficient information and documents to satisfy ourselves that we have a reasonable basis to assess the fairness and reasonableness of the Transaction in order to reach an informed view, to justify reliance on the accuracy of the information contained in the Circular and to provide a reasonable basis for our recommendation.

We have no reason to doubt the truth, accuracy and completeness of the information and representations provided to us by the Directors. We have also been advised by the Directors and believe that no material facts have been omitted from the Circular. We have not, however, conducted an independent verification of the information nor have we conducted any form of in-depth investigation into the businesses and affairs or the prospects of the Company or any of its respective subsidiaries or associates.

– 22 –

LETTER FROM CIMB

PRINCIPAL FACTORS CONSIDERED

In arriving at our opinion on the Transaction, we have considered the following principal factors and reasons:

Background and rationale for the Transaction

The Company is an investment holding company. The principal activities of the Group are the manufacture and sale of liquid crystal displays and other display products. It is the long term strategy of the Group to extend its business coverage to OLED products. The Group’s investments in OLED were made through BJ Visionox and Kunshan Visionox. The Group invested in BJ Visionox in 2004. BJ Visionox was the Group’s initial investment in OLED and has now recompensed the Group with knowhow and capability to proceed with mass production of commercial OLED products. In 2006, the Group jointly with Kunshan Venture Capital and Shenzhen Leaguer, companies affiliated with the municipal government of Kunshan City in PRC and Beijing Tsinghua University respectively, set up Kunshan Visionox to design, manufacture and market commercial OLED products on a large scale.

As Kunshan Visionox, after completed the first phase of the production plant in September 2008, is ready to mass produce OLED products for commercial use and BJ Visionox, on the other hand, holds various patents for the design, development and manufacture of OLED products, the Directors consider that it is logical to put BJ Visionox and Kunshan Visionox together under common control so that they can work seamlessly together to generate the greatest return for their investors. As a result, the Group entered into the Restructuring Agreement to rationalize its investment in OLED and to put up additional capital to enhance Kunshan Visionox’s production capacity and efficiency to commence commercial production.

Based on the unaudited financial information available to us, we note that turnover of BJ Visionox for the two years ended 31 March 2008 amounted to approximately RMB2.2 million and RMB4.4 million respectively, which are mainly attributable to the sale of OLED products. The loss incurred by BJ Visionox for the two years ended 31 March 2008 was mainly due to the research and development expenditure incurred and the amortization of intangible assets which, according to the accounting standards, have to be charged to the profit and loss account. For the same financial periods, Kunshan Visionox had not commenced commercial production and recorded no turnover. The loss incurred by Kunshan Visionox in the year ended 31 March 2008 was mainly due to (i) the exchange loss recorded on its foreign currency deposits (the unutilized funds to be used for the acquisition of plant and equipment); and (ii) the pre-operating expenses incurred.

Having considered the above rationale from the Directors and the past financial results of both BJ Visionox and Kunshan Visionox, we agree that there is potential synergy and it is logical to combine BJ Visionox’s technical knowhow and various OLED patents with Kunshan Visionox’s production capability in order to maximize the potential return for their investors including the Group.

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LETTER FROM CIMB

Under the Restructuring Agreement, Kunshan Visionox’s registered capital will be increased from RMB400 million to RMB665 million and the additional capital will be used to enhance production capacity and efficiency and for working capital purposes. Kunshan Industrial will contribute RMB200 million and Faith Crown will contribute RMB40 million in the registered capital of Kunshan Visionox. As Kunshan Industrial, being affiliated to the municipal government of the Kunshan, Jiangsu Province, PRC, is willing to put up additional capital for the capital investment of Kunshan Visionox, the Directors believe that it is to the best interest of the development of Kunshan Visionox if Kunshan Industrial is to become the single largest equity investor, as Kunshan Industrial will be able to provide crucial advice and assistance in recruiting skilled labours, coordinating with government and regulatory organizations. In this regards, as the Group is still able to maintain its substantial interest in Kunshan after completion of the Transaction, we consider the Directors’ view to allow Kunshan Industrial which will contribute RMB200 million in the registered capital of Kunshan Visionox to become the single largest equity investor in Kunshan Visionox is reasonable.

After taking into account of the above factors and reasons, we consider that the Transaction represents a good opportunity for the Group to consolidate its investments in OLED under common control in order to maximize the potential return to the Group and, at the same time, to raise additional capital to enhance Kunshan Visionox’s production capacity. Therefore, we consider that entering into the Restructuring Agreement which is within the ordinary course of business of the Group is fair and reasonable and is in the interests of the Company and its shareholders as a whole.

Basis of consideration

Pursuant to the Restructuring Agreement, the registered capital of Kunshan Visionox will be restructured as follows:

Faith Crown will contribute a further RMB40 million (equivalent to approximately HK$46 million) in cash for an equal amount in the registered capital of Kunshan Visionox.
Kunshan Industrial will contribute a further RMB200 million (equivalent to approximately HK$228 million) in cash for an equal amount in the registered capital of Kunshan Visionox.
Shenzhen Leaguer will rescind from the JV Agreement. Shenzhen Leaguer will give up all its rights, and the other equity holders of Kunshan Visionox will release it from all its obligations, in the JV Agreement.
Crown Capital will inject its holding of 73.22% in the registered capital of BJ Visionox in exchange for RMB84,200,000 in the registered capital of Kunshan Visionox.
Hebei Tsinghua will inject its holding of 15.53% in the registered capital of BJ Visionox in exchange for RMB17,860,000 in the registered capital of Kunshan Visionox.

– 24 –

LETTER FROM CIMB

IRICO will inject its holding of 11.25% in the registered capital of BJ Visionox in exchange for RMB12,940,000 in the registered capital of Kunshan Visionox.

Upon completion of the Restructuring Agreement, BJ Visionox will become a whollyowned subsidiary of Kunshan Visionox. The equity holding of the respective parties in the registered capital of Kunshan Visionox will be as follows:

Equity holders Kunshan Industrial Faith Crown Crown Capital Hebei Tsinghua IRICO	Registered capital owned RMB’000 % 320,000 48.12 230,000 34.59 84,200 12.66 17,860 2.69 12,940 1.94 665,000 100.00	Registered capital owned RMB’000 % 320,000 48.12 230,000 34.59 84,200 12.66 17,860 2.69 12,940 1.94 665,000 100.00
		100.00

The consideration in exchange for the registered capital in Kunshan Visionox was arrived at after arm’s length negotiations between the parties to the Restructuring Agreement.

Each party’s equity interest in Kunshan Visionox is determined based on their respective assigned value of contribution (the “Assigned Contribution”) towards the registered capital in Kunshaun Visionox. The Group’s effective interest in Kunshan Visionox upon completion of the Restructuring Agreement is approximately 40.56%, represented by approximately 34.59% held through Faith Crown and approximately 12.66% held through Crown Capital, a 47.05% associated company of the Company.

Therefore, to determine whether the basis for the Restructuring Agreement is fair and reasonable, we have considered whether the Assigned Contribution from each party’s is fair and reasonable.

Kunshan Industrial and Faith Crown

The Assigned Contributions from Kunshan Industrial and Faith Crown are determined based on their actual amount of cash considerations in the registered capital in Kunshan Visionox.

Based on the unaudited financial information on Kunshan Visionox available to us, Kunshan Visionox has not yet commenced commercial operation and generated any turnover since its establishment and its assets are mainly comprised of property, plant and equipment, pledged bank deposit and cash. The total cash contributions in the registered capital in Kunshan Visionox from both Kunshan Industrial and Faith Crown of RMB550 million under the original JV Agreement and the Restructuring Agreement represents approximately 2.6% premium over

– 25 –

LETTER FROM CIMB

the pro forma net assets value of Kunshan Visionox of approximately RMB536 million, calculated as the sum of the unaudited net assets value of Kunshan Visionox as at 31 March 2008 of approximately RMB296 million and the additional cash contribution from Kunshan Industrial and Faith Crown of RMB240 million under the Restructuring Agreement.

As Kunshan Industrial and Faith Crown are the two major promoters of Kunshan Visionox which has not yet commenced the commercial operation since its establishment in 2006, we consider it is fair and reasonable to determine the Assigned Contributions from Kunshan Industrial and Faith Crown based on their actual amount of cash considerations in the registered capital in Kunshan Visionox, which also represent approximately a 2.6% premium to the pro forma net assets value of Kunshan Visionox of approximately RMB536 million.

Crown Capital, Hebei Tsinghua and IRICO

The Assigned Contribution allocated to Crown Capital, Heibe Tsinghua and IRICO was based on their respective holding in BJ Visionox immediately before the entering of the Restructuring Agreement. For this purpose, BJ Visionox as a whole has been assigned a value of RMB115 million which is also the basis in which Crown Capital acquired its 73.22% in the registered capital of BJ Visionox in 2004.

The principal activities of BJ Visionox are the development, manufacture and marketing of OLED. It is customary to use asset approach or income approach methodology to determine the reference value of BJ Visionox.

Asset approach

Under the asset approach, it involves an examination of the balance sheet of BJ Visionox and the adoption of the net book value as the reference value of BJ Visionox, and adjustments to the net assets value are made as necessary. However, the asset approach does not take into account of the future economic benefits contributed by the assets of BJ Visionox. Also, despite the fact that the unaudited net assets value of BJ Visionox was approximately RMB47 million as at 31 March 2008, the loss incurred by BJ Visionox in the past few years was mainly due to the research and development expenditure incurred and the amortization of intangible assets which, according to the accounting standards, have to be charged to the profit and loss account. This would not undermine the value of the knowledge and technology developed by BJ Visionox which could be recognized when a partner with mass production capacity in OLED, such as Kunshan Visionox, is identified. Hence, we consider the net assets value is not a comparable reference value of BJ Visionox.

Income approach

Income approach is the conversion of expected periodic benefits of ownership into an indication of value and the value of BJ Visionx will be determined based on the present worth of future economic benefits to be derived from the projected sales income. However, as BJ Visionox is still at its early stage of development and this income approach relies on numerous

– 26 –

LETTER FROM CIMB

assumptions over a long period of time, it is uncertain how closely the projected sales income would correspond with the actual turnover and hence the value of BJ Visionox may be very sensitive to the accuracy of certain assumptions used in the projection.

Given such limitation, as an alternative, we have performed a sensitivity analysis on the Group’s attributable interest in Kunshan Visionox after completion of the Restructuring Agreement assuming different assigned value of BJ Visionox ranging from its unaudited net assets value of approximately RMB47 million as at 31 March 2008 (as net assets value is one of the common references for valuing a loss making company) to RMB1 billion. The result of the sensitivity analysis is summarized as follows:

Registered capital of Under the Transaction Case INote 1 230.00 230.00 320.00 320.00	Registered capital of Under the Transaction Case INote 1 230.00 230.00 320.00 320.00	Kunshan Visionox and BJ Visionox (RMB million) Case IINote 1 Case IIINote 1 Case IVNote 1 230.00 230.00 230.00 320.00 320.00 320.00	Kunshan Visionox and BJ Visionox (RMB million) Case IINote 1 Case IIINote 1 Case IVNote 1 230.00 230.00 230.00 320.00 320.00 320.00	Kunshan Visionox and BJ Visionox (RMB million) Case IINote 1 Case IIINote 1 Case IVNote 1 230.00 230.00 230.00 320.00 320.00 320.00
550.00 84.20 17.86 12.94 115.00	550.00 34.41 7.30 5.29 47.00	550.00 219.66 46.59 33.75 300.00	550.00 366.10 77.65 56.25 500.00	550.00
				732.20 155.30 112.50
				1,000.00
665.00	597.00	850.00	1,050.00	1,550.00

nshan Visionox: 34.59 5.96	38.53 2.71	27.06 12.16	21.90 16.40	14.84 22.23
40.54	41.24	39.22	38.31	37.06

Notes:

1 Assuming the assigned value of BJ Visionox to be RMB47 million, RMB300 million, RMB500 million and RMB1 billion for Case I, II, III and IV, respectively.

2 Calculated by the amount contributed by Faith Crown as compared to the total valuation of the Transaction.
3 Calculated by the amount contributed by Crown Capital as compared to the total valuation of the Transaction, further multiplied by 47.05% as Crown Capital is a 47.05% owned associated company of the Group.

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LETTER FROM CIMB

It is noted from the above analysis that the higher the assigned value of BJ Visionox (as shown from Case II to Case IV), the lower the attributable interest the Group would have in Kunshan Visionox. Despite the fact that we consider net assets value is not a comparable reference value of BJ Visionox, as an additional reference, we have assumed in Case I that if the value of BJ Visionox is RMB47 million, which represents the unaudited net assets value of BJ Visionox as at 31 March 2008, the Group’s attributable interest in Kunshan Visionox will be approximately 41.24%, representing approximately 0.7% more than the Group’s attributable interest of approximately 40.54% based on the assigned value of BJ Visionox of RMB115 million under the Restructuring Agreement.

Given the above and the fact that the assigned value of BJ Visionox of RMB115 million is also the basis in which Crown Capital acquired its 73.22% in the registered capital of BJ Visionox in 2004; the loss incurred by BJ Visionox in the past few years was mainly due to the research and development expenditure incurred and the amortization of intangible assets which, according to the accounting standards, have to be charged to the profit and loss account which would not undermine the value of the knowledge and technology developed by BJ Visionox which could be recognized when a partner with mass production capacity in OLED, such as Kunshan Visionox, is identified; and that it is normal for BJ Visionox to incur the start-up costs and the research and development expenditure at its investment stage, such that BJ Visionox is able to develop the knowhow and technology for future mass production of commercial OLED products, we consider that the assigned value of BJ Visionox of RMB115 million, which also represents the amount in which Crown Capital acquired its 73.22% in the registered capital of BJ Visionox in 2004, and hence the Assigned Contribution allocated to Crown Capital, Heibe Tsinghua and IRICO is fair and reasonable.

Our conclusion

Having taken into account of the above analysis, we consider that the basis of consideration for the Restructuring Agreement is fair and reasonable to the Company and its shareholders as a whole.

The First Option Cancellation Agreement, the Loan Cancellation Agreement and the Second Option Cancellation Agreement

The purpose of these two agreements is to cancel the First Option Agreement, the Loan Agreement and the Second Option Agreement in order to facilitate the Restructuring Agreement. As the First Option Agreement, the Loan Agreement and the Second Option Agreement have never been carried out by the parties to the agreements and there is no compensation to be paid by either Faith Crown or Crown Capital, we consider the entering into the First Option Cancellation Agreement, the Loan Cancellation Agreement and the Second Option Cancellation Agreement is fair and reasonable to the Company.

– 28 –

LETTER FROM CIMB

FINANCIAL EFFECT OF THE TRANSACTION

Earnings and net asset value

Upon completion of the Transaction, BJ Visionox will become a wholly-owned subsidiary of Kunshan Visionox and Kunshan Visionox will no longer be accounted for as a subsidiary of the Group. Instead, Kunshan Visionox will be accounted for as an associated company and its results and net assets will be equity accounted for in the consolidated financial statements of the Group. The Transaction constitutes a deemed disposal of Kunshan Visionox by the Group under the Listing Rules and as noted in the letter from the board of this Circular, the gain on deemed disposal of the Transaction is estimated to be around HK$5 million.

Working capital and gearing

Pursuant to the Restructuring Agreement, the Group will contribute a further RMB40 million (equivalent to approximately HK$46 million) in cash in the registered capital of Kunshan Visionox. As noted from the Company’s latest published annual report, the bank balance and cash of the Group amounted to approximately HK$84.8 million as at 31 March 2008. We also noted from Appendix I to the Circular that the Directors are of the opinion that, after taking into account the internal resources and banking facilities available to the Group, the Group will have sufficient working capital for its present requirements in the next twelve months from the date of this Circular.

As the capital contribution by the Group will be satisfied by way of internal resources, the Transaction will not have a material adverse effect to the gearing position of the Group.

RECOMMENDATION

Having considered the principal factors and reasons referred to the above, we consider that the Transaction is entered into in the ordinary and usual course of business of the Company, in the interests of the Company and the Shareholders as a whole and the terms thereof are on normal commercial terms and fair and reasonable so far as the Company and the Shareholders are concerned. Accordingly, we advise the Independent Board Committee to recommend the Shareholders to vote in favour of the ordinary resolution to be proposed at the SGM to approve the Transaction.

Yours faithfully, For and on behalf of

CIMB-GK Securities (HK) Limited

Alex Lau Mabel Lam

Director Senior Vice President

Head of Corporate Finance

– 29 –

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

A FINANCIAL SUMMARY

There was no qualified opinion issued by the Company’s auditors on the Group’s financial statements for each of the three years ended 31 March 2006, 2007 and 2008. Set out below is a summary of the consolidated results and assets and liabilities of the Group extracted from the annual reports of the Company:

Consolidated Income Statements

For the 2008 HK$’000 (audited) 680,973 (596,471)	year ended 31 March 2007 2006 HK$’000 HK$’000 (audited) (audited) 456,287 391,242 (391,142) (336,672) 65,145 54,570 10,400 3,902 17,618 23,158 (37,058) (28,711) (37,782) (31,338) – 231 – 8,223 – – (6,208) (5,441) 17,832 14,018 (857) (1,451) 29,090 37,161 (3,088) (1,853) 26,002 35,308 25,386 36,186 616 (878) 26,002 35,308 HK2.43 cents HK3.47 cents	year ended 31 March 2007 2006 HK$’000 HK$’000 (audited) (audited) 456,287 391,242 (391,142) (336,672) 65,145 54,570 10,400 3,902 17,618 23,158 (37,058) (28,711) (37,782) (31,338) – 231 – 8,223 – – (6,208) (5,441) 17,832 14,018 (857) (1,451) 29,090 37,161 (3,088) (1,853) 26,002 35,308 25,386 36,186 616 (878) 26,002 35,308 HK2.43 cents HK3.47 cents
84,502 13,142 10,145 (36,113) (52,165) – – (32,011) (5,478) 25,194 (824) 6,392 (3,916)	65,145 10,400 17,618 (37,058) (37,782) – – – (6,208) 17,832 (857) 29,090 (3,088)	54,570 3,902 23,158 (28,711 (31,338 231 8,223 – (5,441 14,018 (1,451
		37,161 (1,853
2,476	26,002
10,978 (8,502)	25,386 616	36,186 (878
2,476 HK1.06 cents	26,002 HK2.43 cents

– 30 –

APPENDIX I

FINANCIAL INFORMATION ON THE GROUP

Consolidated Balance Sheets

2008 HK$’000 (audited) 222,437 22,784 10,567 – 22,188 20,534 137,169 1,402 9,493	31 March 2007 HK$’000 (audited) 169,006 – 458 15,556 – 24,202 134,035 21,695 10,794	2006 HK$’000 (audited) 166,675 – 372 – – 29,403 109,858 117,890 1,459
446,574 104,551 95,897 888 – 37,165 475 20,478 – 144,711 – 84,776 488,941 128,741 – 5,413 1,891 – 1,664 – 6,725 144,434 344,507 791,081	375,746 82,882 111,429 – – – – 18,617 45 – 147,641 194,002 554,616 122,389 132 2,609 2,441 – 808 40,404 3,345 172,128 382,488 758,234	425,657
		68,962 95,933 867 80,670 – – 9,133 – – – 124,769
		380,334
		82,516 – 4,917 2,991 9,000 – 57,504 927
		157,855
		222,479
		648,136

– 31 –

APPENDIX I

FINANCIAL INFORMATION ON THE GROUP

2008 HK$’000 (audited) 17,240 9,768 – – –	31 March 2007 HK$’000 (audited) 11,616 8,346 1,836 – –	2006 HK$’000 (audited) – – – 22,500 188
27,008	21,798	22,688
764,073	736,436	625,448

202,231 436,889 639,120 124,953	208,713 405,786 614,499 121,937	208,713 416,735
		625,448 –
764,073	736,436	625,448

B COMMENTARY ON FINANCIAL INFORMATION OF THE GROUP

REVIEW OF OPERATIONS

The Group recorded a consolidated turnover and profit attributable to equity holders of the Company for the twelve months ended 31 March 2008 amounted to approximately HK$681 million (2007: HK$456 million) and HK$11 million (2007: HK$25 million) respectively. The display business turnover increased by HK$225 million or 49% to HK$681 million. Geographically, the Group sales demonstrated a remarkable growth in local and overseas market like Europe. The display sales was boosted mainly by the LCM sales, which accounted for 50% of total sales. In particular, the TFT modules sales exhibited an impressive growth in the current year. On the other hand, LCD business environment continued to be very competitive with more new entrants and keen competitive pricing.

The Group recorded a gross profit of approximately HK$85 million for the twelve months ended 31 March 2008 (2007: HK$65 million). The improvement in gross profit is largely attributable to the increase in turnover. The gross profit margin was 12% (2007: 14%). The decrease in gross profit margin was caused by the change in the sales mix between LCD and LCM in the two comparative periods and also the increase of manufacturing cost in PRC.

– 32 –

APPENDIX I

FINANCIAL INFORMATION ON THE GROUP

Investment income from the current year was approximately HK$10 million (2007: HK$18 million) largely generated from interest earned from bank deposits.

The selling and distribution expenses were approximately HK$36 million in the current year (2007: HK$37 million), which represented 5% of the sales (2007: 8%). This reflects the tight control in selling and distribution expenses.

Administrative expenses for the year were approximately HK$52 million (2007: HK$38 million), representing an increase of $14 million. There were two main reasons for the increase. Firstly, it was due to exchange loss recorded in the books of the subsidiaries in PRC arising from the foreign currency bank deposit as the RMB appreciated against such foreign currency in the current year. The foreign currency bank deposit was reserved for acquiring equipment and machinery for the OLED project. Secondly, it was due to the pre-operating cost incurred for the OLED factory in Kunshan. Finance costs were largely related to government loan borrowed by certain subsidiaries in PRC.

The Group reported a profit before taxation of approximately HK$6 million for the year ended 31 March 2008 (2007: HK$29 million).

The profit before taxation has been adversely affected by the impact of the impairment loss of the Group’s investment in Ascalade. The share price of Ascalade has dropped significantly since 31 March 2007. In March 2008, Ascalade obtained an order from a court in Canada granting it protection pursuant to the provisions under the Companies’ Creditors Arrangement Acts. An independent firm of accountants has been appointed by the court to monitor the operations of Ascalade. The Board considered it prudent to recognize an impairment loss of approximately HK$32 million in the year ended 31 March 2008 which virtually covers the whole of the Group’s investment in Ascalade.

SIGNIFICANT INVESTMENTS

Investment in Nantong Jianghai

In the year ended 31 March 2008, the Group’s share of profit of its jointly controlled entity, Nantong Jianghai, and its subsidiaries, amounted to approximately HK$25 million (2007: HK$18 million).

The business of Nantong Jianghai grew favourably. This was largely contributed by its committed strategy to diversify from consumer to industrial segment which earned a relatively higher margin; and continuously improve the quality of its products through its well-founded research and development team.

– 33 –

APPENDIX I

FINANCIAL INFORMATION ON THE GROUP

Investment in Kunshan Visionox

The construction of the first phase plant in Kunshan, Jiangsu, PRC has been completed. The procurement of production equipment has been confirmed. Installation of machinery has been completed and pilot run will commence soon. The factory will be equipped with the facilities to produce mono, color, area color and full color OLED products. The application will cover both consumer electronics and industrial instruments segment.

LIQUIDITY AND CAPITAL RESOURCES

The consolidated financial position of the Group continued to be healthy. As at 31 March 2008, the Group’s current ratio was 3.4 (2007: 3.2) and gearing ratio, as a ratio of bank borrowings to net worth, was nil (2007: nil). As at 31 March 2008, the Group had total assets of HK$935 million which were financed by liabilities of HK$171 million and shareholders’ equity of HK$764 million.

As at 31 March 2008, the Group’s banking facilities amounted to approximately HK$407 million (2007: HK$180 million) of which approximately HK$154 million (2007: HK$4 million) were utilized for issuance of letters of credit and bills payable.

Certain subsidiaries of the Company have foreign currency time deposits, which expose the Group to foreign currency risk. The management monitors foreign exchange exposure and will consider hedging significant foreign currency exposure should the need arise.

CONTINGENT LIABILITIES AND CHARGES OF ASSETS

As at 31 March 2008, the Group’s jointly controlled entity, Nantong Jianghai, had guarantees amounting to approximately RMB53,000,000 given to banks in respect of banking facilities granted to a third party and amounting to approximately RMB20,000,000 given to her jointly controlled entities.

As at 31 March 2008, a subsidiary in PRC had pledged approximately HK$145 million equivalent bank deposits against certain banking facilities for the procurement of certain production equipment and machineries.

Except as disclosed above and in the section under “Litigation”, the Group had no other material contingent liabilities and there was no material charge or pledge on the Group’s assets as at 31 March 2008.

– 34 –

APPENDIX I

FINANCIAL INFORMATION ON THE GROUP

INVESTMENTS ON CAPITAL ASSETS

At present the Group does not have any plan for material investments on capital assets.

EMPLOYMENT AND REMUNERATION POLICY

The remuneration package for the Group’s employees is structured by reference to market terms and industry’s practice. Discretionary bonus and other performance reward are based on the financial performance of the Group and the performance of individual staff. Staff benefit plans maintained by the Group include mandatory and voluntary provident fund scheme and medical insurance.

C PROSPECTS

The management takes a cautions view on the outlook of its LCD and LCM business into the coming year. The forthcoming business environment is overcast by the slow down of the economy of the United States of America, the appreciation of RMB and up trend of manufacturing costs. The Group’s profitability will inevitably be under pressure. The Group will continue to strengthen its foothold in the medium to high end segment by broadening and enlarging its customer base. The management will closely monitor the operating costs to sustain the Group’s competitive edge in the market.

D MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, the Directors are not aware of any material adverse changes in the financial or trading position of the Group since 31 March 2008, the date to which the latest published audited consolidated accounts of the Group were made up.

E WORKING CAPITAL

The Directors are of the opinion that in the absence of unforeseen circumstances and after taking into account the Group’s current cash balance and resources as well as its available banking facilities, the Group has sufficient working capital for its present requirements.

F INDEBTEDNESS

As at the close of business on 31 August 2008, being the latest practicable date for the purpose of ascertaining information contained in this indebtedness statement prior to the printing of this circular, the Group had outstanding borrowings of approximately HK$37 million comprising bills payable of approximately HK$3 million, secured bank loan of approximately HK$20 million, unsecured bank loan of approximately HK$3 million and government loan of approximately HK$11 million.

As at 31 August 2008, a jointly controlled entity of the Group provided guarantees amounting to approximately HK$95 million to banks in respect of bank facilities granted to a supplier and two jointly controlled entity of the jointly controlled entity of which HK$48 million is shared by the Group.

– 35 –

APPENDIX I

FINANCIAL INFORMATION ON THE GROUP

As at 31 August 2008, the Group pledged approximately HK$39 million of bank deposits to secure banking facilities of a subsidiary for procurement of certain production equipment and machineries and land use right of approximately HK$24 million in PRC to secure a bank borrowing.

A writ of summons was issued against the Company by the High Court of Hong Kong for a sum of approximately HK$12 million and incidental costs. The case was in reliance on certain legal proceedings that took place in the Province of Guangdong, PRC in respective of a dispute regarding the transfer of certain plant and equipment in the PRC by a dissolved group entity. The Company moved to have the case struck off on the ground that the case has been statute-barred. A trial of preliminary issue was heard in late March and early April 2008 and ruled in favour of the plantiff. The Company has filed an appeal to the Court of Appeal. Without admitting any liability, the Company is also in the process of negotiating with the plaintiff to settle the case out of court. However, no detailed terms of settlement has yet been agreed.

Save as aforesaid and apart from intra-group liabilities, the Group did not have any mortgages, charges, debentures, loan capital, bank loans and overdrafts, debt securities or other similar indebtedness, finance leases or hire purchase commitments, liabilities under acceptances or acceptances creditors, or any guarantees, or other material contingent liabilities outstanding at the close of business on 31 August 2008.

For the purpose of this indebtedness statement, foreign currency amounts have been translated into Hong Kong dollars at the approximate rates of exchange prevailing as at 31 August 2008.

Subsequent to 31 August 2008, the Group has obtained an additional unsecured bank loan of HK$25 million. Except for the above, the Directors are not aware of any material adverse changes in the Group’s indebtedness position and contingent liabilities since 31 August 2008.

– 36 –

GENERAL INFORMATION

APPENDIX II

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 would make any statement herein misleading.

2. DIRECTORS’ AND CHIEF EXECUTIVE’S DISCLOSURE OF INTERESTS

As at the Latest Practicable Date, the interests and short positions of the Directors in the shares, underlying shares and debentures of the Company or its associated corporations (within the meaning of Part XV of the SFO), which would have to be notified to the Company or any of its associated corporations and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO or as recorded in the register maintained by the Company pursuant to section 352 of the SFO or as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Companies were as follows:

Long positions in Shares

Number of shares held, capacity and nature of

interest

				Percentage
				of the
		Through		Company’s
	Personal	controlled		issued
Name of Director	interests	corporation	Total	capital
Mr. Fang Hung, Kenneth	20,130,000	697,692,368	717,822,368	70.99%
(Note)
Mr. Li Kwok Wai, Frankie	31,228,013	697,692,368	728,920,381	72.09%
(Note)

Note: Antrix Investment Limited owns 697,692,368 Shares. Mr. Fang Hung, Kenneth and Mr. Li Kwok Wai, Frankie beneficially owns 51% and 49%, respectively, of the issued share capital of Antrix Investment Limited.

In addition to the above, a Director has non-beneficial personal equity interests in subsidiaries held for the benefit of the Company.

– 37 –

APPENDIX II

GENERAL INFORMATION

Save as disclosed herein, as at the Latest Practicable Date, none of the Directors or chief executives and their associates had registered an interest or short position 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 would have to be notified to the Company or any of its associated corporations) and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO or that was required to be recorded pursuant to section 352 of the SFO or as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Companies.

3. INTERESTS AND SHORT POSITIONS IN SHARES OF SUBSTANTIAL SHAREHOLDERS

As at the Latest Practicable Date, so far as is known to the Directors, the following persons (other than a Director or chief executive of the Company) had an interest or short position in the shares or underlying shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 and 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:

Long position in Shares

			Percentage
			of the
			Company’s
	Capacity and nature	Number of	issued share
Name	of interest	Shares held	capital
Antrix Investment Limited	Directly beneficially	697,692,368	69.00%
(Note)	owned
Esca Investment Limited	Indirectly beneficially	697,692,368	69.00%
(Note)	owned
Megastar Venture Limited	Indirectly beneficially	697,692,368	69.00%
(Note)	owned
Chong Hing Bank Limited	Directly beneficially	57,600,000	5.70%
	owned

Note: Antrix Investment Limited is held as to 51% by Esca Investment Limited (a company wholly-owned by Mr. Fang Hung, Kenneth) and 49% by Megastar Venture Limited (a company wholly-owned by Mr. Li Kwok Wai, Frankie). The Shares held by Esca Investment Limited and Megastar Venture Limited represent the same interest held by Antrix Investment Limited, which have also been disclosed as an interest of Mr. Fang Hung, Kenneth and Mr. Li Kwok Wai, Frankie under the section “Directors’ and Chief Executive’s Disclosure of Interests”.

– 38 –

APPENDIX II

GENERAL INFORMATION

Save as disclosed above, as at the Latest Practicable Date, so far as is known to the Directors, no other person (other than a Director or chief executive of the Company) had an interest or short position in the shares or underlying shares of the Company 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.

4. MATERIAL CONTRACTS

Except for the Restructuring Agreement, the First Option Cancellation Agreement, the Loan Cancellation Agreement and the Second Option Cancellation Agreement, no contracts which are or may be material (other than contracts entered into in the ordinary course of business) have been entered into by any members of the Group within the two years immediately preceding the Latest Practicable Date.

5. LITIGATION

In July 2007, Shenzhen Tian He Jian Sang Electronic Holdings Company Limited issued legal proceedings against the Company. As a consequence, a writ of summons was issued against the Company by the High Court of Hong Kong for a sum of approximately HK$12 million and incidental costs. The case was in reliance on certain legal proceedings that took place in the Province of Guangdong, PRC in respective of a dispute regarding the transfer of certain plant and equipment in the PRC by a dissolved group entity. Details of the case have been set out in the Company’s announcement dated 30 July 2007 and the Company’s 2008 annual report. The Company moved to have the case struck off on the ground that the case has been statute-barred. A trial of preliminary issue was heard in late March and early April 2008 and ruled in favour of the plantiff. The Company has filed an appeal to the Court of Appeal. Without admitting any liability, the Company is also in the process of negotiating with the plaintiff to settle the case out of court. However, no detailed terms of settlement has yet been agreed.

Except for the above, as at the Latest Practicable Date, neither the Company nor any of its subsidiaries is engaged in any litigation, arbitration or claim of material importance and, so far as the Directors are aware, no litigation, arbitration or claim of material importance is pending or threatened against either the Company or any of its subsidiaries.

6. SERVICE CONTRACTS

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

– 39 –

GENERAL INFORMATION

APPENDIX II

7. DIRECTORS’ INTERESTS IN CONTRACTS AND IN COMPETING BUSINESS

So far as the Directors are aware, as at the Latest Practicable Date:

(a) none of the Directors or their associates had any direct or indirect interest in any assets which have been, since 31 March 2008 (being the date to which the latest published audited financial statements of the Group were made up), acquired or disposed of by or leased to or are proposed to be acquired or disposed of by or leased to any member of the Group; and
(b) none of the Directors or their associates was materially interested in any contract or arrangement entered into by any member of the Group and subsisting at the date of this circular which was significant in relation to the business of the Group.

As at the Latest Practicable Date, none of the Directors and their respective associates has interests in a business, apart from the business of the Group, which competes or is likely to compete, either directly or indirectly, with the business of the Group.

8. EXPERTS AND CONSENTS

(a) The following are the qualification of the experts who have given opinions and advice which are included in this circular:

Name

Qualification

CIMB-GK Securities (HK) Limited A licensed corporation to conduct type 1 (securities dealing), type 4 (advising on securities) and type 6 (advising on corporate finance) regulated activities under the SFO

(b) CIMB has given and has not withdrawn its written consent to the issue of this circular, with the inclusion of its letter or references to its name in the form and context in which they are included.
(c) As at the Latest Practicable Date, CIMB did not have any shareholding, directly or indirectly, in any member of the Group or any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group.
(d) CIMB did not have any direct or indirect interest in any assets which have been, since 31 March 2008 (being the date to which the latest published audited financial statements of the Group were made up), acquired or disposed of by or leased to or are proposed to be acquired or disposed of by or leased to any member of the Group.

– 40 –

GENERAL INFORMATION

APPENDIX II

9. MISCELLANEOUS

(a) The registered office of the Company is at Canon’s Court, 22 Victoria Street, Hamilton HM 12, Bermuda.
(b) The qualified accountant of the Company is Mr. Leung Tze Kuen, an associate member of CPA Australia.
(c) The secretary of the Company is Mr. Lau Siu Ki, Kevin, a fellow member of both the Association of Chartered Certified Accountants and the Hong Kong Institute of Certified Public Accountants.
(d) The Company’s branch registrar and transfer office is Tricor Secretaries Limited at 26/F Tesbury Centre, 28 Queen’s Road East, Hong Kong.
(e) This circular has been prepared in both English and Chinese. In the case of any discrepancy, the English text 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 Hong Kong principal office of the Company at 7th Floor, On Dak Industrial Building, 2-6 Wah Sing Street, Kwai Chung, New Territories, Hong Kong, during normal business hours up to and including 5 November 2008:

(a) the memorandum and articles of association of the Company;
(b) the audited consolidated financial statements of the Company and its subsidiaries for the two years ended 31 March 2008;
(c) the letter from CIMB regarding the Transaction set out in this circular;
(d) the letter of consents referred to under the section headed “Experts and Consents” in this appendix;
(e) the Restructuring Agreement, the First Option Cancellation Agreement, the Loan Cancellation Agreement and the Second Option Cancellation Agreement; and
(f) the JV Agreement, the First Option Agreement, the Loan Agreement and the Second Option Agreement.

– 41 –

NOTICE OF SPECIAL GENERAL MEETING

YEEBO (INTERNATIONAL HOLDINGS) LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 259)

NOTICE OF SPECIAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that a special general meeting (the “Meeting”) of Yeebo (International Holdings) Limited (the “Company”) will be held at Crystal Room IV, 3/F Panda Hotel, 3 Tsuen Wah Street, Tsuen Wan, Hong Kong on Thursday, 6 November 2008 at 10:00 a.m. for purpose of considering and, if thought fit, passing (with or without amendments) the following as an ordinary resolution of the Company:

ORDINARY RESOLUTION

“ THAT

(a) (i) The restructuring agreement between Faith Crown International Limited (“Faith Crown”, a wholly-owned subsidiary of the Company), Shenzhen Leaguer Venture Capital Co Limited (“Shenzhen Leaguer”), Kunshan Industrial Assets Management Company Limited (“Kunshan Industrial”), Crown Capital Holdings Limited, Heibei Tsinghua Holdings Hongyi Technology Co Ltd, IRICO Group Corporation and Kunshan Visionox Display Co Ltd (“Kunshan Visionox”) for the restructuring and increase in registered capital of Kunshan Visionox; (ii) the first option cancellation agreement between between Faith Crown and Kunshan Venture Capital and Investment Company Limited (“Kunshan Venture Capital”) for the cancellation of the option previously granted by Kunshan Venture Capital to Faith Crown to acquire its equity interest in Kunshan Visionox; (iii) the loan cancellation agreement between Jiangmen Yeebo Semiconductor Co Limited (“Jiangmen Yeebo”, a whollyowned subsidiary of the Company), Research Institute of Tsinghua University in Shenzhen (“RITUS”) and Shenzhen Leaguer for the unwinding of the loan agreement entered into between the same three parties on 7 March 2006; and (iv) the second option cancellation agreement between Faith Crown, Jiangmen Yeebo, RITUS, Shenzhen Leaguer and Kunshan Venture Capital for the cancellation of the option previously granted by Shenzhen Leaguer to Faith Crown to acquire its equity interest in Kunshan Visionox; all entered into on 22 September 2008 (details of all the aforesaid agreements are set out in the Company’s circular dated 21 October 2008 (the “Circular”) copies of which together with the Circular have been tabled at the meeting for identification purpose) and the transactions contemplated thereunder (the “Transaction”) be and are hereby approved, confirmed and ratified; and

– 42 –

NOTICE OF SPECIAL GENERAL MEETING

(b) The directors of the Company be and are hereby authorized to do such acts and execute such other documents as they may consider necessary, desirable or expedient to carry out or give effect to or otherwise in connection with or in relation to the Transaction.”

By order of the Board Lau Siu Ki, Kevin Company Secretary

Hong Kong 21 October 2008

Notes:

(1) A Shareholder entitled to attend and vote at the Meeting is entitled to appoint a proxy to attend and vote on his behalf. A proxy need not be a Shareholder. In order to be valid, the form of proxy must be deposited with the Company’s Branch Share Registrars in Hong Kong, Tricor Secretaries Limited, at 26 Floor, Tesbury Centre, 28 Queen’s Road East, Hong Kong together with any power of attorney or other authority, if any, under which it is signed, or a certified copy of that power or authority, not less than 48 hours before the time for holding the Meeting or adjournment thereof.
(2) The register of Members of the Company will be closed from Wednesday, 5 November 2008 to Thursday, 6 November 2008 both days inclusive, during which period no transfer of shares will be affected. All transfers accompanied by the relevant share certificates must be lodged with the Company’s Branch Share Registrars in Hong Kong, Tricor Secretaries Limited, at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Hong Kong for registration no later than 4:30p.m. on 4 November 2008.

The Directors of the Company as at date of this notice are Mr. Fang Hung, Kenneth, GBS, JP , Mr. Li Kwok Wai, Frankie and Mr. Leung Tze Kuen being the Executive Directors; and Mr. Tien Pei Chun, James, GBS, JP , Mr. Chu Chi Wai, Allan and Mr. Lau Yuen Sun, Adrian being the Independent Non-executive Directors.

– 43 –

AI assistant

Tristate Holdings Limited — Proxy Solicitation & Information Statement 2008

49226_rns_2008-10-20_34aeb8a9-02cc-4724-87d6-f83fbf4635e4.pdf

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

YEEBO (INTERNATIONAL HOLDINGS) LIMITED

MAJOR AND CONNECTED TRANSACTION

DEEMED DISPOSAL OF KUNSHAN VISIONOX DISPLAY CO LTD

CIMB-GK Securities (HK) Limited

CONTENTS

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

YEEBO (INTERNATIONAL HOLDINGS) LIMITED

(Stock Code: 259)

MAJOR AND CONNECTED TRANSACTION

DEEMED DISPOSAL OF KUNSHAN VISIONOX DISPLAY CO LTD

1. INTRODUCTION

LETTER FROM THE BOARD

LETTER FROM THE BOARD

2. AGREEMENTS ENTERED INTO BY THE GROUP

The Restructuring Agreement

LETTER FROM THE BOARD

The Consideration

LETTER FROM THE BOARD

Conditions Precedent

Timing of Capital Injection

LETTER FROM THE BOARD

Nomination of Directors

Number of directors to be nominated

The First Option Cancellation Agreement

LETTER FROM THE BOARD

Cancellation of Options Granted

The Loan Cancellation Agreement

Cancellation of Loan Agreed to be Granted

LETTER FROM THE BOARD

The Second Option Cancellation Agreement

Cancellation of Options Granted

LETTER FROM THE BOARD

3. INFORMATION ON KUNSHAN VISIONOX

4. EFFECT TO THE GROUP

LETTER FROM THE BOARD

Existing structure

LETTER FROM THE BOARD

LETTER FROM THE BOARD

5. INFORMATION ON THE GROUP

6. REASONS AND BENEFITS OF THE TRANSACTION

LETTER FROM THE BOARD

7. LISTING RULES IMPLICATIONS

8. SGM

LETTER FROM THE BOARD

9. PROCEDURES FOR DEMANDING A POLL

10. RECOMMENDATIONS

LETTER FROM THE BOARD

11. FURTHER INFORMATION

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

YEEBO (INTERNATIONAL HOLDINGS) LIMITED

To the Shareholders

MAJOR AND CONNECTED TRANSACTION

DEEMED DISPOSAL OF KUNSHAN VISIONOX DISPLAY CO LTD

Yours faithfully, Independent Board Committee

LETTER FROM CIMB

MAJOR AND CONNECTED TRANSACTION IN RELATION TO THE DEEMED DISPOSAL OF KUNSHAN VISIONOX DISPLAY CO LTD

LETTER FROM CIMB

PRINCIPAL FACTORS CONSIDERED

Background and rationale for the Transaction

LETTER FROM CIMB

Basis of consideration

LETTER FROM CIMB

Kunshan Industrial and Faith Crown

LETTER FROM CIMB

Crown Capital, Hebei Tsinghua and IRICO

Asset approach

Income approach

LETTER FROM CIMB

LETTER FROM CIMB

Our conclusion

The First Option Cancellation Agreement, the Loan Cancellation Agreement and the Second Option Cancellation Agreement

LETTER FROM CIMB

Tristate Holdings Limited Proxy Solicitation & Information Statement 2008