Wasion Holdings Limited — Proxy Solicitation & Information Statement 2007

Apr 30, 2007

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your shares in Wasion Meters Group Limited, you should at once hand this circular and the accompanying form of proxy to the purchaser or the transferee or to the bank, licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser or the 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.

WASION METERS GROUP LIMITED ����������

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 3393)

DISCLOSEABLE AND CONNECTED TRANSACTION

Independent financial adviser to the Independent Board Committee and the Independent Shareholders

Hantec Capital Limited

A letter from the Board is set out on pages 4 to 10 of this circular and a letter from the Independent Board Committee containing its recommendations to the Independent Shareholders in relation to the Acquisition is set out on page 11 of this circular. A letter from Hantec Capital, the independent financial advisers to the Independent Board Committee and the Independent Shareholders, containing its advice to the Independent Board Committee and the Independent Shareholders on the terms of the Acquisition is set out on pages 12 to 21 of this circular.

A notice convening the Extraordinary General Meeting to be held at JW Marriott Ballroom, Level 3, JW Marriott Hotel Hong Kong, Pacific Place, 88 Queensway, Hong Kong on Monday, 14 May 2007 immediately after the conclusion of the annual general meeting of the Company, which is scheduled to be held at 4:00 p.m. is set out on pages 28 to 29 of this circular. A form of proxy for use at the EGM is enclosed with this circular. Whether or not you are able to attend the meeting, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon and deposit with the Company’s Hong Kong branch share registrar at Computershare Hong Kong Investor Services Limited, Shops 1712-1716, 17tth Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for the holding of the EGM. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM or any adjourned meeting should you so wish.

27 April 2007

CONTENT

	Page
Definitions...........................................................................................................................	1
Letter from the Board.......................................................................................................	4
Letter from the Independent Board Committee...........................................................	11
Letter from Hantec Capital..............................................................................................	12
Appendix — General Information..................................................................................	22
Notice of Extraordinary General Meeting.....................................................................	28

– i –

DEFINITIONS

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

“Acquisition”	the acquisition of the entire issued share capital of Sinowise as
	contemplated by the Sale and Purchase Agreement
“associate(s)”	has the same meaning ascribed to it under the Listing Rules
“Board”	the board of Directors of the Company
“Business Day”	any day (excluding Saturday and Sunday) that banks in Hong Kong
	are generally open for business
“Company”	Wasion Meters Group Limited, a company incorporated in the
	Cayman Islands with limited liability, the shares of which are listed
	on the main board of the Stock Exchange
“Completion”	completion of the Acquisition pursuant to the Sale and Purchase
	Agreement
“connected person”	has the same meaning ascribed to it under the Listing Rules
“Consideration”	the aggregate consideration payable by the Company for the Sale
	Share in accordance with the terms of the Sale and Purchase
	Agreement
“Director(s)”	the directors of the Company
“EGM”	the extraordinary general meeting to be convened to approve the
	Acquisition
“Group”	the Company and its subsidiaries
“HK$”	Hong Kong dollar, the lawful currency of Hong Kong
“Hantec Capital”	Hantec Capital Limited, a licensed corporation to conduct types 1
	(dealing in securities) and 6 (advising on corporate finance)
	regulated activities under the SFO and the independent financial
	adviser to advise the Independent Board Committee and the
	Independent Shareholders in respect of the Acquisition
“Hong Kong”	The Hong Kong Special Administrative Region of the PRC

– 1 –

DEFINITIONS

“Hunan Weike”	Hunan Weike Power Meter Co., Ltd., a wholly foreign owned
	enterprise established in the PRC on 24 May 2002 and is
	beneficially owned by Mr. Liang Ke Nan, a brother of Mr. Ji
“Independent Board Committee”	the committee of the Directors comprising the independent non-
	executive Directors formed to advise the Independent Shareholders
	in respect of the Acquisition
“Independent Shareholders”	Shareholders other than Mr. Ji and his associates
“Latest Practicable Date”	24 April 2007, being the latest practicable date prior to the printing
	of this circular for the purpose of ascertaining certain information
	contained herein
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock
	Exchange
“Master Agreement”	the agreement entered into between the Company and Hunan Weike
	on 5 December 2005 which sets out, among other things, the terms
	of the purchases of single-phase electronic power meters from
	Hunan Weike by the Company
“Mr. Ji”	Mr. Ji Wei, an executive Director and the controlling shareholder
	of the Company
“Oceanbase”	Oceanbase Group Limited, a company incorporated in the British
	Virgin Islands and is a wholly owned subsidiary of the Company
“PRC”	the People’s Republic of China and for the purpose of this
	announcement, excludes Taiwan, Hong Kong and Macau
“RMB”	Renminbi, the lawful currency of the PRC for the time being
“SFO”	Securities and Futures Ordinance (Chapter 571 of the Laws of Hong
	Kong)
“Sale and Purchase Agreement”	the sale and purchase agreement dated 11 April 2007 entered into
	between the Vendor and the Company in relation to the Acquisition
“Sale Share”	1 ordinary share of USD1.00 each, representing the entire issued
	share capital of Sinowise, to be sold by the Vendor to the Company
	pursuant to the Sale and Purchase Agreement

– 2 –

DEFINITIONS

“Share(s)”	ordinary share(s) of HK$0.01 each in the issued share capital of
	the Company
“Shareholder(s)”	holder(s) of Share(s)
“Sinowise”	Sinowise Industries Limited, an investment holding company
	incorporated in the British Virgin Islands on 1 July 2004 and is
	beneficially owned by Mr. Liang Ke Nan, a brother of Mr. Ji
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Vendor”	Mr. Liang Ke Nan, a brother of Mr. Ji
“%”	per cent

For the purpose of this circular,, the exchange rate of RMB1.00 = HK$1.00 has been used for currency translation, where applicable. Such exchange rate is for illustration purposes and does not constitute a representation that any amount in RMB or HK$ have been, could have been or may be converted at such rate.

– 3 –

LETTER FROM THE BOARD

WASION METERS GROUP LIMITED ����������

(Incorporated in the Cayman Islands with limited liability) (Stock Code: 3393)

Executive Directors: Ji Wei (Chairman) Cao Zhao Hui Wang Xue Xin Zheng Xiao Ping Liao Xue Dong Zeng Xin

Registered office: Cricket Square Hutchins Drive P.O. Box 2681GT George Town Grand Cayman British West Indies

Independent non-executive Directors: Hui Wing Kuen Pan Yuan Wu Jin Ming

Principal place of business in Hong Kong: Room 2903, Far East Finance Centre 16 Harcourt Road Admiralty Hong Kong

27 April 2007

To the Shareholders

Dear Sir/Madam,

DISCLOSEABLE AND CONNECTED TRANSACTION

INTRODUCTION

The Board announced that on 11 April 2007, Oceanbase, a wholly owned subsidiary of the Company, has entered into the Sale and Purchase Agreement with the Vendor, pursuant to which the Vendor has agreed to sell to the Company the Sale Share at an initial consideration of RMB81,000,000 (equivalent to approximately HK$81,000,000) and subject to the level of audited net profit after tax of Hunan Weike for the year ending 31 December 2007, an additional consideration up to RMB129,000,000 (equivalent to approximately HK$129,000,000). The total consideration will in any event not exceed RMB210,000,000 (equivalent to approximately HK$210,000,000).

The Vendor is a brother of Mr. Ji, an executive Director and the controlling shareholder of the Company, and hence is an associate of a connected person of the Company. Accordingly, the Acquisition constitutes a connected transaction for the Company under the Listing Rules and will be subject to the reporting, announcement and Independent Shareholders’ approval requirements of Chapter 14A of the Listing Rules.

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LETTER FROM THE BOARD

As the applicable percentage ratios (as set out in the Listing Rules) are more than 5% but less than 25%, the Acquisition also constitutes a discloseable transaction for the Company under Rule 14.06(2) of the Listing Rules.

The purpose of this circular is to give you details of, among other things, the Acquisition.

THE ACQUISITION

The Sale and Purchase Agreement

Date: 11 April 2007

Parties to the Sale and Purchase Agreement:

• (1) Vendor: Mr. Liang Ke Nan, a brother of Mr. Ji.

• (2) Purchaser: Oceanbase Group Limited, a wholly owned subsidiary of the Company.

The Acquisition

Pursuant to the Sale and Purchase Agreement, the Vendor has agreed to sell to the Purchaser the Sale Share. The Sale Share represents the entire issued share capital of Sinowise.

The Vendor is a brother of Mr. Ji, an executive Director and the controlling shareholder of the Company, and hence is an associate of a connected person of the Company. Accordingly, the Acquisition constitutes a discloseable and connected transaction for the Company under the Listing Rules and will be subject to the reporting, announcement and Independent Shareholders’ approval requirements of Chapter 14A of the Listing Rules. Prior to the Acquisition, the Company has no transactions with either Mr. Ji or the Vendor that would fall to be aggregated with the Acquisition under Rule 14.22 or Rule 14A.25 of the Listing Rules.

Assets to be acquired

The asset to be acquired is the Sale Share which represents the entire issued share capital of Sinowise. Sinowise is a company incorporated in the British Virgin Islands and its sole assets is its equity interest in Hunan Weike, which is principally engaged in the production and sale of single-phase electronic power meters. As at the Latest Practicable Date, Sinowise has no other operations other than its equity interest in Hunan Weike.

Based on the audited accounts for each of the two years ended 31 December 2005 and 2006 prepared in accordance with PRC accounting standards, the net profit before tax of Hunan Weike was RMB67,000 (equivalent to approximately HK$67,000) and RMB11,576,000 (equivalent to approximately HK$11,576,000) and the net profit after tax was RMB67,000 (equivalent to approximately HK$67,000) and RMB11,576,000 (equivalent to approximately HK$11,576,000) respectively. As at 31 December 2006, the total net asset value of Hunan Weike was approximately RMB13,349,000 (equivalent to approximately HK$13,349,000). Sinowise is a company established

– 5 –

LETTER FROM THE BOARD

in the British Virgin Islands for the holding of the equity interest in Hunan Weike. As such, no separate accounts have been prepared in respect of Sinowise. If the financial results of Hunan Weike are consolidated into the accounts of Sinowise, the assets, profit, and revenue of Sinowise and Hunan Weike would be largely the same.

Consideration

The Consideration for the Sale Share is an initial consideration of RMB81,000,000 (equivalent to approximately HK$81,000,000) and an additional sum of up to RMB129,000,000 (equivalent to approximately HK$129,000,000), but in any event will not be more than RMB210,000,000 (equivalent to approximately HK$210,000,000) in aggregate.

Payment terms

The Consideration will be satisfied by the Company in the following manner:

• (1) a first payment of RMB81,000,000 (equivalent to approximately HK$81,000,000) (the “ First Payment ”) will be payable in cash within 30 days from the day when the condition precedent to the Sale and Purchase Agreement has been satisfied, or such later date as agreed by both parties in writing; and

• (2) the remaining balance of the Consideration, which will be determined based on the audited net profit after tax of Hunan Weike for the year ending 31 December 2007 multiplied by a priceearnings ratio of 7 times and deducting the First Payment but in any event shall not be more than RMB129,000,000 (equivalent to approximately HK$129,000,000), will be payable in cash within 30 days from the day on which the audited accounts of Hunan Weike for the year ending 31 December 2007 have been issued by the auditors appointed by the Company, which is expected to be around end-February/early-March 2008.

The initial consideration was determined with reference to the market price earnings ratio of 7 times the net profit after tax of Hunan Weike for the year ended 31 December 2006 while the mechanism of the additional consideration is based on a price earning ratios of 7 times the net after tax profit of Hunan Weike for the year ending 31 December 2007, subject to the upper limit of RMB129,000,000 (equivalent to approximately HK$129,000,000). The additional consideration was determined after arm’s length negotiations between the parties with reference to the projected profits of Hunan Weike as a result of the escalated demand in single-phase electronic power meters due to the robust overseas and domestic markets.

The price earning ratio of 7 was determined after arm’s length negotiations and taken into consideration comparative price earning ratios of industrial enterprises of a similar nature in the PRC. The Directors thus consider that the Acquisition has been made on normal commercial terms and after arm’s length negotiations. The terms are fair and reasonable so far as the Company and the Shareholders are concerned and that the Acquisition is in the interest of the Company and the Shareholders as a whole.

The Company will pay the total consideration by cash from its internal resources.

– 6 –

LETTER FROM THE BOARD

Condition of the Sale and Purchase Agreement

Completion of the Acquisition is conditional upon the approvals from the Independent Shareholders in the EGM in respect of the transactions contemplated under the Sale and Purchase Agreement.

If the condition set out above is not fulfilled or waived by 30 June 2007, or such later date as may be agreed by the parties, the Sale and Purchase Agreement will terminate and cease to be of any effect save for any antecedent breach.

Completion

Completion of the Acquisition will take place within 10 days after the satisfaction of the above condition.

Information on Hunan Weike

Hunan Weike is a wholly foreign owned enterprise established in the PRC on 24 May 2002 and is principally engaged in the production and sale of single-phase electronic power meters. The Group has been purchasing single-phase electronic power meters from Hunan Weike on an original equipment manufacturing (“ OEM ”) basis and also sells to Hunan Weike three-phase power meters for distribution pursuant to the Master Agreement entered on 5 December 2005 between the Company and Hunan Weike. The products supplied by Hunan Weike to the Group were single-phase electronic power meters manufactured in accordance with the Group’s specifications and requirements under the Group’s brandname of “ ”. Such transactions between the Company and Hunan Weike constitute continuing connected transactions for the Company under Chapter 14A of the Listing Rules. On 30 November 2005, the Stock Exchange granted a waiver to the Company pursuant to Rule 14A.42(3) of the Listing Rules from strict compliance with the announcement and independent shareholders’ requirements in respect of the transactions under the Master Agreement. Pursuant to an announcement and the circular of the Company dated 29 September 2006 and 24 October 2006, respectively, the Company sought to increase the annual caps in respect of the transactions under the Master Agreement. The Independent Shareholders approved the revisions to the annual caps under the Master Agreement in an extraordinary general meeting held on 9 November 2006.

Hunan Weike currently has an annual production capacity of 2 million units of single-phase electronic power meters.

Reason for the Acquisition

The Group is principally engaged in the development, manufacture and sale of electronic power meters and data collection terminals and the provision of software development services.

Prior to 2006, the Group only has limited sales overseas. As a result of the Group’s expansion into export markets in 2006 and the successfully winning of contracts in Africa and elsewhere, there has been strong demand for electronic single-phase power meters which the Group has been supplying through the OEM manufacturing arrangement with Hunan Weike. At the same time, pursuant to the directive of the PRC Government on reducing power consumption, power reform and development of

– 7 –

LETTER FROM THE BOARD

power grids, demand for electronic power meters in the domestic market has also increased. Pursuant to the Master Agreement and the supplemental agreement dated 29 September 2006, the Group only earns a gross profit margin of 5% on the sale of single-phase electronic power meters produced by Hunan Weike on an OEM basis.

With the continuous development of the domestic and export markets, the Directors expect that the demand in single-phase electronic power meters will continue to increase. The Acquisition would allow the Company to capture the higher gross profit margin associated with the single-phase electronic power meters and enlarge its turnover and profit in view of the increase in demand of single-phase electronic power meters.

In addition, Hunan Weike is in possession of a piece of land at the Changsha Technology Park in Changsha, Hunan Province, which is adjacent to the land owned by the Group. The carrying value of the land is RMB9,439,200 (equivalent to HK$9,439,200). The Directors consider that the Hunan Weike’s land could be developed together with the land of the Group into a more efficient integrated manufacturing facility for electronic power meters. Also, Hunan Weike will become a wholly owned subsidiary of the Group after completion of the Acquisition, which will enable the Group to eliminate the continuing connected transactions with Hunan Weike.

Having considered the reasons above, the Directors consider that the Acquisition has been made on normal commercial terms and after arm’s length negotiations. The terms are fair and reasonable so far as the Company and the Shareholders are concerned and that the Acquisition is in the interest of the Company and the Shareholders as a whole.

FINANCIAL EFFECTS OF THE ACQUISITION

At Completion, the accounts of Hunan Weike will be consolidated into the financial statements of the Company and Hunan Weike will be accounted for as a wholly owned subsidiary of the Group. Sinowise, as the immediate holding company of Hunan Weike, will also be accounted for as a wholly owned subsidiary of the Group at Completion.

As at 31 December 2006, the Group’s audited consolidated net assets value amounted to approximately RMB585,876,000 (equivalent to HK$585,876,000) and its total assets amounted to approximately RMB929,613,000 (equivalent to HK$929,613,000). The Group’s total liabilities as at 31 December 2006 amounted to approximately RMB343,737,000 (equivalent to HK$343,737,000). The audited total assets and liabilities of Hunan Weike as at 31 December 2006 were approximately RMB179,800,000 (equivalent to HK$179,800,000) and approximately RMB166,451,000 (equivalent to HK$166,451,000) respectively and its net asset value was approximately RMB13,349,000 (equivalent to HK$13,349,000).

Total consolidated assets and liabilities of the enlarged Group post completion of the Acquisition are expected to rise modestly. Goodwill calculated as the difference between the First Payment and the total net fair value of Hunan Weike will arise as a result of the Acquisition. Based on the net book value of Hunan Weike of RMB13,349,000 (equivalent to HK$13,349,000) as at 31 December 2006, the goodwill arising from the Acquisition will be approximately RMB67,651,000 (equivalent to HK$67,651,000). The Directors consider that the Acquisition will not have a material effect on the consolidated net asset value of the Group.

– 8 –

LETTER FROM THE BOARD

In light of the above, the Directors are of the view that there will not be any material adverse impacts on the Group’s net asset value as a result of the Acquisition.

GENERAL

As the Vendor is an associate of a connected person of the Company within the meaning of the Listing Rules, the Acquisition constitutes a connected transaction for the Company under the Listing Rules and will be subject to the reporting, announcement and Independent Shareholders’ approval requirements of Chapter 14A of the Listing Rules.

As the applicable percentage ratios as set out in the Listing Rules are more than 5% but less than 25%, the Acquisition also constitutes a discloseable transaction for the Company under Rule 14.06(2) of the Listing Rules.

Hantec Capital has been appointed the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders on the terms of the Acquisition.

EXTRAORDINARY GENERAL MEETING

Set out on pages 28 to 29 is a notice convening the EGM to be held at JW Marriott Ballroom, Level 3, JW Marriott Hotel Hong Kong, Pacific Place, 88 Queensway, Hong Kong on Monday, 14 May 2007 immediately after the conclusion of the annual general meeting of the Company, which is scheduled to be held at 4:00 p.m. at which an ordinary resolution will be proposed to the Independent Shareholders to consider and, if thought fit, approve the Acquisition. Pursuant to the requirements of the Listing Rules, the vote of the Independent Shareholders at the EGM for the approval of the Aquisition will be taken by poll where Mr. Ji and his associates will abstain from voting.

The form of proxy for use at the EGM is enclosed with this circular. Whether or not you are able to attend the EGM in person, you are advised to read the notice and complete and return the form of proxy in accordance with the instructions printed thereon to the Company’s Hong Kong branch share registrar at Computershare Hong Kong Investor Services Limited, Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong as soon as possible but in any event not later than 48 hours before the time appointed for the holding of the EGM or any adjourned meeting thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM or any adjourned meeting thereof should you so wish.

RECOMMENDATIONS

Your attention is drawn to the letter from the Independent Board Committee set out on page 11 of this circular which contains its recommendations to the Independent Shareholders in respect of the terms of the Acquisition and the letter from Hantec Capital on pages 12 to 21 of this circular which contains its advice and the principal factors and reasons it has taken into consideration in arriving at its advice with regard to the terms of the Acquisition.

You are advised to read the letter from Independent Board Committee and the letter from Hantec Capital mentioned above before deciding as to how to vote at the EGM.

– 9 –

LETTER FROM THE BOARD

ADDITIONAL INFORMATION

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

Yours faithfully, By order of the Board of Wasion Meters Group Limited Cao Zhao Hui Executive Director

– 10 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

WASION METERS GROUP LIMITED ����������

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 3393)

27 April 2007

To the Independent Shareholders

Dear Sir or Madam,

DISCLOSEABLE AND CONNECTED TRANSACTION

We have been appointed as members of the Independent Board Committee to advise you in connection with the terms of the Acquisition, details of which are set out in the “Letter from the Board” in the circular dated 27 April 2007 (the “ Circular ”) of which this letter forms part. Defined terms used in this letter shall have the same meanings as given to them in the Circular unless the context otherwise requires.

We, being the independent non-executive Directors constituting the Independent Board Committee, are writing to you to set out our opinion in respect of the terms of the Acquisition. The Independent Board Committee was set up to advise you whether in its view the terms of the Acquisition are in the interests of the Company and the Shareholders as a whole and whether the terms of the Acquisition are fair and reasonable so far as the Company and the Shareholders are concerned.

Hantec Capital Limited (“ Hantec Capital ”) has been appointed by the Company to advise us and the Shareholders as to whether the terms of the Acquisition are fair and reasonable so far as the Company and the Shareholders are concerned. Details of its advice, together with the principal factors taken into consideration in arriving at such advice, are set out on pages 12 to 21 of the Circular.

Your attention is also drawn to the “Letter from the Board” set out on pages 4 to 10 of the Circular and the additional information set out in the appendix to the Circular.

Having considered the terms of the Acquisition and the advice of Hantec Capital, we consider that the terms of the Acquisition are fair and reasonable as far as the Company and the Shareholders are concerned and that they are in the interests of the Company and the Shareholders as a whole. Accordingly, we recommend the Shareholders to vote in favour of the ordinary resolution as set out in the notice of the Extraordinary General Meeting attached to the Circular to approve the Acquisition.

Yours faithfully, For and on behalf of Independent Board Committee Hui Wing Kuen Pan Yuan Wu Jin Ming Independent Independent Independent Non-executive Director Non-executive Director Non-executive Director

– 11 –

LETTER OF ADVICE FROM HANTEC CAPITAL

The following is the full text of a letter of advice from Hantec Capital to the Independent Board Committee and the Independent Shareholders for the purpose of inclusion in this circular:

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Hantec Capital Limited

45th Floor, COSCO Tower 183 Queen’s Road Central Hong Kong

27 April 2007

To the Independent Board Committee and the Independent Shareholders of Wasion Meters Group Limited

Dear Sirs,

DISCLOSEABLE AND CONNECTED TRANSACTION

INTRODUCTION

We refer to our engagement as the independent financial adviser to the Independent Board Committee and the Independent Shareholders on the Acquisition, details of which are set out in the Letter from the Board (the “ Letter from the Board ”) contained in the circular (the “ Circular ”) of the Company to the Shareholders dated 27 April 2007, of which this letter forms part. Terms used in this letter have the same meanings as defined in the Circular unless the context otherwise requires.

On 11 April 2007, the Board announced that Oceanbase, a wholly owned subsidiary of the Company, has entered into the Sale and Purchase Agreement with the Vendor, pursuant to which the Vendor has agreed to sell to the Company the Sale Shares. The Vendor is a brother of Mr. Ji, an executive Director and the controlling shareholder of the Company, and hence is an associate of a connected person of the Company. Accordingly, the Acquisition constitutes a connected transaction for the Company under the Listing Rules and will be subject to the reporting, announcement and Independent Shareholders’ approval requirements of Chapter 14A of the Listing Rules. The Acquisition is subject to, among other things, the approval of the Independent Shareholders at the EGM by way of poll. Mr. Ji and his associates will abstain from voting for the resolution to be proposed at the EGM to approve the Acquisition.

The Independent Board Committee, comprising three independent non-executive Directors, namely Messrs. Hui Wing Kuen, Pan Yuan and Wu Jin Ming, has been established to advise the Independent Shareholders in respect of the Acquisition.

– 12 –

LETTER OF ADVICE FROM HANTEC CAPITAL

BASIS OF OUR ADVICE

In arriving at our recommendation, we have relied on the statements, information and representations contained in the Circular and the information and representations provided to us by the Directors and the management of the Company. We have assumed that all information and representations contained or referred to in the Circular and all information and representations which have been provided by the Directors and the management of the Company for which they are solely responsible, are true and accurate at the time they were made and will continue to be accurate at the date of the despatch of the Circular. We have no reason to doubt the truth, accuracy and completeness of the information and representations provided to us by the Directors and the management of the Company.

We consider that we have been provided with sufficient information on which to form a reasonable basis for our opinion. We have no reason to suspect that any relevant information has been withheld, nor are we aware of any facts or circumstances which would render the information provided and representations made to us untrue, inaccurate or misleading. We consider that we have performed all the necessary steps to enable us to reach an informed view and to justify our reliance on the information provided so as to provide a reasonable basis for our opinion. Having made all reasonable enquiries, the Directors have further confirmed that, to the best of their knowledge, they believe there are no other facts or representations the omission of which would make any statements in the Circular, including this letter, misleading. We have not, however, carried out any independent verification of the information provided by the Directors and the management of the Company, nor have we conducted an independent investigation into the business and affairs of the Group, Sinowise and Hunan Weike.

PRINCIPAL FACTORS TAKEN INTO ACCOUNT

The principal factors and reasons that we have taken into consideration in assessing the Acquisition and the terms thereof and arriving at our opinion are set out as follows:

1. Background of the Acquisition

As disclosed in the Company’s announcement dated 11 April 2007, Oceanbase, a wholly subsidiary of the Company, has entered into the Sale and Purchase Agreement with the Vendor, pursuant to which the Vendor has agreed to sell to the Company the Sale Share at an initial consideration of RMB81,000,000 (equivalent to approximately HK$81,000,000) and subject to the level of audited net profit after tax of Hunan Weike for the year ending 31 December 2007, an additional consideration of up to RMB129,000,000 (equivalent to approximately HK$129,000,000). The total Consideration will in any event not exceed RMB210,000,000 (equivalent to approximately HK$210,000,000). The Sale Share represent the entire issued share capital of Sinowise, the holding company of Hunan Weike. Upon Completion, Oceanbase, a wholly owned subsidiary of the Group, will hold the entire share capital of Sinowise and accordingly Hunan Weike will become a wholly-owned subsidiary of the Group.

– 13 –

LETTER OF ADVICE FROM HANTEC CAPITAL

Information on the Group

The Group is principally engaged in the development, manufacture and sale of electronic power meters and data collection terminals and the provision of software development services.

Information on Hunan Weike

Hunan Weike is a wholly foreign owned enterprise established in the PRC on 24 May 2002 and is principally engaged in the production and sale of single-phase electronic power meters. The Group has been purchasing single-phase electronic power meters from Hunan Weike on an OEM basis and also sell to Hunan Weike three-phase power meters for distribution pursuant to the Master Agreement. The products supplied by Hunan Weike to the Group were single-phase electronic power meters manufactured in accordance with the Group’s specifications and requirements under the Group’s brandname of “ ”. Such transactions between the Company and Hunan Weike constitute continuing connected transactions for the Company under Chapter 14A of the Listing Rules. Hunan Weike currently has an annual production capacity of 2 million units of single-phase electronic power meters.

Based on the audited accounts for each of the two years ended 31 December 2005 and 2006, the net profit before tax of Hunan Weike was RMB67,000 (equivalent to approximately HK$67,000) and RMB11,576,000 (equivalent to approximately HK$11,576,000) and the net profit after tax was RMB67,000 (equivalent to approximately HK$67,000) and RMB11,576,000 (equivalent to approximately HK$11,576,000) respectively. As at 31 December 2006, the total net asset value of Hunan Weike was approximately RMB13,349,000 (equivalent to approximately HK$13,349,000).

2. Reasons for and benefits of the Acquisition

As stated in the Letter from the Board, as a result of the Group’s expansion into export markets in 2006 and the successfully winning of contracts in Africa and elsewhere, there has been strong demand for electronic single-phase power meters of which the Group has been supplying through the OEM manufacturing arrangement with Hunan Weike. At the same time, pursuant to the directive of the PRC Government on reducing power consumption, power reform and development of power grids, demand for electronic power meters in the domestic market has also increased. Pursuant to the Master Agreement and the supplemental agreement dated 29 September 2006, the Group only earns a gross profit margin of 5% on the sale of single-phase electronic power meters produced by Hunan Weike on an OEM basis. With the continuous development of the domestic and export markets, the Directors expect that the demand for single-phase electronic power meters will continue to increase. The Acquisition would allow the Company to capture the higher gross profit margin associated with the single-phase electronic power meters and enlarge its turnover and profit in view of the increase in demand for single-phase electronic power meters.

In addition, Hunan Weike is in possession of a piece of land at the Changsha Technology Park in Changsha, Hunan Province, which is adjacent to the land owned by the Group. The Directors consider that the Hunan Weike’s land could be developed together with the land of the Group into a more efficient integrated manufacturing facility for electronic power meters.

– 14 –

LETTER OF ADVICE FROM HANTEC CAPITAL

Based on the audited accounts for each of the two years ended 31 December 2005 and 2006, the net profit before tax of Hunan Weike was RMB67,000 (equivalent to approximately HK$67,000) and RMB11,576,000 (equivalent to approximately HK$11,576,000) and the net profit after tax was RMB67,000 (equivalent to approximately HK$67,000) and RMB11,576,000 (equivalent to approximately HK$11,576,000) respectively. Upon Completion, Hunan Weike will be accounted as a wholly owned subsidiary of the Group and its accounts will be consolidated into the financial statements of the Company. The increase in the attributable interests in the Hunan Weike is expected to strengthen the Group’s earnings base given the historical and current profitability of Hunan Weike.

As disclosed in the results announcement of the Company dated 2 April 2007 for the year ended 31 December 2006, the Group intends to expand its product range and improve the profitability through mergers and acquisitions, and to exploit the oversea markets, we therefore consider that the Acquisition allows the Group to expand its product range further to single-phase electronic power meter and therefore is in line with the Group’s future development.

In light of the above, in particular that, (i) the Acquisition would allow the Company to capture the higher gross profit margin associated with the single-phase electronic power meters; (ii) Hunan Weike’s land could be developed together with the land of the Group into a more efficient integrated manufacturing facility; (iii) the Acquisition is expected to strengthen the Group’s earnings base given the historical and current profitability of Hunan Weike, and (iv) the Acquisition is line with the Group’s future development, we are of the opinion that the Acquisition is in the interests of the Group and the Independent Shareholders as a whole. As Hunan Weike is engaged in similar business as the Group, the Acquisition is line with the business development of the Group and therefore we consider the Acquisition is in the ordinary and usual course of business of the Company.

3. Consideration of the Sale and Purchase Agreement

• (i) The Consideration

The Consideration for the Sale Share is an initial consideration of RMB81,000,000 (equivalent to approximately HK$81,000,000) and an additional sum of up to RMB129,000,000 (equivalent to approximately HK$129,000,000), but in any event will not be more than RMB210,000,000 (equivalent to approximately HK$210,000,000) in aggregate. The Consideration will be satisfied from internal resources in cash and in the following manner:

• (1) a first payment of RMB81,000,000 (equivalent to approximately HK$81,000,000) (the “First Payment”) will be payable in cash within 30 days from the day when the condition precedent to the Sale and Purchase Agreement are satisfied or waived, as the case may be, or such later date as agreed by both parties in writing; and

• (2) the remaining balance of the Consideration, which will be determined based on the audited net profit after tax of Hunan Weike for the year ending 31 December 2007 multiplied by a price to earnings ratio of 7 times and deducting the First Payment but in any event shall not be more than RMB129,000,000 (equivalent to approximately HK$129,000,000), will be payable in cash within 30 days from the day on which the audited accounts of Hunan Weike for the year ending 31 December 2007 have been issued by the auditors appointed by the Company.

– 15 –

LETTER OF ADVICE FROM HANTEC CAPITAL

The initial consideration was determined with reference to the price to earnings ratio of 7 times the net profit after tax of Hunan Weike for the year ended 31 December 2006 while the mechanism of the additional consideration is based on a price to earnings ratio of 7 times the net after tax profit of Hunan Weike for the year ending 31 December 2007, subject to the upper limit of RMB129,000,000 (equivalent to approximately HK$129,000,000). As advised by the Directors, the additional consideration was determined after arm’s length negotiations between the parties with reference to the earning potential of Hunan Weike as a result of the escalated demand in single-phase electronic power meters due to the robust overseas and domestic markets. The Directors are of the view that the Consideration is on normal commercial terms, and is fair and reasonable and is in the interest of the Company and the Shareholders as a whole.

Given the Consideration ranges from RMB81,000,000 (equivalent to approximately HK$81,000,000) to RMB210,000,000 (equivalent to approximately HK$210,000,000) which is not fixed and was determined with reference to a fixed price to earnings ratio of 7 times the profit after tax of Hunan Weike for the year ending 31 December 2007, we consider that it is appropriate and on normal commercial terms to assess the fairness of the Consideration based on the price to earnings ratio.

(ii) Comparison with the Company

In assessing the fairness and reasonableness of the Consideration, we have been on our best effort to identify companies which perform the similar businesses as Hunan Weike (the sole assets of Sinowise) does, and we identified by searching through the published information on the website of the Stock Exchange that the Company is the only listed company in Hong Kong which performs the similar business to that of Hunan Weike. We have therefore compared the price to earnings ratio of the Company with that of Hunan Weike, the summary of which is set out below:

				Market		Price to
			capitalisation		Net profit after tax	earnings ratio
Company	Business	(as at the Latest			(for the year ended	(as at the Latest
name	activities	Practicable Date)			31 December 2006)	Practicable Date)
The Company	Development,	HK$ 2,521,207,077			RMB 151,736,000	16.6 times
	manufacture and				(equivalent to
	sale of electronic				approximately
	power meters and				HK$151,736,000)
	data collection
	terminals, and the
	provision of software
	development services.

Source: http://www.hkex.com.hk

– 16 –

LETTER OF ADVICE FROM HANTEC CAPITAL

As set out above, the price to earnings ratio of the Company is 16.6 times, whereas the price to earnings ratio of Hunan Weike is 7 times. As the price to earnings ratio of Hunan Weike is lower than that of the Company, we therefore consider that the Consideration represents good value for the Company.

(iii) Comparison with listed Companies

As we consider that only one comparison provided above is not adequate for us to formulate our opinion, we have further identified through the annual reports of the companies listed on the Stock Exchange published since 1 January 2006, on our best effort, three comparable companies (“ Comparable Companies ”) which and part of the businesses of the Comparable Companies, and/or their associate Companies and/or their jointly controlled entities are sale of power meters. The Comparable Companies are identified by searching through published information, and may not contain all listed companies in the related industries. Shareholders should note that the stated price to earnings ratios of the Comparable Companies could be sensitive to, amongst other things, each of their other businesses, financial position and market price performance of the shares of the respective Comparable Companies and therefore, the price to earnings ratios of the Comparable Companies listed below are for information and reference purposes only.

		Market		Price to
		capitalisation		earnings ratio
Company	Business	(as at the Latest		(as at the Latest
name	activities	Practicable Date)	Net profit	Practicable Date)
Cosmos	Trading of	HK$459,889,750	HK$65,143,000	7.1 times
Machinery	industrial		(for the year ended
Enterprises	consumables,		31 December 2006)
Limited (118)	manufacturing of
	plastic processing/
	products, industrial
	machinery, electronic
	products and printed
	circuit boards.

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LETTER OF ADVICE FROM HANTEC CAPITAL

		Market		Price to	Price to
		capitalisation		earnings ratio
Company	Business	(as at the Latest		(as at the Latest
name	activities	Practicable Date)	Net profit	Practicable Date)
GST Holdings	Manufacturing and	HK$2,280,000,000	RMB164,993,000	13.8 times
Limited	distribution of fire		(equivalent to
(416)	alarm systems and		approximately
	fire alarm network		HK$164,993,000)
	products, as well as		(for the year ended
	related products,		31 December 2006)
	including security
	systems, building
	automation systems
	and electronic power
	meters.
Min Xin Holdings	Property investment,	HK$1,424,228,834	HK$59,849,138	23.8 times
Limited (222)	development and		(for the year ended
	sales; financial		31 December 2005)
	services; toll
	road investment;
	industrial instrument
	manufacturing and
	investment holdings.
Range			7.1 times to 23.8 times
Mean				14.9 times
Hunan Weike				7.0 times

Source: http://www.hkex.com.hk

As illustrated above, the price to earnings ratios of the Comparable Companies identified vary widely, with a range from 7.1 times to 23.8 times and a mean value of approximately 14.9 times. From the above, we observed that the price to earnings ratio of Hunan Weike of 7.0 times represented by the Consideration is the lowest amongst the Comparable Companies, which represents a discount of about 53.0% to the average of the price to earnings ratios of the Comparable Companies. Hence we consider the Consideration is acceptable and is in the interest of the Company.

– 18 –

LETTER OF ADVICE FROM HANTEC CAPITAL

(iv) Comparison with recent acquisition of power meters company

In addition to the above comparisons, we have identified, on a best effort basis, one transaction (“ Comparable Deal ”) announced during the period from 1 January 2006 up to 11 April 2007, being the date of entering into the Sale and Purchase Agreement, which involved the acquisition of power meter company principally engaged in the manufacture/provision of electronic power meters as summarized below:

				Price to
Company name	Date announced	Assets acquired	Consideration	earnings ratio
Hi Sun Technology	13 February 2007	Entire registered	RMB300,650,000	7.5 times
(China) Limited		capital of Hangzhou	(equivalent to
(818)		Hualong Electronic	approximately
		Technology	HK$300,650,000)
		Company Limited,
		Hangzhou Hualong
		Information
		Technology Company
		Limited and entire
		issued capital of
		Pacific Sheen
		International Limited
The Company	11 April 2007	Entire issued	RMB81,000,000	7.0 times
		capital of Sinowise,	(equivalent to
		the holding company	approximately
		of Hunan Weike	HK$ 81,000,000)
			(or maximum up to
			RMB210,000,000
			(equivalent to
			approximately
			HK$210,000,000))

Source: http://www.hkex.com.hk

The price to earnings ratio of Hunan Weike represented by the Consideration is 7 times, which is lower than the price to earnings ratio of the Comparable Deal, being 7.5 times, illustrated above. We therefore consider that the Consideration represents good value for the Company.

– 19 –

LETTER OF ADVICE FROM HANTEC CAPITAL

In view of the above, in particular that, (i) the price to earnings ratio of Hunan Weike represented by the Consideration is the lowest amongst those of the Company, the Comparable Companies, and the Comparable Deal; (ii) the profitability of Hunan Weike mentioned under the section headed “Reasons for and benefits of the Acquisition” above, and (iii) demand for single-phase electronic power meters due to the robust overseas and domestic markets is escalated as expected by the Directors. We are of the view that the Consideration is considered reasonable and on normal commercial terms to the Company and it is fair and reasonable so far as the Independent Shareholders are concerned.

4. Financial effects of the Acquisition on the Group

(i) Effect on earnings

Based on the results announcement of the Company for the year ended 31 December 2006, the Group recorded turnover of approximately RMB445,648,000 (equivalent to approximately HK$445,648,000) and RMB596,910,000 (equivalent to approximately HK$596,910,000) for the two years ended 31 December 2006 respectively, and the Group recorded net profit after taxation of approximately RMB115,972,000 (equivalent to approximately HK$115,972,000) and RMB151,736,000 (equivalent to approximately HK$151,736,000) for the two years ended 31 December 2006 respectively. Based on the audited accounts for each of the two years ended 31 December 2005 and 2006 prepared in accordance with PRC accounting standards, the net profit before tax of Hunan Weike was RMB67,000 (equivalent to approximately HK$67,000) and RMB11,576,000 (equivalent to approximately HK$11,576,000) and the net profit after tax was RMB67,000 (equivalent to approximately HK$67,000) and RMB11,576,000 (equivalent to approximately HK$11,576,000) respectively.

Prior to the Acquisition, the Group only earns a gross profit margin of 5% on the sale of singlephase electronic power meters produced by Hunan Weike on an OEM basis pursuant to the Master Agreement and the supplemental agreement dated 29 September 2006. Upon Completion, Hunan Weike will become a wholly owned subsidiary of the Group and its accounts will be consolidated into the financial statements of the Company after Completion. Given the historical performance of Hunan Weike, it is expected that the turnover and net profit of the Group will further be improved upon Completion. We therefore consider that the Acquisition will provide positive contribution to the earnings base of the Group.

(ii) Effect on cash position

As stated in the Letter from the Board, the Acquisition will be satisfied by internal resources of the Group. As at 31 December 2006, the cash and cash equivalents of the Group were maintained at approximately RMB158,182,000 (equivalent to approximately HK$158,182,000). After the First Payment, the Group’s cash and cash equivalents will decrease by the amount of RMB81,000,000 (equivalent to approximately HK$81,000,000) which represent the First Payment payable by the Company for the Acquisition pursuant to the Sale and Purchase Agreement. Accordingly, we concur with the Directors’ view that the Group has adequate financial resources to fulfill the payment obligation and the cash payment will not have a material adverse impact on the Group’s financial or cash flow condition after the First Payment.

– 20 –

LETTER OF ADVICE FROM HANTEC CAPITAL

In view of the historical turnover and profitability of the Group and Hunan Weike, the Directors consider that the Group will have adequate financial resources to fulfill the payment obligation for the remaining balance of the Consideration, which will be determined based on the audited net profit after tax of Hunan Weike for the year ending 31 December 2007 but in any event shall not be more than RMB129,000,000 (equivalent to approximately HK$129,000,000).

• (iii) Effect on net assets value

As advised by the Directors, given the net asset value of Hunan Weike as at 31 December 2006 amounted to approximately RMB13,349,000 (equivalent to approximately HK$13,349,000) as stated in the Letter from the Board, the First Payment of the Acquisition of RMB81,000,000 (equivalent to approximately HK$81,000,000) exceed the net asset value of Hunan Weike by approximately RMB67,651,000 (equivalent to approximately HK$67,651,000). The difference represents the positive goodwill of approximately RMB67,651,000 (equivalent to approximately HK$67,651,000). However, as the final Consideration of Acquisition will be determined based on the audited net profit after tax of Hunan Weike for the year ending 31 December 2007, the goodwill arising from the Acquisition to be recognized will be determined at the time of Completion based on the then audited net profit after tax of Hunan Weike. Such goodwill will be subject to annual assessment of impairment by the Directors and there will be no immediate profit and loss effect immediately upon Completion. In the event that the final Consideration is RMB210,000,000 (equivalent to approximately HK$210,000,000), the positive goodwill arising from the additional consideration RMB129,000,000 (equivalent to approximately HK$129,000,000) will be subject to annual assessment of impairment by the Directors and there will be no immediate profit and loss effect immediately.

RECOMMENDATION

Having taken into account the principal factors and reasons referred to the above, we are of the opinion that the Acquisition and the terms of the Sale and Purchase Agreement are fair and reasonable so far as the Independent Shareholders are concerned and in the interests of the Company and the Shareholders as a whole. We also consider that the Acquisition is on normal commercial terms and is in the ordinary and usual course of business of the Company. We therefore advise the Independent Board Committee to recommend the Independent Shareholders to vote in favour of the ordinary resolutions to be proposed at the EGM to approve the Acquisition.

Yours faithfully, For and on behalf of

Hantec Capital Limited Robert Siu

Director

– 21 –

GENERAL INFORMATION

APPENDIX

1. RESPONSIBILITY STATEMENT

This circular includes particulars given in compliance with the Listing Rules for the purpose of giving information with respect to the Company. The information contained herein relating to the Company has been supplied by the Directors, who 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 not contained in this circular the omission of which would make any statement herein misleading insofar as it relates to the Company.

2. DISCLOSURE OF INTERESTS

(I) Disclosure of interests by the Directors

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

(a) Directors’ interests in shares

Name of	Capacity /	Number of	Percentage
Director	Nature of interest	Shares held	of holding
			(%)
Ji Wei	Interested in	480,000,000	68.16
	controlled
	corporation
	(Note)

Note: Star Treasure Investments Holdings Limited is 100% beneficially owned by Mr. Ji Wei.

– 22 –

GENERAL INFORMATION

APPENDIX

(b) Directors’ interests in underlying shares of the Company attached to the share options granted by the Company

Name of	Capacity /	Number of	Percentage
Director	Nature of interest	Shares held	of holding
			(%)
Cao Zhao Hui	Personal	2,000,000	0.28
Hui Wing Kuen	Personal	600,000	0.09
Liao Xue Dong	Personal	1,600,000	0.23
Pan Yuan	Personal	200,000	0.03
Wang Xue Xin	Personal	5,000,000	0.71
Wu Jin Ming	Personal	200,000	0.03
Zeng Xin	Personal	2,000,000	0.28
Zhang Xiao Ping	Personal	5,000,000	0.71

Note: The above share options were granted pursuant to the Company’s share option scheme adopted on 26 November 2005. Upon execution of the share options in accordance with such scheme, shares are issuable.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors of the Company or their associates has any interests or short positions in any shares, underlying shares and debentures of the Company or any associated corporations (within the meaning of Part XV of the SFO) as recorded in the register to be kept by the Company under section 352 of the SFO or as otherwise notified to the Company and the Stock Exchange.

– 23 –

GENERAL INFORMATION

APPENDIX

(II) Substantial Shareholders’ Interests

As at the Latest Practicable Date, so far as is known to any Directors of the Company, the following persons have interests or short positions in the shares and 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 as recorded in the register required to be kept by the Company pursuant to section 336 of the SFO:

	Number of	Percentage
Name of Shareholder	shares held	of holding
		(%)
Star Treasure Investments
Holdings Limited (Note)	480,000,000	68.16
Government of Singapore
Investment Corporation Pte Ltd	46,047,787	6.54

Note: Star Treasure Investments Holdings Limited is 100% beneficially owned by Mr. Ji Wei.

Save as disclosed above, the Directors of the Company were not aware that there was any person (other than a Director of the Company) who, as at the Latest Practicable Date, had an interest or a short position in the shares and 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 per cent. or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other member of the Group, or in any options, in respect of such capital.

(III) Others

As at the Latest Practicable Date, none of the Directors is a director or employee of a company which had an interest or short position in the shares and 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.

3. MATERIAL ADVERSE CHANGES

The Directors are not aware of any material adverse changes in the financial and trading position of the Group since 31 December 2006, the date of which the latest audited financial statements of the Group were made up.

– 24 –

GENERAL INFORMATION

APPENDIX

4. COMPETING INTERESTS

As at the Latest Practicable Date, none of the Directors of the Company and their respective associates have any interests in a business, which competes or may compete with the business of the Company and its subsidiaries.

5. DIRECTORS’ INTEREST IN ASSETS

As at the Latest Practicable Date, none of the Directors had any direct or indirect interest in any assets which had been acquired, or disposed of by, or leased to any member of the Group, or was proposed to be acquired, or disposed of by, or leased to any member of Group since 31 December 2006, the date of which the latest audited financial statements of the Group were made up.

6. DIRECTORS’ INTERESTS IN CONTRACTS OF SIGNIFICANCE

None of the Directors is interested in any contract or arrangement entered into by the Company or any of its subsidiaries which contract or arrangement is subsisting at the date of this circular and which is significant in relation to the business of the Company.

7. DIRECTORS’ SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors has a service contract with the Company or any of its subsidiaries which is not determinable by the Group within one year without payment of compensation, other than statutory compensation.

8. LITIGATION

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

9. EXPERT’S QUALIFICATION AND CONSENT

Hantec Capital has given and has not withdrawn its written consent to the issue of this circular with the inclusion of its letter and references to its name in the form and context in which it appears.

The following is the qualification of the expert who has given its opinion or advice which is contained in this circular:

Name

Qualification

Hantec Capital a licensed corporation to conduct types 1 (dealing in securities) and 6 (advising on corporate finance) regulated activities under the SFO

– 25 –

GENERAL INFORMATION

APPENDIX

10. EXPERT’S INTERESTS

As at the Latest Practicable Date, Hantec Capital did not have any direct or indirect interest in any asset which had been acquired, or disposed of by, or leased to any member of the Group, or was proposed to be acquired, or disposed of by, or leased to any member of the Group, since 31 December 2006, the date to which the latest audited financial statements of the Group were made up; and was not beneficially interested in the share capital of any member of the Group and did not have any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group.

11. PROCEDURES FOR DEMANDING A POLL

Pursuant to Article 66 of the Articles of Association, a resolution put to the vote of a meeting shall be decided on a show of hands unless a poll is required by the Listing Rules or (before or on the declaration of the result of the show of hands) demanded by:

• (a) by the chairman of the meeting; or

• (b) by at least three members present in person or in the case of a member being a corporation by its duly authorized representative or by proxy for the time being entitled to vote at the meeting; or

• (c) by a member or members present in person or in the case of a member being a corporation by its duly authorized representative or by proxy and representing not less than onetenth of the total voting rights of all members having the right to vote at the meeting; or

• (d) by a member or members present in person or in the case of a member being a corporation by its duly authorized representative or by proxy and holding shares in the Company 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; or

• (e) by any Director or Directors, who, individually or collectively, hold proxies in respect of shares representing five per cent or more of the total voting rights at such meeting.

12. GENERAL

• (a) The registered office of the Company is situated at Cricket Square, Hutchins Drive, P.O. Box 2681GT, George Town, Grand Cayman, British West Indies.

• (b) The branch share registrar of the Company in Hong Kong is Computershare Hong Kong Investor Services Limited, Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong.

– 26 –

GENERAL INFORMATION

APPENDIX

• (c) The secretary and the qualified accountant of the Company is Mr. Choi Wai Lung Edward, a fellow member of the Hong Kong Institute of Certified Public Accountants and the Association of Chartered Certified Accounts.

• (d) The auditors of the Company is KPMG of 8/F., Prince’s Building, 10 Chater Road, Central, Hong Kong.

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

13. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection at the principal place of business of the Company in Hong Kong at Room 2903, Far East Finance Centre, 16 Harcourt Road, Admiralty, Hong Kong during normal business hours from the date of this circular up to and including 14 May 2007:

• (a) the Memorandum of Association and the Articles of Association of the Company;

• (b) the letter from the Independent Board Committee to the Independent Shareholders, the text of which is set out on page 11 of this circular;

• (c) the letter from Hantec Capital to the Independent Board Committee and the Independent Shareholders, the text of which is set out on pages 12 to 21 of this circular;

• (d) the Sale and Purchase Agreement; and

• (e) the written consent from Hantec Capital referred to in the paragraph headed “Expert’s Qualification and Consent” in this Appendix.

– 27 –

NOTICE OF EXTRAORDINARY GENERAL MEETING

WASION METERS GROUP LIMITED ����������

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 3393)

NOTICE IS HEREBY GIVEN that an extraordinary general meeting of Wasion Meters Group Limited (the “Company”) will be held at JW Marriott Ballroom, Level 3, JW Marriott Hotel Hong Kong, Pacific Place, 88 Queensway, Hong Kong on Monday, 14 May 2007 immediately after the conclusion of the annual general meeting of the Company, which is scheduled to be held at 4:00 p.m. for the purpose of considering, and, if thought fit, pass the following resolution as an ordinary resolution:

ORDINARY RESOLUTION

“ THAT

• (1) the sale and purchase agreement (the “ Sale and Purchase Agreement ”) dated 11 April 2007 entered into between Mr. Liang Ke Nan, a brother of Mr. Ji Wei (the “ Vendor ”) and Oceanbase Group Limited (“ Oceanbase ”), a wholly owned subsidiary of the Company, a copy of which is tabled at the meeting and marked “A” and initialled by the chairman of the meeting for identification purposes, pursuant to which, the Vendor has agreed to sell and Oceanbase has agreed to purchase the entire issued share capital in Sinowise Industries Limited for a consideration of not more than RMB210,000,000, be and is hereby approved, confirmed and ratified; and

• (2) any one Director be and is hereby authorised to execute the Sale and Purchase Agreement and to do all such things and take all other steps which, in his/her opinion, may be necessary or desirable in connection with the transactions contemplated under the Sale and Purchase Agreement.”

By Order of the Board Choi Wai Lung Edward Company Secretary

Hong Kong, 27 April 2007

– 28 –

NOTICE OF EXTRAORDINARY GENERAL MEETING

Notes:

1. Any member of the Company entitled to attend and vote at the meeting of the Company by the above notice shall be entitled to appoint another person as his/her proxy to attend and vote instead of such member. A proxy need not be a member of the Company.

2. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his/her attorney duly authorized in writing or, if the appointor is a corporation, either under its seal or under the hand of an officer, attorney or other person authorized to sign the same.

3. The instrument appointing a proxy and (if required by the Board) the power of attorney or other authority (if any) under which it is signed, or a notary certified copy of such power or authority must be delivered to the office of Computershare Hong Kong Investor Services Limited, Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong or by way of notice to or in any document accompanying the notice convening the meeting not less than forty-eight (48) hours before the time appointed for holding the meeting or adjourned meeting at which the person named in the instrument proposed to vote and in default the instrument of proxy shall not be treated as valid.

4. Delivery of an instrument appointing a proxy shall not preclude a member of the Company from attending and voting in person at the meeting convened and in such event, the instrument appointing a proxy shall be deemed to be revoked.

5. In the case of joint holders of any share, if more than one of such joint holders be present at any meeting, the vote of the senior who tenders a vote, whether in person, or by proxy, shall be accepted to the exclusion of the votes of the other joint holders, and for this purpose seniority shall be determined by the order in which the names stand in the register in respect of the joint holding.

6. The votes to be taken at the meeting of the Company by the above notice will be taken by poll.

As at the date of this notice, the Board comprises Messrs. Ji Wei, Cao Zhao Hui, Wang Xue Xin, Zheng Xiao Ping, Liao Xue Dong and Zeng Xin as Executive Directors of the Company and Messrs. Hui Wing Kuen, Pan Yuan and Wu Jin Ming as Independent non-executive Directors of the Company.

– 29 –