Win Hanverky Holdings Limited — Proxy Solicitation & Information Statement 2007

Feb 23, 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 stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Win Hanverky Holdings Limited, you should at once hand this circular to the purchaser(s) or transferee(s) or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser(s) or transferee(s).

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.

WIN HANVERKY HOLDINGS LIMITED

(incorporated in the Cayman Islands with limited liability)

(Stock code: 3322)

CONNECTED TRANSACTION AND CONTINUING CONNECTED TRANSACTIONS

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

CIMB-GK Securities (HK) Ltd.

A letter from the Board is set out on pages 6 to 16 of this circular.

A letter from the Independent Board Committee, containing its recommendation to the Independent Shareholders, is set out on pages 17 to 18 of this circular.

A letter from the Independent Financial Adviser, containing its advice to the Independent Board Committee and the Independent Shareholders is set out on pages 19 to 27 of this circular.

23 February 2007

CONTENTS

		Page
Definitions	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1-5
**Letter from **	the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6-16
**Letter from **	the Independent Board Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	17-18
**Letter from **	the Independent Financial Adviser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	19-27
**Appendix — **	General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	28-34

— i —

DEFINITIONS

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

“2005 Shareholders’ Agreement”	the shareholders’ agreement dated 30 September 2005 entered
	into among Umbro International, T&S BVI and T&S HK
“Amended and Restated	the shareholders agreement to be entered into among T&S
Shareholders’ Agreement”	BVI, Umbro International and T&S HK
“Annual Cap(s)”	the Royalty Annual Cap(s) and the Purchase Royalty Annual
	Cap(s)
“associate(s)”	has the meaning ascribed thereto in the Listing Rules
“Audited Accounts”	the audited consolidated balance sheet and income statement
	of T&S HK and its subsidiaries as at and for the financial year
	ended 31 December 2005 respectively, including all notes,
	reports, statements and other documents annexed to them,
	whether or not pursuant to any legal requirement
“Authorised Manufacturer”	an entity which has a manufacturer’s authorisation agreement
	with Umbro International and T&S HK to manufacture certain
	Umbro Products for sale to T&S HK for distribution under the
	Umbro Distributor Agreement
“Board”	the board of Directors of the Company
“Club Badge Products”	certain products which bear the trademarks, logos and/or
	designs of Umbro as well as incorporation of any logo,
	trademark or badge of a national or international team or club
	or league or otherwise
“Company”	Win Hanverky Holdings 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 sale and purchase of the T&S HK Sale
	Shares
“Completion Date”	the date seven days following the date on which all of the
	conditions have been fully satisfied or duly waived in
	accordance with the SP Agreement (in any event not being
	later than 31 March 2007), or such later date for Completion
	as the parties to the SP Agreement may agree in writing
“connected person(s)”	has the meaning ascribed thereto in the Listing Rules

— 1 —

DEFINITIONS

“Connected Transaction”	the disposal of a 15% interest in T&S HK under the SP
	Agreement
“Continuing Connected	the continuing connected transactions between the Group and
Transactions”	Umbro International contemplated under the Umbro
	Distributor Agreement
“Director(s)”	the director(s) of the Company
“Disclosure Letter”	the letter of the same date as the Completion Date delivered
	from T&S BVI to Umbro International pursuant to the SP
	Agreement
“Frankton”	Frankton International Limited, a company incorporated in
	the British Virgin Islands and a wholly-owned subsidiary of
	the Company
“Group”	the Company and its subsidiaries
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong
“Hong Kong”	the Hong Kong Special Administrative Region of the PRC
“Independent Board Committee”	an independent committee of the Board, comprising all the
	independent non-executive Directors, established to advise
	the Independent Shareholders in relation to the SP Agreement
	and the Umbro Distributor Agreement
“Independent Financial Adviser”	CIMB-GK Securities (HK) Ltd.
“Independent Shareholder(s)”	has the meaning ascribed thereto under the Listing Rules
“Interim Accounts”	the unaudited consolidated management accounts of T&S HK
	and its subsidiaries and the unaudited management accounts
	of each of T&S HK and its subsidiaries as at and for the 11
	month period ended on 30 November 2006 respectively
“Latest Practicable Date”	21 February 2007, being the latest practicable date prior to the
	printing of this circular for ascertaining certain information
	contained herein
“Listing”	listing of the Shares on the main board of the Stock Exchange
	on 6 September 2006
“Listing Rules”	the Rules Governing the Listing of Securities on The Stock
	Exchange of Hong Kong Limited
“Offer Price”	the offer price of HK$2.28 per Share

— 2 —

DEFINITIONS

“PRC”	the People’s Republic of China
“Pre-IPO Share Option(s)”	the options granted by the Company to certain employees and
	a consultant of the Group prior to the Listing
“Purchase Annual Cap(s)”	the maximum aggregate annual value with respect to the
	purchases of Umbro Products from Umbro International
	pursuant to the Umbro Distributor Agreement for the three
	years ending 31 December 2009, as described under
	paragraph 2.4 of the letter from the Board
“Quinta”	Quinta Asia Limited, a company incorporated in the British
	Virgin Islands and is beneficially owned as to 70% by Mr. Li
	Kwok Tung Roy and 30% by Mr. Lai Ching Ping
“Revised Annual Caps”	has the meaning ascribed to it in paragraph 2.1 of the letter
	from the Board
“Royalty Annual Cap(s)”	the maximum aggregate annual value with respect to the
	royalty to be paid to Umbro International pursuant to the
	Umbro Distributor Agreement for the three years ending 31
	December 2009, as described under paragraph 2.3 of the letter
	from the Board
“SFO”	Securities and Futures Ordinance (Cap. 571 of the Laws of
	Hong Kong)
“Shareholder(s)”	holder(s) of Share(s)
“Share(s)”	the share(s) of HK$0.10 each in the share capital of the
	Company
“SP Agreement”	the conditional sale and purchase agreement in respect of the
	sale and purchase of T&S HK Sale Shares dated 8 February
	2007 and entered into among Umbro International, T&S BVI
	and others
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“T&S BVI”	Team & Sports (BVI) Limited, a company incorporated in the
	British Virgin Islands with limited liability and indirectly
	wholly-owned by the Company
“T&S HK”	Team & Sports Limited, a company incorporated in Hong
	Kong with limited liability, being an indirect 75% owned
	subsidiary of the Company

— 3 —

	DEFINITIONS
“T&S HK A Shares”	the “A” ordinary shares of HK$100 each in the capital of T&S
	HK
“T&S HK B Shares”	the “B” ordinary shares of HK$100 each in the capital of T&S
	HK
“T&S HK Sale Shares”	750 T&S HK A Shares and 600 T&S HK B Shares in the
	capital of T&S HK, representing 15% of the issued share
	capital of T&S HK
“Term”	1 March 2007 to 31 December 2020
“Territory”	PRC, Hong Kong, Macau and Taiwan
“TSG BVI”	TSG (BVI) Limited, a company incorporated in the BVI
	which is owned and controlled by Mr. Ho Kin Yeung, Samuel
	and his relatives
“UAS”	Umbro Apparel Sourcing being a division of Umbro
	International responsible for the sourcing and supply of
	Umbro Products on behalf of T&S HK
“Umbro Distributor Agreement”	the distributor agreement dated 8 February 2007 and entered
	into between Umbro International and T&S HK
“Umbro International”	Umbro International Limited, a substantial shareholder of
	T&S HK and a connected person of the Company
“Umbro License Agreement”	the license agreement entered into between T&S HK and
	Umbro Licensing on 24 May 2001 in respect of, inter alia, the
	sale and distribution of Umbro products in the PRC and Hong
	Kong as later assigned by Umbro Licensing to Umbro
	International
“Umbro Licensing”	Umbro Licensing Limited, a wholly-owned subsidiary of
	Umbro International
“Umbro Products”	a selected range of sportswear and other products bearing the
	Umbro brand and distributed by the Group pursuant to the
	Umbro Distributor Agreement, including the Club Badge
	Products
“US$”	United States dollars, the lawful currency of United States of
	America
“WHL”	Win Hanverky Limited, a company incorporated in Hong
	Kong with limited liability and indirectly wholly-owned by
	the Company

— 4 —

DEFINITIONS

“Win Sports”	Win Sports Limited, a company incorporated in Hong Kong,
	which is owned as to 50% by TSG BVI and 50% by Frankton
	as at the date of this circular
“Win Sports Subscription and	the subscription and shareholders’ agreement entered into
Shareholders Agreement”	between Frankton, TSG BVI and Win Sports on 5 February
	2007

— 5 —

LETTER FROM THE BOARD

WIN HANVERKY HOLDINGS LIMITED

(incorporated in the Cayman Islands with limited liability)

(Stock code: 3322)

Executive Directors: Registered Office: Li Kwok Tung Roy Codan Trust Company (Cayman) Limited Lai Ching Ping Cricket Square Lee Kwok Leung Hutchins Drive Chow Chi Wai P.O. Box 2681 Cheung Chi Grand Cayman KY1-1111 Cayman Islands Independent Non-executive Directors: Chan Kwong Fai Principal Place of Business in Hong Kong: Kwan Kai Cheong 6th Floor, Phase 6 Ma Ka Chun Hong Kong Spinners Industrial Building Wun Kwang Vincent 481-483 Castle Peak Road Kowloon Hong Kong 23 February 2007

To the Shareholders

Dear Sir or Madam,

CONNECTED TRANSACTION AND CONTINUING CONNECTED TRANSACTIONS

INTRODUCTION

Reference is made to announcement dated 8 February 2007 as regards the Connected Transaction and the Continuing Connected Transactions between the Group and Umbro International in relation to the SP Agreement and the Umbro Distributor Agreement. Pursuant to the SP Agreement, T&S BVI has conditionally agreed to dispose of and Umbro International has conditionally agreed to acquire the T&S HK Sale Shares for a cash consideration of US$16.5 million (equivalent to HK$128.7 million). Pursuant to the Umbro Distributor Agreement, Umbro International has conditionally agreed to grant T&S HK a non-exclusive license to have the Umbro branded products manufactured by Authorised Manufacturers or UAS and an exclusive right in the Territory for the Term to sell the Umbro Products. As far as the Board is aware, the Connected Transaction and the Continuing Connected Transactions do not have any significant disadvantage for the Company.

— 6 —

LETTER FROM THE BOARD

The purpose of this circular is to provide you with (i) the particulars of the SP Agreement, the Umbro Distributor Agreement and the Annual Caps; (ii) the letter of recommendation from the Independent Board Committee; (iii) the letter of advice from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders; and (iv) other information required by the Listing Rules.

1. THE SP AGREEMENT

• 1.1 Principal terms

• (i) Date

8 February 2007

• (ii) Parties

Vendor: T&S BVI Purchaser: Umbro International Guarantor: the Company which guarantees the obligations of T&S BVI under the SP Agreement Other party: WHL

• (iii) Subject of the Disposal

Pursuant to the SP Agreement, T&S BVI has conditionally agreed to sell and Umbro International has conditionally agreed to acquire the T&S HK Sale Shares.

— 7 —

LETTER FROM THE BOARD

Set out below are the shareholding structure of T&S HK before and after the Completion:

Before the Disposal Immediately after the Completion

==> picture [380 x 183] intentionally omitted <==

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

The Company The Company
100% 100%
Frankton Frankton
100% 100%
Umbro Umbro
T&S BVI T&S BVI
International International
75% 25% 60% 40%
T&S HK T&S HK
----- End of picture text -----

The principal activities of T&S HK and its subsidiaries are wholesale and distribution of branded sportswear products and related accessories under the Umbro License Agreement and if it becomes effective under the Umbro Distributor Agreement.

Based on the audited consolidated accounts of T&S HK and its subsidiaries for the year ended 31 December 2005, T&S HK and its subsidiaries have recorded an audited consolidated turnover of US$43,432,141 (equivalent to approximately HK$338,770,700) and an audited consolidated net profit before and after income tax of US$8,588,200 (equivalent to approximately HK$66,987,960) and US$5,205,349 (equivalent to approximately HK$40,601,722) respectively. As at 31 December 2005, T&S HK and its subsidiaries have recorded audited consolidated net assets of US$5,395,453 (equivalent to approximately HK$42,084,533). Based on the audited accounts of T&S HK for the year ended 31 December 2004, T&S HK has recorded an audited turnover of HK$36,530,797 and an audited net profit both before and after tax of HK$1,258,099. As at 31 December 2004, T&S HK has recorded audited net assets of HK$26,315,697.

T&S HK will continue to be a subsidiary of the Company following the Completion.

(iv) Consideration

The consideration for the T&S HK Sale Shares of US$16.5 million (equivalent to HK$128.7 million) was determined after arm’s length negotiations between T&S BVI and Umbro International by reference to the consolidated net profit after income tax of T&S HK and its subsidiaries for the year ended 31 December 2005. The agreed price was considered by the executive Directors to be fair and reasonable.

The consideration of US$16.5 million (equivalent to approximately HK$128.7 million) will be settled in cash on Completion.

— 8 —

LETTER FROM THE BOARD

• (v) Conditions and Completion

Completion will be subject to fulfillment of the following conditions:

• (a) Umbro International having (at its sole discretion) confirmed in writing to T&S BVI on or before 9:00 a.m. on the Completion Date that Umbro International is satisfied with the contents of the Disclosure Letter;

• (b) Umbro International having confirmed in writing to T&S BVI on or before 9:00 a.m. on the Completion Date that Umbro International is satisfied with the contents of the Interim Accounts. For these purposes, the Interim Accounts shall be deemed to be satisfactory if they show (I) a consolidated net asset value of not less than US$5,395,453 (equivalent to approximately HK$42,084,533); and (II) as of 30 November 2006, consolidated net profit of not less than US$5,600,000 (equivalent to approximately HK$43,680,000); and (III) there is no material adverse change in the financial state of affairs of T&S HK and its subsidiaries by comparison with the Audited Accounts; and

• (c) approval of the SP Agreement and the Umbro Distributor Agreement and of the transactions contemplated thereunder having been obtained from the Independent Shareholders of the Company or a waiver from the requirement to hold a general meeting of the Company to approve the SP Agreement and the Umbro Distributor Agreement and the transactions contemplated thereunder being granted by the Stock Exchange.

Conditions (a) and (b) may be waived only by Umbro International. Condition (c) may only be waived jointly by T&S BVI and Umbro International. If the conditions referred to above are not satisfied or waived on or before the time set for Completion, the SP Agreement will immediately terminate.

Completion shall take place on the Completion Date.

(vi) Amended and Restated Shareholders’ Agreement

On Completion, T&S BVI, Umbro International and T&S HK shall enter into the Amended and Restated Shareholders’ Agreement. In recognition of Umbro International’s additional investment in T&S HK, T&S BVI and Umbro International have agreed to revise the 2005 Shareholders’ Agreement to procure that the business of T&S HK is conducted in accordance with the provisions of the Amended and Restated Shareholders’ Agreement.

Pursuant to the 2005 Shareholders’ Agreement, Umbro International and T&S BVI are entitled to appoint two and five directors to the board of T&S HK respectively. Pursuant to the Amended and Restated Shareholders’ Agreement, Umbro International and T&S BVI will be entitled to appoint three and four directors to the board of T&S HK respectively after completion of the SP Agreement.

— 9 —

LETTER FROM THE BOARD

Pursuant to the Amended and Restated Shareholders’ Agreement and the SP Agreement, T&S HK shall declare cash dividends in the following order of priority:

• (a) T&S HK shall as soon as reasonably practicable declare to T&S BVI (exclusively) dividends in the aggregate amount US$9,895,086 (equivalent to approximately HK$77,181,671);

• (b) T&S HK shall as soon as reasonably practicable following the approval of its audited accounts for the year ended 31 December 2006 declare to T&S BVI and Umbro International in the proportions of 75% and 25% respectively a dividend equal to the accumulated distributable profit of T&S HK attributable to the period from 1 October 2005 to the Completion; and

• (c) T&S HK shall as soon as reasonably practicable following the approval of its audited accounts in respect of each of the financial years ending after 31 December 2006 declare to T&S BVI and Umbro International in the proportions 60% and 40% respectively a dividend equal to not less than 50% of the full amount of T&S HK’s accumulated distributable profit.

T&S HK has sufficient distributable reserves for payments of dividends in (a) and (b) above. T&S HK will make payments of dividends subject to its working capital requirements.

• 1.2 Use of proceeds

The Company intends to use the proceeds from the sale of the T&S HK Sale Shares for general working capital of the Group.

1.3 Reasons for and benefits of the connected transaction

The sale of the T&S HK Sale Shares to Umbro International would strengthen the strategic alliance between the Group and Umbro International for development of the distribution business of Umbro products in the Territory. The executive Directors consider the SP Agreement has been entered into on normal commercial terms which are fair and reasonable and in the interests of Shareholders as a whole.

The Group would increase its reserve due to the disposal of approximately HK$108.5 million by reference to the unaudited net asset value of T&S HK as at 30 November 2006 but would not recognise any gain/loss on disposal. The ultimate impact on reserve will depend on the consolidated net asset value of T&S HK and its subsidiaries at the Completion.

— 10 —

LETTER FROM THE BOARD

1.4 Listing Rules implications

Each of the total assets ratio and revenue ratio for the sale of the T&S HK Sale Shares is more than 2.5% but less than 25% and the consideration is more than HK$10 million. Umbro International currently has a 25% beneficial ownership in T&S HK which is a 75%-owned subsidiary of the Company. Umbro International is a substantial shareholder of a subsidiary of the Company and therefore a connected person of the Company within the meaning of the Listing Rules. The transaction under the SP Agreement constitutes a connected transaction within the meaning of the Listing Rules and subject to reporting, announcement and Independent Shareholders’ approval requirements set out in Rule 14A.45, 14A.47 and 14A.48 of the Listing Rules.

2. THE UMBRO DISTRIBUTOR AGREEMENT

2.1 Background

Pursuant to the Umbro License Agreement, T&S HK was granted an exclusive license by Umbro Licensing for a fixed period from 1 January 2001 to 31 December 2010 to sell various products bearing trademarks of Umbro in Hong Kong and the PRC and to use the trademarks, logos and designs of Umbro Licensing on or in connection with the marketing, advertising, promotion and sale of the Umbro products. The Umbro License Agreement was assigned by Umbro Licensing to Umbro International in 2002. In return for the rights referred to above, royalty payments are made quarterly to Umbro International, calculated based on fixed percentages ranging from 8% to 25% of the total sales of the Umbro products made by the Group during the relevant period (depending on, among others, the types of Umbro products), subject to a minimum royalty payment each year of an amount calculated based on the target minimum sales amount as agreed between the parties under the Umbro License Agreement. As announced by the Company on 4 December 2006, the annual caps with respect to royalties payable under the Umbro License Agreement were revised to HK$57,000,000, HK$95,000,000, HK$142,000,000, HK$198,000,000 and HK$277,000,000 for the five years ending 31 December 2010 and approved by Quinta (the “Revised Annual Caps”).

To secure its exclusive distributorship in the Territory for a longer duration, the Company entered into the Umbro Distributor Agreement with Umbro International on 8 February 2007, pursuant to which the Umbro License Agreement will be superceded or terminated with effect from 1 March 2007 conditional upon completion of the SP Agreement.

The Revised Annual Caps with respect to royalties payable under the Umbro License Agreement will also be superceded by the Royalty Annual Caps upon the Umbro Distributor Agreement becoming effective.

2.2 Principal terms

• (i) Date

8 February 2007

— 11 —

LETTER FROM THE BOARD

(ii) Parties

Umbro International and T&S HK

(iii) Conditions

The Umbro Distributor Agreement shall be conditional upon completion of the SP Agreement occurring on or before 31 March 2007.

(iv) Duration

1 March 2007 to 31 December 2020 (subject to renewal as may be agreed between the parties).

The executive Directors regard the term of the Umbro Distributor Agreement, being more than three years, is consistent with normal market practice given the nature of the Umbro Distributor Agreement. The executive Directors consider that the development of an international sports brand in any market requires medium to long-term commitment of both the sports brand owner and the distributor. Accordingly, the commercial arrangements between Umbro International and the Group need to be of a reasonably long duration to be commercially viable and the executive Directors consider the term of the Umbro Distributor Agreement is fair and reasonable and in the interests of the Shareholders as a whole.

(v) Territory

PRC, Hong Kong, Macau and Taiwan.

(vi) Grant of License/Purchase of Products

Umbro International has agreed to grant T&S HK an exclusive right in the Territory for the Term to sell the Umbro Products and to use certain trade marks, logos and designs of Umbro International on or in connection with any marketing, advertising, promotion and sale of the Umbro Products.

Subject as provided below, Umbro International has agreed to grant T&S HK a non-exclusive license to have the Umbro branded products manufactured by Authorised Manufacturers or UAS. T&S HK may source certain Umbro Products from Authorised Manufacturers until 31 December 2007. Thereafter, all Umbro Products must be sourced through Umbro International and/or UAS.

The sourcing of Umbro Products from Umbro International and/or UAS or Authorised Manufacturers and the grant of a license by Umbro International to distribute Umbro Products form part of a single commercial arrangement between the parties.

— 12 —

LETTER FROM THE BOARD

(vii) Royalty

Royalty payments will be made quarterly to Umbro International, calculated based on fixed percentages ranging from 6% to 25% of the total sales of Umbro Products made by the Group during the relevant period (depending on, among others, the type of Umbro Products).

(viii) Purchase Price of Umbro Products sourced by T&S HK

Umbro International shall use its commercial endeavours to procure that the price charged for Umbro Products sourced through UAS will represent the best price for given quality. The price charged by Umbro International/UAS to T&S HK will reflect the cost of manufacture actually charged to Umbro International or UAS (without any mark up by Umbro International or UAS) together with any agreed sourcing commission (being up to 5% of such cost of manufacture).

(ix) Termination

In addition to other grounds of termination, Umbro International or T&S HK may terminate the Umbro Distributor Agreement if the other party commits a material breach and such breach is not fully cured within 60 days after the other party is notified of such breach and required to remedy such breach in writing.

2.3 Royalty annual caps

For the years ended 31 December 2003, 2004 and 2005 and the nine months ended 30 September 2006, the royalty paid by the Group to Umbro group amounted to HK$3,916,000, HK$6,891,000, HK$30,889,000 and HK$36,944,000, respectively.

Given the Umbro Products to be sold by T&S HK on which royalties will be payable as well as the royalties rates payable under the Umbro Distributor Agreement are substantially the same as those under the Umbro License Agreement, the executive Directors propose to adopt the figures of the Revised Annual Caps for the three years ending 31 December 2009. That is, the executive Directors expect that the aggregate amount of royalty paid or payable by the Group to Umbro group for each of the three years ending 31 December 2009 will not exceed HK$95,000,000, HK$142,000,000 and HK$198,000,000 respectively, which are expected to be satisfied by the general working capital of the Company.

The Company will seek the Independent Shareholders’ approval of the annual caps in respect of the royalty relevant for the remaining period of the Term at the appropriate time in compliance with the Listing Rules.

— 13 —

LETTER FROM THE BOARD

2.4 Purchase annual caps

For the years ended 31 December 2003, 2004 and 2005 and the nine months ended 30 September 2006, the purchases made by the Group of the Umbro products for reselling amounted to approximately HK$70,100,000, HK$112,300,000, HK$165,500,000, and HK$184,000,000, respectively.

The executive Directors expect that the aggregate amount of the purchases of the Umbro Products for each of the three years ending 31 December 2009 will not exceed HK$380,000,000, HK$530,000,000 and HK$740,000,000 respectively, which are expected to be satisfied by the general working capital of the Company. The Purchase Annual Caps are calculated and determined after taking into account the amount of purchases made by the Group for the three years ended 31 December 2005 and nine months ended 30 September 2006, the product trend, the sales mix and the budgeted growth in the sale of Umbro Products.

The Company will seek the Independent Shareholders’ approval of the annual caps in respect of the relevant purchases for the remaining period of the Term at appropriate time in compliance with the Listing Rules.

2.5 Reasons for and benefits of the continuing connected transactions

The exclusive distributorship of Umbro Products in the Territory is important to the business of the Group and offers the Group an invaluable opportunity to expand into the market in the Territory for sale of international sports branded products. To secure exclusive distributorship of Umbro Products for a longer duration, the Company entered into the Umbro Distributor Agreement. The executive Directors consider the Umbro Distributor Agreement has been entered into on normal commercial terms which are fair and reasonable and in the interests of Shareholders as a whole.

The executive Directors currently do not plan to change the business model and the management of T&S HK after the completion of the SP Agreement and the Umbro Distributor Agreement.

2.6 Listing Rules implications

Umbro International is a substantial shareholder of a subsidiary of the Company and therefore a connected person of the Company. The Continuing Connected Transactions will constitute continuing connected transactions within the meaning of the Listing Rules. Each of the applicable percentage ratios for the Continuing Connected Transactions is more the 2.5% on annual basis and each of the Royalty Annual Caps and Purchase Annual Caps is more than HK$10 million, the Continuing Connected Transactions are subject to reporting, announcement and Independent Shareholders’ approval requirements set out in Rule 14A.45, 14A.47 and 14A.48 of the Listing Rules.

— 14 —

LETTER FROM THE BOARD

INDEPENDENT SHAREHOLDERS’ APPROVAL

The Company has submitted an application to the Stock Exchange for a waiver from the compliance with the requirement to hold a general meeting to approve the Connected Transaction and the Continuing Connected Transactions (including the Annual Caps) on the basis that (i) to the best of the Directors’ knowledge, information and belief having made all reasonable enquires, none of the Shareholders or their associates has any interest in the Connected Transaction and the Continuing Connected Transactions, and accordingly, no Shareholder needs to abstain from voting as regards the Connected Transaction and the Continuing Connected Transactions (including the Annual Caps); and (ii) Quinta, being a major shareholder having a direct interest in approximately 59.18% of the issued share capital of the Company, has approved the Connected Transaction and the Continuing Connected Transactions (including the Annual Caps).

INFORMATION OF THE GROUP

The Group is an integrated sportswear and active and outer wear manufacturer and distributor for international sports brands.

INFORMATION OF UMBRO INTERNATIONAL

The principal activities of Umbro International are the designing, manufacturing and sale of football apparel, footwear and equipment.

GENERAL

The Independent Board Committee, comprising all the independent non-executive Directors, has been established to advise the Independent Shareholders in relation to the terms of the Connected Transaction and the Continuing Connected Transactions (including the Annual Caps). The Independent Financial Adviser has been appointed to advise the Independent Board Committee and the Independent Shareholders with respect to the Connected Transaction and the Continuing Connected Transactions (including the Annual Caps).

Details of the Continuing Connected Transactions will be included in each published annual report of the Company as required by the Listing Rules. The Company will comply with the requirements as regards to annual review of the Continuing Connected Transactions under the Listing Rules.

— 15 —

LETTER FROM THE BOARD

RECOMMENDATION

Your attention is drawn to (i) the letter from the Independent Board Committee set out in this circular which contains the recommendation of the Independent Board Committee to the Independent Shareholders on the terms of the Connected Transaction and the Continuing Connected Transactions (including the Annual Caps) and its view as to the duration of the Umbro Distributor Agreement; and (ii) the letter from the Independent Financial Adviser set out in this circular which contains its recommendations to the Independent Board Committee and the Independent Shareholders in relation to the terms of the Connected Transaction and the Continuing Connected Transactions (including the Annual Caps) and its view as to the duration of the Umbro Distributor Agreement.

ADDITIONAL INFORMATION

Your attention is also drawn to the general information as set out in the appendix of this circular.

Yours faithfully, By order of the Board Win Hanverky Holdings Limited Li Kwok Tung Roy Chairman

— 16 —

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

WIN HANVERKY HOLDINGS LIMITED

(incorporated in the Cayman Islands with limited liability)

(Stock code: 3322)

23 February 2007

To the Independent Shareholders

Dear Sir or Madam,

CONNECTED TRANSACTION AND CONTINUING CONNECTED TRANSACTIONS

We have been appointed as members of the Independent Board Committee to advise you in connection with the Connected Transaction and the Continuing Connected Transactions (including the Annual Caps) and to express our view as to duration of the Umbro Distributor Agreement, details of which are set out in the “Letter from the Board” in the circular issued by the Company to its Shareholders dated 23 February 2007 (the “Circular”) of which this letter forms part. Terms defined in the Circular have the same meanings when used in this letter unless the context otherwise requires.

Your attention is drawn to the “Letter from the Board”, the advice of the Independent Financial Adviser in its capacity as the independent financial adviser to the Independent Shareholders and the Independent Board Committee in respect of the Connected Transaction and the Continuing Connected Transactions (including the Annual Caps) as set out in the “Letter from the Independent Financial Adviser” as well as other additional information set out in other parts of the Circular.

We acknowledge that the Company has applied to the Stock Exchange for a waiver from the compliance with the requirement to hold a general meeting under Rule 14A.35(4) of the Listing Rules to approve the Connected Transaction and the Continuing Connected Transactions (including the Annual Caps) on the basis that (i) to the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, none of the Shareholders or their associates has any interest in the Connected Transaction and the Continuing Connected Transactions, and accordingly, no Shareholder needs to abstain from voting as regards the Connected Transaction and the Continuing Connected Transactions (including the Annual Caps); and (ii) Quinta, being a major shareholder having a direct interest in approximately 59.18% of the issued share capital of the Company, has approved the Connected Transaction and the Continuing Connected Transactions (including the Annual Caps).

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LETTER FROM THE INDEPENDENT BOARD COMMITTEE

Having taken into account the advice of, and the principal factors and reasons considered by the Independent Financial Adviser in relation thereto as stated in its letter, we consider the Connected Transaction and the Continuing Connected Transactions (including the Annual Caps) to be fair and reasonable so far as the interests of the Shareholders as a whole are concerned, and accordingly we recommend you to approve the Connected Transaction and the Continuing Connected Transactions (including the Annual Caps).

We also concur with the opinion of the Independent Financial Adviser that the duration of the Umbro Distributor Agreement, which is more than 3 years, is consistent with normal market practice.

Yours faithfully,

Independent Board Committee of

Win Hanverky Holdings Limited

Chan Kwong Fai

Kwan Kai Cheong

Independent non-executive Director Independent non-executive Director

Ma Ka Chun Wun Kwang Vincent Independent non-executive Director Independent non-executive Director

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The following is the text of the letter to the Independent Board Committee and the Independent Shareholders from the Independent Financial Adviser prepared for the purpose of incorporation into this circular.

CIMB-GK Securities (HK) Limited

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

23 February 2007

To the Independent Board Committee and the Independent Shareholders

Dear Sir or Madam,

CONNECTED TRANSACTION AND CONTINUING CONNECTED TRANSACTIONS

INTRODUCTION

We refer to our engagement as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the Connected Transaction contemplated under the SP Agreement and the Continuing Connected Transactions (including the Annual Caps) contemplated under the Umbro Distributor Agreement. Details of the terms of the SP Agreement and the Umbro Distributor Agreement are set out in the letter from the Board (“Letter from the Board”) as contained in the circular of the Company to the Shareholders dated 23 February 2007 (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.

As stated in the letter from the Board, on the basis that (i) to the best of the Directors’ knowledge, information and belief having made all reasonable enquires, none of the Shareholders or their associates has any interest in the Connected Transaction and the Continuing Connected Transactions, and accordingly, no Shareholder is required to abstain from voting as regards the Connected Transaction and the Continuing Connected Transactions (including the Annual Caps); and (ii) Quinta, a major Shareholder directly interested in approximately 59.18% of the issued share capital of the Company, has approved the Connected Transaction and the Continuing Connected Transactions (including the Annual Caps), the Company has applied for a waiver from compliance with the requirement to hold a shareholders’ meeting pursuant to Rule 14A.53 of the Listing Rules. The Independent Board Committee has been formed to advise the Independent Shareholders in respect of the Connected Transaction and the Continuing Connected Transactions (including the Annual Caps).

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LETTER FROM INDEPENDENT FINANCIAL ADVISER

In formulating our recommendation, we have relied on the information and facts contained or referred to in the Circular as well as the representations made or provided by the Directors and senior management of the Company. The Directors have declared in a responsibility statement set out in the Appendix to the Circular that they jointly and severally accept full responsibility for the accuracy of the information contained and representations made in the Circular. We have also assumed that the information and the Directors’ 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 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 Company. We have also been advised by the Directors and believe that no material facts have been omitted from the Circular.

We consider that we have reviewed sufficient information to reach an informed view, to justify reliance on the accuracy of the information contained and the Directors’ representations made in the Circular and to provide a reasonable basis for our recommendation. 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 Group and the related subjects and parties to the Connected Transaction and the Continuing Connected Transactions.

PRINCIPAL FACTORS AND REASONS CONSIDERED

In arriving at our opinion for the Connected Transaction contemplated under the SP Agreement and the Continuing Connected Transactions (including the Annual Caps) contemplated under the Umbro Distributor Agreement, we have considered the following principal factors and reasons:

A. CONNECTED TRANSACTION CONTEMPLATED UNDER THE SP AGREEMENT

Background and reasons

The Group is an integrated sportswear, active and outer wear manufacturer and distributor for international sports brands. The principal activities of T&S HK and its subsidiaries are the wholesale and distribution of branded sportswear products and related accessories. T&S HK is currently owned as to 75% by T&S BVI and 25% by Umbro International. Pursuant to the SP Agreement, T&S BVI conditionally agreed to dispose of and Umbro International conditionally agreed to acquire the T&S HK Sale Shares for a cash consideration of US$16.5 million (equivalent to HK$128.7 million).

Based on the audited consolidated accounts of T&S HK and its subsidiaries for the year ended 31 December 2005, the consolidated turnover of T&S HK and its subsidiaries amounted to approximately HK$338,770,700 and the consolidated net profit before and after income tax of T&S HK and its subsidiaries amounted to approximately HK$66,987,960 and HK$40,601,722 respectively. As at 31 December 2005, the audited consolidated net assets of T&S HK and its subsidiaries amounted to approximately HK$42,084,533. We note from the interim report of the Company for the six months ended 30 June 2006 that the Group’s sportswear distribution business conducted through T&S HK recorded a turnover of approximately HK$166.1 million, representing an improvement of 18.8% as compared to the immediately preceding corresponding period. As stated in the interim report, the increase in turnover was attributable to the increase in demand for Umbro branded products which was a result of the Group’s continued sales and marketing efforts. The Directors have advised that it was

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LETTER FROM INDEPENDENT FINANCIAL ADVISER

Umbro International which had initiated to further increase its stake in T&S HK. They consider that the sale of the T&S HK Sale Shares to Umbro International would further strengthen the strategic alliance between the Group and Umbro International for development of the distribution business of Umbro Products in the Territory. The Company intends to use the proceeds from the sale of the T&S HK Sale Shares for general working capital of the Group.

Having considered the above and the fact that the SP Agreement will enable the Company to have additional resources and financing for expanding the Group’s businesses, and T&S HK will still continue to be a 60% non-wholly owned subsidiary of the Company upon Completion, we consider that the entering into the SP Agreement and the Connected Transaction contemplated under the SP Agreement are in the interest of the Company and the Shareholders as a whole.

The Consideration

The consideration (the “Consideration”) for the T&S HK Sale Shares of US$16.5 million (equivalent to HK$128.7 million) was agreed after arm’s length negotiations between the parties. The Directors determined the Consideration with reference to the consolidated net profit after income tax of T&S HK and its subsidiaries for the year ended 31 December 2005.

In assessing the fairness of the Consideration, we have, to the best of our knowledge, reviewed the price/earning ratio (“PER”) of comparable companies listed on the Stock Exchange (the “Comparables”), whose principal business is engaged in the manufacturing, wholesale and distribution of sportswear products and related accessories similar to those of T&S HK. As the Consideration was determined by the Directors with reference to the consolidated net profit after income tax of T&S HK and its subsidiaries, we consider it is appropriate to assess the fairness of the Consideration based on PER analysis. Details of which are summarised as follows:

Name of the Comparables	Historical PER (times)
Eagle Nice (International) Holdings Limited (Note 1)	7.6
Li Ning Company Limited (Note 1)	80.8
YGM Trading Limited (Note 1)	5.6
Yue Yuen Industrial (Holdings) Limited (Note 1)	19.0
Symphony Holdings Limited (Note 1)	7.9
Prime Success International Group Limited (Note 1)	52.8
Average	29.0
Adjusted average (Note 2)	10.1
The Company (Note 3)	28.9
The SP Agreement	21.0

Notes:

1. Based on the closing price per share as quoted from Bloomberg as at the date of the SP Agreement, the latest published audited accounts of the respective Comparables.

2. Excluding the outlined PER of Li Ning Company Limited (“Li Ning”) and Prime Success International Group Limited (“Prime Success”).

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LETTER FROM INDEPENDENT FINANCIAL ADVISER

1. Based on the closing price per share as quoted from Bloomberg as at the date of the SP Agreement and the prospectus of Company.

The PER of the Comparables ranged from 5.6 times to 80.8 times, with an average PER of approximately 29.0 times. The implied PER under the Consideration of 21.0 times falls within the range of the Comparables but is lower than the average PER of the Comparables. The high average PER of the Comparables is mainly attributable to the high PER of Li Ling and Prime Success which likely would have been attributable to the ownership of their own brands. For reference, if Li Ning and Prime Success are excluded, the adjusted average PER of the Comparables is only 10.1 times. In addition, the PER of the Company of 28.9 times is higher than the implied PER under the Consideration. Given that i) the T&S HK Sale Shares only represents a 15% minority interest in T&S HK; ii) T&S HK will continue to be a 60% non-wholly owned subsidiary of the Company upon Completion; and iii) the Company would be able to strengthen its long term relationship with Umbro International pursuant to the Umbro Distributor Agreement, which will enable the Company to secure an exclusive distributorship of Umbro Products in the Territory for a longer duration compared with the previous Umbro License Agreement, we consider the implied historical PER under the Consideration to be fair and reasonable.

Views

Having taken into account the above, we consider that the Consideration is fair and reasonable so far as the Company and the Independent Shareholders are concerned.

POSSIBLE FINANCIAL EFFECT

Net asset value and earnings

As stated in the Letter from the Board, based on the unaudited net asset value of T&S HK as at 30 November 2006 and the Consideration, upon Completion, the Group would increase its reserves by approximately HK$108.5 million but would not recognise any gain/loss on disposal.

Working capital

The Consideration will be paid in cash and the Company intends to use the sale proceeds for general working capital of the Group. Hence, the liquidity of the Group will be further fortified for future growth as a result of the SP Agreement.

B. CONTINUING CONNECTED TRANSACTIONS COMTEMPLATED UNDER THE UMBRO DISTRIBUTOR AGREEMENT

Background and reasons

T&S HK was granted an exclusive license by Umbro Licensing in 2001 under the existing Umbro License Agreement for a fixed period from 1 January 2001 to 31 December 2010 to sell various products bearing trademarks of Umbro in Hong Kong and the PRC and to use the trademarks, logos and designs of Umbro Licensing on or in connection with the marketing, advertising, promotion and

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LETTER FROM INDEPENDENT FINANCIAL ADVISER

sale of the Umbro products. Pursuant to the Umbro License Agreement, royalty payments are made quarterly to Umbro International, calculated based on fixed percentages ranging (depending on, among other things, the types of Umbro products) from 8% to 25% of the total sales of the Umbro products made by the Group during the relevant period, subject to a minimum royalty payment each year of an amount calculated based on the target minimum sales amount as agreed between the parties under the Umbro License Agreement. As noted from the prospectus of the Company and the recent interim report of the Company, the Group’s sportswear distribution business has shown continued growth as a result of the increase in demand for Umbro products and the Group’s continued sales and marketing efforts.

We note that the Company entered into the Umbro Distributor Agreement with Umbro International on 8 February 2007 in order to secure an exclusive distributorship of the Umbro Products in the Territory for a longer duration. Pursuant to the Umbro Distributor Agreement, Umbro International has agreed to grant T&S HK an exclusive right in the Territory for the Term (from 1 March 2007 to 31 December 2020) to sell the Umbro Products and to use certain trademarks, logos and designs of Umbro on or in connection with any marketing, advertising, promotion and sale of the Umbro Products. We further note that as compared to the Umbro License Agreement, the Umbro Distributor Agreement does not impose on T&S HK any requirements for minimum royalty payments or minimum guaranteed sales. The Umbro Distributor Agreement will supercede the existing Umbro License Agreement.

Pursuant to the Umbro Distributor Agreement, Umbro International has also agreed to grant T&S HK a non-exclusive license to have the Umbro branded products manufactured by Authorised Manufacturers or UAS. T&S HK may source certain Umbro Products from Authorised Manufacturers until 31 December 2007. Thereafter, all Umbro Products must be sourced through Umbro International and/or UAS. We note from the Confirmation given by Umbro International to the Company (as defined below) that it is a worldwide policy of Umbro to require all of its licensees to source directly from Umbro International.

We note that the turnover of the distribution business of the Umbro products represented approximately 13.6% of the Group’s total turnover for the six months ended 30 June 2006. Given the significance of the distribution business of the Umbro products to the Group, the transactions contemplated under the Umbro Distributor Agreement falls within the normal course of business of the Group. Having regard to the existing Umbro Licensing Agreement which expires in 2010, we consider that it is fair and reasonable and in the interests of the Company and the Shareholders as a whole to enter into the Umbro Distributor Agreement which offers a longer duration for T&S HK’s exclusive distributorship of Umbro Products in the Territory and does not impose on T&S HK any requirements for minimum royalty payments or minimum sales.

Duration

As noted from the Letter from the Board, the executive Directors regard the length of the term of the Umbro Distributor Agreement, being more than three years, is consistent with normal market practice for agreements of this type. The executive Directors consider that the development of an international sports brand in any market requires medium to long-term commitment of both the sports brand owner and the distributor. Accordingly, the commercial arrangements between Umbro

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LETTER FROM INDEPENDENT FINANCIAL ADVISER

International and the Group need to be of a reasonably long duration to be commercially viable and the executive Directors consider the term of the Umbro Distributor Agreement is fair and reasonable and in the interests of the Shareholders as a whole. We note that the existing Umbro License Agreement is of a duration of 10 years.

As advised by the Directors, it is Umbro Group’s current strategy to enter into licensing agreements with its licensees worldwide with reasonably long terms, comparable to the duration of the Umbro Distributor Agreement. Based on publicly available information, we have reviewed the terms of licensing and distribution agreements for distribution of garments and related accessories entered into by four other companies listed on the Stock Exchange and have noted that such contracts (which are of a similar nature to the Umbro Distributor Agreement) have terms lasting from 5 years to 10 years.

Based on the above, we are of the view that it would be consistent with normal market practice for contracts of a similar nature to the Umbro Distributor Agreement to be entered into for a term of more than three years.

Basis of determination of royalty rate and sourcing fee

Pursuant to the Umbro Distributor Agreement, royalty payments will be made quarterly to Umbro International, calculated based on fixed percentages ranging (depending on, among other things, the type of Umbro Products) from 6% to 25% of the total sales of Umbro Products made by the Group during the relevant period.

In assessing the fairness of the terms of the Umbro Distributor Agreement, we have reviewed (i) the terms of the existing Umbro License Agreement; (ii) the confirmation from Umbro International to T&S HK relating to, among other things, the bases of the royalty rate and sourcing fee charged to T&S HK the Confirmation. We have also discussed with the senior management of the Company the bases of the Continuing Connected Transactions to be conducted under the Umbro Distributor Agreement. Of the similar distribution agreements listed out in the section headed “Duration” above, no disclosure on the royalty rate was made publicly available. As noted from the Confirmation, Umbro International has confirmed that the 6% to 25% range charged to T&S HK is on normal commercial terms, and on terms no less favourable than those charged to other licencees in similar markets.

It is also noted that pursuant to the Umbro Distributor Agreement, Umbro International shall use its commercial endeavours to procure that the price charged for Umbro Products sourced through UAS will represent the best price for given quality. The price charged by Umbro International/UAS to T&S HK will reflect the actual cost of manufacture charged to Umbro International or UAS (without any mark up by Umbro International or UAS) together with an agreed sourcing commission (being up to 5% of such cost of manufacture). The Directors advised that under the current sourcing arrangements, the Group has been paying a 5% to 8% sourcing commission to the manufacturers for the two years ended 31 December 2005 and 2006. Of the similar distribution agreements listed out in the section headed “Duration” above, no disclosure on the existence or amount of similar sourcing commissions was made publicly available. In the absence of publicly available information, we could only rely on the Confirmation. Since Umbro International is a connected person of the Company under the Listing Rules only because it is a substantial shareholder of a subsidiary of the Company, we have no reason

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LETTER FROM INDEPENDENT FINANCIAL ADVISER

to doubt the accuracy of the Confirmation and consider that the terms of the Umbro Distributor Agreement are negotiated on an arm’s length basis and are on normal commercial terms. Based on the above, we consider that the basis of determination of the royalty rate and sourcing fee charged to T&S HK of the Umbro Distributor Agreement is fair and reasonable so far as the Company and the Independent Shareholders are concerned.

Royalty Annual Caps

As a result of the Umbro Distributor Agreement, the existing revised annual caps with respect to royalties payable under the Umbro License Agreement will also be superceded by the Royalty Annual Caps upon the Umbro Distributor Agreement becoming effective. As disclosed in the Letter from the Board of this Circular, for the three years ended 31 December 2003, 2004 and 2005 and the nine months ended 30 September 2006, the royalty paid by the Group to Umbro Group amounted to HK$3,916,000, HK$6,891,000, HK$30,889,000 and HK$36,944,000, respectively.

The executive Directors expect that the aggregate amount of royalty payable by the Group to Umbro International for each of the three years ending 31 December 2009 will not exceed HK$95,000,000, HK$142,000,000 and HK$198,000,000 respectively.

The executive Directors have taken in account the following factors in determining the Royalty Annual Caps:

• i) the change of sales mix from products solely bearing the logo of Umbro (with lower royalty rate) to Club Badge Products (with higher royalty rate);

• ii) the historical growth rate in sales of Umbro products from 2003 to 2006 and the estimated growth in the sale of Umbro Products in the coming years; and

• iii) the growth prospects of the industry taking into account the growing popularity of soccer in the PRC and the upcoming tournaments such as Euro 2008 and the 2010 World Cup.

We note that the Royalty Annual Caps represent the same annual caps with respect to royalties payable under the Umbro License Agreement approved by Quinta as announced by the Company on 4 December 2006. Furthermore, based on the breakdown in sales of the Umbro products for the year ended 31 December 2005 and the nine months ended 30 September 2006 provided by the Company, we are satisfied that the executive Directors have properly had regard to the change in sales mix of the Umbro products and the growth in the sales of Umbro products during such period.

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LETTER FROM INDEPENDENT FINANCIAL ADVISER

Purchase Annual Caps

As disclosed in the Letter from the Board, for the years ended 31 December 2003, 2004 and 2005 and the nine months ended 30 September 2006, the purchases made by the Group of Umbro products for reselling amounted to approximately HK$70,100,000, HK$112,300,000, HK$165,500,000, and HK$184,000,000, respectively.

The executive Directors expect that the aggregate amount of the purchases of the Umbro Products for each of the three years ending 31 December 2009 will not exceed HK$380,000,000, HK$530,000,000 and HK$740,000,000 respectively.

In determining the Purchase Annual Caps, the executive Directors have taken into account the following factors:

• i) the historical purchase amounts of Umbro products;

• ii) the historical growth rate in sales of Umbro products from 2003 to 2006 and the estimated growth in the sale of Umbro Products in the coming years;

• iii) the historical relative proportion of the total cost of purchases of Umbro branded products as compared to the total sales of Umbro branded products; and

• iv) the Company’s intention to maintain the business model of T&S HK and its current intention to maintain the relative proportion of the total cost of purchases of Umbro branded products as compared to total sales of T&S HK and its subsidiaries in line with recent historical levels.

We have reviewed the management accounts of T&S HK for the year ended 31 December 2005 and the eleven months ended 30 November 2006 as provided by the Company and have noted that the purchases of the Umbro branded products as a percentage to sales for the year ended 31 December 2005 and the eleven months ended 30 November 2006 were in line with the estimations made by the executive Directors in determining the Purchase Annual Caps.

Based on various factors described above, we regard the bases for determining the Annual Caps to be fair and reasonable so far as the Company and the Independent Shareholders are concerned. However, as the Annual Caps relate to future events and are based on assumptions which may or may not remain valid for the entire period up to 31 December 2009, consequently, we express no opinion as to how closely the actual sale or purchase volume of the Continuing Connected Transactions will correspond with the Annual Caps.

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LETTER FROM INDEPENDENT FINANCIAL ADVISER

RECOMMENDATION

Having considered the principal factors and reasons referred to above, we consider that the Connected Transaction contemplated under the SP Agreement and the Continuing Connected Transactions contemplated under the Umbro Distributor Agreement are in the ordinary and usual course of business and in the interests of the Company and the Shareholders as a whole, and the terms thereof as well as the Annual Caps are on normal commercial terms and fair and reasonable so far as the Company and the Independent Shareholders are concerned. Accordingly, we advise the Independent Board Committee and the Independent Shareholders that the Independent Shareholders should vote in favour of the Connected Transaction contemplated under the SP Agreement, the Continuing Connected Transactions contemplated under the Umbro Distributor Agreement as well as the Annual Caps.

Yours faithfully, For and on behalf of CIMB-GK Securities (HK) LIMITED Alex Lau Flavia Hung Executive Vice President Senior Vice President

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GENERAL INFORMATION

APPENDIX

1. RESPONSIBILITY STATEMENT

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

2. DIRECTORS’ DISCLOSURE OF INTERESTS

As at the Latest Practicable Date, the interests and short positions of the Director and chief executive of the Company (if any) in the shares, underlying shares, debentures of the Company and its associated corporation (within the meaning of Part XV of the SFO), which (a) 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 have taken or deemed to have taken under such provisions of the SFO); or (b) were required to be recorded in the register maintained by the Company pursuant to section 352 of the SFO; or (c) were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers (the “Model Code”) adopted by the Company, to be notified to the Company and the Stock Exchange, were as follows:

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

Long positions in the Shares and underlying Shares of the Company

		Number	Approximate
		of Shares or	percentage
		underlying	of interest in
Name of Director	Capacity	Shares	the Company
Mr. Li Kwok Tung, Roy	Interests in controlled	736,735,967	59.18%
	company (Note)
Mr. Chow Chi Wai	Personal interest	24,000,000	1.93%
Mr. Cheung Chi	Personal interest	12,000,000	0.96%
Mr. Lee Kwok Leung	Personal interest	2,400,000	0.19%

Note: Mr. Li Kwok Tung, Roy holds 70% of the issued share capital of Quinta. Mr. Li Kwok Tung, Roy has a controlling interest in Quinta and is therefore deemed to be interested in Quinta’s interest in the Company for the purposes of the SFO. Mr. Lai Ching Ping, a Director, holds the remaining 30% of the issued share capital of Quinta (representing an indirect interest in 221,020,790 Shares or approximately 17.75% shareholding in the Company).

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APPENDIX

GENERAL INFORMATION

Long positions in the shares of associated corporations of the Company (as defined in the SFO)

				Approximate
				percentage
	Associated		Number	of interest in
Name of Director	Corporation	Capacity	of shares	the company
Mr. Li Kwok Tung, Roy	Quinta	Personal interest	7	70%
Mr. Lai Ching Ping	Quinta	Personal interest	3	30%

(b) Pre-IPO Share Option Scheme

The interests of Mr. Cheung Chi, Mr. Chow Chi Wai and Mr. Lee Kwok Leung in the Shares of the Company disclosed in (a) above were the following Pre-IPO Share Options granted to, and accepted by them respectively:

	Number of
	Shares
	to be issued upon	Approximate
	full exercise of	percentage of
Grantee and	the Pre-IPO	total issue
Position	Share Option	Shares	Exercise Periods	Exercise Price
Cheung Chi	12,000,000	0.96%	33% upon Listing on	30% discount to
Executive Director			6 September 2006	Offer Price
			33% on or after
			30 June 2007
			Remaining on or after
			30 June 2008
Chow Chi Wai	24,000,000	1.93%	25% upon Listing on	50% discount to
Executive Director			6 September 2006	Offer Price
			37.5% on or after
			30 June 2007
			Remaining on or after
			30 June 2008
Lee Kwok Leung	2,400,000	0.19%	33.5% upon Listing on	At Offer Price
Executive Director			6 September 2006
			33.5% on or after
			30 June 2007
			Remaining on or after
			30 June 2008
Total	38,400,000	3.08%

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GENERAL INFORMATION

APPENDIX

Note: A cash consideration of HK$1.00 has been paid by each grantee of the Pre-IPO Share Options. Subject to other conditions of the Pre-IPO Share Option scheme, the option period shall be 10 years from the date of the offer of the respective Pre-IPO Share Options unless extended in writing by the Board (and approved by Independent non-executive Directors) in its absolute discretion. Each of the Pre-IPO Share Options (to the extent nor already exercised) shall lapse automatically at the end of such option period. As at the Latest Practicable Date, all Pre-IPO Share Option above remain outstanding.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors and chief executives of the Company (if any) had any interests or short positions in the shares, underlying shares and debentures of the Company or of any of its associated corporation (within the meaning of Part XV of the SFO) which: (a) 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 taken under such provisions of the SFO); or (b) were required to be recorded in the register maintained by the Company pursuant to section 352 of the SFO; or (c) were required, pursuant to the Model Code adopted by the Company, to be notified to the Company and the Stock Exchange.

3. INTERESTS AND SHORT POSITIONS WHICH ARE DISCLOSEABLE UNDER DIVISIONS 2 AND 3 OF PART XV OF THE SFO

As at the Latest Practicable Date, so far as is known to the Directors, the persons (other than a Director or chief executive of the Company (if any)) who 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 Divisions 2 and 3 of Part XV of the SFO, or who is, directly or indirectly, interested in 10 per cent. or more of the nominal value of any class of share capital carry rights to vote in all circumstances at general meeting of any other member of the Group, or in any option, in respect of such securities were as follows:

(a) Long positions in the Shares and underlying Shares of the Company

			Approximate
			percentage
		Number	of interest in
Name	Capacity	of Shares	the Company
Quinta	Beneficial interest	736,735,967	59.18%
TSG BVI	Beneficial interest	67,069,636	5.39%
	Interest in controlled
HTS Holding Company Limited	corporation (Note)	67,069,636	5.39%

Note: TSG BVI is 85% controlled by HTS Holding Company Limited.

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GENERAL INFORMATION

APPENDIX

• (b) Long positions in the shares of any other member of the Group

						Approximate
						percentage of
						interest in the
					Number	relevant member
Name		**Member of **	the Group	Capacity	of shares	of the Group
Wong King Kuen		Bowker Faith Garment Factory		Personal	580,000	29%
		Limited		interest
Chan Siu Wa		Bowker Pacific Garments Limited		Personal	45,000	15%
				interest
Leung Yiu Ming		Bowker Pacific Garments Limited		Personal	45,000	15%
				interest
Chan Siu Wa		Bowker International Company		Personal	15	15%
		Limited		interest
Leung Yiu Ming		Bowker International Company		Personal	15	15%
		Limited		interest
Fu Chi Sing		Bowker (China) Company Limited		Personal	290	29%
				interest
				Beneficial	US$150,000 of	27.3%
(Yunfu Hong Tai		(Sport City Garment Factory		interest	total registered
Garment Co. Ltd.*)		Company Limited*)			capital
Lai Ho Man				Interests in	US$550,000 US$150,000 of	27.3%
		(Sport City Garment Factory		controlled	total registered
		Company Limited*)		corporation	capital
				(Note 1)	US$550,000
Tam Shuk Wai		Win Gear (Asia Pacific) Company		Personal	22,500	45%
		Limited		interest
Chan Hon Kwan		Bowker Garment Accessories		Personal	200	20%
		Company Limited		interest
Umbro International		T&S HK		Beneficial	1,250 T&S HK	25%
				interest	A Shares	(Note 2)
					1,000 T&S HK
					B Shares
TSG BVI		Win Sports		Beneficial	15,000,000	50%
				interest		(Note 3)

Notes:

(1) (Yunfu Hong Tai Garment Co. Ltd) (“Yunfu Hong Tai”) is wholly owned by Mr. Lai Ho Man and therefore Mr. Lai is deemed to be interested in Yunfu Hong Tai’s interest in (Sport City Garment Factory Company Limited) for the purposes of the SFO.

• (2) Umbro International will be interested in 40% issued share capital of T&S HK upon completion of the SP Agreement.

• (3) TSG BVI’s interest will be diluted to 25% upon completion of the Win Sports Subscription and Shareholders’ Agreement.

* For identification purpose only

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Saved as disclosed above, as at the Latest Practicable Date, there was no other person (other than the Directors or the chief executives of the Company (if any)) who had interests or short positions in the Shares or underlying Shares which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or who was, directly or indirectly, interested in 10 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 share capital.

4. DIRECTORS INTEREST IN ASSETS/CONTRACTS AND OTHER INTERESTS

None of the Directors have any interest, direct or indirect, in any asset which have since 31 December 2005, being the date to which the latest published audited accounts of the Company were made up, up to the Latest Practicable Date, been acquired or disposed of by, or leased to, any member of the Group, or are proposed to be acquired or disposed of by, or leased to, any member of the Group.

As at the Latest Practicable Date, none of the Directors is materially interested in any contract or arrangement subsisting at the date of this circular which is significant in relation to the business of the Group.

5. DIRECTORS’ COMPETING INTERESTS

As at the Latest Practicable Date, none of the Directors and their respective associates were considered to have interests in any business which competes or is likely to compete, either directly or indirectly, with the business of the Group or have any other conflicts of interest with the Group pursuant to the Listing Rules.

6. DIRECTORS’ SERVICE CONTRACTS

Save as disclosed below, as at the Latest Practicable Date, none of the Directors had entered or was proposing to enter into a service contract with any member of the Group (excluding contracts expiring or determinable by the employer within one year without payment of compensation (other than statutory compensation)).

Each of Mr. Li Kwok Tung, Roy and Mr. Lai Ching Ping has entered into a service agreement with the Company for a term of three years commencing 1 April 2006 with a monthly remuneration of HK$237,300 and HK$194,400 respectively. Each of Mr. Lee Kwok Leung, Mr. Chow Chi Wai and Mr. Cheung Chi has entered into a service agreement with the Company for a term of three years commencing 20 February 2006 with a monthly remuneration of HK$50,000, HK$143,000 and HK$120,000 respectively and, for Mr. Lee Kwok Leung only, a monthly housing allowance of HK$15,000. In addition, they will each be entitled to a bonus equivalent to two months’ salary at the end of each financial year and for the first financial year, such bonus shall be calculated in proportion to service rendered starting from their respective commencement dates. Each of them will also be entitled to all reasonable out-of-pocket expenses.

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7. EXPERT’S QUALIFICATION AND CONSENT

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

Name

Qualification

CIMB-GK Securities (HK) Ltd.

A corporation licensed to carry out business in type 6 regulated activities under the SFO

CIMB-GK Securities (HK) Ltd., the Independent Financial Adviser, 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 they are included. The letter and recommendation given by the Independent Financial Adviser are given as of the date of this circular for incorporation herein.

8. EXPERT’S INTERESTS

As at the Latest Practicable Date, the Independent Financial Adviser:

• (a) had no direct or indirect interest in any asset which had since 31 December 2005, being the date to which the latest published audited accounts of the Company were made up, 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; and

• (b) was not beneficially interested in the share capital of any member of the Group nor did they 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.

9. MATERIAL ADVERSE CHANGE

The Directors are not aware of any material adverse change in the financial or trading position of the Group since 31 December 2005, being the date to which the latest published audited accounts of the Company were made up.

10. DEMAND FOR POLL

Under the articles of association of the Company, a resolution put to the vote of a meeting shall be decided on a show of hands unless a poll is demanded:

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

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

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• (c) by a member or members present in person or in the case of a member being a corporation by its duly authorised representative or by proxy and representing not less than one-tenth 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 authorised 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) if required by the rules of the Stock Exchange, by any Director or Directors who, individually and collectively, hold proxies in respect of Shares representing 5% or more of the total voting rights at such meeting.

A demand by a person as proxy for a member or in the case of a member being a corporation by its duly authorised representative shall be deemed to be the same as a demand by a member.

11. DOCUMENTS FOR INSPECTION

Copies of the following documents are available for inspection during the normal business hours at the principal place of business of the Company at 6th Floor, Phase 6, Hong Kong Spinners Industrial Building, 481-483 Castle Peak Road, Kowloon, Hong Kong for a period of 14 days from the date of this circular:

• (a) the Directors’ service contracts as referred to in paragraph 6 of this appendix;

• (b) the SP Agreement;

• (c) the Umbro Distributor Agreement;

• (d) the 2005 Shareholders’ Agreement;

• (e) the Amended and Restated Shareholders’ Agreement;

• (f) the Umbro License Agreement; and

• (g) the Win Sports Subscription and Shareholders Agreement.

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