Wisdomcome Group Holdings Ltd. — Proxy Solicitation & Information Statement 2007

Dec 24, 2007

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in doubt as to any respect of this circular or as to the action to be taken, you should consult your licensed securities dealers, bank managers, solicitors, professional accountants or other professional advisers.

If you have sold or transferred all your shares in B.A.L. HOLDINGS LIMITED (the “Company”), you should at once hand this circular to the purchaser or to the bank, stockbroker or other agent through whom the sales 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 however arising from or in reliance upon the whole or any part of the contents of this circular.

B.A.L. HOLDINGS LIMITED 變靚D控股有限公司[*]

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 8079/8395)

DISCLOSEABLE TRANSACTION

(1) Proposed joint venture agreement with a plastic surgery specialist (2) Proposed issue of two-year zero coupon convertible loan notes of HK$10,000,000 pursuant to the proposed joint venture agreement

A notice convening an extraordinary general meeting of the Company (“EGM”) to be held on 11 January 2008 at 5:00 p.m. at Room 1401, 14th Floor, Guardian House, 32 Oi Kwan Road, Wanchai, Hong Kong is set out on pages 20 and 21 of this circular. Whether or not you are able to attend the EGM, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon to the Company’s branch registrar in Hong Kong, Tricor Standard Limited at 26th Floor, Tesbury Centre, 28 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 holding 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 adjournment thereof, should you so wish.

27 December 2007

* for identification purpose only

CHARACTERISTICS OF GEM

GEM has been established as a market designed to accommodate companies to which a high investment risk may be attached. In particular, companies may list on GEM with neither a track record of profitability nor any obligation to forecast future profitability. Furthermore, there may be risks arising out of the emerging nature of companies listed on GEM and the business sectors or countries in which the companies operate. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only after due and careful consideration. The greater risk profile and other characteristics of GEM mean that it is a market more suited to professional and other sophisticated investors.

Given the emerging nature of companies listed on GEM, there is a risk that securities traded on GEM may be more susceptible to high market volatility than securities traded on the Main Board of the Stock Exchange and no assurance is given that there will be a liquid market in the securities traded on GEM.

The principal means of information dissemination on GEM is publication on the internet website operated by the Stock Exchange. Listed companies are not generally required to issue paid announcements in gazetted newspapers. Accordingly, prospective investors should note that they need to have access to the GEM website in order to obtain up-to-date information on GEM-listed issuers.

• i -

Contents

	Page
Definitions	1
Letter from the Board 4
Appendix – General information 16
notice of eGM 20

• ii -

DEFINITIONS

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

• “associates”

has the meaning ascribed to it under the GEM Listing Rules

• “Board”

the board of Directors

• “Centres” the centres or premises at which the Top Empire Group operates and provides the Services from time to time

• “Clinical Subsidiaries” the subsidiaries of the Group engage in the clinical services namely, B.A.L. Clinic Limited, New Creative Limited and Be A Lady (Site 1) Medical Limited

• “Company” B.A.L. Holdings Limited, a company incorporated in the Cayman Islands with limited liability, whose issued shares are listed on GEM

• “Completion” completion of the JV Agreement

• “Conversion Price” the conversion price of HK$0.22 per Share (subject to adjustments) under the terms of the Convertible Notes

• “Conversion Shares” the Shares to be issued upon conversion of the Convertible Notes

• “Convertible Notes” the convertible loan notes in the total principal amount of HK$10,000,000 to be issued by the Company to Dr. Ho

• “Director(s)” the director(s) of the Company

• “Dr. Ho” Dr. Ho Wai Sun “EGM” the extraordinary general meeting of the Company to be held on 11 January 2008 at 5:00 p.m., to consider and, if thought fit, approve, among other things, the Service Agreement

• “GEM” The Growth Enterprises Market of the Stock Exchange “GEM Listing Rules” the Rules Governing the Listing of Securities on GEM “Group” the Company and its subsidiaries “Hong Kong” the Hong Kong Special Administrative Region of the People’s Republic of China

• 1 -

DEFINITIONS

“Independent Third Party”	a person who is independent of and not connected with the
	Company and its connected persons (as defined in the GEM
	Listing Rules) or their respective associates
“JV Agreement”	the agreement dated 4 December 2007 entered into amongst
	Dr. Ho, the Company, Rainbow and Top Empire in relation
	to, among other things, the operation and management of Top
	Empire
“JV Shares”	100 ordinary shares of HK$1.00 each in the capital of Top
	Empire, representing 10% of the issued share capital of Top
	Empire
“Latest Practicable Date”	21 December 2007, being the latest practicable date before the
	printing of this circular for ascertaining certain information for
	the purpose of inclusion in this circular
“Long-Stop Date”	being 9 April 2008 or such other date as mutually agreed by
	Rainbow and Dr. Ho
“Other Doctors”	other medical practitioners or specialists employed or to be
	employed or consultant engaged or to be engaged by Top Empire
	or Top Empire Group to provide the Services at the Centres from
	time to time
“Other Share Options”	the 13,410,000 share options to subscribe for Shares granted
	to other employees of the Company under the Share Option
	Scheme
“Other Share Options Holders”	holder of the Other Share Options
“Payment”	the cash payment of HK$6,500,000 to Dr. Ho by Top Empire as
	part of the consideration of the JV Agreement
“Rainbow”	Rainbow Cosmetic (BVI) Limited, a company incorporated with
	limited liability in the British Virgin Islands and is a wholly-
	owned subsidiary of the Company
“Remuneration Committee”	the remuneration committee comprising all the executive Directors
	namely Ms. Siu York Chee and Mr. Leung Kwok Kui and all
	the independent non-executive Directors namely Mr. Hung Yau
	Keung Anckes (Chairman of the Remuneration Committee),
	Dr. Siu Yim Kwan, Sidney and Mr. Tsui Pui Hung, Walter
	for reviewing, making recommendations on and approving the
	remuneration policy and structure and remuneration packages of
	the executive directors and the senior executives of the Group

• 2 -

DEFINITIONS

• “Services” the clinical services provided at the Centres including cosmetic and plastic surgeries

• “Service Agreement” the agreement dated 4 December 2007 entered into between Dr. Ho and Top Empire

• “SFO” Securities and Futures Ordinance, Chapter 571 of the Laws of Hong Kong

• “Shares(s)” ordinary share(s) of HK$0.2 each in the share capital of the Company

• “Shareholder(s)” holder(s) of Share(s) “Share Options” the option to be granted to Dr. Ho to subscribe for 1% of the entire issued share capital of the Company pursuant to the Share Option Scheme

• “Share Option Scheme” the share option scheme of the Company approved on 24 September 2001 pursuant to which the Board may, at its discretion, offer full-time or part time employees and executive and independent non-executive Directors of the Company and/or any of its subsidiaries options to subscribe for the Shares

• “Stock Exchange” The Stock Exchange of Hong Kong Limited “Top Empire” Top Empire Limited, a company incorporated with limited liability in Hong Kong and is an indirect wholly-owned subsidiary of the Company

• “Top Empire Group” Top Empire and its subsidiaries. As at the Latest Practicable Date, Top Empire’s subsidiaries are the Clinical Subsidiaries

• “Transaction” the entering into the JV Agreement “HK$” Hong Kong dollars, the lawful currency of Hong Kong “%” per cent.

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LETTER FROM THE BOARD

B.A.L. HOLDINGS LIMITED 變靚D控股有限公司[*]

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 8079/8395)

Executive Directors: Ms. Siu York Chee Mr. Leung Kwok Kui

Independent non-executive Directors:

Mr. Hung Yau Keung, Anckes Ph.D, MBA, FCPA (Practising), FCCA, CICPA, ACMA, CGA Dr. Siu Yim Kwan, Sidney, S.B.St.J. Mr. Tsui Pui Hung, Walter, LL.B. (Hons), LL.M, BSc (Hons)

Registered office: P.O. Box 309, Ugland House South Church Street George Town Grand Cayman Cayman Islands British West Indies

Head office and principal place of business in Hong Kong: Room 1401, 14th Floor Guardian House 32 Oi Kwan Road Wanchai Hong Kong

27 December 2007

To the Shareholders

Dear Sir or Madam,

DISCLOSEABLE TRANSACTION

(1) Proposed joint venture agreement with a plastic surgery specialist (2) Proposed issue of two-year zero coupon convertible loan notes of HK$10,000,000 pursuant to the proposed joint venture agreement

INTRODUCTION

The Company announced on 7 December 2007 that Top Empire, Rainbow, both being whollyowned subsidiaries of the Company, the Company and Dr. Ho entered into the JV Agreement on 4 December 2007 for the expansion of the Services, which was supplemented by a supplemental announcement dated 10 December 2007.

Pursuant to the JV Agreement, (i) Dr. Ho will acquire 10% shareholdings in Top Empire from Rainbow at a consideration of HK$1,500,000; (ii) Dr. Ho will enter into the Service Agreement pursuant to which he agrees to become a director of Top Empire and an exclusive principal doctor of the Top Empire Group for a term of 5 years who will be responsible for the management and

• for identification purpose only

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LETTER FROM THE BOARD

provision of the Services at the Centres of the Top Empire Group; and (iii) in consideration of Dr. Ho’s agreement to cease practicing on his own account at his own clinic and agreeing to form a joint venture with Rainbow through the acquisition of the JV Shares, Top Empire agrees to pay Dr. Ho the Payment and the Company agrees to issue to Dr. Ho the Convertible Notes.

The Transaction constitutes a discloseable transaction for the Company under Rules 19.06(2) of the GEM Listing Rules. As Dr. Ho’s service term will be for a duration that exceeds three years, the Service Agreement is required to be approved by the Shareholders at the EGM (at which Dr. Ho and his associates shall abstain from voting) pursuant to Rule 17.90 of the GEM Listing Rules.

The purpose of this circular is to provide you with the details of the JV Agreement, the Service Agreement, the views from the Remuneration Committee in respect of the Service Agreement and the notice of the EGM.

THE JV AGREEMENT

Date

4 December 2007

Parties

• (i) Top Empire;

• (ii) Rainbow;

• (iii) the Company; and

• (iv) Dr. Ho, a registered medical practitioner specialized in cosmetic and plastic surgeries. To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, Dr. Ho is an Independent Third Party.

Subject Matter

• (i) Rainbow, which as at the Latest Practicable Date holds 100% issued share capital of Top Empire, has agreed to sell and Dr. Ho has agreed to purchase the JV Shares, representing 10% of the issued share capital of Top Empire at a consideration of HK$1,500,000;

• (ii) Dr. Ho will be practicing as a registered medical practitioner and a registered specialist in cosmetic and plastic surgery at the Centres exclusively. He will also be responsible for supervising and leading the Other Doctors and staff at the Centres to provide the Services through the Top Empire Group. Top Empire and Dr. Ho agree to enter into the Service Agreement to govern the relationship between them in relation to the provision of Dr. Ho’s Services and duties to the Top Empire Group;

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LETTER FROM THE BOARD

• (iii) in consideration of Dr. Ho’s agreement to cease practicing on his own account at his own clinic upon Completion and agreeing to form a joint venture with Rainbow through the acquisition of the JV Shares, Top Empire agrees to pay Dr. Ho the Payment and the Company agrees to issue to Dr. Ho the Convertible Notes; and

• (iv) the major terms and conditions based on which Top Empire will be managed and operated.

Scope of business of Top Empire

Top Empire is an investment holding company. Through its subsidiaries, it principally engages in the provision of cosmetic and plastic surgery services.

Board Composition

The board of directors of Top Empire will comprise of Ms. Siu York Chee, Mr. Leung Kwok Kui, both being the Directors, and Dr. Ho.

Conditions

The JV Agreement is conditional upon fulfillment of the following conditions (“Conditions”):

• (i) the execution of the Service Agreement by Top Empire and Dr. Ho;

• (ii) completion of the sale and purchase of the JV Shares; and

• (iii) the approval by the Shareholders (other than Dr. Ho and his associates) of the Service Agreement and all matters contemplated thereunder at the EGM.

As at the Latest Practicable Date, condition (i) has been fulfilled.

Completion

Completion shall take place on the fifth business day (“Completion Date”) or such other date as mutually agreed by Rainbow and Dr. Ho upon fulfillment of all the Conditions. If any of the Conditions shall not have been fulfilled by the Long-Stop Date, the JV Agreement shall be null and void and of no effect.

CONSIDERATION

The consideration for the sale and purchase of the JV Shares is HK$1,500,000 which was determined with reference to the unaudited pro-forma consolidated net asset value of Top Empire Group of approximately HK$13,400,000 as at 31 July 2007. This will be paid by Dr. Ho upon completion of the sale and purchase of the JV Shares on the Completion Date.

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LETTER FROM THE BOARD

Top Empire remained dormant until a reorganization of the Top Empire Group was completed on 8 November 2007 whereby the shares of the Clinical Subsidiaries (including any rights attached to the shares of the Clinical Subsidiaries and assets relating to the provision of the clinical services owned by the Clinical Subsidiaries as of the date of the completion of the reorganisation) were transferred to Top Empire by the Group.

The consideration of the JV Agreement of HK$16,500,000 which will be satisfied by the Payment to be paid by Top Empire and the issue of the Convertible Notes by the Company were determined with reference to the taxable income generated by Dr. Ho’s clinic during the past two years.

The Payment (i) has be paid to Dr. Ho as to HK$3,000,000 (“Non-Refundable Amount”) on 7 December, 2007. The Non-Refundable Amount shall not be refundable by Dr. Ho if the Conditions shall not be satisfied by the Long-Stop Date; and (ii) will be paid as to HK$3,500,000 on the Completion Date. The Convertible Notes will be issued on the Completion Date.

SERVICE AGREEMENT

Date

4 December 2007

Parties

• (i) Top Empire and

• (ii) Dr. Ho

Principal terms and conditions of the Service Agreement are summarised as follows:

• (i) subject to Shareholders’ approval at the EGM (at which Dr. Ho and his associates shall abstain from voting), the Service Agreement will be for a term of five years (“Term”) with effect from 10 December 2007. Upon obtaining the Shareholders’ approval, the Service Agreement will supersede the letter of appointment dated 4 December 2007 between Top Empire and Dr. Ho pursuant to which Dr. Ho is appointed as a consultant doctor of Top Empire from 10 December 2007 and up to and including the date falling four months from such date (i.e. 9 April 2008) or the date of the EGM on which the Service Agreement is approved by Shareholders, whichever is earlier;

• (ii) Dr. Ho undertakes with Top Empire that during the Term, he shall provide the Services to the Top Empire Group on an exclusive basis;

• (iii) in consideration of the performance of Dr. Ho’s Services and duties, he shall receive during the Term:

• (a) a monthly fee calculated on the basis of 35% of the total revenue of the Top Empire Group in respect of the Services provided and operated by himself; and

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LETTER FROM THE BOARD

• (b) a monthly fee calculated on the basis of 35% of the total revenue of the Centre located at New World Tower, Central, Hong Kong in respect of the Services provided and operated by Other Doctors only less the total fees or salaries to be paid by Top Empire Group to Other Doctors; and

• (iv) the Company has agreed to grant the Share Options to Dr. Ho. The number of options and the exercise price of the Share Options will be determined in accordance with the terms and conditions of the Share Option Scheme. The Company will comply with Chapter 23 of the GEM Listing Rules in due course.

CONVERTIBLE NOTES

Principal terms and conditions of the Convertible Notes are summarized as follows:

Principal amount: HK$10,000,000

Conversion Price: HK$0.22 per Share, subject to the usual anti-dilution adjustments in certain events such as share consolidation, share subdivision, reclassification, capitalization of profits and reserves, capital distribution, rights issue and other equity or equity derivatives issues.

The Conversion Price of HK$0.22 per Share (subject to adjustments) represents (i) the closing price of the Shares as quoted on the Stock Exchange on 4 December 2007; (ii) a premium of approximately 7.8% over the average closing price of HK$0.204 per Share for the 5 trading days up to and including 4 December 2007; and (iii) a premium of approximately 25.2% over the audited consolidated net asset value per Share of approximately HK$0.176 as at 31 October 2006. The Conversion Price was determined after arm’s length negotiation between Dr. Ho and the Company with reference to the prevailing market prices of the Shares.

Interest rate: The Convertible Notes do not bear any interest

Maturity: The second anniversary from the date of issue of the Convertible Notes (“Maturity Date”)

Conversion Period:

Dr. Ho shall have the right to exercise, at any time on any business day prior to the Maturity Date, to convert the whole or part of the principal amount of the Convertible Notes into Shares subject to the following:

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LETTER FROM THE BOARD

• (i) up to the total amount of HK$5,000,000 may be converted at the end of the twelve month from the date of issue of the Convertible Notes; and

• (ii) any remaining principal amount of the Convertible Notes which has not been exercised in the first year may be fully converted at the Maturity Date.

Ranking:

The Conversion Shares to be issued as a result of the exercise of the conversion rights attaching to the Convertible Notes will rank pari passu in all respects with all other Shares in issue as at the date on which the relevant conversion rights are exercised.

• Redemption: (a) The Company shall redeem at the Maturity Date any outstanding amount of Convertible Notes.

• (b) In the event that Rainbow shall terminate the JV Agreement, the Company shall redeem any outstanding amount of the Convertible Notes subject to the terms and conditions contained in the JV Agreement.

• (c) The Company shall not be required to redeem any outstanding amount of the Convertible Notes due to Dr. Ho for his early termination of the Term or termination on breach by Dr. Ho pursuant to provisions of the JV Agreement.

Transferability: No assignment or transfer is permitted unless agreed by the Company. Voting Rights: Holder of the Convertible Notes will not have any right to attend or vote in any meeting of the Company by virtue of him being a noteholder. Listing: No application will be made for the listing of the Convertible

No application will be made for the listing of the Convertible Notes on the Stock Exchange or any other stock exchange. An application will be made by the Company for the listing of and permission to deal in the Conversion Shares to be issued as a result of the exercise of the conversion rights attached to the Convertible Notes.

Undertaking:

The Company undertakes to the noteholder that it will not issue any security or modify the rights attached to the Conversion Shares which are to be issued upon exercise of the conversion rights attached to the Convertible Notes unless otherwise approved by the noteholder.

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LETTER FROM THE BOARD

SHAREHOLDING STRUCTURE

Based on the total number of issued shares of the Company of 712,206,405 as at the Latest Practicable Date, (i) upon full conversion of the Convertible Notes in the principal amount of HK$10,000,000 at the Conversion Price of HK$0.22 per Share, a maximum of 45,454,545 new Shares will be issued and allotted to Dr. Ho, representing approximately 6.38% of the existing issued share capital of the Company and approximately 6.00% of the issued share capital of the Company as enlarged by the issue of the Conversion Shares; and (ii) upon exercise of the Share Options in full, a maximum of 7,122,064 new Shares will be issued and allotted to Dr. Ho, representing 1% of the existing issued share capital of the Company and approximately 0.99% of the issued share capital of the Company as enlarged by the issue of the new Shares under the Share Options.

As at the Latest Practicable Date, Dr. Ho and his associates together hold an aggregate of 4,850,000 Shares representing approximately 0.68% of the issued shares capital of the Company. The shareholding structure of the Company upon (i) full conversion of the Convertible Notes only; (ii) exercise of the Share Options in full only; and (iii) full conversion of the Convertible Notes and the exercise of the Share Options in full by Dr. Ho are set out as below:

Siu York Chee_(Note 1) Leung Kwok Kui(Note 1) Dr. Ho Other Share Options Holders Heavenly Blaze Ltd(Note 2)_ Other Public Shareholders Total	As at the Latest Practicable Date Approximately Shares % 2,032,158 0.29 7,158 0.00 4,850,000 0.68 0 0.00 104,767,917 14.71 600,549,172 84.32 712,206,405 100.00	As at the Latest Practicable Date Approximately Shares % 2,032,158 0.29 7,158 0.00 4,850,000 0.68 0 0.00 104,767,917 14.71 600,549,172 84.32 712,206,405 100.00	Upon full conversion of the Convertible Notes by Dr. Ho only Approximately Shares % 2,032,158 0.27 7,158 0.00 50,304,545 6.64 0 0.00 104,767,917 13.83 600,549,172 79.26 757,660,950 100.00	Upon full conversion of the Convertible Notes by Dr. Ho only Approximately Shares % 2,032,158 0.27 7,158 0.00 50,304,545 6.64 0 0.00 104,767,917 13.83 600,549,172 79.26 757,660,950 100.00	Upon exercise of the Share Options in full by Dr. Ho only Approximately Shares % 2,032,158 0.28 7,158 0.00 11,972,064 1.66 0 0.00 104,767,917 14.56 600,549,172 83.50 719,328,469 100.00	Upon exercise of the Share Options in full by Dr. Ho only Approximately Shares % 2,032,158 0.28 7,158 0.00 11,972,064 1.66 0 0.00 104,767,917 14.56 600,549,172 83.50 719,328,469 100.00	Upon full conversion of the Convertible Notes and exercise of the Share Options by Dr. Ho and exercise of the Other Share Options by the Other Share Options Holders in full Approximately Shares % 2,032,158 0.26 7.158 0.00 57,426,609 7.38 13,410,000 1.72 104,767,917 13.46 600,549,172 77.18 778,193,014 100.00	Upon full conversion of the Convertible Notes and exercise of the Share Options by Dr. Ho and exercise of the Other Share Options by the Other Share Options Holders in full Approximately Shares % 2,032,158 0.26 7.158 0.00 57,426,609 7.38 13,410,000 1.72 104,767,917 13.46 600,549,172 77.18 778,193,014 100.00
		100.00		100.00		100.00		100.00

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LETTER FROM THE BOARD

Note:

1. As at the Latest Practicable Date, Ms. Siu York Chee and Mr. Leung Kwok Kui both being the executive Directors, are wife and husband.

2. Heavenly Blaze Limited is beneficially owned as to (i) 46% by Mr. Shiu Stephen Junior, nephew of Ms. Siu York Chee; (ii) a total of 34% by Mr. Shiu Yeuk Yuen, younger brother of Ms. Siu York Chee, and Ms. Siu York Chee who together hold as trustees on behalf of Ms. Shiu Yo Yo and Ms. Shiu Sound Sound, nieces of Ms. Siu York Chee; (iii) 16% by Ms. Shiu Ting Yan, Denise, niece of Ms. Siu York Chee; (iv) 1% by Mr. Cheng Jut Si and (v) 3% by One Dollar Productions Limited which is beneficially owned as to (a) 25% by Mr. Shiu Stephen Junior and (b) 75% by Ms. Hau Lai Mei, the step-mother of Mr. Shiu Stephen Junior and therefore are deemed to be interested in such Shares.

FINANCIAL EFFECTS OF THE TRANSACTION

Upon completion of the sales and purchase of the JV Shares, the Group’s cash and cash equivalent will be increased by HK$1,500,000 which is the cash consideration of the JV Shares. Top Empire will be owned as to 90% by the Company and 10% by Dr. Ho and a minority interest will be booked in the consolidated financial statements of the Company.

The total consideration of the JV Agreement of HK$16,500,000 will be satisfied by the Payment and the issue of the Convertible Notes. In this regard, the Group’s cash and cash equivalents will be reduced by the amount of the Payment (HK$6,500,000) on completion of the JV Agreement. If the Company redeems the Convertible Notes pursuant to the terms and conditions of the Convertible Notes, the Group’s cash and cash equivalents will be reduced by the amount to be redeemed which will be in the maximum amount of HK$10,000,000. According to the Company’s interim report for the six months periods ended 30 April 2007, the Group had an unaudited cash and cash equivalents of approximately HK$39,669,000. The Directors consider that the Group has sufficient resources to meet the cash requirement in the event the Company shall redeem the Convertible Notes.

Upon completion of the JV Agreement, the Group’s total assets will be increased by approximately HK$16,500,000 as prepayments and the total liabilities will be increased by the principal amount of the Convertible Notes of HK$10,000,000. Upon conversion of the Convertible Notes, the Company’s share capital will be increased.

By forming a joint venture with Dr. Ho, the Directors expect that the earnings of the Group’s clinical services business will be further enhanced.

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LETTER FROM THE BOARD

REASONS FOR AND BENEFITS OF THE JV AGREEMENT

The Group is principally engaged in the provision of beauty services and sale of beauty products, provision of clinical services and operation of beauty courses.

According to the Company’s annual report for the year ended 31 October 2006, the segment revenue and results for the Group’s clinical services amounted to approximately HK$8,844,000 (2005: NIL) and HK$3,524,000 (2005: NIL) respectively representing approximately 6.0% and 12.9% of the Group’s total turnover and segment results respectively. The Directors stated that the Group’s business focus has been switched to medical based beauty services from the traditional beauty services. In the financial year 2006, three medical centres situated in Mongkok, Tsuen Wan and Wanchai respectively were in full operations. According to the Company’s interim report for the six months period ended 30 April 2007, another medical centre in Central was launched during the period. Segment revenue and results for the clinical services for the six months period ended 30 April 2007 were approximately HK$33,000,000 and HK$7,722,000 respectively representing approximately 38.3% and 76.4% of the Group’s total turnover and segment results respectively.

In view of the performance of the Group’s clinical services business have been encouraging whilst the profit margin of the traditional beauty services has been weakening due to keen market competition, the Directors consider that it is in the interest of the Group to further expand the clinical services business. Dr. Ho is a specialist in cosmetic and plastic surgeries and has more than 10 years’ practicing experience. By leveraging on Dr. Ho’s expertise, the Directors are optimistic on the growth potential of the Group’s clinical services business in the near future. Given the above, the Directors believe that the terms of the JV Agreement and the Service Agreement are fair and reasonable and the entering into the JV Agreement and the Service Agreement is in the interests of the Company and the Shareholders as a whole.

Upon Completion, Top Empire will continue to be an indirect wholly-owned subsidiary of the Company.

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LETTER FROM THE BOARD

FUND RAISING EXERCISE IN THE PREVIOUS 12 MONTHS PERIOD

Save as disclosed below, the Company had not conducted any fund raising activities in the past 12 months before the Latest Practicable Date.

Date of			Intended use of	Actual use
announcement	Event	Net proceeds	proceeds as announced	of proceeds
		(approximately)
1 March 2007	Placing of existing	HK$13,134,000	Intended to be used	Used for the subscription
	Shares and top-up		for general working	of 3,205,129 shares of
	subscription of		capital and/or possible	First Holdings
	new Shares		investment in the future	Consortium Ltd.
1 March 2007	Subscription of	HK$22,968,000	Intended to be used	Approximately 50% was
	Shares		for general working	used for the
			capital and/or possible	subscription of
			investment in the future	3,205,129 shares of
				First Holdings
				Consortium Ltd.
				The remaining was
				used for general
				working capital,
				securities and
				properties investments.
18 July 2007	The top-up placing	HK$21,700,000	Intended to be used for	Approximately 50% was
	of 101,000,000		general working capital	used for securities and
	Shares		of the Group and/or	properties investments.
			possible investment	Approximately 50%
			in the future when	was used for general
			opportunities arise	working capital.
24 August 2007	Placing of new Shares	HK$17,650,000	Intended to be used	Not yet utilized and
			for general working	deposited as time
			capital of the Group	deposits at banks.
			and/or possible
			investment in the future
			when opportunities arise
16 October 2007	Issue of 237,402,135	HK$45,900,000	Intended to be used on the	Not yet utilized and
	Shares by way of		acquisition of new shops	deposited as time
	rights issue on the		for the expansion of the	deposits at banks.
	basis of one right		Group’s beauty services and
	share for every		medical centre(s) in Hong
	two Shares		Kong, Macau and PRC

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LETTER FROM THE BOARD

LISTING RULES IMPLICATIONS

The Transaction constitutes a discloseable transaction for the Company under Rules 19.06 (2) of the GEM Listing Rules. As Dr. Ho’s service term will be for a duration that exceeds three years, the Service Agreement is required to be approved by the Shareholders at the EGM pursuant to Rule 17.90 of the GEM Listing Rules. The Conversion Shares will be allotted and issued under the general mandate granted to the Board at the Company’s extraordinary general meeting held on 30 October 2007. As at the Latest Practicable Date, the Company has not utilized any of this general mandate.

The purpose of this circular is to provide you with the details of the JV Agreement, the Service Agreement, the views from the Remuneration Committee in respect of the Service Agreement and the notice of the EGM.

EGM

A notice convening the EGM to be held on 11 January 2008 at 5:00 p.m. at Room 1401, 14th Floor, Guardian House, 32 Oi Kwan Road, Wanchai, Hong Kong is set out on pages 20 and 21 of this circular for the purpose of considering and, if thought fit, passing the ordinary resolution in respect of the Service Agreement. As at the Latest Practicable Date, Dr. Ho and his associates together hold an aggregate of 4,850,000 Shares and shall abstain from voting at the EGM.

A form of proxy for the EGM is enclosed with this circular. Whether or not you intend to be present at the EGM, you are requested to complete the form of proxy and return it to the office of the Company’s branch share registrar in Hong Kong, Tricor Standard Limited at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong, in accordance with the instructions printed thereon as soon as possible but in any event not less than 48 hours before the time appointed for the holding of the EGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting at the EGM or any adjournment thereof if you so wish.

PROCEDURES FOR DEMANDING A POLL

Pursuant to article 80 of the Articles of Association, at any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands unless (before or on the declaration of the result of the show of hands or on the withdrawal of any other demand for a poll) a poll is duly demanded or otherwise required under the GEM Listing Rules. A poll may be demanded by:

• (a) the Chairman of the meeting; or

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

• (c) any 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 in the aggregate not less than one-tenth of the total voting rights of all members having the right to attend and vote at the meeting; or

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LETTER FROM THE BOARD

• (d) any 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 conferring a right to attend and vote at the meeting on which there have been paid up sums in the aggregate 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 GEM Listing Rules, by the Chairman of such meeting and/or Directors who, individually or collectively, hold proxies in respect or shares representing five per cent (5%) or more of the total voting rights at such meeting.

RECOMMENDATION

The Directors consider that the terms of the JV Agreement and the Service Agreement are fair and reasonable and the entering into the JV agreement and the Service Agreement is in the interests of the Company and the Shareholders as a whole. The Remuneration Committee considers that the terms of the Service Agreement are fair and reasonable and the entering into the Service Agreement is in the interests of the Company and the Shareholders as a whole. Accordingly, the Directors and the Remuneration Committee recommend the Shareholders to vote in favor of the ordinary resolution to approve the Service Agreement to be proposed at the EGM.

ADDITIONAL INFORMATION

Your attention is also drawn to the other information as set out in the Appendix to this circular.

On order of the Board B.A.L. Holdings Limited Siu York Chee Chairperson

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generAl informAtion

Appendix

1. reSponSiBilitY StAtement

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the GEM Listing Rules for the purpose of giving information with regard to the Group. As at the Latest Practicable Date, the Directors, having made all reasonable enquiries, confirm that, to the best of their knowledge and belief: (1) the information contained in this circular is accurate and complete in all material respects and not misleading; (2) there are no other matters the omission of which would make any statement in this circular misleading; and (3) all opinions expressed in this circular have been arrived at after due and careful consideration and are founded on bases and assumptions that are fair and reasonable.

2. diSCloSUre of intereStS

• (i) interests and short positions of the directors or chief executives in the Shares, underlying shares and debentures of the Company and its associated corporations

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 and its associated corporations (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 or short positions which they were taken or deemed to have under such provisions of the SFO), or (b) were required, pursuant to section 352 of the SFO, to be entered in the register referred to therein, or (c) were required, pursuant to Rules 5.46 to 5.67 of the GEM Listing Rules relating to securities transactions by the Directors to be notified to the Company and the Stock Exchange were as follows:

Interest in Shares

Long positions

			Approximate
			percentage of
name	type of interest	no. of Shares	interest
Ms. Siu York Chee	Personal	2,032,158	0.29%
(Note 1 and 2)
Mr. Leung Kwok Kui_(Note 2)_	Personal	7,158	0.00%

Note:

1. Ms. Siu York Chee also together with Mr. Shiu Yeuk Yuen hold on behalf of Ms. Shiu Yo Yo and Ms. Shiu Sound Sound 34% shareholdings in Heavenly Blaze Limited which in turn holds 104,767,917 Shares.

2. Ms. Siu York Chee and Mr. Leung Kwok Kui are wife and husband.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors or chief executive of the Company had any interest or short position in the Shares, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of

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generAl informAtion

Appendix

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 any interests and short positions which they were taken or deemed to have under such provisions of the SFO) or (b) are required, pursuant to section 352 of the SFO, to be entered in the register maintained by the Company referred to therein, or (c) are required, pursuant to Rules 5.46 to 5.67 of the GEM Listing Rules, to be notified to the Company and the Stock Exchange.

• (ii) interests and short positions of substantial Shareholders in the Shares, underlying shares and debentures of the Company and its associated corporations

			Approximate
			percentage
name	type of interest	no. of Shares	of interest
Heavenly Blaze Limited	Corporate	104,767,917	14.71%
Mr. Cheng Jut Si_(Note 1)_	Personal	104,767,917	14.71%
Mr. Shiu Stephen Junior_(Note 1)_	Personal	104,767,917	14.71%
Ms. Shiu Ting Yan, Denise_(Note 1)_	Personal	104,767,917	14.71%
Mr. Shiu Yeuk Yuen
and Ms. Siu York Chee	Personal	104,767,917	14.71%
(Note 2)
One Dollar Productions
Limited_(Note 1)_	Corporate	104,767,917	14.71%
Ms. Hau Lai Mei_(Note 1)_	Personal	104,767,917	14.71%

Notes:

1. Heavenly Blaze Limited is beneficially owned as to (i) 46% by Mr. Shiu Stephen Junior, nephew of Ms. Siu York Chee (being the executive Director); (ii) 34% by Mr. Shiu Yeuk Yuen, younger brother of Ms. Siu York Chee, and Ms. Siu York Chee together hold on behalf of Ms. Shiu Yo Yo and Ms. Shiu Sound Sound, nieces of Ms. Siu York Chee; (iii) 16% by Ms. Shiu Ting Yan, Denise, niece of Ms. Siu York Chee; (iv) 1% by Mr. Cheng Jut Si and (v) 3% by One Dollar Productions Limited which is beneficially owned as to (i) 25% by Mr. Shiu Stephen Junior and (ii) 75% by Ms. Hau Lai Mei, the step-mother of Shiu Stephen Junior and therefore are deemed to be interested in such Shares.

2. Ms. Siu York Chee and Mr. Shiu Yeuk Yuen are the trustees of Ms. Shiu Yo Yo and Ms. Shiu Sound Sound.

Save as disclosed above, as at the Latest Practicable Date, the Directors were not aware of any other person who had an interest or short position in the Shares or underlying Shares or debentures of the Company which would fall to be disclosed under Divisions 2 and 3 of Part XV of the SFO, or who is expected, directly or indirectly to be interested in 10% or more of the nominal value of any class of share capital, or options in respect of such capital, carrying rights to vote in all circumstances at general meetings of any other member of the Company.

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Appendix

3. SerViCe ContrACtS

Each of Ms. Siu York Chee and Mr. Leung Kwok Kui has entered into a service contract with Company. Their appointments are for a term of five (5) years commencing from 1 September 2004 and shall continue thereafter for a successive term of one (1) year unless and until termination in accordance with the terms of the service contract. Each of Ms. Siu York Chee and Mr. Leung Kwok Kui receives a remuneration of HK$50,000 and HK$30,000 per month under their respective service contract with the Company. Save as disclosed herein, none of the Directors has any existing or proposed service contract (excluding contracts expiring or determinable by the Group within one year without payment of compensation (other than statutory compensation)) with any member of the Group.

4. litigAtion

As at the Latest Practicable Date, the Group was not engaged in any litigation or arbitration of material importance and no litigation or claims of material importance is known to the Directors to be pending or threatened by or against the Company.

5. generAl

• (a) The registered address of the Company is at P.O. Box 309, Ugland House, South Church Street, George Town, Grand Cayman, Cayman Islands, British West Indies.

• (b) The head office and principal place of business of the Company in Hong Kong is at Room 1401, 14th Floor, Guardian House, 32 Oi Kwan Road, Wanchai, Hong Kong.

• (c) The share registrar and transfer agent of the Company in Hong Kong is Tricor Standard Limited at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong.

• (d) The Company established an audit committee in October 2001 with terms and reference in compliance with the GEM Listing Rules. The primary duties of the audit committee are to review the annual report and accounts, interim reports and quarterly reports of the Company and internal control system of the Company. The audit committee of the Company (“Audit Committee”) comprises three members, including one independent non-executive Director who possesses the appropriate professional qualifications or accounting or related financial management expertise. Details of the members of the Audit Committee are set out below.

mr. Hung Yau Keung Anckes (“mr. Hung”) , Ph.D, MBA, FCPA (Practising), CICPA, ACMA, CGA , aged 55, a Certified Public Accountant, Chairman of the Audit Committee, was appointed as an independent non-executive Director of the Company in October 2003. Mr. Hung has over 25 years experience in accounting. Mr. Hung is a fellow of the Hong Kong Institute of Certified Public Accountants and the Association of Chartered Certified Accountants, a member of the Chartered Institute of Management Accountants and the Certified General Accountants Association, and an overseas non-practising member of the Chinese Institute of Certified Public Accountants.

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Appendix

Mr. Hung is now the practising director of KND & Co. CPA Limited, Certified Public Accountants (Practising). Mr. Hung is the Honorary Treasurer of The Overseas CICPA Members Association since the incorporation of the Association. Mr. Hung is also the Visiting Professor of the Southwestern University of Finance and Economics and the Research Institute of Economics of the Shenzhen University in China.

dr. Siu Yim Kwan, Sidney (“dr. Siu”) , S.B.St.J., aged 61, Dr. Siu was appointed as an independent non-executive director of the Company in December 2004. Dr. Siu holds a doctorate degree in Business Management from Armstrong University in the United States. Dr. Siu is the non-executive director of Wang On Group Limited, a listed company in Hong Kong since November 1993.

Dr. Siu is a director of The Association of The Directors & Former Directors of Pok Oi Hospital Limited, Bright China Foundation Limited and Chiu Yang Residents Association of Hong Kong Limited, those companies are non-profitable association and providing community services in Hong Kong.

Dr. Siu is also a director of The Hong Kong Tae Kwon Do Association Limited, a sport association in Hong Kong and also an executive member of a number of charitable organizations and sports associations.

mr. tsui pui Hung Walter (“mr. tsui”) , LL.B. (Hons), LL.M, BSc (Hons) , aged 32, is a practicing solicitor of the High Court of Hong Kong, was appointed as an independent non-executive director of the Company in June 2007. Mr. Tsui holds the degrees of a Master in Laws from University of London, a Bachelor of Laws (with Honours) from Manchester Metropolitan University, a Bachelor of Science (with Honours) from the Chinese University of Hong Kong and a Diploma in translation from the Chinese University of Hong Kong. Mr. Tsui has years of senior management experience and is familiar with internal control issues and regulatory rules of listed company.

• (e) The compliance officer of the Company is Ms. Siu York Chee.

• (f) The qualified accountant and the company secretary of the Company is Mr. Lo Gun Yuen, Raymond (CPA).

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

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NOTICE OF EXTRAORDINARY GENERAL mEETING

B.A.L. HOLDINGS LImITED 變靚D控股有限公司[*]

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 8079/8395)

NOTICE OF EXTRAORDINARY GENERAL mEETING

NOTICE IS HEREBY GIVEN that an extraordinary general meeting (“EGM”) of B.A.L. Holdings Limited (the “Company”) will be held on 11 January 2008 at 5:00 p.m., at Room 1401, 14th Floor, Guardian House, 32 Oi Kwan Road, Wanchai, Hong Kong for the purpose of considering, and if thought fit, passing the following resolution (with or without modifications) as ordinary resolution of the Company:

ORDINARY RESOLUTION

“THAT:

the Service Agreement (as defined in the circular of which this notice forms part (the “Circular”)) dated 4 December 2007 entered into between Top Empire and Dr. Ho (as defined in the Circular) (a copy of the Service Agreement has been produced to the meeting marked “A” and signed by the chairman of the meeting for the purpose of identification) and all the transactions contemplated therein be and are hereby approved, confirmed and ratified in all respects and any director of the Company be and is hereby authorised to sign, execute, perfect, deliver all such documents or deeds and to do all such things or matters as he or she may in his or her discretion consider necessary, desirable or expedient to carry out, implement or give full effect to the Service Agreement and all transactions contemplated thereunder.”

By order of the Board of B.A.L. Holdings Limited Siu York Chee Chairperson

Hong Kong, 27 December 2007

Registered office: Head office and principal place of P.O. Box 309, Ugland House business in Hong Kong: South Church Street, George Town Room 1401, 14th Floor Grand Cayman Guardian House Cayman Islands 32 Oi Kwan Road Bristish West Indies Wanchai, Hong Kong

Notes:

1. A shareholder of the Company entitled to attend and vote at the meeting convened by the above notice is entitled to appoint another person as his proxy to attend and vote instead of him. A proxy need not be a shareholder of the Company.

2. for identification purpose only

3. 20 -

NOTICE OF EXTRAORDINARY GENERAL mEETING

1. To be valid, a form of proxy and the power of attorney or other authority, if any, under which it is signed or a certified copy of such power or authority must be deposited at the Company’s branch share registrar in Hong Kong, Tricor Standard Limited, 26th Floor, Tesbury Centre 28 Queen’s Road East, Wan Chai, Hong Kong, not less than 48 hours before the time appointed for the holding of the meeting or any adjournment thereof.

2. Delivery of an instrument appointing a proxy shall not preclude a shareholder 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.

3. As at the date of this notice of EGM, the Board comprises two executive Directors namely Ms. Siu York Chee and Mr. Leung Kwok Kui; and three independent non-executive Directors namely Mr. Hung Yau Keung Anckes, Dr. Siu Yim Kwan, Sidney and Mr. Tsui Pui Hung, Walter.

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