XIAMEN YAN PALACE BIOENGINEERING CO., LTD. — Proxy Solicitation & Information Statement 2005

Jun 8, 2005

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

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

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

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(Incorporated in Bermuda with limited liability)

(Stock Code: 643)

DISCLOSEABLE AND CONNECTED TRANSACTION DEEMED DISPOSAL BY VIRTUE OF THE DILUTION OF SPL’S INTEREST IN SWHT

Independent Financial Adviser to the Independent Board Committee and the Shareholders

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G.K. GOH SECURITIES (H.K.) LIMITED

A letter from the Board is set out on pages 3 to 7 of this circular and a letter from the Independent Board Committee containing its recommendation to the Shareholders is set out on page 8 of this circular. A letter from the Independent Financial Adviser containing its advice to the Independent Board Committee and the Shareholders is set out on pages 9 to 11 of this circular.

A notice convening the Special General Meeting to be held on 24th June, 2005 at 10:00 a.m. at 1301, 13th Floor, BEA Tower, Millennium City 5, 418 Kwun Tong Road, Kwun Tong, Kowloon, Hong Kong is set out on pages 16 and 17 of this circular. A proxy form for use by the Shareholders at the Special General Meeting is also enclosed. Whether or not you intend to attend and vote at the Special General Meeting in person, you are requested to complete the enclosed proxy form in accordance with the instructions printed thereon and return the same to the branch share registrar of the Company in Hong Kong, Abacus Share Registrars Limited at G/F, Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong, as soon as practicable but in any event, not less than 48 hours before the time appointed for holding the Special General Meeting or adjourned meeting or, in the case of a poll taken subsequently to the date of the Special General Meeting or adjourned meeting, not less than 24 hours before the time appointed for the taking of the poll. Such proxy form for use at the Special General Meeting is also published on the website of the Stock Exchange (www.hkex.com.hk). Completion and return of the proxy form will not preclude you from attending and voting in person at the Special General Meeting should you so wish.

3rd June, 2005

CONTENTS

		Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1
Letter from the Board
1.	Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
2.	The Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
3.	Listing Rules Implications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
4.	Reason for the Disposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
5.	General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
6.	Special General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
7.	Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Letter from the Independent Board Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		8
Letter from the Independent Financial Adviser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		9
Appendix	– General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12
Notice of	Special General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	16

DEFINITIONS

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

• “Agreement”

the conditional agreement entered into between SPL and SDWQ dated 18th May, 2005 in connection with, among others, the increase in the registered capital of SWHT

• “Board”

the board of Directors

• “Company”

Carry Wealth Holdings Limited, a company incorporated in Bermuda with limited liability and the shares of which are listed on the main board of the Stock Exchange

• “Disposal” the deemed disposal of interest in SWHT by SPL upon completion of the Agreement

• “Director(s)”

the director(s) of the Company

• “Group” the Company and its subsidiaries

• “Hong Kong”

the Hong Kong Special Administrative Region of the PRC

• “Independent Board Committee”

• the independent board committee of the Company comprising the independent non-executive Directors which is formed to advise the Shareholders on the terms of the Agreement and the Disposal

• “Independent Financial Adviser”

• G.K. Goh Securities (H.K.) Limited, a licensed corporation under the SFO to conduct types 1 (dealing in securities), 4 (advising on securities) and 6 (advising on corporate finance) regulated activities and the independent financial adviser to the Independent Board Committee and the Shareholders on the terms of the Agreement and the Disposal

• “Latest Practicable Date”

• 3rd June, 2005, being the latest practicable date prior to the printing of this circular for the purpose of ascertaining certain information contained herein

• “Listing Rules”

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

• “PRC”

the People’s Republic of China

• “Raw Materials Agreement”

the Supply of Products, Raw Materials and Processing Services Agreement entered into between SDWQ and WQT on 25th August, 2003, details of which have been set out in the circular of the Company dated 7th April, 2004

• “SFO”

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

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DEFINITIONS

• “Special General Meeting” the special general meeting of the Company to be convened for the Shareholders to consider and, if thought fit, approve the Agreement in relation to the Disposal or any adjournment thereof

• “SDWQ” �� ! " # $ % & ' ( ) (Shandong Weiqiao Chuangye Group Company Limited), a limited liability company established under the laws of the PRC and a substantial shareholder of SWHT

• “SWHT” �� !"#$%&'()*+ (ShanDong WeiQiao HengFu Textile Limited), a sino-foreign equity joint venture established under the laws of the PRC and an indirect subsidiary of the Company

• “Shareholders” shareholders of the Company “SPL” Sino Precision Limited, a company incorporated in the British Virgin Islands with limited liability and an indirect subsidiary of the Company

• “Stock Exchange” The Stock Exchange of Hong Kong Limited “substantial shareholder” has the meaning ascribed to it under the Listing Rules “Supply Agreements” Electricity and Steam Supply Agreement, Water Supply Agreement and Waste Water Treatment Service Agreement all dated 5th March, 2004, details of which have been set out in the circular of the Company dated 7th April, 2004

• “WQT” �� !"#$%&' (Weiqiao Textile Company Limited), a joint stock limited company established in the PRC, the H shares of which are listed on the Stock Exchange and a subsidiary of SDWQ

• “Written Undertaking” the written undertaking signed by SDWQ on 5th March, 2004, details of which have been set out in the circular of the Company dated 7th April, 2004

• “HK$” Hong Kong dollar, the lawful currency of Hong Kong “RMB” Renminbi, the lawful currency of the PRC “US$” United States dollar, the lawful currency of the United States of America

In this circular, amounts in RMB have been translated into HK$ at RMB1.06 = HK$1.00.

In this circular, amounts in US$ have been translated into HK$ at US$1 = HK$7.8.

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LETTER FROM THE BOARD

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(Incorporated in Bermuda with limited liability)

(Stock Code: 643)

Executive Directors: Rusli Hendrawan (Chairman) Lee Sheng Kuang, James (Managing Director) Oey Tjie Ho Tang Chak Lam, Charlie

Registered Office: Clarendon House 2 Church Street Hamilton HM11 Bermuda

Independent Non-Executive Directors: Cheung Kwok Ming, Raymond Kwok Lam Kwong, Larry, J.P. Lau Siu Ki, Kevin

Principal Place of Business: 1301, 13th Floor, BEA Tower, Millennium City 5 418 Kwun Tong Road Kwun Tong Kowloon Hong Kong

3rd June, 2005

To the Shareholders

Dear Sir or Madam,

DISCLOSEABLE AND CONNECTED TRANSACTION DEEMED DISPOSAL BY VIRTUE OF THE DILUTION OF SPL’S INTEREST IN SWHT

1. INTRODUCTION

Reference is made to the announcement of the Company dated 19th May, 2005.

On 18th May, 2005, SPL, an indirect subsidiary of the Company, and SDWQ entered into the Agreement pursuant to which, inter alia, the parties agreed that the registered capital of SWHT will be increased from US$8,250,000 (approximately HK$64,350,000) to US$12,375,000 (approximately HK$96,525,000) and that the additional registered capital will be solely contributed by SDWQ. Upon the increase in the registered capital of SWHT becoming effective, SWHT, which is currently owned as to 60% by SPL and as to 40% by SDWQ, will be owned as to 40% by SPL and as to 60% by SDWQ. Such dilution of interest is treated as a deemed disposal by the Company of an interest in SWHT under Rule 14.29 of the Listing Rules.

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LETTER FROM THE BOARD

SDWQ is a substantial shareholder of SWHT, which is currently an indirect subsidiary of the Company. SDWQ is regarded as a connected person of the Company under Rule 14A.11(1) of the Listing Rules. Accordingly, the Agreement and the related transaction would constitute connected transaction for the Company under the Listing Rules. The Disposal will be subject to the reporting, announcement and shareholders’ approval requirements under Rule 14A.17 of the Listing Rules. The Disposal would also constitute a discloseable transaction for the Company under Rule 14.06(2) of the Listing Rules.

The Independent Board Committee has been formed to advise the Shareholders on the terms of the Agreement and the Disposal.

The Independent Financial Adviser, G.K. Goh Securities (H.K.) Limited, has been appointed to advise the Independent Board Committee and the Shareholders on the terms of the Agreement and the Disposal.

The purpose of this circular is:

• (i) to provide the Shareholders with details of the Agreement and the Disposal;

• (ii) to set out the opinion of the Independent Financial Adviser in respect of the terms of the Agreement and the Disposal;

• (iii) to set out the recommendation of the Independent Board Committee in respect of the terms of the Agreement and the Disposal; and

• (iv) to give you the notice of the Special General Meeting to consider and, if thought fit, to approve the Agreement and the Disposal.

2. THE AGREEMENT

Date : 18th May, 2005 Parties : (1) SDWQ (2) SPL, an indirect subsidiary of the Company Subject matter : The parties agreed that the registered capital of SWHT will be increased from US$8,250,000 to US$12,375,000 and that the additional registered capital will be solely contributed by SDWQ in cash within 4 months upon the date of issue of the new business licence of SWHT.

Condition : The Agreement is subject to the obtaining of all necessary approvals required of SPL or the Company under the applicable laws of Hong Kong and/or the Listing Rules (if any). The necessary approval will be the approval by the Shareholders at the Special General Meeting.

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LETTER FROM THE BOARD

Other material term

: The board of directors of SWHT, which currently consists of 5 directors and 2 of whom were nominated by SDWQ and the remaining 3 were nominated by SPL, will consist of 5 directors, 3 of whom will be nominated by SDWQ and other 2 directors will be nominated by SPL.

3. LISTING RULES IMPLICATIONS

SDWQ, which does not hold any shares in the Company, is a substantial shareholder of SWHT, an indirect subsidiary of the Company. Under Rule 14A.11(1) of the Listing Rules, SDWQ is regarded as a connected person of the Company. Accordingly, transactions between SPL and SDWQ would constitute connected transactions for the Company under the Listing Rules. The Disposal will be subject to the reporting, announcement and shareholders’ approval requirements under Rule 14A.17 of the Listing Rules. As SDWQ is only connected by virtue of its interest in SWHT, no Shareholder is required to abstain from voting at the Special General Meeting. Upon the increase in the registered capital of SWHT becoming effective, SWHT, which is currently owned as to 60% by SPL and as to 40% by SDWQ, will be owned as to 40% by SPL and as to 60% by SDWQ. The dilution of interest is treated as a deemed disposal by the Company of an interest in SWHT under Rule 14.29 of the Listing Rules. Following the Disposal, SWHT will cease to be a subsidiary of the Company and will become an associated company of the Company. It is the intention of SPL and the Company to retain their existing shareholding interests in SWHT. From the Disposal, the deemed gain, which will be explained in the below, is approximately HK$969,000 and the net assets of the Group will be increased by approximately HK$969,000 correspondingly. The Disposal would also constitute a discloseable transaction for the Company under Rule 14.06(2) of the Listing Rules.

4. REASON FOR THE DISPOSAL

The Group is principally engaged in the manufacturing of apparel products including knit tops and woven bottoms for internationally renowned brand names.

SDWQ is principally engaged in textile, electric power supply, aluminium and steel business.

SWHT is principally engaged in the knitting, dyeing and finishing of knitted fabrics.

For the period from 12th January, 2004 (date of establishment) to 31st December, 2004, SWHT recorded a net loss of RMB3,298,000 (approximately HK$3,111,000) and its net asset value was RMB64,942,000 (approximately HK$61,266,000) as at 31st December, 2004 according to SWHT’s audited accounts for the period ended 31st December, 2004. Based on SWHT’s unaudited management accounts for the period from 1st January, 2005 to 30th April, 2005, SWHT recorded a net loss of RMB1,865,000 (approximately HK$1,759,000) and its net asset value was RMB63,077,000 (approximately HK$59,507,000) as at 30th April, 2005. The net asset value of the 20% interest in SWHT which the Company is deemed to dispose of is approximately RMB12,615,000 (approximately HK$11,901,000). The consideration deems to be received by the Company is US$1,650,000 (approximately HK$12,870,000), being 40% of the additional registered capital of SWHT contributed by SDWQ. Accordingly, the deemed gain is approximately HK$969,000. The audited accounts for the period ended 31st December, 2004 and the unaudited management accounts for the period from 1st January, 2005 to 30th April, 2005 of SWHT were prepared in accordance with accounting principles generally accepted in Hong Kong and comply with accounting standards issued by the Hong Kong Institute of Certified Public Accountants.

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LETTER FROM THE BOARD

It was noted that on 5th March, 2004, SWHT entered into the Supply Agreements with SDWQ. Under the Supply Agreements, SDWQ agreed to supply electricity, steam and water and provides waste water treatment service to SWHT for a term of 15 years commencing from the date of the Supply Agreements, which are automatically renewed for another 10 years upon expiry of their respective terms unless terminated by either party. On 5th March, 2004, SDWQ also signed the Written Undertaking pursuant to which SDWQ undertook with SWHT that SDWQ shall, upon SWHT’s reasonable request from time to time, request WQT (or procure its subsidiaries) to supply cotton yarn to SWHT in accordance with the terms of the Raw Materials Agreement commencing from the date of the Written Undertaking to the date of the termination of the Raw Materials Agreement. Pursuant to the Raw Materials Agreement, WQT and/or its subsidiaries agreed to supply cotton yarn to SDWQ and its subsidiaries and associates. The transactions between SWHT and SDWQ, WQT and/or its subsidiaries as aforesaid constitute continuing connected transactions for the Company under the Listing Rules and an announcement dated 16th March, 2004 and a circular dated 7th April, 2004 were issued by the Company in connection with the continuing connected transactions. In this regard, the Company has complied with all relevant reporting, announcement and shareholders’ approval requirements under the Listing Rules. Upon the additional capital injection by SDWQ, SDWQ shall become the controlling shareholder of SWHT. Given that all existing infrastructures are provided by SDWQ, the Directors believe that the change of controlling shareholder of SWHT will lead to higher managerial efficiency, which is beneficial to SWHT in long run and may improve the financial performance of SWHT. Moreover, SWHT will be provided with funding necessary for its purchase of additional machineries and working capital. The Directors are of the view that the terms of the Agreement and the Disposal are fair and reasonable so far as the Shareholders are concerned and are in the interests of the Company and the Shareholders as a whole.

Upon the completion of the Agreement, the transactions contemplated by the Supply Agreements and the Written Undertaking will no longer be continuing connected transactions under the Listing Rules.

5. GENERAL

The Independent Board Committee comprising the independent non-executive Directors has been formed to advise the Shareholders on the terms of the Agreement and the Disposal and the Independent Financial Adviser has been appointed to advise the Independent Board Committee and the Shareholders on the terms of the Agreement and the Disposal.

6. SPECIAL GENERAL MEETING

The notice convening the Special General Meeting to be held on 24th June, 2005 at 10:00 a.m. at 1301, 13th Floor, BEA Tower, Millennium City 5, 418 Kwun Tong Road, Kwun Tong, Kowloon, Hong Kong at which an ordinary resolution will be proposed to approve the Agreement and the Disposal is set out on pages 16 and 17 of this circular.

A proxy form for use by the Shareholders at the Special General Meeting is enclosed. Whether or not you intend to attend and vote at the Special General Meeting in person, you are requested to complete the enclosed proxy form in accordance with the instructions printed thereon and return the same to the branch share registrar of the Company in Hong Kong, Abacus Share Registrars Limited at G/F, Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong, as soon as practicable but in any event, not less than 48 hours before the time appointed for holding the Special General Meeting or adjourned meeting or, in the case of a poll taken subsequently to the date of the Special General Meeting or adjourned meeting, not less than 24 hours before the time appointed for the taking of the poll. Such

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LETTER FROM THE BOARD

proxy form for use at the Special General Meeting is also published on the website of the Stock Exchange (www.hkex.com.hk). Completion and return of the proxy form will not preclude you from attending and voting in person at the Special General Meeting should you so wish.

Pursuant to bye-law 66 of the Bye-laws of the Company, a resolution put to vote of a general meeting shall be decided on a show of hands unless a poll is required by the Listing Rules or is demanded by (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) the chairman of the meeting; or

• (b) at least 3 Shareholders present in person (or in the case of a Shareholder being a corporation by its duly authorised representative) or by proxy for the time being entitled to vote at the meeting; or

• (c) a Shareholder or Shareholders present in person (or in the case of a Shareholder being a corporation by its duly authorised representative) or by proxy and representing not less than one-tenth of the total voting rights of all the Shareholders having the right to vote at the meeting; or

• (d) a Shareholder or Shareholders present in person (or in the case of a Shareholder being a corporation by its duly 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.

As the transaction contemplated under the Agreement is a connected transaction, the vote of the Shareholders at the Special General Meeting will be taken by way of a poll pursuant to the Listing Rules. Since no connected person of the Company and no Shareholder has a material interest in the proposed transaction, no Shareholder is required to abstain from voting in the Special General Meeting.

7. RECOMMENDATION

Your attention is drawn to the letter from the Independent Board Committee as set out on page 8 of this circular which contains its recommendation to the Shareholders on the terms of the Agreement and the Disposal. Your attention is also drawn to the letter of advice received from the Independent Financial Adviser as set out on pages 9 to 11 of this circular which contains, amongst other matters, its advice to the Independent Board Committee and the Shareholders in relation to the terms of the Agreement and the Disposal and the principal factors and reasons considered by it in concluding its advice.

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

Yours faithfully, For and on behalf of the Board Lee Sheng Kuang, James Managing Director

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LETTER FROM THE INDEPENDENT BOARD COMMITTEE

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(Incorporated in Bermuda with limited liability)

(Stock Code: 643)

3rd June, 2005

To the Shareholders

Dear Sir or Madam,

DISCLOSEABLE AND CONNECTED TRANSACTION DEEMED DISPOSAL BY VIRTUE OF THE DILUTION OF SPL’S INTEREST IN SWHT

We refer to the circular of the Company to the Shareholders dated 3rd June, 2005 (the “Circular”), in which this letter forms part. Unless the context requires otherwise, capitalised terms used in this letter will have the same meanings as given to them in the section headed “Definitions” of the Circular.

We have been appointed by the Board as the Independent Board Committee to advise the Shareholders on whether the terms of the Agreement and the Disposal are fair and reasonable so far as the Shareholders are concerned.

We wish to draw your attention to the letter of advice from the Independent Financial Adviser as set out on pages 9 to 11 of the Circular and the letter from the Board as set out on pages 3 to 7 of the Circular.

Having considered, amongst other matters, the factors and reasons considered by, and the opinion of the Independent Financial Adviser as stated in its letter of advice, we consider that the terms of the Agreement and the Disposal are fair and reasonable so far as the Shareholders are concerned and accordingly recommend the Shareholders to vote in favour of the ordinary resolution in relation to the Agreement and the Disposal to be proposed at the Special General Meeting.

Yours faithfully,

For and on behalf of

The Independent Board Committee Cheung Kwok Ming, Raymond Kwok Lam Kwong, Larry, J.P. Lau Siu Ki, Kevin

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

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G.K. Goh Securities (H.K.) Limited

Suite 1808 Alexandra House 16-20 Chater Road Central Hong Kong

3rd June, 2005

The Independent Board Committee and the Shareholders of Carry Wealth Holdings Limited

Dear Sirs,

DISCLOSEABLE AND CONNECTED TRANSACTION

We refer to our engagement as the independent financial adviser to the Independent Board Committee and Shareholders in relation to the Agreement, details of which are contained in a circular (the “Circular”) to the Shareholders dated 3rd June, 2005, of which this letter forms part. Expressions used in this letter have the same meanings as defined in the Circular.

An independent board committee comprising Messrs. Cheung Kwok Ming, Raymond, Kwok Lam Kwong, Larry, J.P. and Lau Siu Ki, Kevin being the independent non-executive Directors, has been formed to advise the Shareholders in relation to the terms of Agreement. Any vote of the Shareholders at the Special General Meeting shall be taken by poll.

In formulating our recommendation, we have relied on the information and facts contained or referred to in the Circular. The Directors have declared in a responsibility statement set out in the Appendix to the Circular that they collectively and individually accept full responsibility for the accuracy of the information contained in the Circular. We have also assumed that the information and representations contained or referred to in the Circular were true and accurate at the time they were made and continue to be so at the date of the dispatch of the Circular. We have no reason to doubt the truth, accuracy and completeness of the information and representations provided to us by the Directors. We have also been advised by the Directors and believe that no material facts have been omitted from the Circular.

We consider that we have reviewed sufficient information to reach an informed view, to justify reliance on the accuracy of the information contained in the Circular and to provide a reasonable basis for our recommendation. We have not, however, conducted an independent verification of the information nor have we conducted any form of in-depth investigation into the businesses and affairs or the prospects of the Company or any of its respective subsidiaries or associates.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

PRINCIPAL FACTORS CONSIDERED

In arriving at our opinion in respect of the Agreement, we have considered the following principal factors and reasons:

Background and rationale

The Group is principally engaged in the manufacture of apparel products including knit tops and woven bottoms for internationally renowned brand names. SWHT is the sino-foreign joint venture set up between the Group and SDWQ in January 2004 to principally engage in knitting, dyeing and finishing of knitted fabrics for sale. SWHT is currently owned as to 60% by SPL and as to 40% by SDWQ. SDWQ is principally engaged in textile, electric power supply, aluminium and steel business.

For the period from 12th January, 2004 (date of establishment) to 31st December, 2004, SWHT recorded a net loss of RMB3,298,000 (approximately HK$3,111,000) and its net asset value was RMB64,942,000 (approximately HK$61,266,000) as at 31st December, 2004 according to its audited accounts for the period ended 31st December, 2004. Based on SWHT’s unaudited management accounts for the period from 1st January, 2005 to 30th April, 2005, SWHT recorded a net loss of RMB1,865,000 (approximately HK$1,759,000) and its net asset value was RMB63,077,000 (approximately HK$59,507,000) as at 30th April 2005. As disclosed in the letter from the Board, the audited accounts for the period ended 31st December, 2004 and the unaudited management accounts for the period from 1st January, 2005 to 30th April, 2005 of SWHT were prepared in accordance with accounting principles generally accepted in Hong Kong and comply with accounting standards issued by the Hong Kong Institute of Certified Public Accountants.

We note that following the set up of SWHT, SWHT has entered into the relevant agreements with SDWQ whereby SDWQ is now supplying cotton yarn, electricity, steam and water and provides waste water treatment service to SWHT for its operations. Given that all of the principal infrastructures of SWHT and the supply of raw materials are being provided by SDWQ, we are of the view that SDWQ, after becoming the controlling shareholder of SWHT, should be able to enhance the overall level of managerial efficiency of SWHT, as the majority of the Board of Directors of SWHT will be nominated by SDWQ. This in turn will also benefit SPL in the long term, despite becoming a 40% minority shareholder of SWHT upon completion of the Agreement. Furthermore, with the capital injection to be made by SDWQ (the “Capital Injection”), SWHT will be provided with the funding necessary for its purchase of additional machineries and for general working capital purposes. The Capital Injection together with the improvement in managerial efficiency might improve the overall financial performance of SWHT.

Having taken into account the above, we are of the view that the entering into of the Agreement is in the interests of the Company and the Shareholders as a whole.

Terms of the Agreement

Pursuant to the Agreement, SDWQ will contribute an amount of US$4,125,000 (approximately HK$32,175,000) (the “Injection Amount”) into the registered capital of SWHT, and as a result, the registered capital of SWHT will increase from US$8,250,000 (approximately HK$64,350,000) to US$12,375,000 (approximately HK$96,525,000).

– 10 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

As SWHT recorded a net loss for the year ended 31st December, 2004 of RMB3,298,000 (approximately HK$3,111,000), this renders the assessment of the basis of the Injection Amount using the price/earnings multiple inapplicable. Based on SWHT’s unaudited net asset value of RMB63,077,000 (approximately HK$59,507,000) as at 30th April, 2005, the deemed disposal of 20% attributable interests thereof amounted to approximately RMB12,615,000 (approximately HK$11,901,000). The consideration deemed to be received by SPL under the Disposal is equivalent to its 40% attributable interest in the Injection Amount of US$1,650,000 (approximately HK$12,870,000), which represents a premium of approximately HK$969,000 to SPL’s deemed disposed 20% attributable interests in SWHT’s unaudited net asset value as at 30th April, 2005. Accordingly, the Company will record a deemed gain from the Capital Injection. Despite the fact that SPL’s shareholding in SWHT will be diluted due to its nonparticipation in the Capital Injection, the amount of SPL’s 40% attributable interests in SWHT’s enlarged registered capital of US$12,375,000 will remain unchanged as those prior to completion of the Capital Injection. Hence, we are of the view that the Capital Injection will not have any material adverse impact on SPL’s attributable financial interests in SWHT.

Given the above, we consider the terms of the Agreement to be fair and reasonable so far as the Company and the Shareholders as a whole are concerned.

RECOMMENDATION

Having considered the principal factors and reasons referred to the above, we are of the view that the Agreement is in the interests of the Company and the Shareholders as a whole, and that the terms thereof are also fair and reasonable so far as the Company and the Shareholders are concerned. Accordingly, we advise the Independent Board Committee to advise the Shareholders to vote in favour of the ordinary resolution to be proposed at the Special General Meeting to approve the Agreement.

Yours faithfully, For and on behalf of G.K. GOH SECURITIES (H.K.) LIMITED Alex Lau Flavia Hung Executive Vice President Senior Vice President

– 11 –

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 herein misleading.

2. MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, the Directors are not aware of any material adverse change in the financial or trading position of the Group since 31st December, 2004, the date to which the latest published audited consolidated financial statements of the Group were made up.

3. DIRECTORS’ INTERESTS IN SHARES IN THE COMPANY

As at Latest Practicable Date, the interests of the Directors of the Company in the shares and underlying shares of the Company as recorded in the register required to be kept under section 352 of the SFO or as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers are as follows:

(a) Ordinary shares of HK$0.10 each in the Company

Name of		Number of	Percentage of
director	Capacity	ordinary shares	issued share capital
		(Note)
Mr Rusli Hendrawan	Interest of a	162,000,000	45.00
	controlled
	corporation
Mr Lee Sheng Kuang,	Interest of a	162,000,000	45.00
James	controlled
	corporation

Note: These shares were held by Respected International Limited, which was ultimately owned as to 37.50% and 45.83% by Mr Rusli Hendrawan and Mr Lee Sheng Kuang, James respectively through their respective wholly-owned companies.

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GENERAL INFORMATION

APPENDIX

(b) Derivatives to ordinary shares of HK$0.10 each in the Company

		Unlisted options	Percentage of
		(physically settled	issued share
Name of director	Capacity	equity derivatives) held	capital
Mr Rusli Hendrawan	Beneficial	8,000,000	2.22
	owner
Mr Lee Sheng Kuang,	Beneficial	8,000,000	2.22
James	owner
Mr Oey Tjie Ho	Beneficial	2,000,000	0.56
	owner
Mr Tang Chak Lam,	Beneficial	2,000,000	0.56
Charlie	owner

All the interests stated above represent long position. Save as disclosed above, as at the Latest Practicable Date, none of the Directors or chief executives of the Company had any interests or short positions in the shares, underlying shares or debentures of the Company and any of its associated corporations (within the meaning of Part XV of the SFO) which are required:

• (a) 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 he is taken or deemed to have under such provisions of SFO);

• (b) pursuant to section 352 of the SFO, to be entered in the register referred to therein; or

• (c) to have been notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers contained in the Listing Rules.

4. DIRECTORS’ INTERESTS IN ASSETS AND/OR CONTRACTS AND OTHER INTERESTS

As at the Latest Practicable Date, none of the Directors has any direct or indirect interests in any assets which have been acquired or disposed of by, or leased to, or which are proposed to be acquired or disposed of by, or leased to, the Company or any of its subsidiaries since 31st December, 2004, the date to which the latest published audited consolidated financial statements of the Group were made up.

As at the Latest Practicable Date, none of the Directors was materially interested in any contract or arrangement entered into by any member of the Group which was subsisting or arrangement and which was significant in relation to the business of the Group taken as a whole.

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GENERAL INFORMATION

APPENDIX

5. COMPETING INTEREST

As at the Latest Practicable Date, so far as the Directors are aware, none of the Directors or their respective associates (as defined in the Listing Rules) had any interest in a business which competes or likely to compete with the business of the Group.

6. SERVICE CONTRACT

As at the Latest Practicable Date, none of the Directors had entered into or proposed to enter into any service contracts 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)).

7. EXPERT’S QUALIFICATION AND CONSENT

• (a) G.K. Goh Securities (H.K.) Limited is a licensed corporation under the SFO to conduct types 1 (dealing in securities), 4 (advising on securities) and 6 (advising on corporate finance) regulated activities and the independent financial adviser to the Independent Board Committee and the Shareholders.

• (b) As at the Latest Practicable Date, the Independent Financial Adviser does not have any shareholding in any member of the Group nor any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group.

• (c) 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 appear.

• (d) The letter and recommendation given by the Independent Financial Adviser are given as of the date of this circular for incorporation herein.

• (e) The Independent Financial Adviser has no direct or indirect interest in any assets which have been acquired or disposed of by, or leased to, or which are proposed to be acquired or disposed of by, or leased to, the Company or any of its subsidiaries since 31st December, 2004, being the date to which the latest published audited consolidated accounts of the Company were made up.

8. LITIGATION

Neither the Company nor any of its subsidiaries is engaged in any litigation or claims of material importance and, so far as the Directors are aware, no litigation or claims of material importance is pending or threatened against the Company or any of its subsidiaries.

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GENERAL INFORMATION

APPENDIX

9. GENERAL

• (a) The registered office of the Company is situated at Clarendon House, 2 Church Street, Hamilton HM11, Bermuda.

• (b) The principal place of business of the Company in Hong Kong is 1301, 13th Floor, BEA Tower, Millennium City 5, 418 Kwun Tong Road, Kwun Tong, Kowloon, Hong Kong.

• (c) The branch share registrar and transfer agent of the Company in Hong Kong is Abacus Share Registrars Limited, at Ground Floor, Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong.

• (d) Mr Tang Chak Lam, Charlie, Executive Director, who is responsible for the overall financial operation of the Group, is the qualified accountant appointed pursuant to the Listing Rules. He is a certified public accountant in Hong Kong and a fellow member of both the Hong Kong Institute of Certified Public Accountants and the Association of Chartered Certified Accountants in the United Kingdom.

• (e) The secretary of the Company is Ms Lee Wai Kuen, Judy who is an associate member each of The Hong Kong Institute of Company Secretaries and the Institute of Chartered Secretaries and Administrators in the United Kingdom.

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

10. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection at the Company’s principal place of business in Hong Kong at 1301, 13th Floor, BEA Tower, Millennium City 5, 418 Kwun Tong Road, Kwun Tong, Kowloon, Hong Kong during normal business hours on any weekday (except for public holidays) up to and including 24th June, 2005:

• (a) the Agreement;

• (b) the letter of recommendation from the Independent Board Committee, the text of which is set out on page 8 of this circular;

• (c) the letter issued by the Independent Financial Adviser to the Independent Board Committee and the Shareholders, the text of which is set out on pages 9 to 11 of this circular; and

• (d) the written consent of the Independent Financial Adviser referred to in paragraph 7(c) of this appendix.

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NOTICE OF SPECIAL GENERAL MEETING

==> picture [208 x 46] intentionally omitted <==

(Incorporated in Bermuda with limited liability)

(Stock Code: 643)

NOTICE IS HEREBY GIVEN that a special general meeting of the shareholders of Carry Wealth Holdings Limited (the “Company”) will be held on 24th June, 2005 at 10:00 a.m. at 1301, 13th Floor, BEA Tower, Millennium City 5, 418 Kwun Tong Road, Kwun Tong, Kowloon, Hong Kong for the purpose of considering and, if thought fit, passing with or without modifications the following resolution as an ordinary resolution of the Company:

ORDINARY RESOLUTION

“THAT:

• (a) the agreement (the “ Agreement ”) dated 18th May, 2005 entered into between Sino Precision Limited and �� !"#$%&'() (Shandong Weiqiao Chuangye Group Company Limited) (“ SDWQ ”), a copy of which is tabled at the meeting and marked “A” and initialled by the chairman of the meeting for identification purpose, pursuant to which, inter alia, the parties agreed that the registered capital of �� !"#$%&'()*+ (ShanDong WeiQiao HengFu Textile Limited) will be increased from US$8,250,000 (approximately HK$64,350,000) to US$12,375,000 (approximately HK$96,525,000) and that the additional registered capital will be solely contributed by SDWQ, and the transaction contemplated thereunder be and is hereby approved; and

• (b) any one director of the Company, or any two directors of the Company if the affixation of the common seal is necessary, be and is/are hereby authorised for and on behalf of the Company to execute all such other documents, instruments and agreements and to do all such acts or things deemed by him/them to be incidental to, ancillary to or in connection with the matters contemplated in and completion of the Agreement.”

By order of the Board Lee Wai Kuen, Judy Company Secretary

Hong Kong, 3rd June, 2005

Principal Place of Business: 1301, 13th Floor BEA Tower Millennium City 5 418 Kwun Tong Road Kwun Tong Kowloon Hong Kong

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NOTICE OF SPECIAL GENERAL MEETING

Notes:

1. Any shareholder of the Company entitled to attend and vote at the meeting convened by the above notice is entitled to appoint one or more proxies to attend and, on a poll, vote in his stead. A proxy need not be a shareholder of the Company.

2. In order to be valid, the proxy form, together with any of attorney or other authority (if any) under which it is signed, or a notarially certified copy of such power of attorney must be deposited with the Company’s branch share registrar in Hong Kong, Abacus Share Registrars Limited at Ground Floor, Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong not less than 48 hours before the time appointed for holding the meeting or any adjourned meeting as the case may be or, in the case of a poll taken subsequently to the date of the meeting or adjourned meeting, not less than 24 hours before the time appointed for the taking of the poll.

3. The Ordinary Resolution as set out above will be determined by way of a poll.

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