XIAMEN YAN PALACE BIOENGINEERING CO., LTD. — Proxy Solicitation & Information Statement 2012

Apr 17, 2012

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 transmission to the purchaser or the transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim 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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RE-ELECTION OF DIRECTORS, GENERAL MANDATES TO ISSUE AND REPURCHASE SHARES, ADOPTION OF SHARE OPTION SCHEME AND

NOTICE OF ANNUAL GENERAL MEETING

A notice convening the annual general meeting of Carry Wealth Holdings Limited to be held on 22 May 2012 at 10:00 a.m. at 2701, 27th Floor, One Kowloon, 1 Wang Yuen Street, Kowloon Bay, Hong Kong is set out on pages 28 to 32 of this circular. A proxy form for use by the Shareholders at the annual general meeting is enclosed. If you do not intend to attend and vote at the annual general meeting in person, you are requested to complete the proxy form in accordance with the instructions printed thereon and return the same to the Company’s branch share registrar in Hong Kong, Tricor Abacus Limited at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Hong Kong as soon as practicable but in any event not less than 48 hours before the time appointed for holding the annual general meeting or adjourned meeting or, in the case of a poll taken subsequently to the date of the annual 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 annual general meeting is also published on HKExnews website (www.hkexnews.hk). Completion and return of the proxy form will not preclude you from attending and voting in person at the annual general meeting should you so wish.

18 April 2012

CONTENTS

		Page
Definitions.	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from	the Board
1.	Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
2.	Re-election of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
3.	General Mandates to Issue and Repurchase Shares . . . . . . . . . . . . . . . . . . . . . .	5
4.	Adoption of Share Option Scheme . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
5.	Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
6.	Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
7.	Responsibility Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
Appendix I	– Details of retiring directors proposed for re-election. . . . . . . . . . . . .	9
Appendix II	– Explanatory statement for the Repurchase Mandate. . . . . . . . . . . . .	16
Appendix III – Principal terms of the Share Option Scheme . . . . . . . . . . . . . . . . . . . .		19
Notice of Annual General Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		28

DEFINITIONS

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

“Annual General Meeting” the annual general meeting of the Company to be held on 22 May 2012 at 10:00 a.m. at 2701, 27th Floor, One Kowloon, 1 Wang Yuen Street, Kowloon Bay, Hong Kong or any adjournment thereof “associate” has the meaning ascribed thereto under the Listing Rules “Board” the board of Directors “Bye-laws” the existing bye-laws of the Company “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 “connected person” has the meaning ascribed thereto under the Listing Rules “Director(s)” the director(s) of the Company “Group” the Company and its subsidiaries “Hong Kong” the Hong Kong Special Administrative Region of the People’s Republic of China “Latest Practicable Date” 12 April 2012, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained herein “Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange “Old Share Option Scheme” the share option scheme of the Company adopted on 8 May 2002 and to be expired on 7 May 2012

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DEFINITIONS

“Option”	an option to subscribe for Shares pursuant to the Share
	Option Scheme
“Participants”	any person being an employee, director (including
	executive director, non-executive director or independent
	non-executive director), consultant, representative,
	professional adviser, customer, business partner, joint
	venture partner, strategic partner, landlord or tenant
	of, or any supplier or provider of goods or services to,
	the Company or any Subsidiary, and any trustee(s) of a
	discretionary trust of which one or more beneficiaries
	belong to any of the abovementioned category(ies) of
	persons
“SFO”	the Securities and Futures Ordinance (Chapter 571 of the
	Laws of Hong Kong)
“Share(s)”	ordinary share(s) of HK$0.10 each in the share capital of
	the Company
“Shareholder(s)”	the holder(s) of the Share(s)
“Share Option Scheme”	the new share option scheme of the Company proposed to
	be adopted at the Annual General Meeting, the principal
	terms of which are set out in Appendix III to this circular
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Subsidiary”	a company which is for the time being and from time to
	time a subsidiary (within the meaning of Section 2 of the
	Companies Ordinance or Section 86 of the Companies
	Act) of the Company whether incorporated in Hong Kong,
	Bermuda or elsewhere
“Takeovers Code”	the Code on Takeovers and Mergers approved by the
	Securities and Futures Commission
“HK$”	Hong Kong dollar, the lawful currency of Hong Kong
“%”	per cent

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LETTER FROM THE BOARD

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Executive Directors: Mr Li Haifeng (Chairman) Mr Lee Sheng Kuang, James (Managing Director) Mr Huang Xuxian, Flynn Mr Tang Chak Lam, Charlie Mr Xiao Yong

Independent Non-Executive Directors: Mr Chen Zhongfa Mr Yau Wing Yiu Mr Zhang Feng

Registered Office: Clarendon House 2 Church Street Hamilton HM 11 Bermuda

Principal Place of Business: 2701, 27th Floor One Kowloon 1 Wang Yuen Street Kowloon Bay Hong Kong 18 April 2012

To the Shareholders

Dear Sir or Madam,

RE-ELECTION OF DIRECTORS, GENERAL MANDATES TO ISSUE AND REPURCHASE SHARES, ADOPTION OF SHARE OPTION SCHEME AND NOTICE OF ANNUAL GENERAL MEETING

1. INTRODUCTION

The purpose of this circular is to provide the Shareholders with information regarding the resolutions to be proposed at the Annual General Meeting relating to (i) the re-election of the Directors; (ii) the grant of general mandates to issue and repurchase Shares; and (iii) the adoption of the Share Option Scheme. A notice of the Annual General Meeting is set out on pages 28 to 32 of this circular.

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LETTER FROM THE BOARD

2. RE-ELECTION OF DIRECTORS

The Board currently consists of eight Directors, namely Mr Li Haifeng (“Mr Li”), Mr Lee Sheng Kuang, James (“Mr Lee”), Mr Huang Xuxian, Flynn (“Mr Huang”), Mr Tang Chak Lam, Charlie and Mr Xiao Yong (“Mr Xiao”) being the executive Directors; and Mr Chen Zhongfa (“Mr Chen”), Mr Yau Wing Yiu (“Mr Yau”) and Mr Zhang Feng (“Mr Zhang”), being the independent non-executive Directors.

Pursuant to Bye-law 86(2) of the Bye-laws, the Directors shall have the power from time to time and at any time to appoint any person as a director either to fill a casual vacancy in the Board or, subject to authorisation by the Members in general meeting, as an addition to the existing Board but so that the number of Directors so appointed shall not exceed any maximum number determined from time to time by the Members in general meeting. Any Director so appointed by the Board shall hold office only until the next following annual general meeting of the Company and shall then be eligible for re-election at that meeting.

However, to comply with the Corporate Governance Code of the Listing Rules, the Board voluntarily specified that any Director so appointed by the Board shall hold office only until the first general meeting of the Company and shall be eligible for re-election at that meeting.

Pursuant to the above, Mr Li, Mr Huang, Mr Xiao, Mr Chen, Mr Yau and Mr Zhang shall retire from office at the Annual General Meeting and, being eligible, will offer themselves for reelection.

Pursuant to Bye-law 87 of the Bye-laws, at each annual general meeting of the Company, one-third of the Directors for the time being (or, if their number is not three or a multiple of three, then the number nearest to but not less than one-third) shall retire from office by rotation. Every Director, including those appointed for a specific term, shall be subject to retirement by rotation at least once every three years. A retiring Director shall be eligible for re-election. The Directors to retire by rotation shall include (so far as necessary to ascertain the number of directors to retire by rotation) any Director who wishes to retire and not to offer himself for re-election. Any further Directors so to retire shall be those of the other Directors subject to retirement by rotation who have been longest in office since their last re-election or appointment and so that as between persons who became or were last re-elected Directors on the same day those to retire shall (unless they otherwise agree among themselves) be determined by lot. Any Director appointed pursuant to Bye-law 86(2) shall not be taken into account in determining which particular Directors or the number of Directors who are to retire by rotation.

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LETTER FROM THE BOARD

Pursuant to Bye-law 87 of the Bye-laws, Mr Lee shall retire from office by rotation at the Annual General Meeting and, being eligible, will offer himself for re-election.

Mr Chen, Mr Yau and Mr Zhang continue to contribute effectively and are committed to their roles. Accordingly, the Board recommended Mr Chen, Mr Yau and Mr Zhang to stand for election as Directors at the Annual General Meeting.

The Board assessed and reviewed the individual Director’s annual confirmation of independence based on the independence criteria as set out in Rule 3.13 of the Listing Rules and affirmed that all independent non-executive Directors including Mr Chen, Mr Yau and Mr Zhang, remained independent.

Details of the retiring Directors as proposed to be re-elected at the Annual General Meeting are set out in Appendix I to this circular.

3. GENERAL MANDATES TO ISSUE AND REPURCHASE SHARES

At the Annual General Meeting, ordinary resolutions will be proposed to grant the general mandates to the Directors (i) to allot, issue and otherwise deal with Shares not exceeding in aggregate of 20% of the aggregate nominal amount of the issued share capital of the Company as at the date of passing such resolution (based on the information available as at the Latest Practicable Date, the maximum number of Shares to be issued will be 89,234,800; (ii) to repurchase Shares which does not exceed 10% of the aggregate nominal amount of the issued share capital of the Company as at the date of passing such resolution; and (iii) to add to the general mandate so granted to the Directors under item (i) to issue any Shares representing the aggregate nominal amount of the Shares repurchased by the Company, provided that such amount shall not exceed 10% of the aggregate nominal amount of the issued share capital of the Company as at the date of passing such resolution.

The mandates to issue and repurchase Shares granted at the annual general meeting of the Company held on 24 May 2011 will lapse at (i) the conclusion of the Annual General Meeting; (ii) the expiration of the period within which the next annual general meeting of the Company is required by law to be held; and (iii) the revocation or variation by ordinary resolution of Shareholders in general meeting, whichever is the earliest. In this regard, resolutions nos. 4 to 6 set out in the notice of the Annual General Meeting will be proposed at the Annual General Meeting to renew the mandates. With reference to these resolutions, the Directors wish to state that they have no present intention to issue and repurchase any Shares pursuant to the mandates.

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LETTER FROM THE BOARD

An explanatory statement, required by the Listing Rules to be sent to Shareholders in connection with the proposed general mandate to repurchase the Shares, is set out in Appendix II to this circular. The explanatory statement contains all the information reasonably necessary to enable the Shareholders to make an informed decision on whether to vote for or against the relevant resolution.

4. ADOPTION OF SHARE OPTION SCHEME

The Old Share Option Scheme was adopted by the Company on 8 May 2002 and has a term of 10 years. The Old Share Option Scheme will expire on 7 May 2012. As at the Latest Practicable Date, the Company had no outstanding share options pursuant to the Old Share Option Scheme.

As the Old Share Option Scheme will expire, the Directors proposed to adopt the Share Option Scheme, the principal terms of which are set out in Appendix III to this circular. Adoption of the Share Option Scheme is conditional upon (i) the approval of the adoption of the Share Option Scheme by the Shareholders at the Annual General Meeting; and (ii) the Stock Exchange granting approval for the listing of, and permission to deal in, the Shares which may be issued upon the exercise of the Options which may be granted under the Share Option Scheme.

The purpose of the Share Option Scheme is to enable the Company to grant Options to selected eligible participants as incentives or rewards for their contribution or potential contribution to the Group. The Directors consider that the Share Option Scheme will provide the participants with the opportunity to acquire proprietary interests in the Company and will encourage such participants to work towards enhancing the value of the Company and the Shares for the benefit of the Company and the Shareholders as a whole.

As at the Latest Practicable Date, the Company had 446,174,000 shares in issue. Assuming that no further Shares will be issued or repurchased prior to the date of the Annual General Meeting, the total number of Shares which may be issued upon the exercise of all of the Options which may be granted under the Share Option Scheme on the date of its adoption would be 44,617,400 Shares, representing 10% of the total number of Shares in issue as at the date of the adoption of the Share Option Scheme.

The Share Option Scheme does not specify a minimum period for which an Option must be held nor a performance target which must be achieved before an Option can be exercised. However, the rules of the Share Option Scheme provide that the Board may determine, at its sole discretion, such terms and conditions on the grant of an Option. This determination may vary on a case by case basis but no such terms will be imposed the result of which will be to the advantage of the participant. The basis for the determination of the subscription price is specified in the rules of the Share Option Scheme.

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LETTER FROM THE BOARD

As at the Latest Practicable Date, no Options have been granted under the Share Option Scheme and thus the Company considers that it would not be appropriate to disclose in this circular the value of the Options that may be granted under the proposed Share Option Scheme as if they have been granted as at the Latest Practicable Date, as various determining factors for the calculation of such value cannot be reasonably ascertained at this stage. It would not be meaningful and may even be misleading to the Shareholders if the value of the Options is calculated based on a set of speculative assumptions. However, the Company will disclose the value of any Options granted during a financial year or a particular period in its annual report and interim report based on the Black-Scholes option pricing model, the binomial model or a generally accepted comparable methodology.

An application will be made to the Stock Exchange for the approval of the listing of, and permission to deal in, the Shares which may fall to be issued upon the exercise of the Options which may be granted under the Share Option Scheme.

A copy of the Share Option Scheme will be available for inspection at the principal place of business of the Company at 2701, 27th Floor, One Kowloon, 1 Wang Yuen Street, Kowloon Bay, Hong Kong during normal business hours up to and including the date of the Annual General Meeting. A copy of the Share Option Scheme will also be available for inspection at the Annual General Meeting.

5. ANNUAL GENERAL MEETING

A notice of the Annual General Meeting is set out on pages 28 to 32 of this circular. At the Annual General Meeting, resolutions will be proposed to approve, inter alia, the re-election of the Directors and the grant of general mandates to issue and repurchase Shares.

A proxy form for the Annual General Meeting is enclosed. If you do not intend to attend and vote at the Annual General Meeting in person, you are requested to complete the proxy form in accordance with the instructions printed thereon and return the same to the Company’s branch share registrar in Hong Kong, Tricor Abacus Limited at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Hong Kong as soon as practicable but in any event not less than 48 hours before the time appointed for holding the Annual General Meeting or, in the case of a poll taken subsequently to the date of the Annual General Meeting, not less than 24 hours before the time appointed for the taking of the poll. Such proxy form for use at the Annual General Meeting is also published on HKExnews website (www.hkexnews.hk). Completion and return of the proxy form will not preclude you from attending and voting in person at the Annual General Meeting should you so wish.

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LETTER FROM THE BOARD

Pursuant to Rule 13.39 of the Listing Rules, all votes of the Shareholders at the general meetings must be taken by poll. The Chairman of the meeting will therefore demand a poll on each of the resolutions set out in the notice of the Annual General Meeting pursuant to Bye-law 66 of the Bye-laws.

After the closure of the Annual General Meeting, the poll results will be published on the Company’s website (www.carrywealth.com) and HKExnews website (www.hkexnews.hk).

6. RECOMMENDATION

The Directors are of the opinion that the proposals for the re-election of the Directors, the grant of general mandates to issue and repurchase Shares and the adoption of the Share Option Scheme are in the best interests of the Company and the Shareholders as a whole. Accordingly, the Directors recommend the Shareholders to vote in favour of the relevant resolutions to be proposed at the Annual General Meeting.

7. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this document is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this document misleading.

Yours faithfully,

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

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APPENDIX I

DETAILS OF RETIRING DIRECTORS PROPOSED FOR RE-ELECTION

RETIRING DIRECTORS PROPOSED FOR RE-ELECTION

Mr Li , aged 41, was appointed as the Chairman and an executive director in June 2011 and is the Chairman of the Nomination Committee of the Company. He is also the sole director of Dragon Peace Limited (“DPL”), a substantial shareholder of the Company. Mr Li is responsible for overall corporate and business development, and strategic direction of the Group and provides leadership for the Board of the Company. Mr Li has extensive experience in information technology and waste water treatment industries. He is currently an executive director and a vice president of Beijing Enterprises Water Group Limited (“BEWG”) (a company listed on the main board of the Stock Exchange) and the chairman of the Supervisory Committee of BEWG Environmental Group Co., Ltd (formerly known as Beijing Enterprises Z.K.C. Environmental Co., Ltd.), a wholly owned subsidiary of BEWG, and is mainly responsible for both the PRC and overseas water markets. In addition, Mr Li is also an independent non-executive director of Simsen International Corporation Limited, a company listed on the main board of the Stock Exchange. Mr Li holds a Bachelor degree in Law from the Faculty of Law in Peking University in 1992.

On 7 June 2011, Mr Li was appointed an executive director with no fixed term of service with the Company. On 22 August 2011, Mr Li entered into a service contract with the Company for a term of three years commenced from 7 June 2011, which may be terminated by either party thereto giving to the other party notice in writing with a notice period of not less than 3 months (subject to retirement by rotation and re-election in accordance with the Bye-laws). Mr Li was entitled to have the director’s emoluments amounted to HK$598,000 for the year ended 31 December 2011 and all of his emoluments have been covered by his service contract. The emoluments of Mr Li are determined with reference to his duties and responsibilities with the Company, the Company’s performance and the prevailing market condition, and in accordance with the remuneration policy adopted by the Remuneration Committee of the Company.

As at the Latest Practicable Date, according to the register maintained by the Company pursuant to section 352 of the SFO, Mr Li was deemed to be interested in 236,717,000 Shares, representing approximately 53.05% of the issued share capital of the Company by virtue of his interests in DPL, a substantial Shareholder, which was wholly owned by Mr Li.

Save as disclosed above, Mr Li does not have any relationship with any directors, senior management or substantial or controlling shareholders of the Company.

In relation to the re-election of Mr Li, there are no other matters that need to be brought to the attention of the Shareholders, and there is no information to be disclosed pursuant to any of the requirements of the provisions under paragraphs 13.51(2)(h) to 13.51(2)(v) of the Listing Rules.

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APPENDIX I

DETAILS OF RETIRING DIRECTORS PROPOSED FOR RE-ELECTION

Mr Lee , aged 65, is a founder of the Group and the Managing Director of the Company. Mr Lee is responsible for all day-to-day corporate management matters. He is also responsible for planning and developing the Group’s strategy. Mr Lee has over thirty years of experience in the manufacture and distribution of apparel products. Save as disclosed above, Mr Lee did not hold any other directorships in listed public companies in the last three years.

Mr Lee has entered into a service contract with the Company for a period of three years commenced from 1 January 2012 which may be terminated by either party thereto giving to the other party notice in writing with a notice period of not less than 3 months (subject to retirement by rotation and re-election in accordance with the Bye-laws). Mr Lee was entitled to have the director’s emoluments amounted to approximately HK$4,414,000 for the year ended 31 December 2011 and all of his emoluments have been covered by his service contract. The emoluments of Mr Lee are determined with reference to his experience, duties and responsibilities with the Company, the Company’s performance and the prevailing market condition, and in accordance with the remuneration policy adopted by the Remuneration Committee of the Company.

As at the Latest Practicable Date, Mr Lee did not have interests in any Shares within the meaning of Part XV of the SFO.

Mr Lee does not have any relationship with any directors, senior management or substantial or controlling shareholders of the Company.

In relation to the re-election of Mr Lee, there are no other matters that need to be brought to the attention of the Shareholders, and there is no information to be disclosed pursuant to any of the requirements of the provisions under paragraphs 13.51(2)(h) to 13.51(2)(v) of the Listing Rules.

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APPENDIX I

DETAILS OF RETIRING DIRECTORS PROPOSED FOR RE-ELECTION

Mr Huang , aged 42, was appointed as an executive director in June 2011. Mr Huang is responsible for day-to-day corporate management matters including business development and administration of the Group. He has extensive experience in taxation, accounting and corporate finance. Mr Huang is currently serving as an executive vice president of Paragon Lakewood Group, where he specializes in investment and business development. Mr Huang also serves as a director of Jih Sun Financial Holding Co., Ltd., a company listed on the Taiwan Stock Exchange Corporation. Mr Huang formerly served as the chairman of the board and an executive director of Shang Hua Holdings Limited (currently known as Beijing Enterprises Water Group Limited), a company listed on the main board of the Stock Exchange. Mr Huang also served as a director of the board of First Choice Bank, of which he was one of the co-founders. Mr Huang is a member of the American Institute of Certified Public Accountants and Washington CPA Society. He graduated from University of Washington with a bachelor degree of arts in business administration/accounting in 1993. Mr Huang also holds an International Master of Business Administration from the University of Chicago Booth School of Business.

On 7 June 2011, Mr Huang was appointed an executive director with no fixed term of service with the Company. On 22 August 2011, Mr Huang entered into a service contract with the Company for a term of three years commenced from 7 June 2011, which may be terminated by either party thereto giving to the other party notice in writing with a notice period of not less than 3 months (subject to retirement by rotation and re-election in accordance with the Bye-laws). Mr Huang was entitled to have the director’s emoluments amounted to HK$444,000 for the year ended 31 December 2011 and all of his emoluments have been covered by his service contract. The emoluments of Mr Huang are determined with reference to his duties and responsibilities with the Company, the Company’s performance and the prevailing market condition, and in accordance with the remuneration policy adopted by the Remuneration Committee of the Company.

As at the Latest Practicable Date, Mr Huang did not have interests in any Shares within the meaning of Part XV of the SFO.

Mr Huang does not have any relationship with any directors, senior management or substantial or controlling shareholders of the Company.

In relation to the re-election of Mr Huang, there are no other matters that need to be brought to the attention of the Shareholders, and there is no information to be disclosed pursuant to any of the requirements of the provisions under paragraphs 13.51(2)(h) to 13.51(2)(v) of the Listing Rules.

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APPENDIX I

DETAILS OF RETIRING DIRECTORS PROPOSED FOR RE-ELECTION

Mr Xiao , aged 42, was appointed as an executive director in June 2011. Mr Xiao is responsible for business development and exploring business opportunities with growth potential in the PRC for the Group. He has extensive experience in petrochemical and telecommunications industries. He served as the chairman of Shanghai Ace Co., Ltd. (“Shanghai Ace”), a company listed on the Shanghai Stock Exchange, during the period from May 2008 to May 2011. Prior to joining Shanghai Ace, Mr Xiao was a deputy general manager of 天天科技有限公司, a company principally engaged in research and development of electronics and telecommunications related products as well as network engineering investment management. Mr Xiao graduated from Shanghai University of Electric Power with a bachelor degree in business management in 1990. He also holds a master degree in business management from Zhejiang University.

On 7 June 2011, Mr Xiao was appointed an executive director with no fixed term of service with the Company. On 22 August 2011, Mr Xiao entered into a service contract with the Company for a term of three years commenced from 7 June 2011, which may be terminated by either party thereto giving to the other party notice in writing with a notice period of not less than 3 months (subject to retirement by rotation and re-election in accordance with the Bye-laws). Mr Xiao was entitled to have the director’s emoluments amounted to HK$282,000 for the year ended 31 December 2011 and all of his emoluments have been covered by his service contract. The emoluments of Mr Xiao are determined with reference to his duties and responsibilities with the Company, the Company’s performance and the prevailing market condition, and in accordance with the remuneration policy adopted by the Remuneration Committee of the Company.

As at the Latest Practicable Date, Mr Xiao did not have interests in any Shares within the meaning of Part XV of the SFO.

Mr Xiao does not have any relationship with any directors, senior management or substantial or controlling shareholders of the Company.

In relation to the re-election of Mr Xiao, there are no other matters that need to be brought to the attention of the Shareholders, and there is no information to be disclosed pursuant to any of the requirements of the provisions under paragraphs 13.51(2)(h) to 13.51(2)(v) of the Listing Rules.

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APPENDIX I

DETAILS OF RETIRING DIRECTORS PROPOSED FOR RE-ELECTION

Mr Chen , aged 62, was appointed as an independent non-executive director in September 2011 and is the Chairman of the Remuneration Committee, a member of the Audit Committee and Nomination Committee of the Company. Mr Chen has extensive experience in enterprise management. During March 1995 to June 2001, Mr Chen had been the vice general manager and general manager of Shanghai Tourism Investment and Development Group Company in the PRC. From July 2001 to March 2010, Mr Chen served as the chief economist, CFO, a director and the vice general manager of China Landed Property Development Group Company in the PRC. Since April 2011, Mr Chen is the vice chairman of the China Commerce Association for Senior Citizens and a senior consultant to the Chinese Overseas Students Development Fund. He is currently an independent non-executive director of China Information Technology Development Limited whose shares are listed on the Growth Enterprise Market of the Stock Exchange. Mr Chen obtained a master degree in International Enterprise Management from the Post Graduate School of the Shanghai Finance and Economic University in 1999. Since February 2009, Mr Chen is a Fellow Member, Chartered Financial Practitioner of the Asia Pacific Financial Services Association.

Mr Chen has entered into a service contract with the Company for a term of three years commenced from 9 September 2011, which may be terminated by either party thereto giving to the other party notice in writing with a notice period of not less than 3 months (subject to retirement by rotation and re-election in accordance with the Bye-laws). Mr Chen was entitled to have the director’s emoluments amounted to HK$37,000 for the year ended 31 December 2011 and all of his emoluments have been covered by his service contract. The emoluments of Mr Chen are determined with reference to his duties and responsibilities with the Company, the Company’s performance and the prevailing market condition, and in accordance with the remuneration policy adopted by the Remuneration Committee of the Company.

As at the Latest Practicable Date, Mr Chen did not have interests in any Shares within the meaning of Part XV of the SFO.

Mr Chen does not have any relationship with any directors, senior management or substantial or controlling shareholders of the Company.

In relation to the re-election of Mr Chen, there are no other matters that need to be brought to the attention of the Shareholders, and there is no information to be disclosed pursuant to any of the requirements of the provisions under paragraphs 13.51(2)(h) to 13.51(2)(v) of the Listing Rules.

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APPENDIX I

DETAILS OF RETIRING DIRECTORS PROPOSED FOR RE-ELECTION

Mr Yau , aged 45, was appointed as an independent non-executive director in July 2011 and is the Chairman of the Audit Committee, a member of the Remuneration Committee and Nomination Committee of the Company. He has extensive experience in financial management, corporate finance and investment. Mr Yau was the partner and Chief Financial Officer of AID Partners Capital Limited which is a private equity investment fund. Mr Yau also worked for various listed companies in Hong Kong and overseas and a number of international investment banks. He is currently an executive director of China Strategic Holdings Limited whose shares are listed on the main board of the Stock Exchange and also an independent non-executive director of HanKore Environment Tech Group Limited whose shares are listed on the Singapore Exchange Securities Trading Limited. Mr Yau is an associate member of American Institute of Certified Public Accountant and an associate member of Hong Kong Institute of Certified Public Accountant. He holds a Master Degree of Business Administration in Finance from The Hong Kong University of Science and Technology, Graduate School of Business and a BA (Hons) in Business Studies from The City University of Hong Kong.

On 6 July 2011, Mr Yau was appointed an independent non-executive director with no fixed term of service with the Company. On 24 August 2011, Mr Yau entered into a service contract with the Company for a term of three years commenced from 6 July 2011, which may be terminated by either party thereto giving to the other party notice in writing with a notice period of not less than 3 months (subject to retirement by rotation and re-election in accordance with the Bye-laws). Mr Yau was entitled to have the director’s emoluments amounted to HK$58,000 for the year ended 31 December 2011 and all of his emoluments have been covered by his service contract. The emoluments of Mr Yau are determined with reference to his duties and responsibilities with the Company, the Company’s performance and the prevailing market condition, and in accordance with the remuneration policy adopted by the Remuneration Committee of the Company.

As at the Latest Practicable Date, Mr Yau did not have interests in any Shares within the meaning of Part XV of the SFO.

Mr Yau does not have any relationship with any directors, senior management or substantial or controlling shareholders of the Company.

In relation to the re-election of Mr Yau, there are no other matters that need to be brought to the attention of the Shareholders, and there is no information to be disclosed pursuant to any of the requirements of the provisions under paragraphs 13.51(2)(h) to 13.51(2)(v) of the Listing Rules.

– 14 –

APPENDIX I

DETAILS OF RETIRING DIRECTORS PROPOSED FOR RE-ELECTION

Mr Zhang , aged 43, was appointed as an independent non-executive director in June 2011 and is a member of the Audit Committee, Remuneration Committee and Nomination Committee of the Company. He is a businessman who has about 19 years of experience in hi-technology industry with areas covering satellite communications, system integrator and other related services. Mr Zhang founded 北京海域天科技發展有限公司（「海域天科技」）in 1999 and 北京海域天華通 信技術有限公司（「海域天華」）in 2004 respectively. Mr Zhang has been serving as the chairman and general manager of 海域天科技 and the chairman of 海域天華 since their incorporations. He acted as the vice chairman of Aircraft Owners and Pilots Association of China in 2010. Mr Zhang graduated from Hohai University with double bachelor degrees in industrial automation and business management in 1992 and 1994 respectively.

On 7 June 2011, Mr Zhang was appointed an independent non-executive director with no fixed term of service with the Company. On 24 August 2011, Mr Zhang entered into a service contract with the Company for a term of three years commenced from 7 June 2011, which may be terminated by either party thereto giving to the other party notice in writing with a notice period of not less than 3 months (subject to retirement by rotation and re-election in accordance with the Bye-laws). Mr Zhang was entitled to have the director’s emoluments amounted to HK$68,000 for the year ended 31 December 2011 and all of his emoluments have been covered by his service contract. The emoluments of Mr Zhang are determined with reference to his duties and responsibilities with the Company, the Company’s performance and the prevailing market condition, and in accordance with the remuneration policy adopted by the Remuneration Committee of the Company.

As at the Latest Practicable Date, Mr Zhang did not have interests in any Shares within the meaning of Part XV of the SFO.

Mr Zhang does not have any relationship with any directors, senior management or substantial or controlling shareholders of the Company.

In relation to the re-election of Mr Zhang, there are no other matters that need to be brought to the attention of the Shareholders, and there is no information to be disclosed pursuant to any of the requirements of the provisions under paragraphs 13.51(2)(h) to 13.51(2)(v) of the Listing Rules.

– 15 –

APPENDIX II

EXPLANATORY STATEMENT FOR THE REPURCHASE MANDATE

This Appendix contains the particulars that are required by the Listing Rules to be included in an explanatory statement to enable the Shareholders to make an informed view on whether to vote for or against the resolution to be proposed at the Annual General Meeting in relation to the mandate to repurchase Shares (“Repurchase Mandate”).

SHARE CAPITAL

As at the Latest Practicable Date, the issued share capital of the Company comprised 446,174,000 Shares.

Exercise in full of the Repurchase Mandate, on the basis that no further Shares are issued or repurchased prior to 22 May 2012, being the date of the Annual General Meeting, could accordingly result in up to a maximum of 44,617,400 Shares being repurchased by the Company during the course of the period from 22 May 2012 to the earliest of (i) the date of the 2013 annual general meeting; (ii) the date by which the next annual general meeting of the Company is required to be held by law; and (iii) the date upon which such authority is revoked or varied.

REASONS FOR REPURCHASES

The Directors believe that it is in the best interests of the Company and its Shareholders to seek a general authority from the Shareholders to enable the Directors to purchase Shares in the market. Such purchases may, depending on market conditions and funding arrangements at the time, lead to an enhancement of the net value of the Company and its assets and/or its earnings per share and will only be made when the Directors believe that such a purchase will benefit the Company and its Shareholders.

FUNDING OF REPURCHASES

Pursuant to the Repurchase Mandate, repurchases would be funded entirely from the Company’s available cash flow or working capital facilities which will be funds legally available for the purpose in accordance with all applicable laws of Bermuda and the Company’s memorandum of association and Bye-laws.

On the basis of the consolidated financial position of the Company as at 31 December 2011 (being the date to which the latest published audited financial statements of the Company have been made up), the Directors consider that the exercise in full of the Repurchase Mandate to repurchase Shares might have a material adverse impact on the working capital position of the Company as compared with its position as at 31 December 2011. No purchase would be made in circumstances that might have a material adverse impact on the working capital or gearing position of the Company (as compared with the position disclosed in the latest published audited financial statements) unless the Directors considered that such purchases were in the best interests of the Company notwithstanding such material adverse impact.

– 16 –

EXPLANATORY STATEMENT FOR THE REPURCHASE MANDATE

APPENDIX II

SHARE PRICES AND REPURCHASED SHARES

The highest and lowest prices at which the Shares have traded on the Stock Exchange in each of the previous twelve months are as follows:

	Highest	Lowest
	HK$	HK$
2011
April	0.600	0.520
May	1.340	0.580
June	1.270	0.720
July	0.850	0.660
August	1.200	0.760
September	0.850	0.420
October	0.690	0.420
November	0.630	0.510
December	0.610	0.510
2012
January	0.580	0.490
February	0.640	0.500
March	0.660	0.500
April (up to the Latest Practicable Date)	0.600	0.520

The Company has not made any purchase of Shares (whether on the Stock Exchange or otherwise) in the previous six months.

EFFECT OF THE TAKEOVERS CODE

If as a result of a share repurchase, a Shareholder’s proportionate interest in the voting capital of the Company increases, such increase will be treated as an acquisition for the purposes of the Takeovers Code and, if such increase results in a change of control, may in certain circumstances give rise to an obligation to make a mandatory offer for Shares under Rule 26 of the Takeovers Code, according to Rule 32 of the Takeovers Code.

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APPENDIX II

EXPLANATORY STATEMENT FOR THE REPURCHASE MANDATE

As at the Latest Practicable Date, Dragon Peace Limited (“DPL”) was interested in 236,717,000 Shares, representing approximately 53.05% of the issued share capital of the Company. In the event that the Directors exercise in full the power to repurchase Shares which is proposed to be granted pursuant to the Repurchase Mandate, the shareholding of DPL in the Company would be increased to approximately 58.95% of the issued share capital of the Company. Such increase will not trigger any mandatory offer under Rule 26 of the Takeovers Code. The Directors are not aware of any consequences which may arise under the Takeovers Code as a result of any repurchase made under the Repurchase Mandate.

CONNECTED PERSONS

No persons who are connected persons of the Company have notified the Company that they have a present intention to sell Shares to the Company nor have they undertaken not to do so, if the Repurchase Mandate is approved.

DIRECTORS

None of the Directors or, to the best of their knowledge and having made all reasonable enquiries, their respective associates have any present intention, if the Repurchase Mandate is approved, to sell any Shares to the Company.

The Directors have undertaken to the Stock Exchange that they would exercise the power of the Company to make purchases pursuant to the proposed ordinary resolution in accordance with the Listing Rules and the applicable laws of Bermuda, the jurisdiction in which the Company is incorporated.

– 18 –

APPENDIX III

PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

The following is a summary of the principal terms of the Share Option Scheme proposed to be approved by the Shareholders at the Annual General Meeting.

(A) PURPOSE

The Share Option Scheme is a share incentive scheme and is established to enable the Company to grant Options to Participants as incentives or rewards for their contribution or potential contribution to the Company and/or any of the Subsidiaries.

(B) WHO MAY JOIN

The Board may, at its absolute discretion, offer to grant an Option to subscribe for such number of new Shares as the Board may determine at an exercise price determined in accordance with paragraph (E) below to any person being an employee, director (including executive director, non-executive director or independent non-executive director), consultant, representative, professional adviser, customer, business partner, joint venture partner, strategic partner, landlord or tenant of, or any supplier or provider of goods or services to, the Company or any Subsidiary, and any trustee(s) of a discretionary trust of which one or more beneficiaries belong to any of the abovementioned category(ies) of persons.

Upon acceptance of the Option, the grantee shall pay HK$1.00 to the Company by way of consideration for the grant. Any offer to grant an Option to subscribe for Shares may be accepted in respect of less than the number of Shares for which it is offered provided that it is accepted in respect of a board lot of dealing in Shares on the Stock Exchange or an integral multiple thereof and such number is clearly stated in the duplicate offer document constituting the acceptance of the Option. To the extent that the offer to grant an Option is not accepted by any prescribed acceptance date, it shall be deemed to have been irrevocably declined.

(C) MAXIMUM NUMBER OF SHARES

The maximum number of Shares in respect of which Options may be granted under the Share Option Scheme and under any other share option schemes of the Company must not in aggregate exceed 10% of the total number of Shares in issue at the time the Share Option Scheme is adopted by the Shareholders. Subject to the issue of a circular by the Company and the approval of the Shareholders in general meeting and/or such other requirements prescribed under the Listing Rules from time to time, the Board may:

• (i) renew this limit at any time to 10% of the Shares in issue as at the date of the approval by the Shareholders in general meeting; and/or

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APPENDIX III

PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

• (ii) grant Options beyond the 10% limit to Participants specifically identified by the Board. The circular issued by the Company to the Shareholders shall contain a generic description of the specified Participants who may be granted such Options, the number and terms of the Options to be granted, the purpose of granting Options to the specified Participants with an explanation as to how the Options serve such purpose, the information required under Rule 17.02(2)(d) and the disclaimer required under Rule 17.02(4) of the Listing Rules.

Notwithstanding the foregoing, the Shares which may be issued upon exercise of all outstanding Options granted and yet to be exercised under the Share Option Scheme and any other share option schemes of the Company at any time shall not exceed 30% of the Shares in issue from time to time. No options shall be granted under any schemes of the Company (including the Share Option Scheme) if this will result in the 30% limit being exceeded. The maximum number of Shares in respect of which Options may be granted shall be adjusted, in such manner as the auditors of the Company or an approved independent financial adviser shall certify to be appropriate, fair and reasonable in the event of any alteration in the capital structure of the Company in accordance with paragraph (Q) below whether by way of consolidation, capitalisation issue, rights issue, subdivision or reduction of the share capital of the Company but in no event shall exceed the limit prescribed in this paragraph.

(D) MAXIMUM NUMBER OF OPTIONS TO ANY ONE INDIVIDUAL

The total number of Shares issued and which may fall to be issued upon exercise of the Options granted under the Share Option Scheme and any other share option schemes of the Company (including both exercised and outstanding Options) to each Participant in any 12-month period up to the date of grant shall not exceed 1% of the Shares in issue as at the date of grant. Any further grant of Options in excess of this 1% limit shall be subject to:

• (i) the issue of a circular by the Company containing the identity of the Participant, the numbers of and terms of the Options to be granted (and Options previously granted to such participant) the information as required under Rules 17.02(2)(d) and the disclaimer required under 17.02(4) of the Listing Rules; and

• (ii) the approval of the Shareholders in general meeting and/or other requirements prescribed under the Listing Rules from time to time with such Participant and his associates (as defined in the Listing Rules) abstaining from voting. The numbers and terms (including the exercise price) of Options to be granted to such participant must be fixed before the Shareholders’ approval and the date of the Board meeting at which the Board proposes to grant the Options to such Participant shall be taken as the date of grant for the purpose of calculating the subscription price of the Shares. The Board shall forward to such Participant an offer document in such form as the Board may from time to time determine.

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PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

APPENDIX III

(E) PRICE OF SHARES

The subscription price of a Share in respect of any particular Option granted under the Share Option Scheme shall be such price as the Board in its absolute discretion shall determine, save that such price will not be less than the highest of:

• (i) the official closing price of the Shares as stated in the Stock Exchange’s daily quotation sheets on the date of grant, which must be a day on which the Stock Exchange is open for the business of dealing in securities;

• (ii) the average of the official closing prices of the Shares as stated in the Stock Exchange’s daily quotation sheets for the five business days immediately preceding the date of grant; and

• (iii) the nominal value of a Share.

(F) GRANTING OPTIONS TO CONNECTED PERSONS

Any grant of Options to a director, chief executive or substantial shareholder (as defined in the Listing Rules) of the Company or any of their respective associates (as defined in the Listing Rules) is required to be approved by the independent non-executive Directors (excluding any independent non-executive Director who is the grantee of the Options). If the Board proposes to grant Options to a substantial shareholder or any independent non-executive Director or their respective associates (as defined in the Listing Rules) which will result in the number of Shares issued and to be issued upon exercise of Options granted and to be granted (including Options exercised, cancelled and outstanding) to such person in the 12-month period up to and including the date of such grant:

• (i) representing in aggregate over 0.1% or such other percentage as may be from time to time provided under the Listing Rules of the Shares in issue; and

• (ii) having an aggregate value in excess of HK$5 million or such other sum as may be from time to time provided under the Listing Rules, based on the official closing price of the Shares at the date of each grant,

such further grant of Options will be subject to the issue of a circular by the Company and the approval of the Shareholders in general meeting on a poll at which all connected persons (as defined in the Listing Rules) of the Company shall abstain from voting in favour, and/or such other requirements prescribed under the Listing Rules from time to time.

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APPENDIX III

PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

(G) RESTRICTIONS ON THE TIMES OF GRANT OF OPTIONS

No Option may be granted to any Participant if the grant date in respect of that Option occurs:

• (i) after a price sensitive event in relation to the securities of the Company has occurred or a price sensitive matter in relation to the securities of the Company has been the subject of a decision, until an announcement of such price sensitive information has been published in accordance with the requirements of Rule 2.07C of the Listing Rules; or

• (ii) within the period commencing one month immediately preceding the earlier of: (i) the date of the Board meeting (as such date is first notified to the Stock Exchange in accordance with the Listing Rules) for the approval of the Company’s results for any year, half-year, quarterly or any other interim period; and (ii) the deadline for the Company to publish an announcement of its results for any year or half-year under the Listing Rules, or quarterly or any other interim period, and ending on the date of such results announcement.

(H) RIGHTS ARE PERSONAL TO GRANTEE

An Option is personal to the grantee and may be exercised or treated as exercised, as the case may be, in whole or in part. No grantee shall in any way sell, transfer, charge, mortgage, encumber or create any interest (legal or beneficial) in favour of any third party over or in relation to any Option or attempt so to do.

(I) TIME OF EXERCISE OF OPTION AND DURATION OF THE SHARE OPTION SCHEME

An Option may be exercised in accordance with the terms of the Share Option Scheme at any time after the date upon which the Option is deemed to be granted and accepted and prior to the expiry of 10 years from that date. The period during which an Option may be exercised will be determined by the Board in its absolute discretion, save that no Option may be exercised more than 10 years after it has been granted. No Option may be granted more than 10 years after the date of approval of the Share Option Scheme. Subject to earlier termination by the Company in general meeting or by the Board, the Share Option Scheme shall be valid and effective for a period of 10 years from the date of its adoption.

– 22 –

PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

APPENDIX III

(J) PERFORMANCE TARGET

A grantee may be required to achieve any performance targets as the Board may then specify in the grant before any Options granted under the Share Option Scheme can be exercised.

(K) RIGHTS ON CEASING EMPLOYMENT OR DEATH

An Option may be exercised by a grantee at any time during the option period, provided that subject to sub-paragraphs (R)(v) and (R)(vi), in the event of the grantee ceasing to be in an eligible relationship with the Company or any subsidiary for any reason (including his death, ill health, disability or insanity) other than:

• (i) the termination of the eligible relationship for any reason (including his death, ill health, disability or insanity) during the 12-month period immediately following the grant date in respect of his Option; or

• (ii) the termination of the eligible relationship on one or more of the grounds specified in sub-paragraph (R)(vi),

the Grantee (or the legal personal representative(s) of the Grantee) may exercise the Option up to his entitlement at the date of cessation (to the extent not already exercised) from the later of the date of commencement of the option period and the date of such cessation until whichever is the earlier of the date of expiry of the option period or the last day of the period of 1 month (or such longer period as the Board may determine) following the date of such cessation, which date shall be the last actual day of the eligible relationship with the Company or the relevant subsidiary and, where applicable, whether payment in lieu of notice is made or not.

(L) RIGHTS ON DISMISSAL

If the eligible relationship of the grantee of an Option with the Company or any of its subsidiaries is terminated on the grounds that he has been guilty of serious misconduct, or has committed an act of bankruptcy or has become insolvent or has made any arrangement or composition with his creditors generally, or has been convicted of any criminal offence involving his integrity or honesty or a petition of winding-up or bankruptcy has been filed against him or (if so determined by the Board) on any other ground on which the eligible relationship may be terminated at common law or pursuant to any applicable laws or under the grantee’s contract with the Group, his Option will lapse and not be exercisable after the date of termination of such eligible relationship.

– 23 –

APPENDIX III

PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

(M) RIGHTS ON TAKEOVER

If a general offer is made to all the Shareholders (or all such Shareholders other than the offeror and/or any person controlled by the offeror and/or any person acting in concert with the offeror (as defined in the Takeovers Codes)) and such offer becomes or is declared unconditional during the option period of the relevant Option, the grantee of an Option shall be entitled to exercise the Option in full (to the extent not already exercised) at any time until whichever is earlier of the date of expiry of the option period or the last day of a period of 1 month after the date on which the offer becomes or is declared unconditional.

(N) RIGHTS ON WINDING-UP

In the event a notice is given by the Company to its members to convene a general meeting for the purposes of considering, and if thought fit, approving a resolution to voluntarily windup the Company, the Company shall forthwith give notice thereof to all grantees and thereupon, each grantee (or his legal personal representative(s)) shall be entitled to exercise all or any of his Options (to the extent not already exercised) at any time not later than two business days prior to the record date for ascertaining entitlements to attend and vote at the proposed general meeting of the Company referred to above by giving notice in writing to the Company, accompanied by a remittance for the full amount of the aggregate subscription price for the Shares in respect of which the notice is given, whereupon the Company shall as soon as possible and, in any event, no later than the record date for ascertaining entitlements to attend and vote at the proposed general meeting, allot the relevant Shares to the grantee credited as fully paid.

(O) RIGHTS ON COMPROMISE OR ARRANGEMENT BETWEEN THE COMPANY AND ITS MEMBERS OR CREDITORS

If a compromise or arrangement between the Company and its members or creditors is proposed for the purposes of a scheme for the reconstruction of the Company or its amalgamation with any other companies pursuant to the laws of jurisdictions in which the Company was incorporated, the Company shall give notice to all the grantees of the Options on the same day as it gives notice of the meeting to its members or creditors summoning the meeting to consider such a scheme or arrangement and any grantee may by notice in writing to the Company accompanied by a remittance for the full amount of the aggregate subscription price for the Shares in respect of which the notice is given (such notice to be received by the Company not later than two business days prior to the record date for ascertaining entitlements to attend and vote at the proposed meeting), exercise the Option to its full extent or to the extent specified in the notice and the Company shall as soon as possible and in any event no later than the record date for ascertaining entitlements to attend and vote at the proposed meeting, allot and issue such number of Shares to the grantee which falls to be issued on such exercise of the Option credited as fully paid.

– 24 –

PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

APPENDIX III

(P) RANKING OF SHARES

The Shares to be allotted upon the exercise of an Option will be subject to all the provisions of the Bye-laws and will rank pari passu with the fully paid Shares in issue on the date of allotment.

(Q) EFFECT OF ALTERATIONS TO CAPITAL

In the event of any alteration in the capital structure of the Company whilst any Option may become or remains exercisable, whether by way of capitalisation issue, rights issue, open offer, consolidation, sub-division or reduction of share capital of the Company, such corresponding alterations (if any) shall be made in the number or nominal amount of Shares subject to any Options so far as unexercised and/or the subscription price per Share of each outstanding Option as the auditors of the Company or an independent financial adviser shall certify in writing to the Board to be in their/his opinion fair and reasonable in compliance with Rule 17.03(13) of the Listing Rules and the note thereto and the supplementary guidance issued by the Stock Exchange on 5 September 2005 and any future guidance and interpretation of the Listing Rules issued by the Stock Exchange from time to time.

Any such alterations will be made on the basis that a grantee shall have the same proportion of the issued share capital of the Company for which any grantee of an Option is entitled to subscribe pursuant to the Options held by him before such alteration and the aggregate subscription price payable on full exercise of any Option is to remain as nearly as possible the same (and in any event not greater than) as it was before such event. No such alteration will be made the effect of which would be to enable a Share to be issued at less than its nominal value.

(R) EXPIRY OF OPTION

An Option shall lapse automatically and not be exercisable (to the extent not already exercised) on the earliest of:

• (i) the expiry of the option period;

• (ii) the expiry of any of the periods referred to in paragraphs (L), (M) and (O);

• (iii) subject to paragraph (N), the earliest of the close of business on the second business day prior to the record date for ascertaining entitlements to attend and vote at the general meeting referred to in paragraph (N) or the date of commencement of the winding-up of the Company;

– 25 –

APPENDIX III

PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

• (iv) subject to paragraph (O) or by the court in relation to the scheme in question, upon the sanctioning pursuant to the Companies Act by the Supreme Court of Bermuda of a compromise or arrangement between the Company and its members or creditors for the purposes of or in connection with a scheme for the reconstruction of the Company or its amalgamation with any other company or companies;

• (v) where the Grantee ceases to be in an eligible relationship with the Company or any subsidiary for any reason (including his death, ill health, disability or insanity) during the 12-month period immediately following the grant date of the Options, the date of cessation of the eligible relationship;

• (vi) the date on which the grantee ceases to be in an eligible relationship with the Company or any subsidiary by reason of:

• (a) his resignation or termination of the eligible relationship of his own accord; or

• (b) the termination of the eligible relationship on any one or more of the following grounds (where applicable): that he has been guilty of misconduct, or has committed an act of bankruptcy or has become insolvent or has made any arrangement or composition with his creditors generally, or has been convicted of any criminal offence involving his integrity or honesty or a petition of winding-up or bankruptcy has been filed against him or (if so determined by the Board) on any other ground on which an employer or party would be entitled to terminate the eligible relationship at common law or pursuant to any applicable laws or under the contract, agreement or arrangement governing the eligible relationship between the grantee of the Options and the Company or the relevant subsidiary; or

• (vii) where the grantee assigned, transferred or otherwise created any interest in favour of any third party in respect of the Options, the date on which the Board shall exercise the Company’s right to cancel the Option.

(S) ALTERATION OF THE SHARE OPTION SCHEME

The Share Option Scheme may be altered in any respect by resolution of the Board except

that:

• (i) any alteration to the advantage of the grantees or the Eligible Participants (as the case may be) in respect of the matters contained in Rule 17.03 of the Listing Rules; and

• (ii) any material alteration to the terms and conditions of the Share Option Scheme or any change to the terms of Options granted,

– 26 –

APPENDIX III

PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

shall first be approved by the Shareholders in general meeting provided that if the proposed alteration shall adversely affect any Option granted or agreed to be granted prior to the date of alteration, such alteration shall be further subject to the grantees’ approval in accordance with the terms of the Share Option Scheme. The amended terms of the Share Option Scheme shall still comply with Chapter 17 of the Listing Rules and any change to the authority of the Board in relation to any alteration to the terms of the Share Option Scheme must be approved by Shareholders in general meeting.

(T) CANCELLATION OF OPTIONS

Subject to paragraph (H) above, any cancellation of Options granted but not exercised must be approved by the grantees of the relevant Options in writing.

(U) TERMINATION OF THE SHARE OPTION SCHEME

The Company may by resolution in general meeting or the Board at any time terminate the Share Option Scheme and in such event no further Option shall be offered but the provisions of the Share Option Scheme shall remain in force to the extent necessary to give effect to the exercise of any Option granted prior thereto or otherwise as may be required in accordance with the provisions of the Share Option Scheme. Options granted prior to such termination but not yet exercised at the time of termination shall continue to be valid and exercisable in accordance with the Share Option Scheme.

(V) ADMINISTRATION OF THE BOARD

The Share Option Scheme shall be subject to the administration of the Board whose decision as to all matters arising in relation to the Share Option Scheme or its interpretation or effect (save as otherwise provided herein) shall be final and binding on all parties.

(W) CONDITION OF THE SHARE OPTION SCHEME

The Share Option Scheme is conditional on:

• (i) the Listing Committee of the Stock Exchange granting the listing of and permission to deal in the Shares which may fall to be issued pursuant to the exercise of Options to be granted under the Share Option Scheme; and

• (ii) the approval of the rules of the Share Option Scheme by the Shareholders in the Annual General Meeting.

– 27 –

NOTICE OF ANNUAL GENERAL MEETING

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NOTICE IS HEREBY GIVEN that an annual general meeting of the shareholders of Carry Wealth Holdings Limited (the “Company”) will be held on 22 May 2012 at 10:00 a.m. at 2701, 27th Floor, One Kowloon, 1 Wang Yuen Street, Kowloon Bay, Hong Kong for the following purposes:

1. To receive and adopt the audited financial statements and report of the directors and the independent auditor’s report for the year ended 31 December 2011.

2. To re-elect the following retiring directors of the Company:

3. (i) Mr Li Haifeng as an executive director;

4. (ii) Mr Lee Sheng Kuang, James as an executive director;

5. (iii) Mr Huang Xuxian, Flynn as an executive director;

6. (iv) Mr Xiao Yong as an executive director;

7. (v) Mr Chen Zhongfa as an independent non-executive director;

8. (vi) Mr Yau Wing Yiu as an independent non-executive director; and

9. (vii) Mr Zhang Feng as an independent non-executive director;

10. To re-appoint auditor for the ensuing year and to authorise the board of directors to fix their remuneration.

– 28 –

NOTICE OF ANNUAL GENERAL MEETING

1. To consider and, if thought fit, passing the following resolution as an ordinary resolution of the Company:

“ THAT :

• (A) subject to paragraph 4(C) below, the exercise by the directors of the Company during the Relevant Period of all the powers of the Company to allot and issue additional shares in the share capital of the Company and to make or grant offers, agreements and options which might require the exercise of such power be and is hereby generally and unconditionally approved;

• (B) the approval in paragraph 4(A) shall authorise the directors of the Company during the Relevant Period to make or grant offers, agreements and options which might require the exercise of such power after the end of the Relevant Period;

• (C) the aggregate nominal amount of share capital allotted or agreed conditionally or unconditionally to be allotted (whether pursuant to an option or otherwise) by the directors of the Company pursuant to the approval in paragraph 4(A), otherwise than (i) pursuant to a Rights Issue or (ii) on the exercise of the options granted under any share option scheme adopted by the Company or (iii) any scrip dividend or similar arrangement providing for the allotment and issue of shares in lieu of the whole or part of a dividend on shares in accordance with the bye-laws of the Company in force from time to time, shall not exceed 20 per cent of the aggregate nominal amount of the issued share capital of the Company as at the date of passing this Resolution and the said approval shall be limited accordingly; and

• (D) for the purposes of this Resolution:

“Relevant Period” means the period from the passing of this Resolution until whichever is the earlier of:

• (i) the conclusion of the next annual general meeting of the Company;

• (ii) the expiration of the period within which the next annual general meeting of the Company is required by law to be held; and

• (iii) the revocation or variation of this Resolution by an ordinary resolution of shareholders of the Company in general meeting.

– 29 –

NOTICE OF ANNUAL GENERAL MEETING

“Rights Issue” means an offer of shares open for a period fixed by the directors of the Company to holders of shares, or any class of shares, whose names appear on the Company’s register of members on a fixed record date in proportion to their then holdings of such shares (subject to such exclusions or other arrangements as the directors of the Company may deem necessary or expedient in relation to fractional entitlements or having regard to any restrictions or obligations under the laws of, or the requirements of any recognised regulatory body or any stock exchange in, any territory outside Hong Kong).”

1. To consider and, if thought fit, passing the following resolution as an ordinary resolution of the Company:

“ THAT :

• (A) subject to paragraph 5(C) below, the exercise by the directors of the Company during the Relevant Period of all the powers of the Company to repurchase issued shares in the capital of the Company subject to and in accordance with all applicable laws be and is hereby generally and unconditionally approved;

• (B) the approval in paragraph 5(A) shall be in addition to any other authorisation given to the directors of the Company;

• (C) the aggregate nominal amount of the shares of the Company to be purchased or agreed conditionally or unconditionally to be purchased by the directors of the Company pursuant to the approval in paragraph 5(A) during the Relevant Period, shall not exceed 10 per cent of the aggregate nominal amount of the issued share capital of the Company as at the date of passing this Resolution, and the authority pursuant to paragraph 5(A) shall be limited accordingly; and

• (D) for the purposes of this Resolution:

“Relevant Period” means the period from the passing of this Resolution until whichever is the earlier of:

• (i) the conclusion of the next annual general meeting of the Company;

• (ii) the expiration of the period within which the next annual general meeting of the Company is required by law to be held; and

• (iii) the revocation or variation of this Resolution by an ordinary resolution of shareholders of the Company in general meeting.”

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NOTICE OF ANNUAL GENERAL MEETING

1. To consider and, if thought fit, passing the following resolution as an ordinary resolution of the Company:

“ THAT conditional upon the passing of the ordinary resolutions as set out in paragraphs 4 and 5, the general mandate granted to the directors pursuant to paragraph 4 shall be extended by the addition thereto of an amount representing the aggregate nominal amount of the share capital of the Company repurchased by the Company under the authority granted in paragraph 5, provided that such amount shall not exceed 10 per cent of the aggregate nominal amount of the issued share capital of the Company as at the date of passing this Resolution.”

1. To consider and, if thought fit, passing the following resolution as an ordinary resolution of the Company:

“ THAT conditional upon The Stock Exchange of Hong Kong Limited granting approval of the listing of and permission to deal in the shares falling to be issued pursuant to the exercise of any options granted under the share option scheme referred to in the circular dispatched to the shareholders on the same day as this Notice, the terms of which are set out in the printed document marked “ A ” now produced to the Meeting and for the purpose of identification signed by the Chairman hereof (the “Share Option Scheme”), the Share Option Scheme be approved and adopted to be the share option scheme of the Company and that the Directors of the Company be authorized to grant options thereunder and to allot and issue shares pursuant to the Share Option Scheme and take all such steps as may be necessary or desirable to implement such Share Option Scheme.”

By order of the Board Tang Chak Lam, Charlie Company Secretary

Hong Kong, 18 April 2012

Principal Place of Business: 2701, 27th Floor One Kowloon 1 Wang Yuen Street Kowloon Bay Hong Kong

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NOTICE OF ANNUAL GENERAL MEETING

Notes:

1. The register of members of the Company will be closed from 18 May 2012 to 22 May 2012 (both days inclusive) during which period no transfer of share(s) will be effected. In order to be entitled to attend and vote at the 2012 annual general meeting of the Company, all transfer of share(s), accompanied by the relevant share certificate(s) with the completed transfer form(s) either overleaf or separately, must be lodged with the Company’s branch share registrar in Hong Kong, Tricor Abacus Limited at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Hong Kong for registration not later than 4:00 p.m. on 17 May 2012.

2. Any shareholder of the Company entitled to attend and vote at the meeting is entitled to appoint another person as his/her proxy to attend and vote, on a poll, on his/her behalf. A proxy need not be a shareholder of the Company. A shareholder may appoint more than one proxy to attend on the same occasion.

3. In order to be valid, a proxy form together with the power of attorney or other authority (if any) under which it is signed, or a notarially certified copy of such power or authority, must be lodged with the Company’s branch share registrar in Hong Kong, Tricor Abacus Limited at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Hong Kong not less than 48 hours before the time appointed for holding the annual general meeting or 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.

4. As at the date hereof, the board of directors of the Company comprises Mr Li Haifeng, Mr Lee Sheng Kuang, James, Mr Huang Xuxian, Flynn, Mr Tang Chak Lam, Charlie and Mr Xiao Yong, being executive directors; and Mr Chen Zhongfa, Mr Yau Wing Yiu and Mr Zhang Feng, being independent non-executive directors.

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