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for identification purpose only

This announcement is for information purposes only and does not constitute an invitation or offer to
acquire, purchase or subscribe for any Shares in the Company.
SCUD GROUP LIMITED

(incorporated in the Cayman Islands with limited liability)
(Stock Code: 1399)
DISCLOSEABLE TRANSACTION

AND
CONNECTED TRANSACTION
RESIGNATION OF AUDITORS
GENERAL UPDATE
RESUMPTION OF TRADING
THE ACQUISITION

The Board is pleased to announce that on 12 December 2007, the Company entered into the
Agreement with the Vendor pursuant to which the Vendor agreed to procure the sale of the Sale
Interest (being 100% equity interest in CLTT) to the Purchaser and the sale of the Sale Assets to
CLTT. The Purchaser is ultimately owned as to 70% by the Company and 30% by the Vendor. The
Sale Assets, related senior management and employees who are expected to join CLTT as from the
CLTT Completion Date have previously been responsible for managing the manufacture and sale
of rechargeable battery packs for mobile phones under the “Chaolitong tb” brand in China.
“Chaolitong tb” is one of the largest rivals to the “SCUD -z” brand of rechargeable battery
packs for mobile phones in China.
The total consideration for the Acquisition is up to RMB245 million, whereby RMB37 million will
be paid for the purchase of the Sale Interest and the Sale Assets and the balance of up to RMB208
million to the Vendor. The RMB208 million consists of RMB91 million in cash and up to RMB117
million to be satisfied by the issue of at least 30 million and no more than 60 million Consideration
Shares at HK$2.05 if NPAT Targets are met or exceeded for FY2008, FY2009 and FY2010.

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GENERAL

As the relevant percentage ratios for the 5 tests set out in Rule 14.07 of the Listing Rules for all the
transactions contemplated under the Agreement exceed 5% but are less than 25%, the entering into
the Agreement constitutes a discloseable transaction for the Company under Rule 14.06(2) of the
Listing Rules. Further due to the Vendor being a 30% shareholder of the Purchaser, the Acquisition
constitutes a connected transaction (as defined in the Listing Rules) under Chapter 14A of the Listing
Rules.
A circular containing details of the Acquisition will be dispatched to the Shareholders as soon as
practicable.
The Board also announces that on 11 December 2007, it had received a letter from Deloitte notifying
the Company of Deloitte’s resignation as auditors of the Group with effect from 10 December 2007.
The Company is given to understand that Deloitte needs to devote significant additional resources
to audit the loss of inventories and products during the fire which occurred on 31 May 2007, thus
resulting in a significant increase in the audit fee, details of the fire are set out in the Company’s
announcement dated 1 June 2007. The Company and Deloitte could not reach a consensus on the
audit fee and as a result Deloitte resigned as the auditors of the Group.
The Group is also progressing its full resumption of production as planned. It has also received
insurance compensation of approximately RMB52.2 million from its insurers in respect of its losses
due to the fire reported in the Company’s announcement dated 1 June 2007.
At the request of the Company, trading in the Shares was suspended at 9:30 a.m. on 12 December 2007
pending the release of this announcement with details of the Acquisition. An application has been made to
the Stock Exchange for the resumption of trading in the Shares with effect from 9:30 a.m. on 21 December
2007.
THE ACQUISITION

The Agreement
Parties:
Vendor: Mr. Ma Yuk Sang.
He is the 30% shareholder of the Purchaser, a 70% indirect subsidiary of the
Company. As a substantial shareholder of an indirect subsidiary of the Company, Mr.
Ma is a connected person of the Company.
Purchaser: The Company.

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Subject Matter of the Agreement
Pursuant to the Agreement, the Vendor has agreed to procure the sale of the Sale Interest (being 100%
equity interest in CLTT) to the Purchaser and the sale of the Sale Assets to CLTT. In light of the
fact that the Sale Assets will constitute a new production line after the Acquisition, as a commercial
decision, the Company decided to purchase the Sale Assets via CLTT, a company that is not currently
engaged in any business activities and not part of the Group prior to the Acquisition. If it had invested
through an existing subsidiary of the Company, then those existing businesses would be subject to the
potential risks of the new business. The Purchaser is ultimately owned as to 70% by the Company and
30% by the Vendor. The Vendor does not and will not (save through his 30% stake in the Purchaser)
on implementation of the Acquisition, own the Sale Assets. Accordingly he has not and will not have
incurred any “purchase cost” for the Sale Assets before the acquisition by the Group. The Sale Assets,
related senior management and employees who are expected to join CLTT as from the CLTT Completion
Date have previously been responsible for managing the manufacture and sale of rechargeable battery
packs for mobile phones under the “Chaolitong tb” brand in China. “Chaolitong tb” is one
of the largest rivals to the “SCUD -z” brand of rechargeable battery packs for mobile phones in
China. The Sale Assets do not represent all assets of CLTE. The Sale Assets only represent some of
assets of CLTE such as fixed assets and intellectual property rights. It does not include CLTE’s accounts
receivables, interest in real properties and that part of the inventory which the Group may not acquire.
The Group does not intend to acquire such other assets of CLTE or assume its liabilities.
Consideration
The Company has agreed to pay up to RMB245 million as the total consideration payable pursuant to the
Agreement as follows:–
(i) RMB37 million to be injected into CLTT through the Purchaser to fund the purchase of the Sale
Interest from CLTE as well as to ultimately pay CLTE not more than RMB36.5 million for the
Sale Assets. The Sale Assets (excluding the raw materials which is the subject of the adjustment
detailed below and the intellectual property rights which were not the subject of the valuation
report referred to below), amount to RMB11,476,845 based on a valuation report dated 10
December 2007 prepared in the PRC and its book value is RMB11,617,981 based on audited
accounts for the nine months ended 30 September 2007 prepared in accordance with PRC
GAAP. Such funds would be advanced by the Company to the Purchaser (a 70% subsidiary of
the Company) on the CLTT Approval Date and, subject to compliance with the relevant Chinese
regulatory requirements, CLTT would then complete the purchase of the Sale Interest and the
Sale Assets on the CLTT Completion Date ; and
(ii) up to RMB208 million to the Vendor, of which RMB91 million is to be paid in cash in HK$ on the
CLTT Completion Date to the Vendor and the balance of RMB117 million is to be satisfied by the
issue of an aggregate of 30 million Consideration Shares to the Vendor at HK$2.05 (based on the 20
day average closing price immediately preceding suspension of trading in the Shares) per Share three
months after the CLTT Completion Date, and of up to an additional 30 million Consideration Shares
at HK$2.05 per Share in three tranches to the Vendor if CLTT achieves or exceeds the specified
NPAT Targets for FY2008, FY2009 and FY2010 as described below. Therefore, if the NPAT

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Targets for any of those years is not met, the maximum number of Consideration Shares will not be
issued to the Vendor and the total consideration payable pursuant to the Agreement will be reduced
accordingly;
The Vendor has confirmed that as part of his arrangements with the Original Shareholders, assuming the
Original Shareholders comply with the agreed terms, he will be entitled to 0.5% of the Consideration. If
the Original Shareholders do not abide by their undertakings and/or the NPAT Targets are not met, the
Original Shareholders entitlement to the Consideration will be accordingly reduced.
There are four tranches of Consideration Shares to be issued to the Vendor. Save for the first tranche
which will be issued three months after the CLTT Completion Date, the number of Consideration Shares
to be issued in the remaining three tranches will be issued by the Company at the end of the relevant
financial years subject to the NPAT Targets being met.
The NPAT Targets for FY2008, FY2009 and FY2010 and the number of Consideration Shares to be
issued if each NPAT Target is met or exceeded is set out below:–
Maximum number of shares
to be issued in each tranche NPAT Target
10,000,000 RMB50 million (approximately HK$52.6 million) for FY2008
10,000,000 RMB55 million (approximately HK$57.9 million) for FY2009
10,000,000 RMB60 million (approximately HK$63.2 million) for FY2010
If any of the NPAT Targets is not met, the corresponding Consideration Shares will not be issued to the
Vendor and the consideration payable pursuant to the Agreement will be reduced accordingly. Should
the NPAT be met or exceeded, the Company will issue the above Shares as soon as practicable following
receipt of confirmation of the relevant audited NPAT results for the relevant financial year.
The issue price per Consideration Share is HK$2.05. It represents a 13.5% discount to the last closing
price of the Shares on 11 December 2007 of HK$2.37 and a 7.66% discount to the average closing price
of the Shares for the 5 trading days ended on 11 December 2007 of HK$2.22, being the last trading day
prior to the suspension in trading of the Shares pending this announcement. Based on the last closing
price of the Shares of HK$2.37, the maximum number of Consideration Shares is valued at HK$142.2
million.
The Company will make further announcement(s) in accordance with Rule 14A.57 of the Listing Rules if
any of the NPAT Targets are not met.
The Consideration was arrived at after arm’s length negotiations between the Company and the Vendor
with reference to the past sales and financial performance of the “Chaolitong tb” business (see
“Information on the Vendor, CLTT, CLTE and the “Chaolitong tb” Business” below), the registered
capital of CLTT (RMB2 million) and an agreed valuation of the Sale Assets (subject to adjustment
described below), details of which adjustment which will be agreed prior to the CLTT Completion Date.

5
The Company also took into account the synergies and benefits that are expected to accrue to the Group
as a result of such acquisition (see “Reasons for the Acquisition” below) and the undertakings from the
Vendor in respect of the NPAT Targets. The maximum Consideration of RMB245 million is 7 times,
6.4 times and 5.8 times the NPAT Target for FY 2008, FY2009 and FY2010 respectively; and the
minimum cash Consideration of RMB128 million (assuming that none of the NPAT Targets are met)
is 6.7 times the FY2006 net profit after taxation of CLTE. By way of illustration only, bearing in mind
the differences in time periods and taking into account the highest and lowest traded price of the Shares
prior to the fire in May 2007 (further details of which are set out in the Company’s announcement dated
1 June 2007) of HK$3.73 (approximately RMB3.91 based on the December 2006 exchange rate of HK$1
to RMB1.047) per Share and HK$2.69 (approximately RMB2.82 based on the December 2006 exchange
rate of HK$1 to RMB1.047) per Share and the Group’s net profit after tax of approximately RMB160
million for FY 2006, the price to earnings ratio would range from 10.60 to 14.82. Taking into account
the fact that (i) the Sales Assets are to be deployed for the same product type (albeit under different
brands) as the principal products of the Group; (ii) the price/earnings multiple of the Shares of 8.8 times
and 9.3 times (based on the HK$2.22 (approximately RMB2.32 based on the December 2006 exchange
rate of HK$1 to RMB1.047), being the 5 day average closing price per Share disclosed above and (i) the
FY2006 basic earnings per share of RMB26.35 cents, and (ii) diluted earnings per share of RMB24.93
cents (assuming all share options issued under the Company’s pre-IPO share option scheme, the over-
allotment option exercised as per the Company’s announcement dated 8 January 2007 and conversion of
the convertible bond issued by the Company to Neng Liang Limited have been exercised, respectively);
and (iii) other factors referred to above, the Directors (including the independent non-executive
Directors) consider the Consideration fair and reasonable and in the interest of the Company and the
Shareholders as a whole.
The revenue and operating profits before tax of CLTE are set out as follows:
9 months ended
30 September 2007 FY2006 FY2005
Revenue RMB148.3 million RMB154.1 million RMB172.4 million
Operating profits before tax RMB31.0 million RMB29.6 million RMB39.6 million
The Company expects to fund the cash component of the Consideration partly through its working capital
and partly through the initial public offering proceeds as an intended use. It is stated in the Company’s
prospectus dated 11 December 2006 that part of the proceeds from the initial public offering would be
used for the purpose of expanding its sales network including through the acquisition of an established
business of the Group’s competitors.
The Consideration Shares are not subject to any lock-up.

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General Mandate
The Consideration Shares will be allotted and issued under the General Mandate which was granted to
the Directors pursuant to an ordinary resolution of the Company passed at its annual general meeting
on 10 May 2007 to allot and issue up to 198,400,249 new Shares, representing 20% of the aggregate
nominal amount of the share capital of the Company in issue on that date. The General Mandate has not
previously been utilised prior to the entering into of the Agreement.
Application will be made by the Company to the Stock Exchange for the grant of the listing of and the
permission to deal in the Consideration Shares on the Stock Exchange.
The issue price per Consideration Shares is HK$2.05. The maximum number of Consideration Shares
which may be issued represents 6.05% of the total issued share capital of the Company as at the date of
this announcement and 5.70% of the total issued share capital as enlarged by such issue.
CLTT Completion Date
The CLTT Completion Date is when the purchase of the Sale Interest and Sale Assets are completed.
The Vendor has undertaken to procure that after the CLTT Completion Date, CLTE and related previous
management would not compete with the Group under the “Chaolitong tb” brand or otherwise.
Apart from certain agreed key personnel previously involved in the “Chaolitong tb” business who
are also required to enter into employment contracts with CLTT, CLTT will employ such other staff as it
considers necessary.
Adjustment to the Consideration
The final price for the purchase of the Sale Assets will not exceed RMB36.5 million but is to be fixed
after the details of the Sale Assets are finalized by the Purchaser, including verification by the Purchaser
that certain raw materials are in acceptable condition. The Purchaser will make its determination by
reference to factors such as the audited value (as at 31 December 2007) of the raw materials available
on that date, the age and utility of such raw materials. To the extent that the Purchaser elects to accept
delivery of raw materials which when aggregated with the agreed value of the other Sale Assets is less
than RMB36.5 million, the Vendor has undertaken to procure that CLTE refunds the difference to CLTT
in cash on a dollar-to-dollar basis. The total amount of raw materials as of 30 September 2007 was
approximately RMB36.5 million based on CLTE’s audited accounts prepared in accordance with PRC
GAAP for the nine month period ended 30 September 2007.
The Directors (including the independent non-executive Directors) consider the terms of the Agreement
are fair and reasonable and in the interests of the Company and Shareholders as a whole.

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Conditions precedent
Completion of the Acquisition is conditional upon the satisfaction or waiver of the following conditions,
among others:
(i) the due diligence review of, among other things, the business, operations and financial positions of
CLTE and CLTT having been completed to the satisfaction of the Group;
(ii) a PRC legal opinion from the Group’s PRC legal advisers in such form as satisfactory to the
Company, in relation to, among other things, the due incorporation of CLTT and the relevant
approvals for the transfer of the Sale Interest;
(iii) all approvals, consents and permits in relation to the transaction have been obtained, including but
not limited to the listing approval of the Consideration Shares from the Stock Exchange; and
(iv) CLTE and CLTT having entered into the asset transfer agreement in the agreed form.
SHAREHOLDING STRUCTURE OF CLTT AND CLTE

The following diagrams illustrate the shareholding structure of CLTT and CLTE immediately before and
after Completion.
Immediately before CLTT Completion Date and as at the date of this announcement
CLTT

Zheng Zhenjian Ma Jie Zheng Wei
CLTT

20%40%40%

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CLTE

Zheng Zhenjian Ma Jie Zheng Wei
CLTE

40%40% 20%
Sale Assets
Immediately after the CLTT Completion Date
Company
Great Speed
Enterprises
Limited
CLTT

Vendor
The Purchaser
100%
30%70%
100%
Sale Assets

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Lease agreement
It is expected that after the date of the Agreement, CLTT and CLTE may enter into a lease agreement
whereby CLTT will lease the factory and office premises from CLTE in Shenzhen. The annual rental
payable is expected to be approximately RMB3.6 million subject to final agreement. The Original
Shareholders are also expected to become directors of CLTT upon the CLTT Approval Date and which,
by then, CLTT will have become an indirect subsidiary of the Company. If such lease is entered into, the
lease may be a continuing connected transaction for the Group as CLTE and the Original Shareholders
could be considered as associates (as defined in the Listing Rules) of the Vendor, being a substantial
shareholder of one of the Company’s subsidiaries, namely, the Purchaser. Further announcement and
related compliance with the Listing Rules will be made as and when required.
INFORMATION ON THE VENDOR, CLTT, CLTE AND THE “CHAOLITONG tb”
BUSINESS

CLTT was incorporated in China with limited liability and is not currently engaged in any business
activities. Its total registered capital is RMB2 million, which has been fully paid. CLTE was incorporated
in China with limited liability and is one of the Group’s largest rivals which principally engaged
in the manufacture and sale of rechargeable battery packs in China for mobile phones under the
“Chaolitong tb” brand. The Sale Assets represent the principal operating assets of CLTE. CLTE
has a total registered capital of RMB20 million which has been fully paid. To the best of the Directors’
knowledge, information and belief, having made all reasonable enquiries, each of the ultimate beneficial
owners of each of CLTT and CLTE, being the Original Shareholders, is not a connected person of the
Company (other than as a result of them being involved in the Acquisition in the manner stated in this
announcement).
Based on the Chinese audited accounts for FY2005 and FY2006 prepared under PRC GAAP provided to
the Company, the net profit before and after taxation and extraordinary items attributable to CLTE which
operates the “Chaolitongtb” brand business were as follows:
Net profit before taxation
and extraordinary items
Net profit after taxation
and extraordinary items
FY2005 RMB39.6 million RMB36.3 million
FY2006 RMB29.6 million RMB27.4 million

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Arrangements between the Vendor and the Original Shareholders
Save for the connected person relationship of the Vendor by way of its 30% interest in the Purchaser,
the Vendor has no other interests in the other operations of the Group. As at the date of the Agreement,
the Vendor does not own the Sale Interest or the Sale Assets. The Company was informed by the
Original Shareholders during negotiations that they have delegated the negotiations and contractual
arrangements relating to the Acquisition to the Vendor and that the Company should primarily deal
with the Original Shareholders via the Vendor. The Original Shareholders are the owners of CLTE. At
the start of negotiations with the Group, the Company was directed by them to discuss with the Vendor
due to initial sensitivities of negotiations between industry competitors. The Group had, prior to signing
the Agreement, engaged a Chinese law firm for legal due diligence, a Chinese accounting firm for
financial due diligence and relied on its own due diligence for business due diligence since CLTE and
the Group are in the same industry. As discussions progressed, it also became apparent that CLTE had
other assets, businesses and liabilities that the Group would not be interested in. Once the details of the
Acquisition had been finalised and also involved the Consideration Shares, the Original Shareholders
found that it would be convenient to nominate a Hong Kong resident to open a securities account in
Hong Kong and hold the Consideration Shares. The Original Shareholders and Vendor therefore agreed
that the Vendor would be a party to the contract with the Company. The Company has been informed
that for his role in the negotiations with the Group, the Vendor and the Original Shareholders also came
to agree private commercial arrangements among themselves. The Vendor has confirmed that as part of
his arrangements with the Original Shareholders, assuming the Original Shareholders comply with the
agreed terms, he will be entitled to 0.5% of the Consideration. If the Original Shareholders do not abide
by their undertakings and/or the NPAT Targets are not met, the Original Shareholders entitlement to the
Consideration will be accordingly reduced. These arrangements were to ensure that the Vendor would
minimise any risk to himself under the Agreement in case the Original Shareholders did not abide by
their agreement to join CLTT and manage the business. The Group is not party to such arrangements (if
any). The structure of the transaction is designed to ensure (i) that the Group acquires the Assets without
associated liabilities (including taxation liabilities) in an efficient and lawful manner; (ii) accountability
and alignment with the Group of interests of the Vendor for the successful implementation of the
transaction; and (iii) retention of existing key management on terms which is compliant with PRC laws.
So as to safeguard the Group’s interest in the cash flows involved in this Acquisition, a loan of RMB37
million would only be made to the Purchaser (a 70% subsidiary of the Company) upon the CLTT
Approval Date and, subject to compliance with the relevant Chinese regulatory requirements, the
Purchaser would remit the relevant funds to CLTT. Once such funds have been injected into CLTT (and
not before) payment to CLTE would only be made on the CLTT Completion Date with the simultaneous
completion of the purchase of the Sale Interest and the Sale Assets. Until such time that funds are paid
to CLTE, only the Group’s authorised signatories (not the Vendor nor the Original Shareholders) are
permitted to deal in such funds. The balance of the Consideration, being up to RMB208 million in cash
and Consideration Shares, will only be paid and/or issued after CLTT Completion Date when the transfer
of the Sale Assets to CLTT has been completed.

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REASONS FOR THE ACQUISITION

The Group is a market leader in the sales and marketing of self-manufactured rechargeable battery packs
for mobile phones in the PRC under its own “SCUD -z” brand. For more information, please visit
the Group’s website at http://www.scudcn.com. The Directors believe that with the acquisition of the
Sale Interest, the Sale Assets and employment of certain previous management of CLTE, the Group will
benefit from the following main factors:
(i) the “Chaolitongtb” brand has a solid sales network covering second, third-tier cities, towns
and villages in the PRC, thus complementing the Group’s lack of sales coverage in these areas whilst
increasing the Group’s market share both under the “SCUD -z” and “Chaolitongtb” brands
within a short period of time;
(ii) the Group’s product variety will be expanded and the rate of its research and development will
improve;
(iii) both of the Group’s production capacity and efficiency will be increased, thus reducing costs of
production and sourcing of raw materials; and
(iv) the level of market competition against the Group will decrease by way of consolidating two of the
largest mobile phone battery pack manufacturers in China since the “Chaolitongtb” brand is
one of the largest rivals to the “SCUD -z” brand of battery packs in China. As a result market
prices will become more stable and the overall margin of the Group’s products will improve.
For the first nine months ended 30 September 2007, CLTE had revenue of approximately RMB148.3
million whilst the revenue for the full year of 2006 amounted to RMB154.1 million. Operating profits
before tax of CLTE amounted to RMB31.0 million for the nine months ended 30 September 2007 whilst
it was RMB29.6 million for the full year of 2006.
CERTAIN EFFECTS OF THE ACQUISITION

The following table illustrates the shareholding details of the Company before and after the Acquisition:
Name of Shareholders
Shareholding before
Acquisition (as at the date
of this Announcement)
Shareholding after
Acquisition (assuming
NPAT Targets not met
and minimum 30 million
Consideration Shares issued)
Shareholding after
Acquisition (assuming
all NPAT Targets met
and maximum 60 million
Consideration Shares issued)
Swift Joy Holdings Limited 402,000,000 (40.52%) 402,000,000 (39.33%) 402,000,000 (38.21%)
Right Grand Holdings Limited 180,000,000 (18.15%) 180,000,000 (17.61%) 180,000,000 (17.11%)
Cheer View Holdings Limited 18,000,000 (1.81%) 18,000,000 (1.76%) 18,000,000 (1.71%)
Public 392,001,246 (39.52%) 392,001,246 (38.36%) 392,001,246 (37.27%)
Vendor N/A 30,000,000 (2.94%) 60,000,000 (5.70%)

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Upon completion of the acquisition of CLTT, it will be accounted for as a subsidiary of the Company and
its results, assets and liabilities will be consolidated in the Group’s financial statements. On completion
of the purchase by CLTT of the Sale Assets, they will become assets of CLTT and be accounted for
accordingly.
FUND RAISING ACTIVITIES INVOLVING ISSUE OF SECURITIES IN THE PAST 12 MONTHS

Save for the listing proceeds raised by the Company pursuant to its listing on the Stock Exchange on
21 December 2006 (and the exercise of the over-allotment option as announced in the Company’s
announcement dated 8 January 2007), the Company had not carried out any fund raising exercise issuing
any equity securities in the 12-month period immediately preceding the date of this announcement.
The net proceeds from the Company’s listing (together with the exercise of the over-allotment option)
amounted to approximately HK$604 million. Throughout the past 12 months, the Company applied
approximately HK$78 million and approximately HK$195 million as capital injection to Scud (Fujian)
Electronics Co. Ltd. and Scud (Fujian) Battery Co. Ltd. respectively (which was subsequently utilised
as intended to construct new factories, funded the establishment of new production lines, promotion
and advertising and repayment of bank borrowing). The Group has also applied (as intended) a further
approximately HK$20 million for the construction of new factories. The unutilised proceeds are held as
deposits with commercial banks in Hong Kong and are expected to be utilised as stated in the Company’s
prospectus dated 11 December 2006.
LISTING RULES IMPLICATIONS

As at the date of the Agreement, the Vendor was interested in 30% of the total issued share capital of
the Purchaser and therefore a substantial shareholder of the Company’s subsidiary. The Vendor is thus a
connected person of the Company. By virtue of the Vendor’s interest in the Purchaser, the transactions
contemplated under the Agreement constitute connected transactions of the Company under Chapter 14A
of the Listing Rules. Given certain of the applicable percentage ratios exceed 5% but are less than 25%,
the Acquisition constitutes discloseable transactions of the Company under the Listing Rules.
Pursuant to the Listing Rules, the Acquisition is conditional on the approval by independent
shareholders. However, where no Shareholder is required to abstain from voting if the Company was to
convene a general meeting for the approval of the connected transaction, a written resolution from the
shareholders of a closely allied group of shareholders who together hold more than 50% in normal value
of the Shares to approve the connected transaction is sufficient. As no Shareholder is required to be
abstained from voting on the Acquisition, the Company has applied to the Stock Exchange for a waiver
from the requirement to hold a physical shareholders’ meeting to approve the Acquisition and, instead
this Acquisition will be approved by way of a written resolution from its controlling shareholders, being
Swift Joy Holdings Limited, Right Grand Holdings Limited and Cheer View Holdings Limited, who
together hold more than 50% Shares in the Company. Swift Joy Holdings Limited, Right Grand Holdings
Limited and Cheer View Holdings Limited are wholly owned companies of Mr. Fang Jin, Mr. Lin Chao
and Mr Guo Quan Zeng respectively, all of whom are directors of the Company. As at the date of this

13
announcement, Swift Joy Holdings Limited, Right Grand Holdings Limited and Cheer View Holdings
Limited held 402,000,000 Shares, 180,000,000 Shares and 18,000,000 Shares respectively, representing
in aggregate approximately 60.48% of the total issued share capital of the Company as of the date of this
Announcement. The written resolutions were passed on 18 December 2007.
An independent financial adviser will be appointed pursuant to the requirements of the Listing Rules
and a circular containing details of the Acquisition together with a letter from an independent financial
adviser will be dispatched to the Shareholders as soon as practicable.
RESIGNATION OF AUDITORS

The Board announces that on 11 December 2007, it had received a letter from Deloitte notifying the
Company of Deloitte’s resignation as auditors of the Group with effect from 10 December 2007. The
Company is given to understand that in light of the possibility of limitation on the scope of its audit due
to the fire which occurred on 31 May 2007, Deloitte needs to devote significant additional resources to
audit the loss of inventories and products during the fire, thus resulting in a significant increase in the
audit fee accordingly, details of such fire are set out in the Company’s announcement dated 1 June 2007.
The Group and Deloitte could not reach a consensus on the audit fee and as a result Deloitte resigned as
auditors of the Group.
In their letter of resignation, Deloitte have confirmed that there are no circumstances connected with
their resignation which they consider should be brought to the attention of the holders of securities of the
Company.
GENERAL UPDATE

The Company is progressing its full resumption of production as planned. It has also received insurance
compensation of approximately RMB52.2 million from its insurers in respect of its losses due to the fire
reported in the Company’s announcement dated 1 June 2007. As stated in its interim report for the six
months ended 30 June 2007, the Group’s insurance coverage was for up to RMB100 million for loss of
inventory and products. The insurance compensation represents the agreed results between the Company
and the insurer after taking into account the nature and extent of the losses and the level of insurance
coverage.
To date, production has resumed in phases as per management’s expectation and, as stated in the
Company’s interim report for the six months ended 30 June 2007, management continues to expect that
the Group will resume full resumption of normal operations in early 2008.

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SUSPENSION AND RESUMPTION OF TRADING

At the request of the Company, trading in the Shares was suspended with effect from 9:30 a.m. on 12
December 2007 pending the release of this announcement. Application has been made by the Company
to the Stock Exchange for resumption of trading in the Shares with effect from 9:30 a.m. on 21 December
2007.
DEFINITIONS

Unless the context requires otherwise, the following expressions shall have the following meanings in
this announcement:
“Acquisition” the proposed acquisition by the Purchaser of the Sale Interest and the Sale
Assets pursuant to the Agreement
“Agreement” the sale and purchase agreement dated 12 December 2007 entered into by
the Company and the Vendor in respect of the Sale Interest and the Sale
Assets
“Board” the board of Directors
“Business Day” a day (other than a Saturday) on which banks are open for business in
Hong Kong
“CLTE” Chaolitong Electronics Company Limited (9tbe"!),
a company incorporated in the PRC
“CLTT” Chaolitong Technology Company Limited (9tb"!),
a company incorporated in the PRC
“CLTT Approval Date” The date on which the Company receives all relevant approvals required
from Chinese regulatory authorities for the purchase of the Sale Interest by
the Purchaser from an Independent Third Party (or such later date as the
parties may agree)
“CLTT Completion Date” the date on which all the conditions to the Agreement are fulfilled (or
waived, as the case may be) and the acquisition of the Sale Interest and
Sale Assets are completed
“Company” SCUD Group Limited, a company incorporated in the Cayman Islands
with limited liability whose issued Shares are listed on the Main Board of
the Stock Exchange
“connected person(s)” has the meaning ascribed to it under the Listing Rules

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“Consideration” the aggregate consideration of approximately RMB245 million (equivalent
to approximately HK$257.91 million) payable by the Group for the Sale
Interest and the Sale Assets under the Agreement
“Consideration Shares” Up to 60 million Shares to be allotted and issued at the price of HK$2.05
per Share, credited as fully paid, to the Vendor if the relevant profit targets
are met
“Deloitte” Deloitte Touche Tohmatsu, a firm of certified public accountants
“Directors” Directors of the Company
“FY2005” financial year ended 31 December 2005
“FY2006” financial year ended 31 December 2006
“FY2008” financial year ending 31 December 2008
“FY2009” financial year ending 31 December 2009
“FY2010” financial year ending 31 December 2010
“General Mandate” the general mandate granted to the Directors to exercise the powers of the
Company to allot, issue and deal with shares of the Company up to 20% of
the issued share capital of the Company pursuant to the ordinary resolution
of the Shareholders passed in the annual general meeting of the Company
held on 10 May 2007
“Group” the Company and its subsidiaries, and following CLTT Completion Date,
would include CLTT
“Hong Kong” the Hong Kong Special Administrative Region of the PRC
“IFRS” International Financial Reporting Standard
“Independent Third Party” Third parties independent of the Company and connected persons of the
Company
“Listing Rules” The Rules Governing the Listing of Securities on the Stock Exchange
“Mr. Ma” Ma Yuk Sang, a Hong Kong resident and a connected person of the
Company by way of his 30% interest in the Purchaser

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“NPAT Targets” the net profit after tax targets for FY2008, FY2009 and FY2010
“Original Shareholders” Zheng Zhenjian (MD:), Ma Jie () and Zheng Wei (M) who
together own the entire equity interest in CLTE and CLTT as at the date of
the Agreement
“PRC” the People’s Republic of China
“Purchaser” Joint Smart Holdings Limited, a company incorporated in Hong Kong and
which the share capital is owned by the Company and the Vendor as to
70% and 30% respectively
“Sale Assets” the production equipment, inventory and intellectual property rights of
CLTE

“Sale Interest” entire equity interest in CLTT
“Share(s)” shares(s) of HK$0.10 each in the share capital of the Company
“Shareholder(s)” holder(s) of Shares
“Stock Exchange” Ma, a Hong Kong resident
“RMB” Renminbi, the lawful currency of Hong Kong
“sq.m.” square metre
“&#%8221; per cent.
Unless otherwise specified, this announcement contains translations between RMB and HK$ at the rate
of RMB1.00 = HK$1.0527. The translation should not be taken as a representation that the relevant
currency could actually be converted into HK$ at that rate or at all.
Hong Kong, 20 December 2007
As at the date of this announcement, the Board comprises Messrs. Fang Jin, Lin Chao, Guo Quan
Zeng and Li Hui Qiu being the executive Directors, Mr. Ho Man being the non-executive Director, and
Messrs. Heng Kwoo Seng, Wang Jing Zhong and Wang Jian Zhang being the independent non-executive
Directors.
By Order of the Board
SCUD GROUP LIMITED

Fang Jin
Chairman