A & S Group (Holdings) Limited — Proxy Solicitation & Information Statement 2005

Jun 29, 2005

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your shares in Le Saunda Holdings Limited, you should at once hand this circular, together with the enclosed form of proxy, to the purchaser or other transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

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

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(Incorporated in Bermuda with limited liability)
(Stock Code: 738)
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GENERAL MANDATE TO ISSUE NEW SHARES AND REPURCHASE SHARES

AMENDMENTS TO THE BYE-LAWS

RE-ELECTION OF DIRECTORS

AND

NOTICE OF ANNUAL GENERAL MEETING

A notice convening the annual general meeting of Le Saunda Holdings Limited to be held at 30th Floor, Hing Wai Centre, 7 Tin Wan Praya Road, Aberdeen, Hong Kong on Friday, 29 July 2005 at 3:00 p.m. (or any adjournment thereof) is set out on pages 14 to 19 of this circular. Whether or not you intend to attend the meeting, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon as soon as possible and in any event not less than 48 hours before the time for holding the meeting or any adjournment thereof. Completion and return of the form of proxy shall not preclude you from attending and voting at the annual general meeting or any adjourned meeting should you so wish.

• For identification purposes only

Hong Kong, 29 June 2005

CONTENTS

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
General Mandates to Issue New Shares and Repurchase its Own Shares . . . . .	4
Amendments to the Bye-laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Re-election of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Responsibility Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
Appendix – Explanatory Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
Notice of Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	14

−i −

DEFINITIONS

“Annual General Meeting”	annual general meeting of the Company to be held at 3:00
	p.m. on Friday, 29 July 2005 (or any adjournment
	thereof), the notice of which is set out on pages 14 to 19
	of this circular
“associates”	has the same meaning as defined in the Listing Rules
“Board”	board of Directors (or a duly authorised committee
	thereof)
“Bye-laws”	bye-laws of the Company as amended from time to time
“Companies Act”	Companies Act 1981 of Bermuda
“Company”	Le Saunda Holdings Limited, a company incorporated in
	Bermuda with limited liability, the securities of which are
	listed on the main board of the Stock Exchange
“Director(s)”	director(s) of the Company
“General Mandates”	the Share Issue Mandate and the Repurchase Mandate
“Group”	the Company and its subsidiaries
“Hong Kong”	the Hong Kong Special Administrative Region of the
	People’s Republic of China
“Latest Practicable Date”	24 June 2005, being the latest practicable date prior to the
	printing of this circular for ascertaining certain
	information included herein
“Listing Rules”	Rules Governing the Listing of Securities on the Stock
	Exchange
“Mr. Leung”	Mr. Leung Wai Ki, George, an independent non-executive
	Director
“Mr. Law”	Mr. Law King Wan, an independent non-executive
	Director
“Mr. Ven”	Mr. Ven Kam Cheong, Eric, an Executive Director

−1 −

DEFINITIONS

“Repurchase Mandate”	a general and unconditional mandate proposed to be
	granted at the Annual General Meeting to the Directors to
	exercise all the powers of the Company to repurchase
	Shares up to 10% of the entire issued Shares as at the date
	of passing of the relevant resolution
“SFO”	Securities and Futures Ordinance (Chapter 571 of the
	Laws of Hong Kong)
“Share(s)”	ordinary share(s) of HK$0.10 each in the share capital of
	the Company
“Share Issue Mandate”	a general and unconditional mandate proposed to be
	granted at the Annual General Meeting to the Directors to
	exercise all the powers of the Company to issue, allot and
	otherwise deal with new Shares up to 20% of the entire
	issued Shares as at the date of passing of the relevant
	resolution
“Share Options”	options granted by the Company pursuant to a share
	option scheme adopted by the Company on 22 July 2002
	entitling the grantees thereof to subscribe for a specific
	number of Shares within a specific period(s)
“Shareholders”	holders of Shares
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Takeovers Code”	The Code on Takeovers and Mergers
“HK$”	Hong Kong dollars
“%”	per cent.

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LETTER FROM THE BOARD

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(Incorporated in Bermuda with limited liability)

(Stock Code: 738)

Executive Directors:

Mr. Lee Tze Bun, Marces (Chairman) Mr. Wan Tat Wah (President) Ms. Chui Kwan Ho, Jacky (Managing Director) Ms. Tsui Oi Kuen Mr. Ven Kam Cheong, Eric

Independent non-executive Directors: Mr. Wong Kong Chi Mr. Law King Wan Mr. Leung Wai Ki, George

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

Principal Place of Business in Hong Kong: 30th Floor, Hing Wai Centre 7 Tin Wan Praya Road Aberdeen Hong Kong

29 June 2005

To Shareholders

Dear Sir/Madam,

GENERAL MANDATE TO ISSUE NEW SHARES AND REPURCHASE SHARES

AMENDMENTS TO THE BYE-LAWS

RE-ELECTION OF DIRECTORS

AND

NOTICE OF ANNUAL GENERAL MEETING

INTRODUCTION

The purpose of this circular is to provide you with information reasonably necessary to enable you to make a decision on whether to vote for or against the ordinary resolutions and special resolution to be proposed at the Annual General Meeting which will be convened for the purpose of considering and, if thought fit, approving:

• (a) the grant of the Share Issue Mandate and Repurchase Mandate to the Directors to issue new Shares and to repurchase Shares;

• For identification purposes only

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LETTER FROM THE BOARD

• (b) the amendments to the existing Bye-laws which are consequential to the recent changes to the Listing Rules and the implementation of the Code on Corporate Governance Practices; and

• (c) the re-election of Directors.

The notice of the Annual General Meeting is set out on pages 14 to 19 of this circular.

GENERAL MANDATES TO ISSUE NEW SHARES AND REPURCHASE ITS OWN SHARES

At the last annual general meeting of the Company held on 26 July 2004, the Directors were granted a general mandate to allot and issue Shares and a general mandate to repurchase Shares. These mandates will expire at the conclusion of the Annual General Meeting. The Directors propose to seek the approval of the Shareholders at the Annual General Meeting by way of passing ordinary resolutions for granting:

• the Share Issue Mandate to issue Shares up to a maximum of 20% of the Shares in issue as at the date of passing of the relevant resolution;

• the Repurchase Mandate to repurchase Shares up to a maximum of 10% of the Shares in issue as at the date of passing of the relevant resolution; and

• the Share Issue Mandate be extended to the Shares and other securities that are allowed to be repurchased by the Company pursuant to the Repurchase Mandate.

As required by the Listing Rules, an explanatory statement on the Repurchase Mandate is set out in the Appendix to this circular.

AMENDMENTS TO THE BYE-LAWS

On 1 January 2005, the Listing Rules were amended by replacing the Code of Best Practice in Appendix 14 by a new Code on Corporate Governance Practices. Accordingly, the Directors proposed to amend the Bye-laws to reflect the changes required by this new Code of Corporate Governance. An explanation of the proposed amendments to the existing Bye-Laws is set out as follows:

• (a) The Bye-laws will be amended so that in a general meeting, a poll will be demanded when it is so required under the Listing Rules;

• (b) A new provision will be included to provide that if the aggregate proxies held by the chairman of a particular general meeting and the Directors account for 5% or more of the total voting rights at that meeting, and if on a show of hands in respect of any resolution, the meeting votes in the opposite manner to that instructed in those proxies, the chairman of the general meeting and/or any Director holding proxies as aforesaid shall demand a poll, unless it is apparent from the total proxies held by those persons that a vote taken on a show of hands; and

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LETTER FROM THE BOARD

• (c) The Bye-laws will be amended so that every Director shall retire from office by rotation no later than the third annual general meeting of the Company after he was last elected or re-elected and Directors holding office as chairman or managing Director are also subject to retirement by rotation.

RE-ELECTION OF DIRECTORS

During the year under review, Mr. Ven Kam Cheong, Eric, an executive Director, and Mr. Leung Wai Ki, George, an independent non-executive Director, were appointed with effect from 13 December and 28 September 2004 respectively. According to Bye-law 86(2) of the Company’s Bye-laws, both of them 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. Accordingly, at the forthcoming annual general meeting, both Mr. Ven Kam Cheong, Eric and Mr. Leung Wai Ki, George will retire and, being eligible, offer themselves for re-election.

Also, in accordance with Bye-law 87 of the Company’s Bye-laws, one-third of the Directors for the time being (or, if their number is not a multiple of three, the number nearest to but not greater than one-third) shall retire from office by rotation provided that notwithstanding anything herein, the chairman of the Board and/or the managing director of the Company shall not, whilst holding such office, be subject to retirement by rotation or be taken into account in determining the number of Directors to retire in each year. Accordingly, at the forthcoming annual general meeting, Mr. Law King Wan will retire and, being eligible, offers himself for re-election.

Brief biographies of Mr. Ven Kam Cheong, Eric, Mr. Leung Wai Ki, George and Mr. Law King Wan are as follows:

Mr. Ven Kam Cheong, Eric (“Mr. Ven”), aged 41, is responsible for the Mainland China operations of the Company and its subsidiaries. Mr. Ven joined the Group in July 2003. He has over 18 years of experience in retail business, and working experience in Southeast Asia, Taiwan, Europe, Australia and Mainland China. Prior to joining the Group, he was the Chief Operation Officer of China Resources Retail (Group) Company Limited and involved extensively in its expansion in the Mainland China retail market, in which over 10 international high-end brands were operated under his supervision.

Other than the directorship held in the Company, Mr. Ven does not hold any positions in the Company or other members of the Company’s group and he has not held directorships in other listed public companies in the last three years.

Mr. Ven entered into a service agreement with the Group on 7 July 2003 (“Service Agreement”) which does not have any fixed term and may be terminated by either party by giving a three-month written notice, pursuant to which he is entitled to a fixed annual salary of HK$1,440,000 plus discretionary bonus (which is to be determined by the Board based on Mr. Ven’s performance with reference to the annual results of the Group). In addition, Mr. Ven shall be entitled to share options granted by the Company under the

−5 −

LETTER FROM THE BOARD

share option scheme from time to time adopted by the Company subject to compliance with the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited (“Listing Rules”) and the approval by the Board. The emolument of Mr. Ven (including the fixed salary and the bonus) is determined by the Board with reference to Mr. Ven’s qualification, experience and performance and the profitability of the Group.

Mr. Ven is interested in share options granted to him under the share option scheme adopted by the Company on 22 July 2002, pursuant to which he is entitled to subscribe for an aggregate of 5,000,000 shares in the capital of the Company.

Save as disclosed above, within the meaning of Part XV of the SFO, Mr. Ven does not have, and is not taken or deemed to have, any interests or short positions in any shares, underlying shares of equity derivatives or debentures of the Company and/or its associated corporations.

Save as disclosed above, Mr. Ven is not connected with any directors, chief executives, substantial shareholders or controlling shareholders or any of their respective associates (as defined in the Listing Rules) of the Company.

Save as disclosed above, the Company is not aware of any other matter that need to be brought to the shareholders of the Company in relation to Mr. Ven’s appointment.

Mr. Leung Wai Ki, George (“Mr. Leung”), aged 47, has over 20 years of experience in accounting, financial management, auditing and receivership. Mr. Leung is acting as a director and financial controller of a real estate development company in Hong Kong. He joined the Group in September 2004.

There is currently no service contract signed between the Company and Mr. Leung for acting as the Company’s independent non-executive Director. Mr. Leung will be entitled to receive an annual director’s fee of HK$120,000 which is determined and approved by the Board according to prevailing market rate and the Company’s remuneration policy and which is subject to review by the Board each year.

Save as disclosed above, within the meaning of Part XV of the SFO, Mr. Leung does not have, and is not deemed to have, any interests or short positions in any shares, underlying shares or debentures of the Company and/or its associated corporations.

Save as disclosed above, Mr. Leung is not connected with any directors, chief executives, substantial shareholders or controlling shareholders (as defined in the Listing Rules) of the Company.

Save as disclosed above, the Company is not aware of any other matter that need to be brought to the shareholders of the Company in relation to Mr. Leung’s appointment.

Mr. Law King Wan , aged 69, is Director of Sun Hung Kai Properties Limited. He first joined the Group in 1992 and has over 30 years of experience in sales and marketing of properties. He left the Group in February 2002 and re-joined the Group in November 2002.

−6 −

LETTER FROM THE BOARD

There is no service contract between the Company and Mr. Law as from acting as an independent non-executive Director of the Company since 29 November 2002 but Mr. Law is entitled to receive an annual director’s fee of HK$120,000 which is determined and approved by the Board according to prevailing market rate and the Company’s remuneration policy and is subject to review by the Board each year.

Save as disclosed above, within the meaning of Part XV of the SFO, Mr. Law does not have, and is not deemed to have, any interests or short positions in any Shares, underlying shares, or debentures of the Company and/or its associated corporations.

Save as disclosed above, Mr. Law is not connected with any directors, chief executives, substantial shareholders or controlling shareholders (as defined in the Listing Rules) of the Company.

All Directors will be subject to the retirement by rotation and re-election of directors of the Company at the annual general meeting of the Company in accordance with the requirements contained in the Bye-laws of the Company which require, inter alia, that at each annual general meeting one-third of the Directors for the time being (or, if their number is not a multiple of three (3) the number nearest to but not less than one-third) shall retire from office by rotation provided that every Director (including those appointed for a specific term) shall retire from office by rotation no later than the third annual general meeting after he was elected or re-elected.

ANNUAL GENERAL MEETING

The notice convening the Annual General Meeting is set out on pages 14 to 19 of this circular. A form of proxy is also enclosed with this circular and whether or not you intend to attend the Annual General Meeting, you are requested to complete the form of proxy and return it to the principal office of the Company in Hong Kong in accordance with the instructions printed thereon not less than 48 hours before the time for holding the Annual General Meeting. Completion of the form of proxy and returning it to the Company will not preclude you from attending, and voting at, the Annual General Meeting if you so wish.

Procedures for Demand Poll

The procedures by which the Shareholders may demand a poll at the Annual General Meeting are as follows.

According to Bye-law 66, at any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands unless (before or on the declaration of the result of the show of hands or on the withdrawal of any other demand for a poll) a poll is demanded:

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

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

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LETTER FROM THE BOARD

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

• (d) by a member or members present in person (or in the case of a member being a corporation by its duly authorised representative) or by proxy and holding Shares in the Company conferring a right to vote at the meeting being shares on which an aggregate sum has been paid up equal to not less than one-tenth of the total sum paid up on all Shares conferring the right.

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

RESPONSIBILITY STATEMENT

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

RECOMMENDATION

The Board believes that the ordinary and special resolutions to be put before the Annual General Meeting are in the best interests of the Company and the Shareholders as a whole. Accordingly, the Board recommends you to vote in favour of all the ordinary resolutions and special resolution to be proposed at the Annual General Meeting.

Yours faithfully, For and on behalf of the Board Lee Tze Bun, Marces Chairman

−8 −

EXPLANATORY STATEMENT

APPENDIX

This Appendix serves as an explanatory statement as required by the Listing Rules to provide the requisite information to you for your consideration of the Repurchase Mandate.

SHARE CAPITAL

As at the Latest Practicable Date, the issued share capital of the Company was HK$50,530,960 comprising 505,309,600 Shares.

Subject to the passing of the relevant ordinary resolutions as set out in the notice of the Annual General Meeting approving the Repurchase Mandate and assuming that no further Shares are issued and that no further Shares are purchased by the Company on or prior to the Annual General Meeting, the Directors will be authorized to purchase up to 50,530,960 Shares pursuant to the Repurchase Mandate.

The Company is also prohibited from making securities repurchases on the Stock Exchange if the repurchase would result in the number of listed securities in the hands of the public falling below 25% as required by the Stock Exchange.

REASONS FOR REPURCHASES

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

FUNDING OF REPURCHASES

In repurchasing Shares, the Company must apply funds legally available for such purpose in accordance with its memorandum of association and Bye-laws and the laws of Bermuda. Under Bermuda law, the amount of capital paid by the Company in connection with a Share repurchase may only be paid out of either the capital paid up on the relevant Shares, or the funds of the Company that would otherwise be available for distribution by way of dividend or distribution or the proceeds of a new issue of Shares made for such purpose. The amount of premium payable on a repurchase of Shares by the Company may only be paid out of either the funds of the Company that would otherwise be available for dividend or distribution or out of the share premium account of the Company. Under Bermuda law, the shares so repurchased will be treated as cancelled but the aggregate amount of the authorised share capital will not be reduced so that the shares may be subsequently re-issued.

Taking into account of the current working capital position of the Company, the Directors consider that, if the Repurchase Mandate were to be exercised in full, it might have a material adverse effect on the working capital and/or the gearing position of the Company as compared with the position disclosed in the audited consolidated accounts of the Company in the annual

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APPENDIX

EXPLANATORY STATEMENT

report for the year ended 28 February 2005. However, the Directors do not propose to exercise the Repurchase Mandate to such extent as could, in the circumstances have a material adverse effect on the working capital or the gearing level of Company which in the opinion of the Directors is from time to time appropriate for the Company.

DIRECTORS, THEIR ASSOCIATES AND CONNECTED PERSONS

None of the Directors nor, to the best of their knowledge having made all reasonable enquiries, any of their associates currently intends to sell Shares to the Company under the Repurchase Mandate in the event that it is granted by the Shareholders at the Annual General Meeting.

No connected person (as defined in the Listing Rules) has notified the Company that he has a present intention to sell any Shares to the Company, or that he has undertaken not to sell any Shares held by him to the Company, in the event that the Repurchase Mandate is granted by the Shareholders at the Annual General Meeting.

SHARE REPURCHASE MADE BY THE COMPANY

The Company has not purchased any of its Shares (whether on the Stock Exchange or otherwise) in the six months preceding the Latest Practicable Date.

DIRECTORS’ UNDERTAKING

The Directors have undertaken to the Stock Exchange that they will exercise the Repurchase Mandate in accordance with the Listing Rules and the applicable laws of Bermuda so far as the same may be applicable.

EFFECT ON THE TAKEOVERS CODE

If, on the exercise of the power by the Company to repurchase Shares pursuant to the Repurchase Mandate, a Shareholder’s proportionate interest in the voting rights of the Company increases, such increase will be treated as an acquisition for the purposes of the Takeovers Code. As a result, a Shareholder or a group of Shareholders acting in concert (as defined in the Takeovers Code), depending on the level of such increase, could obtain or consolidate control of the Company and may become obliged to make a mandatory offer in accordance with Rule 26 of the Takeovers Code.

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APPENDIX

EXPLANATORY STATEMENT

As at the Latest Practicable Date, according to the register of interests required to be kept by the Company under the SFO, the Shareholders who were interested in 5% or more of the issued share capital of the Company were as follows:

		% of issued
Name	No. of Shares	share capital
HSBC International Trustee Limited (“HSBCITL”)	205,000,000	40.6
HSBC Trustee (Cook Islands) Limited	205,000,000	40.6
(“HSBC Trustee”) (formerly known as
Bermuda Trust (Cook Islands) Limited)
Lee Tze Bun Trustee Holding Corporation as	155,000,000	30.7
trustee of The Lee Tze Bun Unit Trust
(“LTB Trust”)
Lee Keung Trustee Holding Corporation as trustee	50,000,000	9.9
of The Lee Keung Unit Trust (“LK Trust”)
Ms. Chui Kwan Ho, Jacky (“Ms. Chui”),	50,000,000	9.9
Ms. Tsui Oi Kuen (“Ms. Tsui”) and
Ms. Lee Wing Kam Rowena Jackie (“Ms. Lee”)
as trustees of The Lee Keung Charitable
Foundation (“The Charitable Foundation”)
Mr. Lee Tze Bun, Marces (“Mr. Lee”)	25,820,000	5.1
Succex Limited	30,000,000	5.9
Ms. Chui	56,250,000	11.1
Ms. Tsui	54,856,000	10.9
Ms. Lee	54,000,000	10.7
Value Partners Limited (“VPL”)	50,000,000	9.9
Mr. Cheah Cheng Hye (“Mr. Cheah”)	50,000,000	9.9

HSBCITL, being a controlling corporation of HSBC Trustee, was taken to be interested in 205,000,000 Shares of the Company.

HSBC Trustee, is the trustee of a unit trust called The Lee Keung Family Trust (“Lee Family Trust”) which is the beneficial owner of LTB Trust and LK Trust. By virtue of HSBC Trustee’s interests in Lee Family Trust, HSBC Trustee was taken to be interested in 205,000,000 Shares of which 155,000,000 Shares are held by LTB Trust and 50,000,000 Shares are held by LK Trust.

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APPENDIX

EXPLANATORY STATEMENT

Mr. Lee is the appointor of the LTB Trust and LK Trust. All units in the LTB Trust and the LK Trust (other than one unit in each of the LTB Trust and LK Trust which are beneficially owned by Mr. Lee) are beneficially owned by Lee Family Trust, a discretionary trust.

Mr. Lee personally holds 25,820,000 Shares, representing approximately 5.1% of the issued share capital of the Company. Succex Limited holds 30,000,000 Shares, in which Mr. Lee is a controlling shareholder. Together with the interests in the LTB Trust, LK Trust and Succex Limited, Mr. Lee was interested in approximately 260,820,000 Shares, being approximately 51.6% of the issued share capital of the Company. Assuming the Repurchase Mandate is exercised in full and there is not any issue of new Shares by the Company, the shareholding of Mr. Lee will be increased to 57.4% of the entire issued share capital of the Company and therefore no obligation would arise in accordance with Rule 26 of the Takeovers Code. The Company has no intention to purchase Shares to such an extent which will result in the amount of Shares held by the public being reduced to less than 25%.

Ms. Chui holds an aggregate of 56,250,000 Shares, comprising her personal interest of 4,150,000 Shares, and together with Ms. Tsui and Ms. Lee as trustees of The Charitable Foundation hold 50,000,000 Shares, and 2,100,000 Share Options at a subscription price of HK$0.38 were granted on 13 April 2004, representing approximately 11.1% of the issued share capital of the Company (assuming the Share Options are exercised in full). Assuming the Repurchase Mandate is exercised in full and there is not any issue of new Shares by the Company, the shareholding of Ms. Chui will be increased to approximately 12.4% of the entire issued share capital of the Company and therefore no obligation would arise in accordance with Rule 26 of the Takeovers Code.

Ms. Tsui holds an aggregate of 54,856,000 Shares, comprising her personal interest of 2,756,000 Shares, and together with Ms. Chui and Ms. Lee as trustees of The Charitable Foundation hold 50,000,000 Shares, and 2,100,000 Share Options at a subscription price of HK$0.38 were granted on 13 April 2004, representing approximately 10.9% of the issued share capital of the Company (assuming the Share Options are exercised in full). Assuming the Repurchase Mandate is exercised in full and there is not any issue of new Shares by the Company, the shareholding of Ms. Tsui will be increased to approximately 12.1% of the entire issued share capital of the Company and therefore no obligation would arise in accordance with Rule 26 of the Takeovers Code.

Ms. Lee, daughter of Mr. Lee, holds an aggregate of 54,000,000 Shares, comprising her personal interest of 4,000,000 Shares, and together with Ms. Chui and Ms. Tsui as trustees of The Charitable Foundation hold 50,000,000 Shares, representing approximately 10.7% of the issued share capital of the Company. Assuming the Repurchase Mandate is exercised in full and there is not any issue of new Shares by the Company, the shareholding of Ms. Lee will be increased to approximately 11.9% of the entire issued share capital of the Company and therefore no obligation would arise in accordance with Rule 26 of the Takeovers Code.

50,000,000 Shares representing approximately 9.9% of the issued share capital of the Company are held by various funds under the management of VPL, being the fund manager. Therefore, VPL is deemed to be interested in these Shares.

Mr. Cheah is a controlling shareholder of VPL. By virtue of Mr. Cheah’s interests in VPL, Mr. Cheah is deemed to be interested in 50,000,000 Shares, representing approximately 9.9% of the issued share capital of the Company.

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APPENDIX

EXPLANATORY STATEMENT

Assuming no issue of Shares and repurchase of Shares between the Latest Practicable Date and the Annual General Meeting, and given the Repurchase Mandate been approved by the Shareholders, in the event that the Repurchase Mandate is exercised in full, the substantial Shareholders and the parties named above who are taken to be acting in concert (i.e. Succex Limited, Mr. Lee and Ms. Lee) in aggregate control the voting rights of 62.30% and 69.22% of the entire issued Shares before and after such repurchase. The Directors therefore are not aware of any shareholder or a group of shareholders acting in concert, who may become obliged to make a mandatory offer in accordance with Rule 26 of the Takeovers Code. Accordingly, the Directors are not aware of any consequences which would arise under the Takeovers Code as a consequence of any repurchase made pursuant to the Repurchase Mandate.

The Company has no intention to purchase Shares to such an extent which will result in the amount of Shares held by the public being reduced to less than 25%

SHARE PRICES

The highest and lowest prices at which the Shares have been traded on the Stock Exchange during the 12 months preceding the Latest Practicable Date were as follows:

	**Share **	prices
	Highest	Lowest
	HK$	HK$
2004
July	0.94	0.65
August	0.91	0.78
September	0.85	0.79
October	1.04	0.81
November	1.31	0.96
December	1.33	1.10
2005
January	1.25	1.09
February	1.37	1.20
March	1.37	1.16
April	1.29	1.16
May	1.25	1.15
June*	1.35	1.16

• Up to and including the Latest Practicable Date

SHAREHOLDERS’ APPROVAL

The Listing Rules provides that all proposed repurchases of securities by a company with primary listing on the Stock Exchange must be approved in advance by an ordinary resolution, either by way of general mandate or by specific approval of a particular transaction.

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NOTICE OF ANNUAL GENERAL MEETING

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(Incorporated in Bermuda with limited liability)

(Stock Code: 738)

NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the annual general meeting of Le Saunda Holdings Limited (the “ Company ”) will be held at 30th Floor, Hing Wai Centre, 7 Tin Wan Praya Road, Aberdeen, Hong Kong on Friday, 29 July 2005 at 3:00 p.m. for the following purposes:

As ordinary business:

1. To receive and consider the audited financial statements of the Company and the reports of the Directors and auditors for the year ended 28 February 2005.

2. To consider and declare a final dividend of HK 4.5 cents per Share for the financial year ended 28 February 2005.

3. To re-elect the retiring Directors and to authorize the Board to fix the Directors’ remuneration.

4. To re-appoint auditors and to authorize the Board to fix their remuneration.

As special business:

ORDINARY RESOLUTIONS

To consider and, if thought fit, pass with or without modifications, the following resolutions as ordinary resolutions:

1. “ THAT :

2. (a) the general mandate granted to the Directors of the Company to exercise the powers of the Company to allot and issue shares in the capital of the Company (“Shares”) as approved by the shareholders of the Company pursuant to an ordinary resolution passed at the annual general meeting of the Company held on 26 July 2004 be and is hereby revoked (without prejudice to any valid exercise of such general mandate prior to the passing of this resolution);

3. For identification purposes only

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NOTICE OF ANNUAL GENERAL MEETING

• (b) subject to paragraph (d) of this resolution, the exercise by the Directors of the Company during the Relevant Period (as hereinafter defined) of all the powers of the Company to allot, issue and deal with additional Shares and to make or grant offers, agreements and options which would or might require the exercise of such power be and is hereby generally and unconditionally approved;

• (c) the approval in paragraph (b) of this resolution shall authorize the Directors of the Company during the Relevant Period (as hereinafter defined) to make or grant offers, agreements and options which would or might require the exercise of such power after the end of the Relevant Period;

• (d) the aggregate nominal amount of share capital allotted or agreed conditionally or unconditionally to be allotted (whether pursuant to an option or otherwise) and issued by the Directors of the Company pursuant to the approval in paragraph (b) of this resolution, otherwise than pursuant to (i) a Rights Issue (as hereinafter defined); (ii) or the exercise of rights of conversion or subscription under the terms of any securities which are convertible into Shares or any share option scheme or similar arrangement of the Company for the time being adopted for the grant or issue to eligible persons of Shares or rights to acquire Shares; or (iii) an issue of Shares as scrip dividends or similar arrangement providing for the allotment of Shares in lieu of the whole or part of a dividend in accordance with the new Bye-laws of the Company, shall not exceed in total 20% of the aggregate nominal amount of the share capital of the Company as at the date of passing of this resolution, and the said approval shall be limited accordingly; and

• (e) 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 the Bye-laws of the Company or any applicable laws of Bermuda to be held; or

• (iii) the date on which the authority set out in this resolution is revoked or varied by an ordinary resolution of the shareholders of the Company in general meeting.

“Rights Issue” means an offer of shares open for a period fixed by the Directors of the Company to holders of Shares on the register on a fixed record date in proportion to their then holdings of such Shares (subject to such exclusions to 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, or the requirements of, any recognized regulatory body or any stock exchange in any territory outside Hong Kong).”

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NOTICE OF ANNUAL GENERAL MEETING

1. “ THAT :

2. (a) the general mandate granted to the Directors of the Company to exercise the powers of the Company to repurchase Shares pursuant to an ordinary resolution passed by the shareholders of the Company be and is hereby revoked (but without prejudice to any exercise of such mandate prior to the passing of this resolution);

3. (b) subject to paragraph (c) of this resolution, the exercise by the Directors of the Company during the Relevant Period (as hereinafter defined) of all the powers of the Company to repurchase Shares be and is hereby generally and unconditionally approved;

4. (c) the aggregate nominal amount of the Shares which the Company is authorized to purchase pursuant to the approval in paragraph (b) of this resolution shall not exceed 10% of the aggregate nominal amount of the share capital of the Company in issue as at the date of passing of this resolution, and the said approval shall be limited accordingly; and

5. (d) for the purpose 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 the Bye-laws of the Company or any applicable laws of Bermuda to be held; or

   • (iii) the date on which the authority set out in this resolution is revoked or varied by an ordinary resolution of the shareholders of the Company in general meeting.”

6. “ THAT conditional upon ordinary resolutions numbered 5 and 6 set out in the Notice becoming unconditional and effective, the aggregate nominal amount of the share capital of the Company which are purchased by the Company pursuant to the authority granted to the Directors of the Company in accordance with the said resolution numbered 6 shall be added to the aggregate nominal amount of share capital that may be allotted, issued or dealt with or agreed conditionally or unconditionally to be allotted, issued or dealt with by the Directors of the Company pursuant to and in accordance with ordinary resolution numbered 5 set out in the Notice.”

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NOTICE OF ANNUAL GENERAL MEETING

SPECIAL RESOLUTION

To consider and, if thought fit, pass with or without modification, the following resolution as special resolution:

1. “ THAT the Bye-laws of the Company be amended in the following manner:

2. (a) By inserting in the opening paragraph of Bye-law 66 the words “voting by way of poll is required by the rules of the Designated Stock Exchange or” immediately after the words “decided on a show of hands unless”;

3. (b) By adding the following new Bye-law 66A immediately after Bye-law 66:

   • “66A Notwithstanding any other provisions in these Bye-laws:

     • (a) if the aggregate proxies held by the chairman of a particular general meeting and the Directors account for 5 per cent. or more of the total voting rights at that general meeting, and

     • (b) if on a show of hands in respect of any resolution, the shareholders at the general meeting vote in the opposite manner to that instructed in the proxies referred to in (a) above,

the chairman of the general meeting and/or any Director holding the proxies referred to above shall demand a poll provided that if it is apparent from the total proxies held by the persons referred to in (a) above that a vote taken on a poll will not reverse the vote taken on a show of hands, then no poll shall be required.”

• (c) By deleting Bye-law 87(1) in its entirety and replacing it with the following:

• “87(1) Notwithstanding any other provisions in these Bye-laws, at each annual general meeting one-third of the Directors for the time being (or, if their number is not a multiple of three (3) the number nearest to but not less than one-third) shall retire from office by rotation provided that every Director (including those appointed for a specific term) shall retire from office by rotation no later than the third annual general meeting after he was last elected or re-elected.”

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NOTICE OF ANNUAL GENERAL MEETING

• (d) By deleting the last sentence of Bye-laws 90 and replacing it with the following sentence:

“A Director appointed to an office under this Bye-law shall be subject to the same provisions as to rotation, resignation and removal as the other Directors of the Company, and he shall (subject to the provisions of any contract between him and the Company) ipso facto and immediately cease to hold such office if he shall cease to hold the office of Director for any cause.”

On behalf of the Board Lau Yin Wan Company secretary

Hong Kong, 29 June 2005

As at the date hereof, the Board comprises five executive Directors, namely Mr. Lee Tze Bun, Marces, Mr. Wan Tat Wah, Ms. Chui Kwan Ho, Jacky, Ms. Tsui Oi Kuen and Mr. Ven Kam Cheong, Eric and three independent non-executive Directors, namely Mr. Wong Kong Chi, Mr. Law King Wan and Mr. Leung Wai Ki, George.

Principal place of business in Hong Kong:

30th Floor, Hing Wai Centre

7 Tin Wan Praya Road

Aberdeen Hong Kong

Notes:

1. A form of proxy for use at the meeting is being despatched to the shareholders of the Company together with a copy of this notice.

2. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorized in writing or, if the appointor is a corporation, either under its seal or under the hand of any officer, attorney or other person duly authorized to sign the same.

3. Any shareholder entitled to attend and vote at the meeting convened by the above notice shall be entitled to appoint one or more proxies to attend and vote instead of him. A proxy need not be a member of the Company.

4. In order to be valid, the form of proxy, together with the power of attorney or other authority (if any) under which it is signed, or a certified copy of such power of attorney or authority, must be deposited at the Company’s principal office in Hong Kong at 30th Floor, Hing Wai Centre, 7 Tin Wan Praya Road, Aberdeen, Hong Kong not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof.

5. The register of members of the Company will be closed from Wednesday, 27 July 2005 to Friday, 29 July 2005, both days inclusive, during which period no transfer of shares will be effected. In order to qualify for the final dividend which, if approved, will be payable on 3 August 2005, all transfers accompanied by the relevant share certificates and transfer forms must be lodged with Computershare Hong Kong Investor Services Limited, Unit 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Hong Kong for registration no later than 4:00 p.m. on Tuesday, 26 July 2005.

6. Completion and deposit of the form of proxy will not preclude a shareholder of the Company from attending and voting in person at the meeting convened or any adjourned meeting and in such event, the form of proxy will be deemed to be revoked.

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NOTICE OF ANNUAL GENERAL MEETING

1. Where there are joint holders of any share of the Company, any one of such joint holders may vote, either in person or by proxy, in respect of such share as if he/she were solely entitled thereto, but if more than one of such joint holders are present at the meeting, the most senior shall alone be entitled to vote, whether in person or by proxy. For this purpose, seniority shall be determined by the order in which the names stand on the register of members of the Company in respect of the joint holding.

2. A circular containing further details regarding resolutions 5 and 6 as required by the Rules Governing the Listing of Securities in the Stock Exchange of Hong Kong Limited will be despatched to the shareholders of the Company together with the 2005 Annual Report on or before 30 June 2005.

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