APT Satellite Holdings Limited — Proxy Solicitation & Information Statement 2005

Mar 22, 2005

THIS DOCUMENT 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 adviser.

If you have sold or transferred all your securities in GOME ELECTRICAL APPLIANCES HOLDING LIMITED, you should at once hand this circular to the purchaser or to the transferee or to the bank, stockbroker or other agent through whom the sale was effected for transmission to the purchaser or to the transferee.

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

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GOME Electrical Appliances Holding Limited 國美電器控股有限公司[*]

(incorporated in Bermuda with limited liability)

(Stock Code: 493)

PROPOSED RE-ELECTION AND ELECTION OF DIRECTORS, ADOPTION OF THE SHARE OPTION SCHEME AND

GENERAL MANDATES TO ISSUE AND REPURCHASE SHARES

A notice convening an annual general meeting of GOME Electrical Appliances Holding Limited to be held at Salon at the JW Marriott Ballroom of JW Marriott Hotel Hong Kong, Pacific Place, 88 Queensway, Hong Kong at 9:30 a.m. on 15 April 2005 is set out on page 22 to 25 of this circular. Whether or not you are able to attend the meeting in person, please complete the enclosed form of proxy in accordance with the instructions printed thereon and return it to the branch share registrar of the Company in Hong Kong, Abacus Share Registrars Limited at Ground Floor, Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong as soon as practicable and in any event not later than 48 hours before the time appointed for holding the meeting or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the meeting should you so wish.

21 March 2005

* for the purpose of identification only

CONTENT

	Page
Definition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1-2
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3-7
Appendix I – Biographical Details of Directors proposed
for Re-election or Election . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8-10
Appendix II – A Summary of the Principal Terms of
the Share Option Scheme . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11-18
Appendix III – Explanatory Statement for the Repurchase Mandate . . . . . . . . . . . . . . . . . . . . . .	19-21
Appendix IV – Notice of the Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	22-25

• i -

DEFINITION

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

• “Annual General Meeting”

the annual general meeting of the Company to be held at Salon at the JW Marriott Ballroom of JW Marriott Hotel Hong Kong, Pacific Place, 88 Queensway, Hong Kong, on 15 April 2005 at 9:30 a.m., to consider and, if thought fit, approve the proposals for re-election of Directors, adoption of the Share Option Scheme and grant of general mandates to issue and repurchase Shares, or any adjournment thereof

• “associates”

has the same meaning ascribed to it in the Listing Rules

• “Board”

the board of Directors

• “Bye-laws”

the bye-laws of the Company

• “Companies Act”

the Companies Act 1981 of Bermuda (as amended)

“Company”

GOME Electrical Appliances Holding Limited, an exempted company incorporated in Bermuda with limited liability and the securities of which are listed on the Main Board of the Stock Exchange

• “controlling shareholder”

has the same meaning ascribed to it in the Listing Rules

• “Directors”

• the directors of the Company

• “Eligible Participants”

any employees (whether full-time or part-time (with no minimum hours of work per week required)), executives or officers of the Company and any of its subsidiaries (including executive and nonexecutive Directors) and any business consultants, business partners, suppliers, customers, agents, financial or legal advisers, debtors and creditors who the Board considers, in its sole discretion, will contribute or have contributed to the Company or any of its subsidiaries

• “Group” the Company and its subsidiaries

• “Hong Kong”

the Hong Kong Special Administrative Region of the People’s Republic of China

• “Latest Practicable Date”

• 16 March 2005, being the latest practicable date prior to the printing of this circular for ascertaining certain information referred to in this circular

• 1 -

	DEFINITION
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock
	Exchange
“SFO”	the Securities and Futures Ordinance (Chapter 571 of the Laws of
	Hong Kong)
“Share Option Scheme”	the share option scheme which is proposed to be adopted by the
	Company, the principal terms of which are summarised in
	Appendix II to this circular
“Share(s)”	ordinary share(s) of HK$0.10 each in the capital of the Company
“Shareholder(s)”	the holder(s) of the Shares
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“subsidiary”	a subsidiary within the meaning of the Companies Ordinance
	(Chapter 32 of the Laws of Hong Kong)
“Takeovers Code”	Hong Kong Code on Takeovers and Mergers
“HK$”	Hong Kong dollar, the lawful currency of Hong Kong
“%”	per cent.

• 2 -

LETTER FROM THE BOARD

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GOME Electrical Appliances Holding Limited 國美電器控股有限公司[*]

(incorporated in Bermuda with limited liability)

(Stock Code: 493)

Executive Directors: WONG Kwong Yu (Chairman) DU Juan LAM Pang NG Kin Wah

Registered office: Canon’s Court 22 Victoria Street Hamilton HM12 Bermuda

Independent Non-executive Directors: SZE Tsai Ping, Michael CHAN Yuk Sang CHEN Huai

Principal place of business in Hong Kong: Unit 6101, 61st Floor The Center 99 Queen’s Road Central Hong Kong

21 March 2005

To the Shareholders

Dear Sir or Madam,

PROPOSED RE-ELECTION OF DIRECTORS, ADOPTION OF THE SHARE OPTION SCHEME AND

RENEWAL OF GENERAL MANDATES TO ISSUE AND REPURCHASE SHARES

I. INTRODUCTION

The purpose of this circular is to provide you with information regarding resolutions to be proposed at the Annual General Meeting relating to (i) the re-election of Directors; (ii) the adoption of the Share Option Scheme; and (iii) the grant to the Directors the general mandates to issue and repurchase Shares up to 20% and 10% respectively of the aggregate nominal amount of the Company’s issued share capital as at the date of the passing of the relevant resolutions. A notice of the Annual General Meeting in relation to the proposals is set out on pages 22 to 25 of this circular.

• for the purpose of identification only

• 3 -

LETTER FROM THE BOARD

II. RE-ELECTION OF DIRECTORS

The Board currently consists of seven Directors, namely Mr. Wong Kwong Yu, Ms. Du Juan, Mr. Lam Pang and Mr. Ng Kin Wah, being the executive Directors, and Mr. Sze Tsai Ping, Michael, Mr. Chan Yuk Sang and Mr. Chen Huai, being the independent non-executive Directors.

Pursuant to Bye-law 99(A) of the Bye-laws, at each annual general meeting of the Company, all Directors for the time being shall retire from office. Pursuant to Bye-law 99(B) of the Bye-laws, a retiring Director shall be eligible for re-election. Thus, all Directors will hold office only until the Annual General Meeting. They are eligible and, save for Mr. Chen Hui, are offered for re-election at the Annual General Meeting. Mr. Chen Hui has confirmed to the Board that he has no disagreement with the Board and there are no matters which need to be brought to the attention of the Shareholders or the Stock Exchange.

It is proposed that Mr. Mark C. Greaves will be put forward for election as a new independent nonexecutive Director at the Annual General Meeting.

A brief biographical details of the Directors proposed for re-election or election are set out in Appendix I to this circular.

III. ADOPTION OF THE SHARE OPTION SCHEME

As the Company currently does not have any share option scheme, the Directors propose to adopt the Share Option Scheme in compliance with the Listing Rules.

The principal terms of the Share Option Scheme are summarised in Appendix II to this circular.

Application has been made to the Listing Committee of the Stock Exchange for the listing of, and permission to deal in, the Shares which may fall to be issued pursuant to the exercise of the options granted under the Share Option Scheme.

The Board considers that it is not appropriate or helpful to the Shareholders to state the value of all options that can be granted pursuant to the Share Option Scheme as if they had been granted at the Latest Practicable Date. The Board believes that any statement regarding the value of the options as at the Latest Practicable Date will not be meaningful to the Shareholders, since the options to be granted shall not be assignable, and no holder of the option shall in any way sell, transfer, charge, mortgage or create any interest (legal or beneficial) in favour of any third party over or in relation to any option.

In addition, the calculation of the value of the options is based on a number of variables such as the exercise price, the exercise period, interest rate, expected volatility and other relevant variables. The Board believes that any calculation of the value of the options as at the Latest Practicable Date based on a great number of speculative assumptions would not be meaningful and would be misleading to the Shareholders.

• 4 -

LETTER FROM THE BOARD

The adoption of the Share Option Scheme is conditional upon:

• (a) the Shareholders’ approval at the Annual General Meeting to adopt the Share Option Scheme; and

• (b) the Stock Exchange granting the approval for the listing of and permission to deal in the Shares to be issued pursuant to the exercise of any options granted under the Share Option Scheme.

Application has been made to the Listing Committee of the Stock Exchange for obtaining the approval mentioned in paragraph (b) above.

IV. GRANT OF 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 20% of the aggregate nominal amount of the share capital of the Company in issue as at the date of passing of such resolution; (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 of such resolution; and (iii) to add the aggregate amount of the Shares repurchased by the Company to the general mandate to the Directors to allot new Shares of up to 20% of the issued share capital of the Company as at the date of passing of such resolution.

The mandates to issue and repurchase Shares granted at the annual general meeting of the Company held on 16 June 2004 will lapse at the conclusion of the Annual General Meeting. In this regard, resolutions nos. 5 to 7 set out in the notice of Annual General Meeting will be proposed at the Annual General Meeting to renew these mandates. With reference to these resolutions, the Directors wish to state that they have no present intention to repurchase any Shares or to issue any new Shares pursuant to the relevant mandates.

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

V. ANNUAL GENERAL MEETING

A notice convening the Annual General Meeting for the purpose of considering and, if thought fit, passing the ordinary resolutions to, among others, adopt the proposals for re-election of Directors, adoption of the Share Option Scheme and grant of general mandates to Directors to issue and repurchase Shares is set out in Appendix IV to this circular.

• 5 -

LETTER FROM THE BOARD

A form of proxy for use at the Annual General Meeting is also enclosed with this circular. Whether or not you are able to attend the Annual General Meeting, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return the same to the Company’s share registrar in Hong Kong, Abacus Share Registrars Limited, at Ground Floor, Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong as soon as possible, and in any event not less than 48 hours before the time appointed for holding of the Annual General Meeting or any adjournment thereof. Completion and return of the form of proxy shall not preclude Shareholders from attending and voting in person at the Annual General Meeting or any adjournment thereof if they so wish.

Pursuant to Bye-law 70 of the Bye-laws, a resolution put to the vote of a general 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:

• (i) by the Chairman of the meeting; or

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

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

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

VI. RECOMMENDATION

The Board considers that the proposed ordinary resolutions to be put forward at the Annual General Meeting are in the interests of the Company and Shareholders as a whole. Accordingly, the Board recommends all Shareholders to vote in favour of all resolutions to be proposed at the Annual General Meeting.

VII. DOCUMENTS AVAILABLE FOR INSPECTION

Copy of the rules of the Share Option Scheme will be available for inspection at the principal place of business of the Company in Hong Kong at 6101, 61st Floor, The Center, 99 Queen’s Road Central, Hong Kong during normal business hours for a period of 14 days before the date of the Annual General Meeting (i.e. from 1 April 2005 to 14 April 2005 (both dates inclusive)) and at the Annual General Meeting.

• 6 -

LETTER FROM THE BOARD

VIII. RESPONSIBILITY STATEMENT

This circular includes particulars given in compliance with the Listing Rules for the purpose of giving information with respect 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.

Yours faithfully For and on behalf of

GOME Electrical Appliances Holding Limited Wong Kwong Yu

Chairman

• 7 -

APPENDIX I BIOGRAPHICAL DETAILS OF DIRECTORS PROPOSED FOR RE-ELECTION OR ELECTION

The biographical details of the Directors proposed for re-election or election at the Annual General Meeting are set out as follows:

Executive Directors

Mr. WONG Kwong Yu（黃光裕） , aged 35, has been the Chairman of the Group and an executive Director since April 2002.

Mr. WONG has 17 years of experience in the retailing of electrical appliances and consumer electronic products. Mr. Wong founded the GOME Group in 1987 and has since developed the GOME Group into one of the largest chain operators for electrical appliances and consumer electronic products in the PRC. In 1993, Mr. Wong established the “GOME” brand name and conceived the strategies for chain store operations.

For the year ended 31 December 2004, director’s remuneration paid to Mr. Wong was HK$1,126,000 which was fixed with reference to his duties and responsibilities with the Company as well as the Company’s remuneration policy. Save for the fact that Mr. Wong is the spouse of Ms. Du Juan, an executive Director, Mr. Wong has no relationship with any Directors, senior management or substantial or controlling shareholders of the Company.

Ms. DU Juan（杜鵑） , aged 32, has been an executive Director since August 2002. Ms. Du has extensive experience in banking and finance industry. From 1998 to 2002, Ms. Du worked in two diversified conglomerates and was responsible for financial and administrative management. Ms. Du is a fellow member of Hong Kong Institute of Directors Limited.

For the year ended 31 December 2004, director’s remuneration paid to Ms. Du was HK$315,000 which was fixed with reference to her duties and responsibilities with the Company as well as the Company’s remuneration policy. Save for the fact that Ms. Du is the spouse of Mr. Wong Kwong Yu, Ms. Du has no relationship with any Directors, senior management or substantial or controlling shareholders of the Company.

Mr. LAM Pang（林鵬） , aged 35, has been the executive Director since September 2000. He was the Chairman of the Group in the period between 7 December 2000 and 17 April 2002. Mr. Lam has extensive experience in the trade between the PRC and Hong Kong, and the property investment in the PRC.

For the year ended 31 December 2004, director’s remuneration paid to Mr. Lam was HK$289,700 which was fixed with reference to his duties and responsibilities with the Company as well as the Company’s remuneration policy. Mr. Lam has no relationship with any Directors, senior management or substantial or controlling shareholders of the Company.

• 8 -

APPENDIX I BIOGRAPHICAL DETAILS OF DIRECTORS PROPOSED FOR RE-ELECTION OR ELECTION

Mr. NG Kin Wah（伍健華） , aged 45, has been the executive Director since September 2000. Mr. Ng has over 20 years’ experience in securities investment in Hong Kong.

For the year ended 31 December 2004, director’s remuneration paid to Mr. Ng was HK$317,700 which was fixed with reference to his duties and responsibilities with the Company as well as the Company’s remuneration policy. Mr. Ng has no relationship with any Directors, senior management or substantial or controlling shareholders of the Company.

Independent Non-executive Directors

Mr. SZE Tsai Ping（史習平） , Michael , aged 59, was appointed as an independent non-executive director of the Company on 31 October 2002. Mr. Sze has over 30 years of experience in the financial and securities field. He was a former Council Member of the Stock Exchange from 1996 to 2000 and a former member of the Listing Committee of the Stock Exchange from 1997 to 2003. Currently, he is a member of the Cash Market Consultative Panel of Hong Kong Exchanges and Clearing Limited, Mr. Sze is a Fellow of the Institute of Chartered Accountants in England and Wales, a Fellow member of the Association of Chartered Certified Accountants, a Fellow of the Hong Kong Institute of Certified Public Accountants and a Certified Public Accountant. Mr. Sze is a Fellow member of Hong Kong Institute of Directors Limited.

For the year ended 31 December 2004, director’s remuneration paid to Mr. Sze was HK$162,000 which was fixed with reference to his duties and responsibilities with the Company as well as the Company’s remuneration policy. Mr. Sze has no relationship with any Directors, senior management or substantial or controlling shareholders of the Company.

Mr. CHAN Yuk Sang（陳玉生） , aged 59, was appointed as an independent non-executive director on 20 May 2004. Mr. Chan was the chairman of Century Legend (Holdings) Limited since September 1999 until July 2002 and a director of Hong King Building & Loan Agency Ltd. from 1993 to 1995. Both of these companies are listed on the Main Board of The Stock Exchange of Hong Kong Limited. Mr. Chan was a senior general manager of a local bank and was an executive director of a joint Chinese-foreign bank in Shenzhen. Mr. Chan has more than 30 years of experience in the banking and finance industry. Mr. Chan is currently an independent non-executive director of Four Sea Mercantile Holdings Limited, a company listed on the Main Board of the Stock Exchange.

For the year ended 31 December 2004, director’s remuneration paid to Mr. Chan was HK$73,871 which was fixed with reference to his duties and responsibilities with the Company as well as the Company’s remuneration policy. Mr. Chan has no relationship with any Directors, senior management or substantial or controlling shareholders of the Company.

• 9 -

BIOGRAPHICAL DETAILS OF DIRECTORS PROPOSED FOR RE-ELECTION OR ELECTION

APPENDIX I

Mr. Mark C. GREAVES , aged 48, was the managing director for the Asia region of NM Rothschild & Sons Limited and a director of NM Rothschild & Sons Limited, London from 1977 to 2002. Mr. Greaves was the founder and the principal of specialist consultancy practice of Anglo FarEast Group with emphasis on cross-border assignments between Asia and Europe from 2002 to 2004 and is currently the chief executive of Hanson Capital Limited. Mr. Greaves is the council representative of the Singapore Investment Banking Association and the authorised representative and approved person of the UK Financial Services Authority.

Mr. Greaves has no relationship with any Directors, senior management or substantial or controlling shareholders of the Company.

There is no service contract, which is not determinable by the Company within the period without payment of compensation (other than statutory compensation), in respect of any director proposed for reelection at the Annual General Meeting.

As at the Latest Practicable Date, save as disclosed herein, none of the Directors held any directorship in public listed companies in the past 3 years and none of the Directors receive any bonus (either discretionary or fixed) from the Company.

As at the Latest Practicable Date, the emoluments of the Directors for the coming year had not been determined.

The Board confirms that save as disclosed herein, there is no matter which needs to be brought to the attention of the Shareholders regarding the appointments.

As at the Latest Practicable Date, other than as stated below, none of the directors of the Company had an interest in the Shares within the meaning of Part XV of the SFO

	Number	of ordinary shares	held
	Personal	Corporate		Percentage of
Name of director	interests	interests	Total	Shareholding
WONG Kwong Yu	900,087	1,075,714,998	1,076,615,085	65.55%
		(Note 1)

Note:

1. These shares are held as to 889,677,604 shares by Shinning Crown Holdings Inc. and as to 186,037,394 shares by Shine Group Limited. Both companies are 100% beneficially owned by Mr. Wong Kwong Yu.

2. 10 -

A SUMMARY OF THE PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

APPENDIX II

SHARE OPTION SCHEME

Summary of terms

The following is a summary of the principal terms of the Share Option Scheme to be adopted at the Annual General Meeting:

1. Purpose

The purpose of the Share Option Scheme is to enable the Company to grant options to the Eligible Participants as incentives and rewards for their contribution to the Company or its subsidiaries. The Board believes that the terms of the Share Option Scheme, including but not limited to, the time of exercise of option, performance target and the basis of determination of the exercise price, can, on one hand, provide flexibility to the Board to grant options to the Eligible Participants when the Board thinks appropriate, whilst on the other hand, provide flexible opportunities to the Eligible Participant who meets the performance target set up by the Board from time to time to acquire Shares which enable the Eligible Participant to have a personal stake in the performance and result of the Company.

2. Who may join

The Board may, at its discretion and based on the contribution and expected contribution of each of the Eligible Participants to the Group, offer the Eligible Participant options to subscribe for such number of new Shares as the Board may determine at an exercise price determined in accordance with paragraph 5 below. Upon acceptance of the option, the grantee shall pay HK$1.00 to the Company by way of consideration for the grant.

3. Maximum number of Shares

The maximum number of Shares which may be issued upon exercise of all options to be granted under the Share Option Scheme and any other share option scheme(s) of the Company must not exceed 10% of the Shares in issue on the date of approval and adoption of the Share Option Scheme by the Shareholders (which is expected to be the date of the Annual General Meeting). Shares which would have been issuable pursuant to options which have lapsed in accordance with the terms of such share option scheme(s) will not be counted for the purpose of the 10% limit.

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:

• (a) refresh 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 (options previously granted under any share option schemes of the Company (including those outstanding, cancelled, lapsed in accordance with such schemes or exercised options) will not be counted for the purpose of calculating the limit as refreshed); and/or

• 11 -

A SUMMARY OF THE PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

APPENDIX II

• (b) grant options beyond the 10% limit to Eligible Participants specifically identified by the Board whereupon the Company shall send a circular to the Shareholders containing, amongst others, a generic description of the specified participants who may be granted such options, the number and terms of the options to be granted and the purpose of granting options to the specified participants with an explanation as to how the options serve such purpose.

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 scheme(s) 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 scheme(s) of the Company or any of its subsidiaries if this will result in the 30% limit being exceeded.

4. Maximum number of options to each participant

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 scheme(s) of the Company (including exercised, cancelled and outstanding options) to each Eligible Participant in any 12-month period shall not exceed 1% of the Shares in issue as at the date of grant.

Any further grant of options in the 12 month period up to and including the date of further grant in excess of this 1% limit shall be subject to the issue of a circular by the Company and the approval of the Shareholders in general meeting with such Eligible Participant and his associates (as defined in the Listing Rules) abstaining from voting and/or other requirements prescribed under the Listing Rules from time to time.

5. Price of Shares

The subscription price for a Share in respect of any particular option granted under the Share Option Scheme (which shall be payable upon exercise of the option) 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 (a) the closing price of the Shares as stated in the Stock Exchange’s daily quotations sheet on the date of grant, which must be a business day (and for this purpose shall be taken to be the date of the Board meeting at which the Board proposes to grant the options); (b) the average of the closing prices of the Shares as stated in the Stock Exchange’s daily quotations sheet for the five business days immediately preceding the date of grant; and (c) the nominal value of a Share.

6. Granting options to connected persons

Any grant of options to a Director, chief executive or substantial shareholder of the Company or any of its associates (as defined in the Listing Rules) is required to be approved by the independent non-executive Directors (excluding the independent non-executive Director who is the grantee of the options).

• 12 -

A SUMMARY OF THE PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

APPENDIX II

If the Company proposes to grant options to a substantial shareholder (as defined in the Listing Rules) of the Company 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 (including options exercised, cancelled and outstanding) to such person in the 12-month period up to and including the date of the grant:

• (a) representing in aggregate over 0.1% of the Shares in issue on the date of the offer; and

• (b) having an aggregate value in excess of HK$5 million, based on the 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 at such general meeting.

7. Restrictions on the time of grant of options

A grant of options may not be made after a price-sensitive event has occurred or a price sensitive matter has been the subject of a decision until such price-sensitive information has been published in the newspaper. In particular, no options may be granted during the period commencing one month immediately preceding the earlier of (a) the date of the Board meeting for the approval of the Company’s results for year, half-year, quarterly or any other interim period (whether or not required under the Listing Rules); and (b) 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 (whether or not required under the Listing Rules) and ending on the date of actual publication of the results announcement.

8. Rights are personal to grantee

An option is personal to the grantee and the grantee may not in any way sell, transfer, charge, mortgage, encumber or create any interest in favour of any third party over or in relation to any option or attempt to do so.

9. Time of exercise of option

There is no general requirement that an option must be held for any minimum period before it can be exercised but the Board is empowered to impose at its discretion any such minimum period at the time of grant of any particular option. The date of grant of any particular option is the date when the duplicate offer document constituting acceptance of the option duly signed by the grantee, together with a remittance in favour of the Company of HK$1.00 by way of consideration is received by the Company. The period during which an option may be exercised will be determined by the Board at its absolute discretion, save that no option may be exercised more than 10 years

• 13 -

A SUMMARY OF THE PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

APPENDIX II

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 after the date of adoption of the Share Option Scheme by Shareholders by resolution at a general meeting.

10. Performance Target

The Board has the discretion to require a particular grantee to achieve certain performance targets specified at the time of grant before any option granted under the Share Option Scheme can be exercised.

11. Rights on ceasing to be an Eligible Participant and death

• (a) If the grantee is under employment with the Company and/or any of the subsidiaries, in the event of the grantee ceasing to be an Eligible Participant for any reason other than his ill-health, injury or disability (all evidenced to the satisfaction of the Board) or death or the termination of his employment on one or more of the grounds specified in paragraph 12 below, the grantee may exercise the option up to his entitlement at the date of cessation of his employment (to the extent not already exercised) within the period of one month following the date of such cessation (which date shall be the last actual working day with the Company or the relevant subsidiary whether salary is paid in lieu of notice or not or such longer period as the Board may determine).

• (b) If the grantee is under employment with the Company and/or any of the subsidiaries, in the event that the grantee ceases to be an Eligible Participant by reason of illhealth, injury or disability (all evidenced to the satisfaction of the Board) or death and none of the events which would be a ground for termination of his employment specified in paragraph 12 below has occurred, the grantee or the legal representative(s) of the grantee, as the case may be, shall be entitled to exercise the option in full (to the extent not already exercised) on or before the earlier of (i) the last day in the 12month period commencing from the date of ceasing to be an Eligible Participant or death (or such longer period as the Board may determine) or (ii) the relevant Expiry Date.

12. Lapse of option on dismissal

If the grantee is an employee of the Company and/or any of the subsidiaries, the date on which the grantee ceases to be an Eligible Participant by reason of the termination of his employment on any one or more of the grounds that he has been guilty of serious misconduct, or has been convicted of any criminal offence involving his integrity or honesty or (if so determined by the Board) on any other ground on which an employer would be entitled to terminate his employment at common law or pursuant to any applicable laws or under the grantee’s service contract with the Company or the relevant subsidiary, his option will lapse and not be exercisable on the date of termination of his employment.

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A SUMMARY OF THE PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

APPENDIX II

13. Rights on takeover

If a general offer (whether by way of take-over offer, share repurchase offer or scheme of arrangement or otherwise in like manner) is made to all the holders of Shares (or all such holders other than the offeror and/or any person controlled by the offeror and/or any person acting in association or in concert with the offeror), the Company shall use its best endeavours to procure that such offer is extended to all the grantees (on the same terms mutatis mutandis, and assuming that they shall become, by the exercise in full of the options granted to them, shareholders of the Company). If such offer having been approved in accordance with the applicable laws and regulatory requirements becomes or is declared unconditional, the grantee (or his legal personal representatives) shall be entitled to exercise the option in full or in part (to the extent not already exercised) thereafter and up to the closing date of such general offer (or any revised offer).

14. Rights on scheme of arrangement for the Company

If, pursuant to the Companies Act, a compromise or arrangement between the Company and its members and/or creditors is proposed 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, the Company shall give notice thereof to all the grantees (together with a notice of the existence of the provisions of this paragraph) on the same day as it despatches to members and/or creditors of the Company a notice summoning the meeting to consider such a compromise or arrangement, and thereupon each grantee shall be entitled to exercise all or any of his options in whole or in part at any time prior to 12:00 noon (Hong Kong time) on the business day immediately preceding the date of the meeting directed to be convened by the relevant court for the purposes of considering such compromise or arrangement and if there are more than one meeting for such purpose, the date of the first meeting. With effect from the date of such meeting, the rights of all grantees to exercise their respective options shall forthwith be suspended. Upon such compromise or arrangement becoming effective, all options shall, to the extent that they have not been exercised, lapse and determine. The Board shall endeavour to procure that the Shares issued as a result of the exercise of options under this paragraph shall for the purposes of such compromise or arrangement form part of the issued share capital of the Company on the effective date thereof and that such Shares shall in all respects be subject to such compromise or arrangement. If for any reason such compromise or arrangement is not approved by the relevant court (whether upon the terms presented to the relevant court or upon any other terms as may be approved by such court) the rights of grantees to exercise their respective options shall with effect from the date of the making of the order by the relevant court be restored in full as if such compromise or arrangement had not been proposed by the Company and no claim shall lie against the Company or any of its officers for any loss or damage sustained by any grantee as a result of the aforesaid suspension.

15. Rights on winding-up

In the event a notice is given by the Company to its shareholders to convene a meeting for the purpose of considering and, if thought fit, approving a resolution to wind up the Company voluntarily, the Company shall on the same date as or promptly after it dispatches such notice to

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A SUMMARY OF THE PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

APPENDIX II

each shareholder of the Company gives notice thereof to the grantee, and thereupon the grantee (or his or her personal representative(s)) shall be entitled to exercise all or any of the option at any time no later than four business days prior to the proposed meeting of the shareholders of the Company by giving notice in writing to the Company, accompanied by a remittance for the full amount of the aggregate exercise price for the Shares in respect of which the notice is given, whereupon the Company shall as soon as practicable as the circumstance allow but in any event no later than the Business Day immediately before the proposed meeting of the shareholders, allot the relevant Shares to the grantees credited as fully paid.

16. Lapse of options

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

• (a) the expiry date relevant to that option;

• (b) the expiry of any of the periods referred to in paragraphs 11 and 13 above;

• (c) subject to the scheme of arrangement of the Company becoming effective, the expiry of the period referred to in paragraph 14 above;

• (d) the date of commencement of the winding-up of the Company (as determined in accordance with the applicable law) as referred to in paragraph 15 above;

• (e) the date on which the grantee ceases to be an Eligible Participant by reason of the termination of his relationship with the Company and/or any of its subsidiaries on any one or more of the grounds that he has been guilty of serious misconduct, or has committed any act of bankruptcy or is unable to pay his debts or has become insolvent or has made any arrangement or has compromised with his creditors generally, or has been convicted of any criminal offence involving his integrity or honesty or in relation to an employee of the Company and/or any of its subsidiaries (if so determined by the Board) on any other ground on which an employer would be entitled to terminate his employment at common law or pursuant to any applicable laws or under the grantee’s service contract with the Company or the relevant subsidiary. A resolution of the Board or the board of directors of the relevant subsidiary to the effect that the relationship of a grantee has or has not been terminated on one or more of the grounds specified in this paragraph shall be conclusive; or

• (f) the date on which the Board shall exercise the Company’s right to cancel the option at any time after the grantee commits a breach of the prohibitions specified in paragraph 8 above or the options are cancelled in accordance with paragraph 20 below.

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A SUMMARY OF THE PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

APPENDIX II

17. Ranking of Shares

The Shares to be allotted upon the exercise of an option will not carry voting rights until completion of the registration of the grantee (or such other person nominated by the grantee) as the holder thereof. Subject to the aforesaid, Shares allotted and issued on the exercise of options will rank pari passu with and shall have the same voting, dividend, transfer and other rights, including those arising on liquidation of the Company as attached to the other fully-paid Shares in issue on the date of issue.

18. Effect of alterations to capital

In the event of a capitalisation issue, rights issue, sub-division or consolidation of shares or reduction of capital whilst any option may become or remains exercisable, such corresponding alterations (if any) shall be made in the number of Shares subject to any outstanding options and/ or the exercise price of each outstanding option and/or the number of Shares in respect of which any further options may be granted as the auditors of the Company or the independent financial adviser shall certify in writing to the Board to be in their opinion fair and reasonable and in compliance with Rule 17.03(13) of the Listing Rules and the note thereto. 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 the 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. The issue of securities as consideration in a transaction is not to be regarded as a circumstance requiring any such alterations.

19. Alteration of the Share Option Scheme

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

• (a) 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;

• (b) any change to the authority of the Board or scheme administrators in relation to any alteration to the terms of the Share Option Scheme; or

• (c) any material alteration to the terms and conditions of the Share Option Scheme or any change to the terms of options granted (except any alterations which take effect automatically under the terms of the Share Option Scheme),

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A SUMMARY OF THE PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

APPENDIX II

shall first be approved by the Shareholders in general meeting provided that if the proposed alteration shall adversely affect an 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 the 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.

20. Cancellation of options

Any cancellation of options granted but not exercised must be approved by the grantee of the relevant options in writing. Where the Company cancels options and issues new ones to the same grantee, the issue of such new options may only be made under the Share Option Scheme with available unissued options (excluding the cancelled options) within the limit approved by Shareholders.

21. Termination of the Share Option Scheme

The Company may by resolution in general meeting at any time terminate the Share Option Scheme and in such event no further option shall be offered but the provisions of Share Option Scheme shall remain in force to the extent necessary to give effect to the exercise of any option granted prior to the termination or otherwise as may be required in accordance with the provisions of the Share Option Scheme. Options granted prior to such termination at the time of termination shall continue to be valid and exercisable in accordance with the Share Option Scheme.

22. Conditions of the adoption of the Share Option Scheme

The Share Option Scheme is conditional on (a) the Shareholders’ approval at the Annual General Meeting; and (b) the Listing Committee of the Stock Exchange granting approval for the listing of, and permission to deal in, the Shares which may fall to be issued pursuant to the exercise of options granted pursuant thereto.

23. Disclosure in annual and interim reports

The Company will disclose details of the Share Option Scheme in its annual and interim reports including the number of options, date of grant, exercise price, exercise period, vesting period and (if appropriate) a valuation of options granted during the financial year/period in the annual/interim reports in accordance with the Listing Rules in force from time to time.

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EXPLANATORY STATEMENT FOR THE REPURCHASE MANDATE

APPENDIX III

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 proposed Repurchase Mandate.

SHARE CAPITAL

As at the Latest Practicable Date, the issued share capital of the Company was HK$164,244,758.5 divided into 1,642,447,585 Shares.

Subject to the passing of the resolution granting the proposed mandate to repurchase the Shares and on the basis that no further Shares are issued or repurchased before the Annual General Meeting, the Company will be allowed to repurchase a maximum of 164,244,758 Shares during the period ending on the earlier of the conclusion of the next annual general meeting of the Company or the date by which the next annual general meeting of the Company is required to be held by law or the date upon which such authority is revoked or varied by a resolution of the Shareholders in general meeting.

REASONS FOR REPURCHASES

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

The Directors have no present intention to repurchase any Shares of the Company and they would only exercise the power to repurchase in circumstances where they consider that the repurchase would be in the best interests of the Company and in circumstances where they consider that the Shares can be repurchased on the terms favourable to the Company. On the basis of the combined financial position of the Company as at 31 December 2004, being the date to which the latest published audited accounts of the Company were made up, the Directors consider that if the general mandate to repurchase Shares were to be exercised in full at the currently prevailing market value, it may have a material adverse impact on the working capital position and gearing level of the Company. The Directors do not propose to exercise the mandate to repurchase Shares to such an extent as would, in the circumstances, have a material adverse effect on the working capital position of the Company as compared with the position disclosed in the latest published audited financial statements or the gearing level which, in the opinion of the Directors, are from time to time appropriate for the Company.

FUNDING OF REPURCHASES

Repurchases to be made pursuant to the proposed mandate to repurchase Shares would be financed out of funds legally available for the purpose in accordance with the Bye-laws and the applicable laws in Hong Kong and Bermuda. Such funds include, but are not limited to, profits available for distribution.

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EXPLANATORY STATEMENT FOR THE REPURCHASE MANDATE

APPENDIX III

EFFECT OF THE TAKEOVERS CODE

Upon the exercise of the power to repurchase the 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 of voting rights for the purposes of Rule 32 of the Takeovers Code. Accordingly, a Shareholder or group of Shareholders acting in concert, depending on the level of increase of the Shareholders’ interest, could obtain or consolidate control of the Company and, depending on the level of increase of the Shareholders’ interests, may become obliged to make a mandatory general offer in accordance with Rules 26 and 32 of the Takeovers Code.

As at the Latest Practicable Date, Mr. Wong Kwong Yu, which himself and/or through his associates, was interested in an aggregate of 1,076,615,085 Shares, representing approximately 65.55% of the issued share capital of the Company. Based on such interest in Shares and in the event that the Directors exercise in full the power to repurchase Shares under the Repurchase Mandate, and assuming that no further Shares are issued (whether pursuant to the exercise of the Share Option Scheme or otherwise) or repurchased prior to the Annual General Meeting, the interest of Mr. Wong Kwong Yu would be increased to approximately 72.8% of the issued share capital of the Company. Such increase of interest will not give rise to an obligation to make a mandatory general offer under Rules 26 and 32 of the Takeovers Code and would not reduce the number of Shares held by the public to less then 25 per cent. of the issued share capital of the Company. The Directors have no present intention to repurchase Shares if the proposed repurchase mandate is approved at the Annual General Meeting.

PRICE OF THE SHARES

The following table shows the highest and lowest prices at which the Shares have been traded on the Stock Exchange in each of the past twelve months:

	Highest	Lowest
	HK$	HK$
2004
March	16.20	14.00
April	17.60	9.00
May	9.60	5.80
June	12.60	5.92
July	9.52	5.95
August	5.95	4.93
September	5.10	4.45
October	6.40	4.65
November	6.80	6.00
December	7.25	6.45
2005
January	7.60	6.50
February	7.50	7.15
March (up to the Latest Practicable Date)	9.10	7.10

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EXPLANATORY STATEMENT FOR THE REPURCHASE MANDATE

APPENDIX III

REPURCHASE OF SHARES

No Shares of the Company have been repurchased by the Company or any of its subsidiaries during the 6 months immediately preceding the Latest Practicable Date.

GENERAL

To the best of their knowledge and having made all reasonable enquiries, none of the Directors nor any of their associates (as defined in the Listing Rules) have any present intention to sell any Shares to the Company or its subsidiaries if the Repurchase Mandate is exercised by the Company.

No connected persons of the Company (as defined in the Listing Rules) have notified the Company that they have a present intention to sell any Shares to the Company, or have undertaken not to do so in the event that the Company is authorised to make repurchases of the Shares.

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

• 21 -

NOTICE OF ANNUAL GENERAL MEETING

APPENDIX IV

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GOME Electrical Appliances Holding Limited 國美電器控股有限公司[*]

(incorporated in Bermuda with limited liability)

(Stock Code: 493)

NOTICE IS HEREBY GIVEN that the Annual General Meeting (“ Meeting ”) of GOME Electrical Appliances Holding Limited 國美電器控股有限公司 * (the “Company”) will be held at Salon at the JW Marriott Ballroom of JW Marriott Hotel Hong Kong, Pacific Place, 88 Queensway, Hong Kong on 15 April, 2005 at 9:30 a.m. for the following purposes:

1. To receive and adopt the audited financial statements and the reports of the directors and auditors of the Company for the year ended 31 December, 2004.

2. To re-elect directors of the Company who are subject to retirement and are offered for reelection and to elect a new independent non-executive director of the Company.

3. To re-appoint Ernst & Young as auditors and authorise the board of directors of the Company to fix their remuneration.

4. To consider as special business and, if thought fit, pass with or without amendments; the following resolutions as ordinary resolutions:

ORDINARY RESOLUTIONS

• A. “ THAT subject to and conditional upon the Listing Committee of The Stock Exchange of Hong Kong Limited (the “ Stock Exchange ”) granting the approval of the listing of, and permission to deal in, the shares of HK$0.10 each in the capital of the Company (“ Shares ”) to be issued pursuant to the exercise of options which may be granted under the share option scheme (copy of which is produced to this meeting and signed by the chairman of this meeting for the purpose of identification) (the “ Share Option Scheme ”), the rules of the Share Option Scheme be and are hereby approved and adopted and that any director of the Company be and is hereby authorised to do all such acts and to enter into such transactions, arrangements and agreements as may be necessary or expedient in order to give full effect to the Share Option Scheme.”

• B. “ THAT :

• (a) 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 allot, issue or otherwise deal with additional Shares, and to make or grant offers, agreements and options which might require the exercise of such powers, be and is hereby generally and unconditionally approved;

* for the purpose of identification only

• 22 -

NOTICE OF ANNUAL GENERAL MEETING

APPENDIX IV

• (b) the approval given in paragraph (a) of this Resolution 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 powers 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) and issued by the directors of the Company pursuant to the approval given in paragraph (a) of this Resolution, otherwise than pursuant to:

• (i) a Rights Issue (as hereinafter defined);

• (ii) the exercise of the rights of subscription or conversion attaching to any warrants issued by the Company or any securities which are convertible into Shares;

• (iii) the exercise of any option scheme or similar arrangement for the time being adopted for the grant or issue to employees of the Company and/ or any of its subsidiaries of Shares or rights to acquire Shares in the Company; or

• (iv) any scrip dividend or similar arrangement providing for the allotment of Shares in lieu of the whole or part of a dividend on Shares pursuant to the articles of association of the Company from time to time,

shall not exceed 20% of the aggregate nominal amount of the share capital of the Company in issue at the date of the passing of this Resolution and the said approval shall be limited accordingly;

• (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 articles of Association of the Company or any applicable laws to be held;

• (iii) the revocation or variation of the authority given under this Resolution by an ordinary resolution of the shareholders of the Company (the “ Shareholders ”) in general meeting; and

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NOTICE OF ANNUAL GENERAL MEETING

APPENDIX IV

“Rights Issue” means the allotment, issue or grant of Shares pursuant to an offer of Shares open for a period fixed by the directors of the Company to holders of Shares whose names stand on the register of members of the Company on a fixed record date in proportion to their then holdings of such Shares at that date (subject to such exclusion 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 applicable to the Company).”

• C. “ THAT :

• (a) subject to paragraph (b) 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 on the Stock Exchange or on any other stock exchange on which the Shares may be listed and recognised for this purpose by the Securities and Futures Commission of Hong Kong and the Stock Exchange under the Hong Kong Code on Share Repurchases, subject to and in accordance all applicable laws and regulations, be and is hereby generally and unconditionally approved;

• (b) the aggregate nominal amount of the Shares which may be repurchased by the Company pursuant to paragraph (a) of this Resolution during the Relevant Period shall not exceed 10% of the aggregate nominal amount of the share capital of the Company in issue at the date of the passing of this Resolution, and the approval granted under paragraph (a) of this Resolution shall be limited accordingly;

• (c) 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 Articles of Association of the Company or any applicable laws to be held; and

• (iii) the revocation or variation of the authority given under this Resolution by an ordinary resolution of the Shareholders in general meeting.”

• D. “ THAT conditional upon the passing of Resolutions 4(B) and 4(C), the general mandate granted to the directors of the Company to exercise the powers of the Company to allot, issue or otherwise deal with additional securities of the Company pursuant to Resolution 4(B) as set out in the notice convening the Meeting of which this Resolution forms part be and is hereby extended by the addition thereto an amount representing

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NOTICE OF ANNUAL GENERAL MEETING

APPENDIX IV

the aggregate nominal amount of the share capital of the Company repurchased by the Company under the authority granted pursuant to Resolution 4(C) as set out in the notice convening the Meeting of which this Resolution forms part, provided that such amount shall not exceed 10% of the aggregate nominal amount of such securities of the Company in issue at the date of the passing of this Resolution.”

Yours faithfully For and on behalf of

GOME Electrical Appliances Holding Limited Wong Kwong Yu Chairman

Hong Kong, 21 March, 2005

Principal place of business in Hong Kong:

Unit 6101, 61st Floor

The Center 99 Queen’s Road Central

Hong Kong

Notes:

• (1) Any member entitled to attend and vote at the Annual General Meeting is entitled to appoint another person as his proxy to attend and vote instead of him. A member who is the holder of two or more shares of the Company may appoint one or more proxies to attend and vote instead of him/her. A proxy need not be a member of the Company.

• (2) A form of proxy for use at the meeting is enclosed herewith.

• (3) The form of proxy must be signed by you or your attorney duly authorised in writing or, in the case of a corporation, must be under its seal or the hand of an officer, attorney or other person duly authorised.

• (4) The form of proxy and the power of attorney or other authority, if any, under which it is signed or a notarially certified copy thereof must be lodged at the Company’s branch share registrar in Hong Kong, Abacus Share Registrars Limited, at Ground Floor, Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong, not later than 48 hours before the time appointed for holding the Annual General Meeting or any adjourned meeting (as the case may be) and in default the proxy shall not be treated as valid. Completion and return of the form of proxy shall not preclude members from attending and voting in person at the Annual General Meeting or at any adjourned meeting (as the case may be) should they so wish.

• (5) Where there are joint registered holders of any share, any one of such persons may vote at any meeting, either in personal or by proxy, in respect of such share as if he/she was solely entitled thereto; but if more than one of such joint holders be present at the meeting in personal or by proxy, that the vote of one of the said persons so present whose name stands first on the register of members in respect of such share shall be accepted to the exclusion of the votes of the other joint holders.

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