CHYY Development Group Limited — AGM Information 2003

Dec 30, 2003

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this document 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 shares in IIN International Limited, you should at once hand this document to the purchaser or 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 document, 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 document.

IIN INTERNATIONAL LIMITED 國訊國際有限公司[*]

(Incorporated in the Cayman Islands with limited liability)

PROPOSED REFRESHMENT OF SCHEME MANDATE LIMIT, GENERAL MANDATES TO REPURCHASE AND ISSUE SHARES AND

NOTICE OF ANNUAL GENERAL MEETING

A notice convening an Annual General Meeting of IIN International Limited to be held at Tien Room, Pacific Place Conference Centre, Level 5, One Pacific Place, 88 Queensway, Hong Kong on Wednesday, 28 January 2004 at 10:30 a.m. is set out on pages 14 to 17 of this circular.

A proxy form for use at the Annual General Meeting is enclosed with this circular. Whether or not you intend to attend the meeting in person, you are requested to complete the proxy form in accordance with the instructions printed thereon and return the same to the Company’s share registrar, Computershare Hong Kong Investor Services Limited at Rooms 1901-1905, 19th Floor, Hopewell Centre, 183 Queen’s Road East, 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 proxy form will not preclude you from attending and voting in person at the Annual General Meeting or any adjournment thereof should you so wish.

This circular will remain on the “Latest Company Announcements” section of the GEM website (www.hkgem.com) for at least 7 days from the date of publication and on the website of IIN International Limited at www.iini.com.

30 December 2003

* For identification purposes only

CHARACTERISTICS OF GEM

GEM has been established as a market designed to accommodate companies to which a high investment risk may be attached. In particular, companies may list on GEM with neither a track record of profitability nor any obligation to forecast future profitability. Furthermore, there may be risks arising out of the emerging nature of companies listed on GEM and the business sectors or countries in which the companies operate. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only after due and careful consideration. The greater risk profile and other characteristics of GEM mean that it is a market more suited to professional and other sophisticated investors.

Given the emerging nature of companies listed on GEM, there is a risk that securities traded on GEM may be more susceptible to high market volatility than securities traded on the main board of the Stock Exchange and no assurance is given that there will be a liquid market in the securities traded on GEM.

The principal means of information dissemination on GEM is publication on the internet website operated by the Stock Exchange. Listed companies are not generally required to issue paid announcements in gazetted newspapers. Accordingly, prospective investors should note that they need to have access to the GEM website in order to obtain up-to-date information on GEM-listed issuers.

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CONTENTS

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board
Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
Refreshment of the scheme mandate limit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
General mandates to repurchase and issue shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
Appendix – Explanatory Statement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
Notice of Annual General Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	14

– ii –

DEFINITIONS

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

“Annual General Meeting” or	the annual general meeting of the Company to be held at
“AGM”	Tien Room, Pacific Place Conference Centre, Level 5,
	One Pacific Place, 88 Queensway, Hong Kong on
	Wednesday, 28 January 2004 at 10:30 a.m.
“Board”	the board of Directors of the Company
“Company”	IIN International Limited
“Directors”	directors of the Company
“GEM”	the Growth Enterprise Market of the Stock Exchange
“GEM Listing Rules”	the Rules Governing the Listing of Securities on the
	GEM as amended, supplemented or otherwise modified
	from time to time
“General Mandate”	the general mandate to issue Shares of the Company to
	be granted to the Directors at the Annual General
	Meeting
“Group”	the Company and its subsidiaries
“HK$” and “HK cent(s)”	Hong Kong dollars and cent(s) respectively, the lawful
	currency of Hong Kong
“Hong Kong”	Hong Kong Special Administrative Region of the People’s
	Republic of China
“Latest Practicable Date”	23 December 2003, being the latest practicable date prior
	to the printing of this circular for ascertaining certain
	information in this circular
“Participants”	any person who satisfies the eligibility criteria under the
	Share Option Scheme
“Placing”	the placing of 492,424,000 Shares with investors as
	described in the prospectus of the Company dated 26
	November 2001

– 1 –

DEFINITIONS

“Pre-IPO Share Option Scheme”	the share option scheme adopted by the Company
	pursuant to an ordinary resolution of the Company
	passed on 7 January 2000
“Repurchases Code”	Hong Kong Code on Share Repurchases
“Repurchase Mandate”	the general mandate to repurchase Shares of the Company
	to be granted to the Directors at the Annual General
	Meeting
“Scheme Mandate Limit”	the maximum number of Shares which may be issued
	upon the exercise of all options granted under the Share
	Option Scheme and any other share option scheme(s) of
	the Company, being 10% of the Company’s issued share
	capital immediately following completion of the Placing,
	which may be refreshed pursuant to the rules of the
	Share Option Scheme
“SFC”	the Securities and Futures Commission of Hong Kong
“Share Option Scheme”	the share option scheme adopted by the Company
	pursuant to an ordinary resolution of the Company
	passed on 22 November 2001
“Shares”	share(s) of US$0.01 each in the share capital of the
	Company
“Shareholders”	shareholders of the Company
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Takeovers Code”	the Hong Kong Code on Takeovers and Mergers
“US$” or “US dollars”	United States dollars, the lawful currency of the United
	States of America

– 2 –

LETTER FROM THE BOARD

IIN INTERNATIONAL LIMITED 國訊國際有限公司[*]

(Incorporated in the Cayman Islands with limited liability)

Executive Directors: Wu Shu Min (Chairman) Chang Ye Min, William (Chief Executive Officer) Jin Feng

Non-executive Directors: Zhu Rong Lo Wai Shun Leong Ka Cheong, Christopher

Independent Non-executive Directors: Chan Wai Dune Ng Ching Wo Chen Junliang

Registered office: Huntlaw Building P.O. Box 2804 George Town Grand Cayman Cayman Islands

Head office and principal place of business in Hong Kong: Suite 15C Entertainment Building 30 Queen’s Road Central Hong Kong

30 December 2003

To the Shareholders

Dear Sir or Madam,

PROPOSED REFRESHMENT OF SCHEME MANDATE LIMIT, GENERAL MANDATES TO REPURCHASE AND ISSUE SHARES AND NOTICE OF ANNUAL GENERAL MEETING

INTRODUCTION

The purpose of this circular is to provide you with the relevant information regarding, inter alia, the proposed refreshment of the Scheme Mandate Limit on the grant of options under the Share Option Scheme and the granting of the General Mandate and the Repurchase Mandate and to give you notice of AGM at which ordinary resolutions will be proposed to consider, and if thought fit, approve at the AGM, among other matters, the refreshment of the Scheme Mandate Limit and the granting of the General Mandate and the Repurchase Mandate.

* For identification purposes only

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LETTER FROM THE BOARD

REFRESHMENT OF THE SCHEME MANDATE LIMIT

The Company has two share option schemes, namely the Pre-IPO Share Option Scheme adopted on 7 January 2000 and the Share Option Scheme adopted on 22 November 2001. Upon listing of the Shares on GEM on 30 November 2001, no further option was granted under the Pre-IPO Share Option Scheme and the Share Option Scheme became valid and effective for a period of ten years from 22 November 2001. Apart from the Pre-IPO Share Option Scheme and the Share Option Scheme, as at the Latest Practicable Date, the Company did not have any other share option schemes.

Under the GEM Listing Rules and the Share Option Scheme, the total number of Shares which may be issued upon exercise of all options which may be granted under the Share Option Scheme and any other share option schemes of the Company shall not exceed 140,362,135 Shares, being 10% of the total number of Shares in issue immediately following completion of the Placing (being the Scheme Mandate Limit).

The Company will seek approval of the Shareholders in general meetings to refresh the Scheme Mandate Limit provided that:

• (i) the Scheme Mandate Limit so refreshed must not exceed 10% of the issued share capital of the Company at the date of the approval of the refreshed Scheme Mandate Limit by the Shareholders (excluding (a) any Shares issued pursuant to the Share Option Scheme and any other share option schemes of the Company; and (b) any pro-rata entitlements to further Shares issued in respect of those Shares mentioned in (a));

• (ii) all options granted under the Share Option Scheme and any other share option schemes of the Company (including those exercised, outstanding, cancelled or lapsed in accordance with the Share Option Scheme and any other share option schemes of the Company) prior to the approval of such refreshed Scheme Mandate Limit shall not be counted for the purpose of calculating whether the refreshed Scheme Mandate Limit has been exceeded and the total number of Shares subject to the refreshed Scheme Mandate Limit;

• (iii) a circular regarding the proposed refreshment of the Scheme Mandate Limit has been dispatched to the Shareholders in a manner complying with, and containing the matters specified in, the relevant provisions of Chapter 23 of the GEM Listing Rules; and

• (iv) the refreshment of the Scheme Mandate Limit is conditional upon the approval of such refreshment at the AGM and upon granting by the Stock Exchange of the listing of and permission to deal in the Shares to be issued upon the exercise of the options be granted under the refreshed Scheme Mandate Limited.

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LETTER FROM THE BOARD

Notwithstanding the above, the maximum number of Shares which may be issued upon exercise of all outstanding options granted and yet to be exercised under the share option schemes of the Company shall not exceed 30% (or such higher percentage as may be allowed under the GEM Listing Rules) of the total number of Shares in issue from time to time other than (a) any Shares issued upon the exercise of options granted pursuant to the Share Option Scheme and any other share option scheme of the Company (including the Pre-IPO Share Option Scheme) and (b) any pro rata entitlements to further Shares issued in respect of those Shares mentioned in (a).

As at the Latest Practicable Date, a total of 80,700,000 options carrying rights to subscribe for a total of 80,700,000 Shares had been granted on 7 January 2000, 26 February 2000, 23 May 2000 and 20 July 2001 in accordance with the terms and restrictions of the PreIPO Share Option Scheme. Out of such 80,700,000 options, 1,100,000 options were cancelled, 35,956,000 options lapsed and 1,216,000 options were exercised in accordance with the terms of the Pre-IPO Share Option Scheme. As at the latest Practicable Date, there were 42,428,000 outstanding and unexercised options granted under the Pre-IPO Share Option Scheme (representing approximately 3.0% of the issued share capital of the Company as at the Latest Practicable Date).

As at the Latest Practicable Date, a total of 146,000,000 options carrying rights to subscribe for a total of 146,000,000 Shares were granted on 1 March 2002, 7 March 2002 and 5 June 2003 under the existing Scheme Mandate Limit in accordance with the terms and restrictions of the Share Option Scheme. Out of such 146,000,000 options, 41,300,000 options lapsed and no options were exercised in accordance with the terms of the Share Option Scheme. As at the latest Practicable Date, there were 104,700,000 outstanding and unexercised options granted under the Share Option Scheme (representing approximately 7.3% of the issued share capital of the Company as at the Latest Practicable Date). The Directors have no present intention to grant any further options under the existing Scheme Mandate Limit prior to the AGM.

The Directors notice that nearly 74.6% of the Scheme Mandate Limit has been utilized and only up to 35,662,135 options entitling the holders thereof to subscribe for an aggregate of 35,662,135 Shares may be further granted under the Share Option Scheme unless the Scheme Mandate Limit is refreshed, and consider that the refreshment of the Scheme Mandate Limit is in the interests of the Company and the Shareholders as a whole as it enables the Company to grant options to the Participants to reward and motivate them to strive for the future developments and expansion of the Group.

The Board wishes to take this opportunity to recommend for the Shareholders’ approval at the AGM that the existing Scheme Mandate Limit be refreshed so that, assuming that no Shares are repurchased or further issued prior to the AGM, the total number of Shares which may be issued upon exercise of all options to be granted under the Share Option Scheme and any other

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LETTER FROM THE BOARD

share option schemes of the Company (but excluding all options previously granted under the Share Option Scheme and any other share option schemes of the Company, including options exercised, outstanding, cancelled or lapsed in accordance with the relevant scheme rules, for the purpose of calculating the Scheme Mandate Limit as refreshed) shall not exceed 143,530,135 Shares which represents 10% of the Shares in issue as at the date of passing the relevant resolution at the AGM (excluding (a) any Shares issued pursuant to the Share Option Scheme and any other share option schemes of the Company; and (b) any pro-rata entitlements to further Shares issued in respect of those Shares mentioned in (a)).

The proposed refreshment of the Scheme Mandate Limit will be conditional upon:

• (a) the passing of an ordinary resolution by the Shareholders to approve the refreshment of the Scheme Mandate Limit at the AGM; and

• (b) the Listing Committee of the Stock Exchange granting the listing of, and the permission to deal in, such number of Shares, representing 10 per cent. of the Shares in issue as at the date of the AGM (excluding (a) any Shares issued pursuant to the Share Option Scheme and any other share option schemes of the Company; and (b) any pro-rata entitlements to further Shares issued in respect of those Shares mentioned in (a)), which may fall to be allotted and issued pursuant to the exercise of options granted under the refreshed Scheme Mandate Limit.

Application will be made to the Stock Exchange for granting the listing of, and the permission to deal in, the Shares to be issued pursuant to the exercise of the options granted under the Share Option Scheme.

If the Scheme Mandate Limit is refreshed upon Shareholders’ approval at the AGM, based on 1,435,301,350 Shares in issue as at the Latest Practicable Date (excluding (a) any Shares issued pursuant to the Share Option Scheme and any other share option schemes of the Company; and (b) any pro-rata entitlements to further Shares issued in respect of those Shares mentioned in (a)) and assuming that no Shares are repurchased or further issued prior to the AGM, the Board will be able to grant options for subscription of up to 143,530,135 Shares under the Share Option Scheme and any other share option schemes of the Company, which do not include options that are exercised, outstanding, cancelled or lapsed in accordance with the Share Option Schemes and any other share option schemes of the Company as at the AGM. The refreshment of the Scheme Mandate Limit is conditional upon the approval by Shareholders at the AGM. The maximum number of Shares that could be issued upon exercise in full of all options granted under the Share Option Scheme and any other share option schemes of the Company after the refreshment of the Scheme Mandate Limit will be 290,658,135 Shares which would be issued pursuant to the full exercise of (a) 42,428,000 outstanding options granted under the Pre-IPO Share Option Scheme; (b) 104,700,000 outstanding options granted under the Share Option Scheme; and (c) 143,530,135 options that would be granted under the

– 6 –

LETTER FROM THE BOARD

refreshed Scheme Mandate Limit, representing approximately 20.23% of the issued share capital as at the date of the AGM (based on 1,436,517,350 Shares in issue as at the Latest Practicable Date and assuming that no Shares are repurchased or further issued prior to the AGM).

In particular, the Company will comply with note 2 to Rule 23.03(2) of the GEM Listing Rules when granting further options.

GENERAL MANDATES TO REPURCHASE AND ISSUE SHARES

At the annual general meeting of the Company held on 24 January 2003, ordinary resolutions were passed to grant to the Directors general unconditional mandates (i) to repurchase Shares of the Company on GEM or on any other exchange on which the Shares have been or may be listed and recognised for this purpose by the SFC and the Stock Exchange under the Repurchases Code, which does not exceed 10 per cent. of the aggregate nominal value of the issued share capital of the Company on the date of passing the relevant resolution; and (ii) to allot, issue and otherwise deal with Shares of the Company up to the limit of 20 per cent. of the aggregate nominal value of the issued share capital of the Company on the date of passing such resolution. No Shares have been repurchased pursuant to the repurchase mandate granted.

These general mandates will lapse at the conclusion of the forthcoming Annual General Meeting of the Company which will be held at Tien Room, Pacific Place Conference Centre, Level 5, One Pacific Place, 88 Queensway, Hong Kong on 28 January 2004 at 10:30 a.m. At the AGM, ordinary resolutions will be proposed:

• (i) to grant the Repurchase Mandate to the Directors to enable them to repurchase Shares of the Company on GEM or on any other exchange on which the Shares have been or may be listed and recognised for this purpose by the SFC and the Stock Exchange under the Repurchases Code, which does not exceed 10 per cent. of the aggregate nominal value of the issued share capital of the Company on the date of passing such resolution to grant the Repurchase Mandate;

• (ii) to grant the General Mandate to the Directors to enable them to allot, issue and otherwise deal with Shares of the Company up to the limit of 20 per cent. of the aggregate nominal value of the issued share capital of the Company on the date of passing such resolution to grant the General Mandate; and

• (iii) to increase the number of Shares to be allotted, issued and deal with under the General Mandate by an additional number representing such number of Shares repurchased under the Repurchase Mandate.

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LETTER FROM THE BOARD

As at the Latest Practicable Date, the authorised share capital of the Company was US$20,000,000 divided into 2,000,000,000 Shares, of which 1,436,517,350 Shares were in issue. There were 147,128,000 outstanding options under the Company’s share option schemes, to subscribe up to 147,128,000 Shares.

On the basis of 1,436,517,350 existing Shares in issue as at the Latest Practicable Date, the Directors would be authorised to repurchase up to 143,651,735 Shares which represent 10 per cent. of the 1,436,517,350 existing Shares in issue as at the Latest Practicable Date.

In the event that all the options are exercised in full on or before 5:00 p.m. on Monday, 26 January 2004 from the holders of options granted under the Company’s share option schemes, the number of Shares in issue will be increased to 1,583,645,350. On the basis of such figure (and assuming no Shares are purchased or further issued) the Directors would be authorised to repurchase up to 158,364,535 Shares which represent 10 per cent. of such 1,583,645,350 Shares.

The Repurchase Mandate allows the Company to make repurchase only during the period from the date of the passing of the relevant resolution until the earliest of the conclusion of next annual general meeting of the Company, the date by which the next annual general meeting of the Company is required by the articles of association of the Company, or any applicable law of the Cayman Islands to be held and the date upon which the Repurchase Mandate is revoked or varied by an ordinary resolution of shareholders of the Company in general meeting.

In accordance with the GEM Listing Rules, the Company is required to send to the Shareholders an explanatory statement containing all information reasonably necessary to enable them to make an informed decision on whether to vote for or against the ordinary resolution to renew the grant to the Directors of the Repurchase Mandate. Such explanatory statement is set out in the appendix to this circular.

ANNUAL GENERAL MEETING

A notice convening the AGM is set out on pages 14 to 17 of this circular, ordinary resolutions will be proposed to approve the refreshment of the Scheme Mandate Limit as well as the General Mandate and the Repurchase Mandate.

A proxy form for use at the AGM is enclosed with this circular. Whether or not you intend to attend the AGM in person, you are requested to complete the proxy form in accordance with the instructions printed thereon and return the same to the Company’s share registrar, Computershare Hong Kong Investor Services Limited at Rooms 1901-1905, 19th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for holding of the AGM or any adjournment thereof. Completion and return of the proxy form will not preclude you from attending and voting in person at the AGM or any adjournment thereof should you so wish.

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LETTER FROM THE BOARD

RECOMMENDATION

The Directors consider that the refreshment of the Scheme Mandate Limit and the granting of the Repurchase Mandate and the General Mandate are in the best interest of the Company and the Shareholders. Accordingly, the Directors recommend that all Shareholders should vote in favour of the relevant resolutions to be proposed at the AGM.

Yours faithfully, For and on behalf of

IIN INTERNATIONAL LIMITED Wu Shu Min

Chairman

– 9 –

EXPLANATORY STATEMENT

APPENDIX

RESPONSIBILITY STATEMENT

This document, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the GEM Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquires, confirm that, to the best of their knowledge and belief:

1. the information contained in this document is accurate and complete in all material respects and not misleading;

2. there are no other matters the omission of which would make any statement in this document misleading; and

3. all opinions expressed in this document have been arrived at after due and careful consideration and are founded on bases and assumptions that are fair and reasonable.

The following is the explanatory statement required to be sent to the Shareholders under the GEM Listing Rules in connection with the proposed general mandate for repurchases of Shares to be passed by the Shareholders by an ordinary resolution at the Annual General Meeting.

(1) Reasons for Repurchases

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

(2) Funding of Repurchases

Repurchases pursuant to the Repurchase Mandate would be financed entirely from the Company’s available cash flow or working capital facilities. Any repurchases will only be funded out of funds of the Company legally available for the purposes in accordance with its memorandum of association and articles of association and the laws of the Cayman Islands. The Company may not repurchase its own Shares on the Stock Exchange for a consideration other than cash or for settlement otherwise than in accordance with the trading rules of the Stock Exchange from time to time.

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EXPLANATORY STATEMENT

APPENDIX

(3) Impact of Repurchases

There might be a material adverse impact on the working capital or gearing position of the Company (as compared with the position disclosed in its latest published audited accounts for the year ended 30 September 2003) in the event that the proposed repurchases were to be carried out in full at any time during the proposed repurchase period. However, the Directors do not propose to exercise the Repurchase Mandate to such an extent as would, in the circumstances, have a material adverse effect on the working capital requirements of the Company or the gearing levels which in the opinion of the Directors are from time to time appropriate for the Company.

(4) Exercise of the Repurchase Mandate

As at the Latest Practicable Date, the authorised share capital of the Company was US$20,000,000 divided into 2,000,000,000 Shares, of which 1,436,517,350 Shares were in issue. There were 147,128,000 outstanding options under the Company’s share option schemes, to subscribe up to 147,128,000 Shares.

On the basis of 1,436,517,350 existing Shares in issue as at the Latest Practicable Date, the Directors would be authorised to repurchase up to 143,651,735 Shares which represent 10 per cent. of the 1,436,517,350 existing Shares in issue as at the Latest Practicable Date.

In the event that all the options are exercised in full on or before 5:00 p.m. on Monday, 26 January 2004 from the holders of options granted under the Company’s share option schemes, the number of Shares in issue will be increased to 1,583,645,350. On the basis of such figure (and assuming no Shares are repurchased or further issued) the Directors would be authorised to repurchase up to 158,364,535 Shares which represent 10 per cent. of such 1,583,645,350 Shares.

(5) Disclosure of Interest

Rule 13.11(2) of the GEM Listing Rules prohibit a company from knowingly repurchasing its shares on GEM from a connected person (as defined in the GEM Listing Rules) and a connected person is prohibited from knowingly selling his/her/its shares to the company on GEM.

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

As at the Latest Practicable Date, no connected persons (as defined in the GEM Listing Rules) of the Company have notified the Company that they have a present intention to sell 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.

– 11 –

EXPLANATORY STATEMENT

APPENDIX

(6) Directors’ Undertaking

The Directors have undertaken to the Stock Exchange that they will exercise the power of the Company to make purchases pursuant to the proposed resolution, if granted, in accordance with the GEM Listing Rules, the applicable laws of the Cayman Islands and the regulations set out in the memorandum and articles of association of the Company.

(7) Share Repurchase made by the Company

No repurchases of Shares have been made by the Company during the six months (whether on GEM or otherwise) preceding the Latest Practicable Date.

(8) Takeovers Code Consequences

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

As at the Latest Practicable Date, to the best of the knowledge and belief of the Directors, Multico Holdings Limited (“Multico”) held directly 362,948,350 Shares, representing approximately 25.27% of the issued share capital of the Company and Transpac Capital Pte Ltd. (“Transpac”) held indirectly 371,988,350 Shares, representing 25.90% of the issued share capital of the Company. In the event that the Directors exercised in full the power to repurchase Shares of the Company in accordance with the terms of the Repurchase Mandate, Multico’s and Transpac’s proportionate interests in the voting rights of the Company would respectively be increased to approximately 28.07% and 28.78% and Multico and Transpac will not be obliged to make a mandatory offer under Rule 26 of the Takeovers Code in this respect.

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EXPLANATORY STATEMENT

APPENDIX

(9) Share Prices

The highest and lowest prices at which the Shares were traded on GEM during each of the twelve months from 1 December 2002 to 30 November 2003 and the period from 1 December 2003 up to the Latest Practicable Date were as follows:

Shares

Shares
	Highest	Lowest
	(HK$)	(HK$)
2002
December	0.130	0.090
2003
January	0.090	0.050
February	0.063	0.048
March	0.060	0.040
April	0.050	0.030
May	0.040	0.021
June	0.055	0.035
July	0.049	0.030
August	0.042	0.030
September	0.078	0.032
October	0.078	0.060
November	0.102	0.070
December (up to Latest Practicable Date)	0.126	0.088

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NOTICE OF ANNUAL GENERAL MEETING

IIN INTERNATIONAL LIMITED 國訊國際有限公司[*]

(Incorporated in the Cayman Islands with limited liability)

NOTICE IS HEREBY GIVEN that the annual general meeting (the “Annual General Meeting”) of IIN International Limited (the “Company”) will be held on Wednesday, 28 January 2004 at 10:30 a.m. at Tien Room, Pacific Place Conference Centre, Level 5, One Pacific Place, 88 Queensway, Hong Kong for the following purposes:

1. To receive and consider the audited financial statements of the Company for the year ended 30 September 2003 together with the reports of the directors of the Company (the “Directors”) and the auditors of the Company thereon.

2. To re-elect the retiring directors, Mr. Jin Feng as executive director, Mr. Zhu Rong, Dr. Lo Wai Shun and Dr. Leong Ka Cheong, Christopher as non-executive directors and Mr. Chen Junliang as independent non-executive director, and to authorise the board of Directors to fix their remunerations.

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

4. To consider and, if thought fit, pass the following resolution (with or without amendments) as Ordinary Resolution:

“ THAT subject to and conditional upon the Listing Committee of The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) granting the listing of, and permission to deal in, such number of fully paid shares of US$0.01 each of the Company (“Shares”) which may fall to be allotted and issued pursuant to the exercise of the options which may be granted under the share option scheme adopted by the Company on 22 November 2001 (the “Share Option Scheme”) and any other share option scheme of the Company, representing 10 per cent. of the issued share capital of the Company as at the day on which this resolution is passed (excluding (a) any Shares issued pursuant to the Share Option Scheme and any other share option schemes of the Company; and (b) any pro-rata entitlements to further Shares issued in respect of those Shares mentioned in (a)), pursuant to Clause 8(B)(ii) of the Share Option Scheme, the existing scheme mandate limit under the Share Option Scheme be refreshed so that the aggregate nominal amount of share capital to be allotted and issued pursuant to the grant or exercise of any options under the Share Option Scheme and any other share option schemes of the Company (excluding options previously granted, outstanding, cancelled, lapsed or exercised in accordance with

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NOTICE OF ANNUAL GENERAL MEETING

the Share Option Scheme and any other share option schemes of the Company) shall not exceed 10% of the aggregate nominal amount of the share capital of the Company in issue on the date of the passing of this resolution (excluding (a) any Shares issued pursuant to the Share Option Scheme and any other share option schemes of the Company; and (b) any pro-rata entitlements to further Shares issued in respect of those Shares mentioned in (a)) (the “Refreshed Scheme Mandate Limit”) and that the Directors of the Company be and are hereby unconditionally authorised to grant options up to the Refreshed Scheme Mandate Limit and to exercise all the powers of the Company to allot, issue and deal with the Shares pursuant to the exercise of such options.”

1. To consider and, if thought fit, to pass the following resolutions as Ordinary Resolutions:

2. A. “ THAT :

   • (a) subject to paragraph (c) of this resolution, and pursuant to the Rules Governing the Listing of Securities on the Growth Enterprise Market (the “GEM”) of The Stock Exchange of Hong Kong Limited (the “Stock Exchange”), the exercise by the Directors during the Relevant Period (as defined below) of all the powers of the Company to allot, issue and deal with additional shares in the share capital of the Company and to make or grant offers, agreements and options which might require the exercise of such powers be and is hereby generally and unconditionally approved;

   • (b) the approval in paragraph (a) of this resolution shall authorise the Directors 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) by the Directors pursuant to the approval in paragraph (a) of this resolution, otherwise than pursuant to (i) a Rights Issue (as defined below); or (ii) any issue of shares of the Company upon the exercise of existing warrants to subscribe for shares of the Company or the exercise of options granted under any share option scheme adopted by the Company; or (iii) any scrip dividend or similar arrangement providing for allotment of shares in lieu of the whole or part of a dividend on shares of the Company in accordance with the articles of association of the Company in force from time to time, shall not exceed 20 per cent. 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 authority pursuant to paragraph (a) of this resolution shall be limited accordingly; and

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• (d) for the purposes of this resolution, “Relevant Period” means the period from the date of the passing of this resolution until whichever is the earliest 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 law of the Cayman Islands to be held; and

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

“Rights Issue” means an offer of shares in the Company (“Shares”), or offer or issue of warrants, options or other securities giving rights to subscribe for Shares open for a period fixed by the Directors to holders of Shares on the register on a fixed record date in proportion to their then holdings of Shares (subject to such exclusion or other arrangements as the Directors 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, or the expense or delay which may be involved in determining the existence or extent of any restrictions or obligations under the laws of, or the requirements of, any jurisdiction applicable to the Company, or any recognised regulatory body or any stock exchange applicable to the Company).”

• B. “ THAT :

• (a) subject to paragraph (c) of this resolution, the exercise by the Directors during the Relevant Period (as defined below) of all the powers of the Company to repurchase its shares on GEM or any other stock exchange on which the shares of the Company have been or may be listed and recognised by the Securities and Futures Commission of Hong Kong and the Stock Exchange under the Hong Kong Code on Share Repurchases for such purposes, and otherwise in accordance with all applicable laws and the requirements of the Rules Governing the Listing of Securities on GEM as amended from time to time or that of any other stock exchange, be and is hereby generally and unconditionally approved;

• (b) the approval in paragraph (a) of this resolution shall authorize the Directors to procure the Company to repurchase its shares at such price as the Directors may at their discretion determine in accordance with all applicable laws and regulations;

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• (c) the shares of the Company to be repurchased by the Company pursuant to the approval in paragraph (a) of this resolution during the Relevant Period shall not exceed 10 per cent. of the aggregate nominal amount of the issued share capital of the Company as at the date of passing this resolution, and the authority pursuant to paragraph (a) of this resolution shall be limited accordingly; and

• (d) for the purpose of this resolution, “Relevant Period” shall have the same meanings as ascribed to it under paragraph (d) of resolution 5A of the notice convening this Annual General Meeting.”

• C. “ THAT conditional upon the passing the resolutions nos. 5A and 5B as set out in the notice convening the Annual General Meeting, the aggregate nominal value of the share capital of the Company which are repurchased by the Company pursuant to and in accordance with resolution no. 5B shall be added to the aggregate nominal value of the share capital of the Company that may be allotted or agreed conditionally or unconditionally to be allotted by the Directors pursuant to and in accordance with resolution no. 5A.”

By order of the Board

Chang Ye Min, William

President & Chief Executive Officer

Hong Kong, 27 December 2003

Notes:

1. A member entitled to attend and vote at the Annual General Meeting is entitled to appoint one or more proxies to attend and, in the event of a poll, vote instead of him. A proxy need not be a member of the Company.

2. To be valid, a form of proxy, together with the power of attorney or other authority (if any) under which it is signed (or a notarially certified copy thereof) must be deposited at the Company’s branch share registrar in Hong Kong, Computershare Hong Kong Investor Services Limited, Rooms 1901-1905, 19th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong not less than 48 hours before the time fixed for the holding of the Annual General Meeting or any adjournment thereof.

3. Completion and return of the form of proxy will not preclude a member from attending and voting in person at the Annual General Meeting and in such event, the form of proxy shall be deemed to be revoked.

4. The register of members of the Company will be closed from Tuesday, 27 January 2004 to 28 January 2004, both days inclusive, during which period no transfer of shares can be registered. All transfer documents accompanied by the relevant share certificates must be lodged with the Company’s branch share registrar and transfer office in Hong Kong, Computershare Hong Kong Investor Services Limited, Rooms 1901-1905, 19th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong not later than 5:00 p.m. on 26 January 2004.

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