CHYY Development Group Limited — AGM Information 2004

Dec 31, 2004

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)

(Stock Code: 8128)

GENERAL MANDATES TO REPURCHASE AND ISSUE SHARES, RE-ELECTION OF DIRECTOR

AND

NOTICE OF ANNUAL GENERAL MEETING

A notice convening an Annual General Meeting of IIN International Limited to be held at K-2 Room, Pacific Place Conference Centre, Level 5, One Pacific Place, 88 Queensway, Hong Kong on Friday, 28 January 2005 at 10:30 a.m. is set out on pages 11 to 14 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 46th 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.

31 December 2004

* 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.

– i –

CONTENTS

		Page
Definitions	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from	the Board
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		3
General	mandates to repurchase and issue shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
Re-election of Director . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		5
Annual	General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		6
Appendix I	– Explanatory Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
**Appendix II **	– Details of Director Proposed to be Re-elected. . . . . . . . . . . . . . . . . . . . .	10
Notice of Annual General Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		11

– ii –

DEFINITIONS

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

• “Annual General Meeting” or “AGM”

• the annual general meeting of the Company to be held at K-2 Room, Pacific Place Conference Centre, Level 5, One Pacific Place, 88 Queensway, Hong Kong on Friday, 28 January 2005 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 2004, being the latest practicable date prior to the printing of this circular for ascertaining certain information in this circular

• “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

• “SFC”

the Securities and Futures Commission of Hong Kong

• “Shares”

• share(s) of US$0.01 each in the share capital of the Company

• “Shareholders”

shareholders of the Company

– 1 –

DEFINITIONS

“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) (Stock Code: 8128)

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 Wang Qian (alternate director to 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 31 December 2004

To the Shareholders

Dear Sir or Madam,

GENERAL MANDATES TO REPURCHASE AND ISSUE SHARES, RE-ELECTION OF DIRECTOR AND NOTICE OF ANNUAL GENERAL MEETING

INTRODUCTION

The purpose of this circular is to provide you with the relevant information regarding the granting of the General Mandate and the Repurchase Mandate and the re-election of Director 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 granting of the General Mandate and the Repurchase Mandate and the re-election of Director.

GENERAL MANDATES TO REPURCHASE AND ISSUE SHARES

At the annual general meeting of the Company held on 28 January 2004, 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

* For identification purposes only

– 3 –

LETTER FROM THE BOARD

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 K-2 Room, Pacific Place Conference Centre, Level 5, One Pacific Place, 88 Queensway, Hong Kong on 28 January 2005 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 dealt with under the General Mandate by an additional number representing such number of Shares repurchased under 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 1,543,160,470 Shares were in issue. There were 124,278,000 outstanding options under the Company’s share option schemes, to subscribe up to 124,278,000 Shares.

On the basis of 1,543,160,470 existing Shares in issue as at the Latest Practicable Date, the Directors would be authorised to repurchase up to 154,316,047 Shares which represent 10 per cent. of the 1,543,160,470 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 Wednesday, 26 January 2005 from the holders of options granted under the Company’s share option schemes, the number of Shares in issue will be increased to 1,667,438,470. On the basis of such figure (and assuming no Shares are purchased or further issued) the Directors would be authorised to repurchase up to 166,743,847 Shares which represent 10 per cent. of such 1,667,438,470 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.

– 4 –

LETTER FROM THE BOARD

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 I to this circular.

RE-ELECTION OF DIRECTOR

In accordance with Article 87 of the Articles of Association of the Company, each of Mr. Chan Wai Dune and Mr. Ng Ching Wo would retire by rotation at the forthcoming Annual General Meeting. Mr. Chan Wai Dune, being eligible, would offer himself for re-election and Mr. Ng Ching Wo would not offer himself for re-election. Details of Mr. Chan Wai Dune are set out in the Appendix II to this circular.

ANNUAL GENERAL MEETING

A notice convening the AGM is set out on pages 11 to 14 of this circular, ordinary resolutions will be proposed to approve the General Mandate and the Repurchase Mandate and to re-elect a Director of the Company.

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 46th 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.

Pursuant to Article 66 of the Articles of Association of the Company, at any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands, unless a poll is (before or on the declaration of the result of the show of hands or on the withdrawal of any other demand for a poll) demanded:

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

• (b) 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

• (c) 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 representing not less than one-tenth of the total voting rights of all Shareholders having the right to vote at the meeting; or

• (d) 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 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.

– 5 –

LETTER FROM THE BOARD

Unless a poll is so demanded and the demand is not withdrawn, a declaration by the chairman that a resolution has, on a show of hands, been carried, or carried unanimously, or by a particular majority, or not carried by a particular majority, or lost, and an entry to that effect made in the minute book of the Company, shall be conclusive evidence of the fact, without proof of the number or proportion of the votes recorded for or against that resolution.

RECOMMENDATION

The Directors consider that the granting of the Repurchase Mandate and the General Mandate and the re-election of the Director to be proposed at the AGM 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. The Directors wish to state that they have no immediate plans to repurchase any existing Shares or to issue any new Shares pursuant to the relevant mandate.

Yours faithfully, For and on behalf of IIN INTERNATIONAL LIMITED Wu Shu Min Chairman

– 6 –

EXPLANATORY STATEMENT

APPENDIX I

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.

(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 2004) 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.

– 7 –

EXPLANATORY STATEMENT

APPENDIX I

(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 1,543,160,470 Shares were in issue. There were 124,278,000 outstanding options under the Company’s share option schemes, to subscribe up to 124,278,000 Shares.

On the basis of 1,543,160,470 existing Shares in issue as at the Latest Practicable Date, the Directors would be authorised to repurchase up to 154,316,047 Shares which represent 10 per cent. of the 1,543,160,470 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 Wednesday, 26 January 2005 from the holders of options granted under the Company’s share option schemes, the number of Shares in issue will be increased to 1,667,438,470. On the basis of such figure (and assuming no Shares are repurchased or further issued) the Directors would be authorised to repurchase up to 166,743,847 Shares which represent 10 per cent. of such 1,667,438,470 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.

(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 –

EXPLANATORY STATEMENT

APPENDIX I

(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 23.52% of the issued share capital of the Company and Transpac Capital Pte Ltd. (“Transpac”) held indirectly through Multico and Huiya South China Investments Limited, which are the wholly owned subsidiaries of Transpac, 371,988,350 Shares, representing 24.11% 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 26.13% and 26.78% and Multico and Transpac would not be obliged to make a mandatory offer under Rule 26 of the Takeovers Code in this respect.

Save as aforesaid, the Directors are not aware of any consequences which would arise under the Takeovers Code as a consequence of any repurchase pursuant to the Repurchase Mandate.

(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 2003 to 30 November 2004 and the period from 1 December 2004 up to the Latest Practicable Date were as follows:

Shares	Highest	Lowest
	(HK$)	(HK$)
2003
December	0.126	0.088
2004
January	0.118	0.086
February	0.105	0.090
March	0.095	0.050
April	0.106	0.080
May	0.082	0.080
June	0.060	0.050
July	0.050	0.030
August	0.050	0.036
September	0.052	0.042
October	0.060	0.055
November	0.058	0.046
December (up to Latest Practicable Date)	0.050	0.050

– 9 –

APPENDIX II DETAILS OF DIRECTOR PROPOSED TO BE RE-ELECTED

The following are the particulars of the director proposed to be re-elected at the AGM:

Mr. Chan Wai Dune (陳維端 ), aged 52, has been an independent non-executive Director and the chairman of the audit committee of the Company since August 2000. Mr. Chan is currently principally employed as the Managing Director of CCIF CPA Limited. He has over 24 years of experience in the finance sector, especially in auditing and taxation areas. He is a certified public accountant and is a fellow member of the Hong Kong Institute of Certified Public Accountants, the Association of Chartered Certified Accountants and the Taxation Institute of Hong Kong. He has also served a number of committees of the Hong Kong Institute of Certified Public Accountants including Disciplinary Panel, Small and Medium Practitioners Committee, Taxation Committee, PRC Technical Committee, Third Long Range Plan Working Group and Fourth Long Range Plan Working Group. Mr. Chan is currently a member of the Chinese People’s Political Consultative Conference of Guangzhou Municipal Committee and a member of the Executive Council of the China Overseas Friendship Association. He was a member of the Selection Committee for the Establishment of the First Government of the Hong Kong Special Administrative Region.

During the past three years, Mr. Chan has had, at different times, held independent nonexecutive directorships at Shanghai Zendai Property Limited (“Shanghai Zendai”), Tai Shing International (Holdings) Limited (“Tai Shing”) and China Treasure (Greater China) Investments Limited (“China Treasure”) and as of the Latest Practicable Date, he had resigned from the above directorships. Mr. Chan currently also serves as independent non-executive directors of Sam Woo Holdings Limited (“Sam Woo”), Hualing Holdings Limited (“Hualing”), Mexan Limited (“Mexan”), Oriental Metals (Holdings) Company Limited (“Oriental Metals”), Zhongda International Holdings Limited (“Zhongda”), Jinheng Automotive Safety Technology Holdings Limited (“Jinheng”) and Sino Union Petroleum & Chemical International Limited (“Sino Union”). Shanghai Zendai, China Treasure, Sam Woo, Hualing, Mexan, Oriental Metals, Zhongda and Sino Union are companies listed on the main board of the Stock Exchange. Tai Shing and Jinheng are companies listed on the GEM of the Stock Exchange.

Mr. Chan has no designated length of service with the Company but he is subject to retirement and re-election at the forthcoming Annual General Meeting pursuant to the Articles of Association of the Company. The director’s fee of Mr. Chan is determined by the Board with reference to market rates and subject to the approval of the Shareholders of the Company. Mr. Chan does not have any relationship with any directors, senior management or substantial or controlling shareholders of the Company. On 5 June 2003, Mr. Chan was granted options to subscribe for 1,000,000 Shares which are exercisable during the period from 5 June 2003 to 21 December 2011 at an exercise price of HK$0.078 per Share and save as aforesaid, as at the Latest Practicable Date, he did not have any interests in the Shares of the Company within the meaning of Part XV of the Securities and Futures Ordinance.

– 10 –

NOTICE OF ANNUAL GENERAL MEETING

IIN INTERNATIONAL LIMITED 國訊國際有限公司[*]

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 8128)

NOTICE IS HEREBY GIVEN that the annual general meeting (the “Annual General Meeting”) of IIN International Limited (the “Company”) will be held on Friday, 28 January 2005 at 10:30 a.m. at K-2 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 2004 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 director, Mr. Chan Wai Dune as independent non-executive director, and to authorise the board of Directors to fix his remuneration.

3. To re-appoint Grant Thornton, Certified Public Accountant as the auditors of the Company and to authorise the Directors to fix their remuneration.

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

5. 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

* For identification purposes only

– 11 –

NOTICE OF ANNUAL GENERAL MEETING

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

• (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;

– 12 –

NOTICE OF ANNUAL GENERAL MEETING

• (b) the approval in paragraph (a) of this resolution shall authorise 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;

• (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 numbered 4A of the notice convening this Annual General Meeting.”

• C. “ THAT conditional upon the passing the resolutions numbered 4A and 4B 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 numbered 4B 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 numbered 4A.”

By order of the Board Chang Ye Min, William President & Chief Executive Officer

Hong Kong, 31 December 2004

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, at 46th 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.

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NOTICE OF ANNUAL GENERAL MEETING

1. In relation to the proposed resolutions numbered 4(A) and 4(C) above, approval is being sought from the members for the grant to the Directors of a general mandate to authorise the allotment and issue of shares of the Company under the Rules Governing the Listing of Securities on the GEM of the Stock Exchange. The Directors have no immediate plans to issue any new shares of the Company under such general mandate (if granted).

2. In relation to the proposed resolution numbered 4(B) above, the Directors wish to state that repurchases of shares of the Company will only be made when the Directors believe that such a repurchase will benefit the Company and its shareholders.

3. The register of members of the Company will be closed from Thursday, 27 January 2005 to Friday, 28 January 2005, both days inclusive, during which period no transfer of shares of the Company 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, at Rooms 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong not later than 5:00 p.m. on 26 January 2005.

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