CHYY Development Group Limited — Proxy Solicitation & Information Statement 2004

Oct 18, 2004

THE CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your shares in IIN International Limited, you should at once hand this circular 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 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.

This circular, for which the directors of the Company collectively and individually accept full responsibility, includes particulars given in compliance with the Rules Governing the Listing of Securities on the Growth Enterprise Market of The Stock Exchange of Hong Kong Limited for the purpose of giving information with regard to the Company. The directors of the Company, having made all reasonable enquiries, confirm that, to the best of their knowledge and belief: (1) the information contained in this circular 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 circular misleading; and (3) all opinions expressed in this circular have been arrived at after due and careful consideration and are founded on bases and assumptions that are fair and reasonable.

IIN INTERNATIONAL LIMITED 國訊國際有限公司[*]

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 8128)

AMENDMENTS TO THE ARTICLES OF ASSOCIATION AND

APPOINTMENT OF AUDITORS

A notice convening the Extraordinary General Meeting to be held at 10:30 a.m. on Wednesday, 10 November 2004 at Suite 15C, Entertainment Building, 30 Queen’s Road Central, Central, Hong Kong is set out on pages 5 to 9 of this circular.

A form of proxy for use at the Extraordinary General Meeting is enclosed. Whether or not you intend to attend the Extraordinary General Meeting, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon not less than 48 hours before the time appointed for holding the Extraordinary General Meeting. Completion and return of the form of proxy will not preclude you from attending and voting in person if you so wish.

This circular will remain on the GEM website at “www.hkgem.com” on the “Latest Company Announcements” page for a minimum period of 7 (seven) days from the date of publication.

18 October 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 these 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 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. GEM-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 at www.hkgem.com in order to obtain up-to-date information on GEM-listed issuers.

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CONTENTS

	Page
Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	ii
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2
Amendments to the Articles of Association . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
Appointment of Auditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Extraordinary General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Notice of Extraordinary General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5

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DEFINITIONS

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

• “Articles of Association”

the existing articles of association of the Company adopted on 22 November 2001

• “Board”

the board of Directors of the Company

• “Company” IIN International Limited

• “Directors”

directors of the Company

• “Extraordinary General Meeting”

• the extraordinary general meeting of the Company to be held at 10:30 a.m. on Wednesday, 10 November 2004 at Suite 15C, Entertainment Building, 30 Queen’s Road Central, Central, Hong Kong

• “EGM Notice”

• the notice convening the Extraordinary General Meeting set out on pages 5 to 9 of this circular

• “GEM”

• means the Growth Enterprise Market of the Stock Exchange

• “GEM Listing Rules”

• the Rules Governing the Listing of Securities on the GEM of the Stock Exchange

• “Grant Thornton”

• Messrs. Grant Thornton, Certified Public Accountants

• “Group”

the Company and the Subsidiaries

• “Hong Kong”

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

• “HK$” and “HK cent(s)”

• Hong Kong dollars and cent(s) respectively, the lawful currency of Hong Kong

• “Share(s)”

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

• “Shareholders”

• holders of Share(s)

• “Subsidiary”

• means a subsidiary within the meaning of the Companies Ordinance (Chapter 32 of the Laws of Hong Kong) for the time being of the Company whether incorporated in Hong Kong or elsewhere

• “Stock Exchange”

The Stock Exchange of Hong Kong Limited

• “US$”

means United States dollars, the lawful currency of the United States of America

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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 Chang Ye Min, William Jin Feng

Non-executive Directors:

Zhu Rong Lo Wai Shun Christopher Leong Ka Cheong

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 Central Hong Kong 18 October 2004

To the Shareholders

Dear Sir or Madam,

AMENDMENTS TO THE ARTICLES OF ASSOCIATION AND APPOINTMENT OF AUDITORS

INTRODUCTION

At the Extraordinary General Meeting, (i) a special resolution will be proposed to approve certain amendments to the Articles of Association; and (ii) an ordinary resolution will be proposed to approve the appointment of Grant Thornton as the auditors of the Company.

The purpose of this document is to provide you with all the information reasonably necessary to enable you to make an informed decision on whether to vote for or against the proposed resolutions at the Extraordinary General Meeting.

* For identification purpose only

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LETTER FROM THE BOARD

AMENDMENTS TO THE ARTICLES OF ASSOCIATION

In view of certain amendments made to the GEM Listing Rules relating to corporate governance issues came into effect on 31 March 2004 (subject to certain transitional arrangements), at the Extraordinary General Meeting, a special resolution will be proposed to approve certain amendments to the Articles of Association including, among others, the following provisions:

(a) Articles 2(1)

To insert a definition of “associate” in line with the GEM Listing Rules and to amend the definition for “clearing house” in view of the coming into effect of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).

(b) Article 76

To be consistent with the amended Appendix 3 of the GEM Listing Rules which stipulates that where any Shareholder is, under the GEM Listing Rules, required to abstain from voting on any particular resolution or restricted to voting for or against any particular resolution, any votes cast by or on behalf of such Shareholder in contravention of such requirement or restriction shall not be counted.

(c) Article 88

To be consistent with the amended Appendix 3 of the GEM Listing Rules which stipulates that the period for lodgement by Shareholders of the notice to nominate a Director shall commence no earlier than the day after the despatch of the notice of the meeting appointed for such election and end no later than 7 days prior to the date of such meeting.

(d) Articles 103

To be consistent with the amended Appendix 3 of the GEM Listing Rules which stipulates that subject to such exceptions specified in the Articles of Association, a Director shall not vote on any board resolution approving any contract or arrangement or any other proposal in which he or any of his associates has a material interest nor shall he be counted in the quorum present at the meeting.

(e) Articles 153

To fix the term of the office of auditor from its appointment to the next annual general meeting.

The full text of the above proposed amendments to the Articles of Association is contained in the EGM Notice set out on pages 5 to 9 of this circular. Such proposed amendments to the Articles of Association are subject to the approval of the Shareholders by way of a special resolution at the Extraordinary General Meeting.

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LETTER FROM THE BOARD

APPOINTMENT OF AUDITORS

As the Company and Ernst & Young could not reach an agreement on audit fee for the financial year ended 30 September 2004, Ernst & Young resigned as the auditors of the Company with effect from 5 October 2004. Ernst & Young have confirmed that there were no circumstances connected with their resignation which they considered should be brought to the attention of the members or creditors of the Company of its subsidiaries.

The Directors proposed to appoint Grant Thornton as the auditors of the Company. Such proposed appointment of Grant Thornton as the auditors of the Company is subject to the approval of the shareholders of the Company by way of an ordinary resolution at the Extraordinary General Meeting.

EXTRAORDINARY GENERAL MEETING

A notice convening the Extraordinary General Meeting to be held at 10:30 a.m. on Wednesday, 10 November 2004 at Suite 15C, Entertainment Building, 30 Queen’s Road Central, Central, Hong Kong, is set out on pages 5 to 9 of this circular.

A form of proxy for use at the Extraordinary General Meeting is enclosed. Whether or not you intend to attend the Extraordinary General Meeting, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon not less than 48 hours before the time appointed for holding the Extraordinary General Meeting. Completion and return of the form of proxy will not preclude you from attending and voting in person if you so wish.

RECOMMENDATION

The Directors believe that (i) the special resolution in relation to the proposed amendments to the Articles of Associations; and (ii) the ordinary resolution in relation to the proposed appointment of Grant Thornton as the auditors of the Company, are in the best interests of the Company and the Shareholders as a whole, in particular, to ensure compliance with the amended provisions of Appendix 3 of the GEM Listing Rules. Accordingly, the Directors recommend that all the Shareholders should vote in favour of the resolutions to be proposed at the Extraordinary General Meeting as set out in the EGM Notice.

By Order of the Board IIN INTERNATIONAL LIMITED Chang Ye Min, William President & Chief Executive Officer

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NOTICE OF EXTRAORDINARY 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 OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that an extraordinary general meeting of members of IIN International Limited will be held at 10:30 a.m. on Wednesday, 10 November 2004 at Suite 15C, Entertainment Building, 30 Queen’s Road Central, Central, Hong Kong for the purpose of transacting the following businesses:

SPECIAL RESOLUTION

• (1) As special business, to consider and, if thought fit, to pass with or without amendments, the following resolution as a special resolution:

• “That the articles of association of the Company be amended as follows:

• (A) Article 2

  • (i) By inserting the following new definition of “associate” in Article 2(1):

    • “associate” the meaning attributed to it in the rules of the Designated Stock Exchange.

  • (ii) By deleting the words “a recognised clearing house within the meaning of Section 2 of the Securities and Futures (Clearing Houses) Ordinance of Hong Kong or” from the existing definition of “clearing house” in Article 2(1).

• (B) Article 76

By re-numbering existing Article 76 as Article 76(1) and inserting the following as new Article 76(2):

• (2) Where the Company has knowledge that any Member is, under the rules of the Designated Stock Exchange, required to abstain from voting on any particular resolution of the Company or restricted to voting only for or only against any particular resolution of the Company, any votes cast by or on behalf of such Member in contravention of such requirement or restriction shall not be counted.

• For identification purposes only

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NOTICE OF EXTRAORDINARY GENERAL MEETING

• (C) Article 88

By deleting the existing Article 88 in its entirety and replacing therefor the following new Article 88:

1. No person other than a Director retiring at the meeting shall, unless recommended by the Directors for election, be eligible for election as a Director at any general meeting unless a Notice signed by a Member (other than the person to be proposed) duly qualified to attend and vote at the meeting for which such notice is given of his intention to propose such person for election and also a Notice signed by the person to be proposed of his willingness to be elected shall have been lodged at the head office or at the Registration Office provided that the minimum length of the period, during which such Notice(s) are given, shall be at least seven (7) days and that (if the Notices are submitted after the dispatch of the notice of the general meeting appointed for such election) the period for lodgement of such Notice(s) shall commence on the day after the dispatch of the notice of the general meeting appointed for such election and end no later than seven (7) days prior to the date of such general meeting.

2. (D) Article 103

By deleting the existing Article 103 in its entirety and replacing therefor the following new Article 103:

1. (1) A Director shall not vote (nor be counted in the quorum) on any resolution of the Board approving any contract or arrangement or any other proposal in which he or any of his associates is materially interested, but this prohibition shall not apply to any of the following matters namely:

2. (i) any contract or arrangement for the giving to such Director or his associate(s) any security or indemnity in respect of money lent by him or any of his associates or obligations incurred or undertaken by him or any of his associates at the request of or for the benefit of the Company or any of its subsidiaries;

3. (ii) any contract or arrangement for the giving of any security or indemnity to a third party in respect of a debt or obligation of the Company or any of its subsidiaries for which the Director or his associate(s) has himself/themselves assumed responsibility in whole or in part whether alone or jointly under a guarantee or indemnity or by the giving of security;

4. (iii) any contract or arrangement concerning an offer of shares or debentures or other securities of or by the Company or any other company which the Company may promote or be interested in for subscription or purchase, where the Director or his associate(s) is/are or is/are to be interested as a participant in the underwriting or sub-underwriting of the offer;

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NOTICE OF EXTRAORDINARY GENERAL MEETING

• (iv) any contract or arrangement in which the Director or his associate(s) is/are interested in the same manner as other holders of shares or debentures or other securities of the Company or any of its subsidiaries by virtue only of his/their interest in shares or debentures or other securities of the Company;

• (v) any contract or arrangement concerning any other company in which the Director or his associate(s) is/are interested only, whether directly or indirectly, as an officer or executive or a shareholder other than a company in which the Director and/or his associate(s) is/are beneficially interested in five (5) per cent. or more of the issued shares or of the voting rights of any class of shares of such company (or of any third company through which his interest or that of any of his associates is derived); or

• (vi) any proposal concerning the adoption, modification or operation of a share option scheme, a pension fund or retirement, death or disability benefits scheme or other arrangement which relates both to directors, his associates and employees of the Company or of any of its subsidiaries and does not provide in respect of any Director, or his associate(s), as such any privilege or advantage not accorded generally to the class of persons to which such scheme or fund relates.

• (2) A company shall be deemed to be a company in which a Director and/ or his associate(s) owns five (5) per cent. or more if and so long as (but only if and so long as) he and/or his associates, (either directly or indirectly) are the holders of or beneficially interested in five (5) per cent. or more of any class of the equity share capital of such company or of the voting rights available to members of such company (or of any third company through which his interest or that of any of his associates is derived). For the purpose of this paragraph there shall be disregarded any shares held by a Director or his associate(s) as bare or custodian trustee and in which he or any of them has no beneficial interest, any shares comprised in a trust in which the interest of the Director or his associate(s) is/are in reversion or remainder if and so long as some other person is entitled to receive the income thereof, and any shares comprised in an authorised unit trust scheme in which the Director or his associate(s) is/are interested only as a unit holder.

• (3) Where a company in which a Director and/or his associate(s) holds five (5) per cent. or more is materially interested in a transaction, then that Director and/or his associate(s) shall also be deemed materially interested in such transaction.

• (4) If any question shall arise at any meeting of the Board as to the materiality of the interest of a Director (other than the chairman of the meeting) or as to the entitlement of any Director (other than such chairman) to vote and such question is not resolved by his voluntarily

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NOTICE OF EXTRAORDINARY GENERAL MEETING

agreeing to abstain from voting, such question shall be referred to the chairman of the meeting and his ruling in relation to such other Director shall be final and conclusive except in a case where the nature or extent of the interest of the Director concerned as known to such Director has not been fairly disclosed to the Board. If any question as aforesaid shall arise in respect of the chairman of the meeting such question shall be decided by a resolution of the Board (for which purpose such chairman shall not vote thereon) and such resolution shall be final and conclusive except in a case where the nature or extent of the interest of such chairman as known to such chairman has not been fairly disclosed to the Board.

• (E) Article 153

• (i) By deleting the words “Members appoint another auditor” and substituting therefor the words “next annual general meeting” in the third line of existing Article 153(1); and

• (ii) By deleting the existing Article 153(2) in its entirety and re-numbering the existing Article 153(3) as Article 153(2).”

ORDINARY RESOLUTION

• (2) As special business, to consider and, if thought fit, to pass with or without amendments, the following resolution as an ordinary resolution:

“To appoint Messrs. Grant Thornton, Certified Public Accountants, as the auditors of the Company and to authorise the Directors to fix their remuneration.”

By Order of the Board IIN INTERNATIONAL LIMITED Chang Ye Min, William President & Chief Executive Officer

Hong Kong, 18 October 2004

Notes:

1. A member entitled to attend and vote at the Extraordinary 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, 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 Extraordinary General Meeting or any adjournment thereof.

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NOTICE OF EXTRAORDINARY GENERAL MEETING

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

2. The register of members of the Company will be closed from Tuesday, 9 November 2004 to Wednesday, 10 November 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 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong not later than 5:00 p.m. on 8 November 2004.

As at the date hereof, the member of the board of directors comprises executive directors namely, Wu Shu Min, Chang Ye Min, William, Jin Feng, non-executive directors namely, Zhu Rong, Lo Wai Shun, Christopher Leong Ka Cheong and independent non-executive directors namely, Chan Wai Dune, Ng Ching Wo and Chen Junliang.

This Notice of Extraordinary General Meeting will remain on the “Latest Company Announcement” page on the GEM website for at least 7 days from the date of publication and on the website of IIN at www.iini.com.

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