Comtec Solar Systems Group Limited — Proxy Solicitation & Information Statement 2002

Aug 6, 2002

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

If you have sold or transferred all your shares and/or warrants in Sun East Technology (Holdings) Limited, you should at once hand this circular and the enclosed form of proxy to the purchaser or other transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

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

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Sun East Technology (Holdings) Limited 日東科技（控股）有限公司[*]

(Incorporated in Bermuda with limited liability)

Directors Principal office and But Tin Hing head office in Hong Kong: But Tin Fu Unit H4, 1st Floor, Block 4 Leung Cheong Kwun Tong Industrial Centre Leung Kuen, Ivan Nos. 436-446 Kwun Tong Road But Tin Hung Kwun Tong Leung Ka Lok Kowloon Szeto Kin Yue Hong Kong

Non-executive directors Registered office: Au Son Yiu Clarendon House Goh Gen Cheung 2 Church Street Hamilton HM 11 Bermuda

29th July 2002

To the shareholders

Dear Sir or Madam,

GENERAL MANDATE TO REPURCHASE SHARES

INTRODUCTION

It is proposed that at the annual general meeting of Sun East Technology (Holdings) Limited (the “ Company ”) for the year ended 31st March, 2002, a resolution will be proposed

* For identification only

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in respect of the renewal of a general mandate (“ Repurchase Mandate ”) given to the directors of the Company (the “Directors”) to exercise all the powers of the Company to repurchase its issued and fully paid shares.

The purpose of this circular is to provide you with information required to be sent to the shareholders under Rule 10.06(1)(b) of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “ Listing Rules ”) in connection with the proposed resolution set out in the notice of the annual general meeting for approval of the renewal of the Repurchase Mandate.

GENERAL MANDATE TO REPURCHASE SHARES

At the annual general meeting to be held on 30th August, 2002, an ordinary resolution will be proposed for the renewal of the Repurchase Mandate. Under such Repurchase Mandate, the number of shares that the Company may repurchase shall not exceed 10 per cent. of the share capital of the Company in issue on the date of the resolution.

As at 26th July, 2002, being the latest practicable date (the “Latest Practicable Date”) prior to printing of this circular, there were in issue an aggregate of 312,000,000 shares of HK$0.1 each in the Company (“ Shares ”). Exercise in full of the Repurchase Mandate, on the basis that no further Shares are issued prior to the date of the annual general meeting, could accordingly result in up to 31,200,000 Shares being repurchased by the Company. The Company’s authority is restricted to purchases made on the Stock Exchange in accordance with the Listing Rules. The Repurchase Mandate allows the Company to make or agree to make purchases only during the period ending on the earliest of (a) the conclusion of the next annual general meeting, (b) the date by which the next annual general meeting of the Company is required to be held by its bye-laws (“ Bye-laws ”) or any applicable law or (c) the date upon which such authority is revoked or varied by an ordinary resolution of the shareholders in a general meeting of the Company.

The Directors have no present intention to repurchase any Shares but consider that the Repurchase Mandate will provide the Company the flexibility to make such repurchases when appropriate and beneficial to the Company. Such repurchases may enhance the net value of the Company and/or earnings per Share.

As compared with the financial position of the Company as at 31st March, 2002 (being the date of its latest audited accounts), the Directors consider that there would not be a material adverse impact on the working capital or the gearing position of the Company in the event that the proposed purchases were to be carried out in full during the proposed purchase period. No purchase would be made in circumstances where such repurchases would have a material adverse impact on the working capital or gearing ratio of the Company.

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The Company is empowered by its memorandum of association and Bye-laws to repurchase its Shares. Bermuda law provides that such repurchases may only be effected out of the capital paid up on the relevant shares repurchased, or funds of the Company that would otherwise be available for dividend or distribution or the proceeds of a new issue of shares made for such purpose. The amount of premium payable on repurchase may only be paid out of either the funds of the Company that would otherwise be available for dividend or distribution or out of the share premium account of the Company. Under Bermuda law, the shares so repurchased will be treated as cancelled and the Company’s issued share capital shall be diminished by the nominal value of those shares accordingly but the aggregate amount of authorised share capital will not be reduced.

DIRECTORS, THEIR ASSOCIATES AND CONNECTED PERSONS

None of the Directors nor, to the best of the knowledge and belief of the Directors having made all reasonable enquiries, any of the associates (as defined in the Listing Rules) of any of the Directors has any present intention, in the event that the proposal is approved by shareholders, to sell Shares to the Company.

No connected person (as defined in the Listing Rules) of the Company has notified the Company that he/she has a present intention to sell Shares to the Company nor has he/she undertaken not to sell any of the Shares held by him/her to the Company in the event that the Company is authorised to make purchases of Shares.

UNDERTAKING OF THE DIRECTORS

The Directors have undertaken to the Stock Exchange to exercise the power of the Company to make purchases pursuant to the proposed resolution in accordance with the Listing Rules and all applicable laws of Bermuda, and in accordance with the regulations set out in the memorandum of association and the Bye-laws.

EFFECT OF TAKEOVERS CODE

A repurchase of Shares by the Company may result in an increase in the proportionate interests of a substantial shareholder of the Company in the voting rights of the Company, which could give rise to an obligation to make a mandatory offer in accordance with the Hong Kong Code on Takeovers and Mergers (the “ Code ”).

As at the Latest Practicable Date, to the best of the knowledge and belief of the Company, Mind Seekers Investment Limited (“Mind Seekers”) who held approximately 50.50 per cent. of the issued share capital of the Company was the only substantial shareholder holding more than 10 per cent. of the issued share capital of the Company. In the event that the Directors should exercise in full the power to repurchase Shares which is proposed to be granted pursuant to the resolution, the shareholding of Mind Seekers, together with its associates (as defined in the Listing Rules), in the Company would be increased to approximately 56.11 per cent. of the

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issued share capital of the Company and such increase would not give rise to an obligation to make a mandatory offer under the Code or reduce the amount of Shares held by the public to less than 25 per cent.. The Directors have no intention to purchase Shares to such an extent which will result in the amount of Shares held by the public being reduced to less than 25 per cent..

SHARE REPURCHASES MADE BY THE COMPANY

During the six months preceding the date of this circular, no Shares have been repurchased by the Company.

MARKET PRICES

The highest and lowest prices at which Shares have been traded on the Stock Exchange during each of the previous twelve months preceding the date of this circular were as follows:–

		Per Share
Month	Highest		Lowest
	HK$		HK$
2001
July	1.110		0.890
August	1.060		0.960
September	1.050		0.690
October	0.930		0.700
November	0.930		0.750
December	0.900		0.710
2002
January	0.870		0.640
February	0.790		0.610
March	0.780		0.600
April	0.790		0.660
May	1.180		0.720
June	1.120		0.640

RECOMMENDATION

The Directors consider that the granting of the Repurchase Mandate to repurchase Shares of the Company is in the interest of the Company and so recommend you to vote in favour of the resolution at the forthcoming annual general meeting. The Directors will vote all their shareholdings in favour of the resolution.

Yours faithfully, But Tin Hing

Chairman

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