Deson Development International Holdings Limited — Proxy Solicitation & Information Statement 2002

Jul 22, 2002

迪臣發展國際集團有限公司

(Incorporated in Bermuda with limited liability)

NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the Annual General Meeting of DESON DEVELOPMENT INTERNTIONAL HOLDINGS LIMITED (the "Company") will be held at 11th Floor, Nanyang Plaza, 57 Hung To Road, Kwun Tong, Kowloon on 14 August 2002 at 11:00 a.m. for the following purposes:

(1) To receive and consider the Audited Consolidated Financial Statements and the Reports of the Directors and Auditors of the Company for the year ended 31 March 2002.

(2) To re-elect Mr. Wang Jing Ning as executive Director and Ms. Wong Sin Yee as an independent non-executive Director of the Company.

(3) To authorize the Board of Directors to fix the remuneration of the Directors.

(4) To re-appoint Auditors of the Company and to authorize the Board of Directors of the Company to fix their remuneration.

(5) As special business, to consider and, if thought fit, to pass with or without modifications the following Resolution as an ordinary resolution of the Company:

"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, the Warrants (as hereinafter defined) and any shares of the Company which may fall to be issued pursuant to any exercise of subscription rights attaching to the Warrants, and conditional upon the Bermuda Monetary Authority granting permission for the issue of the Warrants and any shares of the Company which may fall to be allotted and issued on the exercise of the subscription rights attaching to the Warrants, the Directors of the Company be and are hereby authorized:

(a) to create and issue warrants ("Warrants") carrying aggregate subscription rights of HK$31,624,644.15 which shall be in registered form and shall be exercisable at any time between the first day of issue (being 15 August 2002) and 14 August 2004, both days inclusive, to subscribe at an initial subscription price of HK$0.033 per share of the Company, subject to adjustments, for new shares in the capital of the Company on the terms and conditions set out in the draft Warrant instrument, a copy of which is produced to this meeting marked "A" and signed for the purpose of identification by the Chairman hereof, and to issue the same by way of bonus to and among the persons who were registered as shareholders of the Company at the close of business on 13 August 2002 in the proportion of one Warrant carrying the right to subscribe at a price of HK$0.033 for one share in the capital of the Company for every five shares of the Company then held provided that:

(i) in the case of persons having registered addresses outside Hong Kong, the Warrants shall not be granted to such persons but shall be aggregated and sold in the market as soon as practicable after dealings in the Warrants commence and the net proceeds of sale, after deduction of expenses, shall be distributed to such persons pro rata to their respective entitlements unless the amount falling to be distributed to any such person shall be less than HK$100.00 in which case such amount shall be retained for the benefit of the Company; and

(ii) no fractional entitlements to the Warrants shall be granted as aforesaid, but all fractional entitlements shall, where applicable, be aggregated and sold for the benefit of the Company;

(b) to allot and issue new shares in the capital of the Company arising from the exercise of subscription rights attaching to the Warrants or any of them, to the intent that the authority hereby granted for the allotment and issue of shares in the capital of the Company upon the exercise of any of the subscription rights attaching to the Warrants shall be regarded as separate from and in addition to any general mandate held by the Directors of the Company for the issue of shares in the capital of the Company currently in force or to be obtained in the future; and

(c) to do all such acts and things as they consider necessary or expedient to give effect to the foregoing arrangements."

(6) As special business, to consider and, if thought fit, to pass with or without modifications the following Resolution as an ordinary resolution of the Company:

"THAT, subject to and conditional upon the Listing Committee of the Stock Exchange granting the listing of and permission to deal in the shares of the Company to be issued pursuant to the exercise of the options which may be granted under the new share option scheme of the Company (the "New Share Option Scheme"), a draft of which is produced to this meeting marked "B" and signed for the purpose of identification by the Chairman hereof, in an amount not exceeding 10 per cent. of the Shares in issue as at the date of passing this resolution, the New Share Option Scheme be and is hereby approved and adopted and the Board of Directors of the Company be and is hereby authorized to do all such acts and to enter into all such transactions, arrangements and agreements as may be necessary or expedient in order to give full effect to the New Share Option Scheme including, but without limitation:

(a) to administer the New Share Option Scheme under which options may be granted to Eligible Persons (as defined in the New Share Option Scheme) to subscribe for shares in the capital of the Company;

(b) to modify and/or amend the New Share Option Scheme from time to time, provided that such modification and/or amendment is effected in accordance with the provisions of the New Share Option Scheme relating to modification and/or amendment;

(c) to consent, if it so deems fit and expedient, to such conditions, modifications and/or variations as may be required or imposed by the relevant authorities in relation to the New Share Option Scheme; and

(d) to take all such steps as may be necessary, desirable or expedient to carry into effect the New Share Option Scheme,

and accordingly THAT the existing share option scheme of the Company adopted on 21 May 1997 be and is hereby terminated with effect from the close of this meeting (without prejudice to the rights and benefits of and attached to any such options as may have been granted thereunder which are outstanding)."

(7) As special business, to consider and, if thought fit, to pass with or without modifications the following Resolution as an ordinary resolution of the Company:

"THAT:

(a) subject to paragraph (c) below, the exercise by the Directors of the Company during the Relevant Period (as defined in paragraph (d) below) of all the powers of the Company to allot, issue and deal with additional shares in the capital of the Company and to make or grant offers, agreements and options which might or would require the exercise of such powers be and is hereby generally and unconditionally approved;

(b) the approval in paragraph (a) above shall authorize the Directors of the Company during the Relevant Period (as defined in paragraph (d) below) to make or grant offers, agreements and options which might or would require the exercise of such powers after the end of the Relevant Period;

(c) the aggregate nominal amount of share capital allotted or agreed conditionally or unconditionally to be allotted (whether pursuant to an option or otherwise) and issued by the Directors of the Company pursuant to the approval in paragraph (a) above, otherwise than pursuant to (i) a Rights Issue (as defined in paragraph (d) below), (ii) any issue of shares as any scrip dividend or similar arrangement pursuant to the Bye-laws of the Company, or (iii) the exercise of rights of conversion or subscription under the terms of any securities which are convertible into shares of the Company, or (iv) any issue of shares under any share option scheme or similar arrangement of the Company for the time being adopted for the grant or issue to officers and/or employees of the Company and/or any of its subsidiaries of shares or rights to acquire shares in the capital of the Company, shall not exceed 20 per cent. of the total nominal amount of the share capital of the Company in issue as at the date of the passing of this Resolution and the said approval to the Directors in paragraph (a) above shall be limited accordingly; and

(d) for the purpose of this Resolution:

"Relevant Period" means the period from the time of the passing of this Resolution until whichever is the earlier of:

(i) the conclusion of the next Annual General Meeting of the Company;

(ii) the expiration of the period within which the next Annual General Meeting of the Company is required by the Bye-laws of the Company or any applicable law of Bermuda to be held; and

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

"Rights Issue" means an offer of shares open for a period fixed by the Directors of the Company to holders of shares on the register of members of the Company on a fixed record date in proportion to their then holdings of such shares as at that date (subject to such exclusions or other arrangements as the Directors of the Company may deem necessary or expedient in relation to fractional entitlements or having regard to any restrictions or obligations under the laws of or the requirements of any recognized regulatory body or any stock exchange in any territory outside Hong Kong applicable to the Company)."

(8) As special business, to consider and, if thought fit, to pass with or without modifications the following Resolution as an ordinary resolution of the Company:

"THAT:

(a) subject to paragraph (b) below, the exercise by the Directors of the Company during the Relevant Period (as defined in paragraph (c) below) of all the powers of the Company to repurchase its own shares on the Stock Exchange subject to and in accordance with all applicable laws and the requirements of the Rules Governing the Listing of Securities on the Stock Exchange, be and is hereby generally and unconditionally approved;

(b) the aggregate nominal amount of shares which the Company is authorized to repurchase pursuant to the approval in paragraph (a) above shall not exceed 10 per cent. of the total nominal amount of the share capital of the Company in issue as at the date of the passing of this Resolution and the said approval shall be limited accordingly; and

(c) for the purposes of this Resolution:

"Relevant Period" means the period from the passing of this Resolution until whichever is the earlier of:

(i) the conclusion of the next Annual General Meeting of the Company;

(ii) the expiration of the period within which the next Annual General Meeting of the Company is required by the Bye-laws of the Company or any applicable law of Bermuda to be held; and

(iii) the revocation or variation of the authority given under this Resolution by an ordinary resolution of the shareholders of the Company in general meeting."

(9) As special business, to consider and, if thought fit, pass with or without modifications the following Resolution as an ordinary resolution of the Company:

"THAT conditional upon Resolutions numbered 7 and 8 set out in the notice convening this meeting being duly passed, the general mandate granted to the Directors of the Company to allot, issue and deal with additional shares pursuant to Resolution numbered 7 set out in the notice convening this meeting be and is hereby extended by the addition thereto of an amount representing the aggregate nominal amount of share capital of the Company which is repurchased by the Company under the authority granted to the Directors as mentioned in Resolution numbered 8 set out in the notice convening this meeting, provided that the amount of shares repurchased by the Company shall not exceed 10 per cent. of the total nominal amount of the share capital of the Company in issue as at the date of the passing of the said Resolution."

(10) To determine the minimum and maximum numbers of Directors for the financial year ended 31 March 2003.

(11) To transact any other business.

By Order of the Board

Ong Chi King

Company Secretary

Hong Kong, 22 July 2002

Notes:

1. A member who is the holder of two or more shares and who is entitled to attend and vote at the meeting is entitled to appoint more than one proxy. If more than one proxy is so appointed, the appointment shall specify the number and class of shares in respect of which each such proxy is appointed. A proxy need not be a member of the Company.

2. In order to be valid, the proxy form together with the power of attorney or other authority (if any) under which it is signed or a notarially certified copy of such power or authority must be deposited at the Company's Hong Kong branch share registrars, Tengis Limited at 4th Floor, Hutchison House, 10 Harcourt Road, Central, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for the holding of the meeting or any adjourned meeting thereof. Delivery of an instrument appointing a proxy shall not preclude a member from attending and voting in person at the meeting.

3. With reference to the Resolution numbered 7 set out in this notice, the Directors of the Company wish to state that they have no immediate plans to issue any new shares of the Company other than the shares that may be issued as a result of the exercise of the subscription rights attaching to (a) the options which granted or may be granted under any share option schemes adopted by the Company, (b) the warrants to be created under Resolution numbered 5 set out in this notice (subject to such resolution having became unconditional) .

4. An explanatory statement containing further details regarding the Resolution numbered 8 above will be sent to the members together with the Annual Report of the Company.

5. The Register of Members will be closed from 8 August 2002 to 13 August 2002, both days inclusive, during which period no transfer of shares will be effected. All transfers accompanied by the relevant share certificates must be lodged with Company's Hong Kong branch share registrars, Tengis Limited at 4th Floor, Hutchison House, 10 Harcourt Road, Central, Hong Kong not later than 4:00 p.m. on 7 August 2002.

Please also refer to the published version of this announcement in The Standard dated 22 July 2002.