DIT Group Limited — Proxy Solicitation & Information Statement 2004

Jul 30, 2004

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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.

If you are in any doubt as to any aspect of this circular, you should consult a 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 South East Group Limited (the “Company”), you should at once hand this circular and the enclosed proxy form to the purchaser or to the bank, stockbroker or other agent through whom the sale was effected for transmission to the purchaser or the transferee.

SOUTH EAST GROUP LIMITED 東南國際集團有限公司[*]

(Incorporated in Bermuda with limited liability)

(Stock Code: 726)

PROPOSALS INVOLVING

GENERAL MANDATES TO ISSUE SHARES AND REPURCHASE SHARES

AMENDMENTS TO THE BYE-LAWS AND

RE-ELECTION OF DIRECTORS

A letter from the Board of South East Group Limited is set out on pages 1 to 8 of this circular.

A notice convening the annual general meeting of South East Group Limited to be held at Basement Function Room I, Luk Kwok Hotel, 72 Gloucester Road, Wanchai, Hong Kong on Thursday, 23 September, 2004 at 10:00 a.m. is set out on pages 9 to 17 of this circular.

A form of proxy is also enclosed. Whether or not you are able to attend and vote at the annual general meeting, you are requested to complete the enclosed proxy form and return it to the Company at its principal place of business at Room 2705, 27th Floor, The Centrium, 60 Wyndham Street, Central, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for holding the annual general meeting or any adjournment thereof. Completion and return of the proxy form will not preclude you from subsequently attending and voting at the annual general meeting or any adjournment thereof should you so wish.

* For identification purposes only

30 July, 2004

CONTENTS

	Page
Letter from the Board
– Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
– The Share Issue Mandate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
– The Share Repurchase Mandate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2
– Proposed Amendments to the Bye-laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
– Re-election of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
– Procedure to Demand a Poll . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
– Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
– Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
Notice of Annual General Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9

LETTER FROM THE BOARD

SOUTH EAST GROUP LIMITED 東南國際集團有限公司[*]

(Incorporated in Bermuda with limited liability)

Executive Directors: Budiman RAHARDJA (Chairman) KWAN Kei Chor, Samuel

Non-Executive Director:

Registered Office: Canon’s Court 22 Victoria Street Hamilton HM12 Bermuda

CHEN Zhi Yung

Principal place of

Independent Non-Executive Directors: LO Yuk Lam WONG Kam Wah

business in Hong Kong: Room 2705, 27th Floor The Centrium 60 Wyndham Street Central, Hong Kong

30 July, 2004

To the Shareholders

Dear Sir or Madam,

PROPOSALS INVOLVING GENERAL MANDATES TO ISSUE SHARES AND REPURCHASE SHARES AMENDMENTS TO THE BYE-LAWS

AND RE-ELECTION OF DIRECTORS

INTRODUCTION

This circular is to provide information to shareholders of South East Group Limited (“Company”) required by the Rules Governing the Listing of Securities (“Listing Rules”) on The Stock Exchange of Hong Kong Limited (“Stock Exchange”) concerning (1) the proposed general mandates for the issue of shares and repurchase of shares to be granted to the Directors of the Company; (2) the proposed amendments to the bye-laws (“Bye-laws”) of the Company and (3) re-election of directors, to be approved by shareholders at the annual general meeting of the Company to be held on Thursday, 23 September 2004 (“AGM”).

THE SHARE ISSUE MANDATE

Resolution no. 5 referred to in the notice of AGM (“AGM Notice”) dated 30 July 2004 will, if passed, give a general unconditional mandate (“Share Issue Mandate”) to the Directors authorizing the

* For identification purposes only

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LETTER FROM THE BOARD

exercise by the Directors of the powers of the Company to allot additional shares of HK$0.10 each in the capital of the Company (“Shares”). This authority would apply to up to 20% of the issued share capital of the Company at the date of the AGM.

THE SHARE REPURCHASE MANDATE

Resolution no. 6 (“Ordinary Resolution”) referred to in the AGM Notice will, if passed, give a general unconditional mandate (“Share Repurchase Mandate”) to the Directors to exercise the powers of the Company to repurchase Shares up to a maximum of 10% of the issued share capital of the Company at the date of the AGM (“Repurchase Proposal”).

The Directors propose to seek your approval of the Ordinary Resolution to be proposed at the AGM. The information set out below constitutes an Explanatory Statement in accordance with the relevant rules as set out in the Listing Rules to regulate the repurchase by companies with primary listing on the Stock Exchange of their own securities on the Stock Exchange (“Share Buy Back Rules”):

(1) Shareholders’ approval

The Share Buy Back Rules provide that all on-market share repurchase by company with its primary listing on the Stock Exchange must be of fully paid up shares and approved in advance by an ordinary resolution, either by way of a general mandate or by specific approval in relation to specific transactions.

(2) Share Capital

As at 30 July 2004 (the latest practicable date prior to the printing of this statement) (“Latest Practicable Date”) the issued share capital of the Company comprised 330,571,880 Shares.

Subject to the passing of the Ordinary Resolution and on the basis that no further Shares are issued or repurchased prior to the AGM, the Company would be allowed, under the Share Repurchase Mandate to repurchase a maximum of 33,057,188 Shares.

(3) Reasons for repurchase proposal

The directors of the Company believe that the Repurchase Proposal is in the best interests of the Company and its shareholders. Such repurchases may, depending on market conditions and funding arrangements at the time, lead to an enhancement of the net assets and/or earnings per share and will only be made when the directors of the Company believe that such a repurchase will benefit the Company and its shareholders.

(4) Funding of repurchases

In repurchasing Shares, the Company may only apply funds legally available for such purpose in accordance with its memorandum of association and bye-laws and the applicable laws of Bermuda. The laws of Bermuda provide that the amount of capital repaid in connection with a

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LETTER FROM THE BOARD

share repurchase may only be paid out of either the capital paid up on the relevant Shares, or out of funds of the Company otherwise available for dividend or distribution or the proceeds of a fresh issue of Shares made for the purpose of the repurchase to such extent allowable under the Companies Act 1981 of Bermuda (as amended). The amount of premium payable on repurchase may only be paid out of funds of the Company otherwise available for dividend or distribution or out of the share premium account of the Company.

There might be a material adverse impact on the working capital or gearing position of the Company (as compared with the position disclosed in the audited consolidated accounts contained in the annual report of the Company for the year ended 31 March 2004) in the event that the proposed share repurchases were to be carried out in full at any time during the proposed repurchase period. Such proposed repurchase period means the period from the passing of the Ordinary Resolution until whichever is the earliest of: (i) the conclusion of the next annual general meeting of the Company; (ii) the date on which the authority sets out in the Ordinary Resolution is revoked or varied by an ordinary resolution of the shareholders of the Company in a general meeting; and (iii) the expiration of the period within which the next annual general meeting of the Company is required to be held by Bermuda laws or the bye-laws of the Company. However, the directors of the Company do not propose to exercise the buy back mandate to such extent as would, in the circumstances, have a material adverse effect on the working capital requirement of the Company or the gearing levels which, in the opinion of the directors of the Company, are from time to time appropriate for the Company.

(5) Share prices

The highest and lowest prices at which the Shares have traded on the Stock Exchange during each of the previous twelve months before the printing of this statement were as follows:

	Highest	Lowest
	HK$	HK$
July 2003	0.052	0.030
August 2003	0.070	0.038
September 2003	0.108	0.050
October 2003	0.098	0.070
November 2003	0.096	0.070
December 2003	0.146	0.078
January 2004	0.140	0.108
February 2004	0.130	0.100
March 2004	0.119	0.081
April 2004	0.100	0.080
May 2004	0.084	0.061
June 2004	0.084	0.062

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LETTER FROM THE BOARD

(6) Disclosure of interests

The directors of the Company have undertaken to the Stock Exchange that, so far as the same may be applicable, they will exercise the powers of the company to make repurchases pursuant to the Ordinary Resolution and in accordance with the Listing Rules and the applicable laws of Bermuda.

None of the directors of the Company nor, to the best of their knowledge having made all reasonable enquiries, their associates have any present intention to sell any Shares to the Company under the Repurchase Proposal if such is approved by the shareholders.

No connected persons (as defined in the Listing Rules) have notified the Company that they have a present intention to sell Shares to the Company or its subsidiaries, or have undertaken not to do so, in the event that the Repurchase Proposal is approved by the shareholders.

(7) Substantial shareholders

If on the exercise of the power to repurchase Shares pursuant to the Repurchase Proposal a shareholder’s proportionate interest in the voting rights of the Company increases, such increase will be treated as an acquisition for the purposes of Rule 32 of the Hong Kong Code on Takeovers and Mergers (the “Takeover Code”). Accordingly, a shareholder or group of shareholders acting in concert could obtain or consolidate control of the Company and become obligated to make a mandatory offer in accordance with Rule 26 of the Takeover Code.

As at the Latest Practicable Date, Mr. Budiman Rahardja and Easy Lead Corporation Limited, in which Mr. Rahardja and his mother, Madan Sri Wasi Hastuti are deemed to be interested, hold approximately 6.17% and 35.09% of the entire issued share capital of the Company respectively. In the event that the directors of the Company exercise in full the power to repurchase Shares in the Company in accordance with the terms of the Ordinary Resolution, the shareholding of Mr. Budiman Rahardja and Easy Lead Corporation Limited in the Company would be increased to approximately 6.85% and 38.98% respectively. The directors of the Company are aware that such increase may give rise to an obligation to make a mandatory offer under Rule 26 of the Takeovers Code. If any exercise of the powers of the Company to make repurchases pursuant to the Ordinary Resolution would, to the knowledge of the directors, result in takeovers obligations, the directors would not purchase Shares to such an extent.

(8) Share repurchase made by the Company

The Company has not repurchased any of its Shares (whether on the Stock Exchange or otherwise) in the six months preceding the date of this statement.

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LETTER FROM THE BOARD

PROPOSED AMENDMENTS TO THE BYE-LAWS

It is also proposed that in the AGM a resolution will be put to shareholders for approval for certain amendments and improvements to be made to the Company’s Bye-laws in compliance with the amendments to the Listing Rules which, subject to certain transitional arrangements, came into effect on 31 March 2004. In principle, the Bye-laws of the Company will be amended in the following respects to conform to the revised Appendix 3 to the Listing Rules:–

• (1) in compliance with paragraphs 4(4) and 4(5) of Appendix 3 to the Listing Rules, the minimum length of the period during which notice to the Company of the intention to propose a person for election as a director and during which notice to the Company by such person of his willingness to be elected may be given will be at least 7 days, commencing no earlier than the day after the despatch of the notice of the meeting appointed for such election and ending no later than 7 days prior to the date of such meeting;

• (2) in compliance with paragraph 4(1) of Appendix 3 to the Listing Rules, directors 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 and he shall not be counted in the quorum at the relevant board meeting;

• (3) in compliance with paragraph 14 of Appendix 3 to the Listing Rules, where any shareholder is, under the Listing Rules, required to abstain from voting on any particular resolution or restricted to voting only for or only 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;

• (4) in compliance with paragraph 8 of Appendix 3 to the Listing Rules, where the issuer has the power to purchase for redemption of a redeemable share, (i) purchases not made through the market or by tender shall be limited to a maximum price; and (ii) if purchases are by tender, tenders shall be available to all shareholders alike; and

• (5) in compliance with paragraph 10 of Appendix 3 to the Listing Rules that, where the capital of the Company includes shares which do not carry voting rights, the words “non-voting” must appear in the designation of such shares, and where the equity capital includes shares with different voting rights, the designation of each class of shares, other than those with the most favourable voting rights, must include the words “restricted voting” or “limited voting”.

RE-ELECTION OF DIRECTORS

In accordance with Bye-law 182(vi) of the Company’s Bye-laws, Mr. Lo Yuk Lam (“Mr. Lo”) and Mr. Kwan Kei Chor, Samuel (“Mr. Kwan”) shall retire by rotation at the AGM and, being eligible, offer themselves for re-election.

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LETTER FROM THE BOARD

Information on the retiring directors proposed for re-election at the AGM is set out below:

Mr. LO Yuk Lam , aged 56, was appointed as an independent non-executive director of the Company in January 2002. He is presently the Chairman of the Chinese Manufacturers’ Association of Hong Kong - Industry & Technology Committee, the Honorary Life Chairman of Hong Kong Biotechnology Association (Founding Chairman) and the Vice President of PerkinElmer Life and Analytical Sciences, Pac Rim. He is also the former Chairman of the Innovation and Technology Fund (Biotechnology Projects) Vetting Committee and the Biotechnology Committee of the Industry and Technology Development Council. Mr. Lo has been awarded the Honorary Fellowship by the Hong Kong University of Science and Technology and is heavily involved with several committees with the Industry Department of the HKSAR Government. Mr. Lo is currently an Adjunct Professor of the Chinese University of Hong Kong, a special advisor to the Hong Kong University of Science and Technology and a member of the Advisory Committee of both City University of Hong Kong and the Hong Kong Polytechnic University, and also as Honorary Professor in several universities in Mainland China.

There is no service contract entered into by Mr. Lo with the Company and no fixed or proposed length of service with the Company. Mr. Lo will be subject to retirement by rotation and re-election at annual general meetings of the Company in accordance with the Company’s bye-laws. Under the Company’s bye-laws, at each annual general meeting one-third of the directors for the time being shall retire from office by rotation and the directors (other than the chairman or managing director) to retire shall be those who have been longest in office since their last election; the retiring directors shall be eligible for reelection. Mr. Lo will be entitled to an emolument as determined by the Board from time to time with reference to services and contribution to the Company.

Mr. Lo does not have any relationship with any directors, senior management or substantial or controlling shareholders of the Company.

As at the Latest Practicable Date, Mr. Lo has interest in an option to subscribe for 990,000 Shares within the meaning of Part XV of the Securities and Futures Ordinance.

Saved as disclosed herein, Mr. Lo has not held any directorships in listed public companies or other major appointments and qualifications in the last three years prior to the Latest Practicable Date.

Mr. KWAN Kei Chor, Samuel , aged 38, was appointed as an executive director of the Company in December 2002. Mr. Kwan is a degree holder in Business Administration and is an associate member of each of the Hong Kong Society of Accountants and the Association of International Accountants. Prior to joining the Group in 1997, he had been working in the field of auditing, finance and accounting. Mr. Kwan is responsible for the finance and corporate matters of the Group.

Mr. Kwan has entered into a service agreement with the Company for a period of one year from 1 December 2002 and will continue thereafter unless and until terminated by either party by two months’ prior notice with a monthly salary of HK$37,000 (payable on a 13 months basis) together with other benefits. The amount of salary was based on the nature of his job and his working experience in the past.

Mr. Kwan does not have any relationship with any directors, senior management or substantial or controlling shareholders of the Company.

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LETTER FROM THE BOARD

As at the Latest Practicable Date, Mr. Kwan has interest in an option to subscribe for 3,966,000 Shares within the meaning of Part XV of the Securities and Futures Ordinance.

Saved as disclosed herein, Mr. Kwan has not held any directorships in listed public companies or other major appointments and qualifications in the last three years prior to the Latest Practicable Date.

Saved as disclosed above, there are no other matters regarding the re-elected directors that need to be brought to the attention of the shareholders of the Company.

PROCEDURE TO DEMAND A POLL

Pursuant to Bye-law 70 of the Company’s Bye-laws, every resolution put to the vote of a general meeting shall be decided on a show of hands in the first instance, but a poll may be demanded (before or on the declaration of the result of the show of hands) by:

• (1) the chairman of the meeting; or

• (2) at least three members present in person or by proxy having the right to vote at the meeting; or

• (3) a member or members present in person or by proxy representing not less than one-tenth of the total voting rights of all the members having the right to vote at the meeting; or

• (4) a member or members present in person or by proxy 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 the Shares conferring that right.

ANNUAL GENERAL MEETING

A notice convening the AGM is set out on pages 9 to 17 of this circular for the purpose of considering and, if thought fit, passing the resolutions set out therein. A form of proxy is enclosed for use at the AGM. You are requested to complete and return the form of proxy to the Company of its principal place of business at Room 2705, 27th Floor, The Centrium, 60 Wyndham Street, Central, Hong Kong as soon as possible, and in any event not later than 48 hours before the time appointed for the holding of the AGM or any adjournment thereof. The lodging of a form of proxy will not preclude you from subsequently attending the AGM or any adjournment thereof and voting in person should you so wish.

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LETTER FROM THE BOARD

RECOMMENDATION

The Directors consider that the Share Issue Mandate and the Share Repurchase Mandate and the amendments to the Bye-laws are in the interests of the Company and its shareholders. The Directors are also pleased to recommend Mr. Lo Yuk Lam and Mr. Kwan Kei Chor, Samuel, the retiring Directors, for re-election at the AGM. Accordingly, the Directors recommend that shareholders of the Company vote in favour of the resolutions to be proposed at the AGM.

Yours faithfully, For and on behalf of the Board Kwan Kei Chor, Samuel Director

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NOTICE OF ANNUAL GENERAL MEETING

SOUTH EAST GROUP LIMITED 東南國際集團有限公司[*]

(Incorporated in Bermuda with limited liability)

(Stock Code: 726)

NOTICE IS HEREBY GIVEN that the Annual General Meeting of South East Group Limited (the “Company”) will be held at Basement Function Room I, Luk Kwok Hotel, 72 Gloucester Road, Wanchai, Hong Kong on Thursday, 23 September 2004 at 10:00 a.m. for the following purposes:

1. To receive and consider the audited financial statements and the reports of the directors and the auditors of the Company for the year ended 31 March 2004;

2. To re-elect retiring directors and to authorise the board of directors to fix the remuneration of directors;

3. To determine the maximum number of directors for the financial year 2004/2005;

4. To re-appoint auditors and to authorise the board of directors to fix their remuneration;

5. As special business, to consider and, if thought fit, pass, with or without amendments, the following resolution as an Ordinary Resolution:

“ THAT:

• (a) the exercise by the directors of the Company during the Relevant Period (as hereinafter defined) of all the powers of the Company to allot, issue and deal with additional shares of the Company, be and is hereby generally and unconditionally approved, provided that, otherwise than (i) pursuant to a rights issue where shares are offered to shareholders on a fixed record date in proportion to their then holdings of shares of the Company 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 recognised regulatory body of any stock exchange, in any territory outside Hong Kong applicable to the Company); (ii) an issue of shares upon the exercise of rights of subscription or conversion under the terms of any securities which are convertible into shares of the Company; (iii) an issue of shares as scrip dividends pursuant to the bye-laws of the Company from time to time; or (iv) an issue of shares under any option scheme or similar arrangement for the grant or issue to employees of the Company and/or any of its subsidiaries of shares or rights to acquire shares of the Company, the aggregate nominal amount of share capital issued, allotted or disposed of or agreed conditionally or unconditionally to be issued, allotted or dealt with whether pursuant to an option or otherwise, shall not in total exceed 20 per cent. of the nominal amount of share capital of the Company in issue on the date of passing this Resolution and the said approval shall be limited accordingly; and

* For identification purposes only

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NOTICE OF ANNUAL GENERAL MEETING

• (b) for the purpose 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 revocation or variation of the authority given under this Resolution by ordinary resolution of the shareholders of the Company in general meeting; and

  • (iii) 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 to be held.”

• As special business, to consider and, if thought fit, pass with or without amendments, the following resolution as an Ordinary Resolution:

“ THAT:

• (a) subject to paragraph (b) below, the exercise by the directors of the Company during the Relevant Period (as hereinafter defined) of all the powers of the Company to repurchase its shares on The Stock Exchange of Hong Kong Limited (“Stock Exchange”) or on any other stock exchange on which the shares of the Company may be listed and recognised by the Securities and Futures Commission of Hong Kong and the Stock Exchange for this purpose, subject to and in accordance with all applicable laws and the requirements of the Rules Governing the Listing of Securities on the Stock Exchange or of any other stock exchange as amended from time to time, be and is hereby generally and unconditionally approved;

• (b) the total nominal amount of shares of the Company to be repurchased by the Company pursuant to the approval in paragraph (a) above shall not exceed 10 per cent of the total nominal amount of the shares of the Company in issue on the date of passing this Resolution and the said approval shall be limited accordingly; and

• (c) for the purpose 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 revocation or variation of the authority given under this Resolution by ordinary resolution of the shareholders of the Company in general meeting; and

• (iii) 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 to be held.”

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NOTICE OF ANNUAL GENERAL MEETING

1. As special business, to consider and, if thought fit, pass, with or without amendments, the following resolution as an Ordinary Resolution:

“ THAT , subject to the passing of Resolutions Nos. 5 and 6 set out in the notice convening this meeting, the general mandate granted to the directors of the Company to exercise the powers of the Company to allot and deal with additional shares and to make or grant offers, agreements and options which might or would require the exercise of such power pursuant to Resolution No. 5 set out in the notice convening this meeting, be and is hereby extended by the addition to the total nominal amount of the share capital of the Company which may be allotted or agreed conditionally or unconditionally to be allotted by the directors of the Company pursuant to such general mandate of an amount representing the total nominal amount of shares in the capital of the Company which has been repurchased by the Company under the authority granted pursuant to Resolution No. 6 set out in the notice convening this meeting provided that such amount of shares shall not exceed 10 per cent of the total nominal amount of the share capital of the Company in issue on the date of passing this Resolution.”

1. As special business, to consider and, if thought fit, pass with or without amendments, the following resolution as Special Resolution:

“ THAT the bye-laws of the Company be and are hereby amended in the following manner:

• (a) deleting the existing definition of “associates” in Bye-law 1 in its entirety and substituting therefor the following new definition:

““Associate” in relation to any Director shall have the meaning ascribed to it under the rules of the Designated Stock Exchange;”;

• (b) deleting the words “Securities and Futures (Clearing Houses) Ordinance (Chapter 420 of the Laws of Hong Kong) under the definition of “Clearing House” in Bye-law 1 and replacing them with the following:

“Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)”;

• (c) adding before the definition of “HK$” in Bye-law 1 the following definition of “Hong Kong”:

““Hong Kong” shall mean The Hong Kong Special Administrative Region of the People’s Republic of China.”;

• (d) adding before the definition of “Seal” in Bye-law 1 the following definition of “Designated Stock Exchange”:

““Designated Stock Exchange” shall mean The Stock Exchange of Hong Kong Limited or a stock exchange which is an appointed stock exchange for the purposes of the Companies Act as from time to time in force on which any share capital of the

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NOTICE OF ANNUAL GENERAL MEETING

Company is listed or quoted and where such appointed stock exchange deems such listing or quotation to be the primary listing or quotation of the share capital of the Company.”;

• (e) deleting the existing Bye-law 6(B) in their entirety and replacing therewith the following new Bye-law 6(B):

• “6(B) Subject to the Statutes, the power of the Company to purchase or otherwise acquire its shares (including its redeemable shares) and warrants or other securities for the subscription or purchase of its own shares (including redeemable shares) shall be exercisable by the Directors upon such terms and subject to such conditions as they think fit provided that, in respect of a purchase of redeemable shares:

  • (i) the price per share for purchases proposed to be made otherwise than by tender in the manner prescribed in (ii) below or on or through a stock exchange on which such shares are listed with the consent of the Company shall not exceed 100 per cent. of the average closing prices for dealings in one or more board lots of such shares on the principal stock exchange on which the shares are traded for the five trading days immediately before the date on which the purchase is made (whether conditionally or otherwise); and

  • (ii) where any such purchase is proposed to be made by tender, tenders shall be made available to all holders of such shares on the same terms.”

• (f) Deleting the existing Bye-law 17 in its entirety and substituting therefor the following new Bye-law 17:

• “17. Every share certificate hereafter issued shall specify the number and class of shares in respect of which it is issued and the amount paid thereon and may otherwise be in such form as the Board may from time to time prescribe. A share certificate shall relate to only one class of shares, and where the capital of the Company includes shares with different voting rights, the designation of each class of shares, other than those which carry the general right to vote at general meetings, must include the words “restricted voting” or “limited voting” or some other appropriate designation which is commensurate with the rights attaching to the relevant class of shares.”

• (g) adding the following as a new Bye-law 80(C) immediately after Bye-law 80(B):

• “80(C) Where the Company has knowledge that any member is, under the rules of the stock exchange on which the shares of the Company are listed or quoted, required to abstain from voting on any particular resolution of the Company

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NOTICE OF ANNUAL GENERAL MEETING

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.”;

• (h) deleting the existing Bye-laws 98(E), (G), (H), (I) and (J) in their entirety and replacing therewith the following new Bye-laws 98(E), (G), (H), (I) and (J):

• “98 (E) Where arrangements are under consideration concerning the appointment (including the arrangement, remuneration or variation of the terms thereof, or the termination thereof) of two or more Directors or any of the associate(s) of any such Director(s) to offices or places of profit with the Company or any other company in which the Company is interested, a separate resolution may be put in relation to each Director or, as the case may be, the associate(s) of such Director and in such case each of the Directors concerned shall be entitled to vote (and be counted in the quorum) in respect of each resolution except that concerning his own appointment or the appointment of any of his associates (or the arrangement or variation of the terms thereof, or the termination thereof) and (in the case of an office or place of profit with any such other company as aforesaid) where the other company is a company in which the Director and his associates in aggregate own 5 per cent. or more of the issued shares of any class of the voting equity share capital of such company or of the voting rights of any class of shares of such company (other than shares which carry no voting rights at general meetings and no or nugatory dividend and return of capital rights);”

  • “(G) If to the knowledge of a Director, he or any of his associates, is in any way, whether directly or indirectly, interested in a contract or arrangement or proposed contract or arrangement with the Company, he shall declare the nature of his or, as the case may be, his associate(s)’ interest at the meeting of the Directors at which the question of entering into the contract or arrangement is first taken into consideration, if he knows his interest or that of his associate(s) then exists, or in any other case at the first meeting of the Directors after he knows that he or his associate(s) is or has become so interested. For the purposes of this Article, a general notice to the Directors by a Director to the effect that (a) he or his associate(s) is a shareholder of a specified company or firm and is to be regarded as interested in any contract or arrangement which may after the date of the notice be made with that company or firm or (b) he or his associate(s) is to be regarded as interested in any contract or arrangement which may after the date of the notice be made with a specified person who is connected with him or any of his associate(s), shall be deemed to be a sufficient declaration of interest under this Article in relation to any such contract or arrangement; provided that no such notice shall be effective unless either it is given at a meeting of the Directors or the Director takes reasonable steps to secure that it is brought up and read at the next meeting of the Directors after it is given.”;

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NOTICE OF ANNUAL GENERAL MEETING

• “(H) A Director shall not vote (nor be counted in the quorum) on any resolution of the Board in respect of any contract or arrangement or proposal in which he or any of his associate(s) has/have a material interest, and if he shall do so his vote shall not be counted (nor be counted in the quorum for that resolution), but this prohibition shall not apply to any of the following matters namely:

• (i) any contract or arrangement or proposal for the giving by the Company of any security or indemnity to the Director or his associate(s) in respect of money lent or obligations incurred or undertaken by him or any of them at the request of or for the benefit of the Company or any company in which the Company has interest; or

• (ii) any contract or arrangement or proposal for the giving by the Company of any security or indemnity to a third party in respect of a debt or obligation of the Company or any company in which the Company has interest for which the Director or his associates(s) has himself/ themselves guaranteed or secured or otherwise assumed responsibility in whole or in part and whether alone or jointly under a guarantee or indemnity or by the giving of security;

• (iii) any contract or arrangement or proposal 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 subunderwriting of the offer; and/or for the purposes of making any representation, the giving of any covenants, undertakings or warranties or assuming any other obligations in connection with such offer;

• (iv) any contract or arrangement or proposal in which the Director or his associate(s) is/are interested in the same manner as other holders of such shares or debentures or other securities of the Company by virtue only of his/their interest in shares or debentures or other securities of the Company and/or his/their being the offeror or one of the offerors or is interested in one of the offerors for the purchase or effective acquisition of such shares, debentures or other securities;

• (v) any contract or arrangement or proposal by the Director or his associate(s) to subscribe for shares or debentures or other securities of the Company to be issued pursuant to any offer or invitation to the shareholders or debenture or securities holders of the Company or to the public which does not provide the Director or his associate(s) any privilege not accorded to any other shareholders or debenture or securities holders of the Company or to the public;

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NOTICE OF ANNUAL GENERAL MEETING

• (vi) any contract or arrangement or proposal 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 shareholder or in which the Director or his associate(s) is/are beneficially interested in shares of that company, provided that the Director and any of his associates are not in aggregate beneficially interested in five (5) per cent. or more of the issued shares of any class of the voting equity share capital of such company (or of any third company through which his interest or that of his associate(s) is derived) or of the voting rights of any class of shares of such company (other than shares which carry no voting rights at general meetings and no or nugatory dividend and return of capital rights);

• (vii) any contract or proposal or arrangement concerning the benefit of employees of the Company or its subsidiaries including:

  • (a) the adoption, modification or operation of any employees’ share scheme or any share incentive or share option scheme under which the Director or his associate(s) may benefit; or

  • (b) the adoption, modification or operation of a pension fund or retirement, death or disability benefits scheme which relates to Directors, their associate(s) and employees of the Company or any of its subsidiaries and does not provide in respect of any Director or his associate(s), any privilege or advantage not generally accorded to the class of persons to which such scheme or fund relates.

• (viii) any contract or proposal or arrangement concerning the purchase and/or maintenance of any insurance policy for the benefit of any Director, his associate(s), officer or employee pursuant to these ByeLaws.

• (I) A company shall be deemed to be a company in which a Director and/or his associate(s) own(s) 5 per cent. or more of any class of the voting equity share capital of such company or of the voting rights of any class of shares of such company if and so long as (but only if and so long as) he and/or his associates (either directly or indirectly) is/are the holder(s) of or beneficially interested in 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 party through which his/their interest of 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

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NOTICE OF ANNUAL GENERAL MEETING

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 and any shares which carry no voting right at general meetings and no or very restrictive dividend and return of capital right.

  - (J) Where a company in which a Director and/or his associate(s) in aggregate hold(s) 5 per cent. or more is/are materially interested in a transaction, then that Director and/or his associate(s) shall also be deemed materially interested in such transaction.”;

• (i) adding the words “or his associate(s)” immediately after the words “(other than the chairman of the meeting)” in the third line of Bye-law 98(K);

• (j) adding the words “and/or his associate(s)” immediately after the words “the interest of the Director” in the eleventh line of Bye-law 98(K);

• (k) deleting the existing Bye-law 103(A) in its entirety and substituting therefor the following new Bye-law 103(A):

• “103(A) No person, other than a retiring Director, shall, unless recommended by the Board for election, be eligible for election to the office of Director at any general meeting, unless notice in writing by some member (not being the person to be proposed) entitled to attend and vote at the meeting for which such notice is given of his intention to propose that person for election as a Director and notice in writing by that person of his willingness to be elected shall have been given to the Company. The period for lodgment of the notice required under this Bye-law shall commence no earlier than the day immediately after the despatch of the notice of the general meeting appointed for such election and end no later than seven days prior to the date of such meeting, provided that such period shall be at least seven days.”;

• (l) deleting the words “and the latest date for lodgment of the notices will be not more than 7 days prior to the date of the general meeting” in the last sentence of Bye-law 103(B);

• (m) adding the words “or by facsimile or through electronic means” immediately after the words “or by telephone” in the eighth line of Bye-law 121; and

• (n) adding the words “or number or electronic address” immediately after the words “telegram at the address” in the nineth line of Bye-law 121.”

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NOTICE OF ANNUAL GENERAL MEETING

1. To transact any other business.

By Order of the Board Chan Sau Chee Company Secretary

Hong Kong, 30 July 2004

Notes:

• (i) A member entitled to attend and vote at the meeting convened by the above notice is entitled to appoint a proxy to attend and, in the event of a poll, vote in his stead. A proxy need not be a member of the Company.

• (ii) In order to be valid, the form of proxy together with a power of attorney or other authority, if any, under which it is signed or a notarially certified copy of the power of attorney or authority must be deposited with the Company’s principal place of business at Room 2705, 27/F., The Centrium, 60 Wyndham Street, Hong Kong not less than 48 hours before the time for holding the meeting or adjourned meeting.

• (iii) Completion and return of the form of proxy will not preclude a member of the Company from attending and voting in person at the meeting convened or any adjournment thereof and in such event, the authority of the proxy shall be deemed to be revoked.

The directors of the Company as at the date of this notice are Mr. Budiman Rahardja and Mr. Kwan Kei Chor, Samuel as executive directors, Mr. Chen Zhi Yung as non-executive director and Mr. Lo Yuk Lam and Mr. Wong Kam Wah as independent non-executive directors.

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