THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your shares in i100 Limited, you should at once hand this document to the purchaser(s) or transferee(s) or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser(s) or transferee(s).

The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents of this document, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this document.

i100 Limited

(Incorporated in Bermuda with limited liability)

Document to the Independent Shareholders and Optionholders regarding the Mandatory unconditional cash offer by

ALTUS CAPITAL LIMITED

on behalf of

Landmark Profits Limited

(Incorporated in the British Virgin Islands with limited liability)

a wholly-owned subsidiary of

==> picture [46 x 46] intentionally omitted <==

EASYKNIT INTERNATIONAL HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

to acquire all the issued Shares and outstanding Options to subscribe for Shares in

i100 Limited

(other than those Shares in i100 Limited already owned and/or agreed to be acquired by Landmark Profits Limited or parties acting in concert with it)

Joint independent financial advisers to the independent director of i100 Limited

==> picture [48 x 31] intentionally omitted <==

Barits Securities (Hong Kong) Limited

CSC Asia Limited

A letter of advice from Barits Securities (Hong Kong) Limited and CSC Asia Limited containing their opinion and advice to the Independent Director in connection with the Offers are set out on pages 13 to 29 of this document. A letter from the Independent Director to the Independent Shareholders and Optionholders is set out on pages 11 to 12 of this document.

31st March, 2003

i100 Limited

	Page
Expected timetable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	ii
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
Letter from the Independent Director . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
Letter of Advice from Barits and CSC Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	13
Appendix I — Financial information of the i100 Group . . . . . . . . . . . . . . . . . . . . . .	30
Appendix II — General information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	97

— i —

i100 Limited

EXPECTED TIMETABLE

Commencement date of the Offers . . . . . . . . . . . . . . . . . . . . . . . . . Thursday, 27th February, 2003 Despatch of the Offeree Document . . . . . . . . . . . . . . . . . . . . . . . . . . . . Monday, 31st March, 2003 Latest time for receipt of valid forms of acceptance and transfer relating to the Offers (Note 1) . . . . . . . . . . 4:00 p.m. on Monday, 14th April, 2003 Closing Date (Note 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Monday, 14th April, 2003

Announcement in respect of the close of the Offers and valid acceptance under the Offers to be published in the newspapers . . . . . . . . . . . . . . . . . . . Tuesday, 15th April, 2003

Latest date for despatch of remittances in

respect of valid acceptance of the Offers received on or before 4:00 p.m. on
Monday, 14th April, 2003 (Note 2) . . . . . . . . . . . . . . . . . . . . . . . . . . Wednesday, 23rd April, 2003

Notes:

The Offers will remain open for acceptance until 4:00 p.m. on Monday, 14th April, 2003 unless Landmark Profits revises or extends the Offers in accordance with the Takeovers Code. While Landmark Profits has no intention of revising or extending the Offers beyond this time and date, it reserves the right to do so.
Remittances in respect of the consideration payable for the Shares or the surrender of the Options tendered under the Offers will be posted within 10 days of the date of receipt by the Registrar (in respect of the Share Offer) or Landmark Profits (in respect of the Option Offer) of all the relevant documents to render the relevant acceptances under the Offers complete and valid.

All time references contained in this document refer to Hong Kong time.

— ii —

i100 Limited

DEFINITIONS

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

“Acquisition”	the acquisition of the Sale Shares by Landmark Profits from
	the Vendors
“Altus Capital”	Altus Capital Limited, an investment adviser and a dealer
	registered under the Securities Ordinance (Chapter 333 of the
	Laws of Hong Kong) and the financial adviser to Easyknit in
	relation to the Offers
“Altus Letter”	the letter from Altus Capital contained in the Offer Document
“Announcement”	the announcement dated 6th February, 2003 made jointly by
	Easyknit and i100 regarding, inter alia, the Offers
“Barits”	Barits Securities (Hong Kong) Limited, an investment adviser
	and a dealer registered under the Securities Ordinance
	(Chapter 333 of the Laws of Hong Kong) and one of the joint
	independent financial advisers to the Independent Director
“Board”	the board of Directors
“Capital Reorganisation”	the capital reorganisation of i100 involving the reduction of
	the issued share capital, the subdivision of unissued shares,
	and the cancellation of share premium as set out in the
	circular dated 16th January, 2003 despatched by i100 to its
	shareholders, which was approved by the Shareholders on 7th
	February, 2003 and became effective on 10th February, 2003
“CCASS”	the Central Clearing and Settlement System established and
	operated by Hong Kong Securities Clearing Company Limited
“Closing Date”	14th April, 2003 or if the Offers are extended, the closing date
	of the Offers as extended in accordance with the Takeovers
	Code
“Companies Ordinance”	Companies Ordinance (Chapter 32 of the Laws of Hong
	Kong)
“Completion”	completion of the Sale and Purchase Agreement in accordance
	with its terms which took place on 28th January, 2003
“Consideration”	HK$6.09 million paid for the Sale Shares under the Sale and
	Purchase Agreement

— 1 —

i100 Limited

DEFINITIONS

“CSC Asia”	CSC Asia Limited, an investment adviser registered under the	CSC Asia Limited, an investment adviser registered under the
	Securities Ordinance (Chapter 333 of the Laws of Hong
	Kong) and one of the joint independent financial advisers to
	the Independent Director
“Directors”	the directors of i100
“Easyknit”	Easyknit International Holdings Limited, a company
	incorporated in Bermuda with limited liability, the shares of
	which are listed on the main board of the Stock Exchange	and
	the Singapore Exchange Securities Trading Limited in which
	Magical Profits Limited, which is ultimately owned by	the
	Magical 2000 Trust (the beneficiaries of which include	Ms.
	Lui Yuk Chu, a director of Easyknit, and members of	her
	family which include her sons, Mr. Koon Chun Ting and	Mr.
	Koon Chun Kit, and daughters, Ms. Koon Wai Yan and	Ms.
	Koon Ho Yan), is interested in approximately 36.74% of	the
	issued shares of Easyknit
“Easyknit Group”	Easyknit and its subsidiaries
“Escrow Agent”	Messrs Simmons & Simmons
“Escrow Agreement”	the agreement dated 24th January, 2003 and entered into
	between i100, Planetic and the Escrow Agent in relation to the
	escrow arrangements concerning the Loan
“Executive”	the Executive Director of the Corporate Finance Division of
	the SFC or any delegate of the Executive Director
“Hong Kong”	The Hong Kong Special Administrative Region of	the
	People’s Republic of China
“Independent Director”	Mr. Wong Ying Wai, Wilfred, which has been appointed	for
	the purpose of advising the Independent Shareholders	and
	Optionholders in relation to the Offers
“Independent Shareholders”	Shareholders other than Landmark Profits, its associates	(as
	defined under the Listing Rules) and parties acting in concert
	with any of them
“Independent Third Parties”	parties not connected nor acting in concert with the Directors,
	chief executives or substantial shareholders of i100 or any of
	its subsidiaries or an associate of any of them

— 2 —

i100 Limited

DEFINITIONS

“IT”	acronym for information technology, a term encompasses all
	forms of technology used to create, store, exchange and use in
	its various forms
“i100” or “Company”	i100 Limited, a company incorporated in Bermuda with
	limited liability, the Shares of which are listed on the main
	board of the Stock Exchange
“i100 Group”	i100 and its subsidiaries
“Landmark Profits”	Landmark Profits Limited, a company incorporated in the
	British Virgin Islands and a wholly-owned subsidiary of
	Easyknit
“Latest Practicable Date”	28th March, 2003, being the latest practicable date prior to
	the printing of this document for the purpose of ascertaining
	certain information for inclusion in this document
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock
	Exchange
“Loan”	the loan facility of HK$30.27 million granted by Easyknit,
	through its wholly-owned subsidiary, Planetic, to i100
	pursuant to the Loan Facility Letter
“Loan Facility Letter”	the loan facility letter dated 24th January, 2003 and entered
	into between Planetic and i100 in relation to the granting of
	the Loan
“Offer Document”	the offer document dated 27th February, 2003 to the
	Independent Shareholders and Optionholders and containing
	details of the Offers
“Offer Price”	HK$0.01 per Offer Share in cash
“Offer Share(s)”	all the issued Share(s) (other than those already owned by
	Landmark Profits or parties acting in concert with it)
“Offeree Document”	this document containing recommendation of the Independent
	Director and the advice of the joint independent financial
	advisers in respect of the Offers issued by i100 to its
	shareholders and optionholders in accordance with the
	provisions of the Takeovers Code
“Offers”	the Share Offer and the Option Offer

i100 Limited

— 3 —

DEFINITIONS

“Option(s)”	the outstanding option(s) granted by i100 to a Director,
	management and employees of i100 to subscribe for Shares,
	pursuant to the share option schemes of i100 adopted on 21st
	August, 1991, 22nd May, 2001 and 6th June, 2002
	respectively
“Option Offer”	the mandatory unconditional cash offer to be made after
	Completion by Altus Capital, on behalf of Landmark Profits,
	in accordance with the Takeovers Code to all the
	Optionholders to surrender their Options for cancellation at
	an amount equal to HK$0.0001 multiplied by the number of
	Shares which may be subscribed for under the Options
“Optionholder(s)”	holder(s) of the Option(s)
“parties acting in concert”	has the meaning ascribed thereto in the Takeovers Code
“PRC”	People’s Republic of China
“Planetic”	Planetic International Limited, a company incorporated in
	Hong Kong and a wholly-owned subsidiary of Easyknit
“Registrar”	Tengis Limited, the Hong Kong branch registrars and transfer
	office of i100, at Ground Floor, Bank of East Asia Harbour
	View Centre, 56 Gloucester Road, Wanchai, Hong Kong
“Sale and Purchase Agreement”	the agreement dated 24th January, 2003 and entered into
	between the Vendors, Landmark Profits, Easyknit and the
	Vendor Guarantors in relation to the sale by the Vendors and
	the purchase by Landmark Profits of the Sale Shares
“Sale Shares”	609,000,000 Shares owned by the Vendors
“SDI Ordinance”	Securities (Disclosure of Interests) Ordinance (Chapter 396 of
	the Laws of Hong Kong)
“SFC”	the Securities and Futures Commission of Hong Kong
“Share(s)”	share(s) of HK$0.01 each in the share capital of i100
“Share Offer”	the mandatory unconditional cash offer for all the Offer
	Shares at the Offer Price to be made after Completion by
	Altus Capital on behalf of Landmark Profits in accordance
	with the Takeovers Code
“Shareholder(s)”	holder(s) of the Share(s)
	— 4 —
i100 Limited

DEFINITIONS

“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Takeovers Code”	the Hong Kong Code on Takeovers and Mergers
“Vendors”	Asia Pacific Growth Fund III, L.P., i100 Capital Corporation
	and i100 Holdings Corporation, which in aggregate were,
	immediately prior to Completion, interested in the Sale
	Shares representing approximately 55.27% of the then issued
	share capital of i100
“Vendor Guarantors”	Mr. Cheuk Ho Yeung, Gerald, Mr. Kan Siu Kei, Laurie and
	Mr. Vong Tat Ieong, David, all of whom are executive
	Directors who respectively hold 10%, 50% and 40% of the
	equity interests in i100 Holdings Corporation and
	approximately 30.6% beneficial interests in i100 Capital
	Corporation
“HK$”	Hong Kong dollars and Hong Kong cent(s) respectively, the
	lawful currency of Hong Kong
“%”	per cent.

per cent.

— 5 —

i100 Limited

LETTER FROM THE BOARD

i100 Limited

(Incorporated in Bermuda with limited liability)

Executive Directors:

Mr. CHEUK, Ho Yeung Gerald (Deputy Chief Executive Officer and Chief Financial Officer)

Mr. KAN, Siu Kei Laurie (President)

Registered office: Clarendon House 2 Church Street Hamilton HM 11 Bermuda

Mr. KOON, Wing Yee
Ms. LUI, Yuk Chu
Mr. TSANG, Yiu Kai

Mr. VONG, Tat Ieong David (Deputy Chief Executive Officer and Chief Operating Officer)

Head office and principal place of business in Hong Kong: 2906 Central Plaza 18 Harbour Road Wanchai Hong Kong

Non-executive Directors:

Mr. CHAN, Chi Chung

Mr. KO, Pil Jae Peter

Ms. LEUNG, Siu Mei

Ms. LOUIE, Siu Kuen

Mr. WONG, Sui Wah Michael

Independent non-executive Directors:

Ms. TSANG, Wai Chun Marianna

Mr. WONG, Ying Wai Wilfred

31st March, 2003

To the Shareholders and Optionholders

Dear Sir or Madam,

Mandatory unconditional cash offer by Altus Capital on behalf of Landmark Profits for all the Offer Shares and outstanding Options to subscribe for Shares in i100

INTRODUCTION

It was jointly announced by Easyknit and i100 on 6th February, 2003 that Landmark Profits completed the Acquisition pursuant to the Sale and Purchase Agreement at a cash consideration of HK$6,090,000 on 28th January, 2003.

— 6 —

i100 Limited

LETTER FROM THE BOARD

After Completion, Landmark Profits and parties acting in concert with it became interested in the Sale Shares, representing approximately 55.27% of the then issued share capital of i100. According to Rule 26 of the Takeovers Code, Altus Capital, on behalf of Landmark Profits, is making the Offers.

In accordance with Rule 2.1 of the Takeovers Code, Mr. Wong Ying Wai, Wilfred has been appointed as the Independent Director to consider the terms of the Offers and to advise you on the action that you should take with regard to the Offers. Mr. Cheuk Ho Yeung, Gerald, Mr. Kan Siu Kei, Laurie and Mr. Vong Tat Ieong, David, hold 10%, 50% and 40% of the equity interests respectively in i100 Holdings Corporation and approximately 30.6% beneficial interests in i100 Capital Corporation. Mr. Ko Pil Jae, Peter is a non-executive Director nominated by Asia Pacific Growth Fund III, L.P.. Ms. Tsang Wai Chun, Marianna, an independent non-executive Director, was a personal professional adviser to Mr. Kan Siu Kei, Laurie on tax, accounts, audit and company secretarial issues and received a service fee for service rendered during the period from 1st January, 2001 to 31st December, 2002. Mr. Koon Wing Yee, Ms. Lui Yuk Chu and Mr. Tsang Yiu Kai, all newly appointed executive Directors, and Mr. Chan Chi Chung, Mr. Michael Wong Sui Wah, Ms. Leung Siu Mei and Ms. Louie Siu Kuen, all newly appointed non-executive Directors, are all nominated by Landmark Profits and hence have conflicts of interests. Accordingly, all of these Directors are not considered to be independent in relation to the Offers.

i100 has appointed Barits and CSC Asia as the joint independent financial advisers to advise the Independent Director on their recommendations in connection with the Offers. This document sets out the letters from the Independent Director, as set out on pages 11 to 12 of this document, and Barits and CSC Asia, as set out on pages 13 to 29 of this document. You are requested to read them carefully before you decide on your response to the Offers.

INFORMATION ON THE OFFEROR

We refer you to the Altus Letter, which sets out, among other things, details of the Offers, information on Easyknit and Landmark Profits.

THE OFFERS

As stated in the Altus Letter, Altus Capital, on behalf of Landmark Profits, is offering to acquire all the Offer Shares and all the Options on the following basis:

For each Offer Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HK$0.01 in cash

For each Option . . . . . . . . . . an amount payable in cash equal to HK$0.0001 multiplied by the number of Shares which may be subscribed for under the Option

— 7 —

i100 Limited

LETTER FROM THE BOARD

As at the Latest Practicable Date, there are outstanding Options granted by i100 to a Director (Mr. Cheuk Ho Yeung, Gerald), management and employees of i100 to subscribe for a total of 27,248,000 Shares at exercise prices ranging from HK$0.385 per Share to HK$0.75 per Share. At present, Mr. Cheuk Ho Yeung, Gerald, the only Director that currently holds outstanding Options to subscribe for a total of 25,000,000 Shares, has no intention to accept the Option Offer.

Save for the Options, i100 has no outstanding equity securities (including equity related convertible securities, warrants, options or subscription rights in respect of any equity share capital) in issue as at the Latest Practicable Date.

INFORMATION ON THE i100 GROUP

i100, previously known as Acme Landis Holdings Limited, was listed on the Stock Exchange in 1991. The i100 Group is principally engaged in the provision of a branded wireless data service. It also invests in and operates information technology companies through a network of divisions, which entail a digital solutions provider and other strategic investments in networking. Based on i100’s audited financial results, it recorded a loss before tax and minority interests of approximately HK$130.1 million and HK$119.3 million respectively for the two financial years ended 31st December, 2001. The net loss after tax and minority interests attributable to Shareholders were approximately HK$132.6 million (20.3 cents per Share) and HK$118.5 million (11.8 cents per Share) respectively for the two financial years ended 31st December, 2001. For the six months ended 30th June, 2002, i100 recorded unaudited loss before tax and minority interests and unaudited net loss after tax and minority interests attributable to Shareholders of approximately HK$106.7 million and HK$106.8 million (10.5 cents per Share) respectively. i100 had unaudited net assets of approximately HK$96.2 million (8.7 cents per Share) as at 30th June, 2002. As at 31st December, 2000, 31st December, 2001 and 30th June, 2002, i100 recorded cash and cash equivalents of approximately HK$116.5 million, HK$32.8 million and HK$31.9 million respectively. A top-up placement of Shares was conducted on 4th June, 2002 and the net proceeds amounted to approximately HK$29 million. The net proceeds were used for the development in wireless data service and as general working capital.

As at 30th June, 2002, a loan to Acme Landis Operations Holdings Limited (“Acme Landis”), which was previously a subsidiary of i100 before its disposal by i100 in May 2002, amounting to HK$53 million was recorded in the consolidated balance sheet of i100. The loan is interest-free and its principal will be reduced upon receipt of repayment from Acme Landis. Besides, the loan has no fixed term of repayment and was secured by a pledge given by the purchaser of Acme Landis in respect of 100 million Shares. The Company is in the process of reviewing whether a provision is to be made against such loan to Acme Landis in the accounts of 2002. However, as at the Latest Practicable Date, no decision has been arrived at as to whether a provision is to be made and as to the amount to be made.

With reference to the announcement dated 7th February, 2003 issued by i100 in relation to the result of the special general meeting of i100 held on 7th February, 2003 (“SGM”), the Directors announced that the Capital Reorganisation was approved by the Shareholders at the SGM and the Capital Reorganisation became effective on 10th February, 2003. The Capital Reorganisation involved

— 8 —

i100 Limited

LETTER FROM THE BOARD

the reduction in the par value of each of the issued Shares from HK$0.10 to HK$0.01, the subdivision of each of the authorised but unissued shares of HK$0.10 each in the capital of i100 into 10 new Shares of HK$0.01 each and the cancellation of the entire amount standing to the credit of the share premium account of i100. The Capital Reorganisation has no effect on the terms of the Offers.

Your attention is drawn to Appendix I to this document which contains further financial information on the i100 Group.

FUTURE PROSPECTS OF THE i100 GROUP

Please refer to the section headed “Reasons for the Acquisition and future intentions of Easyknit regarding i100” in the Altus Letter contained in the Offer Document for detailed information.

CHANGE OF BOARD COMPOSITION

Landmark Profits has nominated Mr. Koon Wing Yee, Ms. Lui Yuk Chu, Mr. Tsang Yiu Kai, Mr. Chan Chi Chung, Mr. Wong Sui Wah, Michael, Ms. Leung Siu Mei and Ms. Louie Siu Kuen to the Board according to the earliest date permitted under the Takeovers Code and the Listing Rules. Please refer to the section headed “Directors and management of i100” in the Altus Letter contained in the Offer Document for particulars of the new Directors to be appointed to the Board.

The existing Directors will resign in accordance with the Sale and Purchase Agreement and in full compliance with Rule 7 of the Takeovers Code. Three existing executive Directors and two existing independent non-executive Directors comprising Mr. Cheuk Ho Yeung, Gerald, Mr. Kan Siu Kei, Laurie, Mr. Vong Tat Ieong, David, Ms. Tsang Wai Chun, Marianna and Mr. Wong Ying Wai, Wilfred have agreed not to resign as Directors until the audited financial statements of i100 Group for the year ended 31st December, 2002 have been approved which is expected to be before the end of April 2003. Upon such resignations, new independent non-executive Directors will be nominated to the Board in compliance with the requirements under Rule 3.10 of the Listing Rules.

MAINTAINING THE LISTING STATUS OF i100

Easyknit intends that i100 will remain listed on the Stock Exchange after the closing of the Offers. Each of Easyknit and the new Directors will undertake to the Stock Exchange to take appropriate steps as soon as possible following the closing of the Offers to ensure that not less than 25% of the i100 Shares will be held by the public, including:

(a) arranging for the sale of the existing i100 Shares by existing shareholders of i100 who are not regarded as members of the public for the purposes of the Listing Rules to parties not connected nor acting in concert with the Directors, chief executives or substantial shareholders of i100 or any of its subsidiaries or an associate of any of them; and/or
(b) such other steps as may be appropriate to restore the minimum percentage of securities of i100 held in public hands in accordance with the Listing Rules.

— 9 —

i100 Limited

LETTER FROM THE BOARD

The Stock Exchange has stated that if less than 25% of the issued i100 Shares are in public hands following the completion of the Offers, or if the Stock Exchange believes that (i) a false market exists or may exist in the trading of the i100 Shares; or (ii) there are insufficient i100 Shares in public hands to maintain an orderly market, then it will consider exercising its discretion to suspend trading in the i100 Shares. In this connection, it should be noted that upon the closing of the Offers, there may be insufficient public float for the i100 Shares and therefore trading in the i100 Shares may be suspended until a sufficient level of public float is attained.

The Stock Exchange will also closely monitor all future acquisitions or disposals of assets by i100. The Stock Exchange has indicated that it has the discretion to require i100 to issue an announcement and/or a circular to the shareholders of i100 irrespective of the size of any proposed transactions, particularly when such proposed transactions represent a departure from the principal activities of i100. The Stock Exchange also has the power to aggregate a series of transactions of i100 and any such transactions may result in i100 being treated as if it were a new listing applicant and subject to the requirements for new listing application as set out in the Listing Rules.

PROCEDURE FOR ACCEPTANCE OF THE OFFERS

Your attention is drawn to the Offer Document, and the accompanying form of acceptance and transfer and form of renunciation and acceptance attached thereto, which set out the procedures for acceptance of the Offers.

RECOMMENDATION

We strongly advise you to read the letter from the Independent Director on pages 11 to 12 of this document and the letter of advice from Barits and CSC Asia, the joint independent financial advisers to the Independent Director, on pages 13 to 29 of this document which set out their respective recommendations and advice in respect of the Offers.

Yours faithfully, By order of the Board i100 Limited KAN Siu Kei, Laurie President

— 10 —

i100 Limited

LETTER FROM THE INDEPENDENT DIRECTOR

i100 Limited

(Incorporated in Bermuda with limited liability)

31st March, 2003

To Independent Shareholders and Optionholders

Dear Sir or Madam,

Mandatory unconditional cash offer by Altus Capital on behalf of Landmark Profits for all the Offer Shares and outstanding Options to subscribe for Shares in i100

I refer to the document dated 31st March, 2003 issued by i100 (the “Offeree Document”), of which this letter forms part. Terms defined in the Offeree Document have the same meanings when used herein unless the context requires otherwise.

I have been appointed to consider the Offers and make recommendation to the Independent Shareholders and Optionholders in respect of the Offers. Barits and CSC Asia have been appointed as the joint independent financial advisers to advise me in this respect.

Your attention is drawn to the letter from the Board and the letter of advice from Barits and CSC Asia containing their advice and opinion to me as set out in the Offeree Document respectively, and to the letter from Altus Capital which sets out in the Offer Document containing, inter alia, the terms of the Offers.

Having taken into account the terms of the Share Offer, the principal factors and reasons considered by, and the advice and opinion of Barits and CSC Asia, I consider that the terms of the Share Offer are not fair and reasonable so far as the Independent Shareholders are concerned. Hence, I recommend the Independent Shareholders not to accept the Share Offer.

The market prices of the Shares have been substantially above the Offer Price. Accordingly, I would like to advise the Independent Shareholders who wish to realize whole or part of their Shares to closely monitor the market price of the Shares in the market during the offer period and consider selling their Shares in the market during the offer period, rather than accepting the Share Offer, if the net proceeds of the sales would exceed the amount receivable under the Share Offer. Independent Shareholders should note that there is a risk that the current trading prices and trading volume of the Shares may not be sustainable after the close of the Share Offer.

— 11 —

i100 Limited

LETTER FROM THE INDEPENDENT DIRECTOR

On the other hand, for those Independent Shareholders who are attracted to the future prospects of i100 and wish to retain part or all of their investments in the Shares, they should carefully consider the future intentions of Easyknit regarding the i100 Group and evaluate the prospects of the i100 Group under the new management after the close of the Share Offer, details of which are set out in the letter from Altus Capital contained in the Offer Document.

Having taken into account the terms of the Option Offer, the principal factors and reasons considered by, and the advice and opinion of Barits and CSC Asia, I consider that the terms of the Option Offer are fair and reasonable so far as the Optionholders are concerned. Hence, I recommend the Optionholders to accept the Option Offer. However, for those Optionholders who are optimistic on the i100 Group’s future prospects should consider not to accept the Option Offer.

Yours faithfully,

Wong Ying Wai, Wilfred Independent non-executive director

— 12 —

i100 Limited

LETTER OF ADVICE FROM BARITS AND CSC ASIA

The following is the text of the letter of advice to the Independent Director from Barits and CSC Asia dated 31st March, 2003 for incorporation in this document. A copy of this letter is available for inspection as mentioned in Appendix II to this document.

==> picture [59 x 37] intentionally omitted <==

Barits Securities (Hong Kong) Limited Room 3403-3407, 34/F., Edinburgh Tower, The Landmark, 15 Queen’s Road Central Hong Kong

CSC Asia Limited 28/F., COSCO Tower Grand Millennium Plaza 183 Queen’s Road Central Hong Kong

31st March, 2003

To the Independent Director of i100 Limited

Dear Sir,

Mandatory unconditional cash offer by Altus Capital on behalf of Landmark Profits for all the Offer Shares and outstanding Options to subscribe for Shares in i100

INTRODUCTION

We refer to our appointment as the joint independent financial advisers to advise the Independent Director in respect of the terms of the Offers, details of which are set out in this document, of which this letter forms part, and in the Offer Document and the accompanying form of acceptance and transfer in respect of the Share Offer and form of renunciation and acceptance in respect of the Option Offer. Terms used in this letter have the same meanings as defined in this document unless the context otherwise requires. We recommend the Independent Director to advise the Independent Shareholders and the Optionholders to read this document carefully before they decide what action to take in response to the Offers.

Mr. Cheuk Ho Yeung, Gerald, Mr. Kan Siu Kei, Laurie and Mr. Vong Tat Ieong, David, all executive Directors, are salaried employees of i100. Mr. Ko Pil Jae, Peter is an non-executive Director nominated by Asia Pacific Growth Fund III, L.P.. Mr. Koon Wing Yee, Ms. Lui Yuk Chu and Mr. Tsang Yiu Kai, all newly appointed executive Directors, and Mr. Chan Chi Chung, Ms. Leung Siu Mei, Ms. Louie Siu Kuen and Mr. Wong Sui Wah, Michael, all newly appointed non-executive Directors, are all nominated by Landmark Profits into the Board and hence have conflicts of interest. Ms. Tsang Wai Chun, Marianna, an independent non-executive Director, was a personal professional adviser to Mr. Kan Siu Kei, Laurie, an executive Director, on tax, accounts, audit and company secretarial issues and received a service fee for service rendered during the period from 1st January, 2001 to 31st December, 2002. Accordingly, none of them is considered to be independent so far as the Offers are concerned

— 13 —

i100 Limited

LETTER OF ADVICE FROM BARITS AND CSC ASIA

and therefore they have not participated in formulating a recommendation to the Independent Shareholders and Optionholders so as to avoid any conflict of interest that may arise. Consequently, the independent non-executive Director, Mr. Wong Ying Wai, Wilfred, has been appointed as the Independent Director to advise the Independent Shareholders and Optionholders in relation to the Offers.

In formulating our opinion, we have relied on the accuracy of the information and facts supplied to us by i100, the Directors and management of i100. We have also assumed that all statements of belief and intention made by the Directors in this document were reasonably made after due enquiry. We have assumed that all information, representations and opinions made or referred to in this document were true and accurate at the time they were made and continue to be true and accurate until the closing date of the Offers. We have no reason to doubt the truth, accuracy and completeness of the information and representations provided to us by i100, the Directors and management of i100 and have been advised by the Directors that no material facts have been omitted from the information provided and referred to in this document.

We have also relied on the accuracy of the information and facts contained in the Offer Document and assumed that all statements contained therein and representations made or referred to it were true at the time they were made and continued to be true until the closing date of the Offers.

We have reviewed, among other things, the published information of the i100 Group, including its audited financial statements for the three years ended 31st December, 2001, and the interim report for the six months ended 30th June, 2002. We have reviewed information provided by i100 regarding the prospects of the business in which the i100 Group is engaged. We have reviewed the past performance of the Share price since the date falling six months preceding the date of the Announcement. We have also identified and analysed cases of takeovers for listed companies since 1st August, 2002 based on published information. We consider that we have reviewed sufficient information to reach an informed view and to justify reliance on the accuracy of the information contained in this document and to provide a reasonable basis for our opinion. We have not, however, conducted an independent investigation into the business affairs, financial position or future prospects of the i100 Group and the Easyknit Group nor have we carried out any independent verification of the information supplied.

We have not considered any tax implications on the Independent Shareholders and the Optionholders in respect of their acceptance or non-acceptance of the Offers since these will vary in accordance with their individual circumstances. The Independent Shareholders and the Optionholders who reside outside of Hong Kong or are subject to overseas taxes or Hong Kong taxation on securities dealings should consider their own tax positions and, if in any doubt, should consult their own professional advisers.

PRINCIPAL FACTORS AND REASONS CONSIDERED

In giving our opinion to the Independent Director, we have taken into account the following principal factors and reasons in assessing the fairness and reasonableness of the Offers.

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i100 Limited

LETTER OF ADVICE FROM BARITS AND CSC ASIA

THE SHARE OFFER

Background of i100

i100, previously known as Acme Landis Holdings Limited, was listed on the Stock Exchange in 1991. Prior to a change of control in 2000, the i100 Group was principally engaged in traditional non-IT related trading businesses which consisted of importing, marketing, retailing and distributing sanitary fixtures and fittings and a range of hardware, industrial and consumer products. In addition, the i100 Group was a then specialist contractor in the design and installation of plumbing and drainage systems and provided related engineering services in Hong Kong.

As stated in the announcement dated 1st February, 2000, Acme Landis Holdings Limited entered into a subscription agreement with i100 Corporation, i100 Holdings Corporation and H&Q Asia Pacific, Ltd. as manager of the Asia Pacific Growth Fund III, L.P. in relation to the subscription of 800 million new Shares, representing 79.92% of the then issued share capital. The Directors stated that the proceeds of the subscription, which amounted to HK$200 million before expenses, were principally applied for the diversification of the business of the i100 Group into internet and internet-related businesses. In the meantime, the company’s name was changed from Acme Landis Holdings Limited to i100 to reflect the intention of operating internet and internet-related businesses in the future.

As stated in the announcement dated 31st May, 2000, i100 entered into a subscription agreement with i100 Asiaweb Holdings Corporation, Asiaweb ASP Limited, Mr. Fok Wing Keung and Mr. Yue Mun Yee to acquire a 49% interest in Asiaweb ASP Limited as part of the Company’s business strategy to expand businesses from the traditional business to high-tech business.

As stated in the announcement dated 7th September, 2000, solution100 Corporation, a wholly-owned subsidiary of i100, through a direct wholly-owned subsidiary, i100 Solutions Limited, agreed to acquire the business of Shanghai Cyberway CompuComm Limited, a company principally engaged in the provision of network system solutions and enterprise application services in the PRC. Upon completion of the acquisition, the Directors anticipated that i100 could lever its strategic, technological and management expertise in the internet business and expand the coverage of e-business to key cities in the PRC.

In 2000, the i100 Group set up three platforms, namely, Ask100, OnAir100 and FoodNet100. Ask100 was a net-links integrating network of 300 expert-hosted topics including: (i) up-to-minute financial, sports and entertainment news from online Chinese news provider; (ii) financial news, stock quotes and fund information from online financial service providers; (iii) interactive recruitment services, property searches and valuations, travel reservation services, insurance and automotive content; and (iv) linkage with email alert service provider which enabled Ask 100 to regularly transmit newsletters to registered subscribers. OnAir100 was a Chinese-language broadband multimedia directory integrating a directory of global multimedia hyperlinks. FoodNet 100 was an e-marketplace for food and agricultural products and equipment supply chain industries which operated as a center providing industry information, resources, consulting and technical services. FoodNet100 was jointly owned by i100 Group and China State Farm Agribusiness (Group) Corporation, one of the largest state owned agriculture and food conglomerates in the PRC. Apart from on-line trading, FoodNet 100 built important alliances that served to facilitate supplementary trading logistics.

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i100 Limited

LETTER OF ADVICE FROM BARITS AND CSC ASIA

In June 2001, the i100 Group announced a Korean wireless company, The Leadcorp’s 8% strategic equity investment in i100 and that the i100 Group and The Leadcorp were to incorporate and unify their respective wireless entertainment businesses. By then, the i100 Group and The Leadcorp formed alliances with two Korean wireless entertainment companies.

As stated in the interim report for the six months ended 30th June, 2002, i100 Wireless Corporation, a wholly-owned subsidiary of i100, entered into a long-term network access contract for unlimited bandwidth with a local 3G license-holding network operator. The i100 Group also secured the necessary license from the Office of the Telecommunications Authority of Hong Kong to operate as a full service mobile operator using the Mobile Virtual Network Operator (“MVNO”) business structure in Hong Kong.

As advised by the Directors, the sluggish economy, the depressed state of the property market and the dearth of property transactions have adversely affected the sanitary ware and the plumbing engineering business and the business volume in plumbing engineering was likely to decrease due to the drastic curtailment of land supply by the Hong Kong SAR Government. According to the statistics issued by Census & Statistics Department of Hong Kong, the number of residential flats newly constructed in Hong Kong dropped by approximately 33.6% from 96,200 units in 2001 to 63,900 units in 2002 and the property price index for private domestic units in 2002 dropped by approximately 11.3% as compared to that of 2001. In view that the demand for sanitary ware and plumbing engineering business is directly driven by the property market, we concur with the Directors that depressed state of property market and the resulting dearth of property transactions will affect the sanitary ware and the plumbing engineering business of the i100 Group. Besides, the Directors noted the declining turnover of the sanitary and plumbing engineering businesses and the loss making situation of the i100 Group since 2000 which were unlikely to improve in the near future due to reasons stated above. Furthermore, the i100 Group was in need of capital to finance the marketing and advertising expenses of its wireless data service business, “noodle”, rolled out in October 2002. Accordingly, i100 disposed of its businesses in relation to drainage, plumbing and engineering contracting services, and distribution of sanitary fixtures and other products in May 2002. We are of the view that such disposal was in line with the Company’s strategy to shift to internet and wireless businesses.

As stated in the announcement dated 4th June, 2002, i100 conducted a placement of Shares through which i100 raised net proceeds of approximately HK$29 million which were mainly applied for developing wireless data business and as general working capital of i100 and its subsidiaries. According to the interim report for the six months ended 30th June, 2002, i100 launched a branded GPRS-driven and entertainment focused wireless data service in the third quarter of 2002 which made it one of the world’s first 2.5G focused wireless operators outside the highly developed markets of Japan, Korea and Taiwan. i100 built partnerships with a variety of international content and application providers and leading wireless games companies from Japan, Sweden, UK, Hong Kong, Europe, Korea and Taiwan, and incorporated proven games into the wireless service.

As advised by the Directors, among all businesses and plans mentioned above, only its solutions providing business and wireless data service business are currently retained as the existing core businesses of the i100 Group while other businesses were either discontinued or inactive. In particular, the Directors planned to terminate the alliances with certain Korean wireless companies as mentioned above and shift the resources of Ask100, OnAir100 and FoodNet 100 to its wireless data services.

As detailed above, the Independent Shareholders should note that i100 has changed its business model from its traditional non-IT related trading businesses to internet and wireless service businesses.

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i100 Limited

LETTER OF ADVICE FROM BARITS AND CSC ASIA

Financial Performance

The following section illustrates the financial performance of i100 Group for the three years ended 31st December, 2001 and the six months ended 30th June, 2002.

A summary of the profit and loss accounts for each of the three years ended 31st December, 2001 is set out below:

2001 HK$’000 79,464 46,270 60,159 10,275 1,966	2000 HK$’000 113,831 51,788 79,943 412 1,029	1999 HK$’000 120,696 48,972 279,455 — — 449,123 (382,261) 66,862 5,894 72,756 (13,924) (46,380) (5,527) 6,925 (980) 5,945 — — 5,945 (1,661) 4,284 (8) 4,276
198,134 (170,172) 27,962 6,817 34,779 (23,521) (78,522) (55,576) (122,840) (458) (123,298) (15) 4,014 (119,299) 570 (118,729) 269	247,003 (191,482) 55,521 15,360 70,881 (23,412) (74,707) (58,607) (85,845) (954) (86,799) (35) (43,277) (130,111) (3,056) (133,167) 587	449,123 (382,261
		66,862 5,894
		72,756 (13,924 (46,380 (5,527
		6,925 (980
		5,945 — —
		5,945 (1,661
		4,284 (8
(118,460)	(132,580)

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i100 Limited

LETTER OF ADVICE FROM BARITS AND CSC ASIA

Financial year ended 31st December, 2000

For the financial year ended 31st December, 2000, the i100 Group recorded a turnover of about HK$247.00 million, representing a drop of about 45% from previous year’s turnover of about HK$449.12 million. In 1999, about 62.22% of the i100 Group’s turnover was attributable to drainage, plumbing and engineering contracting services. However, in 2000, only about 32.37% of the i100 Group’s turnover was derived from the same source. The Directors explained in i100’s 2000 annual report that the decrease of turnover was mainly due to a depressed real estate market and the resulting dearth of property development projects. In 2000, the revenue generated from internet operations and communication solutions consultancy services contributed about 0.42% and 0.17% to the total turnover respectively.

For 2000, the gross profit declined about 16.96% from about HK$66.86 million in 1999 to about HK$55.52 million in 2000. However, the gross profit margin increased from about 14.89% in 1999 to about 22.48% in 2000. The Directors explained in i100’s 2000 annual report that the increase in gross profit margin was mainly attributable to the changes in the revenue mix. The i100 Group generated loss revenue from engineering projects which had lower gross profit margins than the sanitary ware trading services.

On the other hand, the Company recorded a net loss attributable to shareholders of about HK$132.58 million in 2000. In 1999, the Company recorded a net profit attributable to shareholders of about HK$4.28 million. The loss-making situation was mainly due to the increase of selling and distribution expenses, administrative expenses and other operating expenses, which increased from about HK$13.92 million, HK$46.38 million and HK$5.53 million in 1999 respectively to about HK$23.41 million, HK$74.71 million and HK$58.61 million in 2000 respectively, representing an increase of about 68.18%, 61.08% and 959.86% respectively. The increase of such expenses was primarily due to the start-up of new IT and internet-related businesses since May 2000. The net loss was also attributable to the share of loss of the jointly controlled entity and associate of the Company totaling about HK$43.31 million.

Financial year ended 31st December, 2001

For the financial year ended 31st December, 2001, the i100 Group recorded a turnover of about HK$198.13 million, representing a drop of about 19.79% from the previous year’s turnover of HK$247.00 million. For 2001, the revenue of the i100 Group were derived from (i) the sale of sanitary fixtures and fittings; (ii) the sale of hardware, industrial and consumer products; (iii) drainage, plumbing and engineering contracting services; (iv) provision of communication solutions consultancy services; and (v) the internet operations while the revenue generated from items (i), (ii) and (iii) accounted for about 93.82% to total turnover in 2001. In 2001, about 30.36% of the i100 Group’s turnover was attributable to drainage, plumbing and engineering contracting services, representing a further decrease of about 2.01% as compared to that in 2000. For 2001, the revenue generated from internet operations and provision of communication solutions consultancy services which contributed about 0.99% and 5.19% to the total turnover respectively, which represented an

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i100 Limited

LETTER OF ADVICE FROM BARITS AND CSC ASIA

increase of about 0.57% and 5.02% as compared to about 0.42% and 0.17% respectively to the turnover in 2000. In 2001, the revenue generated from items (i), (ii) and (iii) above decreased by about 30.19%, 10.65% and 24.75%. As stated in the 2001 annual report, the drop in turnover in i100 Group’s sanitary businesses was mainly due to a continuing lethargic real estate market and the resulting reduction in sanitary engineering resulted from curtailment of land supply by the Hong Kong SAR Government. The Directors stated that the prices for i100 Group’s sanitary products and engineering services were under great pressure due to tough competition in the market.

For the same period, the gross profit of the i100 Group declined by about 49.64% from HK$55.52 million in 2000 to HK$27.96 million in 2001. The gross profit margin decreased from about 22.48% in 2000 to about 14.11% in 2001. The major factors for the significant decline in the gross profit were the overall drop in sales prices and changes in revenue mix. Under a sluggish economy, the i100 Group was facing tough competition in the market and the sales prices of its sanitary ware products and the engineering services were adversely affected. The loss attributable to shareholders declined by about 10.65% from about HK$132.58 million in 2000 to about HK$118.46 million in 2001. Total operating expenses amounted to about HK$157.62 million in 2001, compared to about HK$156.73 million in 2000. During the year 2001, significant expenses were incurred in all aspects of development work for the wireless data service.

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i100 Limited

LETTER OF ADVICE FROM BARITS AND CSC ASIA

A summary of the unaudited profit and loss accounts for the six months ended 30th June, 2002 is set out below:

Turnover Sales of sanitary fixtures and fittings Sales of hardware, industrial and consumer products Drainage, plumbing and engineering contracting services Provision of communication solutions consultancy services Internet operations Cost of sales Gross profit Other revenue and gains Selling and distribution expenses Administrative expenses Other operating expenses Provision for loans to an associate Impaired goodwill of an associate Loss on discontinued operations Loss from operations Finance cost Operating loss Share of profits/(losses) of: Jointly-controlled entities Associate Loss before tax Tax Loss before minority interests Minority interests Loss attributable to shareholders	2002 1H 2001 1H HK$’000 HK$’000 38,860 32,863 20,258 22,019 9,152 23,215 572 8,063 — 672 68,842 86,832 (50,745) (75,123) 18,097 11,709 2,296 3,811 20,393 15,520 (6,012) (10,754) (27,996) (34,695) (11,921) (44,423) (13,703) — (48,807) — (4,616) — (92,662) (74,352) (50) (409) (92,712) (74,761) (61) (5) (13,882) 12,406 (106,655) (62,360) 310 (642) (106,345) (63,002) (443) 262 (106,788) (62,740)	2002 1H 2001 1H HK$’000 HK$’000 38,860 32,863 20,258 22,019 9,152 23,215 572 8,063 — 672 68,842 86,832 (50,745) (75,123) 18,097 11,709 2,296 3,811 20,393 15,520 (6,012) (10,754) (27,996) (34,695) (11,921) (44,423) (13,703) — (48,807) — (4,616) — (92,662) (74,352) (50) (409) (92,712) (74,761) (61) (5) (13,882) 12,406 (106,655) (62,360) 310 (642) (106,345) (63,002) (443) 262 (106,788) (62,740)
	68,842 (50,745) 18,097 2,296 20,393 (6,012) (27,996) (11,921) (13,703) (48,807) (4,616) (92,662) (50) (92,712) (61) (13,882) (106,655) 310 (106,345) (443)	86,832 (75,123
		11,709 3,811
		15,520 (10,754 (34,695 (44,423 — — —
		(74,352 (409
		(74,761 (5 12,406
		(62,360 (642
		(63,002 262
	(106,788)

— 20 —

i100 Limited

LETTER OF ADVICE FROM BARITS AND CSC ASIA

Six months ended 30th June, 2002 and future prospects

Based on the Company’s 2002 interim report, for the six months ended 30th June, 2002, the i100 Group generated an unaudited turnover of about HK$68.84 million, which represented a decrease of about 20.72% as compared with the turnover of about HK$86.83 million for the same period in 2001. However, the gross profit margin for the period was increased from about 13.48% for the six months ended 30th June, 2001 to 26.29% for the six months ended 30th June, 2002. As set out in such interim report, the reduced turnover was mainly due to the decrease in contract fee revenue from drainage, plumbing and engineering contracting services. In May 2002, the i100 Group disposed of its businesses in relation to drainage, plumbing and engineering contracting services, and distribution of sanitary fixtures and other products in order to focus its direction onto internet and wireless market.

For the period, the i100 Group’s loss attributable to shareholders amounted to about HK$106.79 million which principally comprised a provision of about HK$13.70 million for loans to an associate, the impaired goodwill of an associate of about HK$48.81 million, a loss on discontinued operations of about HK$4.62 million arising from its disposal of sanitary and drainage related business and a share of loss of an associate of about HK$13.88 million. The provision of loans to Asiaweb ASP Limited, an associate of the i100 Group, was made because the proposed listing exercise of Asiaweb Technologies Group Limited, the holding company of Asiaweb ASP Limited, was delayed and hence the repayment of such loan was in doubt. Besides, as advised by the Directors, the i100 Group incurred significant expenses of about HK$14.5 million in developing the wireless data service during the period.

As stated previously, in May 2002, the i100 Group disposed of its businesses in relation to drainage, plumbing and engineering contracting services, and distribution of sanitary fixtures and other products which accounted for about 93.82% of i100 Group’s turnover in 2001. Such disposals have resulted in a reduction in the revenue base of the i100 Group and the future prospects of the i100 Group are primarily dependent upon its performance in the solution providing business and wireless data business in the future.

Having considered research reports on wireless data industry, the Directors believe that the global mobile data penetration and the data subscribers in Hong Kong was expected to rise. Backing on the i100 Group’s business strategies as mentioned below, there is great potential for developing the wireless business. In order to achieve its goal to become a pioneering force in the region’s wireless data sector, the i100 Group maintained focused effort in establishing its branded wireless data service. i100 Group is utilizing its MVNO business structure based on which the i100 Group does not need to make any network infrastructure investment or incur related capital expenditure and maintenance costs. Moreover, the i100 Group’s services were device-independent which will be provided on mobile phones, wireless PDAs and other types of mobile device. The revenue was mainly generated from data, voice and message usage by offering a range of basic monthly subscription plans, which adjust for

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i100 Limited

LETTER OF ADVICE FROM BARITS AND CSC ASIA

varying amounts of voice airtime, data packets and a bundle of Instant Messaging and SMS messages to cater for different usage levels and consumer needs. The i100 Group’s service platform and architecture are designed for deployment on all major network technologies like GSM, CDMA or TDMA and are therefore applicable in other markets.

Notwithstanding that the Directors anticipated that there would be business opportunity in the wireless market, we wish to remind the Independent Shareholders to note the loss making situation of the i100 Group since its engagement in internet and wireless businesses in 2000 and its latest tight cashflow position resulted from the heavy start-up cost and marketing expenses incurred in the third quarter of 2002. In particular, as stated in the letter from Altus Capital, as at 31 December, 2002, the i100 only recorded a cash and cash equivalent of approximately HK$1.4 million notwithstanding that i100 Group raised a total funding of about HK$229 million from its two placements conducted in May 2000 and June 2002 respectively. At Completion, Easyknit, through Planetic, made available the Loan to i100. The entire amount of the Loan was deposited in escrow at Completion and was released to i100 on 20th February, 2003. The Loan is to be used by i100 for the sole purpose of subscribing shares in Copplestone Limited, a wholly-owned subsidiary of i100, and the subscription money will be used as working capital for the i100 Group. The Loan has been made available on arm’s length commercial terms and is unsecured. Interest on the Loan is payable on demand at prime rate and the Loan is repayable on demand. However, given the financial performance of the i100 Group since its engagement in internet and wireless businesses, it is uncertain as to whether the Loan will suffice to ensure that all future plans of i100 Group’s existing businesses will be able to be implemented in full.

Net asset value

As at 31st December, 2001, the audited consolidated net asset value of i100 amounted to approximately HK$126.85 million, or HK$0.127 per Share based on the then total number of issued Shares of 1,001,873,000. As set out in the pro forma net asset table in the Appendix I to this document, the grant of Loan does not have any impact on the net asset value of i100 and the pro forma unaudited adjusted consolidated net tangible assets as at 30th June, 2002 of i100 amounted to HK$96.25 million, or HK$0.087 per Share based on the then total number of issued Shares of 1,101,873,000.

As stated in the letter from the Board, as at 30th June, 2002, a loan to Acme Landis Operations Holdings Limited (“Acme Landis”), which was previously a subsidiary of i100 before its disposal by i100 in May 2002, amounting to HK$53 million was recorded in the consolidated balance sheet of i100. The loan is interest-free and its principal will be reduced upon receipt of repayment from Acme Landis. Besides, the loan has no fixed term of repayment and was secured by a pledge given by the purchaser of Acme Landis in respect of 100 million Shares. The Company is in the process of reviewing whether a provision is to be made against such loan to Acme Landis in the accounts of 2002. As at the Latest Practicable Date, no decision has been arrived at as to whether a provision is to be made and as to the amount to be made. However, if a provision is decided to be made, the net asset value of i100 Group will be affected.

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i100 Limited

LETTER OF ADVICE FROM BARITS AND CSC ASIA

In general, the total consideration for the acquisition of the controlling interests in a listed company is determined by taking into account a premium for the listing status of such listed company. Such premium is usually equivalent to the valuation of the whole company offered by the Offer Price over the consolidated net tangible assets of such company at the time of acquisition. i100 had a market capitalization of about HK$35.26 million as at the time immediately preceding the date of the Announcement based on 1,101,873,000 Shares. In order to assess the reasonableness of the listing premium in the Offers, we have analyzed, so far as we are aware, the listing premiums in all cases (excluding cases of privatization), including i100 Group, for the acquisition of controlling interests of companies listed on the main board of the Stock Exchange with offeree documents despatched since 1st August, 2002. Our analysis is set out as below:

Listed			Valuation	Valuation
company				of whole	Pro forma		Implied
involved				company	consolidated		listing
(Date of offeree	Total	Shareholding	implied by		net tangible		premium/
document)	consideration	acquired	offer price			assets	(discount)
	(HK$’million)	(%)	(HK$’million)		(HK$’million)		(HK$’million)
Luen Tai Group	56.66	68		83.32		101	(17.68)
Limited
(28/8/2002)
Shanghai Ming	163.8	74.5		219.87		104.9	114.97
Yuan Holdings
Limited
(13/9/2002)
ehealthcareasia	50.00	91.9		54.41		26.24	28.17
Limited
(7/10/2002)
i100	6.09	55.27		11.02		96.25	(85.23)

As set out in the table above, we note that apart from two cases which implied a listing premium, the listing discount of HK$85.23 million offered by Landmark Profits is higher among the remaining two cases which implied a listing discount. By taking into consideration the size of listing discount alone, we consider that the valuation of about HK$11.02 million inferred to the whole Company by the Offer Price together with the Loan does not reflect the intrinsic value of i100 and is prejudicial to the interests of the Independent Shareholders as a whole.

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i100 Limited

LETTER OF ADVICE FROM BARITS AND CSC ASIA

Price earnings multiple and dividend yield

One of the most commonly used references for valuing an entity is based on a price earnings multiple. However, given that the Company made a net loss for the two years ended 31st December, 2001 and the six months ended 30th June, 2002, a meaningful price earnings multiple is not available for evaluation purpose.

Given that the i100 Group has not declared any dividend for the past two years ended 31st December, 2001 and the six months ended 30th June, 2002, it is also not possible to make a meaningful assessment of the price of the Offers on the historic dividend yield basis. In essence, it should be noted that the price of the Offers is made for the Shares against the background of an unprofitable company with zero dividend yield.

Share price performance and trading volume

Share price performance

The Offer Price of HK$0.01 represents:

(a) a discount of approximately 81.8% to the closing price of HK$0.055 per Share quoted on the Stock Exchange on 22nd January, 2003, being the last trading day prior to the publication of the Announcement;
(b) a discount of approximately 79.3% to the average closing price of approximately HK$0.0484 per Share for the 10 trading days up to and including 22nd January, 2003;
(c) a discount of approximately 50.00% to the closing price of HK$0.02 per Share as at the Latest Practicable Date; and
(d) a discount of approximately 88.51% to the unaudited net asset value per Share of approximately HK$0.087 as at 30th June, 2002 based on the pro forma unaudited adjusted consolidated net tangible assets value on the Latest Practicable Date.

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i100 Limited

LETTER OF ADVICE FROM BARITS AND CSC ASIA

The following chart sets out the movement of daily closing prices of Shares from 7th August, 2002, being the date six months preceding the date of the Announcement, to the Latest Practicable Date (the “Relevant Period”).

==> picture [427 x 193] intentionally omitted <==

----- Start of picture text -----

0.14
0.12
0.10
0.08
0.06
0.04
0.02
01 08 15 22 02 08 16 23 02 09 16 23 01 08 15 22 02 08 16 23 02 09 16 23 04 11 18 25 03 10 17 24
2002 Aug 2002 Sep 2002 Oct 2002 Nov 2002 Dec 2003 Jan 2003 Feb 2003 Mar
----- End of picture text -----

Source: Bloomberg

During the period from early August 2002 to 28th October, 2002, there was an upward movement in the price of Shares from the closing price of HK$0.068 per Share on 7th August, 2002 to the peak of HK$0.136 per Share on 28th October, 2002. The surge on the closing price in October might be attributable to the market speculations on the i100 Group’s entry into telecommunication market by introducing a next-generation mobile telecommunications service, namely “noodle”. Thereafter, the price of Shares declined gradually and reached HK$0.04 per Share on 17th January, 2003. Trading in the Shares was then suspended from 23rd January, 2003 up to and including 6th February, 2003. After resumption of trading on 7th February, 2003, the closing price of Shares further declined to the lowest closing price of HK$0.02 per Share on 24th, 25th, 26th and 27th March, 2003 and the Latest Practicable Date.

During the Relevant Period, the Shares traded at the lowest closing price of HK$0.02 on 24th, 25th, 26th and 27th March, 2003 and the Latest Practicable Date and at the highest closing price of HK$0.136 per Share on 28th October, 2002. The Offer Price represents a discount of about 50.00% to the lowest closing price and about 92.65% to the highest closing price respectively during the Relevant Period.

Given the fact that the Shares have been traded at prices ranging from HK$0.02 to HK$0.136 during the Relevant Period and the Share Offer Price represents a substantial discount to such trading prices as analysed above, we do not consider the Share Offer Price as favourable to the Shareholders.

i100 Limited

— 25 —

LETTER OF ADVICE FROM BARITS AND CSC ASIA

Trading volume

The following chart sets out the daily trading volume of the Shares during the Relevant Period:

==> picture [418 x 195] intentionally omitted <==

----- Start of picture text -----

(’000 million)
50
45
40
35
30
25
20
15
10
5
0
01 08 15 22 02 08 16 23 02 09 16 23 01 08 15 22 02 08 16 23 02 09 16 23 04 11 18 25 03 10 17 24
2002 Aug 2002 Sep 2002 Oct 2002 Nov 2002 Dec 2003 Jan 2003 Feb 2003 Mar
----- End of picture text -----

Source: Bloomberg

The following table sets out the average daily trading volume for each of the months during the Relevant Period and up to the Latest Practicable Date and its percentage to the total number of Shares in public hands as at the Latest Practicable Date:

				Percentage of
				average daily
				trading volume
				for the month
	Total trading	Number of	Average daily	to total number
	volume for	trading days	trading volume	of Shares in
Month	the month	in the month	for the month	public hands
	(in ’000 Shares)		(in ’000 Shares)	(%)
				(Note 3)
2002
August (Note 1)	105,234.10	18	5,846.34	1.19
September	126,772.00	21	6,036.76	1.22
October	443,678.00	21	21,127.52	4.29
November	152,465.40	21	7,260.26	1.47
December	133,356.00	20	6,667.80	1.35
2003
January	54,002.00	15	3,600.13	0.73
February	11,390	16	711.88	0.14
March (Note 2)	21,944	20	1,097.20	0.22

Source: Bloomberg

Note 1: Since 7th August, 2002 (being six months prior to the date of the Announcement) Note 2: Up to and including the Latest Practicable Date Note 3: Based on 492,803,540 Shares held in public hands as at the Latest Practicable Date

— 26 —

i100 Limited

LETTER OF ADVICE FROM BARITS AND CSC ASIA

During the Relevant Period, except October 2002, the trading of Shares stayed on a relatively low level and less than one percent of Shares in public hands were traded for the period from 1st January to 31st March, 2003. The liquidity of i100 Shares was generally low. For those Independent Shareholders who decide to realize part or all of their investments in the Company in the market, they may need to do so in tranches in order not to adversely affect the trading prices of the Shares given the low liquidity of the Shares.

Intention of Easyknit towards the future operations of the i100 Group

As set out in the letter from the Board, Easyknit Group is principally engaged in the sourcing and exporting of cotton-based knitted garments for women, children and infants, garment bleaching and dyeing and property investment.

As stated in the letter from Altus Capital in the Offer Document, the directors of Easyknit intends to retain the existing principal activities of the i100 Group after completion of the Offers and has no intention to dispose of, re-deploy or inject any assets into the i100 Group.

Easyknit expects that the branded wireless data service of i100 which was launched in the second half of 2002 will lead to an improvement in the trading and business prospect of i100 in the future and that the Acquisition will diversify the income source of the Easyknit Group given its expectation that the wireless markets will grow. Having considered that i100 has (i) built a business platform which can be deployed on various network and exported to other markets; (ii) obtained the necessary license from the Office of the Telecommunications Authority to operate as a full service mobile operator using a Mobile Virtual Network Operator business structure in Hong Kong, with such the i100 Group does not need to make any network infrastructure investment or incur relevant capital expenditure and maintenance costs; and (iii) executed contracts with several content and application partners, Easyknit believes that there is potential to develop in such wireless business. As such, Easyknit considers that the business model of i100 is sound and that even though i100 is under tight cash flow conditions, the injection of sufficient working capital by Easyknit through providing the Loan to i100 will help i100 to overcome its current tight cashflow difficult situation. It intends to conduct a review of the i100 Group’s existing position with a view of broadening and expanding the scope of business of the i100 Group. Given the track record of the i100 Group since its engagement in internet and wireless businesses, we consider that there is no guarantee as to the improvement of business of i100 Group in the future.

Easyknit appointed three persons as executive directors to the board of i100 on 10th March, 2003. Please refer to “Letter from Altus” contained in the Offer Document for personal particulars. We noted that all of the proposed Directors do not have expertise in the existing business of i100 Group, but they do have extensive experience in the administration and management of corporations in garment business. Besides, the existing senior management of i100 Group will remain with the i100 Group and will continue to run the existing business. However, the Independent Shareholders should be aware that the newly appointed directors are lack of relevant experience in the internet and wireless businesses and there is uncertainty as to whether the new Board can improve the Group’s profitability and resolve the cashflow difficulty in the future.

— 27 —

i100 Limited

LETTER OF ADVICE FROM BARITS AND CSC ASIA

On the other hand, for those Independent Shareholders who are not attracted to future prospects of i100 could opt to realise part or all of their investments in i100. However, Independent Shareholders are advised to closely monitor the market price and the liquidity of the Shares during the Offers period and consider selling their Shares in the market during the Offers period rather than accepting the Share Offer if the market price of the Shares exceeds the Share Offer Price and the net sale proceeds exceed the amount receivable under the Share Offer.

Recommendation on Share Offer

As stated above, the i100 Group recorded a loss-making track record for the past two years ended 31st December, 2001 and thereafter it changed its business model from traditional drainage, plumbing and engineering business to internet and wireless business. Given that the i100 Group has a net cash outflow situation resulted from operating activities of about HK$72.11 million and HK$56.76 million for each of the two years ended 31st December, 2001 respectively, it was facing a shortage of cash problem which might affect the development in the internet and wireless business in the future. In the meantime, the i100 Group changed its focus on the wireless communication business, the communication solution consultancy services and the internet operations for generating profits. Besides, the proposed Directors being appointed have no relevant expertise in the internet and wireless business which may affect the development of the internet and wireless business.

Notwithstanding the unfavorable factors mentioned above, after considering the huge discount of the Offer Price to the recent market prices, from which the Shareholders can only receive a nominal amount in accepting the Share Offer and the listing discount offered by the Offer Price which is the lowest as compared to the listing discounts for takeover cases on main board of the Stock Exchange since 1st August, 2002, we are of the view that the Share Offer to be not fair and reasonable so far as the Independent Shareholders are concerned . Accordingly, we recommend the Independent Director to advise the Independent Shareholders to consider not accepting the Share Offer.

The market prices of Shares have traded at prices substantially above the Offer Price. Accordingly, we would like to advise the Independent Director to recommend the Independent Shareholders who wish to realize whole or part of their Shares to closely monitor the market price of the Shares in the market during the offer period and consider selling their Shares in the market during the offer period, rather than accepting the Share Offer, if the net proceeds of the sales would exceed the amount receivable under the Share Offer. Independent Shareholders should note that there is a risk that the current trading prices and trading volume of the Shares may not be sustainable after the close of the Share Offer.

On the other hand, for those Independent Shareholders who are attracted to the future prospects of i100 and wish to retain part or all of their investments in the Shares, they should carefully consider the future intentions of Easyknit regarding the i100 Group and evaluate the prospects of the i100 Group under the new management after the close of Share Offer, details of which are set out in the letter from Altus Capital contained in the Offer Document.

Independent Shareholders should read carefully the procedures for accepting the Share Offer as detailed in the Offer Document and this document and are strongly advised that the decision to realize or to hold their investment in the Shares is subject to individual circumstances and investment objectives.

— 28 —

i100 Limited

LETTER OF ADVICE FROM BARITS AND CSC ASIA

THE OPTION OFFER

As at the Latest Practicable Date, there are outstanding Options granted by i100 to a director, Mr. Cheuk Ho Yeung, Gerald, management and employees of i100 to subscribe for a total of 27,216,263 Shares, representing about 2.47% of 1,101,873,000 Shares in issue as at the Latest Practicable Date, at exercise prices ranging from HK$0.385 per Share to HK0.75 per Share.

As stated in the letter from the Board, the cancellation price of each Option is HK$0.0001 in cash. Notwithstanding the exercise period of the Option shall end 10 years after the date of grant, the last date to exercise the outstanding options granted on 2nd August, 2000, 6th October, 2000, 26th March, 2001 and 31st August, 2001 will be 1st August, 2010, 5th October, 2010, 25th March, 2011 and 30th August, 2011 respectively. The exercise prices of the Options are significantly above the prevailing price level of the Shares. Based on the closing price of HK$0.02 per Share as at the Latest Practicable Date, such exercise prices range from 19.25 times to 37.5 times of such closing price of the Shares. In the absence of unforeseeable favourable conditions to the business development of the Company, we consider it unlikely that the Share price will rise above the exercise prices in short term and hence the intrinsic value of the Options is close to nil.

Recommendation on Option Offer

Having considered the close to nil intrinsic value of the Options, we consider that the Option Offer is fair and reasonable so far as the Optionholders are concerned. Accordingly, we recommend the Independent Director to advise the Optionholders to consider accepting the Option Offer.

	Yours faithfully,	Yours faithfully,
	For and on behalf of	For and on behalf of
BARITS	SECURITIES (HONG KONG) LIMITED	CSC ASIA LIMITED
	Terence Hong / Alfred Wong	Andrew Chiu
	Executive Director / Director	Managing Director and
		Head of Investment Banking

— 29 —

i100 Limited

FINANCIAL INFORMATION OF THE i100 GROUP

APPENDIX I

1. SUMMARY OF FINANCIAL INFORMATION

The following is a summary of the audited consolidated results of the i100 Group for the three years ended 31st December, 2001.

2001 HK$’000 198,134 (170,172)	2000 HK$’000 247,003 (191,482)	1999 HK$’000 449,123 (382,261) 66,862 5,894 (13,924) (46,380) (5,527) 6,925 (980) 5,945 — — 5,945 (1,661) 4,284 (8) 4,276 (7,680) 2.7 cents 4.8 cents
27,962 6,817 (23,521) (78,522) (55,576) (122,840) (458) (123,298) (15) 4,014 (119,299) 570 (118,729) 269	55,521 15,360 (23,412) (74,707) (58,607) (85,845) (954) (86,799) (35) (43,277) (130,111) (3,056) (133,167) 587	66,862 5,894 (13,924 (46,380 (5,527
		6,925 (980
		5,945 — —
		5,945 (1,661
		4,284 (8
(118,460) — (11.8 cents) —	(132,580) — (20.3 cents) —

— 30 —

i100 Limited

FINANCIAL INFORMATION OF THE i100 GROUP

APPENDIX I

2. AUDITED FINANCIAL STATEMENTS OF THE i100 GROUP FOR THE TWO YEARS ENDED 31ST DECEMBER, 2001

Set out below is the audited financial statements of the i100 Group for the year ended 31st December, 2001 as extracted from the annual report 2001 of i100.

A. Consolidated profit and loss account

Year ended 31st December, 2001

Notes TURNOVER 5 Cost of sales Gross profit Other revenue and gains 5 Selling and distribution costs Administrative expenses Other operating expenses LOSS FROM OPERATING ACTIVITIES 6 Finance costs 9 OPERATING LOSS Share of profits and losses of: Jointly-controlled entities Associate LOSS BEFORE TAX Tax 10 LOSS BEFORE MINORITY INTERESTS Minority interests NET LOSS FROM ORDINARY ACTIVITIES ATTRIBUTABLE TO SHAREHOLDERS 11 & 25 LOSS PER SHARE — Basic 12	2001 HK$’000 198,134 (170,172)	2000 HK$’000 247,003 (191,482) 55,521 15,360 (23,412) (74,707) (58,607) (85,845) (954) (86,799) (35) (43,277) (130,111) (3,056) (133,167) 587 (132,580) 20.3 cents
	27,962 6,817 (23,521) (78,522) (55,576) (122,840) (458) (123,298) (15) 4,014 (119,299) 570 (118,729) 269	55,521 15,360 (23,412 (74,707 (58,607
		(85,845 (954
		(86,799 (35 (43,277
		(130,111 (3,056
		(133,167 587
	(118,460) 11.8 cents

— 31 —

i100 Limited

FINANCIAL INFORMATION OF THE i100 GROUP

APPENDIX I

B. Consolidated statement of recognised gains and losses

Year ended 31st December, 2001

Notes Exchange differences on translation of the financial statements of foreign entities 25 Share of exchange fluctuation reserve of an associate 25 Deficit on revaluation of leasehold land and buildings 25 Losses not recognised in the profit and loss account Net loss for the year attributable to shareholders Total recognised gains and losses Capital reserve arising on acquisition eliminated directly to reserves 25 Goodwill arising on acquisition eliminated directly to reserves 25	2001 HK$’000 (2) (64) (242)	2000 HK$’000 (14) — (512) (526) (132,580) (133,106) 27 (48,807) (181,886)
	(308) (118,460) (118,768) — —	(526 (132,580
		(133,106 27 (48,807
	(118,768)

— 32 —

i100 Limited

FINANCIAL INFORMATION OF THE i100 GROUP

APPENDIX I

C. Consolidated balance sheet

31st December, 2001

		2001	2000
	Notes	HK$’000	HK$’000
NON-CURRENT ASSETS
Fixed assets	13	30,028	39,161
Investment properties	14	3,980	20,000
Interests in jointly-controlled entities	16	1,318	180
Interest in an associate	17	13,584	10,155
Long term investments	18	5,699	5,836
		54,609	75,332
CURRENT ASSETS
Inventories		23,231	29,752
Construction contracts	19	13,825	30,012
Loans to an associate	17	9,823	5,845
Trade receivables	20	24,039	37,471
Prepayments, deposits and other receivables		8,558	11,450
Tax recoverable		277	—
Cash and cash equivalents	21	32,762	116,525
		112,515	231,055
CURRENT LIABILITIES
Trade payables, other payables and accruals	22	35,116	43,575
Tax payable		—	644
Interest-bearing bank loans and overdrafts	23	4,326	15,564
		39,442	59,783
NET CURRENT ASSETS		73,073	171,272
TOTAL ASSETS LESS CURRENT LIABILITIES		127,682	246,604
MINORITY INTERESTS		(829)	(1,437)
		126,853	245,167
CAPITAL AND RESERVES
Issued capital	24	100,187	100,100
Reserves	25	26,666	145,067
		126,853	245,167

— 33 —

i100 Limited

APPENDIX I

FINANCIAL INFORMATION OF THE i100 GROUP

D. Balance sheet 31st December, 2001

2001 2000 Notes HK$’000 HK$’000 NON-CURRENT ASSETS Interests in subsidiaries 15 102,177 143,564 CURRENT ASSETS Loans to an associate 17 8,919 5,044 Prepayments, deposits and other receivables 1,246 1,992 Cash and cash equivalents 21 23,529 101,780 33,694 108,816 CURRENT LIABILITIES Other payables and accruals 22 99 2,169 NET CURRENT ASSETS 33,595 106,647 135,772 250,211 CAPITAL AND RESERVES Issued capital 24 100,187 100,100 Reserves 25 35,585 150,111 135,772 250,211	2001 2000 Notes HK$’000 HK$’000 NON-CURRENT ASSETS Interests in subsidiaries 15 102,177 143,564 CURRENT ASSETS Loans to an associate 17 8,919 5,044 Prepayments, deposits and other receivables 1,246 1,992 Cash and cash equivalents 21 23,529 101,780 33,694 108,816 CURRENT LIABILITIES Other payables and accruals 22 99 2,169 NET CURRENT ASSETS 33,595 106,647 135,772 250,211 CAPITAL AND RESERVES Issued capital 24 100,187 100,100 Reserves 25 35,585 150,111 135,772 250,211	2001 2000 Notes HK$’000 HK$’000 NON-CURRENT ASSETS Interests in subsidiaries 15 102,177 143,564 CURRENT ASSETS Loans to an associate 17 8,919 5,044 Prepayments, deposits and other receivables 1,246 1,992 Cash and cash equivalents 21 23,529 101,780 33,694 108,816 CURRENT LIABILITIES Other payables and accruals 22 99 2,169 NET CURRENT ASSETS 33,595 106,647 135,772 250,211 CAPITAL AND RESERVES Issued capital 24 100,187 100,100 Reserves 25 35,585 150,111 135,772 250,211
	33,694 99 33,595	108,816
		2,169
		106,647
	135,772	250,211
	100,187 35,585	100,100 150,111
	135,772	250,211

— 34 —

i100 Limited

APPENDIX I

FINANCIAL INFORMATION OF THE i100 GROUP

E. Consolidated cash flow statement Year ended 31st December, 2001

		2001	2000
	Notes	HK$’000	HK$’000
NET CASH OUTFLOW FROM OPERATING
ACTIVITIES	26(a)	(72,107)	(56,759)
RETURNS ON INVESTMENTS AND
SERVICING OF FINANCE
Dividends paid		—	(5,600)
Dividends paid to minority shareholders		(339)	—
Dividends from an unlisted investment		—	38
Interest paid		(458)	(954)
Interest received		4,321	8,784
Net cash inflow from returns on investments
and servicing of finance		3,524	2,268
TAX
Hong Kong profits tax refunded/(paid)		172	(1,851)
INVESTING ACTIVITIES
Purchases of fixed assets		(10,791)	(21,601)
Proceeds from disposal of fixed assets		908	25
Purchases of long term investments		(600)	(4,356)
Investment in a jointly-controlled entity		(1,170)	(176)
Loans to an associate		(3,978)	(5,845)
Repayment of loan from a jointly-controlled entity		17	(39)
Acquisition of a subsidiary	26(b)	—	99
Acquisition of a business	26(c)	25	—
Disposal of a subsidiary	26(d)	10,987	—
Proceeds from disposal of an listed investment		490	—
Net cash outflow from investing activities		(4,112)	(31,893)

— 35 —

i100 Limited

APPENDIX I FINANCIAL INFORMATION	APPENDIX I FINANCIAL INFORMATION	OF THE i100	GROUP
		2001	2000
	Notes	HK$’000	HK$’000
NET CASH OUTFLOW BEFORE FINANCING
ACTIVITIES		(72,523)	(88,235)
FINANCING ACTIVITIES	26(e)
Proceeds from issue of share capital		—	200,000
Share issue expenses		—	(12,824)
New bank loans		5,000	7,000
Repayment of bank loans		(11,000)	(10,271)
Capital injection from minority shareholders		—	2,000
Net cash inflow/(outflow) from financing activities		(6,000)	185,905
INCREASE/(DECREASE) IN CASH AND CASH
EQUIVALENTS		(78,523)	97,670
Cash and cash equivalents at beginning of year		108,961	11,311
Effect of foreign exchange rate changes		(2)	(20)
CASH AND CASH EQUIVALENTS AT
END OF YEAR		30,436	108,961
ANALYSIS OF BALANCES OF CASH AND CASH
EQUIVALENTS
Cash and bank balances		6,113	8,934
Time deposits with original maturity of
less than three months when acquired		25,529	107,591
Time deposits with original maturity of
less than three months when acquired,
pledged as security for bank facilities		1,120	—
Bank loans and overdrafts repayable within
three months from date of advance		(2,326)	(7,564)
		30,436	108,961

— 36 —

i100 Limited

FINANCIAL INFORMATION OF THE i100 GROUP

APPENDIX I

Notes to the financial statements

31st December, 2001

1. CORPORATE INFORMATION

The register office of i100 Limited is located at Clarendon House, Church Street, Hamilton HM11, Bermuda.

During the year, the Group was involved in the following principal activities:

sales of sanitary fixtures and fittings
sales of hardware, industrial and consumer products
drainage, plumbing and engineering contracting services
provision of communication solutions consultancy services
Internet operations
wireless communication business

2. IMPACT OF NEW AND REVISED STATEMENTS OF STANDARD ACCOUNTING PRACTICE (“SSAPs”)

The following recently-issued and revised SSAPs and related Interpretations are effective for the first time for the current year’s financial statements:

SSAP 9 (Revised): “Events after the balance sheet date”
SSAP 14 (Revised): “Leases”
SSAP 18 (Revised): “Revenue”
SSAP 26: “Segment reporting”
SSAP 28: “Provisions, contingent liabilities and contingent assets”
SSAP 29: “Intangible assets”
SSAP 30: “Business combinations”
SSAP 31: “Impairment of assets”
SSAP 32: “Consolidated financial statements and accounting for investments in subsidiaries”
Interpretation 12: “Business combinations - subsequent adjustment of fair values and goodwill initially reported”
Interpretation 13: “Goodwill - continuing requirements for goodwill and negative goodwill previously eliminated against/credited to reserves”

— 37 —

i100 Limited

APPENDIX I

FINANCIAL INFORMATION OF THE i100 GROUP

These SSAPs prescribe new accounting measurement and disclosure practices. The major effects on the Group’s accounting policies and on the amounts disclosed in these financial statements of adopting these SSAPs and Interpretations, are summarised as follows:

SSAP 9 (Revised) prescribes which type of events occurring after the balance sheet date require adjustment to the financial statements, and which require disclosure, but no adjustment. Its principal impact on these financial statements is that the proposed final dividend which is not declared and approved until after the balance sheet date, is no longer recognised as a liability at the balance sheet date, but is disclosed as an allocation of retained earnings on a separate line within the capital and reserves section of the balance sheet. The adoption of this revised SSAP has had no impact on the financial statements as there was no final dividend proposed for the current and previous years.

SSAP 14 (Revised) prescribes the basis for lessor and lessee accounting for finance and operating leases, and the required disclosures in respect thereof. Certain amendments have been made to the previous accounting measurement treatments, which may be accounted for retrospectively or prospectively, in accordance with the requirements of the SSAP. The revised SSAP requirements have not had a material effect on the amounts previously recorded in the financial statements, therefore no prior year adjustment has been required. The disclosure changes under the SSAP have resulted in changes to the detailed information disclosed for operating leases, which are further detailed in note 28 to the financial statements.

SSAP 18 (Revised) prescribes the recognition of revenue and was revised as a consequence of the revision to SSAP 9 described above. Proposed final dividends from subsidiaries that are declared and approved by the subsidiaries after the balance sheet date are no longer recognised in the Company’s own financial statements for the year. The adoption of this revised SSAP has no effect to the financial statements as there was no proposed final dividend from subsidiaries for the current and previous years.

SSAP 26 prescribes the principles to be applied for reporting financial information by segment. It requires that management assesses whether the Group’s predominant risks or returns are based on business segments or geographical segments and determines one of these bases to be the primary segment information reporting format, with the other as the secondary segment information reporting format. The impact of the SSAP is the inclusion of significant additional segment reporting disclosures which are set out in note 4 to the financial statements.

SSAP 28 prescribes the recognition criteria and measurement bases to apply to provisions, contingent liabilities and contingent assets, together with the required disclosure in respect thereof. The adoption of the SSAP has had no significant effect on the financial statements.

SSAP 29 prescribes the recognition and measurement criteria for intangible assets, together with the disclosure requirements. The adoption of this SSAP has no impact to the financial statements as there was no intangible asset for the years reported.

SSAP 30 prescribes the accounting treatment for business combinations, including the determination of the date of acquisition, the method for determining the fair values of the assets and liabilities acquired, and the treatment of goodwill or negative goodwill arising on acquisition. The SSAP requires the disclosure of goodwill and negative goodwill in the non-current assets section of the consolidated balance sheet. It requires that goodwill is amortised to the consolidated profit and loss account over its estimated useful life. Negative goodwill is recognised in the consolidated profit and loss account depending on the circumstances from which it arose, as further described in the accounting policy for negative goodwill disclosed in note 3 to the financial statements. Interpretation 13 prescribes the application of SSAP 30 to goodwill arising from acquisitions in previous years which remains eliminated against consolidated reserves. The adoption of the SSAP and Interpretation has not resulted in a prior year adjustment, for the reasons detailed in note 25 to the financial statements. The required new additional disclosures are included in note 25 to the financial statements.

SSAP 31 prescribes the recognition and measurement criteria for impairments of assets. The SSAP is required to be applied prospectively and therefore, has had no effect on amounts previously reported in prior year financial statements.

— 38 —

i100 Limited

FINANCIAL INFORMATION OF THE i100 GROUP

APPENDIX I

SSAP 32 prescribes the accounting treatment and disclosures for the preparation and presentation of consolidated financial statements, and has had no significant impact on the preparation of these financial statements.

In addition to the above new and revised SSAPs and related Interpretations, certain minor revisions to the following SSAPs are effective for the first time for the current years’ financial statements:

SSAP 10: “Accounting for investments in associates”
SSAP 17: “Property, plant and equipment”
SSAP 21: “Accounting for interests in joint ventures”

The only significant effect of these revisions is that SSAP 17 requires that impairment losses on fixed assets are aggregated with accumulated depreciation in note 13 to the financial statements.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of preparation

These financial statements have been prepared in accordance with Hong Kong Statements of Standard Accounting Practice, accounting principles generally accepted in Hong Kong and the disclosure requirements of the Hong Kong Companies Ordinance. They have been prepared under the historical cost convention, except for the periodic remeasurement of investment properties, and certain fixed assets and equity investments, as further explained below.

Basis of consolidation

The consolidated financial statements include the financial statements of the Company and its subsidiaries for the year ended 31st December, 2001. The results of subsidiaries acquired or disposed of during the year are consolidated from or to their effective dates of acquisition or disposal, respectively. All significant intercompany transactions and balances within the Group are eliminated on consolidation.

Subsidiaries

A subsidiary is a company whose financial and operating policies the Company controls, directly or indirectly, so as to obtain benefits from its activities.

The Company’s interests in subsidiaries are stated at cost less any impairment losses.

Joint venture companies

A joint venture company is a company set up by contractual arrangement, whereby the Group and other parties undertake an economic activity. The joint venture company operates as a separate entity in which the Group and the other parties have an interest.

The joint venture agreement between the venturers stipulates the capital contributions of the joint venture parties, the duration of the joint venture and the basis on which the assets are to be realised upon its dissolution. The profits and losses from the joint venture company’s operations and any distribution of surplus assets are shared by the venturers, either in proportion to their respective capital contributions, or in accordance with the terms of the joint venture agreement.

— 39 —

i100 Limited

FINANCIAL INFORMATION OF THE i100 GROUP

APPENDIX I

A joint venture company is treated as:

(a) a subsidiary, if the Company has unilateral control over the joint venture company;
(b) a jointly-controlled entity, if the Company does not have unilateral control, but has joint control over the joint venture company;
(c) an associate, if the Company does not have unilateral or joint control, but holds generally not less than 20% of the joint venture company’s registered capital and is in a position to exercise significant influence over the joint venture company; or
(d) a long term investment, if the Company holds less than 20% of the joint venture company’s registered capital and has neither joint control of, nor is in a position to exercise significant influence over, the joint venture company.

Jointly-controlled entities

A jointly-controlled entity is a joint venture company which is subject to joint control, resulting in none of the participating parties having unilateral control over the economic activity of the jointly-controlled entity.

The Group’s share of the post-acquisition results and reserves of jointly-controlled entities are included in the consolidated profit and loss account and consolidated reserves, respectively. The Group’s interests in jointly-controlled entities are stated in the consolidated balance sheet at the Group’s share of the net assets under the equity method of accounting less any impairment losses.

Associates

An associate is a company, not being a subsidiary or jointly-controlled entity, in which the Group has a long term interest of generally not less than 20% of the equity voting rights and over which it is in a position to exercise significant influence.

The Group’s share of the post-acquisition results and reserves of an associate is included in the consolidated profit and loss account and consolidated reserves, respectively. The Group’s interest in an associate is stated in the consolidated balance sheet at the Group’s share of net assets under the equity method of accounting less any impairment losses.

The results of an associate are included in the Company’s profit and loss account to the extent of dividends received and receivable. The Company’s interest in an associate is treated as long term assets and are stated at cost less any impairment losses.

Goodwill

Goodwill arising on the acquisition of subsidiaries, associates and jointly-controlled entities represents the excess of the cost of the acquisition over the Group’s share of the fair values of the identifiable assets and liabilities acquired as at the date of acquisition.

Goodwill arising on acquisition is recognised in the consolidated balance sheet as an asset and amortised on the straight-line basis over its estimated useful life. In the case of associates and jointly-controlled entities, any unamortised goodwill is included in the carrying amount thereof, rather than as a separately identified asset on the consolidated balance sheet.

— 40 —

i100 Limited

FINANCIAL INFORMATION OF THE i100 GROUP

APPENDIX I

In prior years, goodwill arising on acquisitions was eliminated against consolidated reserves in the year of acquisition. The Group has adopted the transitional provision of SSAP 30 that permits goodwill on acquisitions which occurred prior to 1st January, 2001, to remain eliminated against consolidated reserves. Goodwill on subsequent acquisitions is treated according to the new accounting policy above.

On disposal of subsidiaries, associates or jointly-controlled entities, the gain or loss on disposal is calculated by reference to the net assets at the date of disposal, including the attributable amount of goodwill which remains unamortised and any relevant reserves, as appropriate. Any attributable goodwill previously eliminated against consolidated reserves at the time of acquisition is written back and included in the calculation of the gain or loss on disposal.

The carrying amount of goodwill, including goodwill remaining eliminated against consolidated reserves, is reviewed annually and written down for impairment when it is considered necessary. A previously recognised impairment loss for goodwill is not reversed unless the impairment loss was caused by a specific external event of an exceptional nature that was not expected to recur, and subsequent external events have occurred which have reversed the effect of that event.

Negative goodwill

Negative goodwill arising on the acquisition of subsidiaries, associates and jointly-controlled entities represents the excess of the Group’s share of the fair values of the identifiable assets and liabilities acquired as at the date of acquisition, over the cost of the acquisition.

To the extent that negative goodwill relates to expectations of future losses and expenses that are identified in the acquisition plan and that can be measured reliably, but which do not represent identifiable liabilities as at the date of acquisition, that portion of negative goodwill is recognised as income in the consolidated profit and loss account when the future losses and expenses are recognised.

To the extent that negative goodwill does not relate to identifiable expected future losses and expenses as at the date of acquisition, negative goodwill is recognised in the consolidated profit and loss account on a systematic basis over the remaining average useful life of the acquired depreciable/amortisable assets. The amount of any negative goodwill in excess of the fair values of the acquired non-monetary assets is recognised as income immediately.

In the case of associates and jointly-controlled entities, any negative goodwill not yet recognised in the consolidated profit and loss account is included in the carrying amount thereof, rather than as a separately identified item on the consolidated balance sheet.

In prior years, negative goodwill arising on acquisitions was credited to reserves in the year of acquisition. The Group has adopted the transitional provision of SSAP 30 that permits negative goodwill on acquisitions which occurred prior to 1st January, 2001, to remain credited to the goodwill reserve. Negative goodwill on subsequent acquisitions is treated according to the new accounting policy above.

On disposal of subsidiaries, associates or jointly-controlled entities, the gain or loss on disposal is calculated by reference to the net assets at the date of disposal, including the attributable amount of negative goodwill which has not been recognised in the consolidated profit and loss account and any relevant reserves as appropriate. Any attributable negative goodwill previously credited to the goodwill reserve at the time of acquisition is written back and included in the calculation of the gain or loss on disposal.

Impairment of assets

An assessment is made at each balance sheet date of whether there is any indication of impairment of any asset, or whether there is any indication that an impairment loss previously recognised for an asset in prior years may no longer exist or may have decreased. If any such indication exists, the asset’s recoverable amount is estimated. An asset’s recoverable amount is calculated as the higher of the asset’s value in use or its net selling price.

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i100 Limited

FINANCIAL INFORMATION OF THE i100 GROUP

APPENDIX I

An impairment loss is recognised only if the carrying amount of an asset exceeds its recoverable amount. An impairment loss is charged to the profit and loss account in the period in which it arises, unless the asset is carried at a revalued amount, when the impairment loss is accounted for in accordance with the relevant accounting policy for that revalued asset.

A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the recoverable amount of an asset, however not to an amount higher than the carrying amount that would have been determined (net of any depreciation/amortisation), had no impairment loss been recognised for the asset in prior years.

A reversal of an impairment loss is credited to the profit and loss account in the period in which it arises, unless the asset is carried at a revalued amount, when the reversal of the impairment loss is accounted for in accordance with the relevant accounting policy for that revalued asset.

Fixed assets and depreciation

Fixed assets, other than investment properties, are stated at cost or valuation less accumulated depreciation. The cost of an asset comprises its purchase price and any directly attributable costs of bringing the asset to its working condition and location for its intended use. Expenditure incurred after fixed assets have been put into operation, such as repairs and maintenance, is normally charged to the profit and loss account in the period in which it is incurred. In situations where it can be clearly demonstrated that the expenditure has resulted in an increase in the future economic benefits expected to be obtained from the use of a fixed asset, the expenditure is capitalised as an additional cost of that asset.

Changes in the values of fixed assets, other than investment properties, are dealt with as movements in the revaluation reserve. If the total of this reserve is insufficient to cover a deficit, on an individual asset basis, the excess of the deficit is charged to the profit and loss account. Any subsequent revaluation surplus is credited to the profit and loss account to the extent of the deficit previously charged. On disposal of a revalued asset, the relevant portion of the revaluation reserve realised in respect of previous valuations is transferred to retained earnings as a movement in reserves.

Depreciation is calculated on the straight-line basis to write off the cost or valuation of each asset over its estimated useful life. The principal annual rates used for this purpose are as follows:

Leasehold land	2%
Buildings	31⁄3%
Furniture, fixtures and equipment	20% to 331⁄3%
Motor vehicles	20% to 50%

The gain or loss on disposal or retirement of a fixed asset recognised in the profit and loss account is the difference between the net sales proceeds and the carrying amount of the relevant asset.

Investment properties

Investment properties are interests in land and buildings in respect of which construction work and development have been completed and which are intended to be held on a long term basis for their investment potential, any rental income being negotiated at arm’s length. Such properties are not depreciated and are stated at their open market values on the basis of annual professional valuations performed at the end of each financial year. Changes in the values of investment properties are dealt with as movements in the investment property revaluation reserve. If the total of this reserve is insufficient to cover a deficit, on a portfolio basis, the excess of the deficit is charged to the profit and loss account. Any subsequent revaluation surplus is credited to the profit and loss account to the extent of the deficit previously charged.

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i100 Limited

FINANCIAL INFORMATION OF THE i100 GROUP

APPENDIX I

Upon the disposal of an investment property, the relevant portion of the investment property revaluation reserve realised in respect of previous valuations is released to the profit and loss account.

Leased assets

Leases that transfer substantially all the rewards and risks of ownership of assets to the Group, other than legal title, are accounted for as finance leases. At the inception of a finance lease, the cost of the leased asset is capitalised at the present value of the minimum lease payments and recorded together with the obligation, excluding the interest element, to reflect the purchase and financing. Assets held under capitalised finance leases are included in fixed assets and depreciated over the shorter of the lease terms and the estimated useful lives of the assets. The finance costs of such leases are charged to the profit and loss account so as to produce a constant periodic rate of charge over the lease terms.

Leases where substantially all the rewards and risks of ownership of assets remain with the lessor are accounted for as operating leases. Where the Group is the lessor, assets leased by the Group under operating leases are included in non-current assets and rentals receivable under the operating leases are credited to the profit and loss account on the straight-line basis over the lease terms. Where the Group is the lessee, rentals payable under the operating leases are charged to the profit and loss account on the straight-line basis over the lease terms.

Long term investments

Long term investments in listed and unlisted equity securities, intended to be held for a continuing strategic or long term purpose, are classified as investment securities and are stated at cost less any impairment losses, on an individual basis.

When impairments have occurred, the carrying amounts of the securities are reduced to their fair values, as estimated by the directors, and the amounts of the impairments are charged to the profit and loss account for the period in which they arise. When the circumstances and events which led to the impairments cease to exist and there is persuasive evidence that the new circumstances and events will persist for the foreseeable future, the amount of the impairment previously charged is credited to the profit and loss account to the extent of the amount previously charged.

Listed and unlisted equity securities which are not classified as investment securities are classified as other investments. Listed securities are stated at their fair values on the basis of their quoted market prices at the balance sheet date on an individual basis. Unlisted securities are stated at their estimated fair values on an individual basis. The gains and losses arising from changes in the fair value of a security are credited or charged to the profit and loss account for the period in which they arise.

Inventories

Inventories, which comprise finished goods, are stated at the lower of cost and net realisable value. Cost is determined on the first-in, first-out basis and includes all costs of purchase and other costs incurred in bringing the inventories to their present location and condition. Net realisable value is based on estimated selling prices less any estimated costs necessary to make the sale.

Construction contracts

Contract revenue comprises the agreed contract amount and appropriate amounts from variation orders, claims and incentive payments. Contract costs incurred comprise direct materials, the costs of subcontracting, direct labour and an appropriate proportion of variable and fixed construction overheads.

Revenue from fixed price construction contracts is recognised on the percentage of completion method, measured by reference to the proportion of costs incurred to date to the estimated total cost of the relevant contract.

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i100 Limited

FINANCIAL INFORMATION OF THE i100 GROUP

APPENDIX I

Revenue from cost plus construction contracts is recognised on the percentage of completion method, by reference to the recoverable costs incurred during the year plus the related fee earned, measured by the proportion of costs incurred to date to the estimated total cost of the relevant contract.

Provision is made for foreseeable losses as soon as they are anticipated by management.

Where contract costs incurred to date plus recognised profits less recognised losses exceed progress billings, the surplus is treated as an amount due from contract customers.

Where progress billings exceed contract costs incurred to date plus recognised profits less recognised losses, the surplus is treated as an amount due to contract customers.

Deferred tax

Deferred tax is provided, using the liability method, on all significant timing differences to the extent it is probable that the liability will crystallise in the foreseeable future. A deferred tax asset is not recognised until its realisation is assured beyond reasonable doubt.

Foreign currencies

Foreign currency transactions are recorded at the applicable rates of exchange ruling at the transaction dates. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the applicable rates of exchange ruling at that date. Exchange differences are dealt with in the profit and loss account.

On consolidation, the financial statements of overseas subsidiaries and the jointly-controlled entity are translated into Hong Kong dollars at the applicable rates of exchange ruling at the balance sheet date. The resulting translation differences are included in the exchange fluctuation reserve.

Retirement benefits schemes

The Group operates a defined contribution Mandatory Provident Fund retirement benefits scheme (the “MPF Scheme”) under the Mandatory Provident Fund Schemes Ordinance, for those employees who are eligible to participate in the MPF Scheme. The MPF Scheme has operated since 1st December, 2000. Contributions are made based on a percentage of the employees’ basic salaries and are charged to the profit and loss account as they become payable in accordance with the rules of the MPF Scheme. The assets of the MPF Scheme are held separately from those of the Group in an independently administered fund. The Group’s employer contributions vest fully with the employees when contributed into the MPF Scheme.

Prior to the MPF Scheme becoming effective, the Group operated a defined contribution retirement benefits scheme (the “ORSO Scheme”) for those employees who were eligible to participate in this scheme. The ORSO Scheme operated in a similar way to the MPF Scheme, except that when an employee left the ORSO Scheme before his/her interest in the Group’s employer contributions vested fully, the ongoing contributions payable by the Group were reduced by the relevant amount of the forfeited employer’s contributions. With effect from 1st December, 2000, the Group operates both schemes and those employees who were not eligible or elected not to participate in the ORSO Scheme before 1st December, 2000, participate in the MPF Scheme.

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i100 Limited

FINANCIAL INFORMATION OF THE i100 GROUP

APPENDIX I

Revenue recognition

Revenue is recognised when it is probable that the economic benefits will flow to the Group and when the revenue can be measured reliably, on the following bases:

(a) from the sale of goods, when the significant risks and rewards of ownership have been transferred to the buyer, provided that the Group maintains neither managerial involvement to the degree usually associated with ownership, nor effective control over the goods sold;
(b) from construction contracts, on the percentage of completion basis as further explained in the accounting policy for “Construction contracts” above;
(c) from the rendering of services, on completion of the transaction;
(d) rental income, on a time proportion basis over the lease terms;
(e) interest income, on a time proportion basis, taking into account the principal outstanding and the effective interest rate applicable;
(f) dividends, when the shareholders’ right to receive payment has been established; and
(g) advertising service fees, in the period in which the advertisement is displayed, on the straight-line basis over the terms of the contract, provided that no significant Group obligations remain.

Related parties

Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or common significant influence. Related parties may be individuals or corporate entities.

Cash equivalents

For the purpose of the consolidated cash flow statement, cash equivalents represent short term highly liquid investments which are readily convertible into known amounts of cash and which were within three months of maturity when acquired, less advances from banks repayable within three months from the date of the advance. For the purpose of balance sheet classification, cash equivalents represent assets similar in nature to cash, which are not restricted as to use.

— 45 —

i100 Limited

FINANCIAL INFORMATION OF THE i100 GROUP

APPENDIX I

4. SEGMENT INFORMATION

SSAP 26 was adopted during the year, as detailed in note 2 to the financial statements. Segment information is presented by way of two segment formats: (i) on a primary segment reporting basis, by business segment; and (ii) on a secondary segment reporting basis, by geographical segment.

The Group’s operating businesses are structured and managed separately, according to the nature of their operations and the products and services they provide. Each of the Group’s business segments represents a strategic business unit that offers products and services which are subject to risks and returns that are different from those of other business segments. Summary details of the business segments are as follows:

the sanitary fixtures and fittings segment consisted of importing, marketing, retailing and distributing sanitary fixtures and fittings;
the hardware, industrial and consumer products segment consisted of importing, marketing, and distributing a large range of hardware, industrial and consumer products;
the drainage, plumbing and engineering contracting services segment provides design and installation of plumbing and drainage systems and related engineering services;
the wireless communication business segment develops technologies, in both applications and enabling sectors, to enhance the transaction and delivery of data and information through wireless networks;
the communication solutions consultancy services segment is engaged in services as a digital solutions provider and a multimedia enabler;
the Internet operations segment is engaged in services as a publishing and content management solutions provider, an on-line expert site and the provision of a vertical trading platform; and
the corporate and other segment includes general corporate income and expense items.

In determining the Group’s geographical segments, revenues and results are attributed to the segments based on the location of the customers, and assets are attributed to the segments based on the location of the assets.

Intersegment sales and transfers are transacted with reference to the selling prices used for sales made to third parties at the then prevailing market prices.

— 46 —

i100 Limited

APPENDIX I

FINANCIAL INFORMATION OF THE i100 GROUP

Hardware, Communication	Sanitary industrial and Drainage, plumbing Wireless solutions	fixtures and consumer and engineering communication consultancy Internet Corporate	fittings products contracting services business services operations and other Eliminations Consolidated	2001 2000 2001 2000 2001 2000 2001 2000 2001 2000 2001 2000 2001 2000 2001 2000 2001 2000	HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000	Segment revenue:	Sales to external customers 79,464 113,831 46,270 51,788 60,159 79,943 — — 10,275 412 1,966 1,029 — — — — 198,134 247,003	Intersegment sales 78 72 — — — — — — 4,690 1,279 8 37 — — (4,776) (1,388) — —	Other revenue 1,121 2,937 539 818 — — — — 691 — 15 5 297 56 (167) (41) 2,496 3,775	Total revenue 80,663 116,840 46,809 52,606 60,159 79,943 — — 15,656 1,691 1,989 1,071 297 56 (4,943) (1,429) 200,630 250,778	Segment results (23,414) (23,469) (3,427) (3,836) (18,495) (869) (10,185) — (12,732) (5,484) (22,324) (29,731) (36,556) (33,393) (28) (648) (127,161) (97,430)	Interest income and	unallocated gains 4,321 11,585	Loss from operating activities (122,840) (85,845)	Finance costs (458) (954)	Operating loss (123,298) (86,799)

— 47 —

i100 Limited

APPENDIX I

FINANCIAL INFORMATION OF THE i100 GROUP

Hardware, Communication	Sanitary industrial and Drainage, plumbing Wireless solutions	fixtures and consumer and engineering communication consultancy Internet Corporate	fittings products contracting services business services operations and other Eliminations Consolidated	2001 2000 2001 2000 2001 2000 2001 2000 2001 2000 2001 2000 2001 2000 2001 2000 2001 2000	HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000			— — — — — — — — — — — — 4,014 (43,277) — — 4,014 (43,277)	— — — — — — (10) — — — — — (5) (35) — — (15) (35)	(119,299) (130,111)	570 (3,056)	(118,729) (133,167)	269 587		(118,460) (132,580)	53,890 89,561 30,232 36,965 17,605 40,369 2,838 — 11,802 4,300 6,062 14,807 216,920 260,341 (197,227) (156,186) 142,122 290,157	— — — — — — — — (16) — — — 23,423 16,000 — — 23,407 16,000		— — — — — — 1,160 — — — — — 158 180 — — 1,318 180	277 —		— 50 — — — — — — — — — — — — — — — 50	167,124 306,387	42,941 49,836 6,306 6,866 12,247 16,099 14,974 — 29,557 9,427 52,960 42,100 8,229 9,984 (132,098) (90,737) 35,116 43,575	4,326 16,158
						Share of profit/(loss) of:		— An associate	— Jointly-controlled entities	Loss before tax	Tax	Loss before minority interests	Minority interests	Net loss from ordinary activities	attributable to shareholders	Segment assets	Interest in an associate	Interests in jointly-controlled	entities	Unallocated assets	Bank overdrafts included in	segment assets	Total assets	Segment liabilities	Unallocated liabilities

— 48 —

i100 Limited

APPENDIX I

FINANCIAL INFORMATION OF THE i100 GROUP

Hardware, Communication	Sanitary industrial and Drainage, plumbing Wireless solutions	fixtures and consumer and engineering communication consultancy Internet Corporate	fittings products contracting services business services operations and other Eliminations Consolidated	2001 2000 2001 2000 2001 2000 2001 2000 2001 2000 2001 2000 2001 2000 2001 2000 2001 2000	HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000		— 50 — — — — — — — — — — — — — — — 50	39,442 59,783		1,297 636 1,006 386 — 9 3,619 — 558 1,644 4,972 14,303 701 5,119 (1,244) (376) 10,909 21,721	2,165 2,194 623 431 51 53 2 — 603 232 3,539 1,785 1,663 814 — — 8,646 5,509		2,024 3,210 — — — — — — — — — — — — — — 2,024 3,210		— 2,500 1,020 800 — — — — — — — — — — — — 1,020 3,300			— — 242 512 — — — — — — — — — — — — 242 512		4,000 — — — — — — — — — — — — — — — 4,000 —		— — — — — — — — — — 5,681 — — — — — 5,681 —	(384) 10,521 173 348 — 446 — — 3,252 — — — 750 — — — 3,791 11,315	6,188 5,644 132 1,185 — — — — 708 — — — — — — — 7,028 6,829
						Bank overdrafts included in	segment assets	Total liabilities	Other segment information:	Capital expenditure	Depreciation	Deficit arising from revaluation of	leasehold land and buildings	Deficit arising from revaluation of	investment properties		Deficit on revaluation recognised	directly in equity	Diminution in value of an	investment property		Impairment of fixed assets	Provision for doubtful debts	Stock provisions

— 49 —

i100 Limited

FINANCIAL INFORMATION OF THE i100 GROUP

APPENDIX I

(b) Geographical segments

The following table presents revenue, loss and certain asset and expenditure information for the Group’s geographical segments.

Group

Hong Kong Elsewhere in the PRC Eliminations Consolidated 2001 2000 2001 2000 2001 2000 2001 2000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 174,939 229,181 23,195 17,822 — — 198,134 247,003 (115,403) (83,493) (15,003) (13,410) 3,245 (527) (127,161) (97,430) 171,787 305,844 16,633 11,843 (21,296) (11,350) 167,124 306,337 — 50 — — — — — 50 167,124 306,387 7,009 19,021 3,900 2,700 — — 10,909 21,721	Hong Kong Elsewhere in the PRC Eliminations Consolidated 2001 2000 2001 2000 2001 2000 2001 2000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 174,939 229,181 23,195 17,822 — — 198,134 247,003 (115,403) (83,493) (15,003) (13,410) 3,245 (527) (127,161) (97,430) 171,787 305,844 16,633 11,843 (21,296) (11,350) 167,124 306,337 — 50 — — — — — 50 167,124 306,387 7,009 19,021 3,900 2,700 — — 10,909 21,721	Hong Kong Elsewhere in the PRC Eliminations Consolidated 2001 2000 2001 2000 2001 2000 2001 2000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 174,939 229,181 23,195 17,822 — — 198,134 247,003 (115,403) (83,493) (15,003) (13,410) 3,245 (527) (127,161) (97,430) 171,787 305,844 16,633 11,843 (21,296) (11,350) 167,124 306,337 — 50 — — — — — 50 167,124 306,387 7,009 19,021 3,900 2,700 — — 10,909 21,721	Hong Kong Elsewhere in the PRC Eliminations Consolidated 2001 2000 2001 2000 2001 2000 2001 2000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 174,939 229,181 23,195 17,822 — — 198,134 247,003 (115,403) (83,493) (15,003) (13,410) 3,245 (527) (127,161) (97,430) 171,787 305,844 16,633 11,843 (21,296) (11,350) 167,124 306,337 — 50 — — — — — 50 167,124 306,387 7,009 19,021 3,900 2,700 — — 10,909 21,721	Hong Kong Elsewhere in the PRC Eliminations Consolidated 2001 2000 2001 2000 2001 2000 2001 2000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 174,939 229,181 23,195 17,822 — — 198,134 247,003 (115,403) (83,493) (15,003) (13,410) 3,245 (527) (127,161) (97,430) 171,787 305,844 16,633 11,843 (21,296) (11,350) 167,124 306,337 — 50 — — — — — 50 167,124 306,387 7,009 19,021 3,900 2,700 — — 10,909 21,721	Hong Kong Elsewhere in the PRC Eliminations Consolidated 2001 2000 2001 2000 2001 2000 2001 2000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 174,939 229,181 23,195 17,822 — — 198,134 247,003 (115,403) (83,493) (15,003) (13,410) 3,245 (527) (127,161) (97,430) 171,787 305,844 16,633 11,843 (21,296) (11,350) 167,124 306,337 — 50 — — — — — 50 167,124 306,387 7,009 19,021 3,900 2,700 — — 10,909 21,721	Hong Kong Elsewhere in the PRC Eliminations Consolidated 2001 2000 2001 2000 2001 2000 2001 2000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 174,939 229,181 23,195 17,822 — — 198,134 247,003 (115,403) (83,493) (15,003) (13,410) 3,245 (527) (127,161) (97,430) 171,787 305,844 16,633 11,843 (21,296) (11,350) 167,124 306,337 — 50 — — — — — 50 167,124 306,387 7,009 19,021 3,900 2,700 — — 10,909 21,721
171,787 —	305,844 50	16,633 —	11,843 —
7,009	19,021	3,900	2,700	—	—	167,124
						10,909

— 50 —

i100 Limited

FINANCIAL INFORMATION OF THE i100 GROUP

APPENDIX I

5. TURNOVER, REVENUE AND GAINS

Turnover represents the net invoiced value of services rendered and goods sold, after allowances for returns and trade discounts, and an appropriate proportion of contract revenue of construction contracts during the year.

An analysis of the Group’s turnover, other revenue and gains, is as follows:

Turnover Sales of sanitary fixtures and fittings Sales of hardware, industrial and consumer products Drainage, plumbing and engineering contracting services Provision of communication solutions consultancy services Internet operations Other revenue Rental income Interest income on bank deposits Interest income on overdue balances from customers Gains Forfeited customer deposits Compensation received from an ex-director of a subsidiary for breach of fiduciary duty Others	2001 HK$’000 79,464 46,270 60,159 10,275 1,966	2000 HK$’000 113,831 51,788 79,943 412 1,029
	198,134 1,319 3,841 480 5,640 — — 1,177 1,177	247,003
		2,309 7,851 933
		11,093
		21 2,800 1,446
		4,267
	204,951	262,363

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i100 Limited

FINANCIAL INFORMATION OF THE i100 GROUP

APPENDIX I

6. LOSS FROM OPERATING ACTIVITIES

The Group’s loss from operating activities is arrived at after charging/(crediting):

Staff costs: Wages and salaries Staff accommodation expenses Pension scheme contributions Less: Forfeited contributions Net pension contributions Auditors’ remuneration Cost of sales: Cost of inventories sold Cost of services rendered Stock provisions Deficit arising from revaluation of leasehold land and buildings Deficit arising from revaluation of investment properties Depreciation Diminution in value of an investment property Impairment of fixed assets Information technology business operating costs Loss on disposal of fixed assets Minimum lease payments under operating leases in respect of land and buildings** Provision for doubtful debts Dividend income from an unlisted investment Exchange gains, net Gross and net rental income Interest income	2001 HK$’000 72,393 576 2,692 (145)	2000 HK$’000 68,603 — 1,930 (48) 1,882 70,485 920 110,923 73,730 6,829 191,482 3,210 3,300 5,509 — — 35,963 182 8,548 11,315 (38) (388) (2,309) (8,784)
	2,547 75,516 1,060 82,078 81,066 7,028 170,172	1,882
		70,485 920 110,923 73,730 6,829
		191,482
	2,024 1,020 8,646 4,000 5,681 49,890 2,541 10,064 3,791 — (296) (1,319) (4,321)

Staff costs include directors’ remuneration as set out in note 7 below. As at 31st December, 2001, the Group had no forfeited pension scheme contributions available to offset future contributions (2000: Nil).
** Included staff cost of HK$14,264,000 (2000: HK$19,892,000), depreciation of HK$4,144,000 (2000: HK$2,029,000), minimum lease payments under operating leases in respect of land and buildings of HK$2,605,000 (2000: HK$1,259,000) and interest income of HK$3,200 (2000: HK$5,000) as disclosed above.
*** Operating lease rentals include rental expenses of a staff quarter and a director’s quarter totalling HK$576,000 (2000: Nil) which have also been included in staff accommodation expenses.

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i100 Limited

FINANCIAL INFORMATION OF THE i100 GROUP

APPENDIX I

7. DIRECTORS’ REMUNERATION

Directors’ remuneration disclosed pursuant to the Listing Rules and Section 161 of the Companies Ordinance is as follows:

Fees paid to non-executive directors Executive directors: Fees Salaries, housing allowances and other benefits in kind Performance related bonuses Pension scheme contributions	2001 HK$’000 — 12 7,711 3,500 195 11,418	2000 HK$’000 — 16 8,509 800 252
		9,577

The above directors’ remuneration fell within the following bands:

		2001		2000
	_No. _	of directors	_No. _	of directors
Nil - HK$1,000,000		8		13
HK$2,500,001 - HK$3,000,000		2		3
HK$5,000,001 - HK$5,500,000		1		—
		11		16

There was no arrangement under which a director waived or agreed to waive any remuneration during the year.

During the year, no share options were granted to any of the directors of the Company.

8. FIVE HIGHEST PAID EMPLOYEES

The five highest paid individuals included three (2000: three) directors, details of whose remuneration are set out in note 7 above. Details of the remuneration of the remaining two (2000: two) non-director, highest paid employees are set out below.

Salaries, housing allowances and other benefits in kind Pension scheme contributions	2001 HK$’000 6,915 65 6,980	2000 HK$’000 3,828 52
		3,880

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i100 Limited

APPENDIX I

FINANCIAL INFORMATION OF THE i100 GROUP

The remuneration of the two (2000: two) non-director, highest paid employees fell within the following bands:

	Number of employees	Number of employees
	2001	2000
Nil - HK$1,000,000	—	—
HK$1,000,001 - HK$1,500,000	—	1
HK$2,000,000 - HK$2,500,000	—	1
HK$2,500,001 - HK$3,000,000	1	—
HK$4,000,001 - HK$4,500,000	1	—

During the year, 25,000,000 share options were granted to one of the two non-director, highest paid employees in respect of his services to the Company, further details of which are included in the disclosures set out under the heading “Share option scheme” in the Report of the Directors on pages 15 to 18 thereof. No value in respect of the share options granted during the year has been charged to the profit and loss account.

9. FINANCE COSTS


	2001	2000
	HK$’000	HK$’000
Interest on bank loans and overdrafts wholly repayable
within one year or on demand	458	954

10. TAX

Hong Kong profits tax has been provided at the rate of 16% (2000: 16%) on the estimated assessable profits arising in Hong Kong during the year.

Group: Provision for the year Overprovision in prior years Share of tax attributable to an associate Tax charge/(credit) for the year	Group 2001 HK$’000 393 (1,484)	2000 HK$’000 2,473 (495
	(1,091) 521	1,978 1,078
	(570)	3,056

— 54 —

i100 Limited

FINANCIAL INFORMATION OF THE i100 GROUP

APPENDIX I

The principal components of the Group’s net deferred tax asset not recognised in the financial statements are as follows:

Tax losses carried forward Decelerated/(accelerated) capital allowances Other timing differences	Group 2001 HK$’000 25,983 414 — 26,397	2000 HK$’000 10,727 (2,164) 275 8,838

The revaluation of the Group’s leasehold land and buildings and investment properties do not constitute timing differences. Accordingly, no deferred tax has been provided thereon.

11. NET LOSS FROM ORDINARY ACTIVITIES ATTRIBUTABLE TO SHAREHOLDERS

The net loss from ordinary activities attributable to shareholders dealt with in the financial statements of the Company is HK$114,893,000 (2000: HK$134,599,000).

12. LOSS PER SHARE

The calculation of basic loss per share is based on the net loss attributable to shareholders for the year of HK$118,460,000 (2000: HK$132,580,000) and the weighted average of 1,001,798,855 ordinary shares (2000: 653,079,452 ordinary shares) in issue during the year.

The diluted loss per share for the years ended 31st December, 2001 and 2000 have not been shown as the share options outstanding during these years had an anti-dilutive effect on the basic loss per share for these years.

— 55 —

i100 Limited

FINANCIAL INFORMATION OF THE i100 GROUP

APPENDIX I

13. FIXED ASSETS

Group

Leasehold land and buildings Furniture, fixtures and equipment HK$’000 HK$’000 Cost or valuation: At beginning of year 18,800 34,330 Acquisition of business — 118 Additions — 9,568 Disposals — (12,906) Deficit on revaluation (3,400) — At 31st December, 2001 15,400 31,110 At cost — 31,110 At 2001 valuation 15,400 — 15,400 31,110 Accumulated depreciation and impairment: At beginning of year — 14,896 Provided during the year 1,134 6,957 Impairment during the year recognised in the profit and loss account — 5,681 Disposals — (9,457) Written back on revaluation (1,134) — At 31st December, 2001 — 18,077 Net book value: At 31st December, 2001 15,400 13,033 At 31st December, 2000 18,800 19,434	Leasehold land and buildings Furniture, fixtures and equipment HK$’000 HK$’000 Cost or valuation: At beginning of year 18,800 34,330 Acquisition of business — 118 Additions — 9,568 Disposals — (12,906) Deficit on revaluation (3,400) — At 31st December, 2001 15,400 31,110 At cost — 31,110 At 2001 valuation 15,400 — 15,400 31,110 Accumulated depreciation and impairment: At beginning of year — 14,896 Provided during the year 1,134 6,957 Impairment during the year recognised in the profit and loss account — 5,681 Disposals — (9,457) Written back on revaluation (1,134) — At 31st December, 2001 — 18,077 Net book value: At 31st December, 2001 15,400 13,033 At 31st December, 2000 18,800 19,434	Motor vehicles HK$’000 3,075 — 1,223 (551) —	Total HK$’000 56,205 118 10,791 (13,457) (3,400) 50,257 34,857 15,400 50,257 17,044 8,646 5,681 (10,008) (1,134) 20,229 30,028 39,161
15,400 — 15,400 15,400 — 1,134 — — (1,134) —	31,110 31,110 — 31,110 14,896 6,957 5,681 (9,457) — 18,077	3,747 3,747 — 3,747 2,148 555 — (551) — 2,152	50,257
			34,857 15,400
			50,257
			17,044 8,646 5,681 (10,008 (1,134
			20,229
15,400 18,800	13,033 19,434	1,595 927

The Group’s leasehold land and buildings were revalued at 31st December, 2001 by Debenham Tie Leung, independent professional valuers, at HK$15,400,000 on an open market value, existing use basis giving rise to a revaluation deficit of HK$2,266,000. HK$242,000 of this deficit has been charged to the leasehold land and buildings revaluation reserve and the remaining balance of HK$2,024,000 has been charged to the profit and loss account.

— 56 —

i100 Limited

FINANCIAL INFORMATION OF THE i100 GROUP

APPENDIX I

All of the Group’s leasehold land and buildings are situated in Hong Kong and are held under medium term leases.

At 31st December, 2001, had the Group’s land and buildings been carried at historical cost less accumulated depreciation and impairment losses, their carrying value would have been HK$15,400,000 (2000: HK$18,800,000).

Certain land and buildings held by Group companies are pledged to secure banking facilities, as set out in note 23.

14. INVESTMENT PROPERTIES

At beginning of year Revaluation deficit charged to the profit and loss account Diminution in value during the year Disposal of a subsidiary At end of year	Group 2001 HK$’000 20,000 (1,020) (4,000) (11,000) 3,980	2000 HK$’000 23,300 (3,300) — —
		20,000

All of the Group’s investment properties are situated in Hong Kong and are held under the following lease terms:

Medium term leases Long term leases	Group 2001 HK$’000 1,180 2,800 3,980	2000 HK$’000 1,500 18,500
		20,000

At the balance sheet date, the Group’s investment properties were revalued on an open market value, existing use basis by Debenham Tie Leung, independent professional valuers, at HK$3,980,000. The investment properties are leased to third parties under operating leases, further summary details of which are included in note 28 to the financial statements.

In the prior year, an investment property held by a subsidiary was pledged to a bank to secure banking facilities. This subsidiary was disposed of during the year.

— 57 —

i100 Limited

APPENDIX I

FINANCIAL INFORMATION OF THE i100 GROUP

Particulars of the Group’s investment properties as at 31st December, 2001 are as follows:

			Gross floor	Group’s
Location	Lease terms	Use	area	interest
			(sq. ft.)
Units A & B	Long term	Commercial	1,598	100%
18th Floor
Harbour Commercial Building
122-124 Connaught Road, Central
Hong Kong
Unit B2	Medium term	Industrial	4,785	100%
1st Floor
14 Sze Shan Street
Yau Tong
Kowloon
Hong Kong

15. INTERESTS IN SUBSIDIARIES

Unlisted shares, at cost Due from subsidiaries Provision for impairment	Company 2001 2000 HK$’000 HK$’000 — — 351,914 278,345 (249,737) (134,781) 102,177 143,564	Company 2001 2000 HK$’000 HK$’000 — — 351,914 278,345 (249,737) (134,781) 102,177 143,564
		143,564

The balances with subsidiaries are unsecured, interest-free and have no fixed terms of repayment.

— 58 —

i100 Limited

FINANCIAL INFORMATION OF THE i100 GROUP

APPENDIX I

Particulars of the principal subsidiaries are as follows:

		Nominal
		value of		Percentage
	Place of	issued/			of equity
	incorporation/	registered	Class of	attributable			to	Principal
Name	operations	share capital	shares held	the Company				activities
				2001			2000
IT-related subsidiaries
ask100.com (BVI) Limited	British Virgin	US$2	Ordinary	66.67*		66.67*		Investment
	Islands							holding
ask100.com (Hong Kong)	Hong Kong	HK$2	Ordinary	66.67*		66.67*		Provision of
Limited								an on-line
								expert site
ask100.com Corporation	Cayman	US$30,000	Ordinary	66.67*		66.67*		Investment
	Islands							holding
Beijing Footnet100	People’s	HK$1,200,000	—	100*			100*	Electronic
Information Technology	Republic of							trading
Company Limited#	China							platform for
								food industry
Castlebright Limited	Hong Kong	HK$2	Ordinary	100*			100*	Provision of
								management
								services
Foodnet100 Holdings	Cayman	US$15,750	Ordinary	60*			60*	Investment
Limited	Islands							holding
Golden Throne Holdings	British Virgin	US$1	Ordinary	100*			100*	Investment
Limited	Islands							holding
i100 Asiaweb Holdings	British Virgin	US$1	Ordinary	100			100	Investment
Corporation	Islands							holding
i100 OnAir Limited	British Virgin	US$1	Ordinary	100*			100*	Investment
	Islands							holding
i100 Technological	People’s	HK$1,000,000	—	100*			100*	Development
Shenzhen Company	Republic of							of computer
Limited#	China							hardware and
								software and
								related
								technical
								advisory
								services

— 59 —

i100 Limited

APPENDIX I

FINANCIAL INFORMATION OF THE i100 GROUP

		Nominal
		value of		Percentage
	Place of	issued/			of equity
	incorporation/	registered	Class of	attributable		to	Principal
Name	operations	share capital	shares held	the Company			activities
				2001		2000
i100 Wireless Limited	British Virgin	US$1.00	Ordinary	100*		100*	Investment
(formerly i100 Media	Islands						holding
Limited)
i100 Wireless	Hong Kong	HK$2.00	Ordinary	100*		—	Wireless data
(Hong Kong) Limited							service
(formerly Capital100							provider
Limited)
OnAir100 Limited	Hong Kong	HK$2.00	Ordinary	100*		100*	Multimedia
							enabler
solution100	People’s	US$750,000	—	100*		100*	Provision of
(Shanghai) Limited#	Republic of						network
	China						solutions
							services
solution100 Corporation	Cayman	US$50,000	Ordinary	100*		100*	Investment
	Islands						holding
solution100 Limited	Hong Kong	HK$2	Ordinary	100*		100*	Digital
							solutions
							provider
Non IT-related subsidiaries
Acme Landis Operations	British Virgin	US$1	Ordinary	100		100	Investment
Holdings Limited	Islands						holding
Acme Sanitary Ware	Hong Kong	HK$10,000	Ordinary	100*		100*	Importing,
Company, Limited		HK$3,958,000	Deferred	100*		100*	marketing and
							distributing
							sanitary
							fixtures and
							fittings
Acme Sanitary Ware	British Virgin	US$1	Ordinary	100*		100*	Selling and
(Asia) Company,	Islands						promoting
Limited							sanitary
							fixtures and
							fittings,
							hardware,
							industrial and
							consumer
							products

— 60 —

i100 Limited

APPENDIX I

FINANCIAL INFORMATION OF THE i100 GROUP

		Nominal
		value of		Percentage
	Place of	issued/			of equity
	incorporation/	registered	Class of	attributable		to	Principal
Name	operations	share capital	shares held	the Company			activities
				2001		2000
Acme Sanitary	Hong Kong	HK$1,000,000	Ordinary	100*		100*	Designing and
Engineering Company							installing
Limited							plumbing and
							drainage
							systems
Acme United Engineering	Hong Kong	HK$1,000,000	Ordinary	100*		100*	Designing and
Company Limited							installing
							mechanical
							and electrical
							systems
Alpha Pacific	Hong Kong	HK$2	Ordinary	100*		100*	Importing,
International Limited							marketing and
							distributing
							consumer
							products
Dai Fong Building	Hong Kong	HK$2	Ordinary	—		100*	Property
Supplies (Hong Kong)							holding
Limited
Glory Top Building	Hong Kong	HK$100	Ordinary	52*		52*	Selling and
Materials Limited							promoting
							sanitary
							fixtures and
							fittings
Landis Brothers &	Hong Kong	HK$10,000	Ordinary	100*		100*	Importing,
Company, Limited		HK$1,000,000	Deferred	100*		100*	marketing and
							distributing
							hardware,
							industrial and
							consumer
							products
Landis Brothers (Asia)	British Virgin	US$1	Ordinary	100*		100*	Importing,
Company, Limited	Islands						marketing and
							distributing
							industrial
							products
Marrick Corporation	British Virgin	US$1	Ordinary	100*		100*	Investment
	Islands						holding

— 61 —

i100 Limited

APPENDIX I

FINANCIAL INFORMATION OF THE i100 GROUP

		Nominal
		value of		Percentage
	Place of	issued/		of equity
	incorporation/	registered	Class of	attributable	to	Principal
Name	operations	share capital	shares held	the Company		activities
				2001	2000
Snowball Corporation	British Virgin	US$1	Ordinary	100*	100*	Investment
	Islands					holding
U’Land Sanitary Ware	Hong Kong	HK$100	Ordinary	51*	51*	Retailing
Company Limited						sanitary
						fixtures and
						fittings

Held through subsidiaries.

Not audited by Ernst & Young Hong Kong or other Ernst & Young International member firms.

The above table lists the subsidiaries of the Company which, in the opinion of the directors, principally affected the results for the year or formed a substantial portion of the net assets of the Group. To give details of other subsidiaries would, in the opinion of the directors, result in particulars of excessive length.

16. INTERESTS IN JOINTLY-CONTROLLED ENTITIES

Share of net assets of jointly-controlled entities Loan to a jointly-controlled entity	Group 2001 2000 HK$’000 HK$’000 1,296 141 22 39 1,318 180	Company 2001 2000 HK$’000 HK$’000 — — — — — —	Company 2001 2000 HK$’000 HK$’000 — — — — — —
			—

The loan granted to a jointly-controlled entity is unsecured, interest-free and has no fixed terms of repayment.

— 62 —

i100 Limited

FINANCIAL INFORMATION OF THE i100 GROUP

APPENDIX I

Particulars of the jointly-controlled entities are as follows:

		Place of		Percentage of
	Business	incorporation/	Ownership	voting	Profit
Name	structure	operations	interest	power	sharing	Principal activities
iSTT100 Limited*	Corporate	Cayman Islands/	45	45	45	Provision of financial,
		Singapore				technical, operational,
						marketing and
						strategic support to
						Internet, media, and
						technology businesses
Vector Entertainment	Corporate	British Virgin	45	50	45	Entertainment business
Corporation*		Islands

Not audited by Ernst & Young Hong Kong or other Ernst & Young International member firms.

All of the above investments in jointly-controlled entities are indirectly held by the Company.

17. INTEREST IN AN ASSOCIATE

Share of net assets Loans to an associate	Group 2001 2000 HK$’000 HK$’000 13,584 10,155 9,823 5,845	Company 2001 2000 HK$’000 HK$’000 — — 8,919 5,044	Company 2001 2000 HK$’000 HK$’000 — — 8,919 5,044
			5,044

The loans to the associate are unsecured, interest-bearing at 10% per annum and are repayable on or before 15th June, 2002 or such later date as may be agreed between the two parties.

Particulars of the associate are as follows:

					Percentage
				Place of	of equity
			Business	incorporation/	attributable
Name			structure	and operations	to the Group		Principal activities
					2001 2000
AsiaWeb	ASP	Limited*	Corporate	Hong Kong	49	49	Investment holding

Not audited by Ernst & Young Hong Kong or other Ernst & Young International member firms.

The Group’s voting power held and profit sharing ratio in relation to the associate is 49%.

— 63 —

i100 Limited

FINANCIAL INFORMATION OF THE i100 GROUP

APPENDIX I

The financial year end of the associate is 31st March, which is not coterminous with that of the Group.

The Group’s financial statements have taken into account the results of AsiaWeb ASP Limited and its subsidiaries between 1st January, 2001 and 31st December, 2001.

18. LONG TERM INVESTMENTS

Group 2001 2000 HK$’000 HK$’000 6,048 5,448 (350) — 5,698 5,448	Group 2001 2000 HK$’000 HK$’000 6,048 5,448 (350) — 5,698 5,448
1	388		—	—
		— Group 2001 HK$’000 13,825 (3,059) 10,766
		674,745 (663,979)		704,576 (674,564
		10,766

At 31st December, 2001, no retention monies (2000: Nil) were held by customers for contract works.

At 31st December, 2001, no advances were received from customers for contract works (2000: HK$4,832,000 was received and included in trade payables, other payables and accruals).

— 64 —

i100 Limited

FINANCIAL INFORMATION OF THE i100 GROUP

APPENDIX I

20. TRADE RECEIVABLES

The Group grants credit periods of up to 90 days to its customers. An aged analysis of the trade receivables as at the balance sheet date, based on invoice date, is as follows:

Current 1 to 3 months Over 3 months Bad debts provision	Group 2001 HK$’000 8,641 12,926 18,216	2000 HK$’000 16,489 22,089 14,942
	39,783 (15,744)	53,520 (16,049)
	24,039	37,471

21. CASH AND CASH EQUIVALENTS

Cash and bank balances Time deposits Pledged time deposit for bank facilities granted but not utilised Cash and cash equivalents	Group 2001 2000 HK$’000 HK$’000 6,113 8,934 25,529 107,591 1,120 — 32,762 116,525	Company 2001 2000 HK$’000 HK$’000 478 1,591 23,051 100,189 — — 23,529 101,780	Company 2001 2000 HK$’000 HK$’000 478 1,591 23,051 100,189 — — 23,529 101,780
			101,780

22. TRADE PAYABLES, OTHER PAYABLES AND ACCRUALS

Trade and bills payables Other payables and accruals Due to contract customers Fees in advance Customer deposits	Group 2001 2000 HK$’000 HK$’000 16,482 17,090 13,819 19,086 3,059 — — 4,832 1,756 2,567 35,116 43,575	Company 2001 2000 HK$’000 HK$’000 — — 99 2,169 — — — — — — 99 2,169	Company 2001 2000 HK$’000 HK$’000 — — 99 2,169 — — — — — — 99 2,169
			2,169

— 65 —

i100 Limited

APPENDIX I

FINANCIAL INFORMATION OF THE i100 GROUP

An aged analysis of trade and bills payables as at the balance sheet date, based on invoice date, is as follows:

Current 1 to 3 months Over 3 months	Group 2001 HK$’000 6,371 4,956 5,155 16,482	2000 HK$’000 6,307 7,595 3,188
		17,090

23. INTEREST-BEARING BANK LOANS AND OVERDRAFTS

Bank overdrafts: Secured Unsecured Bank loans: Secured Unsecured Bank overdrafts repayable within one year or on demand Bank loans repayable within one year Portion classified as current liabilities Long term portion	Group 2001 HK$’000 — —	2000 HK$’000 7 43
	— 4,326 — 4,326	50
		14,977 537
		15,514
	4,326	15,564
	— 4,326 4,326 (4,326)	50 15,514
		15,564 (15,564
	—	—

— 66 —

i100 Limited

FINANCIAL INFORMATION OF THE i100 GROUP

APPENDIX I

At 31st December, 2001, certain of the Group’s bank loans and overdrafts are secured by mortgages over certain of the Group’s leasehold land and buildings, which had an aggregate net book value at the balance sheet date of approximately HK$13,900,000 (2000: HK$17,300,000).

In addition, the Group was granted bank facilities, which have not been utilised at the balance sheet date, secured by the pledge of the Group’s time deposit of HK$1,120,000 (2000: Nil).

24. SHARE CAPITAL

Shares Authorised: 3,000,000,000 (2000: 3,000,000,000) ordinary shares of HK$0.10 each Issued and fully paid: 1,001,873,000 (2000: 1,001,000,000) ordinary shares of HK$0.10 each	2001 HK$’000 300,000 100,187	2000 HK$’000 300,000
		100,100

A summary of the movements of the Company’s ordinary share capital during the year is as follows:

At 1st January, 2001 Shares issued for acquisition of business At 31st December, 2001	Number of ordinary shares 1,001,000,000 873,000 1,001,873,000	Issued and fully paid HK$’000 100,100 87
		100,187

Pursuant to the business transfer agreement dated 7th September, 2000 and its supplement (collectively the “Business Transfer Agreement”) made between Shanghai Cyberway CompuComm Limited (“Shanghai Cyberway”), Cao Ming, Hong Zhou and Hong Yuan (the “Founding Shareholders”), i100Solutions Limited and the Company, relating to the acquisition of the business of Shanghai Cyberway, including all the assets and liabilities which are employed in or arise from carrying on of the business, on 13th February, 2001, the Company issued and allotted 873,000 ordinary shares of HK$0.10 each, being ten per cent of the consideration shares to the Founding Shareholders. The remaining 7,857,000 shares were to be issued in three allotments to the Founding Shareholders, conditional on the achievement of three business milestones during the thirteen month period ended 28th February, 2002.

The directors are of the opinion that no additional ordinary shares will be issued to the Founding Shareholders as the relevant business milestones as set out in the Business Transfer Agreement have not been achieved.

— 67 —

i100 Limited

FINANCIAL INFORMATION OF THE i100 GROUP

APPENDIX I

Share options

The Company operates a share option scheme (the “Scheme”), further details of which are set out under the heading “Share option scheme” in the Report of the Directors on pages 15 to 18 thereof.

During the year, the Company granted a total of 49,060,000 share options under the Scheme. Summary of movements in the share options of the Company during the year were as follows:

Date of grant Subscription price per share At 1st January, 2001 2nd August, 2000 HK$0.75 7,270,000 6th October, 2000 HK$0.47 3,140,000 26th March, 2001 HK$0.385 — 31st August, 2001 HK$0.4032 — 10,410,000	Number of share options Granted during the year Lapsed during the year — 3,795,000 — 1,600,000 9,650,000 2,775,000 39,410,000 674,000 49,060,000 8,844,000	At 31st December, 2001 3,475,000 1,540,000 6,875,000 38,736,000
		50,626,000

As at 31st December, 2001, the Company had 50,626,000 outstanding share options. The exercise in full of such share options would, under the present capital structure of the Company, result in the issue of 50,626,000 additional ordinary shares of HK$0.1 each and cash proceeds to the Company of approximately HK$21,595,000, before the related share issue expenses.

— 68 —

i100 Limited

FINANCIAL INFORMATION OF THE i100 GROUP

APPENDIX I

25. RESERVES

Share premium account Leasehold land and building revaluation reserve Investment property revaluation reserve HK$’000 HK$’000 HK$’000 30,786 3,388 7,324 219,220 — — (12,824) — — — — — — — — — — — — (512) — — — —	Share premium account Leasehold land and building revaluation reserve Investment property revaluation reserve HK$’000 HK$’000 HK$’000 30,786 3,388 7,324 219,220 — — (12,824) — — — — — — — — — — — — (512) — — — —	Share premium account Leasehold land and building revaluation reserve Investment property revaluation reserve HK$’000 HK$’000 HK$’000 30,786 3,388 7,324 219,220 — — (12,824) — — — — — — — — — — — — (512) — — — —	Goodwill reserve Exchange fluctuation reserve Retained profits/ (accumulated losses) HK$’000 HK$’000 HK$’000 — — 79,059 — — — — — — 27 — — (48,807) — — — (14) — — — — — — (132,580)	Goodwill reserve Exchange fluctuation reserve Retained profits/ (accumulated losses) HK$’000 HK$’000 HK$’000 — — 79,059 — — — — — — 27 — — (48,807) — — — (14) — — — — — — (132,580)	Goodwill reserve Exchange fluctuation reserve Retained profits/ (accumulated losses) HK$’000 HK$’000 HK$’000 — — 79,059 — — — — — — 27 — — (48,807) — — — (14) — — — — — — (132,580)	Total HK$’000 120,557 219,220 (12,824) 27 (48,807) (14) (512) (132,580) 145,067 367 (2) (64) (242) (118,460) 26,666 67,642 (50) (40,926) 26,666 189,460 (35) (44,358) 145,067
237,182 367 — — — —	2,876 — — — (242) —	7,324 — — — — —	(48,780) — — — — —	(14) — (2) (64) — —	(53,521) — — — — (118,460)	145,067 367 (2 (64 (242 (118,460
237,549	2,634	7,324* (48,780)		(80)	(171,981)
237,549 — —	2,634 — —	7,324 — —	(48,780) — —	(16) — (64)	(131,069) (50) (40,862)	67,642 (50 (40,926
237,549	2,634	7,324	(48,780)	(80)	(171,981)
237,182 — —	2,876 — —	7,324 — —	(48,780) — —	(11) — (3)	(9,131) (35) (44,355)	189,460 (35 (44,358
237,182	2,876	7,324	(48,780)	(14)	(53,521)

The balance of the investment property revaluation reserve was transferred from the leasehold land and building revaluation reserve upon the reclassification of the related properties. This balance is frozen and is not available to offset the current and future years’ revaluation deficits on investment properties. On disposal of a revalued asset, the relevant portion of the revaluation reserve realised in respect of previous valuations is transferred to retained earnings as a movement in reserves.

— 69 —

i100 Limited

FINANCIAL INFORMATION OF THE i100 GROUP

APPENDIX I

As detailed in note 3 to the financial statements, the Group has adopted the transitional provision of SSAP 30 which permits goodwill/negative goodwill in respect of acquisitions which occurred prior to 1st January, 2001, to remain eliminated against/credited to reserves.

Due to the adoption of SSAP 31, the Group has adopted a policy to assess goodwill eliminated against reserves for impairment. Following this assessment, the directors are of the opinion that there is no impairment of goodwill previously included in the goodwill reserve.

The amounts of goodwill and negative goodwill remaining in reserves, arising from the acquisition of subsidiaries and associates, are as follows:

Group Goodwill included in goodwill reserve Negative goodwill included in goodwill reserve HK$’000 HK$’000 Cost: At beginning of year and as at 31st December, 2001 (48,807) 27 Accumulated impairment: At beginning of year and as at 31st December, 2001 — — Net amount: At 31st December, 2001 (48,807) 27 At 31st December, 2000 (48,807) 27 Company	Group Goodwill included in goodwill reserve Negative goodwill included in goodwill reserve HK$’000 HK$’000 Cost: At beginning of year and as at 31st December, 2001 (48,807) 27 Accumulated impairment: At beginning of year and as at 31st December, 2001 — — Net amount: At 31st December, 2001 (48,807) 27 At 31st December, 2000 (48,807) 27 Company	Group Goodwill included in goodwill reserve Negative goodwill included in goodwill reserve HK$’000 HK$’000 Cost: At beginning of year and as at 31st December, 2001 (48,807) 27 Accumulated impairment: At beginning of year and as at 31st December, 2001 — — Net amount: At 31st December, 2001 (48,807) 27 At 31st December, 2000 (48,807) 27 Company
	—	—
	(48,807) (48,807)	27
		27

At 1st January, 2000 Issue of shares Share issue expenses Net loss attributable to shareholders At 31st December, 2000 and 1st January, 2001 Issue of shares Net loss attributable to shareholders At 31st December, 2001	Share premium account Contributed surplus Retained profits/ (accumulated losses) HK$’000 HK$’000 HK$’000 30,786 46,962 566 219,220 — — (12,824) — — — — (134,599)	Share premium account Contributed surplus Retained profits/ (accumulated losses) HK$’000 HK$’000 HK$’000 30,786 46,962 566 219,220 — — (12,824) — — — — (134,599)	Share premium account Contributed surplus Retained profits/ (accumulated losses) HK$’000 HK$’000 HK$’000 30,786 46,962 566 219,220 — — (12,824) — — — — (134,599)	Total HK$’000 78,314 219,220 (12,824 (134,599
	237,182 367 —	46,962 — —	(134,033) — (114,893)	150,111 367 (114,893
	237,549	46,962	(248,926)	35,585

— 70 —

i100 Limited

FINANCIAL INFORMATION OF THE i100 GROUP

APPENDIX I

The contributed surplus of the Company arose from the Group reorganisation in August 1991 and originally represented the excess of the fair value of the subsidiaries’ shares acquired over the nominal value of the Company’s shares issued in exchange. Under the Companies Act 1981 of Bermuda (as amended), the contributed surplus is distributable to shareholders under certain circumstances.

26. NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT

(a) Reconciliation of loss from operating activities to net cash outflow from operating activities

Loss from operating activities Deficit arising from revaluation of leasehold land and buildings Deficit arising from revaluation of investment properties Depreciation Diminution in value of an investment property Impairment of fixed assets Provision for impairment in value of an unlisted investment Loss on disposal of fixed assets Dividend income from an unlisted investment Gain on disposal of a listed investment Gain on disposal of a subsidiary Interest income Negative goodwill recognised as income Unrealised holding loss of a listed investment Decrease in inventories Decrease in construction contracts Decrease in trade receivables Decrease/(increase) in prepayments, deposits and other receivables Decrease in trade and bills payables Increase/(decrease) in other payables and accruals Increase in amounts due to contract customers Increase/(decrease) in fees in advance Decrease in customer deposits Net cash outflow from operating activities	2001 HK$’000 (122,840) 2,024 1,020 8,646 4,000 5,681 350 2,541 — (103) (76) (4,321) (655) — 6,521 16,187 15,332 2,673 (1,542) (5,257) 3,059 (4,832) (515) (72,107)	2000 HK$’000 (85,845) 3,210 3,300 5,509 — — — 182 (38) — — (8,784) — 71 8,506 1,706 14,761 (6,488) (7,481) 10,901 — 4,832 (1,101) (56,759)

— 71 —

i100 Limited

FINANCIAL INFORMATION OF THE i100 GROUP

APPENDIX I

(b) Acquisition of a subsidiary

Net assets acquired: Fixed assets Inventories Trade receivables Prepayments, deposits and other receivables Cash and bank balances Trade payables Other payables and accruals Minority interests Capital reserve on acquisition	2001 HK$’000 — — — — — — — — — — —	2000 HK$’000 120 8 4,422 126 99 (3,457) (1,266) (25)
		27 (27)
		—

Analysis of the net inflow of cash and cash equivalents in respect of the acquisition of a subsidiary:

Cash consideration Cash and bank balances acquired Net inflow of cash and cash equivalents in respect of the acquisition of a subsidiary	2001 HK$’000 — — —	2000 HK$’000 — 99
		99

The subsidiary acquired during the prior year made no significant contribution to the Group in respect of the cash flows, turnover and contribution to the consolidated loss after tax and before minority interests for that year.

— 72 —

i100 Limited

FINANCIAL INFORMATION OF THE i100 GROUP

APPENDIX I

Net assets acquired: Fixed assets Trade receivables Cash and bank balances Trade payables Negative goodwill on acquisition	2001 HK$’000 118 1,900 25 (934)
	1,109 (655)
	454

The consideration of HK$454,000 was satisfied by the issuance of 873,000 ordinary shares of the Company which had no cash flow impact on the Group.

Negative goodwill of HK$655,000 arising on the acquisition of business during the year was recognised as an income to the profit and loss account during the year.

Analysis of the net inflow of cash and cash equivalents in respect of the acquisition of a subsidiary:

Cash consideration Cash and bank balances acquired Net inflow of cash and cash equivalents in respect of the acquisition of a subsidiary	2001 HK$’000 — 25
	25

— 73 —

i100 Limited

FINANCIAL INFORMATION OF THE i100 GROUP

APPENDIX I

(d) Disposal of a subsidiary

Net assets disposed of: Investment properties Cash and bank balances Prepayments and other receivables Other payables and accruals Customer deposits Tax payable Gain on disposal of a subsidiary Satisfied by: Cash	2001 HK$’000 11,000 13 219 (10) (296) (2) 10,924 76 11,000 11,000

An analysis of the net inflow of cash and cash equivalents in respect of the disposal of a subsidiary is as follows:

Cash consideration Cash and bank balances disposal of Net inflow of cash and cash equivalents in respect of the disposal of a subsidiary	2001 HK$’000 11,000 (13) 10,987

The subsidiary disposed of during the year made no significant contribution to the Group in respect of the cash flows, turnover and contribution to the consolidated loss after tax and before minority interests for the year.

— 74 —

i100 Limited

APPENDIX I

FINANCIAL INFORMATION OF THE i100 GROUP

(e) Analysis of changes in financing during the year

Share capital (including share premium) HK$’000 At 1st January, 2000 46,786 Net cash inflow/(outflow) from financing 200,000 Issue of new shares for non-cash consideration 103,320 Share issue expenses (12,824) Decrease in short term bank loans and overdrafts classified as cash equivalents — Acquisition of a subsidiary — Share of profit for the year — Share of exchange fluctuation reserve — At 31st December, 2000 and at 1st January, 2001 337,282 Net cash inflow/(outflow) from financing — Issue of new shares for non-cash consideration 454 Decrease in short term bank loans and overdrafts classified as cash equivalents — Share of loss for the year — Dividend paid to minority shareholders — At 31st December, 2001 337,736	Share capital (including share premium) HK$’000 At 1st January, 2000 46,786 Net cash inflow/(outflow) from financing 200,000 Issue of new shares for non-cash consideration 103,320 Share issue expenses (12,824) Decrease in short term bank loans and overdrafts classified as cash equivalents — Acquisition of a subsidiary — Share of profit for the year — Share of exchange fluctuation reserve — At 31st December, 2000 and at 1st January, 2001 337,282 Net cash inflow/(outflow) from financing — Issue of new shares for non-cash consideration 454 Decrease in short term bank loans and overdrafts classified as cash equivalents — Share of loss for the year — Dividend paid to minority shareholders — At 31st December, 2001 337,736	Minority interests Bank loans and overdrafts HK$’000 HK$’000 8 19,598 2,000 (3,271) — — — — — (763) 25 — (587) — (9) — 1,437 15,564 — (6,000) — — — (5,238) (269) — (339) — 829 4,326	Minority interests Bank loans and overdrafts HK$’000 HK$’000 8 19,598 2,000 (3,271) — — — — — (763) 25 — (587) — (9) — 1,437 15,564 — (6,000) — — — (5,238) (269) — (339) — 829 4,326
	337,282 — 454 — — —	1,437 — — — (269) (339)	15,564 (6,000 — (5,238 — —
	337,736	829

(f) Major non-cash transactions

The deficit arising from the revaluation of the Group’s leasehold land and buildings of HK$2,024,000 (2000: HK$3,210,000) and the deficit arising from the revaluation of the Group’s investment properties of HK$1,020,000 (2000: HK$3,300,000) had no cash flow impact on the Group.

Included in the profit and loss account is a provision for doubtful debts of HK$3,791,000 (2000: HK$11,315,000), which had no cash flow impact on the Group.

During the year, the Group acquired all assets (including cash and bank of HK$25,000 and accounts receivable of HK$1,900,000) and liabilities (including trade payable of HK$934,000) of Shanghai Cyberway for a consideration of HK$454,000 which was satisfied by the issuance of 873,000 ordinary shares of the Company at HK$0.52 each, which had no cash flow impact on the Group.

In the previous year, the Group acquired a 49% equity interest in AsiaWeb ASP Limited for a consideration of HK$103,320,000 which was satisfied by the issuance of 41,000,000 ordinary shares of the Company at HK$2.52 each, which had no cash flow impact on the Group.

— 75 —

i100 Limited

FINANCIAL INFORMATION OF THE i100 GROUP

APPENDIX I

27. CONTINGENT LIABILITIES

			Company	Company
	2001	2000	2001	2000
	HK$’000	HK$’000	HK$’000	HK$’000
Bank guarantees given to secure general banking
facilities granted to subsidiaries	—	—	87,100	107,100

Such banking facilities were utilised by the Group companies to the extent of HK$4,326,000 (2000: HK$15,564,000) at the balance sheet date.

28. OPERATING LEASE ARRANGEMENTS

(a) As lessor

The Group leases its investment properties under operating lease arrangements, with leases negotiated for a term of 2 years.

At 31st December, 2001, the Group had total future minimum lease receivables under non-cancellable operating leases with its tenants falling due as follows:

Within one year In the second to fifth years, inclusive	Group 2001 2000 HK$’000 HK$’000 558 1,996 406 — 964 1,996	Company 2001 2000 HK$’000 HK$’000 — — — — — —	Company 2001 2000 HK$’000 HK$’000 — — — — — —
			—

(b) As lessee

The Group leases certain of its office and warehouse properties under operating lease arrangements. Leases for properties are negotiated for terms ranging from 1 to 3 years.

At 31st December, 2001, the Group and the Company had total future minimum lease payments under non-cancellable operating leases falling due as follows:

Within one year In the second to fifth years, inclusive	Group 2001 2000 HK$’000 HK$’000 7,930 9,403 3,567 8,176 11,497 17,579	Company 2001 2000 HK$’000 HK$’000 368 — — — 368 —	Company 2001 2000 HK$’000 HK$’000 368 — — — 368 —
			—

— 76 —

i100 Limited

FINANCIAL INFORMATION OF THE i100 GROUP

APPENDIX I

SSAP 14 was revised and implemented during the year, as detailed in note 2 to the financial statements. Certain new disclosures are required and have been included above. The prior year comparative amounts for the new disclosures have also been included where appropriate.

29. CAPITAL COMMITMENTS

			Company	Company
	2001	2000	2001	2000
	HK$’000	HK$’000	HK$’000	HK$’000
Capital commitments contracted for:
Capital injection related to the
Group’s interests in jointly-controlled
entities and non wholly-owned subsidiaries	24,238	32,038	—	—

Save as disclosed above, the Company and the Group had no other significant commitments at the balance sheet date.

30. RELATED PARTY TRANSACTIONS

During the year, certain Group companies had the following transactions with related companies:


		2001	2000
	Notes	HK$’000	HK$’000
Office rental expenses paid to Avon Limited	(i), (iii)	2,690	2,593
Warehouse rental expenses paid to:	(ii), (iii)
Come Trend Limited		540	540
Chung Yuen Electrical Company Limited		480	480
Warehouse rental income received from
Chung Yuen Electrical Company Limited	(ii), (iii)	240	240
Purchase of an upgrade web content management
system from AsiaWeb Technologies Limited	(iv)	1,807	—
Purchase of a web publishing systems from
AsiaWeb Technologies Limited	(v)	—	5,600

— 77 —

i100 Limited

FINANCIAL INFORMATION OF THE i100 GROUP

APPENDIX I

Notes:

(i) The office expenses were calculated by the directors by reference to open market rentals, prevailing at the times when the tenancy agreements were entered into, as confirmed to the Group by a firm of independent professional valuers.

Details of the office rental expenses paid to Avon Limited during the year are as follows:

Group company
Location of Premises
Lease terms
Acme Sanitary Ware Company, Limited
Part of basement &
1/F., Acme Building
1st January, 2000 to
31st December, 2001
Acme Sanitary Ware Company, Limited
G/F., Acme Building
1st April, 2000 to
31st March, 2003
Acme Sanitary Ware Company, Limited
12/F., Acme Building
1st January, 2000 to
31st December, 2001
Acme Sanitary Engineering
Company, Limited
Part of basement,
Acme Building
1st January, 2000 to
31st December, 2001
Acme Sanitary Engineering
Company, Limited
Room C, 9/F.,
Acme Building
1st January, 2000 to
31st December, 2001
Landis Brothers & Company, Limited
6/F., Acme Building
1st October, 1999 to
30th September, 2001
1st October, 2001 to
30th September, 2003

HK$’000
528
1,320
336
168
42
222
74

2,690

(ii) The warehouse rental income and expenses were determined by the directors by reference to open market rentals, prevailing at the times when the tenancy agreements were entered into.
(iii) Chiu Chung Kwong, John have minority equity interests in Come Trend Limited. Chiu Chung Kwong, John and Chiu Chun Leong, David are beneficiaries under various discretionary trusts which have minority equity interests in Avon Limited. Chiu Chung Kwong, John and Chiu Chun Leong, David have indirect beneficial interests in Chung Yuen Electrical Company Limited.

In the opinion of the directors, including the independent directors, all of the above transactions were carried out in the ordinary course of the Group’s business.

(iv) AsiaWeb Technologies Limited (formerly known as Compuserve Consultants Limited), is a wholly-owned subsidiary of AsiaWeb ASP Limited, an associate of the Group. The purchases were carried out at prices and terms comparable with those charged by independent third party suppliers of the Group.

— 78 —

i100 Limited

APPENDIX I

FINANCIAL INFORMATION OF THE i100 GROUP

(v) In the prior year, on 10th March, 2000, the Company entered into a purchase agreement with AsiaWeb Technologies Limited for setting up a web publishing system for a total consideration of HK$5,600,000. AsiaWeb ASP Limited became an associate of the Group on 31st May, 2000. In the opinion of the directors, the purchase was carried out in the normal course of business of the Group and was conducted at prices and terms comparable with those charged by independent third party suppliers of the Group.

In addition to the related party transactions as set out above, during the year, HK$1 million was deposited with a bank as security for the bank facility of HK$1 million granted to AsiaWeb Technologies Limited. The security over the HK$1 million deposit was released by the bank on 20th August, 2001.

In the prior year, on 11th August, 2000, the Company through its wholly-owned subsidiary, i100 Telemedia Limited (“i100 Telemedia”), entered into a joint venture agreement with STT Communications Pte Ltd. (“STT”) and Pacific Star Capital Partners Ltd. (“PSCP”) to establish an Asian investment and fund management business, owned as to 45%, 45% and 10% by i100 Telemedia, STT and PSCP, respectively. Further details of the joint venture are included in note 16 to the financial statements. PSCP is beneficially owned by Mr. Lee G. Lam, a former independent non-executive director of the Company. Accordingly, the transaction constituted a connected transaction of the Company pursuant to Rule 14.26 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited. On 15th September, 2000, Mr. Lee G. Lam ceased to be an independent non-executive director of the Company.

31. COMPARATIVE AMOUNTS

As further explained in note 2 to the financial statements, due to the adoption of new and revised SSAPs during the current year, the accounting treatment and presentation of certain items and balances in the financial statements have been revised to comply with the new requirements. Accordingly, certain comparative amounts have been reclassified to conform with the current year’s presentation.

32. APPROVAL OF THE FINANCIAL STATEMENTS

The financial statements were approved and authorised for issue by the board of directors on 22nd April, 2002.

— 79 —

i100 Limited

APPENDIX I FINANCIAL INFORMATION OF THE i100 GROUP

3. UNAUDITED FINANCIAL STATEMENTS OF THE i100 GROUP FOR THE SIX MONTHS ENDED 30TH JUNE, 2002

Set out below is the unaudited financial statements of the i100 Group for the six months ended 30th June, 2002 as extracted from the interim report 2002 of i100.

A. Condensed consolidated profit and loss account

Six months ended 30th June, 2002

Six months ended 30th June, 2002
		Six months ended 30th June,
		2002	2001
		(Unaudited)	(Unaudited)
	Notes	HK$’000	HK$’000
TURNOVER	2	68,842	86,832
Cost of sales		(50,745)	(75,123)
Gross profit		18,097	11,709
Other revenue and gains	3	2,296	3,811
Selling and distribution costs		(6,012)	(10,754)
Administrative expenses		(27,996)	(34,695)
Other operating expenses		(11,921)	(44,423)
Provision for loans to an associate		(13,703)	—
Impaired goodwill of an associate		(48,807)	—
Loss on discontinued operations	5	(4,616)	—
LOSS FROM OPERATING ACTIVITIES	4	(92,662)	(74,352)
Finance costs	6	(50)	(409)
OPERATING LOSS		(92,712)	(74,761)
Share of profits less losses of:
Jointly-controlled entities		(61)	(5)
Associate		(13,882)	12,406
LOSS BEFORE TAX		(106,655)	(62,360)
Tax	7	310	(642)
LOSS BEFORE MINORITY INTERESTS		(106,345)	(63,002)
Minority interests		(443)	262
NET LOSS FROM ORDINARY ACTIVITIES
ATTRIBUTABLE TO SHAREHOLDERS		(106,788)	(62,740)
LOSS PER SHARE (HK CENTS) — Basic	8	(10.51)	(6.27)

— 80 —

i100 Limited

APPENDIX I

FINANCIAL INFORMATION OF THE i100 GROUP

B. Condensed consolidated balance sheet 30th June, 2002

Condensed consolidated balance sheet 30th June, 2002
		30th June,	31st December,
		2002	2001
		(Unaudited)	(Audited)
	Notes	HK$’000	HK$’000
NON-CURRENT ASSETS
Fixed assets		8,474	30,028
Investment properties		—	3,980
Interest in jointly-controlled entities		1,257	1,318
Interest in an associate		—	13,584
Long term investments		3,900	5,699
		13,631	54,609
CURRENT ASSETS
Loan to Acme Landis Operations Holdings Limited	10	53,000	—
Loans to an associate		—	9,823
Inventories		119	23,231
Construction contracts		—	13,825
Trade receivables	11	249	24,039
Prepayments, deposits and other receivables		1,854	8,558
Tax recoverable		—	277
Cash and cash equivalents		31,929	32,762
		87,151	112,515
CURRENT LIABILITIES
Trade payables, other payables and accruals	12	4,537	35,116
Interest-bearing bank loans and overdrafts	13	—	4,326
		4,537	39,442
NET CURRENT ASSETS		82,614	73,073
TOTAL ASSETS LESS CURRENT LIABILITIES		96,245	127,682
Minority interests		—	(829)
		96,245	126,853
CAPITAL AND RESERVES
Issued capital	14	110,187	100,187
Reserves		(13,942)	26,666
		96,245	126,853

— 81 —

i100 Limited

FINANCIAL INFORMATION OF THE i100 GROUP

APPENDIX I

C. Condensed consolidated statement of changes in equity Six months ended 30th June, 2002

			Leasehold
			land and	Investment
		Share	buildings	property
		premium	revaluation	revaluation	Goodwill	Exchange	Accumulated
	Share capital	account	reserve	reserve	reserve	reserve	losses	Total
	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)
	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000
At 1st January, 2002	100,187	237,549	2,634	7,324	(48,780)	(80)	(171,981)	126,853
Issue of shares	10,000	17,481	—	—	—	—	—	27,481
Share of exchange
fluctuation reserve
of an associate	—	—	—	—	—	(44)	—	(44)
Revaluation deficit	—	—	(37)	—	—	—	—	(37)
Net loss attributable to
shareholders	—	—	—	—	—	—	(106,788)	(106,788)
Release of goodwill from
reserve in respect of
impairment of an
investment in an
associate	—	—	—	—	48,807	—	—	48,807
Release on disposal of
subsidiaries	—	—	(2,597)	(7,324)	(27)	—	9,921	(27)
At 30th June, 2002	110,187	255,030	—	—	—	(124)	(268,848)	96,245
			Leasehold
			land and	Investment
		Share	buildings	property
		premium	revaluation	revaluation	Goodwill	Exchange	Accumulated
	Share capital	account	reserve	reserve	reserve	reserve	losses	Total
	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)
	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000
At 1st January, 2001	100,100	237,182	2,876	7,324	(48,780)	(14)	(53,521)	245,167
Issue of shares	87	367	—	—	—	—	—	454
Exchange realignments	—	—	—	—	—	(60)	—	(60)
Revaluation deficit	—	—	(189)	—	—	—	—	(189)
Net loss attributable to
shareholders	—	—	—	—	—	—	(62,740)	(62,740)
At 30th June, 2001	100,187	237,549	2,687	7,324	(48,780)	(74)	(116,261)	182,632

— 82 —

i100 Limited

APPENDIX I

FINANCIAL INFORMATION OF THE i100 GROUP

D. Condensed consolidated cash flow statement

Six months ended 30th June, 2002

	Six months ended 30th June,	Six months ended 30th June,
	2002	2001
	(Unaudited)	(Unaudited)
	HK$’000	HK$’000
NET CASH OUTFLOW FROM OPERATING ACTIVITIES	(23,871)	(49,243)
NET CASH OUTFLOW FROM INVESTING ACTIVITIES	(3,533)	(9,017)
NET CASH INFLOW/(OUTFLOW) FROM
FINANCING ACTIVITIES	28,897	(3,000)
INCREASE/(DECREASE) IN CASH
AND CASH EQUIVALENTS	1,493	(61,260)
Cash and cash equivalents at beginning of period	30,436	108,961
CASH AND CASH EQUIVALENTS AT END OF PERIOD	31,929	47,701
ANALYSIS OF BALANCES OF CASH AND CASH
EQUIVALENTS
Cash and bank balances	2,487	7,487
Time deposits	29,442	47,686
Bank loans and overdrafts repayable
within three months from date of advance	—	(7,472)
	31,929	47,701

— 83 —

i100 Limited

FINANCIAL INFORMATION OF THE i100 GROUP

APPENDIX I

Notes to condensed consolidated financial statements

30th June, 2002

1. ACCOUNTING POLICIES

These unaudited condensed consolidated interim financial statements of the Group have been prepared in accordance with Statement of Standard Accounting Practice (“SSAP”) No. 25 “Interim Financial Reporting” issued by the Hong Kong Society of Accountants.

The accounting policies and basis of preparation used in the preparation of these condensed interim financial statements are consistent with those used in the audited financial statements for the year ended 31st December, 2001, except that the Group has adopted the following recently issued and revised SSAPs:

● SSAP 1 (Revised) : “Presentation of Financial Statements” ● SSAP 11 (Revised) : “Foreign Currency Translation” ● SSAP 15 (Revised) : “Cash Flow Statements” ● SSAP 25 (Revised) : “Interim Financial Reporting” ● SSAP 33 : “Discontinuing Operations” ● SSAP 34 : “Employee Benefits”

As a result of adopting these new and revised SSAPs, a condensed consolidated statement of changes in equity is now included in the interim financial statements and the condensed consolidated cash flow statement and the segment information are revised in accordance with the new requirements of these new and revised SSAPs. Accordingly, comparative amounts in condensed consolidated cash flow statement and segment information have been restated to conform with the current period presentation.

SSAP 33 prescribes the basis for reporting information about discontinuing/discontinued operations. The impact of this SSAP is the inclusion of significant additional disclosures which are set out in note 5 to the condensed interim financial statements.

The adoption of the other new and revised SSAPs has no significant effect to the results of the Group in current and prior periods.

— 84 —

i100 Limited

APPENDIX I

FINANCIAL INFORMATION OF THE i100 GROUP

(a) Business segments (Unaudited)	Communication	Hardware, Drainage, plumbing Wireless solutions	Sanitary fixtures industrial and and engineering communication consultancy Corporate	and fittings consumer products contracting services business services Internet operations and other Eliminations Consolidated	(Discontinued) (Discontinued) (Discontinued)	For six months For six months For six months For six months For six months For six months For six months For six months For six months	ended 30th June, ended 30th June, ended 30th June, ended 30th June, ended 30th June, ended 30th June, ended 30th June, ended 30th June, ended 30th June,	2002 2001 2002 2001 2002 2001 2002 2001 2002 2001 2002 2001 2002 2001 2002 2001 2002 2001	HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000	Segment revenue:	Sales to external customers 38,860 32,863 20,258 22,019 9,152 23,215 — — 572 8,063 — 672 — — — — 68,842 86,832	Intersegment sales 26 27 — — — — — — 437 1,557 — — — — (463) (1,584) — —	Other revenue 714 984 369 134 — — — — — 52 — — — 295 (312) (17) 771 1,448	Total revenue 39,600 33,874 20,627 22,153 9,152 23,215 — — 1,009 9,672 — 672 — 295 (775) (1,601) 69,613 88,280	Segment results 443 (16,985) (926) (2,212) (1,907) (5,756) (9,931) (2,941) (1,995) (9,554) (312) (13,520) (11,997) (24,480) (436) (1,267) (27,061) (76,715)	Interest income and unallocated gains 1,525 2,363	Provision for loans to an associate (13,703) —	Impaired goodwill of an associate (48,807) —	Loss on discontinued operations (4,616) —	Loss from operating activities (92,662) (74,352)	Finance costs (50) (409)	Share of profit/(loss) of:	— Jointly-controlled entities — — — — — — (30) — — — — — (31) (5) — — (61) (5)	— Associate — — — — — — — — — — — — (13,882) 12,406 — — (13,882) 12,406	Loss before tax (106,655) (62,360)	Tax 310 (642)

— 85 —

i100 Limited

APPENDIX I

FINANCIAL INFORMATION OF THE i100 GROUP

Communication	Hardware, Drainage, plumbing Wireless solutions	Sanitary fixtures industrial and and engineering communication consultancy Corporate	and fittings consumer products contracting services business services Internet operations and other Eliminations Consolidated	(Discontinued) (Discontinued) (Discontinued)	For six months For six months For six months For six months For six months For six months For six months For six months For six months	ended 30th June, ended 30th June, ended 30th June, ended 30th June, ended 30th June, ended 30th June, ended 30th June, ended 30th June, ended 30th June,	2002 2001 2002 2001 2002 2001 2002 2001 2002 2001 2002 2001 2002 2001 2002 2001 2002 2001	HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000	Loss before minority interests (106,345) (63,002)	Minority interests (443) 262	Net loss from ordinary activities	attributable to shareholders (106,788) (62,740)	(b) Geographical segments (Unaudited)	Elsewhere in	Hong Kong the PRC Eliminations Consolidated	For six months For six months For six months For six months	ended 30th June, ended 30th June, ended 30th June, ended 30th June,	2002 2001 2002 2001 2002 2001 2002 2001	HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000	Segment revenue:	Sales to external customers 63,285 74,207 5,557 12,625 — — 68,842 86,832	Segment results: (23,886) (68,425) (2,713) (7,520) (462) (770) (27,061) (76,715)

— 86 —

i100 Limited

FINANCIAL INFORMATION OF THE i100 GROUP

APPENDIX I

3. OTHER REVENUE AND GAINS

	Six months ended 30th June,	Six months ended 30th June,
	2002	2001
	(Unaudited)	(Unaudited)
	HK$’000	HK$’000
Rental income	251	874
Interest income	1,525	2,363
Others	520	574
	2,296	3,811

4. LOSS FROM OPERATING ACTIVITIES

The Group’s loss from operating activities is arrived at after charging/(crediting):

	Six months ended	30th June,
	2002	2001
	(Unaudited)	(Unaudited)
	HK$’000	HK$’000
Amortisation of goodwill	—	59
Deficit arising from revaluation of leasehold land and buildings	158	1,394
Deficit arising from revaluation of investment properties	350	830
Depreciation	4,906	4,741
Impaired goodwill of an associate	48,807	—
Impairment loss of fixed assets	—	5,940
Information Technology business operating costs#	13,141	38,942
Loss on discontinued operations	4,616	—
Loss on disposal of fixed assets	129	1,425
Provision for diminution in value of an investment property	—	4,000
Provision/(write back of provision) for doubtful debts	(1,278)	519
Provision for loans to an associate	13,703	—
Stock provision (included in cost of sales)	129	6,311

# This amount included depreciation of HK$2,984,000 (2001: HK$2,658,000), impairment loss of fixed assets of nil (2001: HK$5,940,000) and loss on disposal of fixed assets of HK$59,000 (2001: HK$1,014,000) as disclosed above.

5. DISCONTINUED OPERATIONS

(a) Disposal of the Group’s entire equity interest in Acme Sanitary Engineering Company Limited (“ASE”)

On 4th May, 2002, Acme Sanitary Ware Company, Limited (“ASW”) (an indirect wholly-owned subsidiary) entered into a sale and purchase agreement with an independent third party for the disposal of ASW’s entire 100% equity interest in ASE (a wholly-owned subsidiary of ASW) at a consideration of HK$2. This transaction was completed during the period and upon which the Group’s business for provision of drainage, plumbing and engineering contracting services was then discontinued.

— 87 —

i100 Limited

FINANCIAL INFORMATION OF THE i100 GROUP

APPENDIX I

(b) Disposal of the Group’s entire equity interest in Acme Landis Operations Holdings Limited (“ALOH”)

On 29th May, 2002, the Company entered into a share acquisition agreement with an independent third party for the disposal of the Group’s entire 100% equity interest in ALOH at a consideration of HK$1. This transaction was completed during the period and upon which ALOH ceased to be a subsidiary of the Company and the Group’s businesses relating to the distribution of sanitary fixtures and fittings, a range of hardware, industrial and consumer products were discontinued.

The discontinuation of the Group’s businesses in the distribution of sanitary fixtures and fittings, a range of hardware, industrial and consumer products and the provision of drainage, plumbing and engineering contracting services is consistent with the Group’s strategy to concentrate on its wireless communication business.

The turnover, other revenue, expenses and results from the ordinary operations of ALOH and its subsidiaries (the “ALOH Group”) analysed by business segments for the period from 1st January, 2002 up to the date of disposal are as follows. Comparative information is included in accordance with SSAP 33 “Discontinuing Operations”.

				Hardware,	plumbing
	Sanitary			and industrial and		Drainage,	engineering
	fixtures and fittings			consumer	products	contracting services
	For the six		months	For the six months		For the six months
	ended 30th June,			ended 30th June,		ended 30th June,
	2002		2001	2002	2001	2002	2001
	(Unaudited)	(Unaudited)		(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)
	HK$’000		HK$’000	HK$’000	HK$’000	HK$’000	HK$’000
TURNOVER	38,886		32,890	20,258	22,019	9,152	23,215
Cost of sales	(26,612)		(26,798)	(14,308)	(16,210)	(9,380)	(25,455)
Gross profit	12,274		6,092	5,950	5,809	(228)	(2,240)
Other revenue	1,326		1,934	513	573	—	131
Selling and distribution costs	(4,353)		(7,186)	(1,622)	(1,877)	—	—
Administrative expenses	(9,623)		(11,925)	(5,117)	(5,338)	(1,679)	(3,516)
Other operating income less
expenses	1,659		(950)	(506)	(940)	—	—
Loss on disposal of a subsidiary	(6,355)		—	—	—	—	—
LOSS FROM OPERATING
ACTIVITIES	(5,072)		(12,035)	(782)	(1,773)	(1,907)	(5,625)
Finance costs	(171)		(1,173)	(9)	(78)	(127)	(374)
LOSS BEFORE TAX	(5,243)		(13,208)	(791)	(1,851)	(2,034)	(5,999)
Tax	(29)		(91)	(1)	369	—	—
LOSS BEFORE MINORITY
INTERESTS	(5,272)		(13,299)	(792)	(1,482)	(2,034)	(5,999)
Minority interests	(443)		43	—	—	—	—
NET LOSS FROM ORDINARY
ACTIVITIES ATTRIBUTABLE
TO SHAREHOLDERS	(5,715)		(13,256)	(792)	(1,482)	(2,034)	(5,999)

— 88 —

i100 Limited

APPENDIX I

FINANCIAL INFORMATION OF THE i100 GROUP

FINANCE COSTS

	Six months	ended 30th June,
	2002	2001
	(Unaudited)	(Unaudited)
	HK$’000	HK$’000
Interest on bank loans and overdrafts wholly repayable within one year or on
demand	50	409
TAX
	Six months	ended 30th June,
	2002	2001
	(Unaudited)	(Unaudited)
	HK$’000	HK$’000
Group:
Hong Kong profits tax	(189)	(114)
Overprovision in prior years	159	392
	(30)	278
Share of tax attributable to an associate	340	(920)
Tax credit/(charge) for the period	310	(642)

7. TAX

Hong Kong profits tax has been provided at the rate of 16% (2001: 16%) on the estimated assessable profits arising in Hong Kong during the period.

8. LOSS PER SHARE

The calculation of basic loss per share is based on the net loss from ordinary activities attributable to shareholders for the period of HK$106,788,000 (2001: HK$62,740,000) and the weighted average of 1,016,317,444 ordinary shares (2001: weighted average of 1,001,358,767 ordinary shares) in issue during the period.

The diluted loss per share amounts for the periods ended 30th June, 2002 and 30th June, 2001 have not been shown as the share options outstanding during the periods had an anti-dilutive effect on the basic loss per share for the periods.

9. INTERIM DIVEDEND

The directors of the Company do not recommend the payment of an interim dividend for the year ending 31st December, 2002 (2001: Nil).

10. LOAN TO ACME LANDIS OPERATIONS HOLDINGS LIMITED (“ALOH”)

The loan to ALOH is secured by a pledge given by the purchaser of ALOH in respect of 100 million shares of the Company. The loan is interest-free and the principal of the loan will be reduced upon receipt of repayment from ALOH, or by the amount of net proceeds of disposal of secured shares, or upon the disposal of the last remaining shares when the outstanding loan has not been repaid, the principal shall be reduced to zero.

— 89 —

i100 Limited

FINANCIAL INFORMATION OF THE i100 GROUP

APPENDIX I

11. TRADE RECEIVABLES

The Group grants credit periods of up to 90 days to its customers. An aged analysis of the trade receivables as at the balance sheet, based on invoice date, is as follows:

	30th June,	31st December,
	2002	2001
	(Unaudited)	(Audited)
	HK$’000	HK$’000
Current	3	8,641
1-3 months	76	12,926
Over 3 months	170	18,216
	249	39,783
Bad debts provision	—	(15,744)
	249	24,039
TRADE PAYABLES AND ACCRUALS
	30th June,	31st December,
	2002	2001
	(Unaudited)	(Audited)
	HK$’000	HK$’000
Trade and bills payables	332	16,482
Other payables and accruals	4,205	13,819
Due to contract customers	—	3,059
Customer deposits	—	1,756
	4,537	35,116

12. TRADE PAYABLES AND ACCRUALS

An aged analysis of trade and bills payables as at the balance sheet date, based on invoice date, is as follows:

	30th June,	31st December,
	2002	2001
	(Unaudited)	(Audited)
	HK$’000	HK$’000
Current	—	6,371
1-3 months	—	4,956
Over 3 months	332	5,155
	332	16,482

— 90 —

i100 Limited

FINANCIAL INFORMATION OF THE i100 GROUP

APPENDIX I

13. INTEREST-BEARING BANK LOANS AND OVERDRAFTS

	30th June,	31st December,
	2002	2001
	(Unaudited)	(Audited)
	HK$’000	HK$’000
Bank loans and overdrafts — secured	—	4,326
Bank overdrafts repayable within one year or on demand	—	—
Bank loans repayable within one year	—	4,326
	—	4,326
Portion classified as current liabilities	—	(4,326)
Long term portion	—	—
SHARE CAPITAL
	30th June,	31st December,
	2002	2001
	(Unaudited)	(Audited)
	HK$’000	HK$’000
Authorised:
3,000,000,000 (2001: 3,000,000,000) ordinary shares of HK$0.10 each	300,000	300,000
Issued and fully paid
1,101,873,000 (2001: 1,001,873,000) ordinary shares of HK$0.10 each	110,187	100,187

14. SHARE CAPITAL

A summary of the movements in the issued share capital of the Company during the period is as follows:

		Issued and
	Number of	fully paid
	ordinary shares	(Unaudited)
		HK$’000
At 1st January, 2002	1,001,873,000	100,187
Shares issued during the period	100,000,000	10,000
At 30th June, 2002	1,101,873,000	110,187

On 4th June, 2002, i100 Capital Corporation, a substantial shareholder of the Company, placed 124 million shares of the Company to more than six independent professional and/or institutional investors at a price of HK$0.3 per share (“Placing Price”). The Placing Price represented a discount of approximately 24.1% to the closing price of HK$0.395 per share as quoted on The Stock Exchange of Hong Kong Limited on 3rd June, 2002.

— 91 —

i100 Limited

APPENDIX I

FINANCIAL INFORMATION OF THE i100 GROUP

On the same date, i100 Capital Corporation agreed to subscribe for 100 million new shares issued by the Company at the price equal to the Placing Price less all expenses incurred in connection with the private placement. The new shares issued represented approximately 10% of the Group’s issued share capital immediately before the private placement and approximately 9.1% of the enlarged issued share capital. The net proceeds of the subscription of approximately HK$29 million are planned to be used for development in wireless data service and as general working capital of the Group. All shares issued rank pari passu with the existing shares in issue in all respects.

15. CAPITAL COMMITMENTS

	30th June,	31st December,
	2002	2001
	(Unaudited)	(Audited)
	HK$’000	HK$’000
Capital commitments contracted for:
Capital injection related to the Group’s interests in jointly-controlled
entities and non wholly-owned subsidiaries	24,238	24,238

Save as disclosed above, the Group had no other significant capital commitments at the balance sheet date.

16. PLEDGE OF ASSETS

As at 30th June, 2002, the Company and the Group had no pledged assets.

The pledge of assets for banking facilities granted to the Group as set out in the audited financial statements for the year ended 31st December, 2001 were all owned by the ALOH Group which was disposed of by the Company during the period.

17. CONTINGENT LIABILITIES

	30th June,	31st December,
	2002	2001
	(Unaudited)	(Audited)
	HK$’000	HK$’000
Bank guarantees given to secure general banking facilities
granted to ALOH Group	87,100	—

As the ALOH Group was disposed of by the Company during the period, the above bank guarantees given by the Company will be released on or before 31st December, 2002.

Save as disclosed above, the Group had no other significant contingent liability at the balance sheet date.

— 92 —

i100 Limited

FINANCIAL INFORMATION OF THE i100 GROUP

APPENDIX I

18. RELATED PARTY TRANSACTIONS

During the period, the Group had the following material transactions with related companies:

		Six months	ended 30th June,
		2002	2001
		(Unaudited)	(Unaudited)
	Notes	HK$’000	HK$’000
Office rental expenses paid to Avon Limited	(i)	1,282	1,386
Warehouse rental expenses paid to:	(i)
Come Trend Limited		200	270
Chung Yuen Electrical Company Limited		200	240
Warehouse rental income received from	(i)
Chung Yuen Electrical Company Limited		100	120
Purchase of an upgraded web content management system
from Asiaweb Technologies Limited	(ii)	—	1,807

Notes:

(i) The rental expenses and income were determined by the directors by reference to open market rentals, prevailing at the times when the tenancy agreements were entered into.
(ii) Asiaweb Technologies Limited, is a wholly-owned subsidiary of Asiaweb ASP Limited, an associate of the Group. Last year’s purchases were carried out at prices and terms comparable with those charged by independent third party suppliers of the Group.

— 93 —

i100 Limited

FINANCIAL INFORMATION OF THE i100 GROUP

APPENDIX I

19. DISPOSAL OF SUBSIDIARIES

During the period, the Group disposed of its entire equity interests in ASE and ALOH. Further details are set out in note 5 to the interim financial statements.

The following summarises the effect of the disposals:

	Six months ended
	30th June, 2002
	(Unaudited)
	HK$’000
Total assets	98,503
Total liabilities	(92,588)
Minority interests	(1,272)
Net assets disposed of	4,643
Release of goodwill	(27)
Loss on disposal of subsidiaries	(4,616)
	—
Net outflow of cash and cash equivalents in respect of
disposal of subsidiaries:
Cash consideration	—
Cash and cash equivalents disposed of	(160)
	(160)

The total cash consideration for the disposal of subsidiaries was HK$3.

The results of the subsidiaries disposed of during the period are set out in note 5 to the interim financial statements.

The subsidiaries disposed of during the period contributed HK$5,062,000 to the Group’s net operating cash outflow, received HK$766,000 in respect of the net cash inflow from investing activities and contributed HK$1,416,000 to net cash inflow from financing activities.

20. APPROVAL OF THE INTERIM FINANCIAL STATEMENTS

The unaudited condensed consolidated interim financial statements were approved and authorised for issue by the Board of Directors on 23rd September, 2002.

— 94 —

i100 Limited

FINANCIAL INFORMATION OF THE i100 GROUP

APPENDIX I

PRO FORMA UNAUDITED ADJUSTED CONSOLIDATED NET TANGIBLE ASSET VALUE OF THE i100 GROUP

The following statement of pro forma unaudited adjusted consolidated net tangible assets of the i100 Group is based on the audited consolidated net assets of the i100 Group as at 31st December, 2001 and adjusted as follow:

Audited consolidated net tangible assets of the i100 Group
as at 31st December, 2001
Unaudited net loss from ordinary activities attributable to
Shareholders for the six months ended 30th June, 2002
as shown in the interim report
Net proceeds arising from issue of new shares in June 2002
Movements in other reserves from 1st January, 2002 to
30th June, 2002 as shown in the interim report
Share of exchange fluctuation reserve of an associate
Deficit arising on the revaluation of the i100 Group’s
leasehold land and buildings
Release of goodwill from reserve in respect of impairment of
an investment in an associate
Release of reserves upon disposal of subsidiaries
Pro forma unaudited adjusted consolidated net tangible assets of
the i100 Group as at 30th June, 2002
Pro forma unaudited adjusted consolidated net tangible assets value
per Share in issue on the Latest Practicable Date (Note)

HK$’000
126,853
(106,788)
27,481
(44)
(37)
48,807
(27)
96,245
HK$0.087

Note: Based on the total number of 1,101,873,000 Shares in issue as at the Latest Practical Date.

— 95 —

i100 Limited

FINANCIAL INFORMATION OF THE i100 GROUP

APPENDIX I

STATEMENT OF INDEBTEDNESS

As at the close of business on 31st December, 2002, being the latest practicable date for the purpose of this indebtedness statement prior to the printing of this document, the i100 Group had no outstanding bank borrowings.

As at 31st December, 2002, the i100 Group had contingent liabilities of approximately HK$87.1 million in respect of bank guarantees given to secure banking facilities granted to certain subsidiaries which were disposed of by the i100 Group in May 2002.

Save as aforesaid and apart from intra-group liabilities and the litigation as set out under the section headed “Litigation” in Appendix II to this document, no companies within the i100 Group had outstanding at the close of business on 31st December, 2002 any loan capital issued and outstanding or agreed to be issued, bank overdrafts, loans or other similar indebtedness, obligation under finance lease contracts, liabilities under acceptances, acceptance credits, debentures, mortgages, charges, finance leases or hire purchase commitments, guarantees or other material contingent liabilities.

Save as the release of bank guarantees of approximately HK$87.1 million by the relevant banks subsequent to the close of business on 31st December, 2002, the Directors have confirmed that there has been no material changes in the indebtedness and contingent liabilities of the i100 Group since 31st December, 2002.

MATERIAL CHANGES

Save as disclosed in i100’s interim report 2002, an extract of which is set out on pages 80 to 94 under the paragraph headed “Unaudited financial statements of the i100 Group for the six months ended 30th June, 2002” in this Appendix and a provision that may be made against the loan to Acme Landis amounting to HK$53 million as at 30th June, 2002 (details of which are set out in the section headed “Information on the i100 Group” under the letter from the Board), the Directors are not aware of any circumstances or events that may give rise to a material change in the financial or trading condition or prospects of the i100 Group since 31st December, 2001, being the date to which the latest published audited financial statements of the i100 Group were made up.

— 96 —

i100 Limited

GENERAL INFORMATION

APPENDIX II

1. RESPONSIBILITY STATEMENT

This document includes particulars given in compliance with the Takeovers Code for the purpose of giving information with regard to the i100 Group and the Offers. The information contained herein relating to the i100 Group has been supplied by the Directors, who jointly and severally accept full responsibility for the accuracy of the information contained in this document, other than that relating to Landmark Profits or Easyknit, and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, their opinions expressed in this document have been arrived at after due and careful consideration and there are no other information, other than that relating to Landmark Profits or Easyknit, not contained in this document, the omission of which would make any statement in this document misleading.

The information contained in this document relating to Landmark Profits, Easyknit and their respective intentions in relation to the Group has been extracted or derived from the Offer Document. The Directors jointly and severally accept full responsibility that such information has been accurately and correctly extracted from the Offer Document.

2. MARKET PRICES

The table below shows the closing prices of the Shares quoted on the Stock Exchange on (i) the last trading day for each of the six calendar months immediately preceding the Announcement; (ii) 22nd January, 2003, being the last trading day immediately preceding the Announcement; (iii) 28th February, 2003, being the last trading day in each of the calendar months during the period from the date of Announcement to the Latest Practicable Date; and (iv) the Latest Practicable Date:

	Closing price
Date	per Share
	HK$
31st July, 2002	0.076
30th August, 2002	0.087
30th September, 2002	0.082
31st October, 2002	0.115
29th November, 2002	0.099
31st December, 2002	0.054
22nd January, 2003	0.055
28th February, 2003	0.034
Latest Practicable Date	0.020

The highest and lowest closing prices per Share recorded on the Stock Exchange during the period commencing on the date falling six months prior to the date of the Announcement and ending on the Latest Practicable Date were HK$0.136 per Share on 28th October, 2002 and HK$0.02 per Share on 24th, 25th, 26th and 27th March, 2003 and the Latest Practicable Date respectively.

— 97 —

i100 Limited

GENERAL INFORMATION

APPENDIX II

3. SHARE CAPITAL

The authorised and issued share capital of i100 as at the Latest Practicable Date were as follows:

Authorised: 30,000,000,000 Shares Issued and fully paid up: 1,001,873,000 Shares as at 31st December, 2001 100,000,000 Shares issued pursuant to the subscription by i100 Capital Corporation on 18th June, 2002 — Reduction of share capital on 10th February, 2003 1,101,873,000 Shares in issue as at the Latest Practicable Date	HK$ 300,000,000 100,187,300 10,000,000 (99,168,570) 11,018,730

All Shares rank pari passu in all respects as regards to rights to dividends, voting and return of capital.

The Shares are listed and traded on the main board of the Stock Exchange. None of the Shares is listed, or dealt in, on any other stock exchange, nor is any listing of or permission to deal in Shares being, or proposed to be, sought on any other stock exchange.

Save as disclosed above, no Shares have been issued since 31st December, 2001, being the end of the last financial year of i100, and up to the Latest Practicable Date.

As at the Latest Practicable Date, there are outstanding Options granted by i100 to a director (Mr. Cheuk Ho Yeung, Gerald), management and employees of i100 to subscribe for a total of 27,248,000 Shares at exercise prices ranging between HK$0.385 per Share to HK$0.75 per Share.

Save as aforesaid, as at the Latest Practicable Date, no other Shares or securities convertible into or warrants or options to subscribe for or derivatives relating to Shares were in issue or outstanding.

4. DISCLOSURE OF INTERESTS IN THE SECURITIES OF i100

(i) Directors’ interests

As at the Latest Practicable Date, the interests of the Directors in Shares or in the issued share capital of i100’s associated corporations (within the meaning of the SDI Ordinance) or securities convertible into or warrants or options to subscribe for or derivatives relating to Shares which require notification to i100 and the Stock Exchange under Section 28 of the SDI Ordinance and including interests in which a Director has taken under Section 31 or Part I of the Schedule to the SDI Ordinance or required to be entered into the register maintained by i100 under Section

— 98 —

i100 Limited

APPENDIX II

GENERAL INFORMATION

29 of the SDI Ordinance or required to be notified to i100 and the Stock Exchange pursuant to the Model Code for Securities Transaction by Directors of Listed Companies under the Listing Rules were as follows:

			% of issued
	Number of	Nature of	share capital	Number of
Name of Director(s)	Shares	interest	of i100	Options
Cheuk, Ho Yeung
Gerald	N/A	N/A	N/A	25,000,000
Koon Wing Yee (Note)	609,069,460	Family	55.28	N/A
Lui Yuk Chu (Note)	609,069,460	Other/Family	55.28	N/A

Note: On 28th January, 2003, Landmark Profits acquired 609,000,000 Shares pursuant to the Sale and Purchase Agreement. Thereafter, as at the Latest Practicable Date, Landmark Profits has received valid acceptances of the Share Offer in respect of a total of 69,460 Shares, representing approximately 0.006% of the total issued share capital of i100. Valid acceptances up to 20th March, 2003 for 35,360 Shares have been paid in cash. Landmark Profits is a wholly-owned subsidiary of Easyknit in which Magical Profits Limited which is ultimately owned by the Magical 2000 Trust (the beneficiaries of which include, Ms. Lui Yuk Chu and her family members), is interested in approximately 36.74% of the issued shares of Easyknit. Mr. Koon Wing Yee, being the spouse of Ms. Lui Yuk Chu, is interested in 609,069,460 Shares by virtue of the SDI Ordinance.

Save as aforesaid, as at the Latest Practicable Date, none of the Directors had any interests in Shares or securities convertible into or warrants or options to subscribe for or derivatives relating to Shares which require notification to i100 and the Stock Exchange under Section 28 of the SDI Ordinance and including interests in which a Director has taken under Section 31 or Part I of the Schedule to the SDI Ordinance or required to be entered into the register maintained by i100 under Section 29 of the SDI Ordinance or required to be notified to i100 and the Stock Exchange pursuant to the Model Code for Securities Transaction by Directors of Listed Companies under the Listing Rules or which are required, pursuant to the Takeovers Code, to be disclosed in this document.

(ii) Substantial shareholders’ interests

As at the Latest Practicable Date, the register of substantial Shareholders maintained by i100 under Section 16(1) of the SDI Ordinance showed that, other than the interests disclosed above in respect of certain Directors, the following Shareholder had interests of 10 per cent. or more in the issued ordinary share capital of i100:

			% of issued
		Number of	share capital
Name		Shares	of i100
Landmark	Profits	609,069,460	55.28

— 99 —

i100 Limited

APPENDIX II

GENERAL INFORMATION

Save as disclosed above, according to the above-mentioned register of interests in the Shares and so far as the Directors were aware, as at the Latest Practicable Date, there were no other persons who, directly or indirectly, had interests of 10 per cent. or more in the issued share capital of i100.

5. DISCLOSURE OF INTERESTS IN THE SECURITIES OF LANDMARK PROFITS AND EASYKNIT

As at the Latest Practicable Date, the i100 Group does not have any interest in any shares or options or any other convertible securities, warrants or derivatives in respect of the shares of Landmark Profits or any other companies in the Easyknit Group.

Set out below are the interests of the Directors in the share capital of Easyknit (“Easyknit Shares”):

	Number of		% of issued share
Name of Director(s)	Easyknit Shares	Nature of interest	capital of Easyknit
Lui Yuk Chu (Note)	324,216,452	Other/Family	36.74
Koon Wing Yee (Note)	324,216,452	Family	36.74
Tsang Yiu Kai	98,175	Personal	0.01
Leung Siu Mei	4,440	Personal	negligible
Louie Siu Kuen	40,025	Personal	negligible

Note : These 324,216,452 Easyknit Shares are registered under Magical Profits Limited, which is ultimately owned by The Magical 2000 Trust, the beneficiaries of which include Ms. Lui Yuk Chu and members of her family. Ms. Lui Yuk Chu is the spouse of Mr. Koon Wing Yee.

Save as disclosed above, none of the Directors had the beneficial interests in the share capital of Landmark Profits or any other company in the Easyknit Group.

6. DISCLOSURE OF DEALINGS IN THE SHARES

Set out below are the dealings in the Shares by Mr. Tsang Yiu Kai and the details relating to the Acquisition during the period commencing on the date falling six months prior to the offer period and ending on the Latest Practicable Date:

Dealings by Mr. Tsang Yiu Kai

			No. of Shares	Price per
Date			disposed of	Share
16th	October,	2002	50,000	HK$0.123

— 100 —

i100 Limited

GENERAL INFORMATION

APPENDIX II

Acquisition of Sale Shares by Landmark Profits

	No. of Shares	Price per
Date	acquired	Share
28th January, 2003 (Note 1)	609,000,000	HK$0.01
5th March, 2003 (Note 2)	6,000	HK$0.01
6th March, 2003 (Note 2)	1,360	HK$0.01
12th March, 2003 (Note 2)	4,000	HK$0.01
17th March, 2003 (Note 2)	20,000	HK$0.01
20th March, 2003 (Note 2)	4,000	HK$0.01
25th March, 2003 (Note 2)	18,100	HK$0.01
26th March, 2003 (Note 2)	10,000	HK$0.01
27th March, 2003 (Note 2)	6,000	HK$0.01

Disposal of Sale Shares by i100 Holdings Corporation, i100 Capital Corporation and Asia Pacific Growth Fund III, L.P. (“APGF”)

		No. of Shares	Price per
	Date	disposed of	Share
i100 Holdings Corporation (Note 3)	28th January, 2003	137,000,000	HK$0.01
i100 Capital Corporation (Note 3)	28th January, 2003	317,000,000	HK$0.01
APGF	28th January, 2003	155,000,000	HK$0.01

Notes:

On 28th January, 2003, Landmark Profits acquired 609,000,000 Shares pursuant to the Sale and Purchase Agreement. Landmark Profits is a wholly-owned subsidiary of Easyknit in which Magical Profits Limited which is ultimately owned by the Magical 2000 Trust (the beneficiaries of which include, Ms. Lui Yuk Chu and her family members), is interested in approximately 36.74% of the issued shares of Easyknit. Mr. Koon Wing Yee, being the spouse of Ms. Lui Yuk Chu, is interested in 609,000,000 Shares by virtue of the SDI Ordinance.
As at the Latest Practicable Date, Landmark Profits has received valid acceptances of the Share Offer in respect of a total of 69,460 Shares, representing approximately 0.006% of the total issued share capital of i100. Valid acceptances up to 20th March, 2003 for 35,360 Shares have been paid in cash.
Mr. Cheuk Ho Yeung, Gerald, Mr. Kan Siu Kei, Laurie and Mr. Vong Tat Ieong, David, respectively hold 10%, 50% and 40% of the equity interests in i100 Holdings Corporation and approximately 30.6% beneficial interests in i100 Capital Corporation. The remaining of approximately 69.4% interests in i100 Capital Corporation is held by Asia Pacific Growth Fund III L.P..

Save as disclosed above, none of the Directors, i100, Easyknit, Landmark Profits and parties acting in concert with any of them has dealt for value in any Shares or Options, or any other convertible securities, warrants or derivatives in respect of the Shares during the period commencing on the date falling six months prior to the offer period and ending on the Latest Practicable Date.

— 101 —

i100 Limited

GENERAL INFORMATION

APPENDIX II

7. DISCLOSURE OF DEALINGS IN THE SECURITIES OF LANDMARK PROFITS AND EASYKNIT

During the date falling six months prior to the offer period and ending on the Latest Practicable Date, none of i100 nor the Directors had dealt for value in any shares or options or any other convertible securities, warrants or derivatives in respect of the shares in the share capital of Landmark Profits or any other company in the Easyknit Group.

8. LITIGATION

On 5th February, 2003 and 22nd February, 2003, a writ and an amended writ were issued against i100 Wireless (Hong Kong) Limited, a wholly-owned subsidiary of i100, by Right Choice Development Limited (a landlord of the premises as stated below) claiming a total sum of HK$596,860.00 being the arrears of rental, management fees and rates plus any subsequent arrears of rent, management fees and rates until the date of delivery of vacant possession in relation to an alleged breach of a tenancy agreement for the premises known as Shop Nos. 7 and 8 on Ground Floor and the whole First Floor of Hang Lung Mansion, Nos. 578-580 Nathan Road, Nos. 44-46 Dundas Street, Kowloon, Hong Kong. An acknowledgement of service has been filed in respect of the claim. On 17th March, 2003, the vacant possession of the premises has been duly delivered to the landlord. As at the Latest Practicable Date, i100 Group intends to contest the legal proceedings with defence.

Save as disclosed above, neither i100 nor any of its subsidiaries is engaged in any litigation of material importance and there is no litigation of material importance known to the Directors to be pending or threatened by or against i100 or any of its subsidiaries.

9. MATERIAL CONTRACTS

Save for the Sale and Purchase Agreement and Escrow Agreement, the following contracts (not being contracts in the ordinary course of business) have been entered into by members of the i100 Group within the two years preceding the date of this document and are or may be material:

(a) Sale and Purchase Agreement dated 22nd June, 2001 entered into between Marrick Corporation (formerly, a wholly-owned subsidiary of i100) and Esna Park Limited for the disposal by the i100 Group of its entire equity interest in Dai Fong Building Supplies (Hong Kong) Limited (“Dai Fong”) at a consideration of HK$11,000,000.
(b) Placing Agreement dated 4th June, 2002 relating to the placing of 124 million Shares in the capital of i100 by i100 Capital Corporation, a substantial shareholder of i100 to more than six independent professional and/or institutional investors at a price of HK$0.3 per share.
(c) Top-Up Subscription Agreement dated 4th June, 2002 entered into between i100 and i100 Capital Corporation as subscriber relating to the subscription of 100 million new Shares.
(d) Joint Venture Agreement dated 3rd September, 2001 entered into between The Leadcorp, Inc., Stockpro Investments Limited and i100 Entertainment Limited (a wholly-owned subsidiary of i100) in relation to establishment and operation of a joint venture company to engage in wireless and online entertainment business.

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i100 Limited

GENERAL INFORMATION

APPENDIX II

(e) Share Acquisition Agreement dated 29th May, 2002 entered into between i100 and Mountial Investment Co. Ltd (“Mountial”) relating to disposal of the entire issued share capital of Acme Landis Operations Holdings Limited (“ALOH”), formerly being a wholly-owned subsidiary of i100, for a consideration of HK$1.00.
(f) Deed of Loan Restructure dated 29th May, 2002 entered into between ALOH, Mountial and i100 for amending the terms of the original loan by i100 to ALOH arising pursuant to an asset transfer agreement dated 20th May, 2000.
(g) Deed of Equitable Mortgage of Shares dated 29th May, 2002 entered into between i100 and Mountial relating to the pledge of 100 million shares by Mountial in the capital of i100 as security for the repayment of the outstanding loan as set out under the Deed of Loan Restructure dated 29th May, 2002.
(h) An agreement dated 2nd July, 2002 entered into between Asiaweb ASP Limited as vendors, being an associate of i100, and Yue Man Yee as purchaser relating to sale and purchase of shares in Asiaweb Technologies Limited, Asiaweb Technologies (Singapore) Pte Ltd, Iborne System Limited and Abaca Technology Limited in total consideration of HK$3 and SG$1.
(i) Sale and Purchase Agreement dated 23rd August, 2002 entered into between Digital Empires Company Limited as Vendor, solution100 Limited as purchaser (a wholly-owned subsidiary of i100), Chung Wai Keung, David, Chan Chun Hung, Addison, Lo Yuet Sun, Keymaster Management Limited, Time Matrix Holdings Limited, Major Circle Limited (collectively “Vendor’s Guarantors”) and i100 relating to acquisition of the entire share capital of Digital Empires Company Limited in consideration of a sum of HK$502,500.00 and the allotment and issued to the Vendor’s Guarantors credited as fully paid a total of 2,500 shares of HK$1.00 each in the capital of solution100 Limited (a wholly-owned subsidiary of i100).

10. SERVICE CONTRACTS

The service contract between Mr. Cheuk Ho Yeung, Gerald (“Mr Cheuk”) and the Company was expired on 20th January, 2003. The aggregate annual remuneration payable under such service contract is approximately HK$2,700,000.00 (inclusive of housing benefit).

On 1st February, 2003, Mr. Cheuk has entered into a new service contract with i100 Wireless (Hong Kong) Limited (“i100 Wireless”), a wholly-owned subsidiary of the Company for a term of three years commencing from 1st February, 2003, renewable for a further term of three years, unless and until terminated by i100 Wireless or by Mr. Cheuk by giving to the other party one months’ prior notice in writing. Under the new contract, the aggregate amount of fixed remuneration payable to Mr. Cheuk for the year ending 31st December, 2003 are estimated to be approximately HK$1,210,000.00 and Mr. Cheuk is not entitled to any variable remuneration or other benefits.

Save as disclosed above, none of the Directors has entered into any service contract with i100 or any of its subsidiaries or associated companies which have more than 12 months to run, or which have been entered into or amended within six months before the commencement of the Offers.

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i100 Limited

GENERAL INFORMATION

APPENDIX II

11. MISCELLANEOUS

As at the Latest Practicable Date and so far as the Directors are aware:

(i) no subsidiary of i100, pension fund of i100 or of a subsidiary of i100 nor adviser to i100 as specified in class (2) of the definition of associate in the Takeovers Code (excluding exempt principal traders) held any Shares or Options or any other convertible securities, warrants, derivatives in respect of the Shares;
(ii) no subsidiary of i100, pension fund of i100 or of a subsidiary of i100 nor adviser to i100 as specified in class (2) of the definition of associate in the Takeovers Code (excluding exempt principal traders) has dealt for value in any Shares or Options, or any other convertible securities, warrants or derivatives in respect of the Shares during the offer period and ending with the Latest Practicable Date prior to the posting of this document;
(iii) no Shares were managed on a discretionary basis by fund managers connected with i100;
(iv) no person who owned or controlled Shares had any arrangement of the kind referred to in Note 8 to Rule 22 of the Takeovers Code with i100 or with any person who is an associate of i100 by virtue of classes (1), (2), (3) or (4) of the definition of “associate” in the Takeovers Code;
(v) no benefit (other than statutory compensation) will be given to any Director as compensation for loss of office or otherwise in connection with the Offers;
(vi) no agreement, arrangement or understanding exists whereby any securities to be acquired pursuant to the Offers will be transferred to any other persons;
(vii) none of the Directors has any direct or indirect interests in any assets acquired or disposed of by or leased to any members of the i100 Group, or proposed to be acquired or disposed of by or leased to any member of the i100 Group within the two years immediately preceding the date of this document;
(viii)there is no contract or arrangement subsisting at the date of this document in which a Director is materially interested and which is significant in relation to the business of the i100 Group;
(ix) there was no agreement or arrangement between Easyknit or Landmark Profits and any of the Directors or any other person, or between any Director and any other person, which are conditional upon the outcome of the Offers or otherwise connected with the Offers; and
(x) none of the Directors has any material personal interest in any material contract entered into by Landmark Profits subsisting at the date of this document.

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i100 Limited

GENERAL INFORMATION

APPENDIX II

12. CONSENTS AND QUALIFICATION

Each of Barits and CSC Asia has given and has not withdrawn its written consent to the issue of this document with the inclusion herein of its letter and references to its name in the form and context in which they respectively appear.

As at the Latest Practicable Date, none of the experts named in the paragraph headed “Consents and qualitication” in this appendix, any of their respective holding companies, or any of their respective subsidiaries was beneficially interested, directly or indirectly, in any Shares, and none of them had dealt in any Shares during the date falling six months prior to the offer period and ending on the Latest Practicable Date. None of these experts has any direct or indirect interests in any assets acquired or disposed of by or leased to any members of the i100 Group, or proposed to be acquired or disposed of by or leased to any member of the i100 Group within the two years immediately preceding the date of this document.

The following are the qualifications of the experts who have given opinions or advice which are contained in this document:

Name

Qualification

Barits an investment adviser and a dealer registered under the Securities Ordinance (Chapter 333 of the Laws of Hong Kong) CSC Asia an investment adviser registered under the Securities Ordinance (Chapter 333 of the Laws of Hong Kong)

13. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection at the offices of i100 Limited at 2906 Central Plaza, 18 Harbour Road, Wanchai, Hong Kong during normal business hours up to and including 14th April, 2003:

(a) the memorandum of association and the bye-laws of i100;
(b) the annual reports of i100 for the two financial years ended 31st December, 2001;
(c) the unaudited interim results of i100 for the half year ended 30th June, 2002;
(d) the material contracts referred to in the paragraph headed “Material contracts” in this Appendix;
(e) the written consents referred to in the paragraph headed “Consents and qualification” in this Appendix;
(f) the letter of advice from Barits and CSC Asia, the text of which is set out in this document; and
(g) the service contracts referred to in the paragraph headed “Service Contracts” in this Appendix.

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i100 Limited

AI assistant

Eminence Enterprise Limited — M&A Activity 2003

49340_rns_2003-03-31_ebcbcbd5-3838-4db5-944a-ffe20c5baa22.pdf

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

i100 Limited

Landmark Profits Limited

a wholly-owned subsidiary of

EASYKNIT INTERNATIONAL HOLDINGS LIMITED

i100 Limited

Barits Securities (Hong Kong) Limited

CSC Asia Limited

CONTENTS

EXPECTED TIMETABLE

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

i100 Limited

Mandatory unconditional cash offer by Altus Capital on behalf of Landmark Profits for all the Offer Shares and outstanding Options to subscribe for Shares in i100

INTRODUCTION

LETTER FROM THE BOARD

INFORMATION ON THE OFFEROR

THE OFFERS

LETTER FROM THE BOARD

INFORMATION ON THE i100 GROUP

LETTER FROM THE BOARD

FUTURE PROSPECTS OF THE i100 GROUP

CHANGE OF BOARD COMPOSITION

MAINTAINING THE LISTING STATUS OF i100

LETTER FROM THE BOARD

PROCEDURE FOR ACCEPTANCE OF THE OFFERS

RECOMMENDATION

i100 Limited

Mandatory unconditional cash offer by Altus Capital on behalf of Landmark Profits for all the Offer Shares and outstanding Options to subscribe for Shares in i100

LETTER FROM THE INDEPENDENT DIRECTOR

Yours faithfully,

Mandatory unconditional cash offer by Altus Capital on behalf of Landmark Profits for all the Offer Shares and outstanding Options to subscribe for Shares in i100

INTRODUCTION

LETTER OF ADVICE FROM BARITS AND CSC ASIA

PRINCIPAL FACTORS AND REASONS CONSIDERED

THE SHARE OFFER

Background of i100

Financial Performance

LETTER OF ADVICE FROM BARITS AND CSC ASIA

LETTER OF ADVICE FROM BARITS AND CSC ASIA

LETTER OF ADVICE FROM BARITS AND CSC ASIA

LETTER OF ADVICE FROM BARITS AND CSC ASIA

Net asset value

LETTER OF ADVICE FROM BARITS AND CSC ASIA

Price earnings multiple and dividend yield

Share price performance and trading volume

LETTER OF ADVICE FROM BARITS AND CSC ASIA

Trading volume

LETTER OF ADVICE FROM BARITS AND CSC ASIA

Intention of Easyknit towards the future operations of the i100 Group

LETTER OF ADVICE FROM BARITS AND CSC ASIA

Recommendation on Share Offer

THE OPTION OFFER

Recommendation on Option Offer

1. SUMMARY OF FINANCIAL INFORMATION

2. AUDITED FINANCIAL STATEMENTS OF THE i100 GROUP FOR THE TWO YEARS ENDED 31ST DECEMBER, 2001

A. Consolidated profit and loss account

B. Consolidated statement of recognised gains and losses

APPENDIX I

C. Consolidated balance sheet

APPENDIX I

FINANCIAL INFORMATION OF THE i100 GROUP

APPENDIX I

FINANCIAL INFORMATION OF THE i100 GROUP

E. Consolidated cash flow statement Year ended 31st December, 2001

Notes to the financial statements

1. CORPORATE INFORMATION

APPENDIX I

FINANCIAL INFORMATION OF THE i100 GROUP

APPENDIX I

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of preparation

Basis of consolidation

Subsidiaries

Eminence Enterprise Limited M&A Activity 2003