Emperor Capital Group Ltd. — AGM Information 2005

Apr 29, 2005

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in doubt about this circular, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitors, professional accountant or other professional adviser.

If you have sold all your shares in Luks Industrial (Group) Limited, you should at once hand this circular and the enclosed proxy form to the purchaser or to the bank or stockbroker or other agent through whom the sale was effected for transmission to the purchaser.

The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing Company Limited take no responsibility for the contents of this circular, 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 circular.

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LUKS INDUSTRIAL (GROUP) LIMITED 陸氏實業（集團）有限公司

(incorporated in Bermuda with limited liability) (Stock Code: 366)

CIRCULAR ON

GENERAL MANDATE TO ISSUE SHARES AND TO REPURCHASE BY THE COMPANY OF ITS OWN SHARES AND

RE-ELECTION OF DIRECTORS

AND NOTICE OF ANNUAL GENERAL MEETING

This circular explains the General Issue Mandate and the Repurchase Mandate to be passed as ordinary resolutions and re-election of directors at the Annual General Meeting of the Company to be held at Grand Ballroom East, 2/F, Hotel Nikko Hongkong, 72 Mody Road, Tsimshatsui East, Kowloon, Hong Kong at 3:00 p.m. on 20 May 2005.

A notice convening the Annual General Meeting is set out on pages 10 to 12 of this circular and a form of proxy for use at the Annual General Meeting is enclosed together with this circular.

26 April 2005

DEFINITIONS

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

• “Annual General Meeting”

the annual general meeting of the Company be held at Grand Ballroom East, 2/F, Hotel Nikko Hongkong, 72 Mody Road, Tsimshatsui East, Kowloon, at 3:00 p.m. on 20 May 2005

• “Bye-laws”

the bye-laws of the Company

• “Company”

Luks Industrial (Group) Limited

• “Directors”

• the directors of the Company

• “Extension Mandate”

• The proposed general mandate to be sought at the Annual General Meeting to authorise the Directors to extend the General Issue Mandate and the Repurchase Mandate in the manner as set out in the notice of Annual General Meeting

• “General Issue Mandate”

• the proposed mandate to allot, issue and deal with additional Shares not exceeding 20% of the issued share capital of the Company as at the date of passing the resolution approving the said mandate

• “Latest Practicable Date”

• 22 April 2005, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained herein

• “Listing Rules”

• Rules Governing the Listing of Securities on the Stock Exchange

• “Repurchase Mandate”

• the proposed general mandate to be sought at the Annual General Meeting to authorise the Directors to repurchase Shares in the manner as set out in the notice of Annual General Meeting

• “SFO”

• the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)

• “Share(s)”

• share(s) of HK$0.01 each in the share capital of the Company

• “Shareholder(s)”

holder(s) of Share(s)

• “Stock Exchange”

The Stock Exchange of Hong Kong Limited

• “Takeovers Code”

The Hong Kong Code on Takeovers and Mergers

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LETTER FROM THE CHAIRMAN

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LUKS INDUSTRIAL (GROUP) LIMITED 陸氏實業（集團）有限公司

(incorporated in Bermuda with limited liability)

Executive Directors: Luk King Tin (Chairman) Cheng Cheung Luk Yan Fan Chiu Tat, Martin

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

Independent Non-Executive Directors: Liang Fang Liu Li Yuan Chan Yuk Tong

Principal place of business: 5/F., Cheong Wah Factory Building 39-41 Sheung Heung Road Tokwawan, Kowloon, Hong Kong

Company Secretary: Fan Chiu Tat, Martin

26 April 2005

To: the Shareholders

Dear Sir or Madam,

GENERAL MANDATE TO ISSUE SHARES AND TO REPURCHASE BY THE COMPANY OF ITS OWN SHARES AND RE-ELECTION OF DIRECTORS AND NOTICE OF ANNUAL GENERAL MEETING

INTRODUCTION

The purpose of this circular is to provide you with information with regard to the resolutions to be proposed at the Annual General Meeting relating to, among other matters:

• (a) the granting to the Directors the General Issue Mandate and the Repurchase Mandate and Extension Mandate; and

• (b) re-election of Directors.

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LETTER FROM THE CHAIRMAN

GENERAL ISSUE MANDATE

It is proposed that the General Issue Mandate be granted to the Directors to issue new Shares up to 20 per cent. of the aggregate nominal amount of Shares in issue as at the date of passing the relevant resolution. There is however no present intention for any issuance of Shares pursuant to the General Issue Mandate to be granted.

GENERAL MANDATE FOR REPURCHASE BY THE COMPANY OF ITS OWN SHARES

On 28 May 2004, a general mandate was given to the Directors to exercise all the powers of the Company to repurchase its own Shares granted in the last Annual General Meeting which will lapse at the conclusion of the forthcoming Annual General Meeting of the Company. An ordinary resolution will therefore be proposed at the Annual General Meeting to approve the grant of a general mandate to the Directors to repurchase on Stock Exchange Shares of the Company up to a maximum of 10% of the issued Shares of the Company at the date of passing the resolution.

An explanatory statement to provide Shareholders with all the information reasonably necessary for them to make an informed decision in relation to this proposed resolution as required by the Listing Rules on the Stock Exchange concerning the regulation of repurchases by companies of their own securities on the Stock Exchange is set out in the Appendix II to this circular.

GENERAL EXTENSION MANDATE

It is recommended that a new Extension Mandate be granted to the Directors permitting them, after the grant of the Repurchase Mandate to add to the General Issue Mandate any Shares representing the aggregate nominal value of the Shares in the Company repurchased pursuant to the Repurchase Mandate.

The authority conferred on the Directors by the General Issue Mandate, the Repurchase Mandate and the Extension Mandate would continue in force until the conclusion of the next annual general meeting of the Company unless it is renewed at such meeting or until revoked or varied by ordinary resolution of the Shareholders in general meeting prior to the next annual general meeting.

ANNUAL GENERAL MEETING

A notice convening the Annual General Meeting to be held on 20 May 2005 at Grand Ballroom East, 2/F, Hotel Nikko Hongkong, 72 Mody Road, Tsimshatsui East, Kowloon, Hong Kong is set out as Appendix III on pages 10 to 12 of this circular and a form of proxy for use at the Annual General Meeting is herein enclosed. Whether or not you intend to be present at the Annual General Meeting, you are requested to complete the form of proxy and return it to the Company’s principal place of business in Hong Kong in accordance with the instructions printed thereon not later than 48 hours before the time for holding the Annual General Meeting or any adjournment thereof. Completion and delivery of the form of proxy will not prevent Shareholders from attending and voting at the Annual General Meeting if they so wish.

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LETTER FROM THE CHAIRMAN

DEMAND BY POLL

Pursuant to Bye-Law 66 of the existing Bye-Laws, at any general meeting, a poll may be demanded in respect of a resolution put to the vote at the meeting:–

• (a) by the chairman of such meeting; or

• (b) by at least three members present in person (or in the case of a member being a corporation by its duly authorised representative) or by proxy for the time being entitled to vote at the meeting; or

• (c) by a member or members present in person (or in the case of a member being a corporation by its duly authorised representative) or by proxy and representing not less than one-tenth of the total voting rights of all members having the right to vote at the meeting; or

• (d) by a member or members present in person (or in the case of a member being a corporation by its duly authorised representative) or by proxy and holding shares in the Company conferring a right to vote at the meeting being shares in which an aggregate sum has been paid up equal to not less than one-tenth of the total sum paid up on all shares conferring that right.

RE-ELECTION OF DIRECTORS

Mr. Chan Yuk Tong was appointed by the Board as an independent non-executive Director since 30 September 2004. In accordance with Article 86(2) of the Bye-laws, Mr. Chan will hold office only until the Annual General Meeting and will be eligible for re-election as an independent non-executive Director of the Company at the Annual General Meeting.

In accordance with Article 87 of the Bye-laws, Mr. Luk Yan will retire by rotation and will be eligible for re-election as an executive Director of the Company at the Annual General Meeting.

Biographical details of the above Directors are set out in Appendix I to this circular.

RECOMMENDATION

The Directors consider that the granting of the General Issue Mandate, the Repurchase Mandate and the Extension Mandate and the re-election of Directors of the Company are in the best interests of the Company and Shareholders and accordingly recommend that you should vote in favour of the resolutions referred to above to be proposed at the Annual General Meeting.

Yours faithfully, By Order of the Board Luk King Tin Chairman

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BIOGRAPHICAL DETAILS OF THE DIRECTORS

APPENDIX I

This Appendix contains the biographical details of the Directors eligible to re-election at the Annual General Meeting that are required by the Listing Rules to be disclosed to enable the Shareholders to make an informed view on whether to vote for or against the resolution to be proposed at the Annual General Meeting in relation to the re-election of Directors.

Mr. Chan Yuk Tong , aged 42, was appointed as an independent non-executive Director of the Company and a member of the Company’s audit committee with effect from 30 September 2004. Mr. Chan Yuk Tong has around 20 years of experience in auditing, accounting, management consultancy and financial advisory services.

Mr. Chan Yuk Tong is a shareholder and a director of a CPA firm and a financial consulting firm in Hong Kong. He is also acting as an independent non-executive director of two other listed companies in Hong Kong, namely Daiso Microline Holdings Limited and Kam Hing International Holdings Limited. He holds a Bachelor’s degree in Commerce from the University of Newcastle in Australia. Mr. Chan Yuk Tong is also a practicing fellow member of the Hong Kong Institute of Certified Public Accountants and a member of CPA Australia.

Mr. Chan Yuk Tong does not have any interest in any Shares or underlying Shares of the Company within the meaning of Part XV of the SFO.

Mr. Chan Yuk Tong has not entered into any service contract with the Company. He is appointed for a term of one year and is subject to retirement by rotation and re-election in accordance with the Bye-laws of the Company. The director’s fee payable to Mr. Chan Yuk Tong will be fixed by the Board subject to the approval of the Shareholders in Annual General Meeting. Mr. Chan will receive a director’s fee of HK$25,000 for the year ended 31 December 2004 with reference to his responsibilities in the Company and prevailing market level of directors’ fee. Mr. Chan Yuk Tong is not connected with any Directors, senior management or substantial or controlling shareholders of the Company.

Mr. Luk Yan , aged 40, is an executive Director of the Company. He is currently responsible for the Company’s property investments and management in Vietnam. He has been with the Company for 15 years.

Mr. Luk Yan has a personal interest and a family interest of 3,370,800 Shares and 54,000 Shares respectively, of the Company as at the Latest Practicable Date.

Mr. Luk Yan has not entered into any service contract with the Company and is subject to retirement by rotation and re-election in accordance with the Bye-laws of the Company. The remuneration payable to Mr. Luk Yan will be fixed by the Board, with reference to his experience, responsibilities in the Company and prevailing market level of remuneration. Mr. Luk Yan will receive a director’s fee of HK$100,000 for the year ended 31 December 2004.

Mr. Luk Yan is a son of Mr. Luk King Tin and Madam Cheng Cheung, the Chairman and an executive Director of the Company respectively. Mr. Luk King Tin and Madam Cheng Cheung are also the substantial Shareholders of the Company.

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EXPLANATORY STATEMENT ON REPURCHASE OF THE COMPANY’S SHARES

APPENDIX II

This explanatory statement contains all the information required pursuant to rule 10.06(1)(b) and other relevant provisions of the Listing Rules.

THE SHARE REPURCHASE RULES

The Listing Rules permit companies whose primary listings are on the Stock Exchange to repurchase their fully-paid up shares on the Stock Exchange subject to certain restrictions. In this regard, the definition of “Shares” in the Listing Rules would, include shares of all classes and securities which carry a right to subscribe or purchase Shares of the Company.

EXERCISE OF THE REPURCHASE MANDATE

Exercise in full of the Repurchase Mandate, on the basis of 490,705,418 existing Shares of the Company in issue as at the Latest Practicable Date and on the basis that no new Shares of the Company are issued or repurchased prior to the date of the resolution approving the Repurchase Mandate could accordingly result in up to 49,070,541 Shares of the Company being repurchased by the Company during the course of the period from the date of resolution granting the Repurchase Mandate until the earlier of the conclusion of the first Annual General Meeting of the Company following the passing of the said resolution or the revocation or variation of the existing repurchase mandate by Shareholders of the Company in general meeting.

The directors would like to draw the attention of the Shareholders as regards the amendments to the Listing Rules promulgated by the Stock Exchange as announced on 30 January 2004 and in particular those amendments made to paragraph 10.06(2) on “Dealing Restrictions”. Upon the taking effect of the amendments to the Listing Rules on 31 March 2004, major changes in relation to repurchase by the Company of its securities in the market are as follows:

1. The restriction to repurchase by the Company in any one calendar month of not more than 25% of the total number of a certain kind of Shares which were traded on the Stock Exchange in the preceding calendar month is cancelled;

2. The Company shall not purchase its Shares on the Stock Exchange if the purchase price is higher by 5% or more than the average closing market price for the 5 preceding trading days on which Shares would be traded on the Stock Exchange;

3. The Company shall not purchase Shares during the period of 1 month immediately preceding the earlier of

4. 3.1 the date of the board meeting (as such date is first notified to the Stock Exchange in accordance with the Listing Rules) for the approval of the Company’s results for any year, half-year, quarterly or any other interim period (whether or not required under the Listing Rules); and

5. 3.2 the deadline for the Company to publish an announcement of its results for any year or half-year under the Listing Rules, or quarterly or any other interim period (whether or not required under the Listing Rules).

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APPENDIX II EXPLANATORY STATEMENT ON REPURCHASE OF THE COMPANY’S SHARES

and ending on the date of the results announcement unless the circumstances are exceptional.

Shareholders are advised to refer to the new Listing Rules for details.

REASONS FOR REPURCHASES

The Directors believe that it is in the best interests of the Company and its Shareholders to have a general authority from Shareholders to enable the Directors to repurchase Shares of the Company in the market. Such repurchases may, depending on market conditions and funding arrangements at the time, lead to an enhancement of the net assets and/or earnings per Share of the Company and will only be made if the Directors believe that such repurchases will benefit the Company and its Shareholders.

FUNDING OF REPURCHASES

Repurchases must be funded entirely from the Company’s available cash flow or working capital facilities, which will be funds legally available for the purchase in accordance with the Bye-laws of the Company and the applicable laws of Hong Kong and Bermuda. Under Bermuda law, no Shares shall be repurchased except out of the capital paid up therein or out of the funds of the Company which would otherwise be available for dividend or distribution or out of the proceeds of a fresh issue of Shares. If a premium is payable, it shall be provided for out of fund of the Company which would otherwise be available for dividend or distribution or out of the Company’s share premium account.

On the basis of the combined net tangible assets of the Group as at 31 December 2004, being the balance sheet date for the latest published audited accounts of the Company and taking into account the current working capital position of the Company, the Directors consider that no material adverse effect on the working capital and gearing position of the Company may result in the event that the Repurchase Mandate was to be exercised in full in the period before the Repurchase Mandate expires. The Directors however do not propose to exercise the Repurchase Mandate to such extent as would, in the circumstances, have a material adverse effect on the working capital requirements of the Company or the gearing levels which in the opinion of the Directors are from time to time appropriate for the Company.

GENERAL

None of the Directors, and to the best of their knowledge having made all reasonable enquiries, any associates of any Director, have any present intention in the event that the Repurchase Mandate is approved by Shareholders to sell any of the Shares of the Company.

The Directors have undertaken to the Stock Exchange that, so far as the same may be applicable, they will exercise the Repurchase Mandate in accordance with the Listing Rules and the applicable laws of Bermuda.

If, as a result of a Share repurchase, a Shareholder’s proportionate interest in the voting rights of the Company increases, such increase will be treated as an acquisition for the purpose of the Takeovers Code. In certain circumstances, a Shareholder or a group of Shareholders acting in concert could as a result of increase of its or their interest, obtain or consolidate

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EXPLANATORY STATEMENT ON REPURCHASE OF THE COMPANY’S SHARES

APPENDIX II

control of the Company and become obliged to make a mandatory offer in accordance with Rule 26 of the Takeovers Code.

As at the Latest Practicable Date, the following person holds more than 10% of the entire issued share capital of the Company:–

Name Shares Luk King Tin (“Mr. Luk”) 271,492,184 (including Shares in the name of (55.33%) KT (Holdings) Limited and his family interest) (Note)

Note:

The interest includes:

• (1) Mr. Luk’s personal interest in 164,897,286 Shares (representing 33.60% of the total issued shares of the Company).

• (2) Mr. Luk’s corporate interest in K T (Holdings) Limited (a company which is 100% beneficially owned by Mr. Luk) which held 57,226,071 Shares (representing 11.66% of total issued shares of the Company).

• (3) Mr. Luk’s family interest is held by his wife, Madam Cheng Cheung. Madam Cheng has a personal interest in 12,456,800 Shares (representing 2.54% of the total issued shares of the Company) and through CC (Holdings) Ltd. (a company which is 100% beneficially owned by Madam Cheng Cheung) holds 36,912,027 Shares (representing 7.52% of the total issued shares of the Company).

Apart from the said persons, the Directors are not aware of any single Shareholder who holds more than 10% of the issued Share capital of the Company.

The Directors are not aware of any consequences which the exercise in full of the Repurchase Mandate will have under the Takeovers Code and so far as is known to the Directors, no other Shareholders of the Company at present may become obliged to make a mandatory offer in accordance with Rule 26 of the Takeovers Code in the event that the Directors exercise the power in full to repurchase the Company’s Shares pursuant to the Repurchase Mandate.

No connected person (as defined in the Listing Rules) of the Company has notified the Company that he has a present intention to sell Shares of the Company, or has undertaken not to do so, if the Repurchase Mandate was approved by Shareholders.

The Company has not repurchased any of its Shares, whether on the Stock Exchange or otherwise, during the previous six months.

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EXPLANATORY STATEMENT ON REPURCHASE OF THE COMPANY’S SHARES

APPENDIX II

The highest and lowest prices at which the Shares and Warrants of the Company have traded on the Stock Exchange for the twelve months preceding the Latest Practicable Date:–

	Shares		Warrants
	Highest	Lowest	Highest	Lowest
	HK$	HK$	HK$	HK$
April 2004	1.32	1.15	0.400	0.280
May 2004	1.30	1.20	0.390	0.280
June 2004	1.23	1.10	0.300	0.205
July 2004	1.26	1.21	–	–
August 2004	1.30	1.23	–	–
September 2004	1.37	1.26	–	–
October 2004	1.34	1.28	–	–
November 2004	1.39	1.29	–	–
December 2004	1.35	1.14	–	–
January 2005	1.19	1.10	–	–
February 2005	1.18	1.12	–	–
March 2005	1.17	1.10	–	–

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NOTICE OF ANNUAL GENERAL MEETING

APPENDIX III

NOTICE IS HEREBY GIVEN that the Annual General Meeting of the Company will be held at the Grand Ballroom East, 2/F., Hotel Nikko Hongkong, 72 Mody Road, Tsimshatsui East, Kowloon, Hong Kong on Friday, 20th May, 2005 at 3:00 p.m. to transact the following ordinary business:

1. To receive and consider the Audited Financial Statements and the Reports of the Directors and Auditors for the year ended 31st December, 2004.

2. To declare a final dividend for the year ended 31st December, 2004.

3. To re-elect retiring Directors and to authorise the Board of Directors to fix the remuneration of the Directors.

4. To appoint Auditors and to authorise the Board of Directors to fix their remuneration.

and by way of special business to consider, and if thought fit, pass with or without amendments the following resolutions as:

Ordinary Resolutions

1. “ THAT the Directors be and are hereby granted an unconditional general mandate to repurchase Shares issued by the Company in accordance with all applicable laws and subject to the following conditions:

2. (a) such mandate should not extend beyond the Relevant Period (defined in subparagraph (c) below);

3. (b) the aggregate nominal amount of Shares purchased or agreed conditionally or unconditionally to be purchased by the Directors of the Company pursuant to this Resolution should not exceed 10% of the aggregate nominal amount of the Shares of the Company in issue at the date of passing of this Resolution; and

4. (c) for the purpose of this Resolution:

“Relevant Period” means the period from the passing of this Resolution until whichever is the earliest of:

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

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

• (iii) the date on which the authority set out in this Resolution is revoked or varied by an ordinary resolution of the Shareholders in general meeting.”

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NOTICE OF ANNUAL GENERAL MEETING

APPENDIX III

1. “ THAT the Directors be and are hereby granted an unconditional general mandate to issue and allot additional Shares in the capital of the Company or securities convertible into Shares, and to make or grant offers, agreements and options in respect thereof, subject to the following conditions:

2. (a) such mandate should not extend beyond the Relevant Period (defined in subparagraph (c) below) save that the Directors may during the Relevant Period make or grant offers, agreements and options which might require the exercise of such powers after the end of the Relevant Period;

3. (b) the aggregate nominal amount of share capital allotted or agreed conditionally or unconditionally to be allotted (whether pursuant to an option or otherwise) by the Directors, otherwise than pursuant to a Rights Issue (as defined in subparagraph (c) below) or pursuant to the grant or exercise of options issued under any share option scheme adopted by the Company or pursuant to any scrip dividend scheme or with the consent of the Company in general meeting, should not exceed 20% of the aggregate nominal amount of the share capital of the Company in issue at the date of passing of this Resolution; and

4. (c) for the purpose of this Resolution:

“Relevant Period” means the period from the passing of this Resolution until whichever is the earliest of:

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

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

• (iii) the date on which the authority set out in this Resolution is revoked or varied by an ordinary resolution of the Shareholders in general meeting.

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

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NOTICE OF ANNUAL GENERAL MEETING

APPENDIX III

1. “ THAT the general mandate granted to the Directors to issue and dispose of additional Shares pursuant to Ordinary Resolution 6 set out in the notice convening this meeting be and is hereby extended by the addition thereto of an amount representing the aggregate nominal amount of the share capital of the Company repurchased by the Company under the authority granted pursuant to Ordinary Resolution 5 set out in the notice convening this meeting, provided that such amount shall not exceed 10% of the aggregate nominal amount of the issued share capital of the Company at the date of passing of this Resolution.”

By Order of the Board Martin Fan Company Secretary

Hong Kong, 26th April, 2005

Notes:

• (1) A member entitled to attend and vote at the above meeting may appoint one or more proxies to attend and, on a poll, vote instead of him. A proxy need not be a member of the Company.

• (2) To be valid, a form of proxy, together with the power of attorney or other authority (if any) under which it is signed or a notarially certified copy thereof, must be deposited at the Company’s principal place of business at 5/F., Cheong Wah Factory Building, 39-41 Sheung Heung Road, Kowloon, Hong Kong not less than 48 hours before the time for holding the meeting or adjourned meeting (as the case may be).

• (3) The Register of Members will be closed from 18th May, 2005 to 20th May, 2005, both dates inclusive, during which period no transfers of shares will be effected. To determine entitlements to the proposed final dividend and the voting right in the Annual General Meeting, all transfers accompanied by the relevant share certificates must be lodged with the Company’s Hong Kong Branch Registrar, Tengis Limited, G/F, Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong by not later than 4:30 p.m. on 17th May, 2005.

• (4) With regard to Ordinary Resolution 6 and 7 above, the Directors wish to state that they have no immediate plans to issue any new Shares of the Company.

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