Hybrid Kinetic Group Limited — Proxy Solicitation & Information Statement 2005

Jun 7, 2005

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your shares in Compass Pacific Holdings Limited, you should at once hand this circular with the accompanying form of proxy to the purchaser or the transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or the transferee.

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

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(Incorporated in Bermuda with limited liability) (Stock code: 1188)

RE-ELECTION OF RETIRING DIRECTORS AND

GENERAL MANDATES TO ISSUE SHARES AND TO REPURCHASE SHARES

A notice convening an annual general meeting of Compass Pacific Holdings Limited (the “Company”) to be held at Suites 612-617 Hutchison House, 10 Harcourt Road, Central, Hong Kong on Thursday, 30th June, 2005 at 9:30 a.m. is set out on pages 12 to 15 of this circular. Whether or not you are able to attend the meeting, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon and deposit the same with the Company at its principal place of business at Suites 612-617, 6th Floor, Hutchison House, 10 Harcourt Road, Central, Hong Kong, as soon as possible and in any event not later than 9:30 a.m. on Tuesday, 28th June, 2005 or not less than 48 hours before the time appointed for any adjournment of the meeting. Completion and return of the form of proxy will not preclude you from attending and voting at the meeting or any adjournment thereof should you so wish.

Hong Kong, 6 June, 2005

* For identification purposes only

CONTENTS

		Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1
Letter from the Board
1.	Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
2.	Re-election of retiring directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
3.	Issue Mandate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
4.	Repurchase Mandate and Extension Mandate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
5.	Actions to be taken . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
6.	Procedures by which Shareholders may demand poll . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
7.	Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Appendix	I – Explanatory Statement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
Notice of Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		12

• i -

DEFINITIONS

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

• “Annual General Meeting”

the annual general meeting of the Company to be convened and held on 30th June, 2005;

• “associates”

has the meaning ascribed to it under the Listing Rules;

• “Board”

the board of Directors of the Company for the time being;

• “Bye-laws”

bye-laws of the Company;

• “Companies Act”

• the Companies Act 1981 of Bermuda (as amended from time to time);

• “Company”

Compass Pacific Holdings Limited, a company incorporated in Bermuda with limited liability, the Shares of which are listed on the main board of the Stock Exchange;

• “connected person(s)”

has the meaning ascribed to it under the Listing Rules;

• “Director(s)”

• director(s) of the Company for the time being;

• “Extension Mandate”

• a general and unconditional mandate to the Directors to the effect that any Shares repurchased under the Repurchase Mandate will be added to the total number of Shares which may be allotted and issued under the Issue Mandate;

• “Group”

the Company and its subsidiaries;

• “HK$”

Hong Kong dollars, the lawful currency of Hong Kong;

• “Hong Kong”

the Hong Kong Special Administrative Region of the People’s Republic of China;

• “Issue Mandate”

• a general and unconditional mandate to the Directors to exercise the power of the Company to allot, issue or otherwise deal with Shares up to a maximum of 20% of the aggregate nominal amount of the share capital of the Company in issue as at the date of passing the resolution at the Annual General Meeting;

• “Latest Practicable Date”

• 4 June, 2005, being the latest practicable date prior to the printing of this circular for ascertaining certain information in this circular;

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DEFINITIONS

“Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange; “Repurchase Mandate” a general and unconditional mandate to the Directors to enable them to repurchase the Shares in which the aggregate nominal amount does not exceed 10% of the issued share capital of the Company as at the date of passing the relevant resolution at the Annual General Meeting;

“Share(s)” ordinary share(s) of HK$0.10 each in the share capital of the Company;

“Shareholder(s)” holder(s) of the Shares; “Stock Exchange” The Stock Exchange of Hong Kong Limited; “%” per cent.

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LETTER FROM THE BOARD

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(Incorporated in Bermuda with limited liability) (Stock code: 1188)

Executive directors:

Mr. Yung Yeung (Chairman) Mr. Chunhua Huang (Deputy Chairman) Mr. Jun Li (Chief Executive Officer) Mr. Wing Tak Law (Chief Financial Officer and Company Secretary)

Mr. Yuwen Sun Mrs. Chizuko Kubo

Independent non-executive directors:

Mr. Jian Wang Mr. Bangjie He

Registered office: Canon’s Court 22 Victoria Street Hamilton HM 12 Bermuda

Principal place of business: Suites 612-617, 6th Floor Hutchison House 10 Harcourt Road Central Hong Kong

Mr. Ho Yip Lee

6 June, 2005

To the Shareholders

Dear Sir/Madam,

RE-ELECTION OF RETIRING DIRECTORS AND

GENERAL MANDATES TO ISSUE SHARES AND TO REPURCHASE SHARES

1. INTRODUCTION

The purpose of this circular is to provide you with information regarding the ordinary resolutions to be proposed at the Annual General Meeting. These include ordinary resolutions relating to re-election of retiring Directors and the proposed grant of Repurchase Mandate, Issue Mandate and Extension Mandate.

Under the Listing Rules, the Company is required to provide you with information reasonably necessary to enable you to make an informed decision as to whether to vote for or against the resolutions to be proposed at the Annual General Meeting. This circular is prepared for such purpose.

• For identification purposes only

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LETTER FROM THE BOARD

2. RE-ELECTION OF RETIRING DIRECTORS

In accordance with Bye-laws 87(1) and 87(2) of the Bye-laws, Mr. Yuwen Sun and Mr. Bangjie He will retire by rotation. Besides, Mr. Wing Tak Law and Mr. Ho Yip Lee, being directors appointed by the Board pursuant to Bye-law 86(2), will retire at the Annual General Meeting, being eligible, will offer themselves for re-election. Their details are set out as follows:

Mr. Yuwen Sun (Aged 35)

Mr. Sun was appointed a Director on 30th April, 2003 and holds the office of chief financial officer of American Compass Inc. (a subsidiary of the Company). Mr. Sun holds a Master degree in Business Administration and two Bachelor degrees in Accounting and Finance from the University of Kentucky in the United States of America. He was a manager of an international consulting firm serving top global firms in the United States of America before joining the Group. Mr. Sun has extensive experience in areas of corporate finance, accounting and business operations.

Pursuant to Part XV of the Securities and Futures Ordinance, as at the Latest Practicable Date, Mr. Sun has a personal interest in 18,940,000 Shares by the virtue of the options granted to him under the share option scheme of the Company adopted on 12th June, 2003. In addition, he also has a corporate interest in 945,456,600 Shares. These 945,456,600 Shares represent long positions and are beneficially owned by Sun East LLC, a company which is held as to 35% by Mr. Yung Yeung and as to 65% by Mr. Chunhua Huang and Mr. Sun as trustees for certain trusts established for the benefit of the children of Mr. Yung Yeung. Mr. Sun is deemed to be interested in the 945,456,600 Shares by virtue of their interest in Sun East LLC. Save as disclosed herein, Mr. Sun does not have any other relationship with any Director, senior management or substantial or controlling shareholder of the Company. Mr. Sun has not been a director in any other listed company in the past three years.

Mr. Sun receives US$200,000 (equivalent to approximately HK$1,560,000) of salary and US$10,000 (equivalent to approximately HK$78,000) of director’s fee in his capacity as Director and chief financial officer of American Compass Inc. under a service contract. Mr. Sun’s remuneration is determined by the Board with reference to his responsibilities in the Group and the performance of the Group.

Mr. Wing Tak Law, Jack (Aged 51)

Mr. Law was appointed a director on 28th September, 2004 and holds the offices of chief financial officer and company secretary of the Company. Mr. Law is a graduate of Newcastle University in the United Kingdom with a degree in Economic and Accounting. He became a member of Institute of Chartered Accountants in England & Wales since 1984 and a member of Hong Kong Institute Certified Public Accountants since 1985. Mr. Law has been in the corporate finance business for more than 20 years and held directorships in a number of Hong Kong and the United Kingdom listed companies. His experience covers the areas of banking, credit control, financial management, appraising and implementing investment projects, merger & acquisitions, and corporate finance. He is also currently a partner of a firm of chartered accountants in the United Kingdom.

Mr. Law does not have any relationship with any Director, senior management or substantial or controlling shareholder of the Company, or interest in the Shares within the meaning of Part XV of the Securities and Futures Ordinance. Mr. Law was the director of a listed company in the United Kingdom, namely Bolton Group (International) Limited, from 6th May, 1997 to 14th November, 2003.

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LETTER FROM THE BOARD

Mr. Law entered into a service contract with the Company for his office of chief financial officer for a term of two years commencing from 28th September, 2004 which shall continue thereafter until terminated by either party by giving the other party three months’ written notice. The emoluments payable to Mr. Law is US$200,000 (equivalent to HK$1,560,000) per annum. He is also entitled to a year-end bonus base on his performance and the performance of the Company at the discretion of the Board.

Mr. Bangjie He (Aged 43)

Mr. He is an independent non-executive director of the Company. He was appointed an independent non executive director of the Company on 11th April, 2003. Mr. He holds a Bachelor degree in Engineering from Zhejiang Medical University in China. Mr. He was a senior manager and a director in international trading and investment companies in the United States of America and China, and had extensive experiences in international trading and investments, he currently holds senior managerial position in a United States of America company.

Mr. He does not have any relationship with any Director, senior management or substantial or controlling shareholder of the Company, or interest in the Shares within the meaning of Part XV of the Securities and Futures Ordinance. Mr. He has not been a director in any other listed company in the past three years.

Mr. He has not entered into any service contract with the Company and is entitled to an annual director’s fee of US$10,000 (approximately equivalent to HK$78,000), which is determined by the Board with reference to his qualification, experience and scope of responsibilities.

Mr. Ho Yip Lee (Aged 48)

Mr. Lee was appointed an independent non-executive director of the Company on 28th September, 2004. Mr. Lee obtained his bachelor degree in Economics major in Accounting from Macquarie University of Sydney in Australia in 1986. He became a member of Certified Practising Accountant of Australia in 1992. Mr. Lee had extensive accounting experience in Australia and Hong Kong and has been holding senior positions including as a group financial controller of a Hong Kong listed company.

Mr. Lee does not have any relationship with any Director, senior management or substantial or controlling shareholder of the Company, or interest in the Shares within the meaning of Part XV of the Securities and Futures Ordinance. Mr. Lee has not been a director in any other listed company in the past three years.

Mr. Lee has not entered into any service contract with the Company and is entitled to an annual director’s fee of HK$80,000 which is determined by the Board with reference to his qualification, experience and scope of responsibilities.

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LETTER FROM THE BOARD

3. ISSUE MANDATE

At the Annual General Meeting, an ordinary resolution will be proposed that the Directors be granted the Issue Mandate, i.e. a general and unconditional mandate to allot, issue and deal with new Shares up to 20% of the aggregate nominal share capital of the Company in issue as at the date of passing of the relevant resolution.

4. REPURCHASE MANDATE AND EXTENSION MANDATE

At the Annual General Meeting, an ordinary resolution will also be proposed to grant the Directors the Repurchase Mandate, i.e. a general and unconditional mandate to exercise all powers of the Company to repurchase, on the Stock Exchange or on any other stock exchange on which the Shares may be listed, Shares up to a maximum of 10% of the nominal share capital of the Company in issue as at the date of passing of the relevant resolution.

In addition, an ordinary resolution regarding the Extension Mandate will be proposed at the Annual General Meeting providing that any Shares repurchased under the Repurchase Mandate (up to maximum of 10% of the issued Shares as at the date of the grant of the Repurchase Mandate) will be added to the total number of Shares which may be allotted and issued under the Issue Mandate.

The Repurchase Mandate and the Issue Mandate would expire at the earliest of: (a) the conclusion of the next annual general meeting of the Company; or (b) at the end of the period within which the Company is required by Bermuda law or the Bye-laws to hold its next annual general meeting; or (c) when revoked or varied by ordinary resolutions of the Shareholders in a general meeting prior to the next annual general meeting of the Company.

Under the Listing Rules, the Company is required to give to all Shareholders information which is reasonably necessary to enable Shareholders to make an informed decision as to whether to vote for or against the resolution in respect of the Repurchase Mandate at the Annual General Meeting. An explanatory statement for such purpose is set out in Appendix I to this circular.

5. ACTIONS TO BE TAKEN

At the Annual General Meeting, ordinary resolutions will be proposed to approve, among other matters, the following: the grant of the Issue Mandate, Repurchase Mandate and Extension Mandate with effect from the conclusion of the Annual General Meeting.

Whether or not you are able to attend the Annual General Meeting in person, you are requested to complete and return the form of proxy in accordance with the instructions printed thereon as soon as possible and, in any event not later than 9:30 a.m., Tuesday, 28th June, 2005, or not less than 48 hours before the time for any adjournment of the Annual General Meeting. Completion and return of the form of proxy will not preclude you from attending and voting in person at the Annual General Meeting or any adjournment thereof should you so wish.

• 6 -

LETTER FROM THE BOARD

6. PROCEDURES BY WHICH SHAREHOLDERS MAY DEMAND POLL

Pursuant to Bye-law 66 of the Bye-laws, a resolution put to the vote of a general meeting shall be decided on a show of hands unless (before or on the declaration of the result of the show of hands or on the withdrawal of any other demand for a poll) a poll is demanded:–

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

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

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

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

If a poll is demanded otherwise than on the election of a chairman of the meeting or on question of adjournment, it shall be taken in such manner and either forthwith or at such time (being nor later than 30 days after the date of the demand) and place as the chairman of the meeting directs. The demand for a poll may be withdrawn with the consent of the chairman of meeting at any time before the close of the meeting or the taking of the poll, whichever is the earlier.

Unless a poll is duly demanded and the demand is not withdrawn, a declaration of the result of the show of hands by the chairman of the meeting and an entry to that effect in the minutes book shall be conclusive evidence of the voting result.

7. RECOMMENDATION

The Directors believe that the Issue Mandate, Repurchase Mandate and Extension Mandate are beneficial to the Company and the Shareholders as a whole.

The Directors believe that an exercise of the Issue Mandate will enable the Company to take advantage of market conditions to raise additional capital for the Company.

The Repurchase Mandate may, depending on market conditions and funding arrangements at the time, lead to an enhancement of the net asset value per Share and/or earnings per Share and will only be made when the Directors believe that such repurchases of Shares will benefit the Company and the Shareholders.

• 7 -

LETTER FROM THE BOARD

An exercise of the Repurchase Mandate in full may have a material adverse impact on the working capital and gearing position of the Company compared with that as at 31st December, 2004, being the date of its latest audited consolidated accounts. The Directors do not, however, intend to make any repurchase in circumstances that would have a material adverse impact on the working capital or gearing position of the Company.

Accordingly, the Directors recommend Shareholders to vote in favour of the ordinary resolutions approving the Issue Mandate, the Repurchase Mandate, the Extension Mandate at the Annual General Meeting.

Yours faithfully,

For and on behalf of the Board of Compass Pacific Holdings Limited Yung Yeung Chairman

• 8 -

EXPLANATORY STATEMENT

APPENDIX I

This Appendix serves as an explanatory statement, as required by the Listing Rules, to provide requisite information as to the proposed Repurchase Mandate.

1. LISTING RULES RELATING TO THE REPURCHASE OF SHARES

The Listing Rules permit companies whose primary listing is on the Stock Exchange to repurchase their shares on the Stock Exchange and any other stock exchange on which the securities of the company are listed and such exchange is recognised by the Hong Kong Securities and Futures Commission subject to certain restrictions. Among such restrictions, the Listing Rules provide that the shares of such a company must be fully paid up and all repurchase of shares by such a company must be approved in advance by an ordinary resolution of shareholders, either by way of repurchase mandate or by specific approval of a particular transaction.

2. SHARE CAPITAL

As at the Latest Practicable Date, there was a total of 1,895,451,000 Shares in issue. Subject to the passing of the proposed resolution granting the Repurchase Mandate and on the basis that no further Shares are issued or repurchased prior to the Annual General Meeting, the Company will be allowed under the Repurchase Mandate to repurchase a maximum of 189,545,100 Shares.

3. REASONS FOR THE REPURCHASE

The Directors believe that the Repurchase Mandate is in the best interests of the Company and its Shareholders to seek a general authority from the Shareholders to enable the Company to repurchase its Shares on the Stock Exchange or on stock exchange on which the Shares are listed. Share repurchases may, depending on market conditions and funding arrangements at the time, lead to an enhancement of the net asset per Share and/or earnings per Share and will only be made when the Directors believe that such a repurchase will benefit the Company and the Shareholders.

4. FUNDING OF REPURCHASES

Repurchase made pursuant to the Repurchase Mandate would be funded out of funds legally available for the purpose in accordance with the Company’s memorandum of association and Bye-laws and the applicable laws of Bermuda.

There might be material adverse impact on the working capital and gearing position of the Company (as compared with the position disclosed in the audited accounts contained in the Company’s annual report for the year ended 31st December, 2004, being the date of its last audited accounts), in the event that the Repurchase Mandate were to be exercised in full at any time. However, the Directors do not intend to exercise the Repurchase Mandate to such extent as would in the circumstances have a material adverse impact on the working capital requirements or the gearing levels of the Company.

5. DISCLOSURE OF INTEREST

The Directors have undertaken to the Stock Exchange to exercise the powers of the Company to make purchases pursuant to the Repurchase Mandate in accordance with the Listing Rules and all applicable laws.

• 9 -

EXPLANATORY STATEMENT

APPENDIX I

None of the Directors nor, to the best of their knowledge having made all reasonable enquiries, any of their associates presently intend to sell the Shares to the Company under the Repurchase Mandate in the event that the Repurchase Mandate is approved by the Shareholders.

The Company has not been notified by any connected persons of the Company that they have a present intention to sell any Shares, or that they have undertaken not to sell any Shares held by them, to the Company in the event that the Repurchase Mandate is approved by the Shareholders.

6. EFFECT OF TAKEOVERS CODE

If as a result of a repurchase of the Shares, a Shareholder’s proportionate interest in the voting capital of the Company increases, such increase will be treated as an acquisition for the purpose of the Code on Takeovers and Mergers of Hong Kong (the “Takeovers Code”) and, if such increase results in a change of control, may in certain circumstances give rise to an obligation to make a general offer for the Shares under Rule 26 of the Takeovers Code.

As at the Latest Practicable Date, Sun East LLC, the only substantial shareholder of the Company, holds 49.88% of the issued share capital of the Company. In the event that the Directors should exercise in full the power to repurchase Shares which is proposed to be granted pursuant to the Repurchase Mandate, the shareholding of Sun East LLC, together with persons acting in concert, in the Company would be increased to approximately 55.42% of the issued share capital of the Company. In the opinion of the Directors, such increase will give rise to an obligation to make a mandatory offer under Rules 26 and 32 of the Takeovers Code. The Directors have no present intention to exercise mandate granted under the Repurchase Mandate to such an extent as would result in takeover obligations.

7. PURCHASES OF SHARES MADE BY THE COMPANY

The Company did not purchase any Shares (whether on the Stock Exchange or otherwise) during the six months prior to the Latest Practicable Date.

• 10 -

EXPLANATORY STATEMENT

APPENDIX I

8. SHARE PRICES

The highest and lowest prices at which the Shares have been traded on the Stock Exchange in each of the 12 calendar months immediately preceding the date of this circular are as follows:

	Highest	Lowest
2004	HK$	HK$
June	0.325	0.220
July	0.345	0.250
August	0.345	0.250
September	0.320	0.249
October	0.300	0.210
November	0.335	0.245
December	0.340	0.250
2005
January	0.320	0.246
February	0.285	0.244
March	0.260	0.223
April	0.280	0.245
May	0.265	0.225

• 11 -

NOTICE OF ANNUAL GENERAL MEETING

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(Incorporated in Bermuda with limited liability) (Stock code: 1188)

NOTICE IS HEREBY GIVEN that the annual general meeting of COMPASS PACIFIC HOLDINGS LIMITED (“Company”) will be held at Suites 612-617 Hutchison House, 10 Harcourt Road, Central, Hong Kong on Thursday, 30th June, 2005 at 9:30 a.m. (“Annual General Meeting”) for the following purposes:

AS ORDINARY BUSINESS

1. to receive and consider the audited financial statements of the Company for the year ended 31st December, 2004 and the reports of the directors (“Directors”) and auditors thereon;

2. to re-elect the retiring Directors and to authorize the board of directors (“Board”) to fix the remuneration of the Directors;

3. to re-appoint auditors and to authorize the Board to fix their remuneration;

AS SPECIAL BUSINESS

to consider and, if thought fit, passing (with or without modification) the following Resolutions as ordinary resolutions and special resolution of the Company (as the case may be):

ORDINARY RESOLUTIONS

1. “ THAT :

   • (a) subject to paragraph (c) of this Resolution, the exercise by the Directors during the Relevant Period (as hereinafter defined) of all the powers of the Company to allot, issue and deal with the additional shares of HK$0.10 each in the capital of the Company (“Shares”) and to make or grant offers, agreements and options, including warrants to subscribe for Shares, which would or might require the exercise of such powers be and is hereby generally and unconditionally approved;

   • (b) the approval in paragraph (a) of this Resolution shall authorize the Directors during the Relevant Period to make or grant offers, agreements and options, including warrants to subscribe for Shares, which would or might require the exercise of such powers after the end of the Relevant Period;

2. For identification purposes only

3. 12 -

NOTICE OF ANNUAL GENERAL MEETING

• (c) the aggregate nominal amount of share capital allotted and issued or agreed conditionally or unconditionally to be allotted and issued (whether pursuant to an option or otherwise) by the Directors pursuant to the approval in paragraph (a) of this Resolution, otherwise than pursuant to (i) a Rights Issue (as hereinafter defined); or (ii) the exercise of any option granted under any share option schemes of the Company adopted from time to time in accordance with the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited; or (iii) any scrip dividend or similar arrangement providing for the allotment and issue of Shares in lieu of the whole or part of a dividend on Shares in accordance with the bye-laws of the Company in force from time to time (“Bye-laws”); or (iv) the exercise of rights of subscription or conversion under the terms of any warrants of the Company or any securities which are convertible into Shares, shall not exceed the aggregate of:

• (aa) 20 per cent. of the aggregate nominal amount of the share capital of the Company in issue on the date of the passing of this Resolution; and

• (bb) (if the Directors are so authorized by a separate ordinary resolution of the shareholders of the Company) the aggregate nominal amount of any share capital of the Company purchased by the Company subsequent to the passing of this Resolution (up to a maximum equivalent to 10 per cent. of the aggregate nominal amount of the share capital of the Company in issue on the date of the passing of this Resolution), and the authority pursuant to paragraph (a) of this Resolution shall be limited accordingly; and

• (d) for the purposes of this Resolution:

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

• (i) the conclusion of the next annual general meeting of the Company;

• (ii) the expiration of the period within which the next annual general meeting of the Company is required by the Bye-laws, the Companies Act 1981 of Bermuda (as amended from time to time) (“Companies Act”) or any other applicable laws of Bermuda to be held; and

• (iii) the passing of an ordinary resolution by the shareholders of the Company in general meeting revoking or varying the authority given to the Directors by this Resolution;

• 13 -

NOTICE OF ANNUAL GENERAL MEETING

“ Rights Issue ” means an offer of Shares, or offer or issue of warrants, options or other securities giving rights to subscribe for Shares open for a period fixed by the Directors to holders of Shares on the Company’s register of members on a fixed record date in proportion to their then holdings of Shares (subject to such exclusion or other arrangements as the Directors 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, or the expense or delay which may be involved in determining the existence or extent of any restrictions or obligations under the laws of, or the requirements of, any jurisdiction outside Hong Kong or any recognised regulatory body or any stock exchange outside Hong Kong).”

1. “ THAT :

2. (a) subject to paragraph (b) of this Resolution, the exercise by the Directors during the Relevant Period (as hereinafter defined) of all powers of the Company to purchase Shares on The Stock Exchange of Hong Kong Limited (“Stock Exchange”), or any other stock exchange on which the Shares may be listed and recognised by The Securities and Futures Commission of Hong Kong and the Stock Exchange for such purpose, and otherwise in accordance with the rules and regulations of The Securities and Futures Commission of Hong Kong, the Stock Exchange, the Companies Act and all other applicable laws in this regard, be and the same is hereby generally and unconditionally approved;

3. (b) the aggregate nominal amount of Shares which may be purchased or agreed to be purchased by the Company pursuant to the approval in paragraph (a) of this Resolution during the Relevant Period shall not exceed 10 per cent. of the aggregate nominal amount of the issued share capital of the Company as at the date of the passing of this Resolution and the authority pursuant to paragraph (a) of this Resolution shall be limited accordingly; and

4. (c) for the purposes of this Resolution, “ Relevant Period ” means the period from the date of the passing of this Resolution until whichever is the earlier of:

   • (i) the conclusion of the next annual general meeting of the Company;

   • (ii) the expiration of the period within which the next annual general meeting of the Company is required by the Bye-laws, the Companies Act or any other applicable laws of Bermuda to be held; and

   • (iii) the passing of an ordinary resolution by the shareholders of the Company in general meeting revoking or varying the authority given to the Directors by this Resolution.”

5. 14 -

NOTICE OF ANNUAL GENERAL MEETING

1. “ THAT conditional on the passing of Resolution 4 above, the general mandate granted to the Directors pursuant to paragraph (a) of Resolution 4 above be and is hereby extended by the addition of the aggregate nominal amount of the shares which may be allotted or agreed conditionally or unconditionally to be allotted by the Directors pursuant to or in accordance with such general mandate of an amount representing the aggregate nominal amount of the share capital of the Company purchased or agreed to be repurchased by the Company pursuant to or in accordance with the authority granted under paragraph (a) of Resolution 5 above.”

Hong Kong, 6 June, 2005

By order of the Board of Compass Pacific Holdings Limited Wing Tak Law Director

Principal place of business: Suites 612-617, 6th Floor Hutchison House 10 Harcourt Road Central Hong Kong

Notes:

1. A member of the Company entitled to attend and vote at the meeting convened by the above notice is entitled to appoint one or more proxies to attend and, subject to the provisions of the Bye-laws, vote in his stead. A proxy need not be a member of the Company.

2. To be valid, the form of proxy together with a power of attorney or other authority, if any, under which it is signed or a notarially certified copy of such power or authority must be deposited at the offices of the Company’s principal place of business at Suites 612-617, 6th Floor, Hutchison House, 10 Harcourt Road, Central, Hong Kong not later than 9:30 a.m., Tuesday, 28th June, 2005 or 48 hours before the time for any adjournment of the Annual General Meeting.

3. In relation to proposed Resolution 2 above, Mr. Yuwen Sun, Mr. Wing Tak Law, Mr. Bangjie He and Mr. Ho Yip Lee will retire from their office of directors at the above meeting pursuant to the Bye-laws and, being eligible, offer themselves for re-election.

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