ICO Group Limited — Annual Report 2002

Apr 24, 2003

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JACKIN INTERNATIONAL HOLDINGS LIMITED （輝影國際集團有限公司）

(Incorporated in Bermuda with limited liability)

ANNOUNCEMENT OF RESULTS FOR THE YEAR ENDED 31 DECEMBER 2002

RESULTS

The Board of Directors of Jackin International Holdings Limited (the “Company”) is pleased to announce the audited consolidated results of the Company and its subsidiaries (the “Group”) for the year ended 31 December 2002, together with the comparative figures for the previous year, as follows:

Notes Turnover 2 Cost of sales Gross profit Other operating income 4 Selling and distribution costs Administrative expenses Profit from operations before impairment loss on assets and loss on disposal of assets Impairment loss recognised in respect of intangible assets Impairment loss recognised in respect of plant and machinery Loss on disposal of property, plant and equipment	2002 HK$’000 379,759 (278,262) 101,497 5,923 (23,899) (56,891) 26,630 – – (3,621)	2001 HK$’000 379,945 (292,389) 87,556 6,286 (21,292) (47,634) 24,916 (6,221) (70,000) (18,573)

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Profit (loss) from operations Finance costs Share of profit of an associate Profit (loss) on disposal of a subsidiary Profit (loss) before taxation Taxation credit 5 Profit (loss) for the year Minority interests Profit (loss) attributable to shareholders Dividends 6 Earnings (loss) per share 7 Basic	23,009 (69,878) (13,757) (17,386) 1,609 1,507 3,559 (18,272) 14,420 (104,029) 2,494 572 16,914 (103,457) (320) 1,374 16,594 (102,083) 1,792 – 4.63 cents (28.48 cents)

Notes:

1. Adoption of New and Revised Statements of Standard Accounting Practice

In the current year, the Group has adopted, for the first time, a number of new and revised Statements of Standard Accounting Practice (“SSAP”) issued by the Hong Kong Society of Accountants. The adoption of these SSAPs has resulted in a change in the format of presentation of the cash flow statement and the inclusion of the statement of changes in equity, but has had no material effect on the results for the current or prior accounting years. Accordingly, no prior year adjustment has been required.

Foreign Currencies

The revisions to SSAP 11 “Foreign Currency Translation” have eliminated the choice of translating the income statement of overseas subsidiaries and associate at the closing rate for the year, the policy previously followed by the Group. They are now required to be translated at an average rate. This change in accounting policy has not had any material effect on the results for the current or prior accounting years.

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Employee Benefits

In the current year, the Group has adopted SSAP 34 “Employee Benefits”, which introduces measurement rules for the employee benefits, including retirement benefit plans. As the Group participates only in defined contribution retirement benefit schemes, the adoption of SSAP 34 has not had any material impact on the financial statements.

2. Turnover

Turnover represents the aggregate of the amounts received and receivable for goods sold and services rendered, net of returns and allowances, by the Group to outside customers during the year.

3. Business and Geographical Segments

For management purposes, the Group is currently organised into four operating divisions – the manufacture and trading of media products and computer accessories, total fulfilment services, and distribution of media products. These divisions are the basis on which the Group reports its primary segment information.

By principal activities: Manufacturing and trading of media products Manufacturing and trading of computer accessories Total fulfilment services Distribution of media products Others Other operating income Unallocated corporate expenses	Total revenue HK$’000 229,107 11,444 58,377 80,831 – 379,759	2002 Segments Total results revenue HK$’000 HK$’000 46,851 213,490 13,128 3,545 5,950 108,480 11,030 51,466 – 2,964 76,959 379,945 2,941 (56,891)	2001 Segments results HK$’000 (51,103) 765 10,134 14,230 1,181 (24,793) 2,549 (47,634)

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Profit (loss) from operations 23,009 Finance costs (13,757) Share of profit of an associate 1,609 Profit (loss) on disposal of a subsidiary 3,559 Profit (loss) before taxation 14,420 Taxation credit 2,494 Profit (loss) for the year 16,914 2002 Total revenue HK$’000 By geographical markets: Asia – The People’s Republic of China 165,251 – Other regions in Asia 54,030 Europe 111,117 North America 49,361 379,759 4. Other operating income 2002 HK$’000 Commission income 1,320 Operating lease rental income from plant and machinery 1,662 Interest income 393 Others 2,548 5,923		(69,878) (17,386) 1,507 (18,272) (104,029) 572 (103,457) 2001 Total revenue HK$’000 153,391 71,698 68,037 86,819 379,945 2001 HK$’000 2,037 1,700 1,000 1,549 6,286

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5. Taxation credit

	2002		2001
	HK$’000		HK$’000
The taxation credit (charge) comprises:–
Profits Tax for the year:
Hong Kong	(889)		–
Overseas	(149)		(279)
Prior years:
Hong Kong – underprovision	–		(3)
Overseas – overprovision	90		854
	(948)		572
Deferred taxation	3,582		–
Share of taxation for an associate
Overseas	(140)		–
	2,494		572
Hong Kong Profits Tax is calculated at 16% (2001: 16%) of the estimated			assessable
profits for the year. Overseas taxation is calculated at the rates prevailing in the respective
jurisdictions.
Dividends
	2002		2001
	HK$’000		HK$’000
Final dividend proposed:
– HK0.5 cent (2001: nil)	1,792		–

6. Dividends

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7. Earnings (loss) per share

The calculation of the basic earnings (loss) per share is based on the following data:

Earnings (loss) for the purposes of basic earnings (loss) per share Number of shares for the purposes of basic earnings (loss) per share	2002 HK$’000 16,594 2002 358,494,000	2001 HK$’000 (102,083) 2001 358,494,000

No diluted earnings per share for 2002 has been presented as the exercise price of the Company’s outstanding share options and convertible notes was higher than the average market price for 2002.

No diluted loss per share for 2001 has been presented as the exercise of the Company’s outstanding share options and the conversion of the Company’s outstanding convertible notes would result in a decrease in net loss per share.

CHAIRMAN’S STATEMENT

Results

The Group managed to turnaround and achieved satisfactory results in the 12 months of 2002. For the year ended 31 December 2002, the Group achieved profit attributable to shareholders of approximately HK$17 million, as compared with the loss attributable to shareholders of HK$102 million in 2001. The Group’s turnover amounted to approximately HK$380 million, similar to that recorded in the year of 2001. The Directors recommend the payment of a final dividend of HK0.5 cent per share for the year ended 31 December 2002, to be approved by shareholders at the forthcoming annual general meeting. (2001: Nil).

Review of Operations

The significant improvement in the Group’s annual results and substantial increase in profit margin were the results of business diversification towards high return segments, increased

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penetration in fast growing markets and effective implementation of restructuring plans in 2001.

During the year, the Group diversified its business from the manufacturing of media products to distribution business, which contributed the highest return to the Group. The growth in sales from higher margin new products, such as digital imaging and consumable data recording products, generated satisfactory returns to the Group. The Group is always committed to soliciting distribution rights of new computer accessories and media products, such as DVDR, DVDRW, optical mouse, USB storage media, 8mm video cassettes, digital camera, from suppliers with world recognized and reputable brandnames. In line with this strategy, the Group was granted the distribution right of some computer products such as USB storage media for sales in the PRC, which enriched the product varieties for its distribution business, and hence, created new income sources for the Group.

The rebound in demand for conventional products in the first half of 2002 also helped to enhance the Group’s profit margin. Due to market consolidation, conventional product suppliers gradually stopped their production lines. Those customers however continue to demand conventional products and being able to meet those demands, the Group’s profitability continues to rise.

In the light of the slack US economy resulting from the bursting of the Internet bubble in the 4th quarter of 2000 and the built up of military tensions in the Middle East towards the end of 2001, the Group has shifted its target market from the US to China, Asia and Europe.

Sales from the US decreased from 22.8% in 2001 to less than 13.0% in 2002, while sales contribution from the Asian and European markets have grown by 10%, from 77.1% to 87.0% in 2002. This strategy bear fruits this year.

During the year, the Group has strengthened its distribution business in the PRC by recruiting more sub-distributors and retailers with potential and it is planning to develop retails shops to promote distribution sales in the years ahead. Furthermore, the Group has also set up a sales office and a warehouse in the Netherlands to serve “quick turn” customers and participated in trade shows in the European region to enlarge its customer base.

The streamlining of the Group’s business operations and implementation of restructuring plan with write-down of plant and machinery values in 2001 has successfully resulted in cost savings in 2002. The Group’s profit margin has also been increased as a result of reduction in manufacturing operation costs and improved return on assets.

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Computer Media Production and Total Fulfillment Services

Sales of computer media production and total fulfillment services amounted to HK$299 million, accounting for 78.7% of the Group’s total turnover.

Owing to the over supply of CDs from Taiwan manufacturers and weak demand for total fulfillment services from customers in slack US markets, the sales of content-based media products and total fulfillment services dropped. This, together with high production cost of CDs in Hong Kong, had made the line of CDs production business incur a substantial loss. The group operating result should have been improved by double digit in profit margin percentage if the production cost of CDs in Hong Kong had been mitigated eventually.

Nevertheless, the Group was gaining floppy disk business from the reducing number of competitors. Since the automatic production lines of Taiwan manufacturers become obsolete and the floppy disk industry further consolidated, new reputable brandnames customers have turned to the Group to meet their demands, driving the Group’s floppy disk sales. The launch of USB also boosted the demand for floppy disks, as they are essential for computer start-ups.

Entering into the digital era, the Group will commit its resources to further develop its digital imaging products so as to diversify its scope of products under the media product umbrella. Capitalizing on the growing demand for blank information storage media products, the Group will step up its effort to solicit sales orders from some reputable customers. Conversely, it will take cautious and aggressive approach to reduce CD production in Hong Kong.

Distribution

On track in realizing its goal to diversify its business in the distribution segment, the sales of the Group’s distribution business including Asian (PRC) and European markets increased to HK$81 million, growing by 58.8% from HK$51 million on year-on-year basis. Its contribution to the Group’s total turnover has increased from 13.5% in 2001 to 21.3% in 2002.

With the successful expansion of the product scope of its distribution business to cover high margin new products, such as digital imaging and consumable data recording products, the Group achieved turnover growth in this segment. Granted the distribution rights of a reputable Japanese brand as well as the newly secured distribution license for computer products from another well-known Korean brand, the Group was in the wing, poised to capture opportunities in the flourishing markets. The Group will continue to strengthen its distribution arm by exploring and soliciting new computer products from vendors with renowned brandnames.

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With regard to the geographical expansion of its distribution network, the Group increased its presences in Asia and Europe during the year through partnership with sub-distributors and retailers in China and also establishing sales office and warehouse in Rotterdam, the Netherlands. This enabled the Group to reach more customers and extend its client base to other regions. It is the Group’s plan to further develop and expand its distribution networks by establishing joint ventures in the PRC. Additionally, to extend into the second tier of the market segment in the PRC market, the Group is considering setting up 4 to 5 retail shops in the mainland in the second half of 2003.

Prospects

The Group is seeking to diversify its business into services segments such as distribution and retail businesses with minimal capital expenditure. To enhance its profitability, it has plans on hand to develop and extend its distribution network throughout the world, with special focus on fast growing regions, particularly Asia and Europe. In parallel with this expansion plan, the Group will also direct more resources into soliciting and obtaining dealerships from leading brands worldwide. The increasing number of distribution products, especially high margin computer media products, not only helps to broaden the selection for customers, but will also create new income streams for the Group.

Apart from strengthening its distribution and software development businesses, the Group will minimize its capital expense in the year to come. The Group intends to take aggressive and cautious approach to mitigate the production cost of CDs manufacturing in Hong Kong in order to reduce the negative impact of this line of business on the group operating profit. In addition, the Group will not incur substantial amount of capital expenditure after the disposal of its CD-R manufacturing business and write-down of plant and machinery values in the last few years. The Group’s overall profitability will also benefit from this strategic goal.

Taking into consideration the consolidation of the floppy disk market and gradual reduction in the number of Taiwanese floppy disk suppliers, the Group aims to capture this business opportunity to secure reputable clients who have continuous demand for blank information storage media products.

As the sluggish ambience still shadows the global business environment, the Group will keep on adopting prudent cost control measures and take a conservative approach in managing its business and cash flow. In the meantime, the Group will stay alert to changes in market condition that it may response promptly as new opportunity arises.

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Conclusion

On behalf of the Board of Directors, I would like to express my sincere gratitude to our devoted colleagues for their support and encouragement over the past year. Their efforts have been reflected clearly in the favorable results achieved by the Group during the year. In future, we will continue our commitment in achieving better results and reward our valuable investors with promising returns.

FINANCIAL REVIEW

Review of results

During the year ended 31 December 2002, the Group turnover amounted to approximately HK$380 million, similar to that recorded in the year of 2001.

The Group’s profit attributable to shareholders amounted to approximately HK$17 million as compared to a loss attributable to shareholders of HK$102 million in the year of 2001.

Capital structure

The Group has maintained a stable financial position. As at 31 December 2002, the Group had total assets of approximately HK$485 million, comprising non-current assets of approximately HK$265 million and current assets of approximately HK$220 million, which were financed by current liabilities, non-current liabilities, minority interest and shareholders’ fund of approximately HK$187 million, HK$62 million, HK$4 million and HK$232 million respectively.

As at 31 December 2002, the Group’s total net assets was approximately HK$232 million (2001: HK$215 million), representing an increase of HK$17 million compared with 31 December 2001 mainly attributable to operating profit for the year.

Financial resources and liquidity

The Group continues to enjoy financing its operations from internally generated cash flows and bank facilities. As at 31 December 2002, the Group had total available bank facilities of approximately HK$363 million of which approximately HK$239 million remained unutilized. The available un-drawn bank facilities together with cash holdings of HK$41 million will provide adequate funding for the Group’s operational requirements.

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As at 31 December 2002, the Group’s total borrowings excluding the convertible notes of approximately HK$39.6 million decreased by HK$45 million to HK$156 million (31 December 2001: HK$201 million), of which 134 million was payable within one year and HK$22 million was payable after one year. Most of the borrowings subject to floating interest rate are mainly denominated in Hong Kong dollars and hence the risk of currency exposure was insignificant. Cash holdings amounted to HK$41 million (31 December 2001: HK$88 million).

Gearing ratio

The Group’s net debt to equity ratio was 50% (31 December 2001: 52%), which is expressed as a percentage of total bank borrowings and obligations under finance lease and hire purchase contracts of approximately HK$156 million after deducting cash holdings of approximately HK$41 million over the total net assets of HK$232 million (31 December 2001: HK$215 million). The slight decrease in net debt ratio was mainly due to an increase in closing inventories at 31 December 2002 by approximately HK$12 million to HK$70 million (31 December 2001: HK$58 million) in order to enrich product varieties for the distribution business; albeit the Group reported a growth in operating profit for the year.

Convertible notes

The convertible notes issued were part of the consideration for the acquisition of a company holding an agreement for sale and promotion of data media products together with distributorship and sales agreement with the existing clients of certain vendors in 2001.

The convertible notes amounting to HK$39.6 million comprise four convertible notes and are interest free. A convertible note of HK$32.7 million is convertible in part or in whole into new shares of the Company, at the conversion price of HK$0.55 per share, at any time during the period commencing 18 months from the date of issue on 5 January 2001 to, but excluding, the third anniversary from the date of issue (the “Maturity Date”). To the extent that this convertible note has not been previously converted, it will be redeemed on the Maturity Date at the then outstanding principal amount provided that the Company has the option to call on the holder to convert this convertible note on the same date wholly into new shares of the Company. The other three convertible notes, each having a principal amount of HK$2.3 million, are convertible in part or in whole into the new shares of the Company, at the conversion price of HK$0.55 per share, at any time during the period commencing 12, 24, and 33 months from the date of issue respectively up to but excluding the Maturity Date. To the extent that the three convertible notes have not been previously converted, the convertible notes will be redeemed on the Maturity Date at the then outstanding principal amounts.

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Employees and Remuneration Policies

As at 31 December 2002, the number of employees of the Group was approximately 1,000. The remuneration packages of the Group’s employees are mainly based on their performance and experience, taking into account the current industry practices. Remuneration package of employees includes salaries, insurance and medical cover, mandatory provident fund and share option scheme. Other employee benefits include educational allowance and discretionary bonuses.

Contingent Liabilities and Charges on the Group’s Assets

The Company gave guarantees of approximately HK$363 million (2001: HK$440 million) to financial institutions in respect of banking facilities granted to subsidiaries. The Group had pledged its assets with an aggregate net book value of HK$55.2 million (2001: HK$126.6 million) to secure bank and other loans granted, and obligations under finance leases and hire purchases contracts to its subsidiaries.

In addition, in 1998 a subsidiary of the Company received a writ from a customer in Hong Kong claiming amounts of RMB5.9 million and US$1 million relating to alleged defective products delivered by that subsidiary. However, the directors, based on an opinion from the Group’s independent legal advisers, consider that the allegations made by the customer are not valid and are of the opinion that such claims will not cause any material loss to the Group. No provision for the cost of the legal fees or loss, if any, arising from the allegation has been made in the financial statements.

FINAL DIVIDEND

The Directors have resolved to recommend to shareholders at the forthcoming Annual General Meeting the payment of a final dividend of HK0.5 cent per share for the year ended 31 December, 2002 to shareholders whose names appear on the Register of Members on 20 June, 2003. Subject to the approval by shareholders at the forthcoming Annual General Meeting, the proposed final dividend will be dispatched to shareholders on or about 11 July, 2003.

CLOSURE OF REGISTER OF MEMBERS

The Register of Members of the Company will be closed from 23 June, 2003 to 27 June, 2003, both days inclusive, during which period no share transfers will be effected.

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In order to qualify for the proposed final dividend, all transfer documents accompanied by the relevant share certificates, must be lodged with the Company’s Branch Registrars in Hong Kong, Standard Registrars Limited, G/F., Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong not later than 4:00 p.m. on 20 June 2003.

CORPORATE GOVERANCE

The Company has complied throughout the year ended 31 December, 2002 with the Code of Best Practice as set out in Appendix 14 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (“Listing Rules”).

PURCHASE, SALE OR REDEMPTION OF LISTED SECURITIES

During the year ended 31 December, 2002, neither the Company nor any of its subsidiaries purchased, sold or redeemed any of the Company’s listed securities.

PUBLICATION OF DETAILED RESULTS ANNOUNCEMENT ON THE STOCK EXCHANGE OF HONG KONG LIMITED (“STOCK EXCHANGE”) WEBSITE

All the financial and other related information of the Company required by paragraphs 45(1) to 45(3) of Appendix 16 of the Listing Rules will be published on the Stock Exchange’s website in due course.

On behalf of the Board Ho Yin King, Helena Chairman

Hong Kong, 23 April 2003

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Notice of Annual General Meeting

NOTICE IS HEREBY GIVEN that the annual general meeting of Jackin International Holdings Limited will be held at Unit 8, 10/F Riley House, 88 Lei Muk Road, Kwai Chung, New Territories, Hong Kong on Saturday, 28 June 2003 at 9:00 a.m. for the following purposes:

1. To receive and adopt the Audited Financial Statements of the Company and the Reports of the Directors and of the Auditors for the year ended 31 December 2002.

2. To declare a final dividend for the year ended 31 December 2002.

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

4. To determine the maximum number of Directors at nine for the time being and to authorise the Directors to appoint additional Directors up to such maximum number.

5. To re-appoint Messrs. Deloitte Touche Tohmatsu as the Auditors of the Company and to authorise the Board of Directors to fix their remuneration.

6. As special business, to consider and, if thought fit, pass the following resolutions as Ordinary Resolutions:

7. A. “ THAT :

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

   • (b) the approval in paragraph (a) above shall be in addition to any other authorisation given to the Directors of the Company and shall authorise the Directors of the Company during the Relevant Period to make or grant offers, agreements and options, including warrants to subscribe for shares, which might require the exercise of such powers after the end of the Relevant Period;

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• (c) 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 of the Company pursuant to the approval in paragraph (a) above, otherwise than pursuant to a Rights Issue (as hereinafter defined) or any issue of shares of the Company on the exercise of the subscription rights attaching to any warrants which may be issued by the Company from time to time or the exercise of the options granted under the share option scheme of the Company or an issue of shares in lieu of the whole or part of a dividend on shares in accordance with the Bye-laws of the Company, shall not exceed 20% of the aggregate nominal amount of the share capital of the Company in issue at the date of passing this resolution, and the said approval shall be limited accordingly; and

• (d) 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 any applicable law or the Bye-laws of the Company to be held; and

• (iii) the passing of an ordinary resolution of the Company in general meeting revoking or varying the authority set out in this resolution.

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

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• B. “ THAT :

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

• (b) the aggregate nominal amount of securities authorised to be repurchased by the Company pursuant to the approval in paragraph (a) above during the Relevant Period shall not exceed 10% of the aggregate nominal amount of the share capital of the Company in issue at the date of passing this resolution and the said approval shall be limited accordingly; and

• (c) for the purposes of this resolution:

“Relevant Period” means the period from the passing of this resolution until whichever is the 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 any applicable law or the Bye-laws of the Company to be held; and

• (iii) the passing of an ordinary resolution of the Company in general meeting revoking or varying the authority set out in this resolution.”

• C. “ THAT conditional on the passing of the resolution set out in paragraph 6B of the notice convening this meeting, the general mandate granted to the Directors of the Company and for the time being in force to exercise the powers of the Company to allot, issue and deal with additional shares pursuant to the resolution set out in paragraph 6A of the notice convening this meeting be and is hereby extended by the addition to the aggregate nominal amount of the share capital of the Company

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which may be allotted or agreed conditionally or unconditionally to be allotted by the Directors of the Company pursuant to such general mandate of an amount representing the aggregate nominal amount of the share capital of the Company repurchased by the Company under the authority granted pursuant to the resolution set out in paragraph 6B of the notice convening this meeting.”

By Order of the Board Chan Siu Kay Company Secretary

Hong Kong, 23 April 2003

Notes :

1. Any member entitled to attend and vote at the above meeting is entitled to appoint one or more proxies to attend and 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 of that power or authority must be deposited at the Company’s principal place of business in Hong Kong at Unit 8, 10th Floor, Riley House, 88 Lei Muk Road, Kwai Chung, New Territories, Hong Kong not less than 48 hours before the time appointed for the holding of the meeting or any adjourned meeting.

3. The Register of Members will be closed from Monday, 23 June 2003 to Friday, 27 June 2003 (both days inclusive) during which period no transfer of shares will be registered. In order to qualified for the proposed final dividend, all transfer documents accompanied by the relevant share certificates must be lodged with the Company’s Branch Registrars in Hong Kong, Standard Registrars Limited, G/F., Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong not later than 4:00 p.m. on Friday, 20 June 2003.

4. An explanatory statement containing further details regarding the Resolutions set out in item 6 will be dispatched to members of the Company together with the annual report of the Company for the year ended 31 December 2002.

Please also refer to the published version of this announcement in China Daily.

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