ICO Group Limited — Earnings Release 2001

Apr 29, 2002

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 2001

RESULTS

The Board of Directors of Jackin International Holdings Limited (the "Company") announce the audited consolidated results of the Company and its subsidiaries (the "Group") for the year ended 31 December 2001, together with the comparative figures for the previous year, as follows:

2001 2000

Notes HK$'000 HK$'000

Turnover 2 379,945 647,743

Cost of sales (292,389 ) (490,985 )

Gross profit 87,556 156,758

Other revenue 6,286 4,399

Selling and distribution costs (21,292 ) (26,446 )

Administrative expenses (47,634 ) (57,716 )

Profit from operations before impairment

loss on assets and loss on disposal of

assets 24,916 76,995

Impairment of intangible assets 4 (6,221 ) (4,644 )

Impairment loss recognised in respect of

plant and machinery 5 (70,000 ) -

Loss on disposal of plant and equipment (18,573 ) -

(Loss) profit from operations after

impairment loss on assets and loss on

disposal of assets (69,878 ) 72,351

Finance costs (17,386 ) (23,420 )

Share of profit of an associate 1,507 113

Loss on disposal of a subsidiary (18,272 ) -

(Loss) profit before taxation (104,029 ) 49,044

Taxation credit (charge) 6 572 (1,190 )

(Loss) profit for the year (103,457 ) 47,854

Minority interests 1,374 185

(Loss) profit attributable to shareholders (102,083 ) 48,039

Dividends 7 - (7,889 )

(Loss) earnings per share 8

Basic (28,48 cents) 13.22 cents

Diluted N/A 13.05 cents

Notes:

1. Basis of presentation and comparative figures

The Group has adopted the following new and revised Statements of Standard Accounting Practice ("SSAP's") issued by the Hong Kong Society of Accountants in preparation of the financial statements for the current year. Accordingly, certain comparative figures for the prior year have been restated to achieve as consistant presentation.

SSAP 9 (Revised) : Events after the Balance Sheet Date

SSAP 10 (Revised) : Accounting for Investment in Associates

SSAP 26 : Segment Reporting

SSAP 28 : Provisions, contingent liabilities and contingent assets

SSAP 29 : Intangible assets

SSAP 30 : Business combinations

SSAP 31 : Impairment of assets

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. Principal activities and geographical analysis of operations

The Group's turnover and contribution to operation (loss) profit for both years ended 31 December 2001 and 31 December 2000 analysed by the principal activities and geographical markets are as follows:

2001 2000

Contribution Contribution

to (loss) to profit

profit from from

continuing continuing

operations operations

before before

Turnover taxation Turnover taxation

HK$'000 HK$'000 HK$'000 HK$'000

By principal activities:

Manufacturing and trading of media

products 213,490 (51,103 ) 367,186 93,053

Total fulfilment services 108,480 10,134 265,742 25,521

Distribution of media products 51,466 14,230 - -

Manufacturing and trading of computer

accessories 3,545 765 - -

Other 2,964 1,181 14,815 7,094

379,945 (24,793 ) 647,743 125,668

Other revenue 2,549 4,399

Unallocated corporate expenses (47,634 ) (57,716 )

(Loss) profit from operations after impairment

loss on assets (69,878 ) 72,351

Loss on disposal of a subsidiary (18,272 ) -

Finance costs (17,386 ) (23,420 )

Share of profit of an associate 1,507 113

(Loss) profit before taxation (104,029 ) 49,044

Taxation credit (charge) 572 (1,190 )

(Loss) profit for the year (103,457 ) 47,854

2001 2000

Contribution Contribution

to (loss) to profit

profit from from

continuing continuing

operations operations

before before

Turnover taxation Turnover taxation

HK$'000 HK$'000 HK$'000 HK$'000

By geographical markets:

Asia

• The People's Republic of China 153,391 31,257 146,575 38,024

• Other regions in Asia 71,698 14,778 87,185 20,879

Europe 68,037 14,456 132,789 29,418

North America 86,819 9,510 281,194 41,991

379,945 70,001 647,743 130,312

Other revenue 2,549 4,399

Unallocated corporate expenses (47,634 ) (57,716 )

Profit from operations before impairment

loss on assets and loss on disposal of assets 24,916 76,995

Impairment loss on plant and equipment (70,000 ) 0

Impairment of intangible assets (6,221 ) (4,644 )

Loss on disposal of a subsidiary (18,272 ) 0

Loss on disposal of plant and equipment (18,573 ) 0

Finance costs (17,386 ) (23,420 )

Share of profit of an associate 1,507 113

(Loss) profit before taxation (104,029 ) 49,044

Taxation credit (charge) 572 (1,190 )

(Loss) Profit for the year (103,457 ) 47,854

4. Impairment loss of intangible assets

The impairment loss of intangible assets represent the cost of the technical know-how for products which the directors consider are no longer commercially viable.

5. Impairment loss on plant and equipment

During the year, the Group reviewed the carrying amounts of plant and equipment and identified that certain of those plant and equipment used in the manufacturing process of compact disc have impairment loss in light of the current compact disc market. Accordingly, the carrying amounts of those identified plant and equipment are reduced to their respective recoverable amounts, which represent the net selling prices of those plant and equipment. The net selling prices were determined by reference to the market prices.

6. Taxation

2001 2000

HK$'000 HK$'000

The credit (charge) comprises:-

Profits Tax for the year:

Hong Kong - (529 )

Overseas (279 ) (645 )

Prior years:

Hong Kong - underprovision (3 ) (164 )

Overseas - overprovision 854 148

572 (1,190 )

Hong Kong Profits Tax is calculated at 16% (2000: 16%) of the estimated assessable profits for the year. Overseas taxation is calculated at the rates prevailing in the respective jurisdictions.

7. Dividends

2001 2000

HK$'000 HK$'000

Interim dividend paid:

• nil (2000: HK 2.2 cents) - 7,889

8. (Loss) earnings per share

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

(Loss) earnings:

2001 2000

HK$'000 HK$'000

(Loss) earnings for the purposes of basic

(loss) earnings per share (102,083 ) 48,039

Effect of dilutive potential shares

Interest on convertible bond - 2,364

(Loss) earnings for the purposes of diluted

(loss) earnings per share (102,083 ) 50,403

Number of shares:

2001 2000

HK$'000 HK$'000

Weighted average number of shares for the

purposes of basic (loss) earnings per share 358,494,000 363,482,583

Effect of dilutive potential shares

Convertible bonds - 22,695,156

Weighted average number of shares for the

purposes of diluted (loss) earnings per share 358,494,000 386,177,739

The computation of diluted earnings per share 2000 does not assume the exercise of the Company's outstanding share options as the exercise price of those options is higher than the average market price.

No diluted loss per share figure for 2001 have been presented as the exercise of the Company's outstanding share options and the conversion of the Company's outstanding convertible bonds would result in a decrease in net loss per share.

CHAIRMAN'S STATEMENT

Results

For the year ended 31 December 2001, the Group recorded a turnover of HK$380 million, corresponding to HK$648 million in 2000. Loss attributable to shareholders was HK$102 million, as compared with last year's profit attributable to shareholders of HK$48 million. The Directors do not recommend the payment of a final dividend for the year ended 31 December 2001 (2000: Nil).

Review of Operations

Owing to the slowdown in the US economy since the 4th quarter of 2000, both the Group's turnover and profit dropped in 2001, especially during the 1st and 2nd quarters. Leveraging our strengths in the media products distribution business together with our newly established distribution arm, which recorded the highest profit contribution to the Group, our turnover and profit showed an improvement in the second half of the year.

The decrease in the Group's profit margin was mainly attributable to the restructuring of the optical media products business to streamline this operation and reduce cost. The restructuring plan had resulted in a redundant cost of HK$3 million. In addition, we wrote down the CD lines in the amount of HK$70 million mainly due to the devaluation of foreign currencies in which the purchase cost of CD lines were booked in our accounting record and the matured technology of the CD product manufacturing. With plenty supply of CD-R product from worldwide suppliers and excessive supply from those Taiwanese manufacturers, the CD-R which require huge investment was selling at a price lower than CD-Rom average selling price. The Group viewed that in the foreseeable future, manufacturing CD-R will not generate any benefit to the Group. Therefore, we also disposed a subsidiary company that engaged in the manufacturing of CD-R business, thus generated a loss of HK$18 million. However, these moves will better reflect the fair value of assets in our financial statement.

In the wake of the "911 terrorist attacks" in the US, people spent more time at home, thus making greater use of computer and home entertainment. This created a demand for supply chain management services and media products. As a result, turnover from these business segments showed a rebound in the 2nd half of the year. Recent signs of recovery and the slight rebound in the US economy in the 2nd half of 2001 also brought business growth for our total fulfillment services.

With the PRC's accession to WTO, more foreign companies are setting up offices in China, which has driven the demand for computer media products. During the year, we shifted our market focus from the US to the flourishing PRC market. By strengthening the distribution network in this new market, we were able to increase our penetration in China. In line with our strategy to launch new computer accessories in the digital imaging business, we have further empowered our distribution arm.

Total Fulfillment Services

During the reporting period, turnover for our supply chain management and total fulfillment services was approximately HK$108 million, accounting for 28.4% of the Group's total turnover.

The global economy and the Internet technology industry has remained stagnant ever since the bursting of the Internet bubble in the 4th quarter of 2000. Coupled with the static economic conditions in the US, which is the major market for this segment, resulted in a substantial drop in demand for supply chain management services in the 1st and 2nd quarters of 2001. At the same time, the popularity of the Internet to download software and the trimming of inventory levels by US customers adversely affected demand for total fulfillment services. However, sales of total fulfillment services rebounded in the 4th quarter last year. Due to the "911 terrorist attacks" in the US, consumers preferred to play computer games at home, thus creating a surge in demand for this service.

In view of the sluggish US market and the depressed demand for our services, we have shifted our focus to Asia, especially the PRC and Hong Kong markets. Geographical distribution for total fulfillment services in Asia has increased. Our successful expansion into the PRC market has enhanced the establishment of a solid client base in China. Coupled with our extended value-added agency services, our competitive edge has been further strengthened, and our presence heightened in the booming PRC market.

The Group's Taiwan operations also suffered from the slack conditions in the global Internet technology industry. Our Taiwan operations provide agency services and procurement and logistics services to US customers. As the demand for agency services in Taiwan decreased, profit from this service segment dropped.

To reduce operating costs, we transformed our US operation from production base to sales office, which resulted in an expense of approximately HK$1 million for the elimination of the production plant in the US. The sales office now provides supply chain management and total fulfillment services to US customers which also exploring new markets.

With the sluggish economy, most US software companies outsourced their supply chain management services to reduce their operating costs. Following the slight economic rebound in the 4th quarter of 2001, both the demand of supply chain management and total fulfillment services sustained by US customers consumed the inventory refill. The Group is therefore optimistic with regard to this business segment in the coming year.

Computer Media Production

Sales of the Group's computer media products amounted to approximately HK$213 million during the reporting period, accounting for 56% of the Group's total turnover, representing a drop of 42% as compared with the figure in 2000.

The bursting of the Internet bubble led to a tremendous decrease in market demand for content-based media products, including floppy disk and CD-Rom. Thus, turnover for this business segment fell substantially. Additionally, the inventory backlog held by customers weakened purchases of the Group's computer media products.

The reduction of profit in this business segment was however due to the primarily cost of HK$3 million to implement restructure plan, and the loss brought about by the disposal of the Group's CD-Rom lines and CDR manufacturing business together with the write-down of various CD lines, thus, suffering a loss for the year.

In view of the keen competition brought about by Taiwan manufacturers, the supply of CD was over-flooded in the market. The price of product was squeezed, substantially lowering our profit margin. Additionally, the write-down of CD-Rom production lines, which was denominated in Deutsche Mark after the launch of Euro, devalued the Group's asset. Due to the doubtful prospect of the CD-R production business, the Group decided to dispose the CD-R manufacturing business and write-down its CD lines in order to reflect the fair value of the Group's asset.

However, the write-down of CD lines will improve the cost structure of content-based media products as the amount of depreciation charges will substantially decrease. Since our costs of production will be improved, we will gain more bargaining power to solicit sales orders at very competitive prices. Due to slowdown in worldwide economy, demand for floppy disk has reduced by approximately 20% in quantity. Yet, this business segment continued to benefit the Group. Nevertheless, demand for floppy disk will increase generated by sales orders from reputable customers.

Distribution

Turnover for the Group's newly established distribution segment reached HK$51 million, accounting for 13.4% of the Group's total turnover. This segment was able to fulfill the profit guarantee of approximately HK$12 million, as stated in the contract of acquisition of Fortune Luck Development Ltd. ("Fortune Luck").

The Group's distribution arm was developed through the acquisition of Fortune Luck in January 2001. It catalyzed the diversification of the Group's business from producing media products to distribution. Fortune Luck has 18 distribution centers in major cities in the PRC with direct access to its population of 1.3 billion people. It is an authorized distributor of media products for a reputable Japanese company. In February 2001, Fortune Luck began its income contribution to the Group.

Apart from Fortune Luck's well-established distribution network, the Group is committed to improving the comprehensiveness and geographic coverage of our delivery channels. Therefore, we will expand our network by establishing 8 new distribution centers in selected areas in the PRC and Asian region. These new distribution centers are expected to commence their operations by the 2nd quarter in 2002.

Meanwhile, the Group is obtaining dealership of various products to improve the variety of its distribution items. During the year, the Group won distribution rights of two reputable brands from Japan and Korea with over 100 items for distribution. These products were delivered to different countries within the Asia Pacific region.

With the huge opportunities arising out of China's entry into WTO, the demand for distribution services within the China region will increase. We will continue to extend our distribution channels, further expanding this business segment.

Software Programming Business

In the end of 1999, the Group developed a software programming company, initially planned to develop Internet business with various types of movies. We have owned 3,000 films in our movie library. The Internet company is called "Albata". In the middle of 2000, the Internet bubble was cooling down, we, therefore, transformed this Internet company into software programming. After 18 months development, Albata was successfully to be one of the software programming suppliers to HKSAR Education Department, and maintain stable business from some international educational software companies.

Prospects

The Group's objective is to further diversify into other servicing businesses such as distribution and software programming development that consumed very minimal capital expenditures. The Group will actively expand distribution network to open up more income streams for the Group.

Recent statistics show signs of recovery in the US economy. Thus growth in consumer activities will raise new demand for the Group's products and services. The rebound of the US market condition will generate the needs of our supply chain management and total fulfillment services. The improvement of this business segment in 2002 is expected to be in a greater extent than in the 4th quarter in 2001.

In addition, the Group will expand its distribution business to not only the Asian region, but also Europe and the US. At the same time, the Group put every effort to obtain dealership of different products and distribute them via its network channels. Through the expansion of product scope and gradual expansion into new markets, we are confident that the turnover of this business segment will be sustained and the Group's profitability will be further improved.

As regards to the floppy disk business, it is expected that there will be a rebound of this business segment in 2002. The consolidation of the floppy disk market faded out less competitive companies that led to lessen competition in the market. Therefore, few prominent brand names that dominated the market are our major clients. Sales orders from these renowned clients will bring the demand for our floppy disks.

The expansion of turnover from our software programming business will bring positive results to the Group. Albata, which cooperated with internationally well-known educational institutions for developing educational software products, worked with a reputable telecommunication company in the PRC recently for the development of mobile computing software. We are confident that this new business development will have profit contribution to the Group in 2002.

Meanwhile, the Group will continue to put every effort into product research and development. The positive market responses brought about by the market trials for digital imaging and consumable data recording products reinforce our capabilities in the development of innovative products. To consolidating our manufacturing base, we will look for opportunities to expand our vertical integration through acquisition of material suppliers, which will reduce production costs for these new products. We will also continue to improve our product range to provide more choices for our customers.

China's accession to WTO and the hosting of the 2008 Olympic games will bring many business opportunities to the Group. As more foreign companies establish offices in China, this will create a demand for computer media and software products.

The restructuring of the Group's business improves the fair value reflection of its earnings per asset. Our professional and experienced management team will stay alert in anticipation of changes in global economic conditions, introducing measures in response to these changes. In view of the uncertain business environment, we will adopt a conservative approach in managing our business and cash flow. We will also sustain our ongoing implementation of prudent cost controls which will enhance our profitability and achieve profitable returns for shareholders.

FINANCIAL REVIEW

Financial results

For the year ended 31 December, 2001, the Group's consolidated results from operating activities, before impairment loss on assets and loss on disposal of assets, amounted to a profit of approximately HK$11 million (2000: HK$53 million). As a result of the adoption of Hong Kong Statement of Standard Accounting Practice No. 31 "Impairment of Assets" issued by the Hong Kong Society of Accountants, impairment loss of HK$70 million on plant and equipment and of intangible assets of approximately HK$6 million was made in the financial statements. Together with the impact of loss on disposal of plant and equipment of HK$19 million and a subsidiary of HK$18 million, the Group report a net loss of approximately HK$102 million as compared to a net profit of HK$48 million in 2000.

Net asset value

As at 31 December 2001, the Group's total net asset was approximately HK$215 million (2000: HK$317 million), a decrease of HK$102 million when compared with 31 December, 2000. The decrease in net asset value was mainly due to provision for impairment loss on plant and equipment; loss on disposal of assets and a subsidiary and intangible assets written off for the year.

Liquidity and capital resources

The Group had total available banking facilities of approximately HK$458 million of which HK$301 million remained unutilized. Cash and bank balances amounted to HK$88 million. The Group is able satisfy its commitments and working capital requirement through its internally generated cash flows and banking facilities.

As at 31 December, 2001, the Group's total bank borrowings excluding the convertible bond amounted to HK$200 million (2000: HK$147 million). Net bank borrowings after deducting cash and bank balances amounted to HK$112 million (2000: HK$62 million). The Group's net debt to equity ratio was 52% (2000: 20%), which is expressed as a percentage of total bank borrowings minus cash and bank balances over the Group's shareholders' equity. The increase in net debt ratio was mainly due to provision of impairment loss on plant and equipment and intangible asset written off that had eroded a substantial amount of shareholders' fund. Of the Group's total bank borrowings of HK$200 million, HK$153 million (2000: HK$113 million) are repayable within the 2002 and HK$47 million (2000: HK$34 million) are repayable after one year. Majority of the bank borrowings are subject to floating interest rates.

The Group has carried out refinancing of debt during the year. Certain bank borrowings were refinanced with longer tenor and more competitive terms. The Group will continue to maintain a low gearing ratio and will further reduce its outstanding debts as appropriate.

Convertible bond

During the year, the Group had arranged a term loan of HK$15 million to redeem the remaining portion of convertible bond issued to an investor in the year of 1998. The term loan will be settled by 8 instalments within 2 years. On 5 January 2001, the Group had issued a convertible bond in the total amount of HK$39.6 million to acquire the distribution and logistic business. In consideration of the bond, the vendors guarantee with the Group that the audited net profit after tax shall not be less than approximately HK$11.5 million for the year ended 31 December 2001. The convertible bond in the total amount of HK$39.6 million is divided into four convertible notes. A convertible note of HK$32.7 million is convertible in part or in whole into Company's new shares 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 Company's new shares. The three convertible notes, each having a principal amount of HK$2.3 million, are convertible in part or in whole into the Company's new shares 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.

FINAL DIVIDEND

The Directors do not recommend the payment of final dividend for the year ended 31 December, 2001 (2000: nil).

CORPORATE GOVERANCE

The Company has complied throughout the year ended 31 December, 2001 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.

PURCHASE, SALE OR REDEMPTION OF LISTED SECURITIES

During the year ended 31 December, 2001, 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 ("THE EXCHANGE'S") WEBSITE

A detailed results announcement containing all the information required by paragraphs 46(1) to 46(6) of Appendix 16 of the Listing Rules will be published on the Exchange's website in due course.

By Order of the Board

Ho Yin King, Helena

Chairman

Hong Kong, 26 April 2002

NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the annual general meeting of the Company will be held at Concord Room 2-3, 8th Floor, Renaissance Harbour View Hotel, 1 Harbour Road, Wanchai, Hong Kong on Friday, 24 May 2002 at 9:30 a.m. for the following purposes:

1. To receive and adopt the audited accounts of the Company and the reports of the Directors and of the Auditors for the year ended 31 December 2001.

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

3. 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.

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

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

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;

(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)."

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 5B 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 5A 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 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 5B of the notice convening this meeting."

By Order of the Board

Chan Siu Kay

Company Secretary

Hong Kong, 26 April 2002

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. An explanatory statement as required by the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited in connection with the proposed repurchase mandate under Resolution no. 5B above will be dispatched to members together with the 2001 annual report of the Company.

"Please also refer to the published version of this announcement in the Hong Kong i-mail"