JD Logistics, Inc. — AGM Information 2005

Apr 25, 2005

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any 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, a bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Midas International Holdings Limited, you should at once hand this circular to the purchaser or to the bank, stockbroker or other agent through whom the sale 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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PROPOSALS INVOLVING

GENERAL MANDATES TO REPURCHASE

ORDINARY SHARES AND TO ISSUE ORDINARY SHARES,

AMENDMENTS TO ARTICLES OF ASSOCIATION OF THE COMPANY

AND RE-ELECTION OF RETIRING DIRECTORS

A notice convening the annual general meeting of Midas International Holdings Limited (the “Company”) to be held at 25th Floor, Alexandra House, 16-20 Chater Road, Central, Hong Kong on Wednesday, 25th May, 2005 at 10:00 a.m. is set out on pages 67 to 70 of the annual report of the Company for the year ended 31st December, 2004 despatched together with this circular. Whether or not you intend to attend the said meeting, you are requested to complete the proxy form enclosed in the said annual report in accordance with the instructions printed thereon and return the same to the head office and principal place of business of the Company at 1st Floor, 100 Texaco Road, Tsuen Wan, New Territories, Hong Kong, as soon as possible and in any event not later than 48 hours before the time appointed for the holding of the said meeting.

15th April, 2005

* For identification purpose only

DEFINITIONS

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

“Annual General Meeting”	the annual general meeting of the Company to be held on
	Wednesday, 25th May, 2005 at 10:00 a.m. notice of which
	is set out on pages 67 to 70 of the annual report of the
	Company for the year ended 31st December, 2004
	despatched together with this circular
“Articles of Association”	the articles of association of the Company
“Company”	Midas International Holdings Limited, a company
	incorporated in the Cayman Islands, the Shares of which
	are listed on the Stock Exchange
“Director(s)”	director(s) of the Company
“Group”	the Company and its subsidiaries
“Latest Practicable Date”	8th April, 2005, being the latest practicable date prior to
	the printing of this circular
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock
	Exchange
“Repurchase Proposal”	the proposal to approve the Repurchase Resolution to give
	a general mandate to the Directors to exercise all the powers
	of the Company to repurchase during the relevant period
	Shares up to a maximum of 10% of the Shares in the issued
	share capital of the Company at the date of the Repurchase
	Resolution
“Repurchase Resolution”	the ordinary resolution granting to the Directors a general
	mandate to exercise all the powers of the Company to
	repurchase during the relevant period Shares up to a
	maximum of 10% of the Shares in the issued and fully-paid
	up share capital of the Company at the date of the
	Repurchase Resolution to be proposed at the Annual General
	Meeting as referred to in resolution No. 5A of the notice of
	the Annual General Meeting
“Securities and Futures Ordinance”	the Securities and Futures Ordinance (Chapter 571 of the
	Laws of Hong Kong)
“Share(s)”	ordinary share(s) of HK$0.10 each in the capital of the
	Company
“Shareholder(s)”	holder(s) of Shares
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Takeover Code”	The Hong Kong Code on Takeovers and Mergers
“HK$”	Hong Kong dollars

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Executive Directors:

Mr. CHAN Sheung Chiu (Chairman) Mr. KWONG Tin Lap (Managing Director) Mr. KWOK Chi Fai (Deputy Managing Director) Ms. LI Mee Sum, Ann Mr. TANG Chow Ming, Paul Mr. WONG Chi Sing

Head office and principal place of business: 1st Floor, 100 Texaco Road Tsuen Wan New Territories Hong Kong

Non-Executive Directors:

Mr. LEE Sai Wai Mr. Dominic LAI

Independent Non-Executive Directors:

Mr. SHEK Lai Him, Abraham Dr. LI Sau Hung, Eddy Mr. YAU Chi Ming

15th April, 2005

To Shareholders,

Dear Sir or Madam,

INTRODUCTION

It is proposed that at the Annual General Meeting of the Company to be held on 25th May, 2005, inter alia , resolutions will be proposed (i) to grant to the Directors a general mandate to repurchase Shares, (ii) to grant to the Directors a general mandate to allot, issue and deal with Shares not exceeding 20% of the Shares in the issued share capital of the Company at the date of the resolution and adding to such general mandate so granted to the Directors any Shares representing the aggregate nominal amount of the Shares repurchased by the Company after the granting of the general mandate to repurchase Shares under the Repurchase Resolution, (iii) to amend the Articles of Association as described below, and (iv) to re-elect retiring Directors.

GENERAL MANDATE TO REPURCHASE SHARES

It will be proposed at the Annual General Meeting the Repurchase Resolution and the Directors propose to seek your approval thereof.

GENERAL MANDATE TO ISSUE SHARES

It will also be proposed at the Annual General Meeting two ordinary resolutions, which are set out in resolutions No. 5B and 5C of the notice of the Annual General Meeting, respectively granting to the Directors a general mandate to allot, issue and deal with Shares not exceeding 20% of the Shares in the issued share capital of the Company at the date of the resolution and adding to such general mandate so granted to the Directors any Shares representing the aggregate nominal amount of the Shares repurchased by the Company after the granting of the general mandate to repurchase Shares under the Repurchase Resolution.

• For identification purpose only

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SHARE CAPITAL

As at the Latest Practicable Date, the issued share capital of the Company comprised 534,290,068 Shares and 39,166,668 non voting redeemable preference shares of HK$0.01 each.

Subject to the passing of the Repurchase Resolution and the relevant resolutions on granting the general mandate to the Directors to issue new Shares and on the basis that no further Shares shall be issued or repurchased prior to the Annual General Meeting, the Company would be allowed under these resolutions to repurchase a maximum of 53,429,006 Shares and to issue a maximum of 106,858,013 Shares.

REASONS FOR REPURCHASES

The Directors believe that the Repurchase Proposal is in the best interests of the Company and its Shareholders. Repurchases may, depending on market conditions and funding arrangements at the time, lead to an enhancement of the net assets and/or earnings per Share and will only be made when the Directors believe that such a repurchase will benefit the Company and its Shareholders.

FUNDING OF REPURCHASES

In repurchasing Shares, the Company may only apply funds legally available for such purpose in accordance with its Memorandum of Association and the Articles of Association and the laws of the Cayman Islands which provide that the amount of capital repaid in connection with Share repurchases may only be paid out of either the capital paid up on the relevant Shares, or the profits that would otherwise be available for dividend, or the proceeds of a fresh issue of Shares made for the purpose. The amount of premium payable on repurchase may only be paid out of either the profit that would otherwise be available for dividend or out of the share premium or contributed surplus accounts of the Company.

DIRECTORS, THEIR ASSOCIATES AND CONNECTED PERSONS

None of the Directors nor, to the best of their knowledge having made all reasonable enquiries, their associates, have any present intention to sell any Shares to the Company or its subsidiaries under the Repurchase Proposal if such is approved by the Shareholders.

No connected persons (as defined in the Listing Rules) of the Company have notified the Company that they have a present intention to sell any Shares to the Company or its subsidiaries, or have undertaken not to do so, in the event that the Repurchase Proposal is approved by the Shareholders.

UNDERTAKING OF THE DIRECTORS

The Directors have undertaken to the Stock Exchange to exercise the power of the Company to make purchases pursuant to the Repurchase Resolution in accordance with the Listing Rules, all applicable laws of the Cayman Islands and the regulations set out in the Memorandum of Association of the Company and the Articles of Association.

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There might be an adverse impact on the working capital or gearing position of the Company as compared with the positions disclosed in the Company’s annual report for the year ended 31st December, 2004 in the event that the Repurchase Resolution were to be carried out in full at any time during the proposed repurchase period. However, the Directors do not propose to exercise the Repurchase Resolution to such extent as would, in the circumstances, have a material adverse effect on the working capital requirements of the Company or the Company’s gearing levels which in the opinion of the Directors are from time to time appropriate for the Company.

TAKEOVER CODE

If on the exercise of the power to repurchase Shares pursuant to the Repurchase Resolution, a Shareholder’s proportionate interest in the voting rights of the Company increases, such increase will be treated as an acquisition for the purposes of Rule 32 of the Takeover Code. As a result, a Shareholder, or group of Shareholders acting in concert, could obtain or consolidate control of the Company and become obliged to make a mandatory offer in accordance with Rule 26 of the Takeover Code.

As at the Latest Practicable Date, to the best of the knowledge and belief of the Company, Gold Throne Finance Limited (“Gold Throne”), a wholly owned subsidiary of Chuang’s China Investments Limited (“Chuang’s China”), is interested in 238,000,000 Shares, representing approximately 44.55% of the issued Shares. 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 Resolution, the aggregate shareholding of Gold Throne would increase from 44.55% to approximately 49.49% of the Shares in the issued share capital of the Company. Such an increase would give rise to an obligation to make a mandatory offer under Rule 26.1 of the Takeover Code.

The Directors have no intention to exercise the general authority under the Repurchase Resolution to repurchase Shares to such an extent as would result in such an obligation arising. Save as the aforesaid, the Directors are not aware of any consequences which would arise under the Takeover Code as a consequence of any repurchases pursuant to the Repurchase Resolution.

SHARES REPURCHASE MADE BY THE COMPANY

There was no repurchase by the Company, or any of its subsidiaries, of any Shares (whether on the Stock Exchange or otherwise) during the six months preceding the Latest Practicable Date.

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SHARE PRICES

The highest and lowest prices at which the Shares had been traded on the Stock Exchange during each month from April 2004 to March 2005 were as follows:

	Per Share	Per Share
	Highest	Lowest
Month	Traded Price	Traded Price
	(HK$)	(HK$)
2004
April	0.70	0.61
May	0.65	0.45
June	0.57	0.51
July	0.57	0.52
August	0.56	0.53
September	0.65	0.53
October	0.62	0.54
November	0.65	0.56
December	0.63	0.59
2005
January	0.62	0.58
February	0.66	0.60
March	0.68	0.63

AMENDMENTS TO THE ARTICLES OF ASSOCIATION

The Stock Exchange has revised the Listing Rules to introduce the Code on Corporate Governance Practices (Appendix 14) and the Corporate Governance Report (Appendix 23) with effect from 1st January, 2005. The current Articles of Association only require one-third of the Directors (other than the Managing Director or Joint Managing Director) to retire at each annual general meeting by rotation while the Code on Corporate Governance Practices requires all Directors to retire by rotation at least once every three years. In order to further improve the Company’s corporate governance practices, the Directors proposed to amend the Articles of Association so as to bring them in line with the new Code on Corporate Governance Practices. Please refer to the special resolution set out in the notice of the Annual General Meeting for details of the proposed amendments to the Articles of Association.

PROPOSED DIRECTORS FOR RE-ELECTION

In accordance with Articles 99 and 116 of the Articles of Association, six Directors, Mr. CHAN Sheung Chiu, Mr. TANG Chow Ming, Paul, Mr. WONG Chi Sing, Mr. SHEK Lai Him, Abraham, Dr. LI Sau Hung, Eddy and Mr. YAU Chi Ming, will retire and, being eligible, will offer themselves for re-election at the Annual General Meeting.

Set out below are the details of the six Directors proposed to be re-elected:

Mr. CHAN Sheung Chiu , aged 66, the Chairman of the Group, is responsible for the formulation and development of the Group’s corporate policies and business strategies. He has

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over 30 years of experience in general management in the manufacturing industry and trade and real estate business in the People’s Republic of China (the “PRC”). Mr. CHAN is the Deputy Chairman of Chuang’s China, a company listed on the Stock Exchange, a director of the Chinese Manufacturers’ Association of Hong Kong, the Fukien Chamber of Commerce, the Fukien Chamber of Commerce Education Fund Limited and the General Association of Xiamen (Hong Kong). He is also the registered manager of Fukien Secondary School, Fukien Secondary School (Siu Sai Wan), Fukien Middle School (North Point) and Fukien Education Centre (Evening). He is a brother-in-law of Mr. LEE Sai Wai and Mr. CHUANG Shaw Swee, Alan. He joined the Group in 2000.

Mr. TANG Chow Ming, Paul , aged 57, an Executive Director of the Company, is responsible for the formulation and implementation of the Group’s book printing sales and marketing strategies, joined the Group in 2001. He has extensive experience in business development and sales management in the manufacturing industry.

Mr. WONG Chi Sing , aged 34, was appointed as an Executive Director of the Company in 2004. He is responsible for the finance and accounting functions of the Group. He has over 11 years of experience in finance, accounting and auditing. He holds a Bachelor degree in Business Administration and had worked in an international accountancy firm for many years. He is an associate member of the Association of Chartered Certified Accountants and the Hong Kong Institute of Certified Public Accountants.

Mr. SHEK Lai Him, Abraham , J.P. aged 59, was appointed as an Independent Non-Executive Director of the Company in 2001. He is also an Independent Non-Executive Director of Chuang’s Consortium International Limited, Paliburg Holdings Limited, Lifestyle International Holdings Limited, New World TMT Limited and NWS Holdings Limited, all are listed on the Stock Exchange and a director of The Hong Kong Mortgage Corporation Limited. He holds a Bachelor degree of Arts. Mr. SHEK is currently a member of the Legislative Council for the HKSAR, the Managing Board of Kowloon-Canton Railway Corporation, the Council of The Hong Kong University of Science & Technology and the Court of The University of Hong Kong. As at the Latest Practicable Date, he held 10,000 Shares.

Dr. LI Sau Hung, Eddy , aged 50, was appointed as an Independent Non-Executive Director of the Company in 2004. He has over 20 years’ experience in the manufacturing business. He is a member of the Chinese People’s Political Consultative Committee, the president of Hong Kong Economic & Trade Association and a member of the TDC Watch Trade Advisory Committee. Dr. LI holds a Master degree in Business Administration and a Ph.D. degree in Economics. He was a 1991 awardee of The Ten Outstanding Young Persons and the 1993 awardee of Young Industrialists of Hong Kong. He is currently an Independent Non-Executive Director of Jackin International Holdings Limited, Oriental Watch Holdings Limited and Man Yue International Holdings Limited, all are listed on the Stock Exchange.

Mr. YAU Chi Ming , aged 51, was appointed as an Independent Non-Executive Director of the Company in 2004. He is a practising certified public accountant in Hong Kong with over 20 years of experience. He is a fellow member of the Association of Chartered Certified Accountants in the United Kingdom and an associate member of the Hong Kong Institute of Certified Public Accountants, the Institute of Chartered Secretaries and Administrators in the United Kingdom and the Certified General Accountants’ Association in Canada.

Except mentioned above, all Directors subject to re-election have no interest in the Shares within the meaning of Part XV of the Securities and Futures Ordinance and do not have any relationship with any other Directors, senior management, substantial or controlling shareholders of the Company.

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The Executive Directors, Mr. CHAN Sheung Chiu, Mr. TANG Chow Ming, Paul and Mr. WONG Chi Sing have no service contract with the Company. Total remuneration for the year ended 31st December, 2004 for Mr. CHAN Sheung Chiu amounted to HK$300,000, for Mr. TANG Chow Ming, Paul amounted to HK$1,355,000 and for Mr. WONG Chi Sing amounted to HK$220,000. The respective amounts included the director’s fee, salary, discretionary bonus and pension scheme contribution.

The Independent Non-Executive Directors, Mr. SHEK Lai Him, Abraham, Dr. LI Sau Hung, Eddy and Mr. YAU Chi Ming have no service contract with the Company prior to 1st January, 2005. Pursuant to the amendments to the Listing Rules which came into effect on 1st January 2005, the board of Directors approved a term of service for each of Mr. SHEK Lai Him, Abraham, Dr. LI Sau Hung, Eddy and Mr. YAU Chi Ming for 3 years from 1st January, 2005, subject to re-election. Total emolument for the year ended 31st December, 2004 for each of the Independent Non-Executive Directors was HK$80,000.

All the Directors mentioned above are subject to retirement by rotation and re-election at least once every 3 years pursuant to Appendix 14 of the Listing Rules and Articles 99 and 116 of the Articles of Association.

ACTION TO BE TAKEN

A proxy form for use at the Annual General Meeting is enclosed in the annual report of the Company for the year ended 31st December, 2004 despatched together with this circular. Whether or not you intend to attend the Annual General Meeting, you are requested to complete the said proxy form and return it to the head office and principal place of business of the Company at 1st Floor, 100 Texaco Road, Tsuen Wan, New Territories, Hong Kong not less than 48 hours before the time appointed for holding the Annual General Meeting. Completion and return of the proxy form will not prevent you from attending and voting at the Annual General Meeting if you so wish.

PROCEDURES FOR DEMANDING A POLL

Pursuant to Article 80 of the Articles of Association, a poll may be demanded in relation to any resolution put to the vote of the Annual General Meeting before or on the declaration of the result of the show of hands or on the withdrawal of any other demand for a poll by:

• (a) the chairman of the meeting; or

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

• (c) any 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 in the aggregate not less than one-tenth of the total voting rights of all Shareholders having the right to attend and vote at the meeting; or

• (d) any 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 conferring a right to attend and vote at the meeting on which there have been paid up sums in the aggregate equal to not less than one-tenth of the total sum paid up on all shares conferring that right.

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RECOMMENDATIONS

The Directors believe that the Repurchase Proposal, the general mandate to be granted to the Directors to issue new Shares, the proposed amendments to the Articles of Association and the re-election of the retiring Directors are all in the best interests of the Company and its Shareholders. Accordingly, the Directors recommend that all Shareholders should vote in favour of the resolutions No. 3, 5A, 5B, 5C & 6 set out in the notice of the Annual General Meeting as they intend to do themselves in respect of their own holdings.

Yours faithfully, For and on behalf of Midas International Holdings Limited CHAN Sheung Chiu Chairman

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