King’s Stone Holdings Group Limited — Proxy Solicitation & Information Statement 2002

Jul 17, 2002

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Automated Systems Holdings Limited, you should at once hand this circular to the bank, stockbroker or other agent through whom the sale was effected for transmission to the purchaser or transferee.

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of the 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.

Automated Systems Holdings Limited

(Incorporated in Bermuda with limited liability)

Executive Directors:

Mr. Lai Yam Ting (Managing Director)

Mr. Edward Lau Ming Chi

Non-executive Directors:

Registered Office:

Cedar House 41 Cedar Avenue Hamilton HM12 Bermuda

Mr. Allen Joseph Pathmarajah (Chairman)

• Mr. Peter Kuo Chi Yung (Deputy Chairman)

• Mr. Johnny Moo Kwee Chong

• Mr. Sunny Tan Swee Hock

• Ms. Esther Tan Suan Kheng

• Mr. Michael William Brinsford

• Mr. Samuel Timothy Hilbert

Principal Office in Hong Kong:

15th Floor, Topsail Plaza

11 On Sum Street Shatin New Territories Hong Kong

• Mr. Peter Hon Sheung Tin*

• Mr. Richard Li King Hang*

17th July, 2002

• independent non-executive directors

Dear Sir or Madam,

GENERAL MANDATES TO REPURCHASE SHARES AND TO ISSUE SHARES

GENERAL MANDATES TO REPURCHASE SHARES AND TO ISSUE SHARES

At the annual general meeting of Automated Systems Holdings Limited (the “Company”) to be held on 8th August, 2002 (the “Annual General Meeting”), ordinary resolutions will be proposed to grant to the directors of the Company (the “Directors”) a general mandate to

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exercise all powers of the Company to repurchase fully paid shares of HK$0.10 each (the “Shares”) in the share capital of the Company (the “Repurchase Mandate”) and a general mandate to issue new shares of the Company (the “Share Issue Mandate”).

An explanatory statement to provide shareholders of the Company with all the information reasonably necessary for them to make an informed decision in relation to the Repurchase Mandate as required by the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”) is set out in the Appendix to this circular.

ANNUAL GENERAL MEETING

A notice convening the Annual General Meeting is contained in the 2002 Annual Report of the Company sent to the shareholders together with this circular and a proxy form for use at the Annual General Meeting is therein enclosed. Whether or not you intend to attend the Annual General Meeting, you are requested to complete the proxy form and return it to the Company’s Branch Registrar in Hong Kong, Tengis Limited, 4th Floor Hutchison House, 10 Harcourt Road, Hong Kong not less than 48 hours before the time for holding the Annual General Meeting.

Completion and delivery of the proxy form will not prevent shareholders of the Company from attending and voting in person if they so wish.

RECOMMENDATION

The Directors are of the opinion that the Repurchase Mandate and the Share Issue Mandate as proposed herein are all in the best interests of the Company and accordingly recommend all the shareholders to vote in favour of the ordinary resolutions to be proposed at the Annual General Meeting.

Yours faithfully, LAI YAM TING Managing Director

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EXPLANATORY STATEMENT

APPENDIX

This appendix serves as an explanatory statement, as required under the Listing Rules, to provide information to the shareholders of the Company with regard to the Repurchase Mandate to enable them to make an informed decision as to whether to vote in favour of the Repurchase Mandate.

1. SHARE CAPITAL

As at 12th July, 2002, being the latest practicable date before the printing of this circular for ascertaining information in this circular (the “Latest Practicable Date”), the issued share capital of the Company comprised 288,830,000 Shares.

Subject to the passing of the relevant ordinary resolutions and on the basis that no further Shares are issued or repurchased prior to the Annual General Meeting, the issued share capital of the Company will comprise 288,830,000 Shares and the Company will be allowed under the Repurchase Mandate to repurchase a maximum of 28,883,000 Shares during the course of the period prior to the next annual general meeting of the Company.

2. REASONS FOR REPURCHASES

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

3. FUNDING OF REPURCHASES

In repurchasing shares, the Company may only apply funds legally available for such purchase in accordance with its memorandum of association and bye-laws and the applicable laws of Bermuda and the Listing Rules. Under Bermuda law, the amount of capital to be repaid in connection with a share repurchase may only be paid out of the capital paid up on the relevant Shares or the funds of the Company which would otherwise be available for dividend or distribution or the proceeds of a fresh issue of Shares made for the purpose. The amount of premium payable on a repurchase may only be paid out of the funds of the Company which would otherwise be available for dividend or distribution or out of the share premium account of the Company.

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EXPLANATORY STATEMENT

APPENDIX

The Directors at present have not decided which proposed source of funding is to be used when the Repurchase Mandate is exercised.

There might be a material adverse effect on the working capital or gearing position of the Company in the event that the Repurchase Mandate is exercised in full at any time during the proposed repurchase period. However, the Directors do not propose to exercise the Repurchase Mandate to such an extent as would, in the circumstances, have a material adverse effect on the working capital requirements or the gearing levels of the Company which in the opinion of the Directors are from time to time appropriate for the Company.

4. SHARE PRICES

The highest and lowest prices at which the Shares have been traded on the Stock Exchange during each of the previous twelve months were as follows:

		Shares
	Highest		Lowest
	Price		Price
	HK$		HK$
2001
July	3.200		2.875
August	3.000		2.700
September	2.800		1.900
October	2.600		2.000
November	2.550		2.150
December	2.500		2.050
2002
January	2.325		2.000
February	2.050		1.880
March	2.425		1.940
April	2.325		2.075
May	2.500		2.175
June	2.200		1.950

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EXPLANATORY STATEMENT

APPENDIX

5. UNDERTAKING

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

None of the Directors nor, to the best of their knowledge having made all reasonable enquiries, any of their associates (as defined in the Listing Rules), have any present intention to sell any Shares to the Company under the Repurchase Mandate if the Repurchase Mandate is approved by shareholders of the Company.

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

6. TAKEOVER CODE

If as a result of a share repurchase exercised pursuant to the Repurchase Mandate, 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 Hong Kong Code on Takeovers and Mergers (the “Takeover Code”). Accordingly, a shareholder or a group of shareholders acting in concert could obtain or consolidate control of the Company and become obliged to make a mandatory general offer in accordance with Rule 26 and Rule 32 of the Takeover Code.

As at the Latest Practicable Date, to the best of the knowledge and belief of the Company, CSC Computer Sciences International Inc. (“CSC”) held 13,680,000 Shares representing approximately 4.74% of the issued share capital of the Company whereas CSA Holdings Ltd. (“CSA”) held 189,701,896 Shares representing approximately 65.68% of the issued share capital of the Company. On the other hand, CSC held 73.34% of the issued share capital of CSA. Hence, in aggregate, CSC held, directly and indirectly, 152,807,371 Shares representing approximately 52.91% of the issued share capital of the Company. Based on such shareholdings and in the event that the Directors exercise the Repurchase Mandate in full, then (if the present shareholdings otherwise remained the same) the shareholdings of CSC, in aggregate, would be increased to approximately 58.78% of the issued share capital of the Company whereas the shareholdings of CSA would be increased to approximately 72.98% of the issued share capital of the Company.

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EXPLANATORY STATEMENT

APPENDIX

The Directors are not aware of any consequences which may arise under the Takeover Code as a result of any repurchases made under the Repurchase Mandate and have no present intention to exercise the power to repurchase Shares pursuant to the Repurchase Mandate to such an extent as to result in the number of Shares held by the public falling below 25%.

7. SHARE REPURCHASES MADE BY THE COMPANY

The Company had not repurchased any of its Shares (whether on the Stock Exchange or otherwise) in the six months preceding the Latest Practicable Date.

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Automated Systems Holdings Limited

(Incorporated in Bermuda with limited liability)

Notice of Annual General Meeting

NOTICE IS HEREBY GIVEN that an Annual General Meeting of the Members of Automated Systems Holdings Limited (the “Company”) will be held at the Company’s office on 15th Floor, Topsail Plaza, 11 On Sum Street, Shatin, Hong Kong on Thursday, 8th August, 2002 at 11:30 a.m. for the following purposes:

1.	To receive and consider the Audited Financial Statements and the Reports of the Directors and of the Auditors for the year ended 31st March,	To receive and consider the Audited Financial Statements and the Reports of the Directors and of the Auditors for the year ended 31st March,
	2002;
2.	To declare a final dividend;
3.	To elect	Directors and to authorise the Board of Directors to fix Directors’ remuneration;
4.	To appoint Auditors and to authorise the Board of Directors to fix their remuneration, a notice having been received from a shareholder of the
	Company of his intention to propose the following resolution as an ordinary resolution of the Company:
	“THAT	Messrs. Deloitte Touche Tohmatsu be and are hereby appointed Auditors of the Company in place of the retiring auditors, Messrs.
	Ernst &	Young, to hold office until the conclusion of the next annual general meeting at a remuneration to be fixed by the Board of Directors
	of the Company.”
5.	To consider as Special Business and, if thought fit, pass with or without amendments, the following resolution as an Ordinary Resolution:
	“THAT
	(a)	the exercise by the Directors during the Relevant Period of all the powers of the Company to purchase its shares, subject to and in
		accordance with the applicable laws, be and is hereby generally and unconditionally approved;
	(b)	the total nominal amount of shares to be purchased pursuant to the approval in paragraph (a) above shall not exceed 10% of the total
		nominal amount of the share capital of the Company in issue on the date of this Resolution, and the said approval shall be limited
		accordingly; and
	(c)	for the purpose of this Resolution, “Relevant Period” means the period from 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 revocation or variation of the authority given under this Resolution by Ordinary Resolution of the shareholders in general
		meetings; and
		(iii) the expiration of the period within which the next Annual General Meeting of the Company is required by the Bye-laws of
		the Company or any applicable laws to be held”;
6.	To consider as Special Business and, if thought fit, pass with or without amendments, the following resolution as an Ordinary Resolution:
	“THAT
	(a)	the exercise by the Directors during the Relevant Period of all the powers of the Company to issue, allot and deal with additional
		shares of the Company and to make or grant offers, agreements and options which would or might require shares to be allotted, issued
		or dealt with during or after the end of the Relevant Period, be and is hereby generally and unconditionally approved, provided that,
		otherwise than pursuant to a rights issue where shares are offered to shareholders on a fixed record date in proportion to their then
		holdings of shares (subject to such exclusions 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 any recognised
		regulatory body or any Stock exchange in any territory outside Hong Kong) or any option scheme or similar arrangement for the time
		being adopted for the grant or issue to officers and/or employees of the Company and/or any of its subsidiaries of shares or rights to
		acquire shares of the Company, or any scrip dividend scheme or similar arrangement providing for the allotment of shares in lieu of
		the whole or part of a dividend on shares of the Company in accordance with the Bye-laws of the Company, the total nominal amount
		of additional shares issued, allotted, dealt with or agreed conditionally or unconditionally to be issued, allotted or dealt with shall not
		in total exceed 20% of the total nominal amount of the share capital of the Company in issue on the date of this Resolution and the
		said approval shall be limited accordingly; and
	(b)	for the purpose of this Resolution, “Relevant Period” means the period from 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 revocation or variation of the authority given under this Resolution by Ordinary Resolution of the shareholders in general
		meetings; and
		(iii) the expiration of the period within which the next Annual General Meeting of the Company is required by the Bye-laws of
		the Company or any applicable laws to be held”; and
7.	To consider as Special Business and, if thought fit, pass with or without amendments, the following resolution as an Ordinary Resolution:
	“THAT	the general mandate granted to the Directors of the Company pursuant to Resolution 6 above and for the time being in force to
	exercise	the powers of the Company to allot shares and to make or grant offers, agreements and options which might require the exercise of
	such powers be and is hereby extended by the total nominal amount of shares in the capital of the Company repurchased by the Company since
	the granting of such general mandate pursuant to the exercise by the Directors of the Company of the powers of the Company to purchase such
	shares, provided that such amount shall not exceed 10% of the total nominal amount of the share capital of the Company in issue on the date of
	this Resolution.”

By order of the Board Lau Ming Chi, Edward Secretary

Hong Kong, 17th July, 2002

Notes:

• (a) The Register of Members will be closed from Tuesday, 30th July, 2002 to Friday, 2nd August, 2002 (both days inclusive), during which period no transfer of shares will be registered. In order to qualify for the proposed final dividend, all transfers accompanied by the relevant share certificates must be lodged with the Company’s Branch Registrar in Hong Kong, Tengis Limited, 4th Floor, Hutchison House, 10 Harcourt Road, Hong Kong by 4:00 p.m. on Monday, 29th July, 2002.

• (b) A shareholder who is the holder of two or more shares may appoint more than one proxy to represent him and vote on his behalf. A proxy need not be a shareholder. If more than one proxy is so appointed, the appointment shall specify the number and class of shares in respect of which each such proxy is so appointed.

• (c) The instrument appointing a proxy and the 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 lodged with the Company’s Branch Registrar in Hong Kong, Tengis Limited, 4th Floor, Hutchison House, 10 Harcourt Road, Hong Kong not less than 48 hours before the time fixed for holding the Meeting.

• (d) The Annual Report of the Company for the year ended 31st March, 2002 also containing this notice together with a circular setting out further information regarding Resolutions 5 to 7 above will be despatched to shareholders as soon as practicable.