Kingwell Group Limited — Earnings Release 2001

Apr 29, 2002

FT HOLDINGS INTERNATIONAL LIMITED

(Incorporated in Bermuda with limited liability)

ANNOUNCEMENT OF RESULTS

FOR THE YEAR ENDED 31ST DECEMBER, 2001

RESULTS

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

Year ended Year ended

31st December, 31st December,

2001 2000

(Restated )

Notes HK$'000 HK$'000

Turnover 2 124,027 145,827

Cost of sales (84,875 ) (98,797 )

Gross profit 39,152 47,030

Other revenue 4 14,683 7,688

Selling expenses (7,007 ) (7,598 )

Administrative expenses (38,802 ) (29,371 )

Impairment of goodwill 11(a) - (15,582 )

Other operating expenses (8,759 ) (7,619 )

Loss from operating activities 5 (733 ) (5,452 )

Finance costs 6 (1,665 ) (1,340 )

Loss before tax (2,398 ) (6,792 )

Tax 7 (642 ) 73

Loss before minority interests (3,040 ) (6,719)

Minority interests 3,104 (1,858 )

Net profit/(loss) for the year

attributable to shareholders 64 (8,577 )

Dividend 8 - -

Earnings/(Losses) per share 9

• Basic 0.02 cents (3.10) cents

• Diluted N/A (3.10) cents

Notes:

1. Adoption of new and revised Statements of Standard Accounting Practice ("SSAPs") and related Interpretations

During the year, the Group has adopted, for the first time, the following new and revised SSAPs and related Interpretations issued by the Hong Kong Society of Accountants:

* SSAP 9 (Revised): Events after the balance sheet date

* SSAP 14 (Revised): Leases

* SSAP 18 (Revised): Revenue

* 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

* SSAP 32: Consolidated financial statements and accounting for investments in subsidiaries

* Interpretation 12: Business combinations-subsequent adjustment of fair values and goodwill initially reported

* Interpretation 13: Goodwill-continuing requirements for goodwill and negative goodwill previously eliminated against/credited to reserves

2. Turnover

Turnover represents the invoiced value of goods sold, net of discounts and returns and gross receipt from the licensing and sub-licensing of TV programmes and the provision of related multi-media services, net of applicable business taxes.

3. Segment information

By business activity

2001 2000

Sales to external Inter segment Sales to external Inter segment

customers sales customers sales

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

Turnover

Design, manufacture and

sales of life-like plants 91,259 5,046 111,681 10

Production, acquisition and

distribution of television

programmes and provision of

related multi-media services 30,262 - 34,134 -

Sales of festival gift products through

an internet portal 2,496 - 12 -

Provision of anti-theft car alarm and

tracking services 10 - - -

124,027 5,046 145,827 10

Elimination - (5,046 ) - (10 )

124,027 - 145,827 -

2001 2000

Segment resultsHK$'000 HK$'000

Design, manufacture and sales of life-like plants 6 5,839

Production, acquisition and distribution of

television programmes and provision of

related multi-media services 1,619 (434 )

Sales of festival gift products through an internet portal (4,578 ) (1,615 )

Provision of anti-theft car alarm and tracking services (5,171 ) (8,574 )

(8,124 ) (4,784 )

Interest income and unallocated gains 8,496 578

Unallocated expenses (1,105 ) (1,246 )

Loss from operating activities (733 ) (5,452 )

By geographical area

2001 2000

HK$'000 HK$'000

Turnover

United States of America 66,827 79,468

People's Republic of China ("PRC"):

Hong Kong 19,932 20,808

Elsewhere 25,391 34,134

Europe 11,732 11,288

Others 145 129

124,027 145,827

2001 2000

Segment results HK$'000 HK$'000

United States of America (4,538 ) 2,539

People's Republic of China:

Hong Kong 226 1,088

Elsewhere (3,813 ) (9,007 )

Europe 1 590

Others - 6

(8,124 ) (4,784 )

Interest income and unallocated gains 8,496 578

Unallocated expenses (1,105 ) (1,246 )

Loss from operating activities (733 ) (5,452 )

4. Other revenue

Year ended Year ended

31st December, 31st December,

2001 2000

HK$'000 HK$'000

Interest income 2,637 4,971

Consultancy fees 1,500 -

Guaranteed profit from a minority shareholder of a subsidiary 8,400 -

Sales of samples 546 755

Income from video recording services 844 947

Commission income - 31

Exchange gains, net - 409

Others 756 575

14,683 7,688

5. Loss from operating activities

Loss from operating activities is arrived at after charging:

Year ended Year ended

31st December, 31st December,

2001 2000

HK$'000 HK$'000

(Restated )

Cost of inventories sold 64,686 78,129

Cost of TV programmes and sub-licensing rights 18,696 20,668

Amortization of deferred development expenditure 709 -

Amortization of goodwill 181 -

Depreciation 5,807 5,213

Provision for bad and doubtful debts 8,578 7,619

Provision for impairment of goodwill - 15,582

6. Finance costs

Year ended Year ended

31st December, 31st December,

2001 2000

HK$'000 HK$'000

Interest on bank loans wholly repayable within five years 1,072 1,287

Interest on loans from minority shareholders of a subsidiary 45 53

Interest on finance leases 283 -

Interest on other loans 265 -

1,665 1,340

7. Tax

Year ended Year ended

31st December, 31st December,

2001 2000

HK$'000 HK$'000

Current Tax

Hong Kong 208 195

Under/(Over) provision in prior year 361 (268 )

Deferred tax 73 -

Tax charge/(credit) for the year 642 (73 )

Hong Kong profits tax has been provided at the rate of 16% (2000: 16%) on the estimated assessable profits arising in Hong Kong during the year.

The provision for deferred tax was made in respect of accelerated deprecation allowances to the extent that a liability was expected to crystallize in the foreseeable future. As at 31st December 2001, the Group had an unprovided deferred tax liability of HK$900,000 (2000: HK$500,000), relating to accelerated depreciation allowances, which is not expected to crystallize in the foreseeable future.

8. Dividend

The Directors have resolved not to recommend the payment of any final dividends for the year ended 31st December, 2001 (2000: Nil).

9. Earnings/(Losses) per share

The calculation of basic earnings/(losses) per share is based on the net profit attributable to shareholders for the year ended 31st December, 2001 of HK$64,000 (2000: net loss of HK$8,577,000) and the weighted average of 313,695,890 ordinary shares (2000: 276,797,131 shares) in issue during the year.

No diluted earnings per share has been presented for the current year as the effect of the share options outstanding was anti-dilutive for the year.

The diluted losses per share for the year ended 31st December, 2000 was based on the net loss attributable to shareholders for the year of HK$8,577,000 and the weighted average of 276,797,131 shares in issue during the year plus 634,594 dilutive shares deemed to have been issued for no consideration in respect of share options outstanding during the year.

10. Summary of condensed balance sheet

31st December, 31st December,

2001 2000

(Restated )

Notes HK$'000 HK$'000

Total Assets 244,281 207,539

Total Liabilities 11(b) (54,432 ) (32,366 )

Minority Interests 11(b) (1,536 ) (2,938 )

Net Assets 188,313 172,235

Represented by:

Share Capital 34,550 29,100

Reserves a 153,763 143,135

Net Assets 188,313 172,235

a. Movements on reserves

Balance, 31st December, 2000 143,135

Share premium 10,350

Exchange reserve 214

Profit for the year 64

Balance, 31st December, 2001 153,763

11. Prior year adjustments

a. Impairment of goodwill

During the year, the Group adopted SSAP 31 "Impairment of assets". In accordance with SSAP 31, the Group is required to assess at each balance sheet date whether there are any indications that assets (including fixed assets, intangible assets and goodwill arising on acquisition of subsidiaries and associates) may be impaired, and if there are such indications, the recoverable amount of the assets has to be determined. As SSAP 31 is also applied to goodwill previously eliminated against consolidated reserves according to the provision of Interpretation 13, assessments of impairment on the goodwill arisen from the acquisition of subsidiaries have been made by referencing to their respective net asset values as at 31st December, 2000 and their future profitability. Accordingly, provision for impairment loss of HK$15,582,000 was required and a prior year adjustment has been put through to write down the carrying value of the goodwill as at 31st December, 2000.

b. Events after the balance sheet date

During the year, the Group also adopted the revised SSAP 9 "Events after the balance sheet date". In accordance with the revised SSAP 9, the Group no longer recognizes dividends proposed or declared after the balance sheet date as a liability at that date. This SSAP has been applied retrospectively. To comply with the revised SSAP, a prior year adjustment has been made, reclassifying the proposed final dividend payable to a minority shareholder of a subsidiary for the year ended 31st December, 2000 of HK$2,000,000, which was recognized as a liability in the prior year end, to the minority interests account of the balance sheet. This prior year adjustment has no effect on the net asset value of the Group as at 31st December, 2000.

12. Comparative figures

As explained in notes 1 and 11 above, due to the adoption of certain new and revised SSAPs during the current year, the accounting treatment and presentation of certain items and balances in the financial statements have been revised to comply with the new requirements. Accordingly, certain prior year adjustments have been made and certain comparative amounts have been reclassified to conform with the current year's presentation.

CLOSURE OF REGISTER OF MEMBERS

The register of members of the Company will be closed from, Tuesday, 21st May, 2002 to Friday, 24th May, 2002 (both days inclusive), during which period no transfer of shares will be registered.

In order to qualify for attending the forthcoming Annual General Meeting, all shares transfers accompanied by the relevant share certificates must be lodged with the Company's branch share registrars in Hong Kong, Tengis Limited, at 4/F., Hutchison House, 10 Harcourt Road Central, Hong Kong not later than 4:00 p.m. on Friday, 17th May, 2002.

BUSINESS REVIEW

During the year under review, the Group recorded a total turnover of HK$124 million representing a decrease of approximately 15% compared to last year. The net profit attributable to shareholders was HK$64,000 while a loss of HK$8.6 million was recorded in 2000 after a prior year adjustment for provision of impairment of goodwill arising from the acquisition of the multi-media and anti-theft car alarm and tracking businesses amounting to HK$15.6 million.

The prior year adjustment was made as the Group adopted the SSAP 31"Impairment of assets" during the year which also applied to goodwill previously eliminated against reserves and was accounted for retrospectively.

Sales of life-like plants

Amid the down turn of the global economy, Year 2001 has been a difficult year for the Group's core business on sales of life-like plants. The U.S. retail environment was stagnated since the end of 2000. The terrorists' strikes on 11 September further weakened the consumer spending on luxury goods. The market for foliaged and floral products were weak and competition have been tough and price driven, resulting with profit margin skimmed to a minimal level. The Group's turnover on life-like plants was thus decreased by 16% and a break-even result was recorded.

Given the difficult business climate, the Group still managed some break through in certain sector. Sales of life-like Christmas trees continues to be the major product of the Group's core business which accounted for approximately 80% of the turnover in this sector. It can help to laid down the foundation for us to grow when the worst recession start to recover. The management is optimistic over the future opportunities of the Group's business expansion.

Multi-media business

2001 was also a difficult year for the multi-media business due to the depressed state of the advertising market and also major changes in the TV industry masterminded by the PRC Government. As a result, government approval on content was taking longer and collection of money was also taking longer which slowed down our execution plan. While the overall business strategy was on course, the Group was unable to complete everything planned for the year. It was also the prudent thing to do during these times of uncertainty. One strategy the Group stayed firmly with. All the projects we were able to do, was consistently generated for a good profit margin. Due to fast changing conditions, the Group decided the outdoor project in Shanghai was becoming too high risked and therefore made a strategic decision to pull out before we commit to any investment. The Group will continue to look for other outdoor media opportunities to enrich our multi-media business model. The Group is moving cautiously ahead and are bullish about the future of the division.

Anti-theft car alarm and tracking system

The installation of the Anti-Theft Car Alarm and Tracking System ("CAS") in Xian and Guangzhou cities had been completed during the year. While the installation process was much lengthy than expected, the network has been proved to be one of the most effective systems among the market. The CAS business had no contribution to the Group's results during the year under review, since the system was just launched to the market in August 2001 and January 2002 in Xian and Guangzhou, respectively. The management expects a handsome return after a series of promotional activities carried out in 2002.

PROSPECTS

Sale of life-like plants

Year 2002 will be a challenging year for the Group. We will continue to improve our core business by all means. Our new innovated products, beside the third generation fiber optic Christmas tree, are really well acceptance by the market. It will not only leading the PVC tree market into another horizon, and also brings the industry into a new frontier.

After a year carefully planning, the new sales and marketing channel has already established. It laid down a solid foundation for us to grow. The e-commerce division has also shown some significant data to led us to conclude that we cannot ignore.

In the coming years, the Group will continue to improve its cost and quality control to secure its tradition Christmas tree, floral and foliaged products market share. We will also seek new products, technique and technology to remain our freshness and competitiveness position in the industry for the years to come.

Multi-media business

Having weathered a difficult 2001, the multi-media division is poised to capitalize on the upturn of the media industry in 2002 and beyond. The TV industry has finally settled after the major restructuring in 2001 and are on course for aggressive growth. 2001 also resulted in the weeding out of the lesser players in the field. The demand for high quality content is stronger than ever. The Group is confident in its ability to produce the content that can generate both high revenue and ratings.

In 2002, the Group has successfully launched the 9:30 Theatre. Effectively we have taken over the one hour slot every night between 9:30 p.m. to 10:30 p.m. on 14 TV stations in Jingsu and 10 TV stations in Jiejiang. Top quality imported drama series are being exhibited. In return, the Group is given a block of advertising air time. Since launching in early 2002, our program has generated good ratings and advertising revenue. We are forecasting a strong profit from the 9:30 Theatre for 2002 and beyond. In fact, we are planning to expand the concept into a number of additional provinces.

The Group is optimistic about entering the outdoor business. We are in discussion with a major outdoor company to form a joint venture. The management expects 2002 to be a good year for the multi-media division.

Anti-theft car alarm and tracking system

As with PRC's accession to the WTO, the automobile will be in great demand. The automobile industry has predicted automobile owned by individual will reach 20 million, of which Guangdong Province takes the largest stake. For such rapid growth, the demand for its related products and services are promising. The Group's CAS network just falls right into this category.

Although PRC's modernization is quite successful, but it still faces the developing country problem "Crime". Crime prevention is what CAS all about, with its leading edge technology. It fully utilizes the advanced technology of wireless communications, computations and electronics. Combining short wave and long frequency to establish the city's crime prevention network. It has enabled the police department to bust a lot of vehicle theft. Therefore the network is officially endorsed by the PRC police force.

Because it is well developed, economical, and practical for the PRC's situation, the potential of this investment is tremendous. Compare with the traditional anti-theft system, our low cost, complete coverage and simple installation has favorable response by the market. As of today, this type of new generation anti-theft vehicle system only accounted for approximately 1% in the existing market and hence provides a great opportunity for its development.

Beside our main operation in Guangzhou and Xian, the Group is planning to assist our PRC partners to upgrade their technology that operate in different cities. This will provide the opportunities for us to penetrate the existing markets and facilitate the network migration. Such migration will have synergy effect that will enlarge the CAS and will provide a platform for us to grow into the future.

LIQUIDITY AND FINANCIAL RESOURCES

The Group has been maintaining a conservative approach in its funding and treasury policies. The Group's working capital has been closely monitored to maximize the return on investments and to minimize finance costs.

The Group generally finances its short term funding requirements with cash generated from operation, credit facilities from suppliers and banking facilities provided by its principal bankers.

The Group had committed bank and other financing facilities of HK$60 million as at 31st December, 2001, of which approximately HK$25 million has been utilized. Certain land and buildings and plant and machinery with net book value of approximately HK$68 million and HK$8 million respectively were pledged to secure the mentioned facilities. The Group had a total long term borrowing of approximately HK$9 million and shareholders equity of approximately HK$188 million as at 31st December, 2001. The gearing ratio, calculated based on long-term debt and shareholders' equity, was 4.7% as at 31st December, 2001 comparing to 4.8% as at 31st December, 2000 which was kept at a quite constant level.

Total current assets of the Group amounted to approximately HK$119 million, with cash and bank balance of approximately HK$18 million, inventories and television programmes and sub-licensing rights of approximately HK$21 million, trade and other receivables, prepayments and deposits of approximately HK$80 million while total current liabilities was HK$46 million. The current ratio was 2.61 and the quick ratio was 2.15.

The business operations of the Group are mainly transacted in US dollars and Renminbi. Most of the Group's sales are conducted in the same currency as the corresponding purchase transaction. We do not consider the Group has significant exposure to foreign exchange fluctuations in view of the stability of US dollars and Renminbi. We also consider that there will be sufficient cash resources denominated in Hong Kong dollars for the repayment of its bank borrowings. Accordingly, the Group did not engage any financial instrument for hedging purposes during the period and there is no hedging instrument outstanding as at 31st December, 2001.

PLACEMENT OF SHARES AND USE OF PROCEEDS

On 11th June, 2001, the Company entered into a top-up Placing and Subscription Agreement with Raffles International Holdings Limited ("Raffles"), the major shareholder of the Company. Pursuant to the agreement, Raffles agreed to place, through a Placing Agent, 58,000,000 existing shares of the Company of HK$0.10 each to independent investors at a price of HK$0.30 each and subscribe from the Company 58,000,000 new shares of HK$0.10 each at the same price of HK$0.30 each. The placing of 58,000,000 existing shares was completed on 11th June, 2001.

On 2nd August, 2001, the Company entered into a Supplemental Agreement with Raffles and the Placing Agent. Pursuant to the Supplemental Agreement, the number of new shares subscribed by Raffles was reduced from 58,000,000 shares to 54,500,000 shares. The subscription was completed on 4th August, 2001 and a total of 54,500,000 new shares were issued and allotted to Raffles for net proceeds of approximately HK$15.7 million which had been fully utilized for financing the Group's general working capital requirement during the year.

CAPITAL STRUCTURE

There had been no change in capital structure of the Company since 31st December, 2000 saved for those disclosed in "Placement of Shares and Use of Proceeds" above. The Company had a total of issued share capital of 345,500,000 shares as at 31st December, 2001.

EMPLOYEES AND REMUNERATION POLICY

The Group had a total of approximately 850 employees as at 31st December, 2001. The Group recognizes the importance of its human resources to its success. The remuneration packages of the Group's employees are maintained at competitive levels based on their performance and experience and are in line with the current industry practices. Other staff benefits provided by the Group include the provision of mandatory provident fund, discretionary bonuses and share option scheme. The remuneration policy and packages of the Group's employees are reviewed regularly.

PURCHASE, SALES OR REDEMPTION OF THE COMPANY'S LISTED SECURITIES

Neither the Company nor any of its subsidiaries purchased, sold or redeemed any of the Company's listed securities during the year ended 31st December, 2001.

CODE OF BEST PRACTICE

The Directors are not aware of any information that would reasonably indicate that the Company is not or was not, for the year ended 31st December, 2001, in compliance with the Code of Best Practice as set out in the Listing Rules, save that non-executive directors have not been appointed for a specific term. Independent-non-executive directors are subject to retirement by rotation and re-election of the Annual General Meeting of the Company in accordance with the provisions of the Company's bye-laws.

PUBLICATION OF ANNUAL RESULTS ON THE INTERNET WEBSITE OF THE STOCK EXCHANGE OF HONG KONG LIMITED

A results announcement containing the information required by paragraphs 45(1) to 45(3) of Appendix 16 to the Listing Rules will be published on the website of the Stock Exchange in due course.

On behalf of the Board

Lai Kam Wing, Jimmy

Chairman and Managing Director

Hong Kong, 26th April, 2002

NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that an Annual General Meeting of the Shareholders of FT Holdings International Limited (the "Company") will be held at Unit 501, 5th Floor, Riley House, 88 Lei Muk Road, Kwai Chung, New Territories on Friday, 24th May, 2002 at 10:30 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 December, 2001;

2. To re-elect Directors and to authorize the Board of Directors to fix Directors' remuneration;

3. To re-appoint Auditors and to authorize the Board of Directors to fix Auditors' remuneration; and

4. To consider as Special Business and, if thought fit, pass with or without amendments, the following resolutions as Ordinary Resolutions :

(A) As Ordinary Resolution No. 4

"THAT

(a) the exercise by the Directors during the Relevant Period of all the powers of the Company to purchase it 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 issued share capital of the Company as at 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 meeting; 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.";

(B) As Ordinary Resolution No. 5

"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 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 share issued, allotted, dealt with or agreed conditionally or unconditionally to be issued, allotted or dealt with (whether pursuant to an option or otherwise) shall not in total exceed 20% of the aggregate amount of the existing issued share capital of the Company 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

(C) As Ordinary Resolution No. 6

"THAT the general mandate granted to the Directors of the Company pursuant to Resolution 5 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 share 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 issued share capital of the Company as at the date of this Resolution.".

By order of the Board

CHAN CHI YUEN

Company Secretary

Hong Kong, 26th April, 2002

Notes:

(a) The Register of Members will be closed from Tuesday, 21st May, 2002 to Friday, 24th May, 2002 (both days inclusive), during which period no transfer of shares will be registered. In order to qualify for attending the Annual General Meeting, all share transfers accompanied by the relevant share certificates must be lodged with the Company's Branchy Share Registrars in Hong Kong, Tengis Limited, at 4/F., Hutchison House, 10 Harcourt Road, Central, Hong Kong not later than 4:00 p.m. on Friday, 17th May, 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 of the Company. If more than one proxy is so appointed, the appointment shall specify the number 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 Share Register in Hong Kong, Tegnis Limited, at 4/F., Hutchison House, 10 Harcourt Road, Central, 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 December, 2001 also containing this notice together with a circular setting out further information regarding Resolutions 4 to 6 above will be despatched to shareholders as soon as practicable.

Please also refer to the published version of this announcement in the HK i-Mail.