Ko Yo Chemical (Group) Limited — Proxy Solicitation & Information Statement 2004

Jun 29, 2004

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold all your ordinary shares in Tse Sui Luen Jewellery (International) Limited you should at once hand this document and the accompanying form of proxy to the purchaser or to the bank, stockbroker or other agent through whom the sale was effected for transmission to the purchaser.

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

TSE SUI LUEN JEWELLERY (INTERNATIONAL) LIMITED

(Incorporated in Bermuda with limited liability) (Stock Code: 417)

PROPOSALS INVOLVING

GENERAL MANDATES TO REPURCHASE ORDINARY SHARES

AND TO ISSUE ORDINARY SHARES

AND

AMENDMENTS OF THE EXISTING BYE-LAWS

A notice convening a special general meeting of Tse Sui Luen Jewellery (International) Limited (“the Company”) to be held at Ground Floor, Block B, Summit Building, 30 Man Yue Street, Hunghom, Kowloon, Hong Kong on Wednesday, the 11th day of August, 2004 at 3:05 p.m. (or so soon thereafter as the annual general meeting convened at the same place and date at 3:00 p.m. shall have been concluded or adjourned) is set out on pages 10 to 14 of this document. Whether or not you propose to attend the meeting, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return the same to the head office and principal place of business of the Company at Ground Floor, Block B, Summit Building, 30 Man Yue Street, Hunghom, Kowloon, Hong Kong as soon as possible and in any event not later than 48 hours before the time appointed for the holding of the meeting (or any adjourned meeting as the case may be). Completion and return of a form of proxy will not preclude shareholders from attending and voting at the special general meeting (or any adjourned meeting as the case may be) if they so wish.

Hong Kong, 29th June, 2004

DEFINITIONS

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

• “Companies Act”

• the Companies Act 1981 of the Laws of Bermuda (as amended)

• “Company” Tse Sui Luen Jewellery (International) Limited, a company incorporated in Bermuda with limited liability and listed on the Stock Exchange

• “Directors” directors of the Company

• “Hong Kong” the Hong Kong Special Administrative Region of the People’s Republic of China

• “Latest Practicable Date” 21st June, 2004, being the latest practicable date prior to the printing of this document for the purpose of ascertaining certain information contained therein

• “Listing Rules”

• the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited

• “Ordinary Share(s)”

• ordinary share(s) of HK$0.25 each in the share capital of the Company which are listed on the Stock Exchange

• “Repurchase Proposal”

• the proposal to give a general mandate to the Directors to exercise the powers of the Company to repurchase during the period as set out in the Repurchase Resolution Ordinary Shares up to a maximum of 10% of the issued ordinary share capital of the Company as at the date of passing the Repurchase Resolution

• “Repurchase Resolution”

• the proposed ordinary resolution as referred to in resolution numbered 1 set out in the notice of the Special General Meeting on pages 10 to 14 of this document

• “SFO”

• the Securities and Futures Ordinance (Chapter 571, Laws of Hong Kong), as amended from time to time

• “Share Repurchase Rules” the relevant rules set out in the Listing Rules to regulate the repurchase by companies with primary listing on the Stock Exchange of their own securities on the Stock Exchange

• “Special General Meeting”

• the special general meeting of the Company to be held on Wednesday, 11th August, 2004 at 3:05 p.m. (or so soon thereafter as the annual general meeting of the Company convened at the same place and date at 3:00 p.m. shall have been concluded or adjourned), notice of which is set out on pages 10 to 14 of this document

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DEFINITIONS

“Stock Exchange” The Stock Exchange of Hong Kong Limited “Takeovers Code” the Hong Kong Code on Takeovers and Mergers “HK$” Hong Kong dollars, the lawful currency of Hong Kong

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LETTER FROM THE CHAIRMAN

TSE SUI LUEN JEWELLERY (INTERNATIONAL) LIMITED

(Incorporated in Bermuda with limited liability)

Directors: TSE Tat Fung, Tommy (Chairman) Peter Gerardus VAN WEERDENBURG (Deputy Chairman) LEUNG Yit Kuen, Raymond Alex CHAN HONG Po Kui, Martin CHUI Chi Yun, Robert Gerald Clive DOBBY LUI Pui Kee, Francis

* Independent non-executive Directors

Registered office: Clarendon House Church Street Hamilton HM11 Bermuda

Head Office and Principal Place of Business in Hong Kong: Ground Floor, Block B Summit Building 30 Man Yue Street Hunghom, Kowloon Hong Kong

Hong Kong, 29th June, 2004

To shareholders of the Company

Dear Sir or Madam,

PROPOSALS INVOLVING GENERAL MANDATES TO REPURCHASE ORDINARY SHARES AND TO ISSUE ORDINARY SHARES AND AMENDMENTS OF THE EXISTING BYE-LAWS

1. GENERAL MANDATE TO REPURCHASE ORDINARY SHARES

At the special general meeting of the Company held on 29th August, 2003, a general mandate was given by the Company to the Directors to exercise the powers of the Company to repurchase Ordinary Shares. Such mandate will lapse at the conclusion of the forthcoming annual general meeting of the Company to be held on 11th August, 2004. The Directors propose to seek your approval of the Repurchase Resolution to be proposed at the Special General Meeting. An explanatory statement as required under the Share Repurchase Rules to provide the requisite information of the Repurchase Proposal is set out in appendix I hereto.

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LETTER FROM THE CHAIRMAN

2. GENERAL MANDATE TO ISSUE ORDINARY SHARES

It will also be proposed at the Special General Meeting two ordinary resolutions respectively granting to the Directors a general mandate to allot, issue and deal with new Ordinary Shares not exceeding 20% of the issued ordinary share capital of the Company as at the date of the resolution and adding to such general mandate so granted to the Directors any Ordinary Shares representing the Ordinary Shares repurchased by the Company after the granting of the general mandate to repurchase up to 10% of the issued ordinary share capital of the Company as at the date of the Repurchase Resolution.

3. AMENDMENTS OF THE EXISTING BYE-LAWS

The Stock Exchange has announced amendments to the Listing Rules relating to, among other things, the articles of association or equivalent constitutional documents of listed issuers. The amendments to the Listing Rules have come into effect on 31st March, 2004. Accordingly, the Directors propose to seek the approval of the Shareholders for the amendments to the existing Bye-Laws to ensure compliance with the amendments made to the Listing Rules.

The major amendments to the Bye-Laws relate to the following:

• (i) Where any shareholder is, under the Listing Rules, required to abstain from voting on any particular resolution or restricted to voting only for or only against any particular resolution, any vote cast by or on behalf of such shareholder in contravention of such requirement or restriction shall not be counted;

• (ii) The period for lodgment by shareholder of the notice to nominate a director shall commence no earlier than the day after the despatch of the notice of the meeting appointed for such election and end no later than seven days before the date of such meeting; and

• (iii) A Director shall abstain from voting at the board meeting on any matter in which he or any of his associates has a material interest and shall not be counted towards the quorum of the relevant board meeting.

The full text of the special resolution proposing the amendments to the existing Bye-Laws (Resolution 4) is set out in the notice of Special General Meeting.

4. SPECIAL GENERAL MEETING

On pages 10 to 14 of this document, you will find a notice convening the Special General Meeting at which ordinary resolutions will be respectively proposed:

• to grant to the Directors a general mandate to exercise all powers of the Company to repurchase Ordinary Shares representing up to a maximum of 10% of the issued ordinary share capital of the Company as at the date of passing the Repurchase Resolution;

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LETTER FROM THE CHAIRMAN

• to grant to the Directors a general mandate to authorise the Directors to issue, allot and deal with new Ordinary Shares not exceeding 20% of the issued ordinary share capital of the Company as at the date of passing such resolution; and

• to extend the general mandate which will be granted to the Directors to issue, allot and deal with additional Ordinary Shares by adding to it the number of Ordinary Shares repurchased under the Repurchase Proposal after the granting of the general mandate.

A special resolution regarding the proposal for amendments of the Company’s existing Bye-Laws will also be proposed at the Special General Meeting.

5. ACTION TO BE TAKEN

A form of proxy for use at the Special General Meeting is enclosed herein. Whether or not you intend to attend the Special General Meeting, you are requested to complete the form of proxy and return it to the head office and principal place of business of the Company at Ground Floor, Block B, Summit Building, 30 Man Yue Street, Hunghom, Kowloon, Hong Kong in any event not less than 48 hours before the time appointed for holding the Special General Meeting (or any adjourned meeting as the case may be). Completion and return of the form of proxy will not preclude shareholders from attending and voting at the Special General Meeting (or any adjourned meeting as the case may be) if they so wish.

6. RECOMMENDATION

The Directors believe that the Repurchase Proposal, the general mandate for Directors to issue new Ordinary Shares and the proposal for amendments of the Company’s existing ByeLaws 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 set out in the notice of Special General Meeting as they intend to do themselves in respect of their own holdings, if any.

Yours faithfully, For and on behalf of

Tse Sui Luen Jewellery (International) Limited Tse Tat Fung, Tommy Chairman

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EXPLANATORY STATEMENT

APPENDIX I

This appendix serves as an explanatory statement, as required by the Share Repurchase Rules, to provide requisite information to you for your consideration of the proposal to permit the repurchase of Ordinary Shares up to a maximum of 10% of the issued ordinary share capital of the Company as at the date of passing the Repurchase Resolution.

For the purpose of this appendix, the term “shares” shall be as defined in the Code on Share Repurchase and the Listing Rules to mean shares of all classes (including Ordinary Shares) and securities which carry a right to subscribe or purchase shares.

1. SHARE CAPITAL

As at the Latest Practicable Date, the issued share capital of the Company comprised 391,889,263 Ordinary Shares.

Subject to the passing of the Repurchase Resolution and on the basis that no further Ordinary Shares are issued or repurchased prior to the Special General Meeting, the Company would be allowed under the Repurchase Resolution to repurchase a maximum of 39,188,926 Ordinary Shares.

2. REASONS FOR REPURCHASE

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

3. FUNDING OF REPURCHASE

In repurchasing Ordinary Shares, the Company may only apply funds legally available for such purpose in accordance with its memorandum of association and bye-laws and the Companies Act. Bermuda law provides that the amount of capital repaid in connection with a share repurchase may only be paid out of either the capital paid up on the relevant Ordinary Shares, or the profits that would otherwise be available for dividend or the proceeds of a fresh issue of Ordinary Shares made for the purpose. The amount of premium payable on repurchase may only be paid out of either the profits that would otherwise be available for dividend or out of the share premium or contributed surplus accounts of the Company. It is presently proposed that any Ordinary Shares repurchased pursuant to the Repurchase Proposal would be funded out of the capital paid up on the repurchased Ordinary Shares, the profits of the Company which could otherwise be available for dividend and/or the Company’s share premium account.

There might be an adverse impact on the working capital or gearing position of the Company as compared with the position disclosed in the audited accounts contained in the annual report for the year ended 29th February, 2004 in the event that the power to repurchase Ordinary Shares pursuant to the Repurchase Proposal was to be carried out in full at any time during the proposed repurchase period. However, the Directors do not propose to exercise the power to repurchase Ordinary Shares pursuant to the Repurchase Proposal to such extent as would, in the circumstances, have a material adverse effect on the working capital requirements of the Company or the gearing levels which in the opinion of the Directors are from time to time appropriate for the Company.

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EXPLANATORY STATEMENT

APPENDIX I

4. ORDINARY SHARE PRICES

The highest and lowest prices at which the Ordinary Shares have traded on the Stock Exchange during each of the previous twelve months before the Latest Practicable Date are as follows:

	Highest	Lowest
	HK$	HK$
June 2003	0.092	0.072
July 2003	– *	– *
August 2003	– *	– *
September 2003	– *	– *
October 2003	0.960	0.130
November 2003	0.450	0.270
December 2003	0.350	0.280
January 2004	0.350	0.285
February 2004	0.440	0.300
March 2004	– *	– *
April 2004	– *	– *
May 2004	0.460	0.190

* the shares in the Company were suspended from trading during that period

5. UNDERTAKING

The Directors have undertaken to the Stock Exchange that, so far as the same may be applicable, they will exercise the powers of the Company to make repurchases pursuant to the Repurchase Proposal and 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, their associates, have any present intention to sell any Ordinary Shares to the Company or its subsidiaries under the Repurchase Proposal if such is approved by the shareholders.

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

6. TAKEOVERS CODE

If on the exercise of the power to repurchase Ordinary Shares pursuant to the Repurchase Proposal, 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 Takeovers Code. As a result, a shareholder or group of shareholders acting in concert, could obtain or consolidate control of the Company and become obliged of making a mandatory offer in accordance with Rule 26 of the Takeovers Code.

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EXPLANATORY STATEMENT

APPENDIX I

As at the Latest Practicable Date, the register of members maintained by the Company pursuant to Section 352 of SFO shows the following interests in Ordinary Shares being 10% or more of the issued ordinary share capital of the Company:

Name

% of existing issued No. of Ordinary Shares ordinary share capital

Blink Technology Limited (“Blink”) 195,971,535 approximately 50.01

In the event that the Directors exercise in full the power to repurchase Ordinary Shares under the Repurchase Proposal, then (if the present shareholdings otherwise remained the same) the percentage of shareholding of each of the parties named above would be increased as follows:

% of issued ordinary share capital Name after share repurchase Blink approximately 55.56

Since Blink has already interested in over 50% of the existing issued ordinary share capital, the Directors believe that such an increase may not give rise to an obligation to make a mandatory offer under Rule 26 of the Takeover Code.

7. ORDINARY SHARES REPURCHASE MADE BY THE COMPANY

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

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PROCEDURES BY WHICH SHAREHOLDERS MAY DEMAND A POLL AT GENERAL MEETING PURSUANT TO THE BYE-LAWS

APPENDIX II

Set out below are the procedures by which the shareholders may demand a poll at the Special General Meeting.

According to the Bye-Law 66 of the Company, at any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands unless (before or on the declaration of the result of the show of hand or on the withdrawal of any other demand for a poll) a poll is demanded by:

• (a) the chairman of such meeting; or

• (b) at least three members present in person or in the case of a member being a corporation by its duly authorised representative or by proxy for the time being entitled to vote at the meeting; or

• (c) a member or members present in person or in the case of a member being a corporation by its duly authorised representative or by proxy and representing not less than one-tenth of the total voting rights of all Members having the right to vote at the meeting; or

• (d) a member or members present in person or in the case of a member being a corporation by its duly authorised representative or by proxy and holding shares in the Company conferring a right to vote at the meeting being shares on which an aggregate sum has been paid up equal to not less than one-tenth of the total sum paid up on all shares conferring that right.

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NOTICE OF SPECIAL GENERAL MEETING

TSE SUI LUEN JEWELLERY (INTERNATIONAL) LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 417)

NOTICE IS HEREBY GIVEN that a Special General Meeting of the Company will be held at Ground Floor, Block B, Summit Building, 30 Man Yue Street, Hunghom, Kowloon, Hong Kong on Wednesday, 11th August, 2004 at 3:05 p.m. (or sooner thereafter as the annual general meeting of the Company convened at the same place and date at 3:00 p.m. shall have been concluded or adjourned) for the purpose of considering and, if thought fit, passing the following resolutions which will be proposed as Ordinary Resolutions and Special Resolution:

ORDINARY RESOLUTIONS

1. “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 ordinary shares of HK$0.25 each in the capital of the Company on The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) or on any other stock exchange on which the securities of the Company may be listed and recognised by the Securities and Futures Commission of Hong Kong and the Stock Exchange for this purpose, subject to and in accordance with all applicable laws and the requirements of the Rules Governing the Listing of Securities on 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 ordinary shares of the Company which the Directors of the Company is authorised to repurchase pursuant to the approval in paragraph (a) above shall not exceed 10% of the aggregate nominal amount of the issued ordinary share capital of the Company as 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 law or the bye-laws of the Company to be held; and

• (iii) the date on which the authority set out in this Resolution is revoked or varied by an ordinary resolution of the shareholders of the Company in general meeting.”

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NOTICE OF SPECIAL GENERAL MEETING

1. “THAT

2. (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 ordinary shares of HK$0.25 each in the capital of the Company and to make or grant offers, agreements and options (including bonds, warrants and debentures convertible into ordinary shares of the Company) which would or might require the exercise of such power be and is hereby generally and unconditionally approved;

3. (b) the approval in paragraph (a) above shall authorise the Directors of the Company during the Relevant Period (as hereinafter defined) to make or grant offers, agreements and options (including bonds, warrants and debentures convertible into ordinary shares of the Company) which would or might require the exercise of such power after the end of the Relevant Period;

4. (c) the aggregate nominal amount of ordinary share capital allotted or agreed conditionally or unconditionally to be allotted (whether pursuant to an option or otherwise) and issued by the Directors of the Company pursuant to the approval in paragraph (a) above, otherwise than (i) a Rights Issue (as hereinafter defined); (ii) an issue of ordinary shares as scrip dividends pursuant to the byelaws of the Company from time to time; or (iii) an issue of ordinary shares under any option scheme or similar arrangement for the time being adopted for the grant or issue to employees of the Company and/or any of its subsidiaries of ordinary shares or rights to acquire ordinary shares of the Company, shall not exceed 20% of the aggregate nominal amount of the issued ordinary share capital of the Company as at the date of passing this Resolution, and the said approval shall be limited accordingly; and

5. (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 law or the bye-laws of the Company to be held; and

• (iii) the date on which the authority set out in this Resolution is revoked or varied by an ordinary resolution of the shareholders of the Company in general meeting; and

“Rights Issue” means an offer of shares open for a period fixed by the Directors of the Company to the holders of shares of the Company on the register on a fixed record date in proportion to their then holdings of such shares as at that date (subject to such exclusions or other arrangements as the Directors of the Company may deem necessary or expedient in relation

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NOTICE OF SPECIAL GENERAL MEETING

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 applicable to the Company).”

1. “THAT subject to the passing of Resolutions No.1 and No.2 set out in the notice convening the meeting, the general mandate granted to the Directors of the Company to allot, issue and deal with additional ordinary shares pursuant to Resolution No.2 set out in the notice convening this meeting be and is hereby extended by the addition thereto of an amount representing the aggregate nominal amount of ordinary shares in the capital of the Company repurchased by the Company under the authority granted pursuant to Resolution No.1 set out in the notice convening this meeting, provided that such amount of shares so repurchased shall not exceed 10% of the aggregate nominal amount of the issued ordinary share capital of the Company as at the date of the said Resolution.”

SPECIAL RESOLUTION

1. As Special Business, to consider and, if thought fit, pass the following resolution as a Special Resolution of the Company:

“ THAT the Bye-Laws of the Company adopted on 1st September 1992 and amended up to 29th August 2003 be amended as follows:

• (a) by adding the following new definition of “associates” in Bye-Law 1 in appropriate alphabetical order:

““associates” shall mean in relation to any Director, chief executive or substantial shareholder, such meaning as assigned to it by the Listing Rules.”

• (b) by adding the following new definition of “Hong Kong” in Bye-Law 1 in appropriate alphabetical order:

““Hong Kong” shall mean the Hong Kong Special Administrative Region of the People’s Republic of China.”

• (c) by adding the following new definition of “Listing Rules” in Bye-Law 1 in appropriate alphabetical order:

““Listing Rules” shall mean the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (as amended from time to time).”

• (d) by generally reordering in alphabetical order the definitions as they appear in Bye-law 1 of the Bye-laws of the Company;

• (e) by adding the following paragraph as a new Bye-Law 66A immediately after Bye-Law 66:

“Where any Member is, under the Listing Rules, required at any general meeting to abstain from voting on any particular resolution or restricted to

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NOTICE OF SPECIAL GENERAL MEETING

voting only for or only against any particular resolution, any votes cast by or on behalf of such member in contravention of such requirement or restriction shall not be counted.”

• (f) by adding the words “The period for lodgment of the notices above referred to will commence no earlier than the day after the despatch of the notice of the general meeting appointed for such election and end no later than seven (7) days prior to the date of such general meeting.” immediately following the last sentence of Bye-Law 88;

• (g) by deleting the existing paragraph (1) of Bye-Law 103 in its entirety and substituting therefor the following new paragraph:

“(1) Save as otherwise provided by these Bye-Laws, a Director shall not vote (nor be counted in the quorum) on any resolution of the Board approving any contract or arrangement or any other proposal in which he or any of his associates has/have a material interest, and if he shall do so his vote shall not be counted (nor shall he be counted in the quorum for that resolution), but this prohibition shall not apply to any of the following matters:–

• (i) the giving of any security or indemnity either:

• (a) to the Director or his associate(s) in respect of money lent or obligations incurred or undertaken by him or any of them at the request of or for the benefit of the Company or any of its subsidiaries; or

• (b) to a third party in respect of a debt or obligation of the Company or any of its subsidiaries for which the Director or his associate(s) has himself/themselves assumed responsibility in whole or in part and whether alone or jointly under a guarantee or indemnity or by the giving of security;

• (ii) any proposal concerning an offer of shares or debentures or other securities of or by the Company or any other company which the Company may promote or be interested in for subscription or purchase where the Director or his associate(s) is/are or is/are to be interested as a participant in the underwriting or sub-underwriting of the offer;

• (iii) any proposal concerning any other company in which the Director or his associate(s) is/are interested only, whether directly or indirectly, as an officer or executive or shareholder or in which the Director or his associate(s) is/are beneficially interested in shares of that company, provided that the Director and any of his associates are not in aggregate beneficially interested in 5% or more of the issued shares of any class of such company (or of any third company through which his interest or that of his associate(s) is derived) or of the voting rights;

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NOTICE OF SPECIAL GENERAL MEETING

• (iv) any proposal or arrangement concerning the benefit of employees of the Company or its subsidiaries including:

• (a) the adoption, modification or operation of any employees’ share scheme or any share incentive or share option scheme involving the issue or grant of options over shares or other securities by the Company under which the Director or his associate(s) may benefit; or

• (b) the adoption, modification or operation of a pension fund or retirement, death or disability benefits scheme which relates both to Directors, his associates and employees of the Company or any of its subsidiaries and does not provide in respect of any Director or his associate(s), as such any privilege or advantage not generally accorded to the class of persons to which such scheme or fund relates; and

• (v) any contract or arrangement in which the Director or his associate(s) is/are interested in the same manner as other holders of shares or debentures or other securities of the Company by virtue only of his/their interest in shares or debentures or other securities of the Company.””

By order of the Board Chan Suk Yee Company Secretary

Hong Kong, 29th June, 2004

Notes:

1. A shareholder entitled to attend and vote at the above meeting may appoint one or more than one proxy to attend and to vote in his stead. A proxy need not be a shareholder of the Company.

2. Where there are joint registered holders of any Share, any one such persons may vote at the meeting, either personally or by proxy, in respect of such Share as if he were solely entitled thereto; but if more than one of such joint holders be present at the meeting personally or by proxy, that one of the said persons so present whose name stands first on the register of members of the Company in respect of such Shares shall alone be entitled to vote in respect thereof.

3. In order to be valid, the form of proxy duly completed and signed in accordance with the instructions printed thereon together with the power of attorney or other authority (if any) under which it is signed or a notarially certified copy thereof must be delivered to the head office and principal place of business of the Company in Hong Kong at Ground Floor, Block B, Summit Building, 30 Man Yue Street, Hunghom, Kowloon, Hong Kong not less than 48 hours before the time appointed for holding the meeting (or adjourned meeting as the case may be).

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