Leadway Technology Investment Group Limited — Proxy Solicitation & Information Statement 2002

Apr 30, 2002

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in 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 shares in TIANJIN DEVELOPMENT HOLDINGS LIMITED, you should at once hand this document and the accompanying form of proxy to the purchaser or the bank or stockbroker or other agent through whom the sale was effected for transmission to the purchaser.

The Stock Exchange of Hong Kong Limited (the ‘‘Stock Exchange’’) 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.

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TIANJIN DEVELOPMENT HOLDINGS LIMITED

(Incorporated in Hong Kong SAR with limited liability under the Companies Ordinance)

Executive Directors: Wang Guang Hao (Chairman) Zhou Si Chun (Vice Chairman) Yu Ru Min (Vice Chairman) Chen Zi He Chen Cui Wan Zhang Hong Ru He Xiu Heng Yang Li Heng Sun Zeng Yin Pang Jin Hua

Registered Office: 26–38/F Tianjin Building 167 Connaught Road West Hong Kong

Non-executive Directors: Ye Di Sheng Kwong Che Keung, Gordon Cheung Wing Yui Lau Wai Kit Cheng Hon Kwan

• (* Independent Non-executive Directors)

24th April, 2002

To the shareholders,

Dear Sir or Madam,

PROPOSED GENERAL MANDATES TO REPURCHASE AND ISSUE SHARES PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

INTRODUCTION

At the annual general meeting of Tianjin Development Holdings Limited (the ‘‘Company’’) held on 28th May, 2001, the Company granted a general mandate to the directors of the Company (the ‘‘Directors’’) to exercise the powers of the Company to repurchase shares of the Company. A separate mandate was also

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granted to the Directors enabling them to issue new shares. Such mandates will lapse at the conclusion of the forthcoming annual general meeting of the Company which is to be held at 38/F., Function Room, Tianjin Building, 167 Connaught Road West, Hong Kong on 24th May, 2002 at 3: 00 p.m. (the ‘‘Annual General Meeting’’). It is therefore proposed to renew these general mandates at the Annual General Meeting.

In addition, until recently listed companies are required under the Companies Ordinance (Cap.32), to send each member a copy of every balance sheet, including every document required by law to be annexed thereto, which is to be laid before the Company in general meeting, together with a copy of the directors’ report and a copy of the auditors’ report (the ‘‘Annual Report and Accounts’’). On 4th January, 2002, the Companies (Amendment) Ordinance 2001 (the ‘‘2001 Ordinance’’) came into force in Hong Kong to permit listed companies to offer members the chance to elect to receive, in place of the Annual Report and Accounts, a summary financial report (the ‘‘Summary Report’’) which is derived from and summarizes the Annual Report and Accounts. The 2001 Ordinance also allows listed companies to offer members the opportunity to choose not to receive a printed copy of either the Annual Report and Accounts or the Summary Report and to rely instead on the versions of those documents that will be published on the listed companies’ website.

The Stock Exchange has recently amended the Rules Governing the Listing of Securities on the Stock Exchange (the ‘‘Listing Rules’’) of the Main Board that permit listed companies to, as in the 2001 Ordinance, offer members the chance to elect to receive the Summary Report in place of the Annual Report and Accounts, provided that they ascertain the wishes of their members and comply with the relevant legal requirements of their own jurisdictions and provisions of their own memorandum and articles of association. On 15th February, 2002, the Listing Rules were amended to allow listed companies to send or otherwise make available corporate communications to their members using electronic means with their prior approval if this would be allowed under applicable laws and regulations and the listed companies’ own constitutional documents. The Listing Rules provide for various corporate communications, principally annual and interim reports, listing documents, circulars and notices of meetings, to be sent by listed companies to their members.

In view of the foregoing amendments to the Companies Ordinance and Listing Rules, the Directors therefore propose to amend the Company’s Articles of Association to permit the Company to take advantage of the new legislation by a special resolution (‘‘Special Resolution’’), details as contained in the notice of forthcoming Annual General Meeting, to the effect that the Company’s Articles of Association so altered permits the Company to offer members the chance to elect to receive the Summary Report in place of the Annual Report and Accounts and to rely on the copies posted on the Company’s website in place of being sent a printed copy of either document. Even if the members vote in favour of the Special Resolution, they will still be able to choose to receive printed copies of the Annual Report and Accounts and any other corporate communications. Subsequent to the passing of the Special Resolution, it is intended that the Company will send the members a circular to advise them of the arrangement and to invite them to elect whether (i) to receive the Summary Report in place of the Annual Report and Accounts; or (ii) to rely on the copies posted on the Company’s website in place of being sent a printed copy of either document, together with a statement expressly informing members that they have the right at any time by reasonable notice to the Company in the prescribed manner to change their choice.

Last year’s Annual Report and Accounts of the Company ran to about 100 pages and the costs to the Company of printing, despatching and posting the Annual Report and Accounts to the members and others have previously been high. The Company wishes both to save costs for the benefit of the members and to reinforce its commitment to environmentally friendly methods of carrying out its business by reducing the use of printed papers.

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The purpose of this document is to provide you with information regarding the above proposed general mandates to repurchase shares and issue shares as well as proposed amendments to the Company’s Articles of Association and to seek the approval of members for the resolutions relating to the aforesaid matters at the Annual General Meeting.

GENERAL MANDATE TO REPURCHASE SHARES

An ordinary resolution will be proposed at the Annual General Meeting to give a general and unconditional mandate to the Directors to exercise the powers of the Company to repurchase its own shares at any time until the first to occur of the conclusion of the next annual general meeting or the expiration of the period within which the next annual general meeting of the Company is required by the Companies Ordinance (Chapter 32 of the Laws of Hong Kong) or the Articles of Association of the Company or other applicable laws of Hong Kong to be held or until the mandate is revoked or varied by an ordinary resolution of the shareholders in general meeting of the Company (the ‘‘Repurchase Mandate’’). The shares of the Company which may be repurchased pursuant to the Repurchase Mandate are limited to a maximum of 67,775,000 shares representing 10% of the total issued and fully paid share capital of the Company on the date of passing the resolution approving the Repurchase Mandate.

An explanatory statement, as required by the relevant rules regulating the repurchase by companies having primary listings on the Stock Exchange of their own shares as contained in the Listing Rules, to provide requisite information is set out in the appendix hereto.

GENERAL MANDATE TO ISSUE SHARES

At the Annual General Meeting, an ordinary resolution will be proposed that the Directors be given a general and unconditional mandate to allot, issue and deal with shares up to a maximum of 135,550,000 shares, representing 20% of the total issued and fully paid share capital of the Company on the date the resolution is passed. In addition, an ordinary resolution will also be proposed to authorise an extension of such general mandate to be granted to the Directors to issue new shares by adding to it the number of shares repurchased under the Repurchase Mandate.

AMENDMENT OF THE ARTICLES OF ASSOCIATION

In it present form, Article 163 of the Articles of Association of the Company requires the Company to send to every member a printed copy of balance sheet and profit and loss accounts which are to be laid before the Company at its annual general meeting, together with printed copies of both the Directors’ and Auditors’ reports. Article 167 also requires the Company to serve notice or document on members either personally or by sending it by post in the manner as prescribed under the Articles of Association.

In this respect, a Special Resolution is proposed at the forthcoming Annual General Meeting to amend the Company’s Articles of Association to allow the Company to distribute the Summary Report to members who would prefer to receive that document in place of the Annual Report and Accounts and to send or otherwise make available either document and any corporate communications to members using electronic means if the members have agreed with the Company to their relying on the copies published on the Company’s website instead of being sent a printed copy of such documents. Consequently, amendments are proposed to be made on Articles 163, 167, 169 and 172, of which those changes on Articles 169 and 172 as to how the Company’s corporate communications are to be served or deemed to served are consequential amendments in connection with those made on Articles 163 and 167.

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If the Special Resolution is passed and in compliance with the Listing Rules, the Company will be able to offer the members the chance to receive the Summary Report in place of the Annual Report and Accounts. In addition, the members have the opportunity to elect to rely on the versions of both the Annual Report and Accounts and the Summary Report that will be published on the Company’s website rather than receiving a printed copy of either document.

ACTION TO BE TAKEN

A form of proxy for use at the Annual General Meeting is enclosed herein. Whether or not you intend to attend this meeting, you are requested to complete the form of proxy and return it to the registered office of the Company in accordance with the instructions printed thereon not less than 48 hours before the time fixed for holding the meeting, i.e. by 3: 00 p.m. on 22nd May, 2002. Completion and return of form of proxy will not preclude you from attending and voting in person at the Annual General Meeting if you so wish.

RECOMMENDATION

The Directors believe that the Repurchase Mandate, the general mandate to issue new shares and the amendments of the Company’s Articles of Association are in the best interests of the Company and its shareholders. Accordingly, the Directors recommend that all shareholders should vote in favour of Resolutions Nos. 5 to 6 at the Annual General Meeting.

Yours faithfully, By Order of the Board Wang Guang Hao Chairman

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APPENDIX EXPLANATORY STATEMENT

The appendix serves as an explanatory statement, as required by the Listing Rules, to provide requisite information to you for your consideration of the Repurchase Mandate.

1. SHARE CAPITAL

As at 24th April, 2002 (the latest practicable date prior to the printing of this document), the issued share capital of the Company comprised 677,750,000 shares of HK$0.10 each.

Subject to the passing of the ordinary resolution to approve the Repurchase Mandate and on the basis that no further shares are issued prior to the Annual General Meeting, the Company would be allowed under the Repurchase Mandate to repurchase a maximum of 67,775,000 fully paid shares of HK$0.10 each.

2. FUNDING OF REPURCHASES

In repurchasing shares, the Company may only apply funds legally available for the purpose and in accordance with the Memorandum and Articles of Association of the Company and the relevant laws of Hong Kong. Such funds may include funds otherwise available for dividend or distribution and the proceeds of a fresh issue made for the purpose of the repurchases. Any premium payable on a repurchase must be provided for out of the funds of the Company otherwise available for dividend or distribution or out of the Company’s share premium account. The Directors propose that repurchases of shares under the Repurchase Mandate would be financed by the Company’s internal resources or existing banking facilities.

In the event that the proposed repurchases were to be carried out in full at any time during the proposed repurchase period, there could be an adverse impact on the working capital or gearing position of the Company which, in the opinion of the Directors, are from time to time appropriate for the Company as compared with the position disclosed in the latest published audited financial statements for the year ended 31st December, 2001. However, the Directors do not propose to exercise the Repurchase Mandate to such an extent.

3. SHARE PRICES

The highest and lowest prices at which the shares of the Company have traded on the Stock Exchange in previous twelve months were as follows:

	Share	prices
Month	Highest	Lowest
	HK$	HK$
April 2001	2.525	2.075
May 2001	3.175	2.500
June 2001	3.525	2.600
July 2001	2.675	2.000
August 2001	2.175	1.920
September 2001	1.940	1.530
October 2001	2.100	1.720
November 2001	2.275	1.990
December 2001	2.250	1.930
January 2002	2.250	1.930
February 2002	2.325	2.025
March 2002	2.350	2.150

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1. GENERAL

The Directors have undertaken to the Stock Exchange that, they will exercise the powers of the Company to make repurchases pursuant to the Repurchase Mandate in accordance with the Listing Rules and the applicable laws of Hong Kong.

If, on the exercise of the powers to repurchase shares 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 the Hong Kong Code on Takeovers and Mergers (the ‘‘Code’’). As a result, a shareholder, or group of shareholders acting in concert, could obtain or consolidate control of the Company or become obliged to make a mandatory offer in accordance with Rule 26 of the Code. As at 24th April, 2002 (the latest practicable date prior to the printing of this document), Tianjin Investment Holdings Limited and Tsinlien Property Services Limited, wholly-owned subsidiaries of Tsinlien Group Company Limited, hold 383,460,000 and 2,022,000 shares respectively representing a total of 56.88% of the issued share capital of the Company. Apart from the aforesaid shareholders, no person had registered an interest in the share capital of the Company that was required to be recorded in the register maintained under Section 16(1) of Securities (Disclosure of Interests) Ordinance.

In the event that the Directors exercised in full the powers pursuant to the Repurchase Mandate, the aggregate shareholding of Tianjin Investment Holdings Limited and Tsinlien Property Services Limited would be increased to 63.20% of the issued share capital of the Company. The Directors do not anticipate that a repurchase of shares pursuant to the Repurchase Mandate would give rise to an obligation to make a mandatory offer under Rule 26 of the Code.

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 under the Repurchase Mandate if such Repurchase Mandate is approved by the shareholders.

No connected persons (as defined in the Listing Rules) have notified the Company that they have a present intention to sell shares to the Company, or have undertaken not to do so, in the event that the Repurchase Mandate is approved by the shareholders.

5. SHARE REPURCHASES MADE BY THE COMPANY

No repurchases of shares have been made by the Company whether on the Stock Exchange or otherwise in the previous six months.

6. REASONS FOR REPURCHASES

The Directors believe that it is in the best interests of the Company and its shareholders for the Directors to have the power to repurchase shares pursuant to the Repurchase Mandate. Such repurchases may, depending on market conditions and funding arrangements at the time, lead to an enhancement of the earnings per share of the Company and will only be made when the Directors believe that such a repurchase will benefit the Company and its shareholders.

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