Luye Pharma Group Limited — Proxy Solicitation & Information Statement 2003

Nov 6, 2003

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

This circular is for information purposes only and does not constitute an offer or invitation to, nor is it calculated to invite offers by, the public to subscribe for or to purchase shares or other securities of Takson Holdings Limited.

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

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

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this circular, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

TAKSON HOLDINGS LIMITED 第一德勝控股有限公司

(incorporated in Bermuda with limited liability)

DISCLOSEABLE TRANSACTION

ACQUISITION OF PROPERTIES

6th November, 2003

CONTENTS

	Pages
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1 - 2
Responsibility Statement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
Letter from the Board
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Acquisition Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5 - 6
Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
Reasons for the Acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Information on the Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Discloseable Transaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Appendix — General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8 - 10

DEFINITIONS

In this circular, the following expressions shall have the meanings set out below unless the context requires otherwise:

“associate”	shall have the meaning ascribed thereto under the Listing
	Rules
“Acquisition”	the acquisition of the Properties pursuant to the
	Acquisition Contracts
“Acquisition Contracts”	six agreements all dated 15th October, 2003 for the sale
	and purchase of the Properties each entered into between
	Takson Garment and the Seller
“Board”	the board of Directors
“Company”	Takson Holdings Limited, a company incorporated under
	laws of Bermuda with limited liability whose shares are
	listed on the Stock Exchange
“Director(s)”	the director(s) of the Company
“Group”	the Company and its subsidiaries
“Hong Kong”	The Hong Kong Special Administrative Region of the
	PRC
“Hua Ming Plaza”	Hua Ming Century Plaza (Office Building) (華敏世紀
	廣場(辦公樓)), No. 726, Yan An Road West, Chang
	Ning District, Shanghai, PRC
“Latest Practicable Date”	4th November, 2003, being the latest practicable date
	prior to the printing of this circular for ascertaining
	certain information for inclusion in the circular
“Listing Rules”	the Rules Governing the Listing of Securities on the
	Stock Exchange
“PRC”	the People’s Republic of China
“Properties”	Units E, F, G, H, I and L, 23rd Floor of the Hua Ming
	Plaza

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DEFINITIONS

“Seller”	上海華友房地產開發有限公司(Shanghai HuaYou
	Property Development Co. Ltd.), a company incorporated
	under the laws of the PRC, an independent third party
“SFO”	the Securities and Futures Ordinance (Chapter 571 of
	the Laws of Hong Kong)
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“subsidiaries”	has the meaning ascribed to it under the Companies
	Ordinance (Chapter 32 of the Laws of Hong Kong)
“Takson Garment”	Takson Garment Manufacturing Company, Limited, a
	company incorporated under the laws of Hong Kong and
	a wholly-owned subsidiary of the Company
“US”	The United States of America
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong
“RMB”	Renminbi, the lawful currency of the PRC
“US$”	US dollars, the lawful currency of the US

For the purposes of illustration only and unless otherwise stated, the conversion of US dollars into Renminbi is based on the agreed exchange rate of US$1.00 = RMB8.2771 under the Acquisition Contracts. Such conversion should not be construed as a representation that the amount in question has been, could have been or could be converted at any particular rate or at all.

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RESPONSIBILITY STATEMENT

This circular includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors collectively and individually accept full responsibility for the accuracy of the information contained in this circular and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts the omission of which would make any statement herein misleading.

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LETTER FROM THE BOARD

TAKSON HOLDINGS LIMITED 第一德勝控股有限公司

(incorporated in Bermuda with limited liability)

Executive Directors:

Wong Tek Sun, Takson (Chairman and Chief Executive Officer) Pang Shu Yuk, Adeline Rita (Deputy Chairman)

Registered Office: Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda.

Non-Executive Directors: Tsao Kwang Yung, Peter Lee Kwok Cheung Wong Tak Yuen

Head Office and Principal Place of Business in Hong Kong: 5th Floor, South Wing, Harbour Centre, Tower One, 1 Hok Cheung Street, Hunghom, Kowloon, Hong Kong.

6th November, 2003

To the shareholders

Dear Sir or Madam,

DISCLOSEABLE TRANSACTION ACQUISITION OF PROPERTIES

INTRODUCTION

On 15th October, 2003, Takson Garment entered into the Acquisition Contracts with the Seller to acquire from the Seller the Properties. The Seller and its beneficial owner(s) are independent third parties not connected with any of the Directors, chief executives or substantial shareholders of the Company or any of its subsidiaries or their respective associates.

The purpose of this circular is to give you further information regarding the Acquisition which constitutes a discloseable transaction for the purposes of the Listing Rules.

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LETTER FROM THE BOARD

ACQUISITION CONTRACTS

Date:

15th October, 2003

Parties:

• (1) Takson Garment, a wholly-owned subsidiary of the Company; and

• (2) the Seller, the developer of the Hua Ming Plaza. The Seller and its beneficial owner(s) are independent third parties not connected with any of the Directors, chief executives or substantial shareholders of the Company or any of its subsidiaries or their respective associates

Properties:

The Properties comprise of units E, F, G, H, I and L of a total floor area of 1,023.63 square meters on the 23rd Floor of the Hua Ming Plaza, a building under construction which is located at No. 726, Yan An Road West, Chang Ning District, Shanghai, PRC, a leasehold property with land use period from 22nd May, 2001 to 21st May, 2051. It is expected that construction of the Properties shall be completed on or before 30th July, 2004.

Pursuant to the terms of the Acquisition Contracts, the Seller shall deliver to Takson Garment vacant possession of the completed Properties on or before 30th July, 2004 which shall be subject to the following conditions to be fulfilled by the Seller:-

• (i) discharge of any construction mortgage on the Properties;

• (ii) obtaining of required governmental approvals and complying with necessary legal and registration requirements under laws of the PRC for delivering vacant possession of the completed Properties; and

• (iii) complete necessary governmental filing procedures required in respect of inspection of the completed Properties.

According to the Acquisition Contracts, in the event vacant possession of the completed Properties cannot be delivered by the Seller to Takson Garment on or before 30th July, 2004, a daily penalty of 0.01% of the aggregate consideration paid by Takson Garment for the Acquisition shall become payable by the Seller to Takson Garment from the date immediately after 30th July, 2004 until the date of actual delivery of vacant possession of the Properties. A further penalty of 1% of the aggregate consideration paid by Takson Garment for the Acquisition shall become payable by the Seller if the delay in delivering the completed Properties is more than 90 days.

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LETTER FROM THE BOARD

Consideration:

The aggregate consideration for the Acquisition under the Acquisition Contracts is in the total sum of RMB15,605,092 (equivalent to approximately HK$14,705,590) which represents 22.66% of the consolidated net tangible asset value of the Company as set out in its annual report for the year ended 31st March, 2003. The aggregate consideration shall be satisfied by approximately US$1,885,332 (equivalent to approximately HK$14,705,590) in cash (based on the exchange rate of US$1.00 = RMB8.2771 as agreed under the Acquisition Contracts) which shall be payable by Takson Garment as follows:

• (a) 35% of the aggregate consideration in the total sum of RMB5,461,783 has been satisfied by approximately US$659,866 (equivalent to approximately HK$5,146,955) as deposit in cash on 15th October, 2003; and

• (b) 65% of the aggregate consideration in the total sum of RMB10,143,309 to be satisfied by approximately US$1,225,466 (equivalent to approximately HK$9,558,635) shall be payable in cash on or before 15th April, 2004.

After consultation with an independent property advisor, the Directors consider that, it is general practice that the balance of total consideration for acquisition of first-hand uncompleted properties is required to be fully satisfied before delivery of vacant possession of the completed properties by the property developer.

The aggregate consideration for the Acquisition under the Acquisition Contracts has been negotiated on arm’s length basis by the parties taking into account the market values of similar properties in the market. The aggregate consideration under the Acquisition Contracts is calculated based on the average price of RMB15,245 per square meter of the Properties which according to the view of the Directors after consultation with an independent property advisor, represented a very attractive term comparable to similar quality Grade-A office buildings in Shanghai.

FUNDING

The Company intends to finance 35% and 65% of the aggregate consideration under the Acquisition Contracts by its internal resources and bank mortgages respectively. The Directors confirmed that the Company has sufficient working capital for the operations of the Group after payment of the consideration. The payment of the aggregate consideration for the Acquisition will not have any material adverse effect on the existing cash resources of the Company.

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LETTER FROM THE BOARD

REASONS FOR THE ACQUISITION

The Group currently leases an office in Shanghai as the Shanghai headquarter of the Group. The Directors consider that it is good opportunity for the Group to acquire properties for its own use in the Shanghai property market and intend to remove its current office in Shanghai to the Properties for expansion of the Shanghai headquarter of the Group.

The Directors consider that the transactions under the Acquisition Contracts are conducted at arm’s length, on normal commercial terms and are fair and reasonable so far as the shareholders of the Company as a whole are concerned.

INFORMATION ON THE GROUP

The principal activities of the Group are sourcing, subcontracting, marketing and selling of outerwear garments.

DISCLOSEABLE TRANSACTION

As the consideration involved in the Acquisition exceeds 15% and less than 50% of the Company’s consolidated net tangible asset value as set out in its annual report for the year ended 31st March, 2003, the Acquisition contemplated by the Acquisition Contracts constitute a discloseable transaction of the Company under Chapter 14 of the Listing Rules.

ADDITIONAL INFORMATION

Your attention is drawn to the additional information contained in the Appendix to this circular.

Yours faithfully, For and on behalf of Takson Holdings Limited Wong Tek Sun, Takson Chairman

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GENERAL INFORMATION

APPENDIX

1. DISCLOSURE OF INTERESTS

• (a) As at the Latest Practicable Date, the interests of the Directors in the shares and underlying shares or debentures of the Company which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which they are taken or deemed to have under such provisions of the SFO), or which were required pursuant to Section 352 of the SFO to be entered in the register maintained by the Company referred to therein, or which were required to be notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Companies were as follows:

Beneficial interests and long positions in shares of the Company (Note 1)

Name of

Name of
Directors	Personal	Family	Corporate	Other	Total
Wong Tek Sun,	4,018,000	9,000,000	237,600,000	—	250,618,000
Takson			(Note2)
Pang Shu Yuk,	9,000,000	4,018,000	237,600,000	—	250,618,000
Adeline Rita			(Note 2)

Notes:

1. These interests do not include those in the underlying shares of equity derivatives of the Company. These interests need to be aggregated with those set out in sub-paragraph (2) below (if applicable) to give the Directors’ total interest in shares comprised in the relevant share capital of the Company within the meaning of the SFO.

2. The references to 237,600,000 shares relate to the same block of shares in the Company. Such shares are held by Takson International Holdings Limited, the entire issued share capital of which is held by Wangkin Investments Inc. (“WII”) as trustee of the Wangkin Investments Unit Trust (the “Unit Trust”). All issued and outstanding units in the Unit Trust are beneficially held by Guardian Trustee Limited as trustee of the Wang & Kin Family Trust (the “Family Trust”). The discretionary beneficiaries of the Family Trust are, inter alia, Ms. Pang Shu Yuk, Adeline Rita, Mr. Wong Chi Wang, Calvin, and Mr. Wong Chi Kin, Christopher.

Mr. Wong Tek Sun, Takson owns more than one-third of the issued share capital of WII and his children as, inter alia, discretionary beneficiaries of the Family Trust have interests in the share capital of the Company. Accordingly, he is taken to be interested in the 237,600,000 shares in the Company under the SFO.

Ms. Pang Shu Yuk, Adeline Rita, owns more than one-third of the issued share capital of WII and she and her children as, inter alia, discretionary beneficiaries of the Family Trust have interests in the share capital of the Company. Accordingly, she is taken to be interested in the 237,600,000 shares in the Company under the SFO.

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GENERAL INFORMATION

APPENDIX

• (b) As at the Latest Practicable Date, so far as was known to the Directors, the interest of the persons (not being a Director or chief executive of the Company) in the shares and underlying shares of the Company which were notified to the Company and the Stock Exchange pursuant to Divisions 2 and 3 of Part XV of the SFO were as follows:

Name of substantial shareholders

Number of ordinary shares held

Wangkin Investments Inc. (Note) 237,600,000 Takson International Holdings Limited (Note) 237,600,000

• Note: Since Takson International Holdings Limited is a wholly-owned subsidiary of Wangkin Investments Inc., Takson International Holdings Limited’s interests are recorded as the interests of Wangkin Investments Inc..

• (c) Save as disclosed above, as at the Latest Practicable Date:

• (1) so far as was known to the Directors, none of the Directors or chief executive of the Company had any interest or short positions in any shares or underlying shares or interest in debentures of the Company or any associated corporations (within the meaning of Part XV of the SFO) which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which they are taken or deemed to have under such provisions of the SFO), or which were required, pursuant to section 352 of the SFO, to be entered in the register referred to therein, or which were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Companies, to be notified to the Company and the Stock Exchange.

• (2) there was no person known to the Directors who had an interest or short position in the shares and underlying shares of the Company which would fall to be disclosed to the Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO or, was, directly or indirectly, interested in 5% or more of the nominal value of the issued share capital carrying rights to vote in all circumstances at general meeting of any other member of the Group, or any options in respect of such capital.

2. LITIGATION

As at the Latest Practicable Date, no member of the Group is engaged in any litigation or arbitration of material importance and there is no litigation or claim of material importance known to the Directors to be pending or threatened by or against any member of the Group.

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GENERAL INFORMATION

APPENDIX

3. SERVICE CONTRACTS

As at the Latest Practicable Date, each of Mr. Wong Tek Sun, Takson and Ms. Pang Shu Yuk, Adeline Rita has a service contract with the Company which is determinable within one year without payment of compensation, other than statutory compensation. Apart from the aforesaid, none of the Directors has a service contract with the Group.

4. MISCELLANEOUS

• (a) The English text of this circular shall prevail over the Chinese text in case of inconsistency.

• (b) The registered office of the Company is at Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda.

• (c) The head office and principal place of business of the Company in Hong Kong is at 5th Floor, South Wing, Harbour Centre, Tower One, 1 Hok Cheung Street, Hunghom, Kowloon, Hong Kong.

• (d) The transfer offices of the Company are Abacus Share Registrars Limited at Ground Floor, Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong and Butterfield Fund Services (Bermuda) Limited at Rosebank Centre, 11 Bermudiana Road, Pembroke, Bermuda.

• (e) The company secretary of the Company is Ms. Wan Choi Chun, a member of the Association of Chartered Certified Accountants and the Hong Kong Society of Accountants.

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