Multifield International Holdings Limited — Proxy Solicitation & Information Statement 2002

May 23, 2002

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in doubt about this circular, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitors, professional accountant or other professional adviser.

If you have sold all your shares in MULTIFIELD INTERNATIONAL HOLDINGS LIMITED (the “Company”), you should at once hand this circular to the purchaser or to 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 and Hong Kong Securities Clearing Company 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.

==> picture [169 x 36] intentionally omitted <==

Multifield International Holdings Limited

( )[*] (Incorporated in Bermuda with limited liability)

CIRCULAR ON

PROPOSED BONUS ISSUE OF SHARES

AND

PROPOSED GENERAL MANDATE TO REPURCHASE SHARES

AND

TO ISSUE NEW SHARES

A notice convening the Annual General Meeting is set out on pages 65 to 68 of the Annual Report of the Company sent to you. A form of proxy for use at the Annual General Meeting is enclosed together with the Annual Report. Whether or not you are able to attend the meeting, you are requested to complete and return the form of proxy in accordance with the instructions printed thereon as soon as possible to the Company’s Branch Share Registrar in Hong Kong, Tengis Limited at 4/F, Hutchison House, 10 Harcourt Road, Central, Hong Kong and in any event not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof. Completion and return of the form of proxy shall not preclude you from attending and voting at the meeting or any adjournment thereof should you so desire.

*For identification purpose only

29 April 2002

Multifield International Holdings Limited

	EXPECTED TIMETABLE
	2002
Last day of dealing in Shares cum Entitlements . . . . . . . . . . . . . . . . . . . . . . . . . . . Friday, 14 June
First day of dealing in Shares ex-entitlement
to the Bonus Issue of Shares	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Monday, 17 June
Latest time for lodging forms of
transfer in order to be entitled	for Entitlements . . . . . . . . . . . . . . . . 4:00 p.m. Tuesday, 18 June
Closure of register of members
(both days inclusive) . . . . . .	. . . . . . . . . . . . . . . . . . . . . Wednesday, 19 June — Friday, 21 June
Latest time for lodging forms of	proxy
for the Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . 3:30 p.m. Wednesday, 19 June
Annual General Meeting . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3:30 p.m. Friday, 21 June
Record Date for Entitlements . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Friday, 21 June
Despatch share certificate for Bonus Shares
and final dividends . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Friday, 19 July
First day of dealings in Bonus Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tuesday, 23 July

— 2 —

Multifield International Holdings Limited

CONTENTS

		Page
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		4
LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		6
A.	BONUS ISSUE OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
	1. Bonus Issue of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
	2. Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
	3. Closure of Register of Members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
	4. Listing and Dealing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
B.	GENERAL MANDATE TO REPURCHASE SHARES AND
	TO ISSUE NEW SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
	1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
	2. Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
APPENDIX — EXPLANATORY STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		10

— 3 —

Multifield International Holdings Limited

DEFINITIONS

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

“AGM”	the annual general meeting of the Company convened to be held on
	Friday, 21 June 2002, notice of which is set out on pages 65 and 68
	of the Annual Report of the Company sent to Shareholders, and any
	adjournment thereof
“Board”	the Board of Directors
“Bonus Issue”	a bonus issue of Shares on the basis of 1 new Share for every 5
	existing Shares held on the Record Date
“Bonus Shares”	New Shares issued under the Bonus Issue
“Branch Share Registrar”	Tengis Limited, 4/F, Hutchison House, 10 Harcourt Road, Hong
	Kong
“Buyback Mandate”	A mandate enabling the Company to repurchase the Shares of the
	Company
“CCASS”	Central Clearing and Settlement System
“Companies Act”	the Companies Act 1981 of Bermuda (as amended)
“Company”	Multifield International Holdings Limited, an exempted company
	incorporated in Bermuda with limited liability, the shares of which
	are listed on the Stock Exchange
“Directors”	the directors of the Company
“Entitlements”	entitlement to a proposed final dividend for the year ended 31
	December 2001 of HK$0.0025 per Share and to a proposed bonus
	issue of Shares of 1 new Share for every 5 existing Shares held on
	the Record Date
“General Mandate”	A mandate enabling the Directors of the Company to issue and allot
	new shares
“Group”	the Company and its subsidiaries
“Hongkong Clearing”	Hong Kong Securities Clearing Company Limited
“Latest Practicable Date”	24 April 2002, being the latest practicable date prior to the printing
	of this circular for ascertaining certain information contained
	herein
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock
	Exchange

— 4 —

Multifield International Holdings Limited

	DEFINITIONS
“Preliminary	Announcement of final results of the Company for the year ended
Announcement”	31 December 2001 dated 19 April 2002
“Record Date”	21 June 2002
“Share(s)”	existing share(s) of HK$0.01 each in the capital of the Company
“Shareholder(s)”	holders of Share(s)
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“HK$” and “cents”	Hong Kong dollars and cents respectively

— 5 —

Multifield International Holdings Limited

LETTER FROM THE BOARD

==> picture [169 x 36] intentionally omitted <==

Multifield International Holdings Limited

(

)[*]

(Incorporated in Bermuda with limited liability)

Executive Directors: Lau Chi Yung, Kenneth (Chairman) Tsang Pak Chung, Eddy (Vice-Chairman) Lau Chi Kei, Michael Luu Duc Chi, Kevin Cho Po Hong, Jimmy

Non-Executive Directors:

Tong Wui Tung, Ronald Choy Tak Ho Lee Siu Man, Ervin

Registered Office: Cedar House 41 Cedar Avenue Hamilton HM12 Bermuda

Principal Place of Business: 3rd Floor Multifield Centre 426 Shanghai Street Kowloon Hong Kong

** Independent Non-executive Directors

29 April 2002

To the Shareholders

Dear Sir or Madam,

The purpose of this circular is to provide you with information regarding resolutions to be proposed at the AGM of the Company to be held on Friday, 21 June 2002 at 1st Floor, Multifield Centre, 426 Shanghai Street, Kowloon, Hong Kong relating to the following matters:

• A. Bonus Issue of Shares

• B. Buyback Mandate to repurchase Shares and General Mandate to issue new Shares

A. BONUS ISSUE OF SHARES

1. Bonus Issue of Shares

In the Preliminary Announcement, the Board recommended that, together with a final dividend of HK$0.0025 per Share for the year ended 31 December 2001, a bonus issue of Shares shall be made to Shareholders of the Company registered as such on the Record Date.

• For identification purpose only

— 6 —

Multifield International Holdings Limited

LETTER FROM THE BOARD

The Board recommended a bonus issue of Shares to shareholders who are on the register of members on the Record Date by way of capitalisation of the Company’s contributed surplus account on the basis of 1 new Share for every 5 existing Shares then held subject to the fulfilment of the Conditions set out in the section headed “Conditions” below. The Bonus Shares to be issued pursuant to the Bonus Issue of Shares will be credited as fully paid and will rank pari passu in all respects with the existing Shares of the Company except that they will not be entitled to the final dividend of HK$0.0025 per Share in respect of the year ended 31 December 2001. No fractional Shares shall be allotted and distributed. Shares representing fractional entitlements, if any, will be aggregated and issued to a nominee to be named by the Directors and such Shares shall, at such time as the nominee thinks fit, be sold and the net proceeds shall be retained for the benefit of the Company.

As at the Latest Practicable Date, an aggregate of 3,333,771,936 Shares were in issue. On this basis and assuming no further Shares are issued and repurchased after the Latest Practicable Date and up to the Record Date, 666,754,387 Bonus Shares will be issued pursuant to the Bonus Issue.

1. Conditions

The Bonus Issue is conditional upon:

• (a) the approval of the Shareholders at the AGM; and

• (b) the Listing Committee of the Stock Exchange granting listing of and permission to deal in the Bonus Shares to be issued pursuant to the Bonus Issue.

An ordinary resolution to obtain Shareholders’ approval of (a) above will be proposed for passing at the AGM.

The reasons for making such Bonus Issue are for the benefits of the Shareholders of the Company so that they can enjoy the participation in the growth of the Company.

1. Closure of Register of Members

The register of members of the Company will be closed from Wednesday, 19 June 2002 — Friday, 21 June 2002, both days inclusive, during which period no transfer of Shares will be registered.

In order to qualify for the Entitlements, shareholders are reminded that they must lodge completed transfer forms and share certificates with the Company’s Branch Share Registrar in Hong Kong, Tengis Limited at 4/F, Hutchison House, 10 Harcourt Road, Central, Hong Kong for registration not later than 4:00 p.m. on Tuesday, 18 June 2002.

— 7 —

Multifield International Holdings Limited

LETTER FROM THE BOARD

4. Listing And Dealing

Application will be made to the Listing Committee of the Stock Exchange for listing of, and permission to deal in, the Bonus Shares to be issued pursuant to the Bonus Issue.

The equity or debt securities of the Company is not listed or dealt in any other stock exchange nor is listing or permission to deal in the same being or proposed to be sought from any other stock exchange.

Subject to the granting of listing of, and permission to deal in, the Bonus Shares on the Stock Exchange, the Bonus Shares will be accepted as eligible securities by Hongkong Clearing for deposit, clearance and settlement in CCASS with effect from the commencement date of dealings in the Bonus Shares or such other date as determined by Hongkong Clearing. Settlement of transactions between members of the Stock Exchange is required to take place in CCASS on the second trading day thereafter. All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time.

It is expected that certificates for the Bonus Shares will be posted to those entitled thereto at their own risk on 19 July 2002 and dealing is expected to commerce on 23 July 2002. Dealings in the Bonus Shares are subject to stamp duty pursuant to the Stamp Duty Ordinance Cap. 117 Laws of Hong Kong.

B. GENERAL MANDATE TO REPURCHASE SHARES AND TO ISSUE NEW SHARES

1. Introduction

On 19 April 2002, the Board announced the final results of the Company and its subsidiaries for the year ended 31 December 2001 and gave the shareholders of the Company a notice convening the AGM of the Company to be held on 21 June 2002. Resolutions will be proposed at the AGM to seek, inter alia, shareholders’ approval for the renewal of the general mandate enabling the Directors to issue and allot new shares of the Company, the grant of a general mandate (the “Buyback Mandate”) enabling the Company to repurchase its own shares and the grant of a general mandate enabling the Directors to issue and allot shares repurchased by the Company under the Buyback Mandate. This letter contains the explanatory statement in compliance with the Listing Rules of the Stock Exchange and to give all the information reasonably necessary to enable shareholders to make an informed decision on whether to vote for or against the resolutions to approve the purchase by the Company of its own shares.

The purpose of this circular is to give you the explanatory statement which is set out in the appendix of this circular containing the requisite information as required by the relevant provisions in the Listing Rules of the Stock Exchange, which regulates the repurchase by companies with a primary listing on the Stock Exchange of their own shares on the Stock Exchange.

— 8 —

Multifield International Holdings Limited

LETTER FROM THE BOARD

2. Recommendation

The Directors consider that the proposals are in the interests of the Company and its shareholders. They therefore recommend that shareholders should vote in favour of resolutions nos. 6 to 8 set out in the notice of the AGM as they intend to do themselves in respect of the shares controlled by them.

By Order of the Board Tsang Pak Chung, Eddy Vice-Chairman

— 9 —

Multifield International Holdings Limited

EXPLANATORY STATEMENT

APPENDIX

1. REASONS FOR REPURCHASES

The Directors of the Company have no present intention to repurchase any shares of the Company but believe that it is in the best interests of the Company and its shareholders to have a general authority from shareholders to enable the Directors to repurchase its own shares in the market. Such repurchases may, depending on market conditions and funding arrangements at the time, lead to an enhancement of the net value of the Company and its assets and/or its earnings per share and will only be made when the Directors believe that such repurchases will benefit the Company and its shareholders.

2. SHARE CAPITAL

As at 24 April 2002 (the Latest Practicable Date prior to the printing of this circular), the issued share capital of the Company comprised 3,333,771,936 shares of HK$0.01 each.

Subject to the passing of the resolution no. 7, the Company would be allowed under the Buyback Mandate to repurchase a maximum of 333,377,193 shares (10% of the issued share capital as at 24 April 2002) on the basis that no further shares will be issued or repurchased prior to the date of the forthcoming AGM.

3. FUNDING OF REPURCHASES

Repurchases must be funded entirely from the Company’s available cash flow or working capital facilities, which will be legally available for the purpose in accordance with the Company’s bye-laws and the laws of Bermuda. The Company is empowered by its memorandum of association and bye-laws to purchase its shares. 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 shares, or the profits that would otherwise be available for distribution by way of dividend or the proceeds of a new issue of shares made for such purpose. The amount of premium payable on repurchase may only be paid out of either the profits that would otherwise be available for distribution by way of dividend or out of the share premium or contributed surplus accounts of the Company. Under Bermuda law, the shares so repurchased will be treated as cancelled but the aggregate amount of authorised share capital will not be reduced so that the shares may be subsequently re-issued.

If the Buyback Mandate were exercised in full, there might be a material adverse effect on the working capital or gearing position of the Company (as compared with the position disclosed in the audited financial statements contained in the annual report of the Company for the year ended 31 December 2001). However, the Directors do not propose to exercise the Buyback Mandate to such an extent as would, in the circumstances, have a material adverse effect on the working capital requirements or the gearing levels of the Company which in the opinion of the Directors are from time to time appropriate for the Company.

— 10 —

Multifield International Holdings Limited

EXPLANATORY STATEMENT

APPENDIX

4. DIRECTORS’ DEALINGS AND CONNECTED PERSONS

None of the Directors of the Company nor, to the best of their knowledge and belief, having made all reasonable enquiries, any of their associates have notified the Company that they currently intend to sell shares to the Company or its subsidiaries in the event that the proposal is approved by shareholders.

No connected person of the Company (as defined in the Listing Rules) has notified the Company that he or she currently intends to sell shares to the Company nor has he/she undertaken not to sell any of such shares held by him/her to the Company in the event that the Company is authorised to make repurchases of its own shares.

5. SHARE PRICES

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

	**PER **	SHARE
	Highest	Lowest
	HK$	HK$
2001
April	0.080	0.061
May	0.139	0.068
June	0.185	0.137
July	0.218	0.168
August	0.207	0.160
September	0.179	0.136
October	0.182	0.161
November	0.249	0.160
December	0.385	0.248
2002
January	0.405	0.300
February	0.370	0.345
March	0.365	0.250

6. SHARE REPURCHASES MADE BY THE COMPANY

During the six months preceding the date of this circular, no shares have been repurchased by the Company.

— 11 —

Multifield International Holdings Limited

EXPLANATORY STATEMENT

APPENDIX

7. DIRECTORS’ UNDERTAKING

The Directors of the Company have undertaken to the Stock Exchange that they will exercise the Buyback Mandate in accordance with the Listing Rules and the laws of Bermuda so far as the same may be applicable and in accordance with the regulations set out in the bye-laws of the Company.

8. TAKEOVER CODES CONSEQUENCES

If, as a result of a repurchase of securities, a substantial shareholder’s proportionate interest in the voting rights of the Company increases, such increase will be treated as an acquisition for the purpose of The Codes on Takeovers and Mergers (the “Takeover Codes”). Accordingly, 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 Takeover Codes.

At present, the Company’s substantial shareholder, Power Resources Holdings Limited (“Power Resources”), holds 1,939,520,000 shares, representing 58.18% of the Company’s issued share capital. In the event that the Directors of the Company exercise in full the power to repurchase the shares, the percentage shareholding of Power Resources would be increased to approximately 64.64%. The Directors of the Company are not aware of any consequences which may arise under the Takeover Codes as a result of any purchase to be made under the Buyback Mandate and have no intention to exercise the Buyback Mandate to such extent as to result in the number of shares which are in the hands of the public falling below 25% of the issued share capital of the Company.

— 12 —

Multifield International Holdings Limited