Pacific Online Limited — Proxy Solicitation & Information Statement 2006

Apr 3, 2006

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold all your shares in Prosperity Investment Holdings Limited , you should at once hand this circular and the accompanying proxy form 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 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.

PROSPERITY INVESTMENT HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 310)

PROPOSALS INVOLVING

GENERAL MANDATES TO REPURCHASE SHARES

AND TO ISSUE NEW SHARES

AMENDMENTS TO BYE-LAWS

RE-ELECTION OF RETIRING DIRECTORS AND

NOTICE OF ANNUAL GENERAL MEETING

A notice convening the annual general meeting of Prosperity Investment Holdings Limited to be held at World Trade Centre Club Hong Kong at 38th Floor, World Trade Centre, 280 Gloucester Road, Causeway Bay, Hong Kong on Tuesday, 20th June, 2006, at 10:30 a.m. is set out on pages 10 to 13 of this circular. If you do not propose to attend the meeting, you are requested to complete the proxy form in accordance with the instructions printed thereon and return the same to Secretaries Limited, the Share Registrars of the Company at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Hong Kong as soon as possible and in any event not later than 48 hours before the time appointed for holding of the meeting or any adjournment thereof.

Hong Kong, 3rd April, 2006

DEFINITIONS

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

“Annual General Meeting”	the annual general meeting of the Company to be held at World
	Trade Centre Club Hong Kong at 38th Floor, World Trade
	Centre, 280 Gloucester Road, Causeway Bay, Hong Kong on
	Tuesday, 20th June, 2006 at 10:30 a.m. notice of which is set
	out on pages 10 to 13 of this circular
“Bye-laws”	the existing Bye-laws of the Company
“Companies Act”	the Companies Act 1981 of the laws of Bermuda
“Company”	Prosperity Investment Holdings Limited, a company
	incorporated in Bermuda with limited liability, with its Shares
	listed on the Stock Exchange
“Directors”	the directors of the Company
“Hong Kong”	Hong Kong Special Administrative Region of the People’s
	Republic of China
“Latest Practicable Date”	30th March, 2006, being the latest practicable date prior to the
	printing of this circular
“Listing Rules”	the Rules Governing the Listing of Securities 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 Shares up to a
	maximum of 10% of the issued share capital of the Company
	as at the date of the Repurchase Resolution
“Repurchase Resolution”	the proposed ordinary resolution as referred to in resolution
	no. 4A of the notice of the Annual General Meeting
“Share(s)”	share(s) of HK$0.10 each in the share capital of the Company
“Share Repurchase Rules”	the relevant rules set out in the Listing Rules to regulate the
	repurchase by companies with primary listing on the Stock
	Exchange of their own securities on the Stock Exchange
“Special Resolution”	the special resolution set out in item 5 of the notice of Annual
	General Meeting
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Takeovers Code”	the Hong Kong Code on Takeovers and Mergers
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong

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LETTER FROM THE CHAIRMAN

PROSPERITY INVESTMENT HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 310)

Directors: Executive Directors: WONG Kwok Bui, George (Chairman) CHEUK Yuk Lung

Independent Non-Executive Directors: YAN Mou Keung, Ronald CHAN Fai Yue, Leo CHAN Siu Wing, Raymond

Registered office: Clarendon House 2 Church Street Hamilton HM 11 Bermuda

Principal place of business: Room A, 11th Floor Fortune House No. 61 Connaught Road Central Central Hong Kong 3rd April, 2006

To shareholders,

Dear Sir or Madam,

PROPOSALS INVOLVING GENERAL MANDATES TO REPURCHASE SHARES AND TO ISSUE NEW SHARES AMENDMENTS TO BYE-LAWS RE-ELECTION OF RETIRING DIRECTORS AND NOTICE OF ANNUAL GENERAL MEETING

1. GENERAL MANDATE TO REPURCHASE SHARES

At the annual general meeting of the Company held on 15th March, 2005, a general mandate was given to the Directors to exercise the powers of the Company to repurchase Shares of the Company. Such mandate will lapse at the conclusion of the forthcoming Annual General Meeting. It is therefore proposed to seek your approval of an ordinary resolution to be proposed at the forthcoming Annual General Meeting to give a fresh general mandate to the Directors to exercise the powers of the Company to repurchase Shares.

This is an explanatory statement as required to be sent to shareholders of the Company under the Share Repurchase Rules to provide requisite information to you for your consideration of the Repurchase Proposal.

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LETTER FROM THE CHAIRMAN

Share Capital

As at the Latest Practicable Date, the issued share capital of the Company comprised 431,952,000 Shares.

Subject to the passing of the Repurchase Resolution and on the basis that no further Shares are issued or repurchased prior to the Annual General Meeting, the Company would be allowed under the Repurchase Proposal to repurchase a maximum of 43,195,200 Shares.

Reason 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 Share of the Company and will only be made when the Directors believe that such a repurchase will benefit the Company and its shareholders.

Funding of Repurchase

In repurchasing Shares, the Company may only apply funds legally available for such purpose in accordance with its memorandum of association and bye-laws and the laws of Bermuda. 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 out of the funds of the Company otherwise available for dividend or distribution or the proceeds of a fresh issue of shares made for the purpose. The amount of premium payable on repurchase may only be paid out of either the funds of the Company that would otherwise be available for dividend or distribution or out of the share premium of the Company before the shares are repurchased.

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 31st December, 2005 in the event that the power to repurchase Shares pursuant to the Repurchase Proposal were 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 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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LETTER FROM THE CHAIRMAN

Share Price

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

		Shares
	Highest		Lowest
	HK$		HK$
2005
March	0.125		0.120
April	0.135		0.110
May	0.135		0.120
June	0.142		0.132
July	0.132		0.132
August	0.138		0.101
September	0.150		0.130
October	0.132		0.130
November	0.137		0.100
December	0.131		0.121
2006
January	0.131		0.110
February	0.135		0.111
March (up to Latest Practicable Date)	0.130		0.111

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 Resolution 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 (as defined in the Listing Rules), have any present intention to sell any Shares to the Company or its subsidiaries under the Repurchase Proposal if such 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 its subsidiaries, or have undertaken not to do so, in the event that the Repurchase Proposal is approved by the shareholders.

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LETTER FROM THE CHAIRMAN

Takeovers Code

If on the exercise of the power to repurchase 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 to make a mandatory offer in accordance with Rules 26 and 32 of the Takeovers Code.

As at the Latest Practicable Date, Baron Strategic Holdings Limited together with its associates has beneficially interest in 78,261,016 Shares representing approximately 18.12% of the issued capital of the Company.

Based on such shareholding, and in the event that the Directors exercise in full the power to repurchase Shares pursuant to the Repurchase Proposal, the interest of Baron Strategic Holdings Limited together with its associates in the issued share capital of the company would be increased to approximately 20.13%, and an obligation to make a general offer to shareholders of the Company under Rules 26 and 32 of the Takeover Code may arise. The Directors have no present intention to exercise the power to repurchase Shares pursuant to the Repurchase Proposal to such an extent as would result in such takeover obligation. In the event that the Directors exercise in full the power to repurchase Shares pursuant to the Repurchase Proposal, the number of Shares held by the public would not fall below 25%. The Directors have no present intention to repurchase Shares to such an extent as would result in takeover obligations.

Share Repurchase Made by the Company

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

2. GENERAL MANDATE TO ISSUE NEW SHARES

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

3. AMENDMENTS TO THE BYE-LAWS

Pursuant to paragraph A.4.2 of the Code on Corporate Governance Practices (“the Code”) as set out in Appendix 14 of the Listing Rules, all directors appointed by the Board to fill a casual vacancy should be subject to election by shareholders at the first general meeting after their appointment. Every director, including those appointed for a specific term, should be subject to retirement by rotation at least once every three years. The existing Bye-law 86(2) of the Company provides that any director appointed by the Board either to fill a casual vacancy or as an addition to the existing Board shall hold

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LETTER FROM THE CHAIRMAN

office only until the next following annual general meeting and shall be eligible for reelection at that meeting, while the existing Bye-law 87(2) of the Company provides that any director appointed pursuant to Bye-law 86(2) shall not be taken into account in determining which particular Director or the number of Directors who are to retire by rotation. Accordingly, the existing Bye-laws 86(2) and 87(2) do not comply with the paragraph A.4.2 of the Code.

The Directors therefore propose amendments to the existing Bye-laws 86(2) and 87(2) of the Company, details of which are set in the notice of annual general meeting in order to comply with the paragraph A.4.2 of the Code.

4. RE-ELECTION OF RETIRING DIRECTORS

The Board of Directors currently consists of five Directors, namely Mr. WONG Kwok Bui, George, Mr. CHEUK Yuk Lung, Mr. YAN Mou Keung, Ronald, Mr. CHAN Fai Yue, Leo and Mr. CHAN Siu Wing, Raymond.

Pursuant to the Bye-laws, Mr. CHEUK Yuk Lung, Mr. CHAN Fai Yue, Leo and Mr. WONG Kwok Bui, George shall retire from office at the Annual General Meeting and shall be eligible and offer themselves for re-election. Details of retiring Directors proposed for re-election at the Annual General Meeting are set out in the appendix of this circular.

5. ANNUAL GENERAL MEETING

The notice convening the Annual General Meeting, which contains, inter alia, ordinary resolutions to approve the Repurchase Proposal and the general mandate for Directors to issue new Shares and the special resolution approving the proposed amendment to Bye-laws of the Company, is set out on pages 10 to 13 of this circular. Shareholders are advised to read the notice and, if they do not propose to attend the meeting, to complete and return the form of proxy for use at the Annual General Meeting enclosed with the 2005 annual report of the Company in accordance with the instructions printed thereon.

At the Annual General Meeting, resolutions put to the vote of the meeting shall be decided on a show of hands unless a poll is taken as may from time to time be required under the Listing Rules or unless (before or on the declaration of the result of the show of hands 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 shareholders present in person (or in the case of a shareholder being a corporation by its duly authorized representative) or by proxy for the time being entitled to vote at the meeting; or

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

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LETTER FROM THE CHAIRMAN

• (d) a shareholder or shareholders present in person (or in the case of a shareholder being a corporation by its duly authorized representative) or by proxy and holding Shares 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 the Shares conferring that right.

On a show of hands, every shareholder present in person (or being a corporation is present by duly authorized representative), or by proxy shall have one vote. On a poll, every shareholder present in person, or by proxy or in case of a shareholder being a corporation by its duly authorized representative shall have one vote for every Share held by him. A shareholder entitled to more than one vote on a poll need not use all his votes or cast all the votes he uses the same way.

6. RECOMMENDATION

The Directors believe that the Repurchase Proposal, the general mandate for Directors to issue new Shares, the proposed amendment to Bye-laws of the Company and the reelection of the retiring Directors are all in the best interest of the Company and its shareholders. Accordingly, the Directors recommend that all shareholders should vote in favour of the resolutions to be proposed at the Annual General Meeting.

Yours faithfully, WONG Kwok Bui, George Chairman

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DETAILS OF RETIRING DIRECTORS PROPOSED FOR RE-ELECTION

APPENDIX

The following are the particulars of the Directors to be retired and proposed for re-election at the Annual General Meeting:

1. Mr. CHEUK Yuk Lung, aged 40, was appointed as an executive director of the Company in 2004. He is a fellow member of the Association of Chartered Certified Accountants and an associate member of The Hong Kong Institute of Certified Public Accountants. He has extensive professional experience in management, finance, accounting and auditing fields. Save as director of subsidiaries of the Company and the qualified accountant of the Company, Mr. Cheuk does not hold any position with the Company or other members of the group of the Company. Mr. Cheuk did not act as director in any other listed public company in the last three years.

Mr. Cheuk has no relationship with any directors, senior management, substantial or controlling shareholders of the Company. As at the Latest Practicable Date, Mr. Cheuk does not have any interest in the shares of the Company within the meaning of Part XV of the Securities and Futures Ordinance.

There is no specific term of service with the Company but he is subject to retirement by rotation and re-election at the Annual General Meeting in accordance with the provision of the Bye-laws of the Company. Mr. Cheuk is entitled to receive a basic remuneration of HK$60,000 per annum which was determined by reference to his duties and responsibilities with the Company and the market conditions and authorized by the shareholders at the annual general meeting.

1. Mr. CHAN Fai Yue, Leo, aged 64, was appointed as an independent non-executive director of the Company in 2001. Mr. Chan has over 20 years of invaluable experience in Hong Kong stock market and manufacturing. During his early years in Japan, he exposed in trading and finance fields. He is a director of a paint manufacturing company in Bangkok. Mr. Chan is a member of The Hong Kong Institute of Directors. Save as a member of the audit committee of the Company and a member of the remuneration committee of the Company, Mr. Chan does not hold any position with the Company or other members of the group of the Company. Save as disclosed above, Mr. Chan did not act as director in any other listed public company in the last three years.

Mr. Chan has no relationship with any directors, senior management, substantial or controlling shareholders of the Company. As at the Latest Practicable Date, Mr. Chan does not have any interest in the shares of the Company within the meaning of Part XV of the Securities and Futures Ordinance.

Mr. Chan has entered into a service contract as independent non-executive director with the Company for a period of three years from 31st December, 2004. The appointment is subject to retirement by rotation and re-election at the annual general meeting in accordance with the provisions of the Bye-laws of the Company. Mr. Chan will be entitled to receive a director fee of HK$40,000 per annum as determined by the Board from time to time by reference to his duties and responsibilities with the Company and the market conditions and authorized by the shareholders at the annual general meeting.

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DETAILS OF RETIRING DIRECTORS PROPOSED FOR RE-ELECTION

APPENDIX

1. Mr. WONG Kwok Bui, George, aged 41, was appointed as an executive director of the Company on 9th December, 2005 and the Chairman of the Board on 1st February, 2006. He has a bachelor degree in applied accounting from Oxford Brookes University and a master degree in business administration from University of Lincoln. Mr. Wong is an associate member of The Association of Chartered Certified Accountants and The Hong Kong Institute of Certified Public Accountants respectively. Mr. Wong has over 18 years of professional experience in the fields of investment, financial analysis, accounting and taxation. Save as a member of the remuneration committee of the Company and director of the subsidiaries of the Company, Mr. Wong does not hold any position with the Company or other members of the group of the Company. Mr. Wong did not act as director in any other listed public company in the last three years.

Mr. Wong has no relationship with any directors, senior management, substantial or controlling shareholders of the Company. As at the Latest Practicable Date, Mr. Wong does not have any interest in the shares of the Company within the meaning of Part XV of the Securities and Futures Ordinance.

There is no specific term of service with the Company but he is subject to retirement by rotation and re-election at the Annual General Meeting in accordance with the provision of the Bye-laws of the Company. Mr. Wong is entitled to receive a basic remuneration of HK$60,000 per annum which was determined by reference to his duties and responsibilities with the Company and the market conditions and authorized by the shareholders at the annual general meeting.

In the opinions of the Directors, other than the aforesaid matters, there is no other matters need to be bought to the attention of the shareholders of the Company in relation to the reelection of the above Directors.

Save as disclosed above, there are no other matters that need to be brought to the attention of the Shareholders in connection with their re-election and there are no other information that should be disclosed pursuant to rule 13.51(2) of the Listing Rules.

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NOTICE OF ANNUAL GENERAL MEETING

PROSPERITY INVESTMENT HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 310)

NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the annual general meeting of the Company will be held at World Trade Centre Club Hong Kong at 38th Floor, World Trade Centre, 280 Gloucester Road, Causeway Bay, Hong Kong on Tuesday, 20th day of June, 2006 at 10:30 a.m. for the following purposes:

1. To receive and consider the financial statements and the reports of the directors and auditors for the year ended 31st December, 2005.

2. To re-elect directors and to authorize the board of directors to fix the remuneration of directors.

3. To re-appoint auditors and to fix their remuneration.

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

ORDINARY RESOLUTIONS

• A. “ 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 shares of the Company on The Stock Exchange of Hong Kong Limited (“Stock Exchange”) or on any other stock exchange on which the shares 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 the shares of the Company which 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 share capital of the Company as at the date of passing this Resolution and the said approval shall be limited accordingly; and

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NOTICE OF ANNUAL GENERAL MEETING

• (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 the bye-laws of the Company or any applicable law 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.”

• B. “ THAT :

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

• (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 shares of the Company) which would or might require the exercise of such powers after the end of the Relevant Period;

• (c) the aggregate nominal amount of 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 pursuant to (i) a Rights Issue (as hereinafter defined); (ii) an issue of shares as scrip dividends pursuant to the bye-laws of the Company from time to time; or (iii) an issue of shares under any option scheme or similar arrangement for the time being adopted for the grant or issue of shares or rights of the Company, shall not exceed 20% of the aggregate nominal amount of the issued share capital of the Company as at the date of passing this Resolution and the said approval shall be limited accordingly; and

• (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 the bye-laws of the Company or any applicable law to be held; and

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NOTICE OF ANNUAL GENERAL MEETING

  - (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.

  - “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 to fractional entitlements or having regard to any restrictions or obligations under the laws of, or the requirements of any recognized regulatory body or any stock exchange in, any territory outside Hong Kong applicable to the Company).”

• C. “ THAT subject to the passing of Ordinary Resolutions Nos. 4A and 4B set out in the notice convening this meeting, the general mandate granted to the directors of the Company to allot, issue and deal with additional shares pursuant to Ordinary Resolution No. 4B 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 shares in the capital of the Company repurchased by the Company under the authority granted pursuant to Ordinary Resolution No. 4A set out in the notice convening this meeting, provided that such amount of shares shall not exceed 10% of the aggregate nominal amount of the issued share capital of the Company as at the date of passing the said Resolution.”

• To consider and, if thought fit, pass with or without amendments, the following resolution as a Special Resolution of the Company:

SPECIAL RESOLUTION

“ THAT the Bye-laws of the Company be and are hereby amended in the following manners:

(a) Bye-law 86(2)

by deleting the last sentence and replacing thereof by the following new sentence:

“Any Director so appointed by the Board shall hold office only until the next following general meeting of the Company (in the case of filling a casual vacancy) or until the next following annual general meeting of the Company (in case of an addition to the Board), and shall then be eligible for re-election at the meeting.”

(b) Bye-law 87(2)

by deleting the last sentence in Bye-law 87(2).”

By Order of the Board Peter LEE Yip Wah Secretary

Dated the 3rd day of April, 2006.

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NOTICE OF ANNUAL GENERAL MEETING

Notes:

1. Any member of the Company entitled to attend and vote at the meeting is entitled to appoint one or more proxies to attend and vote in his stead. A proxy need not be a member of the Company.

2. To be valid, the proxy form, together with any power of attorney or other authority (if any) under which it is signed, or a notarially certified copy thereof, must be deposited with the Hong Kong share registrars of the Company, Secretaries Limited, 26th Floor, Tesbury Centre, 28 Queen’s Road East, Hong Kong not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof.

3. An explanatory statement as required by the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited in connection with the proposed repurchase mandate under resolution 4A above will be despatched to members together with the 2005 Annual Report of the Company.

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