Phoenitron Holdings Limited — Proxy Solicitation & Information Statement 2003

Mar 26, 2003

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt about this circular, you should consult your 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 Cardlink Technology Group Limited (the ‘‘Company’’), you should at once hand this circular to the purchaser or to the bank, stockbroker or other agent through whom the sale 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.

The circular, for which the directors of the Company collectively and individually accept full responsibility, includes particulars given in compliance with the Rules Governing the Listing of Securities on the Growth Enterprise Market of The Stock Exchange of Hong Kong Limited for the purpose of giving information with regard to the Company. The directors, having made all reasonable enquiries, confirm that, to the best of their knowledge and belief: (1) the information contained in this circular is accurate and complete in all material respects and not misleading; (2) there are no other matters the omission of which would make any statement in this circular misleading; and (3) all opinions expressed in this circular have been arrived at after due and careful consideration and are founded on bases and assumptions that are fair and reasonable.

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Cardlink Technology Group Limited

(Incorporated in Cayman Islands with limited liability)

PROPOSED GENERAL MANDATES TO ISSUE AND REPURCHASE SHARES

This circular is dispatched together with the Annual Report which comprises of the directors’ report, the auditors’ report by Messrs. Moores Rowland and the financial statements of the Company for the year ended 31 December, 2002.

A notice convening the annual general meeting of the Company to be held at Caine Room, Level 7, Conrad Hong Kong, Pacific Place, 88 Queensway, Hong Kong on 30 April, 2003 at 10: 00 a.m. is contained in the 2002 Annual Report of the Company. Whether or not your are able to attend such meeting, please complete and return the enclosed form of proxy in accordance with the instructions printed thereon to the branch share register of the Company, that is Tengis Limited, at G/F, BEA Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for holding such meeting or any adjourned meeting (as the case may be). Completion and return of the form of proxy will not preclude you from attending and voting at the meeting or any adjourned meeting (as the case may be) should you so wish.

26 March, 2003

This circular will remain on the GEM website on the ‘‘Latest Company Announcement’’ page for at least 7 days from the date of its posting.

CHARACTERISTICS OF THE GROWTH ENTERPRISE MARKET (‘‘GEM’’) OF THE STOCK EXCHANGE OF HONG KONG LIMITED (THE ‘‘STOCK EXCHANGE’’)

GEM has been established as a market designed to accommodate companies to which a high investment risk may be attached. In particular, companies may list on GEM with neither a track record of profitability nor any obligation to forecast future profitability. Furthermore, there may be risks arising out of the emerging nature of companies listed on GEM and the business sectors or countries in which the companies operate. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only after due and careful consideration. The greater risk profile and other characteristics of GEM mean that it is a market more suited to professional and other sophisticated investors.

Given the emerging nature of companies listed on GEM, there is a risk that securities traded on GEM may be more susceptible to high market volatility than securities traded on the Main Board and no assurance is given that there will be a liquid market in the securities traded on GEM.

The principal means of information dissemination on GEM is publication on the Internet website operated by the Stock Exchange. Listed companies are not generally required to issue paid announcements in gazetted newspapers. Accordingly, prospective investors should note that they need to have access to the GEM website in order to obtain up-to-date information on GEM-listed issuers.

CONTENTS

	Page
Letter from the Board of Directors
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
General Mandate to Issue New Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2
General Mandate for Repurchase of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2
Explanatory Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2
Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2
Appendix — Explanatory Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3

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LETTER FROM THE BOARD OF DIRECTORS

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Cardlink Technology Group Limited

(Incorporated in Cayman Islands with limited liability)

Executive directors:

Mr. Wong Chi Ming (Chairman) Mr. Fung Wing Mou, Bernard Mr. Ho Lut Wa, Anton Mr. Lei Heong Man Mr. Wong Hon Sing Mr. Wong Ka Chu

Registered office: Century Yard Cricket Square Hutchins Drive P.O. Box 2681 GT George Town Grand Cayman British West Indies

Independent non-executive directors:

Mr. Leung Ka Kui, Johnny Ms. Wong Ka Wai, Jeanne

Head office and principal Place of business: 1st Floor Milo’s Industrial Building Phase 1, 2–10 Tai Yuen Street Kwai Chung New Territories Hong Kong

26 March, 2003

To the shareholders of Cardlink Technology Group Limited

Dear Sir or Madam,

GENERAL MANDATES TO ISSUE AND REPURCHASE SHARES

INTRODUCTION

The purpose of this circular is to seek your approval of the relevant ordinary resolutions for enabling the directors (the ‘‘Directors’’) of Cardlink Technology Group Limited (the ‘‘Company’’) to exercise the power of the Company to repurchase the Company’s fully paid up shares of HK$0.10 each (the ‘‘Shares’’) representing up to a maximum of 10 per cent. of the existing issued share capital of the Company at the date of passing of the resolution, to grant a general mandate to the Directors to issue new shares up to a maximum of 20 per cent. of the issued share capital of the Company at the date of passing of the resolution and to increase the number of Shares which the Directors may issue under the general mandate by the number of Shares repurchased. The resolutions will be proposed at the forthcoming annual general meeting of the Company to be held on 30 April, 2003 (the ‘‘Annual General Meeting’’) and are set out in the notice convening the Annual General Meeting as contained in the annual report of the Company of 2002 dated 14 March, 2003 (the ‘‘2002 Annual Report’’).

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LETTER FROM THE BOARD OF DIRECTORS

This circular gives details regarding the proposed general mandates for the issuance and the repurchase of Shares.

GENERAL MANDATE TO ISSUE NEW SHARES

The resolution set out in Resolution 4 of the notice convening the Annual General Meeting will be proposed at the Annual General Meeting for the granting of a general mandate to the Directors to allot, issue and deal with new Shares up to a maximum of 20 per cent. of the issued share capital of the Company at the date of passing the resolution (the ‘‘General Mandate’’). In addition, subject to a separate approval of shareholders of the resolution set out in Resolution 6 of the notice convening the Annual General Meeting, the number of Shares purchased by the Company under the Repurchase Proposal will also be added to the 20 per cent. General Mandate as mentioned above.

The resolution set out in Resolution 6 of the notice convening the Annual General Meeting relates to the extension of the General Mandate to be granted to the Directors to issue new Shares during the relevant period by adding to it the number of Shares purchased under the Repurchase Proposal (as defined in the Appendix), if any.

GENERAL MANDATE FOR REPURCHASE OF SHARES

The Rules Governing the Listing of Securities on the Growth Enterprise Market (the ‘‘GEM Listing Rules’’) of The Stock Exchange of Hong Kong Limited (the ‘‘Stock Exchange’’) contain provisions to regulate the repurchase by companies with a primary listing on the Growth Enterprise Market operated by the Stock Exchange (‘‘GEM’’) of their own shares. In accordance with the rules on Share Repurchases, this circular contains an explanatory statement as set out in the Appendix to provide you with requisite information reasonably necessary to enable you to make an informed decision on whether to vote for or against resolution set out in Resolution 5 of the notice convening the Annual General Meeting which will be proposed at the Annual General Meeting. For the purpose of this circular, the term ‘‘shares’’ shall have the meaning ascribed thereto under the Hong Kong Code on Share Repurchases which mean shares of all classes and securities which carry a right to subscribe for or purchase shares.

EXPLANATORY STATEMENT

An explanatory statement containing all relevant information relating to the proposed general mandate to repurchase Shares is set out in the Appendix to this circular. The information in the explanatory statement is to provide you with the information reasonably necessary to enable you to make an informed decision on whether to vote or against the resolution to grant to the Directors the Repurchase Mandate (as defined in the Appendix).

RECOMMENDATION

The Directors consider that the Repurchase Proposal and the granting and the extension of the general mandate to issue new Shares are in the best interests of the Company and its shareholders and accordingly recommend that all shareholders to vote in favour of the resolutions set out as Resolutions 4 to 6 in the notice convening the Annual General Meeting to be proposed at the Annual General Meeting.

Yours faithfully For and on behalf of the Board Wong Chi Ming Chairman

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EXPLANATORY STATEMENT

APPENDIX

The following is the explanatory statement which is required to be sent to you under the Hong Kong Code on Share Repurchases in connection with the proposed general mandate for repurchase of Shares.

(i) GEM Listing Rules

The GEM Listing Rules permit companies with a primary listing on GEM to purchase their securities subject to certain restrictions. Repurchases must be funded out of funds legally available for the purpose and in accordance with the company’s constitutional documents and the applicable laws of the jurisdiction in which the company is incorporated or otherwise established. Any repurchase must be made out of funds which are legally available for the purpose and in accordance with the laws of the Cayman Islands and the memorandum of association and bye-laws of Company. Any premium payable on a repurchase over the par value of the shares may be effected out of funds of the Company which would otherwise be available for dividend or distribution or out of the Company’s share premium account.

(ii) The Repurchase Proposal

The resolution set out in Resolution 5 of the notice convening the Annual General Meeting which will be proposed at the Annual General Meeting relates to the granting of a general and unconditional mandate (the ‘‘Repurchase Mandate’’) to the Directors to repurchase, on GEM or any other stock exchange on which the Shares may be listed and recognized by the Securities and Futures Commission, Shares up to a maximum of 10 per cent. of the issued share capital of the Company at the date of passing of the resolution (the ‘‘Repurchase Proposal’’).

The Repurchase Mandate would continue in force until the conclusion of the next annual general meeting of the Company or the expiration of the period within which the next annual general meeting of the Company is required by the articles of association or any applicable laws of the Cayman Islands to be held or the Repurchase Mandate is revoked or varied by an ordinary resolution in a general meeting by Shareholders, whichever is the earliest.

(iii) Reasons for Repurchase

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

(iv) Share Capital

As at 20 March, 2003, being the latest practicable date prior to the printing of this circular (the ‘‘Latest Practicable Date’’), the issued share capital of the Company comprised 320,000,000 Shares. Subject to the passing of the Repurchase Mandate, the Company would be allowed under the Repurchase Proposal to repurchase Shares up to a maximum of 32,000,000 Shares.

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EXPLANATORY STATEMENT

APPENDIX

(v) Funding of Repurchases

In repurchasing Shares, the Company may only apply funds legally available for such purpose in accordance with the memorandum and articles of association, the GEM Listing Rules and the applicable laws of the Cayman Islands. The Company may not purchase Shares on GEM for a consideration other than cash or for settlement otherwise than in accordance with the trading rules of the Stock Exchange.

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 financial statements contained in the 2002 Annual Report in the event that the Repurchase Mandate 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 Shares pursuant to the Repurchase Mandate to such an 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.

(vi) Share Prices

The highest and lowest prices at which the Shares have been traded on the Stock Exchange in each of the previous 12 months before the Latest Practicable Date were as follows:

	SHARE	PRICES
	Highest	Lowest
	HK$	HK$
2002
March	0.67	0.47
April	0.55	0.485
May	0.56	0.42
June	0.41	0.4
July	0.41	0.41
August	0.34	0.13
September	0.165	0.145
October	0.192	0.18
November	N/A	N/A
December	N/A	N/A
2003
January	N/A	N/A
February	0.14	0.06

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EXPLANATORY STATEMENT

APPENDIX

(vii) Substantial Shareholders

As at the Latest Practicable Date, the interests of substantial shareholders of the Company were as follows:

N C W i- D	ame of shareholder Note Number of Shares Percentage of issued Share capital arkey Limited (i) 153,300,000 47.9% ong Hon Sing (i) 153,300,000 47.9% Concepts Investment Limited (ii) 58,400,000 18.3% ickson Group Holdings Limited (ii) 58,400,000 18.3%

Note:

• (i) Mr. Wong Hon Sing is deemed to be a substantial shareholder of the Company by reason of his 100% beneficial interest in Carkey Limited.

• (ii) i-Concepts Investment Limited is a wholly owned subsidiary of Dickson Group Holdings Limited, a listed company on the Main Board and Dickson Group Holdings Limited is therefore deemed to be interested in the Shares.

(viii) General Information

• (a) 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 or any of its subsidiaries under the Repurchase Mandate if such is approved by the shareholders of the Company.

• (b) The Directors have undertaken to the Stock Exchange that, so far as the same may be applicable, in the event that they will exercise the powers of the Company to make repurchases pursuant to the Repurchase Mandate in accordance with the GEM Listing Rules and the applicable laws of the Cayman Islands.

• (c) No connected persons (as defined in the GEM Listing Rules) of the Company has notified the Company that he has a present intention to sell Shares to the Company or its subsidiaries, or has undertaken not to do so, if the Repurchase Mandate is approved by the shareholders.

(ix) Takeovers Code Consequences

If the Repurchase Mandate were exercised in full, the percentage shareholding of the substantial shareholders of the Company before and after such repurchase would be as follows:

		Before	After
Substantial Shareholders	Note	repurchase	repurchase
Carkey Limited	(i)	47.9%	53.2%
Wong Hon Sing	(i)	47.9%	53.2%
i-Concepts Investment Limited	(ii)	18.3%	20.3%
Dickson Group Holdings Limited	(ii)	18.3%	20.3%

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EXPLANATORY STATEMENT

APPENDIX

Note:

• (i) Mr. Wong Hon Sing is deemed to be a substantial shareholder of the Company by reason of his 100% beneficial interest in Carkey Limited.

• (ii) i-Concepts Investment Limited is a wholly-owned subsidiary of Dickson Group Holdings Limited, a listed company on the Main Board and Dickson Group Limited is therefore deemed to be interested in the shares.

If as a result of a repurchase of Shares, a Shareholder’s proportionate interest in the voting rights of the Company increases, such increase may be treated as an acquisition for the purpose of the Hong Kong Code on Takeovers and Mergers (‘‘Takeovers Code’’). Accordingly, a Shareholder, or a group of Shareholders acting in concert, depending on the level of increase of the Shareholder’s interest, could obtain or consolidate control of the Company and become obliged to make a mandatory offer in accordance with Rule 26 of the Takeovers Code as a result of any such increase.

As at the Latest Practicable Date, to the best of the knowledge and belief of the Company, Carkey Limited beneficially held 153,300,000 Shares representing 47.9 per cent. of the issued share capital of the Company. Based on such shareholding and in the event that the Repurchase Mandate is exercised in full, the shareholding of Carkey Limited would be increased to 53.2 per cent. of the issued share capital of the Company and such increase may give rise to an obligation to make a mandatory offer under Rule 26 of the Takeovers Code. However, the Directors have no current intention to exercise the Repurchase Mandate to such an extent as would give rise to this obligation.

Save as aforesaid in this circular, the Directors are not aware of any consequences which may arise under the Takeovers Code as a consequence of any purchase made under the Repurchase Mandate. The Company will not repurchase Shares which would in the number of Shares held by the public being reduced to less than 25 per cent.

(x) Shares Repurchase Made by the Company

The Company had not repurchased any Shares (whether on GEM or otherwise) during the period from 1 January, 2002, to the Latest Practicable Date.

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