Phoenitron Holdings Limited — Proxy Solicitation & Information Statement 2004

Mar 29, 2004

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 鍇聯科技集團有限公司

(Incorporated in the Cayman Islands with limited liability)

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

This circular is dispatched together with the Annual Report which comprises the directors’ report, the auditors’ report by Messrs. Moores Rowland Mazars and the financial statements of the Company for the year ended 31 December, 2003.

A notice convening the annual general meeting of the Company to be held at 1st Floor, Milo’s Industrial Building, Phase 1, 2–10 Tai Yuen Street, Kwai Chung, New Territories, Hong Kong on 28 April, 2004 at 10:00 a.m. is contained in this circular. Whether or not you 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, 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.

29 March, 2004

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.

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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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
Amendments to the Articles of Association . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
Appendix – Explanatory Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Notice of Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9

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LETTER FROM THE BOARD OF DIRECTORS

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Cardlink Technology Group Limited 鍇聯科技集團有限公司

(Incorporated in the Cayman Islands with limited liability)

Executive directors:

Mr. Wong Chi Ming (Chairman) Mr. Fung Wing Mou, Bernard Mr. Ho Lut Wa, Anton Mr. Wong Hon Sing

Independent non-executive directors: Mr. Leung Ka Kui, Johnny Ms. Wong Ka Wai, Jeanne

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

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

29 March, 2004

To the shareholders of Cardlink Technology Group Limited

Dear Sir or Madam,

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

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

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LETTER FROM THE BOARD OF DIRECTORS

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. A Special resolution will also be proposed to amend the articles of association of the Company. The resolution will be proposed at the forthcoming annual general meeting of the Company to be held on 28 April, 2004 (the “Annual General Meeting”) and are set out in the notice convening the Annual General Meeting as contained in this circular of the Company.

This circular gives details regarding the proposed general mandates for the issuance and the repurchase of Shares and the proposed amendments to the articles of association of the Company.

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.

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LETTER FROM THE BOARD OF DIRECTORS

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 for or against the resolution to grant to the Directors the Repurchase Mandate (as defined in the Appendix).

AMENDMENTS TO THE ARTICLES OF ASSOCIATION

According to the relevant amendments to the GEM Listing Rules which will come effective on 31 March, 2004, the articles of association of the Company must conform with the following:

• (i) the minimum seven-day period for lodgment by shareholders of the notice to nominate a director shall commence no earlier than the day after the despatch of the notice of the meeting appointed for such election and end no later than seven days before the date of such meeting;

• (ii) directors shall abstain from voting at the board meeting on any matter in which they or any of their associates have a material interest and are not to be counted towards the quorum of the relevant board meeting; and

• (iii) where shareholder is, under the GEM Listing Rules, required to abstain from voting on any particular resolution or restricted to voting only for or only against any particular resolution, any votes cast by or on behalf of such shareholder in contravention of such requirement or restriction shall not be counted.

In order to comply with the amended GEM Listing rules, the Directors wish to seek the approval of shareholders at the AGM on proposed amendments to the existing articles of association of the Company. The full text of the proposed amendments to the articles of association of the Company are set out in the notice of the annual general meeting of the Company set out on pages 9 to 27 of this circular.

RECOMMENDATION

The Directors consider that the Repurchase Proposal and the granting and the extension of the General Mandate to issue new Shares and the amendments to the articles of association 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 7 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. As such, 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 the 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.

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EXPLANATORY STATEMENT

APPENDIX

(iv) Share Capital

As at 23 March, 2004, 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, representing not more than 10 per cent. of the aggregate nominal amount of the issued share capital of the Company as at the date of the passing of the resolution 5.

The date on which the authority conferred by the resolution 5 will commence from the date on which such resolution is passed until the date 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 articles of association of the Company or any applicable laws of the Cayman Islands to be held; or (iii) the revocation, variation or renewal of the Repurchase Mandate by ordinary resolution of the Shareholders in general meeting, whichever occurs first.

(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 of the Company, 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 2003 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.

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EXPLANATORY STATEMENT

APPENDIX

(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$
2003
March	0.140	0.085
April	*	*
May	0.154	0.150
June	0.135	0.082
July	*	*
August	0.078	0.057
September	0.060	0.050
October	0.067	0.055
November	0.068	0.047
December	0.116	0.060
2004
January	0.086	0.076
February	0.080	0.065

* no transaction during the month

(vii) Substantial Shareholders

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

			Percentage
		Number	of issued
Name of shareholder	Note	of Shares	Share capital
Carkey Limited	(i)	153,300,000	47.9%
Wong Hon Sing	(i)	153,300,000	47.9%
i-Concepts Investment Limited	(ii)	58,400,000	18.3%
Dickson Group Holdings Limited	(ii)	58,400,000	18.3%

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EXPLANATORY STATEMENT

APPENDIX

Note:

• (i) Mr. Wong Hon Sing is deemed to be a substantial shareholder of the Company by virtue 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, 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%

Note:

• (i) Mr. Wong Hon Sing is deemed to be a substantial shareholder of the Company by virtue 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.

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EXPLANATORY STATEMENT

APPENDIX

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. In addition, such increase may also reduce the amount of Shares held by the public to less than 25 per cent. of the total issued shares of the Company.

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 existing 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 previous six months immediately preceding the Latest Practicable Date.

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NOTICE OF ANNUAL GENERAL MEETING

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Cardlink Technology Group Limited 鍇聯科技集團有限公司

(Incorporated in the Cayman Islands with limited liability)

NOTICE IS HEREBY GIVEN THAT the annual general meeting (“Annual General Meeting”) of the shareholders of Cardlink Technology Group Limited (the “Company”) will be held at 1st Floor, Milo’s Industrial Building, Phase 1, 2–10 Tai Yuen Street, Kwai Chung, New Territories, Hong Kong on 28 April, 2004 at 10:00 a.m. for the following purposes:

1. To receive and consider the audited financial statements of the Company and the reports of the directors and auditors of the Company for the year ended 31 December, 2003.

2. To re-elect retiring directors and to authorize the board of directors (“Board”) to fix the remuneration of the directors.

3. To re-appoint auditors of the Company and to authorize the Board to fix their remuneration.

4. As special business, to consider and if thought fit, to pass the following resolution as an ordinary resolution:

“ THAT

• (a) subject to paragraph (c) of this resolution, and pursuant to the Rules Governing the Listing of Securities on the Growth Enterprise Market (“GEM”) of The Stock Exchange of Hong Kong Limited (“Stock Exchange”), the exercise by the directors of the Company (“Directors”) 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 (“Shares”) and to make or grant offers, agreements and options (including bonds, warrants and debentures convertible into shares) which might require the exercise of such powers be and is hereby generally and unconditionally approved;

• (b) the approval in paragraph (a) of this resolution shall be in addition to any other authorization given to the Directors and shall authorize the Directors during the Relevant Period to make or grant offers, agreements and options which might require the exercise of such powers after the end of the Relevant Period;

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NOTICE OF ANNUAL GENERAL MEETING

• (c) the aggregate nominal amount of share capital allotted or agreed conditionally or unconditionally to be allotted (whether pursuant to options or otherwise) by the Directors pursuant to the approval in paragraph (a) of this resolution, otherwise than pursuant to (i) a Rights Issue (as defined below); or (ii) the grant or exercise of any options under the share option scheme of the Company or any other option scheme or similar arrangement for the time being adopted for the grant or issue of Shares or rights to acquire Shares; or (iii) any scrip dividend or similar arrangement providing for the allotment of Shares in lieu of the whole or part of a dividend on Shares in accordance with the Memorandum and Articles of Association of the Company in force from time to time, shall not exceed 20 per cent. of the aggregate nominal amount of the share capital of the Company in issue as at the date of the passing of this resolution and the approval in paragraph (a) of this resolution shall be limited accordingly; and

• (d) for the purpose of this resolution:

“Relevant Period” means the period from the date of 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 Articles of Association of the Company or any applicable laws of the Cayman Islands to be held; and

• (iii) the date on which the authority given under 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, or offer or issue of warrants, options or other securities giving rights to subscribe for Shares open for a period fixed by the Company or the Directors to holders of Shares on the register of members of the Company on a fixed record date in proportion to their then holdings of Shares (subject to such exclusions or other arrangements as the Directors 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 jurisdiction or any recognized regulatory body or any stock exchange applicable to the Company).”

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NOTICE OF ANNUAL GENERAL MEETING

1. As special business, to consider and, if thought fit, to pass the following resolution as an ordinary resolution:

“ THAT

• (a) subject to paragraph (b) of this resolution, the exercise by the Directors during the Relevant Period (as hereinafter defined) of all powers of the Company to purchase its shares on the GEM or any other stock exchange on which the Shares may be listed and which is recognized by The Securities and Futures Commission of Hong Kong (“Securities and Futures Commission”) and the Stock Exchange for such purpose, in accordance with the rules and regulations of the Securities and Futures Commission, the Stock Exchange or of any such other stock exchange from time to time and all applicable laws in this regard, be and is hereby generally and unconditionally approved;

• (b) the aggregate nominal amount of Shares which may be purchased by the Company pursuant to the approval in paragraph (a) of this resolution during the Relevant Period shall not exceed 10 per cent. of the aggregate nominal amount of the issued share capital of the Company as at the date of the passing of this resolution and the authority pursuant to paragraph (a) of this resolution shall be limited accordingly; and

• (c) for the purpose of this resolution, “Relevant Period” means the period from the date of 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 Articles of Association of the Company, or any applicable laws of the Cayman Islands to be held; and

• (iii) the date on which the authority given under this resolution is revoked or varied by an ordinary resolution of the shareholders of the Company in general meeting.”

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NOTICE OF ANNUAL GENERAL MEETING

1. As special business, to consider and, if thought fit, to pass the following resolution as an ordinary resolution:

“ THAT conditional upon resolutions nos. 4 and 5 above being duly passed, the unconditional general mandate granted to the Directors to exercise the powers of the Company to allot, issue and deal with additional Shares pursuant to resolution no. 4 above be and is hereby extended by the addition to the aggregate nominal amount of the share capital which may be allotted or agreed conditionally or unconditionally to be allotted and issued by the Directors pursuant to such general mandate of an amount representing the aggregate nominal amount of the share capital of the Company repurchased by the Company under the authority granted pursuant to resolution no. 5 above, provided that such amount shall not exceed 10 per cent. of the aggregate nominal amount of the issued share capital of the Company as at the date of the passing of this resolution.”

1. As special business, to consider and if thought fit, pass the following resolution as a special resolution:

2. “ THAT the Articles of Association of the Company be amended as follows:

3. (1) By amending the existing Article 2(1) by:

   • (a) inserting the new definition of “associate”; and

   • (b) deleting the existing definitions of “clearing house”, “Law”, “ordinary resolution” and “special resolution” in their entirety and replacing therewith with the following new definitions.

     • “associate”

4. the meaning attributed to it in the rules of the Designated Stock Exchange.

5. “clearing house”

6. a clearing house recognised by the laws of the jurisdiction in which the shares of the Company are listed or quoted on a stock exchange in such jurisdiction.

7. “Law”

The Companies Law, Cap.22 (Law 3 of 1961, as consolidated and revised) of the Cayman Islands.

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NOTICE OF ANNUAL GENERAL MEETING

• “ordinary resolution”

a resolution shall be an ordinary resolution when it has been passed by a simple majority of votes cast by such Members as, being entitled so to do, vote in person or, in the case of any Member being a corporation, by its duly authorised representative or, where proxies are allowed, by proxy at a general meeting of which not less than fourteen (14) clear days’ Notice has been duly given;

“special resolution”

a resolution shall be a special resolution when it has been passed by a majority of not less than three-fourths of votes cast by such Members as, being entitled so to do, vote in person or, in the case of such Members as are corporations, by their respective duly authorised representative or, where proxies are allowed, by proxy at a general meeting of which not less than twenty-one (21) clear days’ Notice, specifying (without prejudice to the power contained in these Articles to amend the same) the intention to propose the resolution as a special resolution, has been duly given. Provided that, except in the case of an annual general meeting, if it is so agreed by a majority in number of the Members having the right to attend and vote at any such meeting, being a majority together holding not less than ninety-five (95) per cent. in nominal value of the shares giving that right and in the case of an annual general meeting, if it is so agreed by all Members entitled to attend and vote thereat, a resolution may be proposed and passed as a special resolution at a meeting of which less than twenty-one (21) clear days’ Notice has been given;

a special resolution shall be effective for any purpose for which an ordinary resolution is expressed to be required under any provision of these Articles or the Statutes.”

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NOTICE OF ANNUAL GENERAL MEETING

• (2) By deletion of existing Article 2(2)(e) in its entirety and substitution thereof by the following:

• “(e) expressions referring to writing shall, unless the contrary intention appears, be construed as including printing, lithography, photography and other modes of representing words or figures in a visible form, and including where the representation takes the form of electronic display, provided that both the mode of service of the relevant document or notice and the Member’s election comply with all applicable Statutes, rules and regulations;”

• (3) By deletion of existing Article 2(2)(g) in its entirety and substitution thereof by the following:

• “(g) save as aforesaid words and expressions defined in the Statutes shall bear the same meanings in these Articles if not inconsistent with the subject in the context; and”

• (4) By inserting a new Article 2(2)(h) as follows:

• “(h) references to a document being executed include references to it being executed under hand or under seal or by electronic signature or by any other method and references to a notice or document include a notice or document recorded or stored in any digital, electronic, electrical, magnetic or other retrievable form or medium and information in visible form whether having physical substance or not.”

• (5) By deletion of existing Article 6 in its entirety and substitution thereof by the following:

• “6. The Company may from time to time by special resolution, subject to any confirmation or consent required by the Law, reduce its share capital or any capital redemption reserve or other undistributable reserve in any manner permitted by law.”

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NOTICE OF ANNUAL GENERAL MEETING

• (6) By deletion of existing Article 10(a) in its entirety and substitution thereof by the following:

• “(a) the necessary quorum (other than at an adjourned meeting) shall be two persons (or in the case of a Member being a corporation, its duly authorized representative) holding or representing by proxy not less than one-third in nominal value of the issued shares of that class and at any adjourned meeting of such holders, two holders present in person (or in the case of a Member being a corporation, its duly authorized representative) or by proxy (whatever the number of shares held by them) shall be a quorum;”

• (7) By deletion of existing Article 12(2) in its entirety and substitution thereof by the following:

• “(2) The Board may issue warrants or convertible securities or securities of similar nature conferring the right upon the holders thereof to subscribe for any class of shares or securities in the capital of the Company on such terms as it may from time to time determine.”

• (8) By deletion of existing Article 44 in its entirety and substitution thereof by the following:

• “44. The Register and branch register of Members, as the case may be, shall be open to inspection for at least two (2) hours on every business day by Members without charge or by any other person, upon a maximum payment of $2.50 or such lesser sum specified by the Board, at the Office or such other place at which the Register is kept in accordance with the Law or, if appropriate, upon a maximum payment of $1.00 or such lesser sum specified by the Board at the Registration Office. The Register including any overseas or local or other branch register of Members may, after notice has been given by advertisement in an appointed newspaper or any other newspapers in accordance with the requirements of any Designated Stock Exchange or by any electronic means in such manner as may be accepted by the Designated Stock Exchange to that effect, be closed at such times or for such periods not exceeding in the whole thirty (30) days in each year as the Board may determine and either generally or in respect of any class of shares.”

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• (9) By deletion of existing Article 48(4) in its entirety and substitution thereof by the following:

• “(4) Unless the Board otherwise agrees (which agreement may be on such terms and subject to such conditions as the Board in its absolute discretion may from time to time determine, and which agreement the Board shall, without giving any reason therefor, be entitled in its absolute discretion to give or withhold), no shares upon the Register shall be transferred to any branch register nor shall shares on any branch register be transferred to the Register or any other branch register and all transfers and other documents of title shall be lodged for registration, and registered, in the case of any shares on a branch register, at the relevant Registration Office, and, in the case of any shares on the Register, at the Office or such other place at which the Register is kept in accordance with the Law.”

• (10) By deletion of existing Article 51 in its entirety and substitution thereof by the following:

• “51. The registration of transfers of shares or of any class of shares may, after notice has been given by advertisement in an appointed newspaper or any other newspapers or by any other means in accordance with the requirements of any Designated Stock Exchange to that effect be suspended at such times and for such periods (not exceeding in the whole thirty (30) days in any year) as the Board may determine.”

• (11) By deletion of existing Article 56 in its entirety and substitution thereof by the following:

• “56. An annual general meeting of the Company shall be held in each year other than the year of the Company’s adoption of these Articles (within a period of not more than fifteen (15) months after the holding of the last preceding annual general meeting or not more than eighteen (18) months after the date of adoption of these Articles, unless a longer period would not infringe the rules of the Designated Stock Exchange, if any) at such time and place as may be determined by the Board.”

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• (12) By deletion of existing Articles 61(1)(e) to 61(1)(f) in its entirety and substitution thereof by the following:

• “(e) the fixing of the remuneration of the Auditors, and the voting of remuneration or extra remuneration to the Directors;

• (f) the granting of any mandate or authority to the Directors to offer, allot, grant options over or otherwise dispose of the unissued shares in the capital of the Company representing not more than 20 per cent. in nominal value of its existing issued share capital; and”

• (13) By inserting a new Article 61(1)(g) as follows:

• “(g) the granting of any mandate or authority to the Directors to repurchase securities of the Company.”

• (14) By deletion of existing Articles 61(2) in its entirety and substitution thereof by the following:

• “(2) No business other than the appointment of a chairman of a meeting shall be transacted at any general meeting unless a quorum is present at the commencement of the business. Two (2) Members entitled to vote and present in person or by proxy or (in the case of a Member being a corporation) by its duly authorised representative shall form a quorum for all purposes.”

• (15) By deletion of the first paragraph of existing Article 66 in its entirety and substitution thereof by the following:

• “66. Subject to any special rights or restrictions as to voting for the time being attached to any shares by or in accordance with these Articles, at any general meeting on a show of hands every Member present in person (or being a corporation, is present by a duly authorised representative), or by proxy shall have one vote and on a poll every Member present in person or by proxy or, in the case of a Member being a corporation, by its duly authorised representative shall have one vote for every fully paid share of which he is the holder but so that no amount paid up or credited as paid up on a share in advance of calls or instalments is treated for the foregoing purposes as paid up on the share. Notwithstanding anything contained in these Articles, where more than one proxy is appointed by a Member which is a clearing house (or its nominee(s)), each such proxy shall have one vote on a show of hands. A resolution put to the vote of a meeting shall be decided on a show of hands unless (before or on the

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declaration of the result of the show of hands or on the withdrawal of any other demand for a poll) a poll is demanded:”

• (16) By re-numbering existing Article 76 as Article 76(1) and by inserting the following as new Article 76(2):

• “(2) Where any Member is, under the rules of the Designated Stock Exchange, required to abstain from voting on any particular resolution or restricted to voting only for or only against any particular resolution, any votes cast by or on behalf of such Member in contravention of such requirement or restriction shall not be counted.”

• (17) By deletion of existing Article 84(2) in its entirety and substitution thereof by the following:

• “(2) If a clearing house (or its nominee(s)), being a corporation, is a Member, it may authorise such persons as it thinks fit to act as its representatives at any meeting of the Company or at any meeting of any class of Members provided that the authorisation shall specify the number and class of shares in respect of which each such representative is so authorised. Each person so authorised under the provisions of this Article shall be deemed to have been duly authorised without further evidence of the facts and be entitled to exercise the same rights and powers on behalf of the clearing house (or its nominee(s)) as if such person was the registered holder of the shares of the Company held by the clearing house (or its nominee(s)) including the right to vote individually on a show of hands.”

• (18) By deletion of existing Article 86(6) in its entirety and substitution thereof by the following:

• “(6) A vacancy on the Board created by the removal of a Director under the provisions of subparagraph (5) above may be filled by the election or appointment by ordinary resolution the Members at the meeting at which such Director is removed.”

• (19) By deletion of existing Article 88 in its entirety and substitution thereof by the following:

• “88. No person other than a Director retiring at the meeting shall, unless recommended by the Directors for election, be eligible for election as a Director at any general meeting unless a Notice signed by a Member (other than the person to be proposed) duly qualified to attend and vote at the meeting for which such notice is given of his

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intention to propose such person for election and also a Notice signed by the person to be proposed of his willingness to be elected shall have been lodged at the head office or at the Registration Office provided that the minimum length of the period, during which such Notice(s) are given, shall be at least seven (7) days and that the period for lodgment of such Notice(s) shall commence no earlier than the day after the dispatch of the notice of the general meeting appointed for such election and end no later than seven (7) days prior to the date of such general meeting.”

• (20) By deletion of existing Article 89(1) in its entirety and substitution thereof by the following:

• “(1) resigns his office by notice in writing delivered to the Company at the Office or tendered at a meeting of the Board;”

• (21) By deletion of existing Article 103 in its entirety and substitution thereof by the following:

• “103. (1) A Director shall not vote (nor be counted in the quorum) on any resolution of the Board approving any contract or arrangement or any other proposal in which he or any of his associates is materially interested, but this prohibition shall not apply to any of the following matters namely:

  • (i) any contract or arrangement for the giving to such Director or his associate(s) any security or indemnity in respect of money lent by him or any of his associates or obligations incurred or undertaken by him or any of his associates at the request of or for the benefit of the Company or any of its subsidiaries;

  • (ii) any contract or arrangement for the giving of any security or indemnity to a third party in respect of a debt or obligation of the Company or any of its subsidiaries for which the Director or his associate(s) has himself/themselves assumed responsibility in whole or in part whether alone or jointly under a guarantee or indemnity or by the giving of security;

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• (iii) any contract or arrangement concerning an offer of shares or debentures or other securities of or by the Company or any other company which the Company may promote or be interested in for subscription or purchase, where the Director or his associate(s) is/are or is/are to be interested as a participant in the underwriting or sub-underwriting of the offer;

• (iv) any contract or arrangement in which the Director or his associate(s) is/are interested in the same manner as other holders of shares or debentures or other securities of the Company or any of its subsidiaries by virtue only of his/their interest in shares or debentures or other securities of the Company;

• (v) any contract or arrangement concerning any other company in which the Director or his associate(s) is/ are interested only, whether directly or indirectly, as an officer or executive or a shareholder other than a company in which the Director and/or his associate(s) is/are beneficially interested in five (5) per cent. or more of the issued shares or of the voting rights of any class of shares of such company (or any third company through which his interest or that of any of his associates is derived); or

• (vi) any proposal concerning the adoption, modification or operation of a share option scheme, a pension fund or retirement, death or disability benefits scheme or other arrangement which relates both to directors, his associates and employees of the Company or of any of its subsidiaries and does not provide in respect of any Director, or his associate(s), as such any privilege or advantage not accorded to the employees to which such scheme or fund relates.

• (2) A company shall be deemed to be a company in which a Director and/or his associate(s) owns five (5) per cent. or more if and so long as (but only if and so long as) he and/or his associates, (either directly or indirectly) are the holders of or beneficially interested in five (5) per cent. or more of any class of the equity share capital of such company or of the voting rights available to members of such company (or

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of any third company through which his/their interest or that of any of his associates is derived). For the purpose of this paragraph there shall be disregarded any shares held by a Director or his associate(s) as bare or custodian trustee and in which he or any of them has no beneficial interest, any shares comprised in a trust in which the interest of the Director or his associate(s) is/are in reversion or remainder if and so long as some other person is entitled to receive the income thereof, and any shares comprised in an authorised unit trust scheme in which the Director or his associate(s) is/are interested only as a unit holder and any shares which carry no voting right at general meetings and very restrictive dividend and return of capital right.

• (3) Where a company in which a Director and/or his associate(s) holds five (5) per cent. or more is/are materially interested in a transaction, then that Director and/or his associate(s) shall also be deemed materially interested in such transaction.

• (4) If any question shall arise at any meeting of the Board as to the materiality of the interest of a Director (other than the chairman of the meeting) or his associate(s) or as to the entitlement of any Director (other than such chairman) to vote and such question is not resolved by his voluntarily agreeing to abstain from voting, such question shall be referred to the chairman of the meeting and his ruling in relation to such other Director shall be final and conclusive except in a case where the nature or extent of the interest of the Director and/or his associate(s) concerned as known to such Director has not been fairly disclosed to the Board. If any question as aforesaid shall arise in respect of the chairman of the meeting such question shall be decided by a resolution of the Board (for which purpose such chairman shall not vote thereon) and such resolution shall be final and conclusive except in a case where the nature or extent of the interest of such chairman as known to such chairman has not been fairly disclosed to the Board.”

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• (22) By deletion of existing Article 133(1) in its entirety and substitution thereof by the following:

• “133. (1) The Company shall have one or more Seals, as the Board may determine. For the purpose of sealing documents creating or evidencing securities issued by the Company, the Company may have a securities seal which is a facsimile of the Seal of the Company with the addition of the word “Securities” on its face or in such other form as the Board may approve. The Board shall provide for the custody of each Seal and no Seal shall be used without the authority of the Board or of a committee of the Board authorised by the Board in that behalf. Subject as otherwise provided in these Articles, any instrument to which a Seal is affixed shall be signed autographically by one Director and the Secretary or by two Directors or by such other person (including a Director) or persons as the Board may appoint, either generally or in any particular case, save that as regards any certificates for shares or debentures or other securities of the Company the Board may by resolution determine that such signatures or either of them shall be dispensed with or affixed by some method or system of mechanical signature. Every instrument executed in manner provided by this Article shall be deemed to be sealed and executed with the authority of the Board previously given.”

• (23) By deletion of existing Article 146(1) in its entirety and substitution thereof by the following:

• “146. (1) The Board shall establish an account to be called the share premium account and shall carry to the credit of such account from time to time a sum equal to the amount or value of the premium paid on the issue of any share in the Company. Unless otherwise provided by the provisions of these Articles, the Board may apply the share premium account in any manner permitted by the Law. The Company shall at all times comply with the provisions of the Law in relation to the share premium account.”

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• (24) By deletion of existing Article 152 in its entirety and substitution thereof by the following:

• “152. Subject to Article 153, a printed copy of the Directors’ report, accompanied by the balance sheet and profit and loss account, including every document required by law to be annexed thereto, made up to the end of the applicable financial year and containing a summary of the assets and liabilities of the Company under convenient heads and a statement of income and expenditure, together with a copy of the Auditors’ report, shall be sent to each person entitled thereto at least twenty-one (21) days before the date of the general meeting and laid before the Company at the annual general meeting held in accordance with Article 56 provided that this Article shall not require a copy of those documents to be sent to any person whose address the Company is not aware or to more than one of the joint holders of any shares or debentures.”

• (25) By inserting a new article as Article 153 as follows:

• “153. Subject to due compliance with all applicable Statutes, rules and regulations, including, without limitation, the rules of the Designated Stock Exchange, and to obtaining all necessary consents, if any, required thereunder, the requirements of Article 152 shall be deemed satisfied in relation to any person by sending to the person in any manner not prohibited by the Statutes, a summary financial statement derived from the Company’s annual accounts and the directors’ report which shall be in the form and containing the information required by applicable laws and regulations, provided that any person who is otherwise entitled to the annual financial statements of the Company and the directors’ report thereon may, if he so requires by notice in writing served on the Company, demand that the Company sends to him, in addition to a summary financial statement, a complete printed copy of the Company’s annual financial statement and the directors’ report thereon.”

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• (26) By inserting a new article as Article 154 as follows:

• “154. The requirement to send to a person referred to in Article 152 the documents referred to in that article or a summary financial report in accordance with Article 153 shall be deemed satisfied where, in accordance with all applicable Statutes, rules and regulations, including, without limitation, the rules of the Designated Stock Exchange, the Company publishes copies of the documents referred to in Article 152 and, if applicable, a summary financial report complying with Article 153, on the Company’s computer network or in any other permitted manner (including by sending any form of electronic communication), and that person has agreed or is deemed to have agreed to treat the publication or receipt of such documents in such manner as discharging the Company’s obligation to send to him a copy of such documents.”

• (27) Re-numbering existing Article 153 as Article 155 (also on index page).

• (28) Re-numbering existing Article 154 as Article 156 (also on index page). (29) Re-numbering existing Article 155 as Article 157 (also on index page). (30) Re-numbering existing Article 156 as Article 158 (also on index page).

• (31) Re-numbering existing Article 157 as Article 159 (also on index page).

• (32) Re-numbering existing Article 158 as Article 160 (also on index page).

• (33) By deletion of existing Article 159 in its entirety and substitution thereof by the following and re-numbering it as Article 161 (also on index page):

• “161. Any Notice or document (including any “corporate communication” within the meaning ascribed thereto under the rules of the Designated Stock Exchange), whether or not, to be given or issued under these Articles from the Company to a Member shall be in writing or by cable, telex or facsimile transmission message or other form of electronic transmission or communication and any such Notice and document may be served or delivered by the Company on or to any Member either personally or by sending it through the post in a prepaid envelope addressed to such Member at his registered address as appearing in the Register or at any other address supplied by him to the Company for the purpose or, as the case may be, by transmitting it to any such address or transmitting it to any telex or facsimile

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transmission number or electronic number or address or website supplied by him to the Company for the giving of Notice to him or which the person transmitting the notice reasonably and bona fide believes at the relevant time will result in the Notice being duly received by the Member or may also be served by advertisement in appropriate newspapers in accordance with the requirements of the Designated Stock Exchange or, to the extent permitted by the applicable laws, by placing it on the Company’s website and giving to the member a notice stating that the notice or other document is available there (a “notice of availability”). The notice of availability may be given to the Member by any of the means set out above. In the case of joint holders of a share all notices shall be given to that one of the joint holders whose name stands first in the Register and notice so given shall be deemed a sufficient service on or delivery to all the joint holders.”

• (34) By deletion of existing Article 160 in its entirety and substitution thereof by the following and re-numbering it as Article 162 (also on index page):

• “162. Any Notice or other document:

  • (a) if served or delivered by post, shall where appropriate be sent by airmail and shall be deemed to have been served or delivered on the day following that on which the envelope containing the same, properly prepaid and addressed, is put into the post; in proving such service or delivery it shall be sufficient to prove that the envelope or wrapper containing the notice or document was properly addressed and put into the post and a certificate in writing signed by the Secretary or other officer of the Company or other person appointed by the Board that the envelope or wrapper containing the notice or other document was so addressed and put into the post shall be conclusive evidence thereof;

  • (b) if sent by electronic communication, shall be deemed to be given on the day on which it is transmitted from the server of the Company or its agent. A notice placed on the Company’s website is deemed given by the Company to a Member on the day following that on which a notice of availability is deemed served on the Member;

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• (c) if served or delivered in any other manner contemplated by these Articles, shall be deemed to have been served or delivered at the time of personal service or delivery or, as the case may be, at the time of the relevant despatch or transmission; and in proving such service or delivery a certificate in writing signed by the Secretary or other officer of the Company or other person appointed by the Board as to the act and time of such service, delivery, despatch or transmission shall be conclusive evidence thereof; and

• (d) may be given to a Member either in the English language or the Chinese language, subject to due compliance with all applicable Statutes, rules and regulations.”

• (35) Re-numbering existing Article 161 as Article 163 (also on index page).

• (36) Re-numbering existing Article 162 as Article 164 (also on index page).

• (37) Re-numbering existing Article 163 as Article 165 (also on index page).

• (38) Re-numbering existing Article 164 as Article 166 (also on index page). (39) Re-numbering existing Article 165 as Article 167 (also on index page). (40) Re-numbering existing Article 166 as Article 168 (also on index page). (41) Re-numbering existing Article 167 as Article 169 (also on index page).

By Order of the Board Cardlink Technology Group Limited Lau Ka Chung Company Secretary

Hong Kong, 29 March, 2004

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Notes:

1. A shareholder of the Company entitled to attend and vote at the meeting is entitled to appoint a person or persons (if he holds two or more Shares) as his proxy or proxies to attend and vote instead of him. A proxy need not be a shareholder of the Company.

2. To be valid, a form of proxy, together with the power of attorney or other authority (if any) under which it is signed or a notarially certified copy of that power of attorney or authority, must be deposited with the branch share registrar of the Company in Hong Kong, Tengis Limited, G/F, BEA Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong, not less than 48 hours before the time appointed for holding the meeting or any adjourned meeting, and in default thereof the form of proxy shall not be treated as valid. No instrument appointing a proxy shall be valid after the expiry of 12 months from the date of its execution.

3. Delivery of an instrument appointing a proxy shall not preclude a shareholder from attending and voting in person at the meeting if the shareholder so desires and in such event the instrument appointing a proxy shall be deemed to be revoked.

4. An explanatory statement containing further details regarding resolution numbered 4–6 as required by the Rules Governing the Listing of Securities on the Growth Enterprise Market of the Stock Exchange will be dispatched to the members of the Company together with the Annual Report of the Company for the year ended 31 December, 2003.

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