Sing Lee Software (Group) Limited — Proxy Solicitation & Information Statement 2003

Mar 31, 2003

THIS CIRCULAR REQUIRES YOUR IMMEDIATE ATTENTION

The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) 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.

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

If you have sold all your shares in Sing Lee Software (Group) Limited, 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.

*

(Incorporated in Bermuda with limited liability)

GENERAL MANDATE TO REPURCHASE SHARES AND ISSUE NEW SHARES

This circular, for which the directors of Sing Lee Software (Group) Limited 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 Sing Lee Software (Group) Limited. 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.

This circular will remain on the GEM website at www.hkgem.com on the “Latest Company Announcements” page for at least 7 days from the date of posting.

* For identification purposes only

29th March, 2003

LETTER FROM THE BOARD OF DIRECTORS

*

(Incorporated in Bermuda with limited liability)

Board of Directors Executive Directors: Hung Yung Lai (Chairman) Cui Jian (Vice Chairman) Li Kei Ling

Independent non-executive Directors: Pan Yun He Wang Gui Guo Compliance Officer: Hung Yung Lai

Head Office and Principal Place of Business in the People’s Republic of China: 32nd Floor, Morrison Plaza 5-9A Morrison Hill Road Wanchai Hong Kong

Registered Office: Clarendon House, 2 Church Street Hamilton, HM11 Bermuda

29th March, 2003

To Shareholders of the Company

Dear Sir or Madam,

PROPOSED GENERAL MANDATES TO REPURCHASE SHARES AND ISSUE NEW SHARES

INTRODUCTION

The purpose of this circular is to provide you with information regarding resolutions to be proposed as at the annual general meeting (the “AGM”) of the Company to be held at Plaza 4, Novotel Century Hong Kong Hotel, 238 Jaffe Road, Wanchai, Hong Kong on 5th May, 2003 at 10:00 a.m.

BACKGROUND

On 25th April, 2002, resolutions were passed by the shareholders of the Company granting general unconditional mandates to the directors of the Company (the “Directors”) to exercise the powers of the Company to:

• (a) allot, issue and deal with shares in the capital of the Company not exceeding 20% of the aggregate nominal amount of the share capital of the Company in issue on 25th April, 2002;

• For identification purposes only

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LETTER FROM THE BOARD OF DIRECTORS

• (b) repurchase shares of the Company not exceeding 10% of the aggregate nominal amount of the shares of the Company in issue on 25th April, 2002; and

• (c) add to the general mandate for issuing shares set out in paragraph (a) above the number of shares purchased by the Company pursuant to the repurchase mandate set out in paragraph (b) above.

The above general mandates will expire at the conclusion of the forthcoming AGM and the purpose of this circular is to seek your support, at the forthcoming AGM, to approve the general mandates as referred to below.

PROPOSED GENERAL MANDATE TO REPURCHASE SHARES

At the AGM, it will be proposed, by way of an ordinary resolution, that the Directors be given a general and unconditional mandate to exercise all powers of the Company to repurchase on the Growth Enterprise Market (“GEM”) of The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) shares in the Company up to a maximum of 10 per cent. of the shares of the Company in issue at the date of passing the ordinary resolution (the “Repurchase Mandate”).

The Repurchase Mandate, if approved, will continue in force until the conclusion of the next AGM of the Company or until revoked or varied by an ordinary resolution of the shareholders of the Company in general meeting prior to the next annual general meeting.

An explanatory statement containing information relating to the Repurchase Mandate and as required pursuant to the Rules Governing the Listing of Securities on GEM of the Stock Exchange, in particular Rule 13.08, 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 relating to the Repurchase Mandate.

PROPOSED GENERAL MANDATE TO ISSUE NEW SHARES

At the AGM, it will also be proposed, by way of ordinary resolution, that the Directors be given a general and unconditional mandate to exercise all powers of the Company to issue new shares in the Company up to 20 per cent. of the aggregate nominal amount of the issued share capital of the Company on the date of the passing of the ordinary resolution (“Issue Mandate”, together with the Repurchase Mandate, the “General Mandates”). In addition, it is further proposed, by way of another ordinary resolution, that the Issue Mandate be extended so that the Directors be given a general mandate to issue further shares in the Company of an aggregate nominal amount equal to the aggregate nominal amount of the share capital of the Company repurchased under the Repurchase Mandate. Any issue of new shares in the Company is subject to approval from the Stock Exchange for the listing of and permission to deal in such new shares.

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LETTER FROM THE BOARD OF DIRECTORS

ACTION TO BE TAKEN

Whether or not you intend to be present at the AGM, you are requested to complete the form of proxy and return it to the Company’s branch share registrar, Abacus Share Registrars Limited, Ground Floor, BEA Harbour View Center, Wanchai, Hong Kong in accordance with the instructions printed thereon not less than 48 hours before the time fixed for the AGM. The completion and delivery of a form of proxy will not preclude you from attending and voting at the meeting in person.

RECOMMENDATION

The Directors consider that the granting of the General Mandates referred to in this circular are in the best interests of the Company and its shareholders and so recommend shareholders to vote in favour of the resolutions at the AGM.

Yours faithfully,

For and on behalf of the Board of Sing Lee Software (Group) Limited Hung Yung Lai Chairman

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APPENDIX

EXPLANATORY STATEMENT

The following is the Explanatory Statement required to be sent to shareholders pursuant to Rule 13.08 of the Rules Governing the Listing of Securities on GEM of the Stock Exchange (“GEM Listing Rules”) in connection with the proposed Repurchase Mandate which, if approved, would authorise directors of the Company to purchase shares of HK$0.01 each (“Shares”) in the Company.

(a) Shareholders’ approval

The Company may only purchase its Shares on GEM if:

• (i) the Shares proposed to be issued by the Company are fully-paid up;

• (ii) the Company has previously sent to its shareholders this Explanatory Statement; and

• (iii) the shareholders of the Company have in general meeting approved the Repurchase Mandate and the relevant documents in connection therewith have been delivered to the Stock Exchange.

(b) Number of shares which may be repurchased

Exercise in full of the Repurchase Mandate, on the basis of 603,000,000 shares in issue as at 24th March, 2003 (being the latest practicable date (the “Latest Practicable Date”) for ascertaining certain information prior to the printing of this circular), would result in 60,300,000 shares (representing 10% of the total issued share capital of the Company) being repurchased by the Company during the period prior to the next annual general meeting of the Company following the passing of the resolution approving the Repurchase Mandate. As at the Latest Practicable Date, the Directors have no intention to exercise the Repurchase Mandate.

(c) Reasons for proposed repurchase of shares

The Directors believe that it is in the interests of the Company and its shareholders to have a general authority from shareholders to enable the Directors to repurchase shares on GEM. Such repurchases may, depending on market conditions and funding arrangements at the time, lead to an enhancement of the net assets of the Company and/or its earnings per share and will only be made when the Directors believe that such repurchases will benefit the Company and its shareholders.

(d) Source of funds

In repurchasing Shares, the Company may only apply funds legally available for such purpose in accordance with its bye-laws, the GEM Listing Rules and the laws of Bermuda. The Company shall not repurchase Shares on GEM for a consideration other than cash or for settlement otherwise than in accordance with the trading rules of the Stock Exchange from time to time.

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APPENDIX

EXPLANATORY STATEMENT

(e) Effect of exercising the Repurchase Mandate

There will not be a material 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 of the Company) in the event that the Repurchase Mandate is exercised in full. However, the Directors do not propose to exercise the Repurchase Mandate to such an extent as would, in the circumstances, have a material adverse impact on the working capital requirements of the Company or on the gearing levels which, in the opinion of the Directors, are from time to time appropriate of the Company.

(f) Who may sell shares in the event the Repurchase Mandate is exercised

The GEM Listing Rules prohibit the Company from knowingly repurchasing shares from a “connected person”, that is, a director, chief executive, substantial shareholder or management shareholder of the Company or any of their associates (as defined in the GEM Listing Rules). A connected person (as defined in the GEM Listing Rules) shall not knowingly sell his shares to the Company.

As at the Latest Practicable Date, no connected person (as defined in the GEM Listing Rules) has notified the Company that he has a present intention to sell shares to the Company in the event that the Company is authorised to make repurchases of shares.

As at the Latest Practicable Date, none of the Directors or, to the best of their knowledge having made all reasonable enquiries, any of their associates (as defined in the GEM Listing Rules), has any present intention, in the event that the Repurchase Mandate is approved, to sell any Shares to the Company or its subsidiaries.

(g) Directors’ undertaking

The Directors have undertaken to the Stock Exchange that, so far as the same may be applicable, they will exercise the Repurchase Mandate in accordance with the GEM Listing Rules and the applicable laws of Bermuda.

(h) The Hong Kong Code on Takeovers and Mergers

If, as a result of a repurchase of shares, 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 the Hong Kong Code on Takeovers and Mergers (the “Code”). As a result, a shareholder, or a group of shareholders acting in concert (within that term’s meaning under the Code), depending on the level of increase in the shareholders interests, could obtain or consolidate control of the Company and become obliged to make a mandatory offer in accordance with Rule 26 and 32 of the Code.

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APPENDIX

EXPLANATORY STATEMENT

As at the Latest Practicable Date, Goldcorp Industrial Limited, which was an initial management shareholder of the Company, held approximately 50.75% of the issued shares. As at the Latest Practicable Date, the Directors are not aware of any consequences for Goldcorp Industrial Limited under the Code as a result, solely, of the Directors exercising the Repurchase Mandate in full.

(i) No repurchases of shares by the Company

The Company has not repurchased any shares in the previous six months.

(j) Shares prices

The highest and lowest prices at which the Shares were traded on GEM during each of the previous twelve calendar months were as follows:

	Shares
	Highest	Lowest
	HK$	HK$
2002
March	0.75	0.62
April	0.80	0.58
May	0.75	0.62
June	0.65	0.60
July	0.65	0.54
August	0.64	0.55
September	0.65	0.48
October	0.65	0.55
November	0.66	0.60
December	0.65	0.55
2003
January	0.64	0.56
February	0.65	0.56

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