SPT Energy Group Inc. — Proxy Solicitation & Information Statement 2004

Apr 27, 2004

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold all or transferred all your shares in Wing Shan International Limited , you should at once hand this circular, together with the accompanying form of proxy, to the purchaser or to the transferee or to the bank, stockbroker or other agent through whom the sale was effected for transmission to the purchaser or the 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.

WING SHAN INTERNATIONAL LIMITED 榮 山 國 際 有 限 公 司

(Incorporated in Hong Kong with limited liability) (Stock Code: 570)

PROPOSALS FOR GENERAL MANDATES TO REPURCHASE

ITS OWN SHARES AND TO ISSUE SHARES

AND AMENDMENTS TO THE ARTICLES OF ASSOCIATION

A notice convening the annual general meeting of Wing Shan International Limited (the “AGM”) to be held at Chater Room II, Function Room Level, The Ritz-Carlton, Hong Kong, 3 Connaught Road Central, Hong Kong, on Friday, 21 May 2004 at 10:00 a.m. is set out in the Company’s Annual Report 2003 which was sent to you together with this circular.

Whether or not you intend to attend the meeting, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return it to Wing Shan International Limited at its registered office in Hong Kong at Rooms 2801-2805, China Insurance Group Building, 141 Des Voeux Road Central, Hong Kong as soon as possible and in any event not later than 48 hours before the time appointed for the holding of the AGM. Completion and return of the form of proxy will not preclude you from attending and voting at the meeting or any adjourned meeting should you so wish.

27 April 2004

CONTENTS

		Pages
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1-2
Letter	from the Board of Directors
1.	Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3-4
2.	General Mandate to Repurchase Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
3.	General Mandate to Issue Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
4.	Amendments to the Articles of Association . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
5.	Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
6.	Actions to be taken . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
7.	Procedure for Demand a Poll . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6-7
8.	Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Appendix – Explanatory Statement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		8-10

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DEFINITIONS

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

• “AGM” means the annual general meeting of the Company to be held at Chater Room II, Function Room Level, The RitzCarlton, Hong Kong, 3 Connaught Road Central, Hong Kong on Friday, 21 May 2004 at 10:00 a.m.;

• “AGM Notice” means the notice convening the AGM as set out in the Company’s Annual Report 2003;

• “Articles of Association” means the existing articles of association of the Company;

• “Company” means Wing Shan International Limited, a company incorporated in Hong Kong with limited liability and the Shares of which are listed on the Stock Exchange;

• “Companies Ordinance” means Companies Ordinance, Chapter 32 of the Laws of Hong Kong;

• “Directors”

• means the directors of the Company for the time being;

• “Hong Kong”

• means the Hong Kong Special Administrative Region of the People’s Republic of China;

• “HK$” means Hong Kong dollars, the lawful currency of Hong Kong;

• “Latest Practicable Date” means 20 April 2004, being the latest practicable date prior to the printing of this circular for the purpose of ascertaining certain information for inclusion in this circular;

• “Listing Rules”

• means the Rules Governing the Listing of Securities on the Stock Exchange;

• “Ordinary Resolution(s)”

• means the proposed ordinary resolution(s) in respect of the special business as referred to in the AGM Notice;

• “Share(s)”

• means share(s) of HK$0.10 each in the capital of the Company (or of such other nominal amount as shall result from a sub-division, consolidation, reclassification or reconstruction of the share capital of the Company from time to time);

• “Share Repurchase Rules”

• means the relevant rules set out in the Listing Rules to regulate the repurchase by companies with primary listing of their own securities on the Stock Exchange;

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DEFINITIONS

• “Share Issue Mandate” means a general mandate to the Directors to exercise the power of the Company to allot and issue Shares during the period as set out in Ordinary Resolution No.6 up to 20 per cent. of the issued share capital of the Company as at the date of passing of the Ordinary Resolution No.6;

• “Share Repurchase Mandate” means a general and unconditional mandate given to the Directors to exercise the power of the Company to repurchase at any time during the period as set out in Ordinary Resolution No.5 up to 10 per cent. of the issued share capital of the Company at the date of passing of the Ordinary Resolution No.5;

• “Shareholder(s)” means holder(s) of the Share(s);

• “Special Resolution(s)”

• means the proposed special resolution in respect of the special business as referred to in the AGM Notice;

• “Stock Exchange”

means The Stock Exchange of Hong Kong Limited;

• “Summary Financial Report(s)”

• means the summary financial report(s) as defined under the Companies Ordinance; and

• “Takeovers Code”

• means the Hong Kong Codes on Takeovers and Mergers and Share Repurchases.

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LETTER FROM THE BOARD

WING SHAN INTERNATIONAL LIMITED 榮 山 國 際 有 限 公 司

(Incorporated in Hong Kong with limited liability)

Directors: Mr. HE Haochang, Chairman & Managing Director Mr. CHAN Che Kan, Edward, Deputy Managing Director Mr. SITU Min Mr. LI Feng Mr. LAM Siu Hung* Mr. CHAN Ting Chuen, David ** Mr. NG Pui Cheung, Joseph ** Mr. CHEUNG Kin Piu, Valiant **

Registered Office: Rooms 2801-2805, China Insurance Group Building, 141 Des Voeux Road Central, Hong Kong.

( Non-Executive Director) (*Independent Non-Executive Director)

27 April 2004

To the Shareholders

Dear Sir or Madam,

PROPOSALS FOR GENERAL MANDATES TO REPURCHASE ITS OWN SHARES AND TO ISSUE SHARES AND AMENDMENTS TO THE ARTICLES OF ASSOCIATION

1. INTRODUCTION

Pursuant to the Companies Ordinance and the Listing Rules, listed companies incorporated in Hong Kong may in certain circumstances, if authorised by their articles of association, purchase their own shares.

On 26 May 2003, general mandates were given to the Directors to exercise the powers of the Company to repurchase its own shares and to issue shares. Under the Companies Ordinance and the Listing Rules, these general mandates will lapse at the conclusion of the forthcoming annual general meeting of the Company. The Listing Rules have also been amended which require certain changes to be made in the articles of association of listed companies. Ordinary Resolutions and a Special Resolution will therefore be proposed at the AGM to be held on 21 May 2004 to approve general mandates to authorise the Company to engage in share repurchases, to issue shares and to amend the Articles of Association.

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LETTER FROM THE BOARD

The purpose of this circular is to provide you with information regarding the proposed general mandates to repurchase shares and to issue shares and amendments to the Articles of Association.

2. GENERAL MANDATE TO REPURCHASE SHARES

An ordinary resolution will be proposed at the AGM to give the Share Repurchase Mandate to the Directors; details of which are set out in Ordinary Resolution No.5 in the AGM Notice.

An explanatory statement as required under the Listing Rules to provide the requisite information is set out in the appendix hereto.

3. GENERAL MANDATE TO ISSUE SHARES

At the AGM, an ordinary resolution will be proposed that a Share Issue Mandate to be given to the Directors. In addition, an ordinary resolution will be proposed to authorise extension of the Share Issue Mandate which would increase the limit of the Share Issue Mandate by adding to it the number of Shares repurchased under the Share Repurchase Mandate.

Details of the Share Issue Mandate and the extension of the Share Issue Mandate are set out in Ordinary Resolutions No.6 and No.7 in the AGM Notice.

4. AMENDMENTS TO THE ARTICLES OF ASSOCIATION

The Companies Ordinance has been amended in early 2002 to permit listed companies to send to shareholders, for the purposes of their general meetings, copies of Summary Financial Reports in place of copies of the relevant financial documents from which the Summary Financial Reports are derived, provided that they ascertain the wishes of shareholders. Following such amendment to the Companies Ordinance, the Stock Exchange has amended the Listing Rules to allow the listed issuers to distribute Summary Financial Reports in place of a full annual report, provided that they ascertain the wishes of shareholders and comply with the relevant legal requirements of their own jurisdictions and provisions of their own memorandum and articles of association.

In addition, the amendments to the Listing Rules in early 2002 also permit the listed issuers to send or otherwise make available corporate communications, including annual and interim reports, listing documents, circulars and notices of meeting, to holders of securities using electronic means and in either English or Chinese only with their prior approval and, if these would be allowed under applicable laws and regulations and the listed issuers’ own constitutional documents.

With the repeal of the Securities and Futures (Clearing House) Ordinance and the enactment of the Securities and Futures Ordinance (Cap.571 of the Laws of Hong Kong) on 1 April 2003, it is proposed that the definition of “clearing house” in Article 2 of the Articles of Association shall be amended such that its reference to the Securities and Futures (Clearing House) Ordinance shall be deleted.

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LETTER FROM THE BOARD

Recently, the Companies Ordinance has further been amended with effect from 13 February 2004 to provide, inter alia, that (i) a director will be, unless there is a provision in a company’s articles to the contrary, vicariously liable for torts committed by any alternate director that he/she appoints and such alternate is now deemed to be the agent of the appointing director; (ii) a director may be removed by ordinary resolution; and (iii) a company is allowed to purchase liability insurance for officers and auditors and clarifies the permitted scope of indemnities that may be given to directors.

Recently, the Listing Rules have further been amended with effect from 31 March 2004 to (i) alter the extent to which a director is permitted or prohibited to vote on a board resolution on certain kinds of contracts/arrangements; (ii) stipulate clearly the effect of any shareholder voting in contravention of the Listing Rules; and (iii) stipulate clearly the time period for the lodgment of the notice(s) concerning proposal for the election of directors.

In order to achieve such flexibility and to comply with the requirements provided by the above amendments of the Companies Ordinance and the Listing Rules, the Directors proposed to seek your approval for the Special Resolution to amend the Articles of Association. If this Special Resolution is passed and to the extent permitted by the Listing Rules and the Companies Ordinance, the Company will be able to do such acts summarised as follows:

• (a) to send to Shareholders and other entitled persons Summary Financial Reports in place of annual report at their own preference;

• (b) to publish the annual report and/or Summary Financial Reports on its computer network or in any other manner (including electronic communication) as an alternative means in satisfaction of the Company’s obligations to send a printed copy thereof to Shareholders and other entitled persons if requisite consent has been obtained;

• (c) to send, serve and deliver corporate communications to Shareholders and other entitled persons in the English language only or the Chinese language only but not both if requisite consent has been obtained;

• (d) to send, serve, deliver and transmit corporate communications to Shareholders and other entitled persons by electronic communication if requisite consent has been obtained;

• (e) to stipulate the requirement of voting of Shareholders by poll under the Listing Rules;

• (f) to stipulate the time limit for issuance of share certificates in accordance with the Listing Rules and the Companies Ordinance and to revise those provisions on the amount payable for share certificates to the effect that such sum shall not exceed the maximum amount as may from time to time be prescribed by the Stock Exchange.

• (g) to stipulate clearly the scope under which a Director may or may not vote on a board resolution;

• (h) to stipulate the consequences of any Shareholder voting any resolution in contravention to the Listing Rules;

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LETTER FROM THE BOARD

• (i) to stipulate clearly the time period for the lodgment of the notice(s) concerning the proposal for electing any person as Director;

• (j) to stipulate clearly that a Director will be vicariously liable for any torts committed by his alternate Director;

• (k) to stipulate that a Director may be removed by an ordinary resolution; and

• (l) to stipulate that the Company may purchase or maintain for its directors or other officers or auditors of insurance against any liability to the Company or other parties except fraud which a director or other officer or auditor may incur in certain specified circumstances and that the scope of indemnity which the Company may provide for its directors, other officers and auditors.

Full text the proposed amendments to the Articles of Association are set out in the AGM Notice which is contained in the Company’s Annual Report 2003.

5. ANNUAL GENERAL MEETING

At the AGM, Ordinary Resolutions will be proposed to approve the Share Repurchase Mandate, the Share Issue Mandate, the extension of the Share Issue Mandate and a Special Resolution will be proposed to approve the amendments to the Articles of Association. The Company’s Annual Report 2003 which contains the AGM Notice has been despatched to the Shareholders together with this circular.

6. ACTIONS TO BE TAKEN

A form of proxy for use at the AGM is contained in the Company’s Annual Report 2003. 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 registered office of the Company in accordance with the instructions printed thereon not less than 48 hours before the time fixed for holding the AGM. Completion and deposit of the form of proxy will not preclude you from attending and voting at the AGM if you so wish.

7. PROCEDURE FOR DEMAND A POLL

Pursuant to the existing Article 73 of the Articles of Association, at any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands unless a poll is (before or on the declaration of the result of the show of hands) demanded:– (a) by the Chairman; or

• (b) by at least three members present in person or by proxy for the time being entitled to vote at the meeting; or

• (c) by any member or members present in person or by proxy and representing not less than one-tenth of the total voting rights of all the members having the right to vote at the meeting; or

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LETTER FROM THE BOARD

• (d) by any member or members present in person or by proxy and holding shares in the Company conferring a right to vote at the meeting being shares on which an aggregate sum has been paid up equal to not less than one-tenth of the total sum paid up on all the shares conferring that right.

8. RECOMMENDATION

The Directors believe that the Share Repurchase Mandate, the Share Issue Mandate, the extension of the Share Issue Mandate and the proposed amendments to the Articles of Association are in the interests of the Company and the Shareholders. Accordingly, the Directors recommend you to vote in favour of the relevant resolutions to be proposed at the AGM.

Yours faithfully, By order of the Board of Directors Wing Shan International Limited HE Haochang Chairman & Managing Director

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EXPLANATORY STATEMENT

APPENDIX

The appendix serves as an explanatory statement, as required by the Listing Rules, to provide requisite information to you for your consideration of the Share Repurchase Mandate and also constitutes the memorandum as required under Section 49BA(3) of the Companies Ordinance.

1. LISTING RULES

The Listing Rules permit companies whose primary listings are on the Stock Exchange to repurchase their shares on the Stock Exchange or on any other stock exchange on which the shares of the companies may be listed and recognised for the purpose by the Securities and Futures Commission of Hong Kong and the Stock Exchange subject to certain restrictions, the most important of which are summarized below:

• (a) The shares proposed to be purchased by the company are fully-paid up.

• (b) The company has previously sent to its shareholders an explanatory statement complying with the Listing Rules.

• (c) The shareholders of the company have given a specific approval or a general mandate to the directors of the company to make such purchase, by way of an ordinary resolution which complies with the Listing Rules and which has been passed at a general meeting of the company duly convened and held and the company has delivered a copy of such resolution, together with the necessary supporting documentation, to the Stock Exchange in accordance with the Listing Rules.

2. SHARE CAPITAL

As at the Latest Practicable Date, the issued share capital of the Company comprised 829,318,244 Shares.

Subject to the passing of the Ordinary Resolution No.5 set out in the AGM Notice and on the basis that no further Shares are issued or repurchased prior to the AGM, the Company would be allowed under the Share Repurchase Mandate to repurchase up to a limit of 82,931,824 Shares.

3. REASON FOR REPURCHASES

Repurchases of Shares will only be made when the Directors believe that such a repurchase will benefit the Company and its shareholders. Such repurchases may, depending on market Conditions and funding arrangements at the time, lead to an enhancement of the net value of the Company and its assets and/or its earnings per Share.

4. FUNDING OF REPURCHASES

In repurchasing Shares, the Company may only apply funds legally available for such purpose in accordance with its Articles of Association, the Listing Rules and the applicable laws of Hong Kong. Any repurchases will be made out of funds of the Company legally permitted to be utilised in this connection, being distributable profits of the Company or the proceeds of a fresh issue of shares made for such purpose.

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EXPLANATORY STATEMENT

APPENDIX

There might be material adverse impact on the working capital or gearing position of the Company (as compared with the position disclosed in the audited accounts contained in the Annual Report for the year ended 31 December 2003) in the event that the proposed repurchase of Shares was to be carried out in full at any time during the proposed repurchase period. However, the Directors do not propose to exercise the Share Repurchase Mandate to such extent as would, in the circumstances, have a material adverse effect on the working capital requirements of the Company or the gearing levels which in the opinion of the Directors are from time to time appropriate for the Company.

5. SHARE PRICES

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

		Shares
	Highest		Lowest
	HK$		HK$
2003
April	0.350		0.228
May	0.435		0.295
June	0.435		0.360
July	0.520		0.365
August	0.640		0.480
September	0.600		0.405
October	0.510		0.420
November	0.480		0.415
December	0.500		0.400
2004
January	0.540		0.460
February	0.640		0.465
March	0.580		0.480

6. GENERAL

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

If as a result of a share repurchase, 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 Takeovers Code. As a result, a shareholder or a group of shareholders acting in concert, depending on the level of increase of the shareholders’ 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.

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EXPLANATORY STATEMENT

APPENDIX

As at the Latest Practicable Date, (i) Foshan Development Company Limited (“Foshan Development”) together with parties acting in concert with it are beneficially interested in 321,117,079 Shares representing approximately 38.72 per cent. of the issued share capital of the Company; and (ii) Madam YIP Siu Chun together with her associates (as defined in the Listing Rules) are beneficially interested in 290,196,037 Shares representing approximately 34.99 per cent. of the issued share capital of the Company. In the event that the Share Repurchase Mandate were exercised in full, the shareholding of Foshan Development together with parties acting in concert with it and Madam YIP Siu Chun together with her associates would be increased to approximately 43.02 and 38.88 per cent. of the issued share capital of the Company respectively, assuming that the 321,117,079 Shares and 290,196,037 Shares held as mentioned above remains unchanged. Then, each of Foshan Development together with the parties acting in concert with it and Madam YIP Siu Chun together with her associates could be required under Rule 26 of the Takeovers Code to make a mandatory offer in respect of all the issued shares of the Company by reason of such increase. Save as aforesaid, the Directors are not aware of any consequences which may arise under the Takeovers Code as a consequence of any purchases made under the Share Repurchase Mandate. Further, such full exercise of the Share Repurchase Mandate would cause the Shares held in the hands of the public to fall below the minimum requirement to approximately 18.10 per cent. of the issued share capital of the Company. The Directors will use their best endeavours to ensure that the Share Repurchase Mandate will not be exercised to the extent that the number of Shares held by the public would be reduced to less than 25 per cent. of the issued share capital of the Company. The Directors have no intention to exercise the Share Repurchase Mandate which may result in possible mandatory offer being made under the Takeovers Code.

None of the Directors nor, to the best of their knowledge having made all reasonable enquiries, any of their associates (as defined in the Listing Rules), presently intend to sell any Shares to the Company under the Share Repurchase Mandate in the event that the Share Repurchase Mandate is approved by the Shareholders.

The Company has not been notified by any connected persons (as defined in the Listing Rules) that they have a present intention to sell any Shares, or that they have undertaken not to sell any Shares held by them to the Company in the event that the Share Repurchase Mandate is approved by the Shareholders.

7. SHARE REPURCHASE MADE BY THE COMPANY

During the six months preceding the Latest Practicable Date, there was no repurchase of its Shares made by the Company (whether on the Stock Exchange or otherwise).

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