Styland Holdings Limited — Proxy Solicitation & Information Statement 2004

Jul 30, 2004

THIS DOCUMENT 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 or transferred all your shares in Tak Sing Alliance Holdings Limited, you should at once hand this circular together with the enclosed form of proxy to the purchaser(s) or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser(s) 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.

TAK SING ALLIANCE HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 126)

GENERAL MANDATES TO REPURCHASE SHARES AND

TO ISSUE NEW SHARES OF THE COMPANY

PROPOSED AMENDMENT TO THE BYE-LAWS OF THE COMPANY

AND

RE-ELECTION OF DIRECTOR

A notice convening the Annual General Meeting of Tak Sing Alliance Holdings Limited to be held at Carrianna (Chiu Chow) Restaurant, 1st Floor, 151 Gloucester Road, Wanchai, Hong Kong on Thursday, 26 August 2004 at 11:00 a.m. is set out in the 2004 Annual Report. Whether or not you are able to attend the meeting in person, you are requested to complete and return the accompanying form of proxy in accordance with the instructions printed thereon to the Company’s Branch Registrars, Tengis Limited of G/F, Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for the holding of the meeting or any adjournment thereof. Completion and return of the form of proxy shall not preclude you from attending and voting at the meeting or any adjourned meeting should you so desire.

29 July 2004

CONTENTS

	Page
Responsibility Statement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	ii
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
Introduction
General Mandate to Repurchase Shares
General Mandate to Issue New Shares
Amendments to the Bye-Laws
Annual General Meeting
Proxy Arrangement
Recommendation
Appendix I – Explanatory statement for the Repurchase Mandate . . . . . . . . . . . . . . . . . . . . . . .	7
Appendix II – Notice of Annual General Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11

– i –

RESPONSIBILITY STATEMENT

This circular includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Group. The Directors collectively and individually accept full responsibility for the accuracy of the information contained in this circular and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts the omission of which would make any statement contained herein misleading.

– ii –

DEFINITIONS

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

• “Annual General Meeting”

the annual general meeting of the Company convened to be held at Carrianna (Chiu Chow) Restaurant, 1st Floor, 151 Gloucester Road, Wanchai, Hong Kong on Thursday, 26 August 2004 at 11:00 a.m.

• “associate(s)”

has the meanings ascribed to it under the Listing Rules

• “Company”

Tak Sing Alliance Holdings Limited, an exempted company incorporated in Bermuda with limited liability, the share of which are listed on the main board of the Stock Exchange

• “Directors”

the directors of the Company

• “General Mandate”

• a general mandate to allot, issue and deal with new shares not exceeding 20% of the aggregate nominal amount of the issued share capital of the Company as at the date of passing of the ordinary resolution in relation thereof

• “Hong Kong” the Hong Kong Special Administrative Region of The People’s Republic of China

• “Latest Practicable Date” 23 July 2004, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained in this circular

• “Listing Rules”

the Rules Governing the Listing of Securities on the Stock Exchange

• “Repurchase Mandate”

• a general and unconditional mandate to repurchase issued and fully paid up shares in the share capital of the Company up to 10% of the aggregate nominal amount of the issued share capital of the Company as at the date of passing of the resolution

• “SFO”

• the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)

• “Share(s)”

the ordinary share(s) of HK$0.10 each in the share capital of the Company

• “Shareholder(s)”

shareholder(s) of the Company

• “Stock Exchange”

The Stock Exchange of Hong Kong Limited

– 1 –

DEFINITIONS

“Takeover Code” The Hong Kong Code on Takeovers and Mergers “HK$” Hong Kong dollars, the lawful currency of Hong Kong “%” per cent.

– 2 –

LETTER FROM THE BOARD

TAK SING ALLIANCE HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

Executive Directors: Ma Kai Cheung, Ph.d, BBS (Chairman) Ma Kai Yum (Managing Director) Ng Yan Kwong

Non-Executive Director: Yip Hing Chung, BBS, MBE, JP

Independent Non-Executive Directors: Lo Ming Chi, Charles, JP Yau Wing Keung Lo Man Kit, Sam

Registered Office: Canon’s Court 22 Victoria Street Hamilton HM12 Bermuda

Principal Place of Business in Hong Kong: 26th Floor, Phase II Wyler Centre 200 Tai Lin Pai Road Kwai Chung New Territories Hong Kong 29 July 2004

To the Shareholders

GENERAL MANDATES TO REPURCHASE AND ISSUE SHARES, PROPOSED AMENDMENTS TO THE BYE-LAWS AND RE-ELECTION OF DIRECTOR

Dear Sir or Madam,

INTRODUCTION

The purpose of this circular is to give you information regarding the following resolutions to be proposed at the Annual General Meeting to enable the Shareholders to make an informed decision on whether to vote for or against the resolutions.

The resolutions include (i) granting to the Directors the Repurchase Mandate; (ii) granting to the Directors the General Mandate; (iii) granting to the Directors a general and unconditional mandate to issue shares not exceeding the aggregate nominal amount of share capital so repurchased pursuant to the Repurchase Mandate; (iv) approving the amendments to the Bye-laws to align with the amended Listing Rules which have become effective on 31 March, 2004 and the SFO which has become effective on 1 April, 2003; and (v) to re-elect director of the Company.

– 3 –

LETTER FROM THE BOARD

GENERAL MANDATE TO REPURCHASE SHARES

At the Annual General Meeting, an ordinary resolution will be proposed to grant the Directors a general and unconditional mandate to exercise all powers of the Company to repurchase issued shares in the share capital of the Company subject to the criteria set out in this circular. In particular, Shareholders should note that the maximum number of shares that may be repurchased pursuant to the Repurchase Mandate will be such number which represents 10% of the aggregate nominal amount of the issued share capital of the Company as at the date of passing of the resolution subject to the Listing Rules. The Repurchase Mandate will end on the earliest of the date of the next annual general meeting, the date by which the next annual general meeting of the Company is required to be held by law or the Bye-laws, or the date upon which such authority is revoked or varied by ordinary resolution of the Company in general meeting.

In accordance with the Listing Rules, the Company is required to send to the Shareholders an explanatory statement, which is set out in Appendix I of this circular.

GENERAL MANDATE TO ISSUE NEW SHARES

At the Annual General Meeting, an ordinary resolution will be proposed to grant to the Directors a general and unconditional mandate to allot, issue and deal with further shares representing up to 20% of the aggregate nominal amount of the issued share capital of the Company as at the date of passing of the resolution.

Subject to the passing of the aforesaid ordinary resolutions of the Repurchase Mandate and the General Mandate, an ordinary resolution will also be proposed to authorise the Directors to issue new shares in the share capital of the Company in an amount not exceeding the aggregate nominal amount of the shares in the capital of the Company purchased pursuant to the Repurchase Mandate.

AMENDMENTS TO THE BYE-LAWS

The Stock Exchange has revised the Listing Rules and the amended Listing Rules have become effective on 31 March 2004. In addition, the SFO has become effective on 1 April 2003. The Board therefore proposes to make certain amendments to the Bye-laws in compliance with the new Listing Rules and at the same time bring the Bye-laws up to date with the SFO.

It is proposed that the definition of “recognised clearing house” within the meeting of the SFO will be adopted.

The corporate governance issues including, among other things, disclosure of information on proposed directors before election at general meeting and notices to be given in relation thereto, and voting of members at general meeting and of directors at board meeting on any matter in which the directors and/or his associate(s) have a material interest as required under Appendix 3 to the new Listing Rules will be incorporated in the proposed amendments to the Bye-laws.

– 4 –

LETTER FROM THE BOARD

At the Annual General Meeting, a special resolution will be proposed to approve the proposed amendments to the Bye-laws. Details of the proposed amendments to the Bye-laws is set out in the notice of the Annual General Meeting in Appendix II of this circular.

ANNUAL GENERAL MEETING

A notice of the Annual General Meeting is set out in Appendix II to this circular. At the Annual General Meeting, in addition to the ordinary business of the meeting, resolutions will be proposed to approved the Repurchase Mandate, the General Mandate and amendments to the Bye-laws respectively.

The following are the particulars of the Directors (as required by the Listing Rules) proposed to be elected at the Annual General Meeting to be held on 26 August 2004.

Mr. Ng Yan Kwong, aged 43, is Executive Director, Chief Financial Officer and Company Secretary of the Group. He holds a Bachelor’s degree in Commerce of the University of Newcastle in Australia and is a member of the Hong Kong Society of Accountants and the CPA Australia. Before joining the Group in 2000, Mr. Ng was the finance director of an USA beverage company operated in China. Mr. Ng has more than 10 years corporate and financial management experience with multinational consumer product companies in South East Asia and Greater China region. He also has substantial working experience in public accountancy practice with a major international accounting firm.

Mr. Ng has no relationship with any directors, chief executive, substantial or controlling shareholders of the Company. Mr. Ng has personal interest of 4,000,000 shares of the Company, representing 0.54% of the issued share capital of the Company, within the meaning of Part XV of the SFO. The emoluments of Mr. Ng is determined by the Board from time to time with reference to the Company’s performance and profitability, as well as remuneration benchmark in the industry and the prevailing market conditions. Mr. Ng is entitled to an annual director’s fee of HK$100,000. Mr. Ng had not held any directorship in any other listed companies in Hong Kong during the last three years preceding the Latest Practicable Date. The terms of appointment of Mr. Ng is not specified in the service contract and will expire when he is required to retire by rotation in accordance with the Company’s Bye-laws.

Mr. Yip Hing Chung, BBS, MBE, JP, aged 82, is Non-Executive Director of the Company. He joined the Group in 1994. Mr. Yip is Chairman and Managing Director of Gemmy Development Company Limited. Mr Yip is a committee member of the Political Consultative Conference of Guangdong Province. He also serves as a President of the Hong Kong & Kowloon Chiu Chow Public Association, Honorary Permanent President of the Hong Kong Chiu Chow Chamber of Commerce Limited, Vice-President of the Chinese Manufacturers Association of Hong Kong and a member of the executive committee of the New Territories Heung Yee Kuk. Mr Yip is also a member of the First and Second Nominating Committee of the Special Administrative Region of Hong Kong, a committee member of the National Industrial and Commercial Association (Guangdong Province) and an Advisory Committee Member of The Special Economic Zone of Shantou.

Mr. Yip has no relationship with any directors, chief executive, substantial or controlling shareholders of the Company. He has a personal interest of 1,770,000 shares of the Company, representing 0.24% of the issued share capital of the Company, within the meaning of Part XV of the SFO. The emoluments of Mr. Yip is determined by the Board from time to time with reference to the Company’s performance and profitability, as well as remuneration benchmark in the industry and the prevailing market conditions. Mr. Yip is entitled to an annual director’ fee of HK$100,000. Mr. Yip was an Independent Non-Executive Director of K. Wah Construction Materials Limited during the last three years preceding the Latest Practicable Date. The terms of appointment of Mr. Yip is not specified in the service contract and will expire when he is required to retire by rotation in accordance with the Company’s Bye-laws.

– 5 –

LETTER FROM THE BOARD

Mr. Lo Man Kit, Sam , aged 43, Independent Non-Executive Director of the Company. Mr. Lo has been an Independent Non-executive Director of the Company since July 2004. He is a practising solicitor in Hong Kong and the Senior Partner of Messrs. C.C. Lee & Co., a law firm established for over 40 years. He has about 20 years of extensive experience in the areas of conveyancing, banking and commercial law. He is also admitted as solicitor in England and Singapore.

Mr. Lo has no relationship with any directors, chief executive, substantial or controlling shareholders of the Company. Mr. Lo does not have any interest in the Company’s shares within the meaning of Part XV of the SFO. Mr. Lo had not held any directorship in any other listed companies in Hong Kong during the last three years preceding the Latest Practicable Date. The emoluments of Mr. Lo is determined by the Board from time to time with reference to the Company’s performance and profitability, as well as remuneration benchmark in the industry and the prevailing market conditions. The Board has not yet determined the director fee of Mr. Lo. The terms of appointment of Mr. Lo is not specified in the service contract and will expire when he is required to retire by rotation in accordance with the Company’s Byelaws.

PROXY ARRANGEMENT

A form of proxy for use at the Annual General Meeting is enclosed with the 2004 Annual Report. To be valid, the form of proxy must be completed in accordance with the instructions printed thereon and deposited, 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 at the Company’s Share Registrars in Hong Kong, Tengis Limited, at G/F, Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong not less than 48 hours before the time appointed for holding the meeting. Completion and delivery of the form of proxy will not prevent you from attending and voting at the Annual General Meeting.

Pursuant to Bye-law 70, a resolution put to 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 or on the withdrawn of any other demand for a poll) demanded:

• (i) by the Chairman of the meeting; or

• (ii) by at least three shareholders present in person or by a duly authorised corporate representative or by proxy for the time being entitled to vote at the meeting, or

• (iii) by any shareholder or shareholders present in person or by a duly authorised corporate representative or by proxy and representing not less than one-tenth of the total voting rights of all the shareholders having the right to vote at the meeting; or

• (iv) by any shareholder or shareholders present in person or by a duly authorised representative 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 no less than one-tenth of the total sum paid up on all the shares conferring that right.

RECOMMENDATION

The Directors believe that the granting of the Repurchase Mandate, the granting of the General Mandate to issue new Shares and the extension thereof and the proposed amendments to the Bye-laws are in the best interest of the Company and the Shareholders as a whole. Accordingly, the Directors recommend you to vote in favour of the relevant resolutions to be proposed at the Annual General Meeting.

By Order of the Board Ma Kai Cheung Chairman

– 6 –

APPENDIX I EXPLANATORY STATEMENT FOR THE REPURCHASE MANDATE

This is an explanatory statement given to all Shareholders relating to a resolution to be proposed at the Annual General Meeting for approving the Repurchase Mandate. This explanatory statement contains all the information required pursuant to Rule 10.06(1)(b) and other relevant provisions of the Listing Rules which is set out as follows:

1. LISTING RULES

The Listing Rules permit companies whose primary listing are on the Stock Exchange to repurchase their fully paid up securities on the Stock Exchange subject to certain restrictions, the most important of which are summarised below.

(a) Shareholders’ approval

The Listing Rules provide that all proposed repurchases of securities by a company with its primary listing on the Stock Exchange must be approved in advance by an ordinary resolution of shareholders, either by way of a general mandate or by a specific approval of a particular transaction.

(b) Source of Funds

Repurchases must be made out of funds which are legally available for such purpose in accordance with the Memorandum of Association, Bye-laws of the Company and the laws of Bermuda.

(c) Trading Restrictions

A maximum of 10% of the issued share capital as at the date of passing the relevant resolution may be repurchased on the Stock Exchange. No shares may be repurchased unless they are fully paid up.

2. SHARE CAPITAL

As at the Latest Practicable Date, the issued share capital of the Company was 738,587,219 Shares of HK$0.10 each.

Subject to the passing of the ordinary resolution granting the Repurchase Mandate, the Company would be allowed under the Repurchase Mandate to repurchase a maximum of 73,858,722 Shares representing 10% of the issue share capital of the Company which are fully paid-up on the basis that no further shares will be issued or repurchased prior to the date of the Annual General Meeting.

– 7 –

APPENDIX I EXPLANATORY STATEMENT FOR THE REPURCHASE MANDATE

3. REASONS FOR SHARE REPURCHASE AND ISSUE NEW SHARES

The Directors have no present intention to issue new Shares. However, the Directors believe that the general mandate to issue new shares provides flexibility for the Company to raise fund, if necessary and would be beneficial to the Company and its Shareholders.

Although the Directors have no present intention of repurchasing any Shares, they believe that the flexibility afforded by the Repurchase Mandate would be beneficial to the Company and its shareholders. Trading conditions on the Stock Exchange have sometimes been volatile in recent years. At any time in the future when Shares are trading at a discount to their underlying value, the ability of the Company to repurchase Shares will be beneficial to those Shareholders who retain their investment in the Company since their percentage interest in the assets of the Company would increase in proportion to the number of Shares repurchased by the Company and thereby resulting in an increase in net assets and/or earnings per Share of the Company. Such repurchases will only be made when the Directors believe that such repurchases will benefit the Company and the Shareholders.

4. FUNDING OF REPURCHASES

The Directors propose that repurchases of Shares under the Repurchase Mandate in these circumstances would be financed from the Company’s internal resources.

In repurchasing Shares, the Company may only apply funds legally available for such purpose in accordance with the Memorandum of Association, Bye-laws of the Company, and the laws of Bermuda.

The Company is empowered by its Memorandum of Association and Bye-laws to purchase its Shares. Bermuda law provides that the amount of capital paid in connection with a share repurchase may only be paid out of either the capital paid up on the relevant shares, or the funds of the Company that would otherwise be available for dividend or distribution or the proceeds of a fresh issue of shares made for such purpose. The amount of premium payable on repurchase may only be paid out of funds of the Company that would otherwise be available for dividend or distribution or out of the share premium account of the Company.

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 March 2004) 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 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.

– 8 –

APPENDIX I EXPLANATORY STATEMENT FOR THE REPURCHASE MANDATE

5. SHARE PRICES

The highest and lowest prices at which Shares of the Company were traded on the Stock Exchange during each of the previous 12 months were as follows:

		Shares
	Highest		Lowest
	HK$		HK$
2003
July	0.300		0.227
August	0.300		0.240
September	0.330		0.270
October	0.300		0.270
November	0.290		0.270
December	0.285		0.260
2004
January	0.335		0.260
February	0.365		0.285
March	0.350		0.285
April	0.315		0.280
May	0.290		0.260
June	0.275		0.250
July (up to Latest Practicable Date)	0.330		0.270

6. UNDERTAKING OF THE DIRECTORS

The Directors have undertaken to the Stock Exchange to exercise the powers of the Company to make purchases under the Repurchase Mandate in accordance with the Listing Rules and laws of Bermuda.

None of the Directors nor, to the best of their knowledge having made all reasonable enquiries, any of their associates, presently intends to sell Shares to the Company under the Repurchase Mandate in the event that the proposal of the Repurchase Mandate is approved by the Shareholders.

The Company has not been notified by any connected persons of the Company 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 proposal of the Repurchase Mandate is approved by the Shareholders.

7. DISCLOSURE OF INTERESTS

Pursuant to Rule 32 of the Takeover Code, if as a result of a Share repurchase by the Company, a substantial Shareholder’s proportionate interest in the voting rights of the Company increases, such increase will be treated as an acquisition for the purpose of the Takeover Code. Accordingly, a Shareholder, or group of Shareholders acting in concert, could obtain or consolidate control of the Company and become obliged to make a mandatory offer in accordance with Rule 26 of the Takeover Code.

– 9 –

APPENDIX I EXPLANATORY STATEMENT FOR THE REPURCHASE MANDATE

As at the Latest Practicable Date, Ma Kai Cheung together with his associates and Ma Kai Yum together with his associates, Directors of the Company, had direct and/or deemed interests in 296,739,025 shares and 103,901,040 shares representing approximately 40.18% and 14.07% of the Shares issued by the Company respectively.

In the event that the Directors exercised in full the power to repurchase Shares of the Company in accordance with the terms of the ordinary resolution to be proposed at the Annual General Meeting, the total interests of Ma Kai Cheung together with his associates and Ma Kai Yum together with his associates in the Shares of the Company would be increased to approximately 44.64% and 15.63% of the issued Shares of the Company respectively. As such, the increase in Ma Kai Cheung’s proportionate interest in the issued Shares of the Company will give rise to an obligation for him to make a mandatory offer under Rule 26 of the Takeover Code. The Directors will be cautioned in exercising the Repurchase Mandate and have no intention to exercise the Repurchase Mandate to such extent which would result in Ma Kai Cheung becoming obliged to make a mandatory offer. In addition, the Directors also have no intention to repurchase Shares which would result in the amount of Shares held by the public being reduced to less than 25%.

8. PURCHASE OF SECURITIES MADE BY THE COMPANY

No purchase of Shares has been made by the Company during the last six months (whether on the Stock Exchange or otherwise).

– 10 –

NOTICE OF ANNUAL GENERAL MEETING

APPENDIX II

TAK SING ALLIANCE HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 126)

NOTICE IS HEREBY GIVEN that an Annual General Meeting of Tak Sing Alliance Holdings Limited (the “Company”) will be held at Carrianna (Chiu Chow) Restaurant, 1st Floor, 151 Gloucester Road, Wan Chai, Hong Kong on Thursday, 26 August 2004 at 11:00 a.m. for the following purposes:

1. To receive and consider the audited Financial Statements and the Reports of the Directors and of the Auditors for the year ended 31 March 2004.

2. To declare a final dividend for the year ended 31 March 2004.

3. To re-elect Directors and to authorise the Board of Directors to fix Directors’ remuneration.

4. To re-appoint Auditors and to authorise the Board of Directors to fix their remuneration.

5. As special business, to consider and, if thought fit, pass with or without amendments, the following resolutions as an Ordinary Resolutions:

ORDINARY RESOLUTIONS

• A. “THAT

• (a) Subject to paragraph (b) below, the exercise by the Directors during the Relevant Period of all the powers of the Company to purchase issued shares of HK$0.10 each in the capital of the Company, subject to and in accordance with the applicable laws and the requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited as amended from time to time be and is hereby generally and unconditionally approved;

• (b) the aggregate nominal amount of shares to be purchased pursuant to the approval in paragraph (a) above shall not exceed 10% of the aggregate nominal amount of the share capital of the Company in issue on the date of this Resolution, and the said approval shall be limited accordingly; and

• (c) for the purpose of this Resolution, “Relevant Period” means the period from the date of passing of this Resolution until whichever is the earlier of:

  • (i) the conclusion of the next Annual General Meeting of the Company;

– 11 –

NOTICE OF ANNUAL GENERAL MEETING

APPENDIX II

  - (ii) the revocation or variation of the authority given under this Resolution by Ordinary Resolution of the shareholders in general meeting; and

  - (iii) the expiration of the period within which the next Annual General Meeting of the Company is required by the Bye-laws of the Company or the laws of Bermuda to be held.”.

• B. “THAT

• (a) subject to sub-paragraph (c) of this Resolution, the exercise by the Directors during the Relevant Period (as hereinafter defined) of all the powers of the Company to allot, issue or otherwise deal with additional shares of the Company and to make or grant offers, agreements and options which might require the exercise of such powers be and is hereby generally and unconditionally approved;

• (b) the approval in sub-paragraph (a) of this Resolution shall authorise the Directors during the Relevant Period to make or grant offers, agreements and options which might require the exercise of such power after the end of the Relevant Period;

• (c) the aggregate nominal amount of share capital allotted or agreed conditionally or unconditionally to be allotted (whether pursuant to an option or otherwise) by the Directors pursuant to the approval in sub-paragraph (a) of this Resolution, otherwise than pursuant to:

  • (i) a Rights Issue (as hereinafter defined);

  • (ii) the exercise of any option scheme or similar arrangement for the time being adopted for the grant or issue to officers and/or employees of the Company and/or any of its subsidiaries of shares or rights to acquire shares of the Company; and

  • (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 of the Company in accordance with the Bye-laws of the Company;

shall not exceed 20% of the aggregate nominal amount of the share capital of the Company in issue at the date of the passing of this Resolution, and the said approval shall be limited accordingly; and

• (d) for the purpose of this Resolution, “Relevant Period” means the period from the passing of this Resolution until whichever is the earlier of:

• (i) the conclusion of the next Annual General Meeting of the Company;

– 12 –

NOTICE OF ANNUAL GENERAL MEETING

APPENDIX II

• (ii) the revocation or variation of the authority given under this Resolution by Ordinary Resolution of the shareholders in general meeting; and

• (iii) the expiration of the period within which the next Annual General Meeting of the Company is required by the Bye-laws of the Company or the laws of Bermuda to be held.”;

“Rights Issue” means an offer of shares in the Company open for a period fixed by the Directors to holders of shares of the Company whose names appear on the register of members of the Company on a fixed record date in proportion to their then holdings of such shares (subject to such exclusions or other arrangements as the Directors may deem necessary or expedient in relation to fractional entitlements or having regards to any restrictions or obligations under the laws of, or the requirements of any recognised body or any stock exchange, in any territory outside Hong Kong)”.

• C. “ THAT conditional upon the passing of the Ordinary Resolutions no. 5A and 5B set out above, the general mandate granted to the Directors pursuant to resolution no. 5B be and is hereby extended by the addition thereto of an amount representing the aggregate nominal amount of the share capital repurchased by the Company under the authority granted in resolution no. 5A, provided that such amount shall not exceed 10% of the aggregate nominal amount of the share capital of the Company in issue at the date of the passing of this Resolution.”.

• As special business, to consider and, if thought fit, to pass with or without amendments, the following resolutions as special resolutions:

SPECIAL RESOLUTION

“ THAT the bye-laws (the “Bye-Laws”) of the Company be amended as follows:

• a. (i) by deleting the existing definition of “associates” in Bye-Law 1(A) and substituting therefor the following new definition:

  • “associate(s)” shall have the same meanings as in the rules of the stock exchange in the Relevant Territory as amended from time to time;

• (ii) by deleting the words “a recognised clearing house within the meaning of Section 2 of the Securities and Futures (Clearing Houses) Ordinance (Chapter 420 of the Laws of Hong Kong) or” in the definition of “Clearing House”;

• (iii) by adding the new definitions of “address”, “electronic”, “full financial statements” and “summarized financial statements” in Bye-Law 1(A):

  • “address” shall have the ordinary meaning given to it and shall include any facsimile number, electronic number or address or website used for the purposes of any communication pursuant to these ByeLaws;

– 13 –

NOTICE OF ANNUAL GENERAL MEETING

APPENDIX II

• “electronic”

shall mean relating to technology having electrical, digital, magnetic, wireless, optical electromagnetic or similar capabilities and such other meanings as given to it in the Electronic Transactions Act 1999 of Bermuda as may be amended from time to time;

• “full financial statements”

shall mean the financial statements that are required under section 87(1) of the Companies Act;

  - “summarized financial statements” shall have the meaning ascribed to them in section 87A(3) of the Companies Act.

• (iv) by deleting the existing definition of “Statutes” in Bye-law 1(A) and substituting therefore the following new definition:

  • “Statutes” shall mean the Companies Act, the Electronic Transactions Act 1999 of Bermuda, and every other act, as may be amended from time to time, for the time being in force of the Legislature of Bermuda applying to or affecting the Company, the Memorandum of Association and/or these presents.

• b. by deleting the existing Bye-Law 40(i) in its entirety and substituting therefor the following new Bye-Law 40(i):

• “40(i) such sum as the Board shall from time to time determine or, if the shares are listed on a stock exchange in the Relevant Territory, such sum shall not exceed the maximum fees prescribed by the stock exchange from time to time, has been paid.”;

• c. by re-numbering the existing Bye-Law 76 as new Bye-Law 76(A) and inserting the following new Bye-Law 76(B) immediately after the new Bye-Law 76(A):

• “76(B) Where the Company has knowledge that any shareholder is, under the rules of the appointed 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 shareholder in contravention of such requirement or restriction shall not be counted.”;

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• d. by deleting the existing Bye-Law 98(H) in its entirety and substituting therefor the following Bye-Law 98(H):

• “98(H) A Director shall not vote (nor be counted in the quorum) on any resolution of the Board approving any contract or arrangement or proposal in which he or any of his associate(s) is/are, to the knowledge of the Director, materially interested, and if he shall do so his vote shall not be counted (nor shall he be counted in the quorum for that resolution), but this prohibition shall not apply to any of the following matters namely:

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

  • (ii) any contract or arrangement for the giving by the Company of any security 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 and whether alone or jointly under a guarantee or indemnity or by the giving of security;

  • (iii) any contract or arrangement by the Director or his associate(s) to subscribe for shares or debentures or other securities of the Company to be issued pursuant to any offer or invitation to the shareholders or debenture or securities holders of the Company or to the public which does not provide the Director or his associate(s) any privilege not accorded to any other shareholders or debenture or securities holders of the Company or to the public;

  • (iv) any contract or arrangement concerning an offer of the 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 subunderwriting of the offer and/or for the purposes of making any representations, the giving of any covenants, undertakings or warranties or assuming any other obligations in connection with such offer;

  • (v) 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 by virtue only of his/ their interest in shares or debentures or other securities of the Company and/or his/their being the offeror(s) or one of the offerors

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or is/are interested in one of the offerors for the purchase or effective acquisition of such shares, debentures or other securities;

  - (vi) 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 shareholder or in which the Director or his associate(s) is/are beneficially interested in shares of that company, provided that the Director and any of his associates are not in aggregate beneficially interested in five (5) per cent. or more of the issued shares of any class of such company (or of any third company through which his interest or that of his associate(s) is derived) or of the voting rights;

  - (vii) any proposal or arrangement concerning the benefit of employees of the Company or its subsidiaries including the adoption, modification or operation of a pension fund or retirement, death or disability benefit scheme under which a Director or his associate(s) may benefit and which has been approved by or is subject to and conditional on approval by the relevant taxing authorities for taxation purposes or relates both to Directors, his associates and employees of the Company or of any of its subsidiaries and does not give the Director or his associate(s), as such any privilege not accorded to the class of persons to whom such scheme or fund relates; and

  - (viii) any proposal or arrangement concerning the adoption, modification or operation of any employees’ share scheme involving the issue or grant of options over shares or other securities by the Company to, or for the benefit of the employees of the Company or its subsidiaries under which the Director or his associate(s) may benefit.”;

• e. by deleting the existing Bye-Law 98(I) in its entirety and substituting therefor the following new Bye-Law 98(I):

• “98(I) A company shall be deemed to be a company in which a Director and/or his associate(s) own(s) five (5) per cent. or more of any class of the voting equity share capital of such company or of the voting rights of any class of shares of such company if and so long as (but only if and so long as) he and/ or his associates is (either directly or indirectly) the holder of or beneficially interested in five (5) per cent. or more of any class of the issued voting equity share capital of such company (or of any third company, other than the Company or any of its subsidiaries, through which his interest or that of any of his associates is derived) or of the voting rights of any class of shares of the company. 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 and/or his

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associate(s) is/are in reversion or remainder if and so long as some other person is entitled to receive the income thereof, any shares comprised in an authorised unit trust scheme in which the Director and/or his associate(s) is/ are interested only as a unit holder, and shares which carry no voting right at general meetings and no or nugatory dividend and return of capital rights.”;

• f. by deleting the existing Bye-Law 98(J) in its entirety and substituting therefor the following new Bye-Law 98(J):

• “98(J) Where a company (other than a company which is a wholly owned subsidiary of the Company) in which a Director and/or his associate(s) holds five (5) per cent. or more of any class of the voting equity share capital of such company or of the voting rights of any class of shares available to shareholders of the company is materially interested in a transaction, then that Director and/or his associate(s) shall also be deemed materially interested in such transaction.”;

• g. by deleting the existing Bye-Law 98(K) in its entirety and substituting therefor the following new Bye-Law 98(K):

• “98(K) 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) or his associate(s) or as to the entitlement of any Director (other than such Chairman) to vote or be counted in the quorum and such question is not resolved by his voluntarily agreeing to abstain from voting or not to be counted in the quorum, such question (unless it relates to the Chairman) shall be referred to the Chairman and his ruling in relation to such 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 such question shall be decided by a resolution of the Board (for which purpose the Chairman shall not be counted in the quorum and 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 the Chairman as known to him has not been fairly disclosed to the Board.”;

• h. by deleting the existing Bye-Law 103 in its entirety and substituting therefor the following new Bye-Law 103:

• “103. No person, other than a retiring Director, shall, unless recommended by the Board for election, be eligible for election to the office of Director at any general meeting, unless notice in writing of the intention to propose that person for election as a Director and notice in writing by that person 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

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period for lodgement of such notice(s) shall commence no earlier than the date after the despatch 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.”;

• i. By inserting the following words at the beginning of Bye-Law 162(B):

• “Subject to bye-law 162(C) below,”;

• j. By adding the following new Bye-Laws 162(C) and (D):

• “162(C) The Company may send summarized financial statements to members of the Company who have, in accordance with the Statutes and any applicable rules prescribed by The Stock Exchange of Hong Kong Limited, consented and elected to receive summarized financial statements instead of the full financial statements. The summarized financial statements must be accompanied by an auditor’s report and notice informing the member how to notify the Company that he elects to receive the full financial statements. The summarized financial statements, notice and auditor’s report must be sent not less than twenty-one days before the general meeting to those members that consented and elected to receive the summarized financial statements.”;

• “162(D) Subject to Section 88 of the Companies Act, the Company shall send the full financial statements to a member within seven days of receipt of the member’s election to receive the full financial statements.”;

• k. by deleting the existing Bye-Law 167 in its entirety and substituting therefor the following new Bye-Law 167(A) and (B):

• “167(A) (1) Except where otherwise expressly stated, any notice to be given to or by any person pursuant to these Bye-Laws shall be in writing or, to the extent permitted by the Statutes and any applicable rules prescribed by The Stock Exchange of Hong Kong Limited from time to time and subject to this Bye-Law, contained in an electronic communication. A notice calling a meeting of the Board need not be in writing.

  • (2) A notice in respect of any document (including a share certificate) may be served on or delivered to any member of the Company either personally or by sending it through the post in a prepaid envelope or wrapper addressed to such member at his registered address as appearing in the register or by leaving it at that address addressed to the member or by any other means authorised in writing by the member concerned or by publishing it by way of advertisement in at least one English language newspaper and one Chinese language newspaper

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circulating generally in the Hong Kong SAR. 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 sufficient notice to all the joint holders. Without limiting the generality of the foregoing but subject to the Statutes and any rules prescribed by The Stock Exchange of Hong Kong Limited from time to time, a notice or document may be served or delivered by the Company to any member by electronic means to such address as may from time to time be authorised by the member concerned or by publishing it on a computer network and notifying the member concerned, in such manner as he may from time to time authorise, that it has been so published.

     - (3) Any such notice or document may be served or delivered by the Company by reference to the register as it stands at any time not more than fifteen days before the date of service or delivery. No change in the register after that time shall invalidate that service or delivery. Where any notice or document is served or delivered to any person in respect of a share in accordance with these Bye-laws, no person deriving any title or interest in that share shall be entitled to any further service or delivery of that notice or document.”;

  - “167(B) (1) Any notice or document required to be sent to or served upon the Company, or upon any officer of the Company, may be sent or served by leaving the same or sending it through the post in a prepaid envelope or wrapper addressed to the Company or to such officer at the Head Office or Registered Office.

     - (2) The Board may from time to time specify the form and manner in which a notice may be given to the Company by electronic means, including one or more addresses for the receipt of an electronic communication, and may prescribe such procedures as they fit for verifying the authenticity or integrity of any such electronic communication. Any notice may be given to the Company by electronic means only if it is given in accordance with the requirements specified by the Board.”;

• l. by deleting the existing Bye-Law 169 in its entirety and substituting therefor the following new Bye-Law 169:

• “169. Any notice or other document, if sent by mail, postage prepaid, shall be deemed to have been served or delivered on the day following that on which the letter, envelope, or wrapper containing the same is put into the post. In proving such service it shall be sufficient to prove that the letter, envelope or wrapper

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containing the notice or document was properly addressed and put into the post as prepaid mail. Any notice or document not sent by post but left by the Company at the address of a member noted on the register shall be deemed to have been served or delivered on the day it was so left. Any notice or document, if sent by electronic means (including through any relevant system), shall be deemed to be have been given on the day following that on which the electronic communication was sent by or on behalf of the Company. Any notice or document served or delivered by the Company by any other means authorised in writing by the member concerned shall be deemed to have been served when the Company has carried out the action it has been authorised to take for that purpose. Any notice or other document published by way of advertisement in the Newspapers or in an appointed newspaper or posted on a computer network shall be deemed to have been served or delivered on the day it was so published or posted.”

1. To transact any other business.

By Order of the Board Ng Yan Kwong Company Secretary

Hong Kong, 29 July 2004

Notes:

1. The Register of Members will be closed from Monday, 23 August 2004 to Thursday, 26 August 2004 (both days inclusive), during which period no transfer of shares will be registered.

2. A member entitled to attend and vote at the Meeting is entitled to appoint one or more proxies to attend and vote on his/her behalf. A proxy need not be a Member of the Company. If more than one proxy is so appointed, the appointment shall specify the number and class of shares in respect of which each such proxy is so appointed.

3. To be valid, a form of proxy and the power of attorney or other authority, if any, under which it is signed, or a notarially certified copy of such power of attorney or authority, must be lodged with the Company’s Share Registrar in Hong Kong, Tengis Limited at G/F., Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong not less than 48 hours before the time appointed for holding the Meeting.

4. An explanatory statement containing further details regarding Resolution Nos. 5 to 6 above will be sent to shareholders shortly together with the 2004 annual report.

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