Sun Hing Vision Group Holdings Limited — Proxy Solicitation & Information Statement 2005

Jul 27, 2005

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 advisers.

If you have sold or transferred all your shares in Sun Hing Vision Group Holdings Limited, you should at once hand this circular, together with the enclosed form of proxy to the purchaser or other transferee or to the bank, stockbroker or other agent through whom the sale or transfer 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.

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SUN HING VISION GROUP HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code 125)

GENERAL MANDATES TO ISSUE NEW SHARES AND TO REPURCHASE SHARES AND PROPOSED AMENDMENTS TO THE BYE-LAWS AND NOTICE OF ANNUAL GENERAL MEETING

A notice convening the annual general meeting of Sun Hing Vision Group Holdings Limited to be held at Small Connaught Room, 1/F Mandarin Oriental, Hong Kong, 5 Connaught Road, Central, Hong Kong on Monday, 22 August 2005 at 10:00 a.m. is set out on pages 12 to 16 of this circular. Whether or not you intend to attend the meeting, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon as soon as possible and in any event not less than 48 hours before the time for holding the meeting or any adjournment thereof. Completion and return of the form of proxy shall not preclude you from attending and voting at the annual general meeting or any adjourned meeting should you so wish.

Hong Kong, 27 July 2005

CONTENTS

	Page
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
Share Issue Mandate and Repurchase Mandate . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Reasons for Repurchase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Funding of Repurchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Disclosure of Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Share Repurchase made by the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
Directors’ Undertaking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
Takeovers Code Consequences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
Market Prices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Shareholders’ Approval . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Proposed Amendments to Bye-laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Re-election of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
Responsibility Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
Procedures for Demand Poll . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
NOTICE OF ANNUAL GENERAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12

DEFINITIONS

“Annual General Meeting”	annual general meeting of the Company to be held at
	10:00 a.m. on Monday, 22 August 2005, notice of which
	is set out on pages 12 to 16 of this circular
“associates”	as defined in the Listing Rules
“Board”	board of Directors (or a duly authorised committee
	thereof)
“Bye-laws”	bye-laws of the Company
“Companies Act”	Companies Act 1981 of Bermuda
“Company”	Sun Hing Vision Group Holdings Limited, a company
	incorporated in Bermuda with limited liability, the
	securities of which are listed on the main board of the
	Stock Exchange
“Directors”	directors of the Company
“Group”	the Company and its subsidiaries
“Hong Kong”	Hong Kong Special Administrative Region of the
	People’s Republic of China
“Latest Practicable Date”	22 July 2005, being the latest practicable date prior to
	the printing of this circular for ascertaining certain
	information included herein
“Listing Rules”	Rules Governing the Listing of Securities on the Stock
	Exchange
“Repurchase Mandate”	a general and unconditional mandate proposed to be
	granted at the Annual General Meeting to the Directors
	to exercise all the powers of the Company to
	repurchase Shares
“SFO”	Securities and Futures Ordinance (Chapter 571 of the
	Laws of Hong Kong)
“Share Issue Mandate”	a general and unconditional mandate proposed to be
	granted at the Annual General Meeting to the Directors
	to exercise all the powers of the Company to issue,
	allot and otherwise deal with new Shares
“Shareholders”	holders of Shares

– 1 –

DEFINITIONS

“Shares” ordinary shares of HK$0.10 each in the capital of the Company “Stock Exchange” The Stock Exchange of Hong Kong Limited “Substantial Shareholder” any person who is entitled to exercise, or control the exercise of, 10% or more of the voting power at any general meeting of the Company “Takeovers Code” Code on Takeovers and Mergers “HK$” and “cents” Hong Kong dollars and cents respectively “%” per cent.

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LETTER FROM THE BOARD

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SUN HING VISION GROUP HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code 125)

Executive Directors: Ku Ngai Yung, Otis (Chairman) Ku Ka Yung (Deputy Chairman) Ku Ling Wah, Phyllis Tsang Wing Leung, Jimson Cheung Chiu Hung Chan Chi Sun Ma Sau Ching

Non-executive Directors: Ku Yiu Tung Lo Wa Kei, Roy Lee Kwong Yiu Wong Che Man, Eddy*

Principal office: 1001C, 10th Floor Sunbeam Centre 27 Shing Yip Street Kwun Tong Kowloon Hong Kong

Registered office: Clarendon House 2 Church Street Hamilton HM 11 Bermuda

• Independent

27 July 2005

To the shareholders of the Company

Dear Sir/Madam,

GENERAL MANDATES TO ISSUE NEW SHARES AND TO REPURCHASE SHARES AND PROPOSED AMENDMENTS TO THE BYE-LAWS AND NOTICE OF ANNUAL GENERAL MEETING

INTRODUCTION

The purpose of this circular is to provide you with information reasonably necessary to enable you to make a decision on whether to vote for or against the ordinary and

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LETTER FROM THE BOARD

special resolutions to be proposed at the Annual General Meeting which has been convened for the purpose of considering and if thought fit, approving, inter alia:

• (a) the grant of the Share Issue Mandate and Repurchase Mandate to the Directors to issue new Shares and repurchase Shares;

• (b) re-election of Directors; and

• (c) the proposed amendments to the Bye-laws.

A notice of the Annual General Meeting is set out on pages 12 to 16 of this circular.

SHARE ISSUE MANDATE AND REPURCHASE MANDATE

At the last general meeting of the Company held on 6 September 2004, the Directors were granted a general mandate to allot and issue Shares and a general mandate to repurchase Shares. These mandates will expire at the conclusion of the Annual General Meeting. The Directors propose to seek the approval of the Shareholders at the Annual General Meeting by way of passing ordinary resolutions for the granting of:

• (a) the Share Issue Mandate to issue Shares up to a maximum of 20% of the Shares in issue as at the date of passing of the relevant resolution; and

• (b) the Repurchase Mandate to repurchase Shares up to a maximum of 10% of the Shares and in issue as at the date of passing of the relevant resolution.

Whilst the Directors do not presently intend to repurchase any Shares, they believe that the flexibility afforded by the Repurchase Mandate, if the ordinary resolution granting it is passed, would be beneficial to the Company.

As at the Latest Practicable Date for determining such figures, the issued share capital of the Company was 257,039,200 Shares. Subject to the passing of the ordinary resolution approving the Repurchase Mandate and on the basis that no further Shares are issued or repurchased after Latest Practicable Date and up to the date of passing of such resolution, the Directors would be authorised to repurchase up to 25,703,920 Shares representing 10% of the issued share capital during the period up to the next annual general meeting in 2006 or the expiration of the period within which the next annual general meeting of the Company is required by law to be held or the revocation or variation of the Repurchase Mandate by an ordinary resolution of the Shareholders in general meeting of the Company, whichever occurs first. However, the Directors believe that such repurchase would not reduce the amount held by the public to less than 25% of the issued share capital of the Company.

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LETTER FROM THE BOARD

Reasons for Repurchase

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 the market conditions and funding arrangements at the time, lead to an enhancement of the value of the net assets of the Company and/or earnings and/or dividend per Share.

Funding of Repurchases

Repurchases pursuant to the Repurchase Mandate would be financed entirely from the Company’s available cash flow or working capital facilities. Any repurchases will be made out of funds of the Company legally permitted to be utilised in this connection in accordance with its Bye-laws and the laws of Hong Kong and applicable laws of Bermuda, including profits otherwise available for distribution.

Under Bermuda law, repurchases may only be effected out of the capital paid up on the repurchased Shares or out of funds of the Company otherwise available for dividend or distribution or out of the proceeds of a fresh issue of Shares made for the purpose. Any premium payable on a purchase over the par value of the Shares to be purchased must be provided for out of funds of the Company otherwise available for dividend or distribution or out of the Company’s share premium account.

There might be a material adverse impact on the working capital or gearing position of the Company (as compared with the position disclosed in its most recent published audited financial statements as at 31 March 2005) in the event that the Repurchase Mandate is exercised in full. 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.

Disclosure of Interests

None of the Directors, and to the best of their knowledge, having made all reasonable enquiries, none of their associates, has any present intention, if the Repurchase Mandate is exercised, to sell any Shares to the Company or its subsidiaries.

No connected person (as defined in the Listing Rules) has notified the Company that he has a present intention to sell any Shares to the Company, or that he has undertaken not to sell any Shares held by him to the Company, in the event that the Repurchase Mandate is granted by the Shareholders at the Annual General Meeting and is exercised.

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LETTER FROM THE BOARD

Share Repurchase made by the Company

There have been no repurchases of Shares made by the Company during the six months prior to the date of this document (whether on the Stock Exchange or otherwise).

Directors’ Undertaking

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

Takeovers Code Consequences

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 Takeovers Code. As a result, a Shareholder, or 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.

For the purpose of determining the relevant figures, as at the Latest Practicable Date, United Vision International Limited (“ United Vision ”), the single largest Shareholder, is holding 128,848,000 Shares representing approximately 50.13% of the entire issued Shares of the Company. Assuming the Repurchase Mandate is exercised in full and there is not any issue of new Shares by the Company, the shareholding of United Vision will be increased to 55.7% of the entire issued Shares of the Company and therefore no obligation would arise in accordance with Rule 26 of the Takeovers Code. Apart from United Vision, the Directors are not aware of any Shareholder, or group of Shareholders acting in concert who may become obliged to make a mandatory offer in accordance with Rule 26 of the Takeovers Code in the event that the Directors exercise the power to repurchase Shares pursuant to the Repurchase Mandate.

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LETTER FROM THE BOARD

Market Prices

The highest and lowest prices at which the Shares have been traded on the Stock Exchange during the 12 months preceding the Latest Practicable Date were as follows:

	Share	prices
	Highest	Lowest
	HK$	HK$
2004
July	3.725	3.650
August	3.800	3.600
September	3.700	3.550
October	3.650	3.600
November	3.675	3.500
December	3.800	3.600
2005
January	3.800	3.625
February	3.875	3.600
March	3.800	3.525
April	3.650	3.425
May	3.550	3.400
June	3.425	3.200
July (up to and including the Latest Practicable Date)	3.400	2.650

Shareholders’ Approval

All repurchases of securities by a company with its primary listing on the Stock Exchange must be approved in advance by an ordinary resolution, either by way of a general mandate or by specific approval in relation to a specific transaction.

PROPOSED AMENDMENTS TO BYE-LAWS

On 1 January 2005, the Listing Rules were amended by replacing the Code of Best Practice in Appendix 14 by a new Code on Corporate Governance Practices. Accordingly, the Directors proposed to amend the Bye-laws to reflect the changes required by this new Code on Corporate Governance Practices. An explanation of the proposed amendments to the existing Bye-Laws is set out as follows:

• (a) The Bye-laws will be amended so that in a general meeting, a poll will be demanded when it is so required under the Listing Rules;

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LETTER FROM THE BOARD

• (b) A new provision will be included to provide that if the aggregate proxies held by the chairman of a particular general meeting and the Directors account for 5% or more of the total voting rights at that meeting, and if on a show of hands in respect of any resolution, the meeting votes in the opposite manner to that instructed in those proxies, the chairman of the general meeting and/or any Director holding proxies as aforesaid shall demand a poll, unless it is apparent from the total proxies held by those persons that a vote taken on a show of hands; and

• (c) The Bye-laws will be amended so that every Director shall retire from office by rotation no later than the third annual general meeting of the Company after he was last elected or re-elected and Directors holding office as chairman or managing Director are also subject to retirement by rotation.

RE-ELECTION OF DIRECTORS

During the year under review, Mr. Wong Che Man, Eddy, an independent non-executive Director, was appointed with effect from 21 September 2004. According to Bye-law 86(2), he shall hold office only until the next following annual general meeting of the Company and shall then be eligible for re-election at that meeting. Accordingly, at the Annual General Meeting, he will retire and, being eligible, offer himself for re-election.

Also, in accordance with Bye-law 87(1), one-third of the Directors for the time being (or, if their number is not a multiple of three, the number nearest to but not greater than one-third) shall retire from office by rotation provided that notwithstanding anything herein, the chairman of the Board and/or the managing director of the Company shall not, whilst holding such office, be subject to retirement by rotation or be taken into account in determining the number of Directors to retire in each year. Accordingly, at the Annual General Meeting, Ms. Ku Ling Wah, Phyllis, Mr. Tsang Wing Leung, Jimson and Mr. Lo Wa Kei, Roy, shall retire and being eligible, each of them will offer himself/herself for re-election.

Brief biographies of Mr. Wong Che Man, Eddy, Ms. Ku Ling Wah, Phyllis, Mr. Tsang Wing Leung, Jimson and Mr. Lo Wa Kei, Roy are as follows.

Mr. Wong Che Man, Eddy , aged 45, has over 20 years of experience in the auditing and accounting profession. He is the sole proprietor of Eddy Wong & Co , Certified Public Accountants, and is also a fellow member of the Hong Kong Institute of Certified Public Accountants and the Association of Chartered Certified Accountants. Mr. Wong is also an independent non-executive director of Credit Card DNA Security System (Holdings) Limited.

Mr. Wong does not have, and is not deemed to have, any interests or short position in any shares, underlying shares or debentures of the Company and its associated corporations within the meaning of Part XV of the SFO. The Company entered into a service contract with Mr. Wong for a term of 3 years commencing on 21 September 2004 and continuing thereafter until terminated by not less than 3 months’ prior written notice

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LETTER FROM THE BOARD

served by either party. Mr. Wong is entitled to a monthly salary of HK$10,000 from the Company. The emoluments of Mr. Wong are determined by the Board. There is no other position held with the Company and other members of the Company’s group. Save as disclosed above, he has no previous experience including other directorships held in other listed company.

Ms. Ku Ling Wah, Phyllis , aged 40, is the executive Director responsible for the general administration including accounting, human resources management and treasury function of the Group in Hong Kong. She joined the Group in January 1988, and has more than 10 years of experience in the optical frame industry. She is the sister of Mr. Ku Ngai Yung, Otis and Mr. Ku Ka Yung, and the daughter of Mr. Ku Yiu Tung.

There is service contract signed between the Company and Ms. Ku is entitled to a current monthly salary of HK$29,840 from the Company. The emoluments of Ms. Ku are determined by the Board. Under the service agreement with the Company, the initial term is for 2 years commencing on 1 May 1999 and continuing thereafter until terminated by not less than 3 months’ written notice served by either party. The length or proposed length of service with the Company will be renewed year by year. Within the meaning of Part XV of the SFO, Ms. Ku has and is deemed to have interests in the shares or underlying shares of the Company and its associated corporations, particulars of which are set out on the annual report which will also be despatched to Shareholders together with this circular. Apart from that, Ms. Ku does not have any relationship with any Directors, senior management or Substantial or controlling shareholders of the Company. Ms. Ku is also the administration manager of Sun Hing Optical Manufactory Limited. Save as disclosed herein, Ms. Ku does not hold any other position with the Company and other members of the Company’s group. Save as disclosed above, she has no previous experience including other directorships held in other listed company.

Mr. Tsang Wing Leung, Jimson , aged 37, is the executive Director responsible for the Group’s manufacturing, purchasing and other logistics control activities. Mr. Tsang has over 10 years of experience in the optical frame industry. He joined the Group in February 1989 and assisted Mr. Ku Ngai Yung, Otis in the establishment and expansion of the Group’s production facilities in Dongguan, People’s Republic of China.

There is service contract signed between the Company and Mr. Tsang is entitled to a current monthly salary of HK$36,100 from the Company. The emoluments of Mr. Tsang are determined by the Board. Under the service agreement with the Company, the initial term is for two years commencing on 1 May 1999 and continuing thereafter until terminated by not less than 3 months’ written notice served by either party. The length or proposed length of service with the Company will be renewed year by year. Within the meaning of Part XV of the SFO, Mr. Tsang has and is deemed to have interests in the shares or underlying shares of the Company and its associated corporations, particulars of which are also set out on the Annual Report which will also be despatched to the Shareholders with this circular. Apart from the above, Mr. Tsang does not have any relationship with any Directors, senior management or Substantial or controlling shareholders of the Company. Mr. Tsang is also the product director of Sun Hing Optical Manufactory Limited.

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LETTER FROM THE BOARD

Save as disclosed herein, Mr. Tsang does not hold any other position with the Company and other members of the Company’s group. Save as disclosed above, he has no previous experience including other directorships held in other listed company.

Mr. Lo Wa Kei, Roy , aged 34, has over twelve years of experience in accounting and finance. He is a practicing certified public accountant in Hong Kong, and is also a member of the Hong Kong Institute of Certificated Public Accountants, a member of the Hong Kong Institute of Certified Public Accountants and a fellow of the Hong Kong Securities Institute. Mr. Lo was appointed as an independent non-executive Director of the Company on 1 May 1999.

Mr. Lo does not have, and is not deemed to have, any interests or short position in any shares, underlying shares or debentures of the Company and its associated corporations within the meaning of Part XV of the SFO. The Company entered into a service contract with Mr. Lo for a term of 3 years commencing on 20 September 2002 and continuing thereafter until terminated by not less than 3 months’ prior written notice served by either party. Mr. Lo is entitled to a monthly salary of HK$10,000 from the Company. The emoluments of Mr. Lo are determined by the Board. There is no other position held with the Company and other members of the Company’s group. Save as disclosed above, he has no previous experience including other directorships held in other listed company.

RESPONSIBILITY STATEMENT

This circular includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. 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 herein misleading.

ANNUAL GENERAL MEETING

The notice of Annual General Meeting is set out on pages 12 to 16 of this circular. A form of proxy for use at the Annual General Meeting is enclosed and whether you intend to be present at the Annual General Meeting, 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 limit fixed for holding the Annual General Meeting. Completion of the form of proxy and returning it to the Company will not preclude you from attending, and voting at, the Annual General Meeting if you so wish.

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LETTER FROM THE BOARD

Procedures for Demand Poll

At the Annual General Meeting, resolutions put to the vote of the meeting shall be decided on a show of hands unless (before or on the declaration of the result of the show of hands or on the withdrawal of any other demand for a poll) a poll is demanded:

• (a) by the chairman of such meeting; or

• (b) by at least three members present in person (or in the case of a member being a corporation by its duly authorised representative) or by proxy for the time being entitled to vote at the meeting; or

• (c) by a member or members present in person (or in the case of a member being a corporation by its duly authorised representative) or by proxy and representing not less than one-tenth of the total voting rights of all members having the right to vote at the meeting; or

• (d) by a member or members present in person (or in the case of a member being a corporation by its 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 not less than one-tenth of the total sum paid up on all shares conferring that right.

RECOMMENDATION

The Directors consider that the granting of the Share Issue Mandate and the Repurchase Mandate and the amendments to the existing Bye-laws are in the interests of and for the benefit of the Company and the Shareholders and accordingly the Directors recommend you to vote in favour of these resolutions to be proposed at the Annual General Meeting.

Yours faithfully,

For and on behalf of the Board

Ku Ngai Yung, Otis Chairman

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NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the Annual General Meeting of Sun Hing Vision Group Holdings Limited (the “ Company ”) will be held at Small Connaught Room, 1/F Mandarin Oriental, Hong Kong, 5 Connaught Road, Central, Hong Kong on Monday, 22 August 2005 at 10:00 a.m. for the following purposes:

As ordinary business:

1. To receive and consider the audited consolidated financial statements of the Company and its subsidiaries and the reports of the directors and auditors for the year ended 31 March 2005.

2. To re-elect retiring directors and to authorise the Board to fix the directors’ remuneration.

3. To re-appoint auditors and authorise the Board to fix their remunerations.

4. To declare a final dividend for the year ended 31 March 2005.

As special businesses:

1. To consider and, if thought fit, pass with or without modifications, the following resolution as an Ordinary Resolution:

ORDINARY RESOLUTION

• A. “ THAT :

• (a) subject to paragraph (c) of this Resolution, the exercise by the directors of the Company during the Relevant Period (as defined in paragraph (d) of this Resolution) of all the powers of the Company to allot, issue and deal with additional shares in the capital of the Company or securities convertible into such shares, options, warrants or similar rights to subscribe for any shares in the Company, and to make and grant offers, agreements and options which would or 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 authorise the directors of the Company during the Relevant Period to make and grant offers, agreements and options which would or 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 of the Company pursuant to the approval in paragraph (a) of this Resolution, otherwise than pursuant to the shares of the Company issued as a

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NOTICE OF ANNUAL GENERAL MEETING

result of a Rights Issue (as defined in paragraph (d) of this Resolution) or pursuant to the exercise of options under any Existing Share Option Scheme or similar arrangement or any scrip dividend or similar arrangement providing for the allotment of shares of the Company in lieu of the whole or part of the dividend on the shares of the Company in accordance with the Company’s Bye-laws, shall not exceed 20% of the aggregate nominal amount of the share capital of the Company in issue as at the date of 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 earliest of:

• (i) the conclusion of the next annual general meeting of the Company;

• (ii) the end of the period within which the next annual general meeting of the Company is required by the Bye-laws of the Company or any applicable law of Bermuda to be held; or

• (iii) revocation or variation of the authority given under this Resolution by an ordinary resolution of the shareholders of the Company in general meeting;

“Rights Issue” means an offer of shares in the capital of the Company open for a period fixed by the directors of the Company to the holders of shares 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 of the Company 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 recognised regulatory body or any stock exchange in, or in any territory outside, Hong Kong).”

• B. “ THAT :

• (a) subject to paragraph (b) of this Resolution, the exercise by the directors of the Company during the Relevant Period (as defined in paragraph (c) of this Resolution) of all the powers of the Company to repurchase its own shares on The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) or on any other stock exchange on which the securities of the Company may be listed and recognised by the Securities and Futures Commission and the

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NOTICE OF ANNUAL GENERAL MEETING

Stock Exchange for this purpose, subject to and in accordance with all applicable laws and requirements of the Rules Governing the Listing of Securities on the Stock Exchange or of any other stock exchange on which the securities of the Company may be listed as amended from time to time, be and is hereby generally and unconditionally approved;

  - (b) the aggregate nominal amount of shares of the Company to be repurchased by the Company pursuant to the approval mentioned in paragraph (a) of this Resolution during the Relevant Period shall not exceed 10% of the aggregate nominal amount of the share capital of the Company in issue as at the date of passing of this Resolution and the said approval shall be limited accordingly; and

  - (c) for the purposes of this Resolution the expression “Relevant Period” shall have the same meaning as assigned to it under Ordinary Resolution 5A(d) of this notice.”

• C. “ THAT conditional upon Resolutions 5A and 5B being passed, the aggregate nominal amount of shares in the capital of the Company which is repurchased by the Company under the authority granted to the directors as mentioned in Resolution 5B above shall be added to the aggregate nominal amount of share capital that may be allotted or agreed conditionally or unconditionally to be allotted by the directors of the Company pursuant to Resolution 5A, provided that the amount of share capital repurchased by the Company shall not exceed 10% of the total nominal amount of the share capital of the Company in issue on the date of this Resolution.”

• To consider, and if thought fit, pass with or without modifications, the following resolution as a Special Resolution:

SPECIAL RESOLUTION

• “ THAT the Bye-laws of the Company be amended in the following manner:

• (a) By inserting in the opening paragraph of Bye-law 66 the words “voting by way of poll is required by the rules of the Designated Stock Exchange or” immediately after the words “decided on a show of hands unless”;

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NOTICE OF ANNUAL GENERAL MEETING

• (b) By adding the following new Bye-law 66A immediately after Bye-law 66:

• “66A Notwithstanding any other provisions in these Bye-laws:

  • (a) if the aggregate proxies held by the chairman of a particular general meeting and the Directors account for 5 per cent. or more of the total voting rights at that general meeting, and

  • (b) if on a show of hands in respect of any resolution, the shareholders at the general meeting vote in the opposite manner to that instructed in the proxies referred to in (a) above,

the chairman of the general meeting and/or any Director holding the proxies referred to above shall demand a poll, Provided that if it is apparent from the total proxies held by the persons referred to in (a) above that a vote taken on a poll will not reverse the vote taken on a show of hands, then no poll shall be required.”

• (c) By deleting Bye-law 87(1) in its entirety and replacing it with the following:

• “87(1) Notwithstanding any other provisions in these Bye-laws, at each annual general meeting one-third of the Directors for the time being (or, if their number is not a multiple of three (3) the number nearest to but not less than one-third) shall retire from office by rotation provided that every Director (including those appointed for a specific term) shall retire from office by rotation no later than the third annual general meeting after he was last elected or reelected.”

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NOTICE OF ANNUAL GENERAL MEETING

• (d) By deleting the last sentence of Bye-laws 90 and replacing it with the following sentence:

“A Director appointed to an office under this Bye-law shall be subject to the same provisions as to rotation, resignation and removal as the other Directors of the Company, and he shall (subject to the provisions of any contract between him and the Company) ipso facto and immediately cease to hold such office if he shall cease to hold the office of Director for any cause.””

By Order of the Board YUNG Yun Sang, Simon Secretary

Hong Kong, 27 July 2005

Principal Office:

1001C, 10th Floor Sunbeam Centre 27 Shing Yip Street Kwun Tong Kowloon Hong Kong

Notes:

1. A member entitled to attend and vote at the meeting is entitled to appoint one or more proxies to attend and vote instead of him. A proxy need not be a member of the Company.

2. A form of proxy is enclosed. To be valid, this form of proxy, together with the power of attorney or other authority (if any) under which it is signed, or a certified copy of such power or authority, must be deposited at the principal office of the Company at 1001C, 10th Floor, Sunbeam Centre, 27 Shing Yip Street, Kwun Tong, Kowloon, Hong Kong not less than 48 hours before the time appointed for holding the meeting or any adjournment hereof.

3. The register of members of the Company will be closed from 18 August 2005 to 22 August 2005, both days inclusive, during which period no transfer of shares will be effected. In order to qualify for the right to attend and vote at the meeting all transfers accompanied by the relevant share certificates must be lodged with the Company’s Share Registrar in Hong Kong, Secretaries Limited at G/F, Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong not later than 4:00 p.m. on 17 August 2005.

4. With reference to the Ordinary Resolutions sought in item 5A and 5B of this notice, the directors wish to state that they have no immediate plans to issue any new shares or to repurchase any existing shares of the Company. The explanatory statement required by the Listing Rules of the Stock Exchange in connection with the repurchase mandate is included in the circular despatched to shareholders together with this notice.

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