Tristate Holdings Limited - Proxy Solicitation & Information Statement 2004

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

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

This circular includes particulars given in compliance with the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited for the purpose of giving information with regard to the issuer. The directors collectively and individually accept full responsibility for the accuracy of the information contained in this document 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.

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.

YEEBO (INTERNATIONAL HOLDINGS) LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 259)

VERY SUBSTANTIAL DISPOSAL TRANSACTION

DISPOSAL OF PROPERTY

A letter from the board of directors of Yeebo (International Holdings) Limited is set out on pages 3 to 10 of this circular.

The notice convening a Special General Meeting of Yeebo (International Holdings) Limited (the “Company”) to be held at Regency Room 5 and 6, 3rd Floor, Hyatt Regency Hong Kong, 67 Nathan Road, Kowloon, Hong Kong on 5th January, 2005 at 11:00 a.m. at which the above proposals will be set out on pages 55 to 56 to this circular.

A form of proxy for the Special General Meeting is also enclosed with this circular. Whether or not you are able to attend the meeting, you are requested to complete the form of proxy in accordance with the instructions printed thereon and return it to the Company’s Branch Share Registrars in Hong Kong, Secretaries Limited, at Ground Floor, 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. Completion and return of the form of proxy will not preclude you from attending and voting at the meeting if you so wish.

17th December, 2004

CONTENTS

		Page
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1
LETTER	FROM THE BOARD
1.	Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
2.	Provisional Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
3.	Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
4.	Reasons for and benefits of the Disposal . . . . . . . . . . . . . . . . . . . . . . . . .	6
5.	Financial effect of the Disposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
6.	Use of proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
7.	Commentary on pro forma financial information . . . . . . . . . . . . . . . . . . .	7
8.	Prospects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
9.	General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
10.	SGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
11.	Procedures on demanding a poll . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
12.	Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
13.	Further information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
APPENDIX I – Financial information of the Property . . . . . . . . . . . . . . . .		11
APPENDIX II – Financial information relating to the Group . . . . . . . . . . .		12
APPENDIX III – Pro forma financial information
	of the Remaining Group . . . . . . . . . . . . . . . . . . . . . . . . .	41
APPENDIX IV – Property valuation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		46
APPENDIX V – General information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		50
NOTICE	OF SGM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	55

−i −

DEFINITIONS

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

“associate(s)”	has the same meaning ascribed to it under the Listing	has the same meaning ascribed to it under the Listing
	Rules
“Board”	the board of Directors
“Company”	Yeebo (International Holdings) Limited, a company
	incorporated in Bermuda with limited liability, the shares
	of which are listed on the Main Board of the Stock
	Exchange
“Completion”	completion of the Disposal in accordance with the terms
	of the S&P Agreement
“Consideration”	HK$390,000,000, being the consideration payable by	the
	Purchaser to the Vendor for the Property
“Directors”	the directors of the Company
“Disposal”	the proposed disposal of the Property by the Vendor to	the
	Purchaser pursuant to the S&P Agreement
“Group”	the Company and its subsidiaries
“Hong Kong”	the Hong Kong Special Administrative Region of	the
	People’s Republic of China
“Latest Practicable Date”	16th December, 2004, being the latest practicable date	for
	the purpose of ascertaining certain information contained
	in this circular
“LCD”	liquid crystal display
“LCM”	liquid crystal display module
“Listing Rules”	the Rules Governing the listing of Securities on the Stock
	Exchange
“Property”	Unit A on the Basement, Unit A on the Ground Floor
	(together with the external walls thereof) and	the
	Staircase leading from the Ground Floor to Unit A in	the
	Basement of Wheelock House, No. 20 Pedder Street,
	Hong Kong

−1 −

DEFINITIONS

“Provisional Agreement”	the provisional agreement for sale and purchase dated
	23rd November, 2004 entered into between the Vendor
	and the Purchaser in relation to the Disposal
“Purchaser”	Citibank, N.A., an independent third party that is
	independent of the directors, chief executive officer and
	substantial shareholders of the Company, and of their
	respective associates, or its nominee
“Remaining Group”	the Group immediately after Completion
“S&P Agreement”	the formal sale and purchase agreement entered into
	between the Vendor and the Purchaser in relation to the
	Disposal
“SGM”	a special general meeting of the Company to be convened
	to approve the Disposal and the transactions
	contemplated thereto
“Share(s)”	the ordinary share(s) of HK$0.20 each in the capital of
	the Company
“Shareholder(s)”	holder(s) of the Shares
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Vendor”	Yeebo Technology Limited, a company incorporated in
	Hong Kong and a wholly-owned subsidiary of the
	Company
“HK$”	Hong Kong dollar(s), the lawful currency of Hong Kong
“sq.ft”	square feet
“sq.m.”	square meters
“%”	per cent.

−2 −

LETTER FROM THE BOARD

YEEBO (INTERNATIONAL HOLDINGS) LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 259)

Directors: FANG Hung, Kenneth, GBS, JP LI Kwok Wai, Frankie TIEN Pei Chun, James, GBS, JP CHU Chi Wai, Allan LAU Yuen Sun, Adrian*

Independent Non-executive Director

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

Principal Office in Hong Kong: 7th Floor On Dak Industrial Building 2-6 Wah Sing Street Kwai Chung New Territories Hong Kong

17th December, 2004

To the shareholders

Dear Sir or Madam,

VERY SUBSTANTIAL DISPOSAL TRANSACTION DISPOSAL OF PROPERTY

1. INTRODUCTION

On 25th November, 2004 the Company announced that the Vendor, a wholly-owned subsidiary of the Company, entered into a Provisional Agreement on 23rd November, 2004 with the Purchaser, pursuant to which the Vendor had agreed to sell and the Purchaser had agreed to purchase the Property for a consideration of HK$390,000,000.

The Disposal constitutes a very substantial disposal for the Company under Chapter 14 of the Listing Rules. The Disposal is therefore subject to the approval by the Shareholders at the SGM. No Shareholder is required to abstain from voting in respect of the proposed resolutions to approve the Disposal at the SGM.

−3 −

LETTER FROM THE BOARD

The purpose of this circular is to give you further information regarding the Provisional Agreement and the Disposal and to give you notice to convene the SGM to consider and, if thought fit, to approve the Provisional Agreement and Disposal.

2. PROVISIONAL AGREEMENT

Date:

23rd November, 2004

Vendor:

Yeebo Technology Limited

Purchaser:

Citibank, N.A., a licensed bank in Hong Kong or its nominee. To the best knowledge, information and belief of the Directors, having made all reasonable enquiries, the Purchaser and its ultimate beneficial owner are independent third parties, and not connected with any of the directors, chief executive officer or substantial shareholders of the Company or its subsidiaries, and of their respective associates.

Property disposed:

Unit A on the Basement, Unit A on the Ground Floor (together with the external walls thereof) and the Staircase leading from the Ground Floor to Unit A in the Basement of Wheelock House, No. 20 Pedder Street, Hong Kong.

The Property was acquired by the Company in November 2002 at a consideration of HK$184,000,000. The Property has been leased to the Purchaser under an operating lease. The Property has a total saleable area of approximately 8,593 sq.ft. (798.3 sq.m.) plus portion of staircase of approximately 60 sq.ft. (5.6 sq.m.) and open space of approximately 31 sq.ft. (2.9 sq.m.). The Property was pledged to a bank to secure a mortgage loan granted to the Group amounted to approximately HK$104 million.

Consideration:

HK$390,000,000 to be settled as follows:

(a) HK$15,000,000 has been paid to the Vendor’s solicitors as initial deposit upon signing of the Provisional Agreement;
(b) HK$24,000,000 has been paid to the Vendor’s solicitors as further deposit on 7th December, 2004;

−4 −

LETTER FROM THE BOARD

(c) balance in the sum of HK$351,000,000 shall be paid upon Completion; and
(d) the initial and further deposits shall be held by the Vendor’s solicitors as stakeholders and shall be released to the Vendor when the shareholders’ approval mentioned in the section “Conditions Precedent” hereunder has been obtained.

S&P Agreement:

The S&P Agreement has been signed on 17th December, 2004.

Completion Date:

Within 21 working days after the date of receipt of a notification in writing by the Purchaser or its solicitors from the Vendor or its solicitors of the passing of the ordinary resolution of Shareholders approving the Disposal as mentioned in the section “Conditions Precedent” hereunder.

Conditions Precedent:

Completion shall be conditional upon the passing of an ordinary resolution by the Shareholders at the SGM to be held not later than 3 months from the date of the Provisional Agreement approving the Disposal and all the transactions of and incidental thereto.

In the event the above condition is not fulfilled, the Provisional Agreement will lapse and the initial and further deposits shall be refunded, without interest, to the Purchaser.

Antrix Investment Limited, the majority Shareholder of the Company holding approximately 66.9% of its issued capital, has undertaken to vote in favour of the said resolution unless it is prohibited or is required to abstain from voting at the SGM under the Listing Rules and/or other legislation or regulations. Antrix Investment Limited and its associates are not required to abstain from voting in the SGM.

−5 −

LETTER FROM THE BOARD

3. CONSIDERATION

The Consideration of HK$390,000,000 was determined after arm’s length negotiations between the Vendor and Purchaser by reference to the prevailing market condition. The Consideration represents a premium of 53.5% over the carrying value of the Property of HK$254 million according to the Company’s latest published audited annual report as at 31st March 2004, which is based on a valuation by Dudley Surveyors Limited, a firm of independent valuers, on an open market basis on the same date. The Consideration also represents a premium of 2.6% over the market value of HK$380 million as at 31st October, 2004 based on a valuation by Dudley Surveyors Limited.

Based on the above, the Directors believe that the terms of the Disposal are fair and reasonable and in the interests of the Shareholders as a whole.

4. REASONS FOR AND BENEFITS OF THE DISPOSAL

The Group is principally engaged in the manufacture and sale of LCDs and holding of investment properties.

The Property was held by the Group for investment purpose with a view to generating a stable source of rental income at an acceptable rate of return. Since the Vendor has entered into a fixed rental lease agreement with the existing tenant, the unexpected favorable change of property market condition has now made the actual rate of return from the Property less attractive. It is also anticipated that the Group will need funds to further invest in the LCD and LCM business in due course. Accordingly, the Directors have decided to dispose of the Property for the long term benefit of the Group.

5. FINANCIAL EFFECT OF THE DISPOSAL

The Property was acquired in November 2002 at a consideration of HK$184 million. The total cost of the Property, including expenses incidental to its purchase, amounted to approximately HK$191 million. The Property was carried in the audited financial statements of the Group as at 31st March, 2004 at its revalued amount of HK$254 million. Taking into account the net proceeds from the Disposal of approximately HK$386 million, it is estimated that upon Completion, the Group will record a gain of approximately HK$132 million (subject to audit) based on the carrying value of the Property as shown in the latest audited financial statements of the Group. A further amount of approximately HK$61 million will be released from the investment property revaluation reserve to the consolidated profit and loss account.

−6 −

LETTER FROM THE BOARD

The audited gross rental income, profit before and after taxation in respect of the Property for the years ended 31 March 2004 and 31 March 2003 are as follows:

		2004	2003
		HK$’000	HK$’000
Gross	rental income	14,400	4,840
Profit	before taxation	11,776	3,820
Profit	after taxation	10,217	3,556

Since the Property was acquired in late November 2002, the 2003 results are for a period of 4 months only.

Further details of the financial information of the Property and the effect of the Disposal on the earnings, assets and liabilities of the Group are set out in Appendix I and Appendix III to this circular.

6. USE OF PROCEEDS

The proceeds from the Disposal, net of incidental expenses, amounted to approximately HK$386 million. The Group intends to use the net proceeds from the Disposal to repay a mortgage loan of approximately HK$104 million. As to the balance of approximately HK$282 million, the Directors intend to use at least part of it for expansion of the existing LCD and LCM manufacturing facilities. The amount to be used cannot, however, be estimated with reasonable accuracy at present. The balance will be used for general working capital purpose.

The Directors are also constantly looking for other investment opportunities. At present, no concrete new investment projects have been identified.

7. COMMENTARY ON PRO FORMA FINANCIAL INFORMATION

The following commentary on the Group refers to the unaudited pro forma consolidated net assets statement of the Group as included in Appendix III in this circular, assuming that the Property had been disposed of as at 31st March, 2004:

Review of operations

Excluding the rental income derived from the Property, the Group’s turnover for the year ended 31st March, 2004 amounted to HK$294 million (2003: HK$268 million) which was solely generated from the sale of LCD, LCM and related products, representing a growth of 10% over the previous year. Gross profit increased from HK$22 million to HK$37 million. Taking into account the realized and unrealized gain in investments in trading securities but excluding the net income generated from the Property, the net profit for the year amounted to HK$43 million (2003: loss of HK$27 million).

−7 −

LETTER FROM THE BOARD

Major acquisition and investment

In January 2004, the Group acquired effectively a 34.45% interest in Beijing Visionox Technology Company Limited (“Visionox”), a company based in Beijing. The principal activities of Visionox are development, manufacture and marketing of Organic Light Emitted Display, a new generation of flat panel display recognized as an innovation in display technology which will be widely applied in the telecommunication, audiovideo and instrument devices.

As at 31st March, 2004, the Group also held listed securities in Hong Kong blue chip companies amounted to approximately HK$57 million. During the year ended 31st March, 2004, the Group recorded a realized gain of HK$18 million and an unrealized gain of approximately HK$23 million on the investment in trading securities.

Liquidity and financial resources

Assuming Completion of the Disposal had taken place, the Group’s working capital as at 31st March, 2004 would amount to HK$418 million. The Group had total assets of HK$718 million which were financed by liabilities of HK$131 million and shareholders’ equity of HK$587 million.

Taking into account the repayment of the mortgaged loan out of the proceeds of the Disposal, the Group had bank borrowings of HK$45 million as at 31st March 2004. These bank borrowings were not secured by any assets of the Group.

The Group’s cash and bank borrowings are mainly denominated in Hong Kong dollars, hence it is not exposed to exchange risk.

The Group’s current ratio, as a ratio of current assets to current liabilities, was 5.36. The gearing ratio, as a ratio of bank borrowings to net worth, was 0.08.

Employment and remuneration policy

The remuneration package for the Group’s employees is structured by reference to market terms and industry’s practice. Discretionary bonus and other performance reward are based on the financial performance of the Group and the performance of individual staff. Staff benefit plans maintained by the Group include mandatory and voluntary provident fund scheme and medical insurance.

Future plan for material investments

While the Directors are constantly looking for investment opportunities, no concrete new investment projects have been identified.

−8 −

LETTER FROM THE BOARD

8. PROSPECTS

Looking forward, the Group has well-positioned itself to face the prevailing challenges. The Group is committed to becoming a global supplier of display devices by leveraging on its strong marketing team and through continuous investment in hardware equipment and human talents. Firstly, the Group has established a strong sales force covering an extensive clientele base of over 400 customers. Together with the effort of the newly established overseas sales vehicles in the United States, Europe, Japan, Taiwan and Korea, the customer base is set to become well diversified both in terms of geographic locations and industries. Secondly, the Group has broadened the product range of LCD from Twisted Nematic (“TN”) to Highly Twisted Nematic (“HTN”), Super Twisted Nematic (“STN”) and LCM. In the last two fiscal years, the Group allocated considerable financial resources to upgrade its production facilities. For LCD products, the Group has installed two fully automated production lines for STN products. For LCM, the Group has enlarged its production capacity by opening a new factory in Jiangmen with additional production facilities to manufacture Chip on Glass, Chip on Board and Tape Automated Bonding. In terms of human resources commitment, the Group had recruited a number of experienced industrial experts in the field of STN and LCM to facilitate launching the expansion program. Being one of the major LCD suppliers in the world, the Group’s position will be further strengthened by the capability to deliver a wider range of display-related products. In addition, the Group’s investment in Beijing Visionox Technology Company Limited will pave the way for a more long term development of the Group in the flat panel display industry.

9. GENERAL

10. SGM

A notice convening a SGM of the Company to be held at Regency Rooms 5 & 6, 3rd Floor, Hyatt Regency Hong Kong, 67 Nathan Road, Kowloon, Hong Kong on Wednesday, 5th January, 2005 at 11:00 a.m. is set out on pages 55 to 56 of this circular. 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 share registrars, Secretaries Limited at Ground Floor, Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong as soon as practicable but in any event not later than 48 hours before the time appointed for the holding of the meeting or the adjourned meeting (as the case may be). Completion and return of the form of proxy will not preclude you from attending and voting at the meeting or any adjourned meeting thereof (as the case may be) should you so desire.

−9 −

LETTER FROM THE BOARD

11. PROCEDURES ON DEMANDING A POLL

Under bye-law 66 of the bye-laws of the Company, a resolution put to the vote of a general meeting shall be decided by poll if a poll is demanded:

(i) by the chairman of the meeting; or
(ii) by at least three Shareholders present or, in the case of a Shareholder being a corporation, by its duly authorized representative or by proxy for the time being entitled to vote at the meeting; or
(iii) by a Shareholder or Shareholders present in person or, in the case of a Shareholder being a corporation, by its duly authorized representative or by proxy and representing not less than one-tenth of the total voting rights of all Shareholders having the right to vote at the meeting; or
(iv) by a Shareholder or Shareholders present in person or, in the case of a Shareholder being a corporation, by its duly authorized representative or by proxy and holding Shares 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.

A demand for poll must be made before or on the declaration of the result of the show of hands or on the withdrawal of any other demand for a poll.

12. RECOMMENDATION

The Directors consider that the terms of the Disposal are fair and reasonable to the Company and in the interests of the Shareholders and the Group. Accordingly, the Board recommends the Shareholders to vote in favour of the ordinary resolutions to be proposed at the SGM in respect of the Disposal.

13. FURTHER INFORMATION

Your attention is drawn to the appendices to this circular which contain certain additional information in relation to the Company.

Yours faithfully, For and on behalf of Yeebo (International Holdings) Limited Li Kwok Wai, Frankie

Director

−10 −

FINANCIAL INFORMATION OF THE PROPERTY

APPENDIX I

(I) PROFIT AND LOSS STATEMENT OF THE PROPERTY

Notes Rental income 1 Interest expenses Other operating expenses 2 Net income	Year ended 31st March, 2004 2003 HK$’000 HK$’000 14,400 4,840 (2,584) (1,005) (40) (15) 11,776 3,820	Six months ended 30th September, 2004 2003 HK$’000 HK$’000 7,200 7,200 (817) (1,455) (18) (21) 6,365 5,724	Six months ended 30th September, 2004 2003 HK$’000 HK$’000 7,200 7,200 (817) (1,455) (18) (21) 6,365 5,724
			5,724

Notes:

The Property was leased under an operating lease agreement since it was acquired in November 2002.
Other operating expenses mainly comprised insurance premium and building management fees.

Profit and loss statement of the Property set out above has been prepared by the Directors based on information shown in the underlying books and records of the Vendor. Since the Property was acquired in late November 2002, the results for the year ended 31st March, 2003 covered a period of four months only.

The Vendor’s financial statements for the years ended 31st March, 2003 and 31st March, 2004 have been audited.

(II) VALUATION OF THE PROPERTY

Note As at: 31st March, 2003 1 31st March, 2004 1 31st October, 2004 1	HK$’000 192,000

	254,000

	380,000

Note 1: The valuations are based on the valuation reports issued by Dudley Surveyors Limited, a firm of independent valuers.

−11 −

APPENDIX II FINANCIAL INFORMATION RELATING TO THE GROUP

A. AUDITED FINANCIAL STATEMENTS OF THE COMPANY FOR THE TWO YEARS ENDED 31ST MARCH, 2004

Set out below is the audited financial statements of the Group for the two years ended 31st March, 2004 as extracted from the Company’s 2004 annual report.

Consolidated Income Statement

For the year ended 31st March, 2004

Notes Turnover 4&5 Cost of sales Gross profit Other operating income Revaluation increase on investment properties 15 Selling and distribution expenses Administrative expenses Gain on disposal of investments in trading securities Unrealised gain (loss) in investments in trading securities Impairment loss in respect of club debentures Profit (loss) from operations 6 Finance costs 7 Share of results of associates Gain on disposal of a subsidiary 8 Profit (loss) before income tax Income tax expense 11 Profit (loss) for the year Dividend 12 Earnings (loss) per share 13 Basic	2004 HK$’000 308,187 (257,066)	2003 HK$’000 (Restated) 273,181 (245,913) 27,268 7,293 520 (9,381) (28,414) – (17,334) (500) (20,548) (1,393) – 70 (21,871) 1,191 (23,062) – (2.21 cents)
	51,121 4,369 608 (12,607) (24,920) 17,899 22,682 – 59,152 (3,376) (819) – 54,957 738	27,268 7,293 520 (9,381 (28,414 – (17,334 (500
		(20,548 (1,393 – 70
		(21,871 1,191
	54,219 10,435 5.20 cents

−12 −

FINANCIAL INFORMATION RELATING TO THE GROUP

APPENDIX II

Consolidated Balance Sheet

As at 31st March, 2004

Notes Non-current assets Property, plant and equipment 14 Investment properties 15 Deposits for acquisition of plant and equipment Interests in associates 18 Club debentures 19 Current assets Inventories 20 Trade and other receivables 21 Bills receivable Investments in trading securities 22 Bank balances and cash Current liabilities Trade and other payables 23 Bills payable Amount due to an associate 24 Taxation payable Bank borrowings – due within one year 25 Net current assets Total assets less current liabilities Non-current liabilities Bank borrowings – due after one year 25 Deferred taxation 26 Capital and reserves Share capital 27 Reserves	2004 HK$’000 152,806 254,900 8,886 39,172 1,459	2003 HK$’000 (Restated) 128,389 193,000 3,328 – 1,459
	457,223 77,154 93,736 4,604 56,595 10,270 242,359 78,533 2,548 3,917 1,244 22,094 108,336 134,023 591,246 135,969 120 136,089	326,176
		72,311 71,216 1,716 65,582 15,959
		226,784
		52,777 987 – – 46,151
		99,915
		126,869
		453,045
		112,755 635
		113,390
	455,157	339,655

	208,713 246,444	208,713 130,942
	455,157	339,655

−13 −

FINANCIAL INFORMATION RELATING TO THE GROUP

APPENDIX II

Balance Sheet

As at 31st March, 2004

Notes Non-current assets Investments in subsidiaries 16 Amounts due from subsidiaries 17 Investment in an associate 18 Current assets Other receivables Bank balances and cash Current liabilities Other payables Amounts due to subsidiaries Net current liabilities Capital and reserves Share capital 27 Reserves 28	2004 HK$’000 83,384 289,744 40,000	2003 HK$’000 83,384 230,638 – 314,022 189 88 277 753 286 1,039 (762) 313,260 208,713 104,547 313,260
	413,128 190 88 278 370 286 656 (378)	314,022
		189 88
		277
		753 286
		1,039
		(762
	412,750
	208,713 204,037	208,713 104,547
	412,750

−14 −

FINANCIAL INFORMATION RELATING TO THE GROUP

APPENDIX II

Consolidated Statements of Changes in Equity

For the year ended 31st March, 2004

Share capital HK$’000 208,713 –	Share premium HK$’000 147,303 –	Capital reserve Capital redemption reserve Investment property revaluation reserve Translation reserve HK$’000 HK$’000 HK$’000 HK$’000 2,125 1,347 – – – – – –	Capital reserve Capital redemption reserve Investment property revaluation reserve Translation reserve HK$’000 HK$’000 HK$’000 HK$’000 2,125 1,347 – – – – – –	Capital reserve Capital redemption reserve Investment property revaluation reserve Translation reserve HK$’000 HK$’000 HK$’000 HK$’000 2,125 1,347 – – – – – –	Capital reserve Capital redemption reserve Investment property revaluation reserve Translation reserve HK$’000 HK$’000 HK$’000 HK$’000 2,125 1,347 – – – – – –	Retained profit (deficit) HK$’000 3,278 (49)	Total HK$’000 362,766 (49)
208,713 – 208,713 – – –	147,303 – 147,303 – – –	2,125 – 2,125 – – –	1,347 – 1,347 – – –	– – – 61,292 – –	– – – – (9) –	3,229 (23,062) (19,833) – – 54,219	362,717 (23,062)
							339,655 61,292 (9) 54,219
208,713	147,303	2,125	1,347	61,292	(9)	34,386	455,157

The retained profit of the Group includes deficit of HK$819,000 (2003: nil) contributed by associates of the Group as at 31st March, 2004.

The capital reserve balance of the Group represents the difference between the aggregate nominal value of the share capital of acquired subsidiaries and the aggregate nominal value of the Company’s shares issued for the acquisition at the time of the group reorganisation prior to the listing of the Company’s shares in 1993, and after the reclassification of the amounts related to the share premium arising from issue of shares of a subsidiary prior to the group reorganisation to capital reserve and after reserve movements at the time of the capital reduction in previous years.

−15 −

FINANCIAL INFORMATION RELATING TO THE GROUP

APPENDIX II

Consolidated Cash Flow Statement

For the year ended 31st March, 2004

Note Operating activities Profit (loss) from operations Adjustments for: Depreciation and amortisation Unrealised (gain) loss in investments in trading securities Gain on disposal of investments in trading securities Dividend income Revaluation increase of investment properties (Gain) loss on disposals of property, plant and equipment Interest income Impairment loss in club debentures Operating cash flows before movements in working capital (Increase) decrease in inventories Increase in trade and other receivables Increase in bills receivable Increase in trade and other payables Increase (decrease) in bills payable Cash generated from operations Hong Kong Profits Tax paid Income tax paid in the People’s Republic of China (the “PRC”) Net cash from operating activities Investing activities Proceeds on disposal of investments in trading securities Dividend received Proceeds from disposals of property, plant and equipment Interest received Purchase of property, plant and equipment Investment in an associate Increase in deposits paid for acquisition of plant and equipment Decrease in bank deposits held for investment purposes Proceeds received on disposal of a subsidiary 8 Purchase of investment properties Purchase of investments in trading securities	2004 HK$’000 59,152 23,195 (22,682) (17,899) (1,737) (608) (74) (56) –	2003 HK$’000 (20,548) 17,423 17,334 – (2,990) (520) 96 (1,335) 500 9,960 1,208 (4,453) (813) 9,068 (724) 14,246 (7) (849) 13,390 – 1,574 51 1,335 (52,649) – (3,328) 164,731 805 (191,230) (82,916)
	39,291 (4,843) (23,551) (2,888) 25,373 1,561 34,943 (9) – 34,934 49,568 2,768 185 56 (47,723) (40,000) (5,558) – – – –	9,960 1,208 (4,453 (813 9,068 (724
		14,246 (7 (849
		13,390
		– 1,574 51 1,335 (52,649 – (3,328 164,731 805 (191,230 (82,916

−16 −

FINANCIAL INFORMATION RELATING TO THE GROUP

APPENDIX II

Note Net cash used in investing activities Financing activities Increase in bank loans Increase in amount due to an associate (Repayments of) increase in trust receipt loans Interest paid Net cash from financing activities Net (decrease) increase in cash and cash equivalents Cash and cash equivalents at beginning of the year Cash and cash equivalents at end of the year, represented by Being: Bank balances and cash Bank overdrafts	2004 HK$’000 (40,704) 11,496 3,917 (12,362) (2,993) 58 (5,712) 15,684 9,972 10,270 (298) 9,972	2003 HK$’000 (161,627) 146,269 – 8,112 (1,393) 152,988 4,751 10,933 15,684 15,959 (275) 15,684

−17 −

APPENDIX II FINANCIAL INFORMATION RELATING TO THE GROUP

Notes to the Financial Statements

For the year ended 31st March, 2004

1. GENERAL

The Company was incorporated in Bermuda on 8th June, 1993 as an exempted company with limited liability and its shares are listed on the Stock Exchange of Hong Kong Limited (the “Stock Exchange”).

The principal activities of the Group are the manufacture and sale of liquid crystal displays (“LCDs”) and investment property holding.

Details of the principal activities of the Company’s principal subsidiaries are set out in note 16.

2. ADOPTION OF HONG KONG FINANCIAL REPORTING STANDARD

In the current year, the Group has adopted, for the first time, the following Hong Kong Financial Reporting Standard (HKFRS) issued by the Hong Kong Society of Accountants (HKSA). The term of HKFRS is inclusive of Statements of Standard Accounting Practice (SSAPs) and Interpretations approved by the HKSA.

SSAP 12 (Revised) Income taxes

In the current year, the Group has adopted SSAP 12 (Revised) “Income Taxes”. The principal effect of the implementation of SSAP 12 (Revised) is in relation to deferred tax. In previous years, partial provision was made for deferred tax using the income statement liability method, i.e. a liability was recognised in respect of timing differences arising, except where those timing differences were not expected to reverse in the foreseeable future. SSAP 12 (Revised) requires the adoption of a balance sheet liability method, whereby deferred tax is recognised in respect of all temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, with limited exceptions. In the absence of any specific transitional requirements in SSAP 12 (Revised), the new accounting policy has been applied retrospectively. Comparative amounts for 2003 have been restated accordingly. As a result of this change in policy, the opening balance of deficit at 1st April, 2003 has been increased by HK$635,000 (the retained profit at 1st April, 2002 has been reduced by HK$49,000) and the profit for the year ended 31st March, 2004 has been increased by HK$515,000 (the loss for the year ended 31st March, 2003 has been increased by HK$586,000).

3. SIGNIFICANT ACCOUNTING POLICIES

The financial statements have been prepared under the historical cost convention, as modified for the revaluation of investment properties and investments in securities, and in accordance with accounting principles generally accepted in Hong Kong. The principal accounting policies adopted are as follows:

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and its subsidiaries, made up to 31st March each year.

The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal, as appropriate.

All significant inter-company transactions, balances and cash flows are eliminated on consolidation.

Investments in subsidiaries

Investments in subsidiaries are included in the Company’s balance sheet at cost less any identified impairment losses.

−18 −

FINANCIAL INFORMATION RELATING TO THE GROUP

APPENDIX II

Goodwill

Goodwill arising on consolidation represents the excess of the cost of acquisition over the Group’s interest in the fair value of the identified assets and liabilities of an associate at the date of acquisition.

Goodwill is capitalised and amortised on a straight-line basis over the useful economic life. Goodwill arising on the acquisition of an associate is included within the carrying amount of the associate.

Interests in associates

The consolidated income statement includes the Group’s share of the post-acquisition results of its associates for the year. In the consolidated balance sheet, interests in associates are stated at the Group’s share of the net assets of the associates.

The results of associates are accounted for by the Company on the basis of dividends received and receivable during the year. In the Company’s balance sheet, investments in associates are stated at cost, as reduced by any identified impairment loss.

Investments in securities

Investments in securities are recognised on a trade-date basis and are initially measured at cost.

All securities other than held-to-maturity debt securities are measured at subsequent reporting dates at fair value.

Where securities are held for trading purposes, unrealised gains and losses are included in net profit or loss for the period. For other securities, unrealised gains and losses are dealt with in equity, until the security is disposed of or is determined to be impaired, at which time the cumulative gain or loss is included in the net profit or loss for the period.

Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and amortisation and accumulated impairment losses.

Depreciation and amortisation are provided to write off the costs of property, plant and equipment over their estimated useful lives, using the straight-line method, at the following rates per annum:

Leasehold land	Over the term of the lease
Buildings	Over the estimated useful lives of 20 years
Furniture and fixtures	10 – 25%
Office equipment	15 – 25%
Plant and machinery	10 – 15%
Motor vehicles	10 – 20%

No provision for depreciation has been made on machinery under installation until such time as the relevant asset is completed and put into use.

The gain or loss arising from disposal or retirement of an asset is determined as the difference between the sale proceeds and the carrying amount of the asset and is recognised in the income statement.

Investment properties

Investment properties are completed properties which are held for their investment potential, any rental income being negotiated at arm’s length.

Investment properties are stated at their open market value. Any revaluation increase or decrease arising on the revaluation of investment properties is credited or charged to the investment property revaluation reserve unless the balance on this reserve is insufficient to cover a revaluation decrease, in which case the excess of the revaluation decrease over the balance on the investment property revaluation reserve is charged to the income statement. Where a decrease has previously been charged to the income statement and a revaluation increase subsequently arises, this increase is credited to the income statement to the extent of the decrease previously charged.

−19 −

FINANCIAL INFORMATION RELATING TO THE GROUP

APPENDIX II

On disposal of an investment property, the balance on the investment property revaluation reserve attributable to that property is transferred to the income statement.

No depreciation is provided on investment properties except where the unexpired term of the relevant lease is 20 years or less.

Club debentures

Club debentures, which are held for long-term purpose, are measured at cost as reduced by any impairment losses.

Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is calculated using the first-in, first-out method.

Impairment

At each balance sheet date, the Group reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately, unless the relevant asset is carried at a revalued amount under another SSAP, in which case the impairment loss is treated as a revaluation decrease under that SSAP.

Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised as income immediately, unless the relevant asset is carried at a revalued amount under another SSAP, in which case the reversal of the impairment loss is treated as a revaluation increase under that SSAP.

Revenue recognition

Sale of goods is recognised when goods are delivered and title has passed.

Rental income, including rentals invoiced in advance, from properties under operating lease is recognised on a straight-line basis over the relevant lease term.

Dividend income from investments is recognised when the shareholders’ rights to receive payment have been established.

Interest income from bank deposits is accrued on a time basis, by reference to the principal outstanding and at the interest rate applicable.

Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences, and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill (or negative goodwill) or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

−20 −

APPENDIX II

FINANCIAL INFORMATION RELATING TO THE GROUP

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

Operating leases

Rentals payable under operating leases are charged to the income statement on a straight-line basis over the relevant lease term.

Foreign currencies

Transactions in currencies other than Hong Kong dollars are initially recorded at the rates of exchange prevailing on the dates of the transactions. Monetary assets and liabilities denominated in such currencies are re-translated at the rates prevailing on the balance sheet date. Profits and losses arising on exchange are included in the income statement.

On consolidation, the financial statements of the subsidiaries which are denominated in currencies other than Hong Kong dollars are translated using the temporal method as the operations of the subsidiaries outside Hong Kong are dependent on the economic circumstances of the Company’s reporting currency. Exchange differences arising on consolidation are dealt with in the income statement.

On consolidation, the assets and liabilities of the Group’s associates are translated at exchange rates prevailing on the balance sheet date. Income and expense items are translated at the average exchange rates for the year. Exchange differences arising, if any, are classified as equity and transferred to the Group’s translation reserve. Such translation differences are recognised as income or as expenses in the period in which the operation is disposed of.

Retirement benefit costs

Payments to defined contribution retirement benefit plans, state-managed retirement benefit schemes and the Mandatory Provident Fund Scheme are charged as expenses as they fall due.

4. TURNOVER

Turnover represents the amounts received and receivable for goods sold, less returns and allowances, and rental income received and receivable during the year.

5. BUSINESS AND GEOGRAPHICAL SEGMENTS

Business segments

For management purpose, the Group was organised into three operating divisions – LCDs, investment property holding and others. These divisions are the bases on which the Group reports its primary segment information.

The principal activities of the Group are as follows:

LCDs – manufacture and sale of LCDs

Investment property holding – investment properties held under operating leases Others – manufacture and sales of products other than LCDs

−21 −

FINANCIAL INFORMATION RELATING TO THE GROUP

APPENDIX II

Segmental information about these businesses is presented below:

2004

Segment revenue External sales Rental income Result Segment result Dividend income Interest income Gain on disposal of investments in trading securities Unrealised gain in investments in trading securities Unallocated corporate expenses Profit from operations Finance costs Share of results of associates Profit before income tax Income tax expense Profit for the year	LCDs HK$’000 277,465 – 277,465 11,957	Investment property holding HK$’000 – 14,491 14,491 12,172	Others HK$’000 16,231 – 16,231 (1,135)	Consolidated HK$’000 293,696 14,491 308,187 22,994 1,737 56 17,899 22,682 (6,216) 59,152 (3,376) (819) 54,957 (738) 54,219

−22 −

FINANCIAL INFORMATION RELATING TO THE GROUP

APPENDIX II

2004

Consolidated balance sheet

LCDs Investment property holding Others HK$’000 HK$’000 HK$’000 Assets Segment assets 332,395 254,900 15,061 Interests in associates Unallocated corporate assets Consolidated total assets Liabilities Segment liabilities 79,522 1,664 3,812 Borrowings Taxation payable Deferred taxation Consolidated total liabilities Other information Additions to property, plant and equipment 46,900 – 823 Depreciation and amortisation 22,600 – 595 Gain on disposal of property, plant and equipment 74 – –	Consolidated HK$’000 602,356 39,172 58,054
	699,582

	84,998 158,063 1,244 120
	244,425

	47,723 23,195 74

−23 −

FINANCIAL INFORMATION RELATING TO THE GROUP

APPENDIX II

2003

Segment revenue External sales Rental income Result Segment result Dividend income Interest income Unrealised loss in investments in trading securities Impairment loss in respect of club debentures Unallocated corporate expenses Loss from operations Finance costs Gain on disposal of a subsidiary Loss before income tax Income tax expense Loss for the year	LCDs HK$’000 251,735 – 251,735 (6,727)	Investment property holding HK$’000 – 4,931 4,931 5,386	Others HK$’000 16,515 – 16,515 337	Consolidated HK$’000 (Restated) 268,250 4,931 273,181 (1,004) 2,990 1,335 (17,334) (500) (6,035) (20,548) (1,393) 70 (21,871) (1,191) (23,062)
				2,990 1,335 (17,334 (500 (6,035
				(20,548 (1,393 70
				(21,871 (1,191

−24 −

FINANCIAL INFORMATION RELATING TO THE GROUP

APPENDIX II

2003

Consolidated balance sheet

LCDs Investment property holding Others HK$’000 HK$’000 HK$’000 Assets Segment assets 289,773 193,000 3,146 Unallocated corporate assets Consolidated total assets Liabilities Segment liabilities 51,616 1,976 172 Borrowings Deferred taxation Consolidated total liabilities Other information Additions to investment properties – 191,230 – Additions to property, plant and equipment 52,649 – – Depreciation and amortisation 17,147 – 276 Loss on disposal of property, plant and equipment 96 – –	Consolidated HK$’000 (Restated 485,919 67,041
	552,960

	53,764 158,906 635
	213,305

	191,230 52,649 17,423 96

Geographical segments

The Group’s operations are mainly located in Hong Kong and other regions of the PRC. The following table provides an analysis of the Group’s turnover by geographical market, irrespective of the origin of goods or services.

Hong Kong, the PRC Other regions of the PRC Other countries	Turnover by geographical market 2004 2003 HK$’000 HK$’000 266,866 230,455 17,599 26,545 23,722 16,181 308,187 273,181	Turnover by geographical market 2004 2003 HK$’000 HK$’000 266,866 230,455 17,599 26,545 23,722 16,181 308,187 273,181
		273,181

−25 −

FINANCIAL INFORMATION RELATING TO THE GROUP

APPENDIX II

The following is an analysis of the carrying amount of segment assets, and additions to property, plant and equipment analysed by the geographical area in which the assets are located:

Hong Kong, the PRC Other regions of the PRC	Carrying amount of geographical assets 2004 2003 HK$’000 HK$’000 460,337 355,730 239,245 197,230 699,582 552,960	Additions to property, plant and equipment 2004 2003 HK$’000 HK$’000 602 2,842 47,121 49,807 47,723 52,649	Additions to property, plant and equipment 2004 2003 HK$’000 HK$’000 602 2,842 47,121 49,807 47,723 52,649
			52,649

6. PROFIT (LOSS) FROM OPERATIONS

Profit (loss) from operations has been arrived at after charging: Auditors’ remuneration Cost of inventories recognised as expenses Depreciation and amortisation Loss on disposals of property, plant and equipment Staff costs, including directors’ emoluments (Note 9) and after crediting: Dividend income from listed securities Gain on disposals of property, plant and equipment Interest income on bank deposits Interest income from an associate FINANCE COSTS Interest on: Bank borrowings wholly repayable within five years Bank borrowings not wholly repayable within five years	2004 HK$’000 600 124,377 23,195 – 74,000 1,737 74 25 31 2004 HK$’000 792 2,584 3,376	2003 HK$’000 497 125,726 17,423 96 76,917 2,990 – 1,335 –

		2003 HK$’000 388 1,005
		1,393

7. FINANCE COSTS

8. GAIN ON DISPOSAL OF A SUBSIDIARY

During the year ended 31st March, 2003, the Group recognised an additional gain of approximately HK$70,000 which represented the net liabilities, consisting of trade and other payables, of the subsidiary disposed of in 2002, at the date of disposal.

The subsidiary did not have any significant contributions to the results and cash flows of the Group for the year ended 31st March, 2003.

−26 −

FINANCIAL INFORMATION RELATING TO THE GROUP

APPENDIX II

9. DIRECTORS’ EMOLUMENTS

Fees: Executive directors Independent non-executive directors Other non-executive director Other emoluments: Salaries and other benefits Retirement benefit scheme contributions Total emoluments	2004 HK$’000 – 200 – 3,438 160 3,798	2003 HK$’000 167 200 33 3,438 172
		4,010

The emoluments of the directors were within the following bands:

	Number of directors	Number of directors
	2004	2003
Up to HK$1,000,000	3	6
HK$1,000,001 to HK$1,500,000	2	1
HK$1,500,001 to HK$2,000,000	–	1

10. EMPLOYEES’ EMOLUMENTS

Of the five individuals with the highest emoluments in the Group, three (2003: two) were directors of the Company whose emoluments are included in note 9 above. The emoluments of the remaining two (2003: three) individuals were as follows:

Salaries and other benefits Retirement benefit scheme contributions Total emoluments	2004 HK$’000 1,200 60 1,260	2003 HK$’000 2,559 88
		2,647

Each of their emoluments was within HK$1,000,000 for both years.

−27 −

FINANCIAL INFORMATION RELATING TO THE GROUP

APPENDIX II

11. INCOME TAX EXPENSE

The income tax expense comprises: Current taxation Hong Kong Profits Tax PRC income tax Deferred taxation (note 26) Current year Attributable to a change in tax rate	2004 HK$’000 1,253 –	2003 HK$’000 7 598
	1,253 (574) 59 (515)	605
		586 –
		586
	738	1,191

Hong Kong Profits Tax is calculated at 17.5% (2003: 16%) on the estimated assessable profit for the year. In June 2003, the Hong Kong Profits Tax rate was increased from 16% to 17.5% with effect from the 2003/2004 year of assessment. The effect of this increase has been reflected in the calculation of current and deferred tax balance at 31st March, 2004.

No provision for the PRC income tax has been made in the financial statements as the operations in the PRC incurred a tax loss for the year. The PRC income tax for the year ended 31st March, 2003 was calculated at the rate prevailing in the relevant jurisdiction.

Details of deferred taxation are set out in note 26.

The income tax expense for the year can be reconciled to the profit (loss) before income tax per the income statement as follows:

Profit (loss) before income tax Tax at Hong Kong Profits Tax rate of 17.5% (2003: 16%) Tax effect of share of results of associates Tax effect of tax losses not recognised Effect of different tax rates of subsidiaries operating in other jurisdictions Utilisation of tax losses previously not recognised Tax effect of income not taxable for tax purpose Tax effect of expenses that are not deductible for tax purpose Increase in opening deferred tax liability resulting from an increase in Hong Kong Profits Tax rate Tax expense and effective tax rate for the year	2004 HK$’000 % 54,957	2004 HK$’000 % 54,957	2003 HK$’000 % (21,871)	2003 HK$’000 % (21,871)
	9,618 143 100 (2,331) (6,446) (487) 82 59	17.5 0.2 0.2 (4.2) (11.7) (0.9) 0.1 0.1	(3,499) – 5,595 (1,319) (7) (528) 949 –	16.0 – (25.6 6.0 – 2.4 (4.3 –
	738	1.3	1,191	(5.5

−28 −

FINANCIAL INFORMATION RELATING TO THE GROUP

APPENDIX II

12. DIVIDEND

										2004	2003
										HK$’000	HK$’000
Final	proposed	–	HK1	cent	per	ordinary	share	(2003:	nil)	10,435	–

The final dividend of HK1 cent (2003: nil) per ordinary share has been proposed by the directors and is subject to approval by the shareholders in the general meeting.

13. EARNINGS (LOSS) PER SHARE

The calculation of the basic and diluted earnings (loss) per share is based on the following data:

Earnings (loss) for the purposes of basic earnings (loss) per share Number of ordinary shares for the purposes of basic earnings (loss) per share	2004 2003 HK$’000 HK$’000 (Restated) 54,219 (23,062) Number of shares 2004 2003 ’000 ’000 1,043,564 1,043,564	2003 HK$’000 (Restated) (23,062)

No diluted earnings (loss) per share have been presented for the year as there were no potential dilutive ordinary shares in issue.

The adjustment to comparative basic loss per share, arising from the change in accounting policies shown in note 2 above, is as follow:

Reconciliation of 2003 loss per share Reported figure before adjustments Adjustments arising from the adoption of SSAP 12 (Revised) Restated	Basic HK cents 2.15 0.06
	2.21

−29 −

FINANCIAL INFORMATION RELATING TO THE GROUP

APPENDIX II

14. PROPERTY, PLANT AND EQUIPMENT

Leasehold land and buildings HK$’000 13,784 – – –	Furniture and fixtures HK$’000 22,371 2,240 (2,182) –	Office equipment HK$’000 6,430 1,287 (30) –	Plant and machinery HK$’000 195,396 24,895 (7,250) 482	Motor vehicles Machinery under installation HK$’000 HK$’000 4,802 19,129 711 18,590 (908) – – (482)	Motor vehicles Machinery under installation HK$’000 HK$’000 4,802 19,129 711 18,590 (908) – – (482)	Total HK$’000 261,912 47,723 (10,370 –
13,784 2,039 717 – 2,756	22,429 13,030 2,153 (2,073) 13,110	7,687 2,161 981 (28) 3,114	213,523 112,780 18,812 (7,250) 124,342	4,605 3,513 532 (908) 3,137	37,237 – – – –	299,265
						133,523 23,195 (10,259
						146,459
11,028 11,745	9,319 9,341	4,573 4,269	89,181 82,616	1,468 1,289	37,237 19,129	152,806

						128,389

The net book value of the leasehold land and buildings shown above comprises:

Land in Hong Kong held under medium-term leases Land outside Hong Kong held under: Long lease Medium-term lease	2004 HK$’000 4,421 24 6,583 11,028	2003 HK$’000 4,599 170 6,976
		11,745

15. INVESTMENT PROPERTIES

At beginning of the year Revaluation increase Additions At end of the year	THE GROUP 2004 2003 HK$’000 HK$’000 193,000 1,250 61,900 520 – 191,230 254,900 193,000	THE GROUP 2004 2003 HK$’000 HK$’000 193,000 1,250 61,900 520 – 191,230 254,900 193,000
		193,000

The Group’s investment properties are situated in Hong Kong and are held under long leases. They are rented to third parties under operating leases.

−30 −

APPENDIX II FINANCIAL INFORMATION RELATING TO THE GROUP

The investment properties were revalued at 31st March, 2004 by Dudley Surveyors Limited, a firm of independent valuers, on an open market value basis. The revaluation gave rise to a revaluation increase of HK$61,900,000, of which HK$608,000 (2003: HK$520,000) has been credited to the consolidated income statement, the remaining HK$61,292,000 (2003: nil) has been credited to investment property revaluation reserve set out in the consolidated statement of changes in equity.

At 31st March, 2004, certain of the Group’s investment properties with a carrying value of HK$254,000,000 (2003: HK$192,100,000) were pledged to a bank to secure banking facilities granted to the Group.

16. INVESTMENTS IN SUBSIDIARIES

				THE COMPANY	THE COMPANY
				2004	2003
				HK$’000	HK$’000
Unlisted	shares,	at	cost	83,384	83,384

The carrying amount of the unlisted shares is based on the book values of the underlying separable net assets of the subsidiaries attributable to the Group as at the date on which the Company became the holding company of the Group.

Details of the Company’s principal subsidiaries at 31st March, 2004 are as follows:

				Percentage of
		Place of		nominal value of
		incorporation	Issued and fully	issued/registered
	Legal form of	or registration/	paid up share/	capital held by	Principal
Name of subsidiary	business	operations	registered capital	the Company	activities
Dongguan Yeedu	Sino-foreign	The PRC	US$1,496,000	85%	Manufacture of
Semiconductor Co.,	corporate joint		registered	(Note)	LCDs
Ltd. (Note)	venture		capital
Jiangmen Yeebo	Wholly-owned	The PRC	US$5,000,000	100%	Manufacture of
Electronic	foreign		registered		liquid crystal
Technology Ltd.	enterprise		capital		display module
Jiangmen Yeebo	Sino-foreign	The PRC	US$9,307,000	80%	Manufacture of
Semiconductor Co.,	corporate joint		registered	(Note)	LCDs
Ltd. (Note)	venture		capital
LCD Industries Limited	Incorporated	British Virgin	US$1	100%	Trading of LCDs
		Islands/The
		PRC
Yeebo (B.V.I.) Limited	Incorporated	British Virgin	US$8,100	100%	Investment holding
		Islands
Yeebo LCD Limited	Incorporated	Hong Kong	HK$10,000	100%	Development and
					trading of LCDs
Yeebo Technology	Incorporated	Hong Kong	HK$10,000	100%	Property holding
Limited

Note: Dongguan Yeedu Semiconductor Co., Ltd. and Jiangmen Yeebo Semiconductor Co., Ltd. were established by the Group with two separate parties in the PRC as sino-foreign co-operative joint ventures. Under the respective subcontracting agreements, the Group is responsible for all of their assets and liabilities and is entitled to all of the net results of their operations. The Group therefore effectively has a 100% attributable economic interest in these subsidiaries.

−31 −

APPENDIX II FINANCIAL INFORMATION RELATING TO THE GROUP

The above table only includes those subsidiaries which, in the opinion of the directors, principally affected the results for the year or formed a substantial portion of the net assets of the Group. To give details of all subsidiaries would, in the opinion of the directors, result in particulars of excessive length.

Except for Yeebo (B.V.I.) Limited which is a directly owned subsidiary, all of the remaining subsidiaries are indirectly owned by the Company.

None of the subsidiaries had any debt capital outstanding at the end of the year or at any time during the year.

17. AMOUNTS DUE FROM SUBSIDIARIES

Amounts due from subsidiaries Less: Allowances	THE COMPANY 2004 2003 HK$’000 HK$’000 671,034 611,928 (381,290) (381,290 289,744 230,638	THE COMPANY 2004 2003 HK$’000 HK$’000 671,034 611,928 (381,290) (381,290 289,744 230,638
		230,638

The amounts are unsecured, non-interest bearing and have no fixed repayment terms.

In the opinion of the directors, the amounts due from subsidiaries will not be repayable in the next twelve months from the balance sheet date and, accordingly, the amounts are shown as non-current assets in the balance sheet.

18. INTERESTS IN ASSOCIATES

Unlisted shares, at cost Share of net assets Goodwill of associates	THE GROUP 2004 2003 HK$’000 HK$’000 – – 36,683 – 2,489 – 39,172 –	THE COMPANY 2004 2003 HK$’000 HK$’000 40,000 – – – – – 40,000 –	THE COMPANY 2004 2003 HK$’000 HK$’000 40,000 – – – – – 40,000 –
			–

Details of the Group’s principal associates as at 31st March, 2004 are as follows:

		Place of	Percentage of nominal	Percentage of nominal	Issued and fully
		incorporation	value of issued capital/		paid up share/
	Form of	or registration/	registered capital held		registered
Name	business	operation	by the Company		capital	Principal activities
			Directly	Indirectly
Crown Capital	Incorporated	BVI	47.05%	–	US$8,502	Investment holding
Holdings Limited
(“Crown Capital”)
Beijing Visionox	Incorporated	PRC	–	34.45%	RMB82,142,900	Development,
Technology Co.,						manufacturing and
Limited						marketing of organic
(“Visionox”)						light emitting
						display products

The goodwill of the associates arose on the acquisition of Crown Capital and Visionox during the year amounting to HK$2,531,000. The amortisation of goodwill during the year amounting to HK$42,000 (2003: Nil) has been included in the share of results of the associates. The goodwill is amortised over a period of 10 years.

−32 −

FINANCIAL INFORMATION RELATING TO THE GROUP

APPENDIX II

The following details have been extracted from the audited financial statements of Crown Capital:

Results for the year

Turnover Loss before income tax Loss before income tax attributable to the Group Financial position Non-current assets Current assets Current liabilities Non-current liabilities Net assets Net assets attributable to the Group CLUB DEBENTURES At cost Less: Impairment losses Carrying amount	2004 2003 HK$’000 HK$’000 24 – (1,651) – (777) – 2004 2003 HK$’000 HK$’000 86,298 – 27,387 – (2,607) – (33,111) – 77,967 – 36,683 – THE GROUP 2004 2003 HK$’000 HK$’000 2,659 2,659 (1,200) (1,200) 1,459 1,459

19. CLUB DEBENTURES

At 31st March, 2003, the directors conducted a review of the Group’s club debentures and determined that the club debentures were impaired due to the prevailing economical recession. Accordingly, an impairment loss of HK$500,000 was recognised in the financial statements for the year ended 31st March, 2003. In the opinion of the directors, the club debentures were worth at least their carrying values as at 31st March, 2004 with reference to the current market value.

−33 −

FINANCIAL INFORMATION RELATING TO THE GROUP

APPENDIX II

20. INVENTORIES

Raw materials Work in progress Finished goods	THE GROUP 2004 2003 HK$’000 HK$’000 44,753 50,653 5,099 2,204 27,302 19,454 77,154 72,311	THE GROUP 2004 2003 HK$’000 HK$’000 44,753 50,653 5,099 2,204 27,302 19,454 77,154 72,311
		72,311

Included above are raw materials of approximately HK$10,077,000 (2003: HK$19,137,000) which are carried at net realisable value.

21. TRADE AND OTHER RECEIVABLES

The Group allows a credit period of 30 days – 90 days to its trade customers.

The following is an aged analysis of trade receivables at the balance sheet date:

Up to 30 days 31 – 60 days 61 – 90 days 91 – 120 days Over 120 days Other receivables	THE GROUP 2004 2003 HK$’000 HK$’000 30,412 35,894 24,950 13,363 9,494 7,415 9,307 559 5,932 4,378	THE GROUP 2004 2003 HK$’000 HK$’000 30,412 35,894 24,950 13,363 9,494 7,415 9,307 559 5,932 4,378
	80,095 13,641	61,609 9,607
	93,736	71,216

22. INVESTMENTS IN TRADING SECURITIES

									THE	GROUP
									2004	2003
									HK$’000	HK$’000
Equity	securities	listed	in	Hong	Kong,	at	market	value	56,595	65,582

−34 −

FINANCIAL INFORMATION RELATING TO THE GROUP

APPENDIX II

23. TRADE AND OTHER PAYABLES

The following is an aged analysis of trade payables at the balance sheet date:

Up to 30 days 31 – 60 days 61 – 90 days 91 – 120 days Over 120 days Other payables 24. AMOUNT DUE TO AN ASSOCIATE THE GROUP The amount is unsecured, interest-free and repayable on demand.	THE GROUP 2004 2003 HK$’000 HK$’000 13,748 9,640 12,347 7,851 5,473 2,139 4,412 1,085 2,601 1,808	THE GROUP 2004 2003 HK$’000 HK$’000 13,748 9,640 12,347 7,851 5,473 2,139 4,412 1,085 2,601 1,808
	38,581 39,952	22,523 30,254
	78,533	52,777

25. BANK BORROWINGS

Bank loans Bank overdrafts Trust receipt loans Analysed as: Secured Unsecured Repayable as follows: Within one year or on demand More than one year, but not exceeding two years More than two years, but not exceeding five years More than five years Less: Amounts due within one year, included under current liabilities Amounts due after one year	THE GROUP 2004 2003 HK$’000 HK$’000 157,765 146,269 298 275 – 12,362 158,063 158,906	THE GROUP 2004 2003 HK$’000 HK$’000 157,765 146,269 298 275 – 12,362 158,063 158,906
		158,906

	112,765 45,298	124,269 34,637
	158,063	158,906

	22,094 22,085 63,063 50,821 158,063 (22,094)	46,151 11,796 37,153 63,806
		158,906 (46,151
	135,969	112,755

−35 −

FINANCIAL INFORMATION RELATING TO THE GROUP

APPENDIX II

26. DEFERRED TAXATION

The deferred tax liabilities recognised and movements thereon during the current and prior years are as follows:

THE GROUP

Accelerated tax depreciation HK$’000 – 49	Tax losses HK$’000 – –	Total HK$’000 – 49
49 586 635 (102) 59	– – – (472) –	49 586
		635 (574) 59
592	(472)	120

At the balance sheet date, the Group had unused tax losses of HK$35.2 million (2003: HK$68.7 million) available for offset against future profits. A deferred tax asset has been recognised in respect of approximately HK$2.7 million (2003: nil) of such losses. No deferred tax asset has been recognised in respect of the remaining tax losses of HK$32.5 million (2003: HK$68.7 million) due to the unpredictability of future profit streams. The unrecognised tax losses may be carried forward indefinitely.

THE COMPANY

At the balance sheet date, the Company had unused tax losses of HK$11.6 million (2003: HK$11 million) available for offset against future profits. No deferred tax asset has been recognised due to the unpredictability of future profit streams. The unrecognised tax losses may be carried forward indefinitely.

27. SHARE CAPITAL

Ordinary shares of HK$0.20 each Authorised Issued and fully paid	Number of shares 2004 & 2003 ’000 2,000,000 1,043,564	2004 & 2003 HK$’000 400,000

		208,713

−36 −

FINANCIAL INFORMATION RELATING TO THE GROUP

APPENDIX II

28. RESERVES

THE COMPANY At 1st April, 2003 Loss for the year At 31st March, 2003 and 1st April, 2003 Profit for the year At 31st March, 2004	Share premium HK$’000 147,303 –	Capital redemption reserve HK$’000 1,347 –	Contributed surplus HK$’000 49,259 –	Retained profit (deficit) HK$’000 (54,637) (38,725)	Total HK$’000 143,272 (38,725
	147,303 –	1,347 –	49,259 –	(93,362) 99,490	104,547 99,490
	147,303	1,347	49,259	6,128	204,037

The contributed surplus of the Company represents the difference between the consolidated shareholders’ funds of Yeebo (B.V.I.) Limited at the date on which it was acquired by the Company, and the nominal amount of the Company’s shares issued for the acquisition at the time of the group reorganisation prior to the listing of the Company’s shares in 1993. Under the Companies Act 1981 of Bermuda (as amended), the contributed surplus account of the Company is available for distribution. However, the Company cannot declare or pay a dividend, or make a distribution out of the contributed surplus, if:

(a) it is, or would after the payment be, unable to pay its liabilities as they become due; or
(b) the realisable value of its assets would thereby be less than the aggregate of its liabilities and its issued share capital and share premium accounts.

At 31st March, 2004, the Company’s reserves available for distribution to shareholders comprised the retained profit of HK$6,128,000 and contributed surplus of HK$49,259,000. At 31st March, 2003, the Company had no reserves available for distribution to shareholders.

29. CAPITAL COMMITMENT

	THE	GROUP
	2004	2003
	HK$’000	HK$’000
Capital expenditure in respect of acquisition of plant and machinery
contracted for but not provided in the financial statements	12,799	2,396

The Company had no capital commitments at the balance sheet date for both years.

30. OPERATING LEASE ARRANGEMENTS

The Group as lessee

Minimum lease payments paid under operating leases for rented premises during the year amounted to HK$2,929,000 (2003: HK$2,791,000).

−37 −

FINANCIAL INFORMATION RELATING TO THE GROUP

APPENDIX II

At the balance sheet date, the Group had commitments for future minimum lease payments under non-cancellable operating leases which fall due as follows:

Within one year In the second to fifth year inclusive	THE GROUP 2004 2003 HK$’000 HK$’000 2,272 2,028 981 1,780 3,253 3,808	THE GROUP 2004 2003 HK$’000 HK$’000 2,272 2,028 981 1,780 3,253 3,808
		3,808

Operating lease payments represent rentals payable by the Group for certain of its factories and office properties. Leases are negotiated and rentals are fixed for an average term of four years.

The Group as lessor

Property rental income net of outgoings of HK$40,000 (2003: HK$14,000) earned from renting out the investment properties during the year was HK$14,451,000 (2003: HK$4,917,000). The properties held have committed tenants for three years.

At the balance sheet date, the Group had contracted with tenants for the following future minimum lease payments:

Within one year In the second to fifth year inclusive	THE GROUP 2004 2003 HK$’000 HK$’000 14,446 14,446 9,600 24,000 24,046 38,446	THE GROUP 2004 2003 HK$’000 HK$’000 14,446 14,446 9,600 24,000 24,046 38,446
		38,446

The Company had no commitments under non-cancellable operating leases at the balance sheet date for both years.

31. CONTINGENT LIABILITIES

At 31st March, 2004, the Company issued a corporate guarantee in favour of banks to secure general banking facilities granted to its subsidiaries. The total amount of the facilities utilised by the subsidiaries as at 31st March, 2004 amounted to approximately HK$160,611,000 (2003: HK$159,618,000).

The Group had no contingent liabilities as at 31st March, 2004 and 2003.

32. SHARE OPTION SCHEME

The Company’s share option scheme (the “Scheme”) was adopted pursuant to a resolution passed on 9th August, 1993 for the primary purpose of providing incentives to directors and eligible employees, and expired on 8th August, 2003. Under the Scheme, the Board of Directors of the Company may grant options to eligible employees (the “Employees”), including executive directors of the Company or any of its subsidiaries, to subscribe for shares in the Company.

The total number of shares in respect of which options may be granted under the Scheme is not permitted to exceed 10% of the shares of the Company in issue at any point in time, without prior approval from the Company’s shareholders.

The maximum number of shares in respect of the share options granted to any individual shall not exceed 25% of the shares available for subscription under the terms of the Scheme at any time during the year.

−38 −

FINANCIAL INFORMATION RELATING TO THE GROUP

APPENDIX II

Options granted must be taken up within 28 days from the date of grant, upon payment of HK$1 per option. An option may be exercised at any time before the date which is three years after the date of grant. The exercise price is determined by the directors of the Company, at a price equal to the higher of the nominal value of a share and 80% of the average closing prices of the shares on the Stock Exchange of Hong Kong Limited on the five trading days immediately preceding the date of grant of the options.

No share option was granted or exercised during the year ended 31st March, 2004 and 2003 and no share option was outstanding at 31st March, 2004 and 31st March, 2003.

33. RETIREMENT BENEFIT PLANS

The Group operated a defined contribution retirement benefit scheme (“Defined Contribution Scheme”) for its qualifying employees in Hong Kong. The assets of the scheme were held separately from those of the Group in funds under the control of an independent trustee. Where an employee left the Defined Contribution Scheme prior to vesting fully in the contributions, the amount of the forfeited contributions was used to reduce future contributions payable by the Group.

With effect from 1st December, 2000, the Group has joined a Mandatory Provident Fund scheme (“MPF Scheme”) for all employees in Hong Kong. The MPF Scheme is registered with the Mandatory Provident Fund Scheme Authority under the Hong Kong Mandatory Provident Fund Schemes Ordinance. The assets of the MPF Scheme are held separately from those of the Group in funds under the control of an independent trustee. Under the rules of the MPF Scheme, the employer and its employees are each required to make contributions to the scheme at rates specified in the rules. The only obligation of the Group with respect of the MPF Scheme is to make the required contributions under the scheme.

The retirement benefit scheme contributions arising from the Defined Contribution Scheme and the MPF Scheme charged to the income statement represent contributions paid or payable to the funds by the Group at rates specified in the rules of the schemes.

The employees of the Group’s subsidiaries in the PRC are members of a state-managed retirement benefit scheme operated by the government of the PRC. The subsidiaries are required to contribute a specified percentage of payroll costs to the retirement benefit scheme to fund the benefits. The only obligation of the Group with respect to the retirement benefit scheme is to make the specified contributions.

The total cost charged to the income statement of HK$2,602,000 (2003: HK$3,032,000) after forfeited contributions utilised in the Defined Contribution Scheme of approximately HK$194,000 (2003: HK$47,000) represents contributions payable to these schemes by the Group in respect of the current year.

34. RELATED PARTY TRANSACTIONS

During the year, the Group had the following related party transactions:

Associate	Nature of transactions		2004	2003
		Notes	HK$’000	HK$’000
Crown capital	Interest income received	(1)	31	–
	Accountancy service income	(2)	90	–

Notes:

(1) The interest income was charged in accordance with the prevailing commercial interest rate.

(2) The accountancy service income represents an appropriate allocation of costs incurred by the Group.

−39 −

APPENDIX II FINANCIAL INFORMATION RELATING TO THE GROUP

B. MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, the Directors are not aware of any material adverse changes in the financial or trading position of the Group since 31st March, 2004, the date to which the latest published audited consolidated accounts of the Group were made up.

C. WORKING CAPITAL

The Directors are of the opinion that in the absence of unforeseen circumstances and after taking into account the current cash balance and resources of the Group, the available banking facilities and the funds raised from the disposal of the Property, the Group has sufficient working capital for its present requirements.

D. INDEBTEDNESS

As at the close of business on 31st October, 2004, being the latest practicable date for the purpose of ascertaining information contained in this indebtedness statement prior to the printing of this circular, the Group had outstanding borrowings of approximately HK$215.7 million, comprising secured bank loans of approximately HK$105.5 million; unsecured bank loans of approximately HK$100.0 million; and trust receipt loans of approximately HK$10.2 million. The secured bank loans are secured by certain of the Group’s investment properties.

Save as aforesaid and apart from intra-group liabilities, the Group did not have any mortgages, charges, debentures, loan capital, bank loans and overdrafts, debt securities or other similar indebtedness, finance leases or hire purchase commitments, liabilities under acceptances or acceptances creditors, or any guarantees, or other material contingent liabilities outstanding at the close of business on 31st October, 2004.

For the purpose of this indebtedness statement, foreign currency amounts have been translated into Hong Kong dollars at the approximate rates of exchange prevailing as at 31st October, 2004.

The Directors are not aware of any material adverse changes in the Group’s indebtedness position and contingent liabilities since 31st October, 2004.

−40 −

PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

APPENDIX III

The following is the text of a report, prepared for the sole purpose of inclusion in this circular, received from the independent reporting accountants, Deloitte Touche Tohmatsu, Certified Public Accountants, Hong Kong.

==> picture [81 x 39] intentionally omitted <==

17th December, 2004

The Directors

Yeebo (International Holdings) Limited 7th Floor, On Dak Industrial Building 2-6 Wah Sing Street

Kwai Chung New Territories Hong Kong

Dear Sirs,

We report on the unaudited pro forma financial information of Yeebo (International Holdings) Limited (the “Company”) and its subsidiaries (hereinafter collectively referred to as the “Group”) set out in Appendix III to the circular dated 17th December, 2004 (the “Circular”) in connection with a very substantial disposal (the “Disposal”) of a property situated at Unit A on the Basement, Unit A on the Ground Floor (together with the external walls thereof) and the Staircase leading to the Ground Floor to Unit A in the Basement of Wheelock House, No. 20 Pedder Street, Hong Kong (the “Property”), which has been prepared, for illustrative purposes only, to provide information about how the transaction might have affected the financial information presented.

RESPONSIBILITIES

It is the responsibility solely of the Directors of the Company to prepare the unaudited pro forma financial information in accordance with paragraph 29 of Chapter 4 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”). It is our responsibility to form an opinion, as required by paragraph 29(7) of Chapter 4 of the Listing Rules, on the unaudited pro forma financial information and to report our opinion to you. We do not accept any responsibility for any reports previously given by us on any financial information used in the compilation of the unaudited pro forma financial information beyond that owed to those to whom those reports were addressed by us at the dates of their issue.

−41 −

PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

APPENDIX III

BASIS OF OPINION

We conducted our work with reference to the Statements of Investment Circular Reporting Standards and Bulletin 1998/8 “Reporting on pro forma financial information pursuant to the listing rules” issued by the Auditing Practices Board in the United Kingdom, where applicable. Our work, which involved no independent examination of any of the underlying financial information, consisted primarily of comparing the unadjusted financial information with the source documents, considering the evidence supporting the adjustments and discussing the unaudited pro forma financial information with the Directors of the Company.

Our work does not constitute an audit or a review in accordance with Statements of Auditing Standards issued by the Hong Kong Institute of Certified Public Accountants and accordingly we do not express any such assurance on the unaudited pro forma financial information.

The unaudited pro forma financial information has been prepared on the basis set out in Appendix III to the Circular for illustrative purpose only and, because of its nature, it may not give an indicative financial position of the Group as at 31st March, 2004 or at any future date.

OPINION

In our opinion:

a. the unaudited pro forma financial information has been properly compiled on the basis stated;
b. such basis is consistent with the accounting policies of the Group; and
c. the adjustments are appropriate for the purposes of the unaudited pro forma financial information as disclosed pursuant to paragraph 4.29(1) of the Listing Rules.

Yours faithfully,

Deloitte Touche Tohmatsu Certified Public Accountants Hong Kong

−42 −

PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

APPENDIX III

UNAUDITED PRO FORMA CONSOLIDATED NET ASSET STATEMENT

As at 31st March, 2004

The following is the unaudited pro forma consolidated net asset statement of the Group assuming that the Property had been disposed of as at 31st March, 2004. The unaudited pro forma consolidated net asset statement was prepared based on the audited consolidated balance sheet of the Group as at 31st March, 2004 with adjustments to reflect the effect of the Disposal.

This unaudited pro forma consolidated net asset statement was prepared for illustrative purposes only and because of its nature, it may not give a true picture of the financial position of the Group at any dates.

31st March, 2004 Pro forma adjustments Notes HK$’000 Non-current assets Property, plant and equipment 152,806 Investment properties 1 254,900 (254,000) Deposits for acquisition of plant and equipment 8,886 Interest in associates 39,172 Club debentures 1,459 Deferred tax assets 2 – 458 457,223 Current assets Inventories 77,154 Trade and other receivables 3 93,736 (31) Bills receivable 4,604 Investments in trading securities 56,595 Bank balances and cash 3,4,5 10,270 271,816 242,359 Current liabilities Trade and other payables 5 78,533 (1,200) Bills payable 2,548 Amount due to an associate 3,917 Taxation payable 2 1,244 578 Bank borrowings – due within one year 4 22,094 (11,796) 108,336 Net current assets 134,023 Total assets less current liabilities 591,246 Non-current liabilities Bank borrowings – due after one year 4 135,969 (100,969) Deferred taxation 2 120 (120) 136,089 Net assets 455,157	31st March, 2004 Pro forma adjustments Notes HK$’000 Non-current assets Property, plant and equipment 152,806 Investment properties 1 254,900 (254,000) Deposits for acquisition of plant and equipment 8,886 Interest in associates 39,172 Club debentures 1,459 Deferred tax assets 2 – 458 457,223 Current assets Inventories 77,154 Trade and other receivables 3 93,736 (31) Bills receivable 4,604 Investments in trading securities 56,595 Bank balances and cash 3,4,5 10,270 271,816 242,359 Current liabilities Trade and other payables 5 78,533 (1,200) Bills payable 2,548 Amount due to an associate 3,917 Taxation payable 2 1,244 578 Bank borrowings – due within one year 4 22,094 (11,796) 108,336 Net current assets 134,023 Total assets less current liabilities 591,246 Non-current liabilities Bank borrowings – due after one year 4 135,969 (100,969) Deferred taxation 2 120 (120) 136,089 Net assets 455,157	Adjusted balances HK$’000 152,806 900 8,886 39,172 1,459 458
	457,223 77,154 93,736 (31) 4,604 56,595 10,270 271,816 242,359 78,533 (1,200) 2,548 3,917 1,244 578 22,094 (11,796) 108,336 134,023 591,246 135,969 (100,969) 120 (120) 136,089	203,681
		77,154 93,705 4,604 56,595 282,086
		514,144
		77,333 2,548 3,917 1,822 10,298
		95,918
		418,226
		621,907
		35,000 –
		35,000
	455,157	586,907

−43 −

PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

APPENDIX III

UNAUDITED PRO FORMA CONSOLIDATED INCOME STATEMENT

For the year ended 31st March, 2004

The following is the unaudited pro forma consolidated income statement of the Group assuming that the Property had been disposed of as at 1st April, 2003. The unaudited pro forma consolidated income statement was prepared based on the audited consolidated income statement of the Group for the year ended 31st March, 2004 with adjustments to reflect the effect of the Disposal.

This unaudited pro forma consolidated income statement was prepared for illustrative purposes only and because of its nature, it may not give a true picture of the results of the Group for any financial periods.

Year ended 31st March, 2004 Pro forma adjustments Notes HK$’000 Turnover 6 308,187 (14,400) Cost of sales (257,066) Gross profit 51,121 Other operating income 4,369 Revaluation increase on investment properties 7 608 (608) Selling and distribution expenses (12,607) Administrative expenses 8 (24,920) 40 Gain on disposal of investments in trading securities 17,899 Unrealised gain on investments in trading securities 22,682 Profit from operations 59,152 Finance costs 9 (3,376) 2,584 Share of results of associates (819) Profit before income tax 54,957 Income tax expense 2 (738) (1,559) Profit for the year 54,219	Year ended 31st March, 2004 Pro forma adjustments Notes HK$’000 Turnover 6 308,187 (14,400) Cost of sales (257,066) Gross profit 51,121 Other operating income 4,369 Revaluation increase on investment properties 7 608 (608) Selling and distribution expenses (12,607) Administrative expenses 8 (24,920) 40 Gain on disposal of investments in trading securities 17,899 Unrealised gain on investments in trading securities 22,682 Profit from operations 59,152 Finance costs 9 (3,376) 2,584 Share of results of associates (819) Profit before income tax 54,957 Income tax expense 2 (738) (1,559) Profit for the year 54,219	Adjusted balances HK$’000 293,787 (257,066) 36,721 4,369 – (12,607) (24,880) 17,899 22,682 44,184 (792) (819) 42,573 821 43,394
	51,121 4,369 608 (608) (12,607) (24,920) 40 17,899 22,682 59,152 (3,376) 2,584 (819) 54,957 (738) (1,559)	36,721 4,369 – (12,607 (24,880 17,899 22,682
		44,184 (792 (819
		42,573 821
	54,219

−44 −

PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

APPENDIX III

Notes:

The adjustment reflects the Disposal of the Property with a carrying amount of HK$254,000,000 as at 31st March, 2004.
The adjustments reflect the tax effect including Hong Kong Profits Tax and deferred taxation upon the Disposal of the Property.
The adjustment reflects the refund of the management fee deposit from the property management company.
The adjustment reflects the assumption that out of the estimated net sale proceeds from the Disposal of approximately HK$386 million, HK$112,765,000 had been used to repay part of the Group’s bank loans and HK$272,985,000 had been placed in banks as deposits.
The adjustment reflects the refund of the rental received in advance from the tenant of the Property.
The adjustment reflects the decrease in rental income received from an independent third party for the period from 1st April, 2003 to 31st March, 2004 in respect of the leasing of the Property.
The adjustment reflects the reversal of the revaluation increase arising from the revaluation of the Property.
The adjustment reflects the decrease in the direct expenses incurred by the Property.
The adjustment reflects the decrease in the bank interest expense had the bank loans mentioned in note 4 been repaid as at 1st April, 2003.
The adjustments in note 2, 6, 8 and 9 have a continuing effect on the Group.
The unaudited proforma income statement has not recognised any additional income the Group may have earned from the excess of the net sale proceeds on the Disposal of the Property after the repayment of the bank loans as mentioned in note 4.

−45 −

PROPERTY VALUATION

APPENDIX IV

Set out below are the text of the letter and valuation certificate received by the Company from the Dudley Sunveyors Limited, a firm of independent surveyors, prepared for the purpose of incorporation into this circular, of their valuation of the Property as at 31st October, 2004.

==> picture [218 x 64] intentionally omitted <==

14/F., Siu Ying Commercial Building, 153 Queen’s Road Central, Hong Kong. Tel: (852) 2525 0375 Fax: (852) 2877 0378 Email: [email protected]

17th December, 2004

The Directors

Yeebo (International Holdings) Limited 7th Floor, On Dak Industrial Building 2-6 Wah Sing Street

Kwai Chung New Territories Hong Kong

Dear Sirs,

Re: Unit (Commercial) A on Ground Floor together with the external walls thereof and Unit (Commercial) A on the Basement of Wheelock House, No. 20 Pedder Street, Central, Hong Kong.

In accordance with your instruction for us to give our opinion on the Open Market Value of the above property as at 31st October, 2004 (“the relevant date”) for disposal purposes, we confirm that we have made relevant enquiries and obtained such further information as we consider necessary for providing you with our opinion of the property interest.

Our valuation is our opinion of the Open Market Value which we would define as meaning “the best value at which the sale interest in a property might reasonably be expected to have been completed unconditionally for cash consideration on the date of valuation, assuming:-

(a) a willing seller;
(b) that, prior to the date of valuation, there had been a reasonable period (having regard to the nature of the property and the state of the market) for the proper marketing of the interest, for the negotiation and agreement of price and terms and for the completion of the sale;

−46 −

PROPERTY VALUATION

APPENDIX IV

(c) that the state of the market, level of values and other circumstances were, on any earlier assumed date of exchange of contracts, the same as on the date of valuation;
(d) that no account is taken of any additional bid by a prospective purchaser with a special interest; and
(e) that both parties to the transaction had acted knowledgeably, prudently and without compulsion.”

Our valuation is prepared in accordance with the Hong Kong Guidance Notes on the Valuation of Property Assets (2nd Edition) published by the Hong Kong Institute of Surveyors and in compliance with Chapter 5 of the Listing Rules published by The Stock Exchange of Hong Kong Limited.

Our valuation has been made on the assumption that the owner sells the property interest on the open market without the benefit of a deferred terms contract, leaseback, management agreement or any similar arrangement which could serve to increase the value of the property interest.

In undertaking our valuation for the property interest, we have assumed that the Group has an uninterrupted right to use the respective properties for the whole of the term as granted at nominal annual land use fees and any premium payable has been granted. We are unable to ascertain the titles of the property interest but have relied on the advice given by the Group regarding the validity and nature of the property interest.

We have been provided by the Group with some documents in relation to the title to the property interest. However, we have not searched the original documents to verify ownership or to ascertain any amendments which may not appear on the copies available to us. We have relied to a considerable extent on any information given by you and have accepted advice given to us on such matters as statutory notices, easements, tenure, occupation, tenancy schedule, rentals, site and floor areas and all other relevant matters.

All documents and leases have been used as reference only and all dimensions, measurements and areas included in this valuation report are based on information contained in the documents available to us and are therefore approximations only. We have not been able to carry out detailed on-site measurements to verify the site area and floors areas of the property and we have assumed that the site and floor areas shown on the copies of the documents available to us are correct.

We have inspected the exteriors and where possible, the interiors of the property. However, no structural survey has been carried out, and we are not able to report that the property is free of rot, infestation or any other structural defects, nor were any tests carried out on any of the services.

In forming our opinion of the open market value of the property interest, we have adopted the direct comparison method assuming sale with the benefit of immediate vacant possession or existing tenancies and by reference to comparable market transactions.

−47 −

PROPERTY VALUATION

APPENDIX IV

No allowance has been made in our report for any charges, mortgages or amounts owing on the property nor for any expenses or taxation which may be incurred in effecting a sale. Unless otherwise stated, it is assumed that the property is free from encumbrances, restrictions and outgoings of an onerous nature which could affect the value.

Our valuation is shown in the Valuation Certificate as attached.

Yours faithfully, For and on behalf of

DUDLEY SURVEYORS LIMITED Ellen Y. T. LO

B.Sc. (Est. Man.), MRICS, MHKIS, RPS (GP), CIREA Managing Director

Note: Ms. Ellen Y. T. Lo, who is a member of the Hong Kong Institute of Surveyors, a member of the Royal Institution of Chartered Surveyors and a Registered Professional Surveyor in General Practice, has over 22 years’ experience in valuing properties in Hong Kong and the PRC.

−48 −

PROPERTY VALUATION

APPENDIX IV

VALUATION CERTIFICATE

Property Description and tenure

Particulars of Occupancy

Capital Value in existing state as at 31st October, 2004

Unit (Commercial) The property comprises a bank A on Ground Floor space on the Ground Floor together with the together with the external walls external walls and its respective Basement unit thereof and Unit within a 25-storeyed commercial (Commercial) A on building in Central. The external the Basement of of the building is finished with Wheelock House, marble tiled/ metal panelled No. 20 Pedder walls fitted with large glass Street, Central, panels. The building was Hong Kong. completed in 1984.

The property is HK$380,000,000.00 subject to a 3-year tenancy commencing from 30th November, 2002 at a monthly rent of $1,200,000 exclusive of rates and management fee.

The property has a total saleable floor area of 798.3 sq.m. (8,593 sq.ft.) or thereabouts plus portion of staircase of approximately 5.6 sq.m. (60 sq.ft.) or thereabouts and open space of 2.9 sq.m. (31 sq.ft.) or thereabouts.

677/11022 shares of and in Sections A, C and the Remaining Portion of Marine Lot No. 99 and Sections A, B and the Remaining Portion of Marine Lot No. 100.

The property is held under Government Lease for a term of 999 years commencing from 16th November, 1855.

Notes:

The registered owner of the property is Yeebo Technology Limited registered vide Memorial No. 8835617 dated 30th November, 2002.
Mortgage to secure general banking facilities in favour of Hang Seng Bank Limited registered vide Memorial No. 8835618 dated 30th November, 2002.
Tenancy Agreement from 30th November, 2002 to 29th November, 2005 in favour of Citibank N.A. registered vide Memorial No. 8837535 dated 30th November, 2002.

−49 −

GENERAL INFORMATION

APPENDIX V

1. 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 herein misleading.

2. DIRECTORS’ AND CHIEF EXECUTIVE’S DISCLOSURE OF INTERESTS

As at the Latest Practicable Date, the interests and short positions of the Directors in the shares, underlying shares and debentures of the Company or its associated corporations (within the meaning of Part XV of the SFO), which would have to be notified to the Company or any of its associated corporations and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO or as recorded in the register maintained by the Company pursuant to section 352 of the SFO or as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Companies were as follows:

Long positions in Shares

	Number of shares held, capacity	Number of shares held, capacity	Number of shares held, capacity
	and nature of interest
	Directly	Through		Percentage of
	beneficially	controlled		the Company’s
Name of director	owned	corporation	Total	issued capital
Mr. Fang Hung,
Kenneth (Note)	20,130,000	697,692,368	717,822,368	68.79%
Mr. Li Kwok Wai,
Frankie (Note)	18,220,013	697,692,368	715,912,381	68.60%

Note: Antrix Investment Limited owns 697,692,368 Shares. Mr. Fang Hung, Kenneth and Mr. Li Kwok Wai, Frankie beneficially owns 51% and 49%, respectively, of the issued share capital of Antrix Investment Limited.

In addition to the above, a Director has non-beneficial personal equity interests in subsidiaries held for the benefit of the Company.

Save as disclosed herein, as at the Latest Practicable Date, none of the Directors or chief executives and their associates had registered an interest or short position in the shares, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO), which would have to be notified to the Company or any of its associated corporations) and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO or that was required to be recorded pursuant to section 352 of the SFO or as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Companies.

−50 −

GENERAL INFORMATION

APPENDIX V

3. INTERESTS AND SHORT POSITIONS IN SHARES OF SUBSTANTIAL SHAREHOLDERS

As at the Latest Practicable Date, so far as is known to, or can be ascertained after the reasonable enquiry by, the Directors, the following persons (other than a Director or chief executive of the Company) had an interest or short position in the shares or underlying shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 and Part XV of the SFO, or who was directly or indirectly, interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other member of the Group:

Long position in Shares

			Percentage
			of the
			Company’s
	Capacity and nature	Number of	issued share
Name	of interest	Shares held	capital
Antrix Investment	Directly beneficially	697,692,368	68.79%
Limited (Note)	owned
Esca Investment Limited	Indirectly beneficially	697,692,368	68.79%
(Note)	owned
Megastar Venture	Indirectly beneficially	697,692,368	68.79%
Limited (Note)	owned
Liu Chong Hing Bank	Directly beneficially	57,600,000	5.52%
Limited	owned

Note: Antrix Investment Limited is held as to 51% by Esca Investment Limited (a company wholly-owned by Mr. Fang Hung, Kenneth) and 49% by Megastar Venture Limited (a company wholly-owned by Mr. Li Kwok Wai, Frankie). The Shares held by Esca Investment Limited and Megastar Venture Limited represent the same interest held by Antrix Investment Limited, which have also been disclosed as an interest of Mr. Fang Hung, Kenneth and Mr. Li Kwok Wai, Frankie under the section “Directors’ and Chief Executive’s Disclosure of Interests”.

Save as disclosed above, as at the Latest Practicable Date, so far as is known to, or can be ascertained after reasonable enquiry by, the Directors, no other person (other than a Director or chief executive of the Company) had an interest or short position in the shares or underlying shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or who was, directly or indirectly, interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other member of the Group.

−51 −

GENERAL INFORMATION

APPENDIX V

4. MATERIAL CONTRACTS

Within the two years immediately preceding the issue of this circular, the following contracts, not being contracts entered into in the ordinary course of business, have been entered into by members of the Group and are or may be material:

(a) The joint venture agreement entered into between the Company and the other shareholders of Crown Capital Holdings Limited (“Crown Capital”) for the investment in Crown Capital which in turn holds a 73.2% interest in Beijing Visionox Technology Company Limited.
(b) The Provisional Agreement entered into by the Vendor and the Purchaser on 23rd November, 2004 and the S&P Agreement made pursuant thereto.

5. LITIGATION

As at the Latest Practicable Date, neither the Company nor any of its subsidiaries is engaged in any litigation, arbitration or claim of material importance and, so far as the Directors are aware, no litigation, arbitration or claim of material importance is pending or threatened against either the Company or any of its subsidiaries.

6. SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors had any existing or proposed service agreement with any member of the Group which will not expire or is not determinable by the employer within one year without payment of compensation (other than statutory compensation).

7. DIRECTORS’ INTERESTS IN CONTRACTS AND IN COMPETING BUSINESS

So far as the Directors are aware, as at the Latest Practicable Date:

(a) none of the Directors or their associates had any direct or indirect interest in any assets which have been, since 31st March, 2004 (being the date to which the latest published audited financial statements of the Group were made up), acquired or disposed of by or leased to or are proposed to be acquired or disposed of by or leased to any member of the Group; and
(b) none of the Directors or their associates was materially interested in any contract or arrangement entered into by any member of the Group and subsisting at the date of this circular which was significant in relation to the business of the Group.

As at the Latest Practicable Date, none of the Directors and their respective associates have interests in a business, apart from the business of the Group, which competes or is likely to compete, either directly or indirectly, with the business of the Group.

−52 −

GENERAL INFORMATION

APPENDIX V

8. EXPERTS AND CONSENTS

(a) The following are the qualifications of the experts who have given their opinions and advice which are included in this circular:

Name

Qualification

Deloitte Touche Tohmatsu (“DTT”) Dudley Surveyors Limited (“Dudley”)

Certified Public Accountants Chartered Surveyors

(b) Neither DTT or Dudley has any shareholding, directly or indirectly, in any member of the Group or any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group.
(c) Each of DTT and Dudley has given and have not withdrawn its written consent to the issue of this circular, with the inclusion of its letter or references to its name in the form and context in which they are included.
(d) Neither DTT or Dudley has any direct or indirect interest in any assets which have been, since 31st March, 2004 (being the date to which the latest published audited financial statements of the Group were made up), acquired or disposed of by or leased to or are proposed to be acquired or disposed of by or leased to any member of the Group.

9. MISCELLANEOUS

(a) The registered office of the Company is at Canon’s Court, 22 Victoria Street, Hamilton HM 12, Bermuda.
(b) The qualified accountant of the Company is Mr. Leung Tze Kuen, Benny, an associate member of CPA Australia.
(c) The secretary of the Company is Mr. Lau Siu Ki, Kevin, a fellow member of both the Association of Chartered Certified Accountants and the Hong Kong Institute of Certified Public Accountants.
(d) The Company’s share registrar is Secretaries Limited at Ground Floor, Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong.
(e) This circular has been prepared in both English and Chinese. In the case of any discrepancy, the English text shall prevail over the Chinese text.

−53 −

GENERAL INFORMATION

APPENDIX V

10. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection during normal business hours at the Hong Kong principal office of the Company at 7th Floor, On Dak Industrial Building, 2-6 Wah Sing Street, Kwai Chung, New Territories, Hong Kong, during normal business hours up to and including 5th January, 2005:

(a) the memorandum and articles of association of the Company;
(b) the audited consolidated financial statements of the Company and its subsidiaries for the two years ended 31st March, 2004;
(c) the letter, valuation certificate and valuation report prepared by the Dudley;
(d) the letter of consents referred to under the section headed “Experts and Consents” in this appendix;
(e) the material contracts referred to in the paragraph headed “Material Contracts” in this appendix; and
(f) the statements signed by DTT setting out their opinion on the adjustments made on the Pro Forma Net Assets Statement of the Remaining Group and the Pro Forma Consolidated Profit and Loss Account of the Remaining Group as set out in Appendix III to this circular.

−54 −

NOTICE OF SGM

YEEBO (INTERNATIONAL HOLDINGS) LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 259)

NOTICE IS HEREBY GIVEN that a special general meeting of Yeebo (International Holdings) Limited (the “Company”) will be held at Regency Room 5 & 6, 3rd Floor, Hyatt Regency Hong Kong, 67 Nathan Road, Kowloon, Hong Kong on Wednesday, 5th January, 2005 at 11:00 a.m. for the purpose of considering and, if thought fit, passing the following resolutions as ordinary resolutions of the Company:

ORDINARY RESOLUTIONS

“ THAT

The sale of the property (the “Disposal”), particulars of which are set out in a provisional agreement for sale and purchase dated 23rd November, 2004 (the “Agreement”) by Yeebo Technology Limited to Citibank, N.A. or its nominee or sub-purchaser, in relation to such Disposal be and is hereby approved and confirmed;
the contents of the Agreement (a copy of which is tabled at the meeting and marked “A” and initialled by the chairman of the meeting for identification purpose) be and is hereby approved, ratified and confirmed; and
any one director of the Company, or any two directors of the Company if the affixation of the common seal is necessary, be and is/are hereby authorized for and on behalf of the Company to execute all such assignments, documents, instruments and agreements and to do all such acts or things deemed by him/them to be incidental to, ancillary to or in connection with the matters contemplated in or relating to the Agreement and/or the Disposal as he/they may consider necessary, desirable or expedient.”

By order of the Board

Yeebo (International Holdings) Limited Lau Siu Ki, Kevin

Company Secretary

Hong Kong, 17th December, 2004

−55 −

NOTICE OF SGM

As at the date of this notice, the Board comprises Mr. Fang Hung, Kenneth, GBS, JP and Mr. Li Kwok Wai, Frankie as executive directors and Hon. Tien Pei Chun, James, GBS, JP, Mr. Chu Chi Wai, Allan and Mr. Lau Yuen Sun, Adrian as independent non-executive directors.

Principal Office in Hong Kong: 7th Floor On Dak Industrial Building 2-6 Wah Sing Street Kwai Chung New Territories Hong Kong

Notes:

A form of proxy for use at the meeting is enclosed herewith.
A shareholder entitled to attend and vote at the special general meeting is entitled to appoint one or more proxies to attend and vote instead of him/her. A proxy need not be a shareholder of the Company.
To be valid, a form of proxy, together with the power of attorney (if any) or other authority (if any) under which it is signed or a notarially certified copy of the power of attorney or authority, must be completed, signed and deposited with the Company’s share registrars, Secretaries Limited at Ground Floor, 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 or the adjourned meeting (as the case may be).
Delivery of an instrument appointing a proxy shall not preclude a shareholder from attending and voting in person at the meeting or at any adjourned meeting therefore (as the case may be) should you so wish, and in such event, the instrument appointing a proxy shall be deemed to be revoked.

−56 −

AI assistant

Tristate Holdings Limited — Proxy Solicitation & Information Statement 2004

49226_rns_2004-12-20_fd02f1f5-e81f-4d6f-8c1c-1eeec3df3630.pdf

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

YEEBO (INTERNATIONAL HOLDINGS) LIMITED

VERY SUBSTANTIAL DISPOSAL TRANSACTION

DISPOSAL OF PROPERTY

DEFINITIONS

YEEBO (INTERNATIONAL HOLDINGS) LIMITED

VERY SUBSTANTIAL DISPOSAL TRANSACTION DISPOSAL OF PROPERTY

1. INTRODUCTION

2. PROVISIONAL AGREEMENT

Date:

Vendor:

Purchaser:

Property disposed:

Consideration:

S&P Agreement:

Completion Date:

Conditions Precedent:

3. CONSIDERATION

4. REASONS FOR AND BENEFITS OF THE DISPOSAL

5. FINANCIAL EFFECT OF THE DISPOSAL

6. USE OF PROCEEDS

7. COMMENTARY ON PRO FORMA FINANCIAL INFORMATION

Review of operations

Major acquisition and investment

Liquidity and financial resources

Employment and remuneration policy

Future plan for material investments

8. PROSPECTS

9. GENERAL

10. SGM

11. PROCEDURES ON DEMANDING A POLL

12. RECOMMENDATION

13. FURTHER INFORMATION

(I) PROFIT AND LOSS STATEMENT OF THE PROPERTY

(II) VALUATION OF THE PROPERTY

A. AUDITED FINANCIAL STATEMENTS OF THE COMPANY FOR THE TWO YEARS ENDED 31ST MARCH, 2004

Consolidated Income Statement

Consolidated Balance Sheet

Balance Sheet

Consolidated Statements of Changes in Equity

Consolidated Cash Flow Statement

Notes to the Financial Statements

1. GENERAL

2. ADOPTION OF HONG KONG FINANCIAL REPORTING STANDARD

SSAP 12 (Revised) Income taxes

3. SIGNIFICANT ACCOUNTING POLICIES

Basis of consolidation

Investments in subsidiaries

Goodwill

Interests in associates

Investments in securities

Property, plant and equipment

Investment properties

Club debentures

Inventories

Impairment

Revenue recognition

Taxation

FINANCIAL INFORMATION RELATING TO THE GROUP

Operating leases

Foreign currencies

Retirement benefit costs

4. TURNOVER

5. BUSINESS AND GEOGRAPHICAL SEGMENTS

Business segments

2004

2004

2003

2003

Geographical segments

6.

PROFIT (LOSS) FROM OPERATIONS

7. FINANCE COSTS

8. GAIN ON DISPOSAL OF A SUBSIDIARY

9. DIRECTORS’ EMOLUMENTS

10. EMPLOYEES’ EMOLUMENTS

11. INCOME TAX EXPENSE

Tristate Holdings Limited Proxy Solicitation & Information Statement 2004