Tsim Sha Tsui Properties Limited — Proxy Solicitation & Information Statement 2002

Oct 11, 2002

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold all your shares in TSIM SHA TSUI PROPERTIES LIMITED you should at once hand this circular to the purchaser or to the bank, stockbroker or other agent through whom the sale was effected for transmission to the purchaser.

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this circular, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

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TSIM SHA TSUI PROPERTIES LIMITED

(Incorporated in Hong Kong with limited liability)

GENERAL MANDATES TO REPURCHASE SHARES AND TO ISSUE SHARES

AND

AMENDMENTS TO THE ARTICLES OF ASSOCIATION

The notice convening the annual general meeting of Tsim Sha Tsui Properties Limited (“the Company”) to be held at The Pacific Rooms, 9th Floor, Tower Block, The Royal Pacific Hotel & Towers, 33 Canton Road, Tsim Sha Tsui, Kowloon, at 10:00 a.m. on Wednesday, 13th November, 2002 (the “Annual General Meeting”) was given on 24th September, 2002 and is contained in the 2002 Annual Report of the Company. Shareholders are advised to read the notice and to complete and return the form of proxy enclosed with the 2002 Annual Report not less than 48 hours before the time appointed for holding the Annual General Meeting in accordance with the instructions printed thereon.

11th October, 2002

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TSIM SHA TSUI PROPERTIES LIMITED

(Incorporated in Hong Kong with limited liability)

Directors: Robert NG Chee Siong (Chairman) Ronald Joseph ARCULLI, GBS, OBE, JP Paul CHENG Ming Fun, JP Raymond TONG Kwok Tung

Registered Office: 12th Floor Tsim Sha Tsui Centre Salisbury Road Tsim Sha Tsui Kowloon Hong Kong

(* Independent Non-Executive Directors)

11th October, 2002

To the shareholders

Dear Sir or Madam,

GENERAL MANDATES TO REPURCHASE SHARES AND TO ISSUE SHARES AND

AMENDMENTS TO THE ARTICLES OF ASSOCIATION

INTRODUCTION

At the last annual general meeting of the Company held on 15th November, 2001, general mandates were given to the Directors to exercise the powers of the Company to repurchase shares and to issue shares of the Company. Under the terms of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (“Listing Rules”), these general mandates will lapse at the conclusion of the forthcoming annual general meeting of the Company to be held at The Pacific Rooms, 9th Floor, Tower Block, The Royal Pacific Hotel & Towers, 33 Canton Road, Tsim Sha Tsui, Kowloon at 10:00 a.m. on Wednesday, 13th November, 2002 (“Annual General Meeting”) unless renewed at that meeting.

Following certain recent amendments of the Companies Ordinance (Chapter 32) of the Laws of Hong Kong (“Companies Ordinance”) and the Listing Rules in January and February 2002 respectively in relation to the distribution of corporate communications, the Directors would like to propose corresponding amendments to the Company’s Articles of Association so as to achieve flexibility for the Company to take advantage of the amendments whenever considered appropriate in the future.

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

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GENERAL MANDATE TO REPURCHASE SHARES

An ordinary resolution will be proposed at the Annual General Meeting to approve a general and unconditional mandate to be given to the Directors to exercise the powers of the Company to repurchase, at any time until the next annual general meeting of the Company or such earlier period as stated in the ordinary resolution, shares of the Company (“Shares”) up to a maximum of 10% of the issued share capital of the Company at the date of the resolution (“Share Repurchase Mandate”).

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

GENERAL MANDATE TO ISSUE SHARES

It will be proposed at the Annual General Meeting two ordinary resolutions respectively granting to the Directors a general and unconditional mandate to allot, issue and deal with Shares not exceeding 20% of the issued share capital of the Company at the date of the resolution until the next annual general meeting of the Company or such earlier period as stated in the ordinary resolution (the “Share Issue Mandate”) and adding to such general mandate so granted to the Directors any Shares repurchased by the Company under the Share Repurchase Mandate.

AMENDMENTS TO THE ARTICLES OF ASSOCIATION

According to the recent amendments of the Companies Ordinance and the Listing Rules which came into effect in January and February 2002 respectively, the Company is permitted, inter alia, (1) to offer shareholders the choice to receive, in place of Annual Report, a summary financial report (“Summary Financial Report”) which is derived from and summarises the Annual Report; and (2) to offer shareholders the choice to receive corporate communication, including but not limited to, the Annual Report, the Summary Financial Report, the Interim Report, notices of general meetings and circulars through electronic means and in either English or Chinese only or in both English and Chinese.

In order to achieve such flexibility under the new legislation and rules, the Directors propose to introduce certain amendments to the Company’s Articles of Association which will enable the Company, subject to the extent as permitted by the Companies Ordinance, Listing Rules and any applicable laws, rules and regulations:

• (a) to offer shareholders the choice to receive Summary Financial Report in place of Annual Report;

• (b) with the shareholders’ prior consent, to send or otherwise make available the Company’s corporate communication (within the meaning ascribed thereto under the Listing Rules) using electronic means; and

• (c) to send the Company’s corporate communication to shareholders in either the English language only, the Chinese language only or in both the English language and the Chinese language.

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Details of the proposed amendments are set out in Resolution 5 of the notice convening the Annual General Meeting. In the event that the special resolution is passed at the AGM and that the Company considers appropriate in the future and at the shareholders’ preference to publish the Annual Report and/or Summary Financial Report on its computer network as an alternative to despatch printed copies thereof to the relevant shareholders and send corporate communication to the relevant shareholders by electronic means and in either English or Chinese only, it will help enhance environmental protection and save costs of the Company.

ANNUAL GENERAL MEETING

At the Annual General Meeting, ordinary resolutions will be proposed to approve the Share Repurchase Mandate, the Share Issue Mandate and a special resolution will be proposed to approve the amendments to the Articles of Association.

The notice convening the Annual General Meeting was given on 24th September, 2002 and is contained in the 2002 Annual Report of the Company. Shareholders are advised to read the notice and to complete and return the form of proxy enclosed with the 2002 Annual Report not less than 48 hours before the time appointed for holding the Annual General Meeting in accordance with the instructions printed thereon.

RECOMMENDATION

The Directors believe that the Share Repurchase Mandate, the Share Issue Mandate and the amendments to the Articles of Association are in the best interests of the Company and its shareholders as a whole and accordingly the Directors, together with their associates, intend to vote in favour of the resolutions in respect of their respective shareholdings in the Company and recommend you to vote in favour of such resolutions to be proposed at the Annual General Meeting.

Yours faithfully, Robert NG Chee Siong Chairman

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APPENDIX

EXPLANATORY STATEMENT

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

1. LISTING RULES

The Listing Rules permit companies whose primary listing are on The Stock Exchange of Hong Kong Limited (“Stock Exchange”) to repurchase their securities on the Stock Exchange or on another stock exchange recognised for this purpose by the Securities and Futures Commission and the Stock Exchange, subject to certain restrictions, the most important of which are summarised below:

(a) Shareholders’ Approval

The Listing Rules provide that all on-market repurchases of securities by a company with its primary listing on the Stock Exchange must be approved in advance by an ordinary resolution, either by way of a specific approval in relation to specific transactions or by a general mandate to the directors of the company to make such repurchases.

(b) Source of Funds

Repurchases must be made out of funds which are legally available for the purpose and in accordance with the company’s constitutive documents and the laws of the jurisdiction in which the company is incorporated or otherwise established.

2. SHARE CAPITAL

As at 4th October, 2002 (the latest practicable date prior to the printing of this circular), the issued share capital of the Company comprised 1,367,905,827 Shares of HK$0.20 each. On the basis of such figure and assuming that no further shares are issued or repurchased after 4th October, 2002 and up to the date of the Annual General Meeting, the Company would be allowed under the Share Repurchase Mandate to repurchase a maximum of 136,790,582 Shares.

3. REASONS FOR REPURCHASES

The Directors believe that the flexibility afforded by the Share Repurchase Mandate would be beneficial to the Company and its shareholders. Repurchases of Shares will only be made when the Directors believe that such repurchases will benefit the Company and its shareholders. Such repurchases may, depending on market conditions and funding arrangements at the time, lead to an enhancement of the net assets of the Company and/or its earnings per Share. It will then be beneficial to those shareholders who retain their investment in the Company since their percentage interest in the assets of the Company would increase in proportion to the number of Shares repurchased by the Company.

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4. FUNDING OF REPURCHASES

Any repurchases will be made out of funds of the Company legally permitted to be utilised in this connection, being distributable profits of the Company or the proceeds of a fresh issue of Shares made for such purpose.

There might be an adverse impact on the working capital or gearing position of the Company as compared with the position disclosed in the audited accounts contained in the annual report for the year ended 30th June, 2002 in the event that the Share Repurchase Mandate were to be carried out in full at any time during the proposed repurchase period. However, the Directors do not propose to exercise the Share Repurchase Mandate to such extent as would, in the circumstances, have a material adverse effect on the working capital requirements of the Company or the gearing levels which in the opinion of the Directors shall from time to time be appropriate for the Company.

5. DISCLOSURE OF INTEREST

Neither the Directors nor, to the best of their knowledge having made all reasonable enquiries, their associates, have any present intention to sell any Shares to the Company under the Share Repurchase Mandate if such is approved by the shareholders.

No other connected persons (as defined in the Listing Rules) have notified the Company that they have a present intention to sell Shares to the Company, or have undertaken not to do so, in the event that the Share Repurchase Mandate is approved by the shareholders.

6. UNDERTAKING OF DIRECTORS

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

7. SHARE PRICES

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

		Shares
	Highest		Lowest
	HK$		HK$
2001
October	5.95		5.50
November	6.20		5.75
December	6.50		6.10

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		Shares
	Highest		Lowest
	HK$		HK$
2002
January	6.55		6.45
February	6.85		6.60
March	7.15		6.70
April	7.10		6.75
May	8.10		7.05
June	7.95		7.15
July	7.80		7.70
August	7.90		7.50
September	7.80		7.50

8. EFFECT OF THE TAKEOVER CODE

If on the exercise of the power to repurchase shares pursuant to the Share Repurchase Mandate, a shareholder’s proportionate interest in the voting rights of the Company increases, such increase will be treated as an acquisition for the purposes of Rule 32 of the Hong Kong Code on Takeovers and Mergers (the “Takeovers Code”). As a result, a shareholder or group of shareholders acting in concert, could obtain or consolidate control of the Company and become obliged to make a mandatory offer in accordance with Rules 26 and 32 of the Takeovers Code.

As at 4th October, 2002 (being the latest practicable date prior to the printing of this circular), according to the register kept under Section 16(1) of the Securities (Disclosure of Interests) Ordinance, Mr. NG Teng Fong held beneficial interests in approximately 71.72% of the issued share capital of the Company. The Directors are not aware of any consequences which may arise under the Takeovers Code as a result of any purchases made under the Share Repurchase Mandate.

However, Mr. NG Teng Fong together with other connected persons of the Company were beneficially interested in approximately 71.76% of the issued share capital of the Company. Accordingly, any repurchase of Shares exceeding approximately 43.19% of the amount of Shares capable of being repurchased by the Company would reduce the public shareholding to below 25%. Any purchase of Shares which would result in the amount of Shares held by the public being reduced to less than 25% could only be implemented with the prior approval of the Stock Exchange to waive the dealing restriction regarding the public shareholding referred to above. However, a waiver of this restriction would not normally be given except in exceptional circumstances justifying the waiver of such restriction. The Directors wish to state that they would not exercise the Share Repurchase Mandate to such extent that the public shareholding would be reduced to less than 25% of the issued share capital of the Company.

9. SHARE PURCHASES MADE BY THE COMPANY

The Company had not purchased any of its Shares (whether on the Stock Exchange or otherwise) in the six months preceding the date of this circular.

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