YNBY International Limited — Proxy Solicitation & Information Statement 2004

Jul 5, 2004

THE CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your shares in ABC Communications (Holdings) Limited, you should at once hand this circular with the accompanying form of proxy 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 document, 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 document.

ABC COMMUNICATIONS (HOLDINGS) LIMITED

(incorporated in Bermuda with limited liability) (Stock Code: 00030)

PROPOSED GENERAL MANDATES TO ISSUE SHARES AND REPURCHASE SHARES

AND

PROPOSED AMENDMENTS TO THE BYE-LAWS

A letter from the Board of Directors of ABC Communications (Holdings) Limited is set out on pages 1 to 6 of this circular.

A notice convening the annual general meeting of ABC Communications (Holdings) Limited to be held on Monday, 9th August 2004 at Chater Room III, The Ritz Carlton Hotel, 3 Connaught Road Central, Hong Kong at 10:00 a.m. is set out on pages 7 to 18 of this circular.

If you are not able to attend such meeting, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return the same to the Share Registrars of ABC Communications (Holdings) Limited in Hong Kong, Computershare Hong Kong Investor Services Limited of Rooms 1901-5, 19th Floor, Hopewell Centre, 183 Queen’s Road East, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for the holding of such meeting or any adjournment thereof. Completion and return of the form of proxy shall not preclude you from attending and voting in person at the meeting or any adjourned meeting should you so desire.

30th June 2004

CONTENTS

	Page
Letter from the Board
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Exercise of the Share Issue Mandate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Exercise of the Repurchase Mandate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2
Proposed amendments to the Bye-laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Procedures by which a poll may be demanded . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
Notice of AGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7

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LETTER FROM THE BOARD

ABC COMMUNICATIONS (HOLDINGS) LIMITED

(incorporated in Bermuda with limited liability)

(Stock Code: 00030)

Directors:– Michael Tse Chi Hung (Chairman) * George Ho George Joseph Ho Adrian Fu Hau Chak Leung Kwok Kit Li Kwok Sing Aubrey* David Miao Patricia Yeung Shuk Kwan

Registered Office:– Clarendon House, 2 Church Street Hamilton HM11 Bermuda

Principal Office:– 2nd Floor Jade Mansion 40 Waterloo Road Hong Kong

• Non-Executive Director

• ** Independent non-executive director

30th June 2004

To the shareholders

Dear Sirs,

PROPOSED GENERAL MANDATES TO ISSUE SHARES AND REPURCHASE SHARES AND PROPOSED AMENDMENTS TO THE BYE-LAWS

INTRODUCTION

This circular includes information required by the Stock Exchange of Hong Kong Limited (the “ Stock Exchange ”) to be given to shareholders concerning (1) the proposed general mandates for the issue of shares and repurchase of fully-paid shares to be granted to the Directors of the Company; and (2) the proposed amendments to the bye-laws (the “ Bye-laws ”) of the Company, to be approved by shareholders at the annual general meeting to be held on Monday, 9th August 2004 (the “ AGM ”) of the Company.

EXERCISE OF THE SHARE ISSUE MANDATE

Resolution No. 6(1) set out in the notice of AGM (the “ AGM Notice ”) dated 25th June 2004 will, if passed, give a general unconditional mandate (the “ Share Issue Mandate ”) to the Directors authorizing the exercise by the Directors of the powers of the Company to allot additional shares of HK$0.10 each in the capital of the Company (“ Shares ”). This authority would apply to up to 20% of the nominal amount of the share capital of the Company in issue at the date of the AGM and could be exercised at any time during the Relevant Period (as this term is defined in Resolution No. 6(1) set out in the AGM Notice).

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LETTER FROM THE BOARD

EXERCISE OF THE REPURCHASE MANDATE

Resolutions No. 6(2) and 6(3) set out in the AGM Notice will, if passed, give a general unconditional mandate (the “ Repurchase Mandate ”) to the Directors authorizing the repurchase by the Company of up to 10% of the fully paid Shares in issue at the date of the AGM at any time during the Relevant Period (as this term is defined in Resolution No. 6(2) set out in the AGM Notice).

The Directors believe that these proposals, which are similar to those approved by shareholders in previous years, will provide the Board with a prudent measure of flexibility for them to act in the Company’s interests. The information set out below constitutes an Explanatory Statement (as defined in Rule 10.06 of the Rules Governing the Listing of Securities on the Stock Exchange (the “ Listing Rules ”)) for the purpose of the Listing Rules:–

(1) Share Capital

Exercise in full of the Repurchase Mandate (on the basis of 466,886,000 Shares in issue as at 24th June 2004, being the latest practicable date (the “ Latest Practicable Date ”) prior to the printing of this circular) would result in up to 46,688,600 Shares being repurchased by the Company during the Relevant Period as defined in Resolution No. 6(2).

(2) Reasons for Repurchases

The Directors believe that it is in the best interests of the Company and its shareholders to have a general authority from shareholders to enable the Directors to repurchase Shares. Such repurchases may, depending on market conditions and funding arrangements at the time, lead to an enhancement in the value of the Shares and/or earnings per Share and will only be made when the Directors believe that such repurchases will benefit the Company and its shareholders.

(3) Funding of Repurchases

In repurchasing Shares, the Company may only apply funds legally available for such purpose in accordance with the laws of Bermuda and the Memorandum of Association and Bye-laws of the Company. Such funds may include profits available for distribution and the proceeds of a fresh issue of Shares made for the purpose of the repurchases.

The Directors do not propose to exercise the Repurchase Mandate to such an extent as would, in the circumstances, have a material adverse effect on the working capital requirements of the Company or the gearing levels which in the opinion of the Directors are from time to time appropriate for the Company.

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LETTER FROM THE BOARD

(4) Share Price

The highest and lowest prices at which Shares have been traded on the Stock Exchange during each of the previous twelve months from 1st June 2003 were as follows:

	Traded Market Price	Traded Market Price
	Highest	Lowest
	HK$	HK$
2003
June	0.270	0.250
July	0.280	0.250
August	0.350	0.255
September	0.390	0.300
October	0.320	0.280
November	0.350	0.290
December	0.380	0.320
2004
January	0.400	0.350
February	0.470	0.370
March	0.450	0.400
April	0.450	0.400
May	0.450	0.400
June (01-24/06/04)	0.450	0.430

(5) Disclosure of Interests

None of the Directors nor, to the best of their knowledge having made all reasonable enquiries, any of their associates (as defined in the Listing Rules) currently intends to sell any Shares to the Company or its subsidiaries under the Repurchase Mandate if such Repurchase Mandate is approved by shareholders.

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

No 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 Repurchase Mandate is approved by shareholders.

(6) Hong Kong Code on Takeovers and Mergers

If as a result of a repurchase of Shares by the Company, a shareholder’s proportionate interest in the voting rights of the Company increases, such increase will be treated as an acquisition for the purpose of the Hong Kong Code on Takeovers and Mergers (the “ Code ”). Accordingly, a shareholder, or a group of shareholders acting in concert, could obtain or consolidate control of the Company and become obliged to make a mandatory offer in accordance with Rule 26 of the Code. Mr. George Ho and H.C.B.C. Enterprises Limited, in which Mr. Ho is deemed to be interested, already hold in aggregate 273,861,600 Shares, representing approximately 58% of the issued share capital of the Company as at the Latest Practicable Date. The Directors are not aware of any such consequences which would arise under the Code as a consequence of any purchase pursuant to the Repurchase Mandate. In the event that any exercise of the Repurchase Mandate would, to the knowledge of the Directors, have such a consequence, the Directors would not exercise the mandate to such an extent.

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LETTER FROM THE BOARD

In addition, assuming that the Repurchase Mandate is exercised in full, the share capital of the Company in issue will be reduced to 420,197,400 Shares (on the basis of 466,886,000 Shares in issue as at the Latest Practicable Date). Mr. Ho and H.C.B.C Enterprises Limited will hold in aggregate 273,861,600 Shares, representing approximately 65% of the issued share capital of the Company after the exercise of the Repurchase Mandate in full. As far as the Directors are aware, the full exercise of the Repurchase Mandate will not have any impact on the relevant minimum public shareholding requirements as stipulated in the Listing Rules.

(7) Repurchases made by the Company

The Company has not repurchased Shares (whether on the Stock Exchange or otherwise) in the six months up to the Latest Practicable Date.

PROPOSED AMENDMENTS TO THE BYE-LAWS

Following the recent changes to the Listing Rules which came into effect on 31st March 2004, it has become necessary for the Company to amend its Bye-laws to reflect the changes required by the amended Listing Rules. The Directors also wish to take this opportunity to bring the Bye-laws in line with the current Listing Rules, Bermuda law and standard Hong Kong practice. In addition, several other amendments are proposed to the Bye-laws which would allow a more efficient administration and management. The following is a summary of the more significant amendments to the Bye-laws to be proposed at the AGM:–

(1) Amendments required by new Listing Rules

The amended Appendix 3 of the Listing Rules requires that (1) a Director shall not vote on any Board resolution approving any contract, arrangement or other proposal in which he or his associates (as defined in the Listing Rules) has a material interest; (2) the minimum period of seven days during which a shareholder may give notice to propose a person for election as a Director shall commence no earlier than the day after the despatch of the notice of the meeting appointed for such purpose and end no later than seven days prior to the date of such meeting; and (3) if any shareholder is, under the Listing Rules, required to abstain from voting on any particular resolution of the Company or restricted to voting only for or only against thereon, any votes cast by such shareholder or on his behalf in contravention of such requirement or restriction shall not be counted. The amended Bye-laws reflect these provisions accordingly.

(2) Provisions relating to clearing houses

The Securities and Futures (Clearing Houses) Ordinance was repealed upon the commencement of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) on 1st April 2003. Accordingly, the Board proposes to amend the Bye-laws by deleting the reference to Securities and Futures (Clearing Houses) Ordinance in the definition of “clearing house”.

(3) Removal of Directors

In line with current Bermuda law and Hong Kong law, the Board proposes to amend the Bye-laws to reflect the fact that a Director of the Company can be removed from his office as Director at any time in general meeting by Ordinary Resolution (instead of Special Resolution).

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LETTER FROM THE BOARD

(4) Payment of dividends

Bermuda law regarding the payment of dividends out of profit has changed. Current Bermuda law provides that the Company can now pay dividends out of profits subject to certain conditions. The Board therefore proposes to amend the relevant provisions of the Bye-laws so that the Company will have more flexibility to declare dividends and also make a distribution out of its contributed surplus (as ascertained in accordance with the Companies Act 1981 of Bermuda (the “ Act ”) as amended from time to time).

(5) Distribution of summary financial reports

Taking advantage of the flexibility now permitted under the Listing Rules, the Board further proposes that amendments be made to the Bye-laws to allow the Company, unless otherwise notified by shareholders in writing:–

• (a) to distribute summary financial reports to shareholders in place of the full set of the annual reports and accounts; and

• (b) to distribute either the annual reports and accounts or summary financial reports to the shareholders through the Company’s computer network or in any other permitted manner.

These provisions provide shareholders with a choice, so if the Company should choose to implement these provisions, shareholders will be entitled to continue to receive a full set of the annual reports and accounts if they choose to do so. Shareholders will also be able to elect to receive an electronic version of either the annual reports and accounts or summary financial reports, as the case may be.

(6) Corporate communications

Taking advantage of other recent changes to the Listing Rules, the Board also recommends that amendments be made to the Bye-laws to allow the Company to offer the flexibility of sending any corporate communications (as defined in the Listing Rules) to the shareholders by electronic means and in the English language, the Chinese language or in both languages.

(7) Amendments to allow a more efficient administration and management

• (a) Under the existing Bye-laws, a Special Resolution is required if the Company wishes to change the nominal value of its share capital. The Board proposes to amend the Bye-laws in order that the Company may at its general meetings by Ordinary Resolution approve any change of the nominal value of its share capital.

• (b) The existing provisions of the Bye-laws stipulate that any use by the Company of its share premium account in the manner authorised by the Act requires the sanction of a Special Resolution. The Board proposes to amend the Bye-laws so that in the event the Company applies its share premium in the manner authorised by the Act, for example, in paying up unissued shares of the Company to be issued to members of the Company as fully paid bonus shares, an Ordinary Resolution will suffice.

The proposed amendments to the Bye-laws will comply with the Listing Rules and are subject to the passing of the Special Resolution by shareholders at the AGM. The full text of the proposed amendments to the Company’s Bye-laws is set out in Special Resolution No. 7 of the AGM Notice.

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LETTER FROM THE BOARD

PROCEDURE BY WHICH A POLL MAY BE DEMANDED

Pursuant to Bye-law 70 of the Company’s Bye-laws, every question submitted to a general meeting shall be determined in the first instance by a show of hands of the members present in person, but a poll may be demanded (before or upon the declaration of the result of the show of hands) by the Chairman or by:–

• (a) not less than three members present in person or by proxy having the right to vote at the meeting; or

• (b) a member or members present in person or by proxy representing not less than onetenth of the total voting rights of all the members having the right to vote at the meeting; or

• (c) a member or members present in person or by proxy 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.

ANNUAL GENERAL MEETING

The AGM Notice will also be set out in the Company’s 2003 / 2004 Annual Report to be despatched to shareholders together with this circular.

A form of proxy for use at the AGM is enclosed with the Company’s 2003 / 2004 Annual Report. Whether or not you intend to be present at the AGM, you are requested to complete the form of proxy and return it to the Company’s Share Registrars in accordance with the instructions printed thereon not less than 48 hours before the time fixed for holding the AGM. Completion and deposit of the form of proxy will not preclude you from attending and voting at the AGM if you so wish.

RECOMMENDATION

The Directors believe that the Share Issue Mandate, the Repurchase Mandate and the proposed amendments to the Bye-laws are in the interests of the Company and the shareholders of the Company as a whole. Accordingly, the Directors recommend that all shareholders should vote in favour of the relevant Resolutions to be proposed at the AGM.

Yours faithfully, For and on behalf of the Board ABC Communications (Holdings) Limited Patricia Yeung Managing Director

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NOTICE OF AGM

ABC COMMUNICATIONS (HOLDINGS) LIMITED

(incorporated in Bermuda with limited liability)

(Stock Code: 00030)

NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the annual general meeting of the shareholders of ABC Communications (Holdings) Limited (the “ Company ”) will be held at Chater Room III, The Ritz Carlton Hotel, 3 Connaught Road Central, Hong Kong on Monday, 9th August 2004 at 10:00 a.m. for the purpose of considering and, if thought fit, passing the following Resolutions:

1. To receive the audited Statements of Accounts and Reports of the Directors and Auditors for the financial year ended 31st March 2004;

2. To declare a final dividend;

3. To re-elect Directors (please read Note 4);

4. To re-appoint auditors and to fix their remuneration;

As special business to consider and, if thought fit, pass the following Resolutions as Ordinary Resolutions:

1. “ THAT for the period up until the next annual general meeting each of the Directors is authorised to be paid a director’s fee of such sum not exceeding HK$50,000 as the board of Directors shall determine.”

2. (Please read Note 5)

3. (1) “ THAT :–

   • a) the exercise by the Directors of the Company during the Relevant Period of all powers of the Company to allot, issue and deal with additional shares in the capital of the Company, including making and granting offers, agreements and options which would or might require shares to be allotted, issued or dealt with whether during or after the end of the Relevant Period, be and is hereby generally and unconditionally approved, provided that, otherwise than pursuant to a rights issue where shares are offered to shareholders on a fixed record date in proportion to their then holdings of such shares (subject to such exclusions or other arrangements as the Directors may deem necessary or expedient in relation to fractional entitlements or having regard to any restrictions or obligations under the laws of or the requirements of, any recognised regulatory body or any stock exchange in, any territory outside Hong Kong), the additional shares allotted, issued or dealt with, (including shares agreed conditionally or unconditionally to be allotted, issued or dealt with, whether pursuant to an option or otherwise) shall not in aggregate exceed 20 per cent of the nominal amount of the share capital of the Company in issue at the date of this Resolution;

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NOTICE OF AGM

• b) for the purpose of this Resolution:–

“Relevant Period” means the period from the passing of this Resolution until whichever is the earliest of:–

• i. the conclusion of the next annual general meeting of the Company;

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

• iii. the revocation or variation of the authority given under this Resolution by way of Ordinary Resolution of the shareholders of the Company in general meeting; and

• c) the authority contained in this Resolution shall replace the similar authority granted at the general meeting of the Company held on 28th July 2003.”

(2) “ THAT :–

• a) there be granted to the Directors of the Company an unconditional general mandate to repurchase shares in the capital of the Company, and that the exercise by the Directors of the Company of all powers of the Company to purchase shares subject to and in accordance with all applicable laws, rules and regulations be and is hereby generally and unconditionally approved, subject to the following conditions:-

• i. such mandate shall not extend beyond the Relevant Period;

• ii. such mandate shall authorise the Directors of the Company to procure the Company to repurchase shares at such prices as the Directors of the Company may at their discretion determine;

• iii. the aggregate nominal amount of the shares repurchased by the Company pursuant to this Resolution during the Relevant Period shall not exceed 10 per cent of the aggregate nominal amount of the share capital of the Company in issue at the date of passing of this Resolution; and

• b) for the purpose of this Resolution, “Relevant Period” means the period from the passing of this Resolution until whichever is the earliest of:–

• i. the conclusion of the next annual general meeting of the Company; and

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

• iii. the revocation or variation of this Resolution by an Ordinary Resolution of the shareholders of the Company in general meeting.

• c) the authority contained in this Resolution shall replace the similar authority granted at the general meeting of the Company held on 28th July 2003.”

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NOTICE OF AGM

(3) “ THAT :–

conditional upon the passing of Resolutions No. 6(1) and 6(2) as set out in the Notice convening this Meeting, the aggregate nominal amount of the shares which are repurchased by the Company pursuant to and in accordance with Resolution No. 6(2) above shall be added to the aggregate nominal amount of the shares which may be allotted or agreed conditionally or unconditionally to be allotted by the Directors of the Company pursuant to and in accordance with Resolution No. 6(1).”

1. As special business to consider and, if thought fit, pass the following Resolution as a Special Resolution:–

2. “ THAT the Bye-laws of the Company be and are hereby amended as follows:

3. (a) by deleting the words “Securities and Futures (Clearing Houses) Ordinance of Hong Kong” in the first and second lines of the definition of “clearing house” in Bye-Law 1 and replacing them with the following:

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

4. (b) by adding before the definition of “the Statutes” in Bye-Law 1 the following definition of “Act”:

   • ““Act” The Companies Act 1981”;

5. (c) by deleting the definition of “the Statutes” in Bye-Law 1 in its entirety and replacing it with the following:

   • ““the Statutes” The Act and every other act from time to time in force of the Legislature of Bermuda applying to or affecting the Company, its Memorandum of Association and/or these Bye-Laws.”;

6. (d) by adding before the definition of “HK$” in Bye-Law 1 the following definition of “Hong Kong”:

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

7. (e) by adding before the definition of “Seal” in Bye-Law 1 the following definition of “Designated Stock Exchange”:

   • ““Designated The Stock Exchange of Hong Kong Limited or a stock Stock Exchange” exchange which is an appointed stock exchange for the purposes of the Act as from time to time in force on which any share capital of the Company is listed or quoted and where such appointed stock exchange deems such listing or quotation to be the primary listing or quotation of the share capital of the Company.”;

8. (f) by deleting the definition of “in writing” and “written” in Bye-Law 1 in its entirety and replacing it with the following:

““in writing” and “written” shall, unless the contrary intention appears, be construed as including printing, lithography, photography and other modes of representing or reproducing words or figures in a visible form, and including where the representation takes the form of electronic display, providing that

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NOTICE OF AGM

both the mode of service of the relevant document or notice and the member’s election comply with the Statutes and other applicable laws, rules and regulations.”;

• (g) by adding the following as a new paragraph immediately after the paragraph “Words importing persons shall include corporations; and” in Bye-Law 1:

“References to a document being executed include references to it being executed under hand or under seal or, to the extent permitted by and in accordance with the Statutes and other applicable laws, rules and regulations, by electronic signature or by any other method. References to a document or notice, to the extent permitted by and in accordance with the Statutes and other applicable laws, rules and regulations, include a notice or document recorded or stored in any digital, electronic, electrical, magnetic or other retrievable form or medium and information in visible form whether having physical substance or not.”;

• (h) by adding the following words immediately after the words “Subject to the Statutes” in the first line of Bye-Law 4(C)(i) and in the first line of Bye-Law 4(C)(ii) respectively:

“and any applicable rules, codes and regulations of the Designated Stock Exchange and/or of any relevant regulatory body”;

• (i) by adding the following words immediately after the words “usual or common form” in the second line of Bye-Law 37:

• “or in a form prescribed by the Designated Stock Exchange”;

• (j) by deleting the word “The” in the first line of Bye-Law 4(A) and replacing it with the words “Unless otherwise determined by members at a general meeting, the”;

• (k) by adding the words “(save that the Company may always use the share premium in the share premium account” after the words “premium account” and adding the words “without the need to seek the approval of the members)” after the words “the Statutes” in the second line of Bye-Law 54(D);

• (l) by inserting the following Bye-Law 77A immediately after Bye-Law 77:

• Abstention “77A. Where any member is, under the rules of the from Designated Stock Exchange, required to abstain from voting voting on any particular resolution or restricted to voting only for or only against any particular resolution, any votes cast by or on behalf of such member in contravention of such requirement or restriction shall not be counted.”;

• (m) by adding the following words immediately before the words “entitled to exercise” in the sixth line of Bye-Law 78(b):

“deemed to have been duly authorized without further evidence of the facts and be”;

• (n) by deleting Bye-Laws 98(A) and 98(B) in their entirety and replacing them with the following:

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NOTICE OF AGM

Disclosure of interests

“98. (A) If a Director or any of his associates is in any way, whether directly or indirectly, interested in a contract, transaction or arrangement or proposed contract, transaction or arrangement with the Company (each being in paragraphs (A), (B) and (C) of this Bye-Law referred to as a “transaction”), the Director shall declare the nature of his interest or the interest of any of his associates at a meeting of the Board in accordance with the Statutes. For the purposes of this Bye-Law:–

• (i) a general notice given to the Directors by a Director stating that, by reason of facts specified in the notices, he or any of his associates is to be regarded as interested in transactions of any description which may subsequently be made with any specified person, firm or corporation after the date of such notice shall be a sufficient declaration of his interest or the interest of any his associates, so far as attributable to those facts, in relation to any transaction of that description which may subsequently be made by the Company Provided that no such general notice shall have effect in relation to any transaction unless it is given before the date on which the question of entering into the transaction is first taken into consideration on behalf of the Company; and

• (ii) an interest of which a Director has no knowledge and of which it is unreasonable to expect him to have knowledge shall not be treated as an interests of his or of any of his associates.

Interested 98. (B) A Director shall not, as a Director, vote in respect of Director any transaction in which to his knowledge he or any of his not associates has a material interest being an interest which entitled to conflicts or may conflict with the interests of the Company vote and if he shall do so his vote shall not be counted, nor in relation thereto shall be counted in the quorum present at the meeting, but (in the absence of some other material interest than is mentioned below) none of these prohibitions shall apply to:–

• (i) the giving to any Director or any of his associates of any security or indemnity in respect of money lent by him or any of them to or obligations incurred or undertaken by him or any of them at the request of or for the benefit of the Company or any of its subsidiaries; or

• (ii) the giving by the Company or any of its subsidiaries of any security or indemnity to a third party in respect of a debt or obligation of the Company or any of its subsidiaries for which the Director or any of his associates has assumed responsibility in whole or in part and whether alone or jointly with others under a guarantee or indemnity or by the giving of security; or

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NOTICE OF AGM

• (iii) any proposal concerning an offer of shares or debentures or other securities of the Company or any other company which the Company may promote or be interested in for subscription or purchase where the Director or any of his associates is or is to be interested as a participant in the underwriting or sub-underwriting of the offer; or

• (iv) any transaction concerning any other corporation in which the Director or any of his associates does not have a material interest (as defined below); or

• (v) any proposal or arrangement concerning the benefit of employees of the Company or any of its subsidiaries including:–

• (a) the adoption, modification or operation of any employees’ share scheme or any share incentive or share option scheme under which the Director or any of his associates may benefit; or

• (b) the adoption, modification or operation of a pension fund or retirement, death or disability benefits scheme;

which relates both to Directors, their associates and employees of the Company or any of its subsidiaries and does not provide in respect of any Director, or any of his associates, as such any privilege or advantage which may not generally be accorded to the class of persons to which such scheme or fund relates; or

• (vi) any contract or arrangement in which the Director or any of his associates is interested in the same manner as other holders of shares or debentures or other securities of the Company by virtue only of his or their interest in shares or debentures or other securities of the Company;

and so that the interest of a Director or of any of his associates shall not be treated as material in the case of any transaction concerning any company other than the Company in which the Director or any of his associates is interested, directly or indirectly, whether as an officer or executive or shareholder, provided that he and any of his associates together are not beneficially interested in 5% or more of the issued shares of any class of such company or of the voting rights thereof or of any third company through which such interest is derived (any such interest being deemed for the purpose of this Bye-Law to be a material interest in all the circumstances). For the purpose of this Bye-Law 98, the term “associate” shall have the same meaning as defined in the rules of the Designated Stock Exchange.”;

• (o) by adding the words “or any of his associates” immediately after the words “in which he” in the second line of Bye-Law 98(C);

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NOTICE OF AGM

• (p) by deleting the words “he has no” in the fifth line of Bye-Law 98(D) and replacing them with the words “neither he nor any of his associates has”;

• (q) by deleting the words “a Director’s interest” in the second line of Bye-Law 98(E) and replacing them with the words “ the interest of a Director or of any of his associates”;

• (r) by adding the words “or of any of his associates” immediately after the words “interests of the Director” in the fifth line of Bye-Law 98(E);

• (s) by adding the words “or of any of his associates” immediately after the words “interests of the Director” in the fifth line of Bye-Law 98(E);

• (t) by deleting the words “not less than seven nor more than forty-eight days before the day appointed for the meeting” in the third and fourth lines of Bye-Law 106 and replacing them with the following:

“during a period of not less than seven days commencing no earlier than the day after the despatch of the notice of the meeting appointed for such election and ending no later than seven days prior to the date of such meeting”;

• (u) by deleting Bye-Law 110 in its entirety and replacing it with the following:

Company’s power “110 Subject to the Statutes and any provision to the to remove contrary in these Bye-Laws, the members may, at any Directors and general meeting convened and held in accordance with appoint others in these Bye-Laws, by Ordinary Resolution remove a Director their stead at any time before the expiration of his period of office notwithstanding anything in these Bye-Laws or in any agreement between the Company and such Director (but without prejudice to any claim for damages under any agreement) provided that the notice of such meeting convened for the purpose of removing a Director shall contain a statement of the intention so to do and be served on such Director fourteen (14) days before the meeting and at such meeting such Director shall be entitled to be heard on the motion for his removal, and may by Ordinary Resolution appoint another person to be a Director in his stead. The person so appointed shall be subject to retirement at the same time as if he had become a Director on the day on which the Director in whose place he is appointed was last appointed a Director.”;

• (v) by deleting Bye-Law 131 in its entirety and replacing it with the following:

• “131

• (A) Subject to the Act, the Company in general meeting may from time to time declare dividends in any currency to be paid to the Members but no dividend shall be declared in excess of the amount recommended by the Board. The Company in general meeting may also make a distribution to the Members out of any contributed surplus (as ascertained in accordance with the Act).

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NOTICE OF AGM

• (B) No dividend shall be paid or distribution made out of contributed surplus if to do so would render the Company unable to pay its liabilities as they become due or the realisable value of its assets would thereby become less than the aggregate of its liabilities and its issued share capital and share premium accounts.”

• (w) by deleting Bye-Law 147 in its entirety and replacing it with the following:

Delivery “147 (A) Subject to section 88 of the Act and the Bye-Law of reports 147(B), a copy of the Directors’ and Auditors’ reports, and accounts accompanied by copies of the balance sheet and profit and loss account, including every document required by law to be annexed thereto, made up to the end of the applicable financial year and containing a summary of the assets and liabilities of the Company under convenient heads and a statement of income and expenditure, shall be sent to each person entitled thereto at least twenty-one (21) days before the date of the general meeting and laid before the Company in general meeting in accordance with the requirements of the Act provided that this Bye-Law shall not require a copy of those documents to be sent to any person whose address the Company is not aware of or to more than one of the joint holders of any shares or debentures.

Summary 147 (B) To the extent permitted by and subject to due Financial compliance with all applicable Statutes, rules and regulations, Statement including, without limitation, the rules of the Designated Stock Exchange, and to obtaining all necessary consents, if any, required thereunder, the requirements of Bye-Law 147(A) shall be deemed satisfied in relation to any person by sending to the person in any manner not prohibited by the Statutes, a summary financial statement derived from the Company’s annual accounts and the Directors’ report which shall be in the form and containing the information required by applicable laws and regulations, provided that any person who is otherwise entitled to the annual financial statements of the Company and the Directors’ report thereon may, if he so requires by notice in writing served on the Company, demand that the Company sends to him, in addition to a summary financial statement, a complete printed copy of the Company’s annual financial statement and the Directors’ report thereon.

147 (C) The requirement to send to a person referred to in Bye-Law 147(A) the documents referred to in that provision or a summary financial report in accordance with Bye-Law 147(B) shall be deemed satisfied where, in accordance with all applicable Statutes, rules and regulations, including, without limitation, the rules of the Designated Stock Exchange, the Company publishes copies of the documents referred to in Bye-Law 147(A) and, if applicable, a summary financial report complying with Bye-Law 147(B), on the

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NOTICE OF AGM

Company’s computer network or in any other permitted manner (including by sending any form of electronic communication), and that person has agreed or is deemed to have agreed to treat the publication or receipt of such documents in such manner as discharging the Company’s obligation to send to him a copy of such documents.”;

• (x) by deleting Bye-Law 150 in its entirety and replacing it with the following:

Notices

“150 Any notice, document or other publication (including any “corporate communication” as defined in the rules of the Designated Stock Exchange) to be given or issued under these Bye-Laws from the Company to a member may be served or delivered by the following means:–

• (A) by serving it personally on such member;

• (B) by sending it through the post in a prepaid envelope addressed to such member at his registered address as appearing in the Register (or in case of other person, to such address as supplied by him to the Company under Bye-Law 152);

• (C) by delivering or leaving it at such address as aforesaid;

• (D) by transmitting it to any such address or to any telex or facsimile transmission number or electronic number or address or website supplied by him to the Company for the giving of notice to him or which the person transmitting the notice reasonably and bona fide believes at the relevant time will result in the notice, document or publication being duly received by the member (“Electronic Communication”);

• (E) by placing an advertisement in appointed newspapers (as defined in the Act) or in any other newspapers published daily and circulating generally in the Relevant Territory and in accordance with the requirements of the Designated Stock Exchange;

• (F) by publishing it on the Company’s computer network to which member may have access, subject to the Company complying with the Statutes and any other applicable laws, rules and regulations from time to time in force with regard to any requirements for the obtaining of consent (or deemed consent) from such member and/or for giving notification to any such member stating that the notice, document or publication is available on the Company’s computer network (a “Notice of Publication”). The Notice of Publication may be given to the member by any of the means set out in this ByeLaw 150, other than the means specified in paragraph (F) thereof; or

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NOTICE OF AGM

• (G) by sending or otherwise making available to such member through such other means to the extent permitted by and in accordance with the Statutes and other applicable laws, rules and regulations.”;

• (y) by deleting Bye-Laws 153 and 154 in their entirety and replacing them with the following:

Deemed service “153 Any notice, document or publication (including any of notices “corporate communication” as defined in the rules of the Designated Stock Exchange) given or issued by or on behalf of the Company:

• (A) if served or delivered in person, shall be deemed to have been served or delivered at the time of personal service or delivery and in proving such service or delivery, a certificate in writing signed by the Secretary or other officer of the Company or other person appointed by the Board that the notice, document or publication was so served or delivered shall be conclusive evidence of the service or delivery;

• (B) if served or delivered by post, shall where appropriate be sent by airmail and shall be deemed to have been served or delivered at the time when the envelope containing the same, properly prepaid and addressed, is put into the post; in proving such service or delivery it shall be sufficient to prove that the envelope or wrapper containing the notice, document or publication was properly addressed and put into the post and a certificate in writing signed by the Secretary or other officer of the Company or other person appointed by the Board that the envelope or wrapper containing the notice, document or publication was so addressed and put into post shall be conclusive evidence thereof;

• (C) if sent by Electronic Communication, shall be deemed to be given on the day on which it is transmitted from the server of the Company or its agent provided that no notification that such Electronic Communication has not reached its recipient has been received by the sender, except that any failure in transmission beyond the sender’s control shall not invalidate the effectiveness of the notice, document or publication being served;

• (D) if published as an advertisement in a newspaper permitted under Bye-Law 150(E), shall be deemed to have been served on the day on which the advertisement first so appears;

• (E) if published on the Company’s computer network, shall be deemed to have been served on the day on which the notice, document or publication first appears on the

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NOTICE OF AGM

Company’s computer network to which a member may have access or the day on which the Notice of Publication is deemed to have been served or delivered to such member under these Bye-Laws, whichever is later.

  - (F) may, subject to any applicable laws, rules and regulations and the terms of these Bye-Laws, be given to a member in the English language only, in the Chinese language only or in both the English language and the Chinese language.”;

• (z) by deleting the words “by post to, or left at, the registered address of any member” in the first and second lines of Bye-Law 155 and replacing them with the words “to any member in such manner as provided in Bye-Law 150” and renumbering Bye-Law 155 as 154;

• (aa) by adding the words “(including electronic address)” immediately after the words “prior to his name and address” in the third line of Bye-Law 156 and renumbering Bye-Law 156 as 155; and

• (bb) by renumbering Bye-Laws 157, 158(A), 158(B), 159 and 160 to 156, 157(A), 157(B), 158 and 159 respectively.”

By Order of the Board Patricia Yeung Shuk Kwan Secretary

Hong Kong, 25th June 2004

Registered Office:– Clarendon House, 2 Church Street Hamilton HM11 Bermuda

Principal place of business in Hong Kong:– 2nd Floor Jade Mansion 40 Waterloo Road Hong Kong

Notes:

1. A member entitled to attend and vote at the meeting convened by the notice is entitled to appoint one or more proxies to attend and vote in his stead. A proxy need not be a member of the Company.

2. To be valid, a form of proxy, together with the power of attorney or other authority, under which it is signed or a notarially certified copy of that power of attorney or authority, must be deposited at the Company’s principal place of business at 2nd Floor, Jade Mansion, 40 Waterloo Road, Yaumatei, Kowloon, Hong Kong at least 48 hours before the time fixed for holding the meeting or any adjournment thereof.

3. The register of members will be closed from 2nd August 2004 (Monday) to 5th August 2004 (Thursday), both dates inclusive, during which period no transfer of shares will be effected. All transfers accompanied by the relevant share certificates must be lodged with the Company’s Registrars, Computershare Hong Kong Investor Services Limited, 17/F., Hopewell Centre, 183 Queen’s Road East, Hong Kong not later than 4:00 p.m. on 30th July 2004 (Friday).

4. Messrs. Leung Kwok Kit and George Joseph Ho are retiring Directors subject to re-election at the forthcoming general meeting. Mr. Aubrey Li, an independent non-executive Director appointed during the fiscal year, is subject to re-election in accordance with Bye-law 107 of the Company’s Bye-laws.

Leung Kwok Kit , aged 58, joined ABC Communications Limited in 1977 and is currently a non-executive Director and member of the Audit Committee of the Group. As at 24th June 2004 (the “ Latest Practicable Date ”), Mr. Leung was interested in 3,306,600 shares in the Company within the meaning of Part XV of the

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NOTICE OF AGM

Securities and Futures Ordinance (“ SFO ”). He is also a non-executive director of Hong Kong Commercial Broadcasting Company, Limited and of H.C.B.C. Enterprises Limited which has discloseable interests under the provisions of Part XV of the SFO in the Company (please refer to the paragraph headed “Substantial shareholders’ interest in the Company” in the Company’s 2003 / 2004 Annual Report for details). He is a fellow of the Hong Kong Society of Accountants and an associate of The Australian Society of Certified Practising Accountants and The Chartered Institute of Management Accountants. Save as aforesaid, he does not have any relationship with any other Directors, senior management or substantial or controlling shareholders of the Company. There is no service contract between the Company and Mr. Leung. Mr. Leung is not appointed for a specific term since he is subject to retirement by rotation and re-election at the annual general meeting of the Company in accordance with the Bye-laws. Mr. Leung as a non-executive Director of the Company is entitled to a director’s fee, the amount of which is to be determined by the board of Directors as authorized by the shareholders at general meeting with reference to his roles and responsibilities and the prevailing market conditions.

George Joseph Ho , aged 54, has been an executive Director of the Group since October 1992. He holds a Bachelor of Arts degree from the University of California, Berkeley, a Master of Laws degree from New York University and a Doctoral degree in Jurisprudence from Harvard University. As at the Latest Practicable Date, Mr. Ho was interested in 4,462,000 shares in the Company within the meaning of Part XV of the SFO. Mr. Ho is also currently Chairman of Hong Kong Commercial Broadcasting Company Limited and Managing Director of H.C.B.C. Enterprises Limited which has discloseable interests under the provisions of Part XV of the SFO in the Company (please refer to the paragraph headed “Substantial shareholders’ interests in the Company” in the Company’s 2003 / 2004 Annual Report for details). Mr. Ho is also a director of Dairy Farm International Holdings Ltd. Mr. Ho is the son of Mr. George Ho, a Director of the Company. Save as aforesaid, he does not have any relationship with any other Directors, senior management or substantial or controlling shareholders of the Company. There is no service contract between the Company and Mr. Ho. Mr. Ho is not appointed for a specific term since he is subject to retirement by rotation and re-election at the annual general meeting of the Company in accordance with the Bye-laws. The amount of emoluments of Mr. Ho as an executive Director of the Company is to be determined by the board of Directors as authorized by the shareholders at general meeting with reference to his roles and responsibilities and the prevailing market conditions. Mr. Ho is paid an annual remuneration of HK$406,000 in addition to a director’s fee.

Li Kwok Sing, Aubrey , aged 54, was appointed as an independent non-executive Director and member of the Audit Committee of the Company in October 2003. He is director of Management Capital Limited, a Hong Kong-based financial advisory and direct investment firm, and has over 30 years’ experience in merchant banking and commercial banking. He is a non-executive director of The Bank of East Asia, Limited, Café de Coral Holdings Limited, China Everbright International Limited, CNPC (Hong Kong) Limited and Value Partners China Greenchip Fund Limited, and non-executive chairman of Atlantis Asian Recovery Fund plc. Mr. Li has a Master of Business Administration from Columbia University and a Bachelor of Science in Civil Engineering from Brown University. As at the Latest Practicable Date, Mr. Li was interested in 186,000 shares in the Company within the meaning of Part XV of the SFO. Save as aforesaid, he does not have any interest or short position in the shares of the Company which fall to be disclosed under the provisions of Part XV of the SFO, nor does he have any relationship with any other Directors, senior management or substantial or controlling shareholders of the Company. There is no service contract between the Company and Mr. Li. Mr. Li is not appointed for a specific term since he is subject to retirement by rotation and re-election at the annual general meeting of the Company in accordance with the Bye-laws. Mr. Li as an independent nonexecutive Director of the Company is entitled to a director’s fee, the amount of which is to be determined by the board of Directors as authorized by the shareholders at general meeting with reference to his roles and responsibilities and the prevailing market conditions.

1. With regard to the Ordinary Resolutions referred to in agenda items 6(1) and 6(2), approval is being sought from the shareholders for a general mandate to (a) allot shares of the Company and (b) re-purchase shares up to the relevant 20 per cent and 10 per cent limits. These authorities are sought in order that the Directors might take advantage of any relevant circumstances but the Directors have no immediate plans to issue any new shares of the Company or re-purchase any shares of the Company pursuant to such mandates.

2. Members are recommended to read the circular of the Company containing information concerning the Resolutions proposed in this notice.

As at the date hereof, the board of Directors of the Company comprises Mr. George Joseph Ho and Ms. Patricia Yeung Shuk Kwan as executive Directors, and Mr. Michael Tse Chi Hung, Mr. George Ho, Mr. Adrian Fu Hau Chak, Mr. Leung Kwok Kit, Mr. Li Kwok Sing Aubrey and Mr. David Miao as non-executive Directors.

• independent non-executive Directors

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