YNBY International Limited — Proxy Solicitation & Information Statement 2005

Jul 26, 2005

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional 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: 30)

PROPOSED GENERAL MANDATES TO ISSUE SHARES AND REPURCHASE SHARES

AND

PROPOSED RE-ELECTION OF DIRECTORS

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 at Chater Room I, The Ritz Carlton Hotel, 3 Connaught Road Central, Hong Kong at on 16 August 2005 (Tuesday) at 10:00 a.m. is set out on pages 7 to 9 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.

8 July 2005

CONTENTS

	Page
Letter from the Board
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Exercise of Share Issue Mandate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Exercise of Repurchase Mandate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2
Biographical Information on Directors Proposed for Re-Election . . . . . . . . . . . . . . . . . .	4
Procedures by which a poll may be demanded . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
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: 30)

Directors:– Michael Tse Chi Hung (Chairman) Joey Fan Adrian Fu Hau Chak[#] George Ho George Joseph Ho Lester Kwok Chi Hang 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

• Audit Committee Member

8 July 2005

To the shareholders

Dear Sirs,

PROPOSED GENERAL MANDATES TO ISSUE SHARES AND REPURCHASE SHARES AND PROPOSED RE-ELECTION OF DIRECTORS

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 re-election of Directors, to be approved by shareholders at the annual general meeting to be held on 16 August 2005 (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 8 July 2005 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 8 July 2005, 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 1 June 2004 were as follows:

	Traded Market Price	Traded Market Price
	Highest	Lowest
	HK$	HK$
2004
July	0.700	0.510
August	0.620	0.500
September	0.590	0.510
October	0.540	0.500
November	0.610	0.500
December	0.710	0.550
2005
January	0.660	0.610
February	0.770	0.630
March	0.880	0.710
April	0.760	0.620
May	0.730	0.660
June	0.760	0.690
July (04 to 08 July 2005)	0.800	0.740

(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 273,361,600 Shares, representing approximately 58.55% 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 273,361,600 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.

BIOGRAPHICAL INFORMATION ON DIRECTORS PROPOSED FOR RE-ELECTION

Messrs. Joey Fan, an executive Director, and Lester Kwok Chi Hang, an independent nonexecutive Director, were appointed during the fiscal year and are therefore subject to reelection in accordance with Bye-law 107 of the Company’s Bye-laws. Messrs. Adrian Fu and David Miao are retiring Directors subject to re-election at the forthcoming general meeting.

Joey Fan , aged 40, an Executive Director of the Group since 30 September 2004, has been a director of a subsidiary of the Company since late 1999. He has over 16 years’ industry experience in financial information technology, having held key positions at Reuters and Telerate. Mr. Fan holds a Master of Engineering degree from Cornell University. Under the terms of his service agreement with the Company, Mr. Fan is entitled to an annual remuneration of $400,000, in consideration of his devoting no less than a quarter of his time and attention to the business activities of the Company and its subsidiaries. The service agreement has no fixed term and is determinable by either side on two months’ notice. Mr. Fan is not connected with any directors, senior management or substantial or controlling shareholders of the Company. At the date hereof, Mr. Fan has beneficial interests in 13,040,000 shares (representing 2.79% of the outstanding shares) of the Company within the meaning of Part XV of the Securities and Futures Ordinance.

Mr. Kwok Chi Hang, Lester , J.P., aged 55, appointed an Independent Non-Executive Director on 30 September 2004, is the Deputy Chairman and Managing Director of Wing On International Holdings Limited, the Deputy Chairman and Chief Executive Officer of Wing On Company International Limited, which is listed on The Stock Exchange of Hong Kong Limited. He is a member of the Administrative Appeals Board. He has served as a member of the Inland Revenue Board of Review, the Town Planning Appeal Board, the Securities and Futures Appeals Panel of the Securities and Futures Commission and the Consumer Council. He graduated from Stanford University with a Bachelor of Arts degree in economics and was later called to the Bar of England and Wales, and to the Hong Kong Bar. He practiced as a barristerat-law until 1985 when he retired from the bar and joined the Wing On group of companies as an executive director. Mr. Kwok is not connected with any directors, senior management or substantial or controlling shareholders of the Company. Mr. Kwok does not have any interest or short position in any shares of the Company within the meaning of Part XV of the Securities and Futures Ordinance. There is no service contract between the Company and Mr. Kwok. He has no fixed term of service with the Company but is subject to the rotational retirement requirements pursuant to the Company’s Bye-Laws. Mr. Kwok is entitled to a director’s fee, the amount of which is to be determined by the Board as authorised by shareholders at the Company’s Annual General Meeting with reference to his roles and responsibilities and the prevailing market conditions.

– 4 –

LETTER FROM THE BOARD

Fu Hau Chak, Adrian , aged 57, has been an Independent Non-Executive Director of the Company since September 1991. Mr. Fu is also Chairman of the Audit Committee and a member of the Remuneration Committee of the Company. He holds several executive positions on the boards of companies in Hong Kong and in South East Asia. Mr. Fu does not have any interest or short position in the shares of the Company which fall to be disclosed under Part XV of the Securities and Futures Ordinance, 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. Fu. Mr. Fu is not appointed for a specific term since he is subject to rotation and re-election at the Annual General Meeting of the Company in accordance with the Bye-Laws. Mr. Fu as an independent non-executive director is entitled to a director’s fee, the amount of which is to be determined by the Board of Directors as authorized by shareholders at the Company’s Annual General Meeting with reference to his roles and responsibilities and the prevailing market conditions.

David Miao , aged 93, has been a director of ABC Communications Limited since 1971 and has been a Non-Executive Director of the Company since September 1991. He is a nonexecutive director and shareholder of 0.09% of H.C.B.C. Enterprises (BVI) Limited which has discloseable interests under the provisions of Part XV of the Securities and Futures Ordinance in the Company. Mr. Miao is also a non-executive director of Hong Kong Commercial Broadcasting Company Limited. Save as aforesaid, Mr. Miao does not have any interest or short position in the shares of the Company, 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. Miao. Mr. Miao 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. Miao 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 the Company’s Annual General Meeting with reference to his roles and responsibilities and the prevailing market conditions.

PROCEDURE BY WHICH A POLL MAY BE DEMANED

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 2004 / 2005 Annual Report to be despatched to shareholders together with this circular.

– 5 –

LETTER FROM THE BOARD

A form of proxy for use at the AGM is enclosed with the Company’s 2004 / 2005 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 Re-election of Directors 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

– 6 –

NOTICE OF AGM

ABC COMMUNICATIONS (HOLDINGS) LIMITED

(incorporated in Bermuda with limited liability)

(Stock Code: 30)

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 I, The Ritz Carlton Hotel, 3 Connaught Road Central, Hong Kong on 16 August 2005 (Tuesday) 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 31 March 2005;

2. To declare a final dividend;

3. To re-elect Directors;

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 Notes 4 and 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 9 August 2004.”

(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.

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NOTICE OF AGM

• c) the authority contained in this Resolution shall replace the similar authority granted at the general meeting of the Company held on 9 August 2004.”

(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).”

By Order of the Board Patricia Yeung Shuk Kwan Secretary

Hong Kong, 8 July 2005

Registered Office:– Principal place of business in Hong Kong:– Clarendon House, 2 Church Street 2nd Floor Jade Mansion Hamilton HM11 40 Waterloo Road Bermuda 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, 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 8 August 2005 (Monday) to 11 August 2005 (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 5 August 2005 (Friday).

4. 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.

5. 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, Mr. Joey Fan and Ms. Yeung Shuk Kwan, Patricia as Executive Directors, and Mr. Tse Chi Hung, Michael, Mr. George Ho, Mr. Fu Hau Chak, Adrian, Mr. Leung Kwok Kit, Mr. Li Kwok Sing, Aubrey, Mr. Kwok Chi Hang, Lester* and Mr. David Miao as Non-Executive Directors.

• independent non-executive Directors

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