Youzan Technology Limited — Proxy Solicitation & Information Statement 2005

Apr 11, 2005

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your shares in SYSCAN Technology Holdings Limited, you should at once hand this circular, together with the enclosed form of proxy, to the purchaser or the transferee or to the bank, stockbroker or other agent through whom the sale was effected for transmission to the purchaser or the transferee.

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

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SYSCAN Technology Holdings Limited 矽感科技控股有限公司[*]

(Incorporated in Bermuda with limited liability)

(Stock Code: 8083)

PROPOSED REFRESHMENT OF GENERAL MANDATES TO ISSUE SHARES AND REPURCHASE SHARES, PROPOSED REFRESHMENT OF THE SCHEME MANDATE LIMIT UNDER THE EXISTING SHARE OPTION SCHEME, AND PROPOSED AMENDMENTS TO THE BYE-LAWS

This circular, for which the Directors collectively and individually accept fully responsibility, includes particulars given in compliance with the Rules Governing the Listing of Securities on the Growth Enterprise Market of The Stock Exchange of Hong Kong Limited for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that, to the best of their knowledge and belief:– (1) the information contained in this circular is accurate and complete in all material respects and not misleading; (2) there are no other matters the omission of which would make any statement in this circular misleading; and (3) all opinions expressed in this circular have been arrived at after due and careful consideration and are founded on bases and assumptions that are fair and reasonable.

A notice convening the SGM to be held at Function Room 1, Ground Floor, City Garden Hotel, 9 City Garden Road, North Point, Hong Kong on Wednesday, 4 May 2005 at 11:30 a.m. is set out on pages 12 to 18 of this circular. Whether or not you are able to attend the SGM, please complete and return the enclosed form of proxy in accordance with the instructions printed thereon to the principal place of business and head office of the Company at Unit 808, 8th Floor, K. Wah Centre, 191 Java Road, North Point, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for holding of the SGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting at the SGM or any adjournment thereof should you so wish.

This circular will remain on the GEM website at www.hkgem.com on the “Latest Company Announcements” page for at least 7 days from the date of its posting.

11 April 2005

• For identification purpose only

CHARACTERISTICS OF THE GROWTH ENTERPRISE MARKET OF THE STOCK EXCHANGE OF HONG KONG LIMITED

GEM has been established as a market designed to accommodate companies to which a high investment risk may be attached. In particular, companies may list on GEM with neither a track record of profitability nor any obligation to forecast future profitability. Furthermore, there may be risks arising out of the emerging nature of companies listed on GEM and the business sectors or countries in which the companies operate. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only after due and careful consideration. The greater risk profile and other characteristics of GEM mean that it is a market more suited to professional and other sophisticated investors.

Given the emerging nature of companies listed on GEM, there is a risk that securities traded on GEM may be more susceptible to high market volatility than securities traded on the main board of The Stock Exchange of Hong Kong Limited and no assurance is given that there will be a liquid market in the securities traded on GEM.

The principal means of information dissemination on GEM is publication on the internet website operated by The Stock Exchange of Hong Kong Limited. Listed companies are not generally required to issue paid announcements in gazetted newspapers. Accordingly, prospective investors should note that they need to have access to the GEM website in order to obtain up-to-date information on GEM-listed issuers.

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TABLE OF CONTENTS

	Page
Characteristics of The Growth Enterprise Market
of The Stock Exchange of Hong Kong Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	i
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter From the Board
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
General Mandates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Proposed refreshment of the Scheme Mandate Limit
under the Existing Share Option Scheme . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Amendments to the Bye-Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
SGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Procedure by which a poll may be demanded . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Responsibility statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
Appendix – Explanatory Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
Notice of the SGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12

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DEFINITIONS

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

“associates”	has the meaning as defined under the GEM Listing
	Rules;
“Board”	the board of Directors;
“Bye-Laws”	Bye-laws of the Company as may be amended from
	time to time;
“Companies Ordinance”	Companies Ordinance (Chapter 32 of the Laws of Hong
	Kong) as amended from time to time;
“Company”	SYSCAN Technology Holdings Limited (矽感科技控
	股有限公司*), a company incorporated with limited
	liability in Bermuda, the shares of which are listed
	and traded on GEM;
“Director(s)”	the director(s) of the Company;
“Existing Share Option Scheme”	the share option scheme of the Company adopted by
	the Company on 26 April 2002;
“GEM”	the Growth Enterprise Market of the Stock Exchange;
“GEM Listing Rules”	the Rules Governing the Listing of Securities on the
	GEM;
“Group”	the Company and its subsidiaries;
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong;
“Latest Practicable Date”	8 April 2005, being the latest practicable date prior to
	the printing of this circular for ascertaining certain
	information included in this circular;
“Notice”	the notice convening the SGM which is set out on
	pages 12 to 18 of this circular;
“Repurchase Mandate”	a general mandate proposed to be granted to the
	Directors to exercise the power of the Company to
	repurchase Shares up to a maximum of 10% of the
	aggregate nominal amount of the issued share capital
	of the Company at the date of passing resolution no. 3;

• For identification purpose only

– 1 –

DEFINITIONS

“Scheme Mandate Limit” being the maximum number of Shares which may be allotted and issued upon exercise of all options to be granted under the Existing Share Option Scheme and any other share option schemes of the Company as stipulated in Rule 23.03(3) of the GEM Listing Rules; “SGM” the special general meeting of the Company to be held at Function Room 1, Ground Floor, City Garden Hotel, 9 City Garden Road, North Point, Hong Kong on Wednesday, 4 May 2005 at 11:30 a.m., the notice of which is set out on pages 12 to 18 of this circular; “Share(s)” share(s) of par value of HK$0.01 each in the share capital of the Company; “Share Option Schemes A” the share option scheme A adopted by the Company on 2 March 2000 and ceased to be effective (save for the options already granted but unexercised) upon the listing of the Company on 14 April 2000; “Share Option Schemes B” the share option scheme B adopted by the Company on 2 March 2000 and ceased to be effective (save for the options already granted but unexercised) upon the annual general meeting of the Company held on 26 April 2002; “Shareholder(s)” the shareholder(s) of the Company; “Stock Exchange” The Stock Exchange of Hong Kong Limited; “Substantial Shareholder(s)” has the same meaning ascribed in the GEM Listing Rules; and “Takeovers Code” the Hong Kong Code on Takeovers and Mergers

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LETTER FROM THE BOARD

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SYSCAN Technology Holdings Limited 矽感科技控股有限公司[*]

(Incorporated in Bermuda with limited liability)

(Stock Code: 8083)

Executive Directors: Cheung Wai Chan Man Ching

Independent non-executive Directors: Lo Wai Ming Fong Chi Wah Jin Qingjun

Registered office: Canon’s Court 22 Victoria Street Hamilton HM 12 Bermuda

Head office and principal place of business in Hong Kong: Unit 808, 8th Floor, K. Wah Centre, 191 Java Road, North Point, Hong Kong

11 April 2005

To the Shareholders, and for information only, the optionholders of the Company

Dear Sir or Madam,

PROPOSED REFRESHMENT OF GENERAL MANDATES TO ISSUE SHARES AND REPURCHASE SHARES, PROPOSED REFRESHMENT OF THE SCHEME MANDATE LIMIT UNDER THE EXISTING SHARE OPTION SCHEME, AND PROPOSED AMENDMENTS TO THE BYE-LAWS

INTRODUCTION

The purpose of this circular is to provide you with the necessary information regarding the resolutions to be proposed at the SGM to be held at Function Room 1, Ground Floor, City Garden Hotel, 9 City Garden Road, North Point, Hong Kong on Wednesday, 4 May 2005 at 11:30 a.m. These include the (i) ordinary resolutions (aa) to grant to the Directors the general mandates to issue Shares and to repurchase Shares; (bb) to approve the proposed refreshment of the Scheme Mandate Limit under the Existing Share Option Scheme, and (ii) the special resolution to amend the Bye-Laws in view of the amendments to the GEM Listing Rules.

• For identification purpose only

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LETTER FROM THE BOARD

GENERAL MANDATES

At the SGM, the following ordinary resolutions will be proposed:–

• (a) to grant a general mandate to the Directors to allot, issue or deal with Shares of an aggregate nominal amount of up to 20% of the issued share capital of the Company on the date of passing of the relevant ordinary resolution (the “ Issuance Mandate ”);

• (b) to grant to the Directors a general mandate to exercise the powers of the Company to undertake repurchases of the Company’s fully paid up Shares of an aggregate nominal amount of up to a maximum of 10% of the issued share capital of the Company on the date of passing of the relevant ordinary resolution (the “ Repurchase Mandate ”); and

• (c) to extend the Issuance Mandate by an amount representing the aggregate nominal amount of the Shares repurchased by the Company pursuant to and in accordance with the Repurchase Mandate.

Under the GEM Listing Rules, the general mandates granted on 23 April 2003 have already been lapsed on the conclusion of the annual general meeting of the Company held on 7 May 2004. Resolutions nos. 2 and 3 set out in the Notice will be proposed at the SGM to renew the general mandates until whichever is the earliest of: (i) the conclusion of the next annual general meeting of the Company; (ii) the revocation or variation of the authority given under these resolutions by ordinary resolution passed by the Shareholders in general meeting; and (iii) the expiration of the period within which the next annual general meeting of the Company is required by the Bye-Laws or any applicable laws to be held. With reference to these resolutions, the Directors wish to state that they have no present intention to repurchase any Shares pursuant to the relevant mandates.

The explanatory statement containing all relevant information relating to the Repurchase Mandate is set out in the appendix to this circular in accordance with the requirements of the GEM Listing Rules. The information in the explanatory statement is to provide you with the information reasonably necessary to enable you to make an informed decision on whether to vote for or against the resolution to grant to the Directors the Repurchase Mandate at the SGM.

PROPOSED REFRESHMENT OF THE SCHEME MANDATE LIMIT UNDER THE EXISTING SHARE OPTION SCHEME

The Company adopted the Existing Share Option Scheme pursuant to the ordinary resolution passed at the annual general meeting of the Company held on 26 April 2002. Under the rules of the Existing Share Option Scheme and the GEM Listing Rules, the total number of Shares which may be issued upon the exercise of all options to be granted under the Existing Share Option Scheme and any other share option schemes of the Company (options lapsed in accordance with the terms of such scheme(s) will not be taken into account for such purpose) shall not exceed 10% of the issued share capital of

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LETTER FROM THE BOARD

the Company as at the date of the adoption of the Existing Share Option Scheme. The existing Scheme Mandate Limit is 10,226,432 Shares, being 10% of the issued share capital of the Company as at the date of the adoption of the Existing Share Option Scheme on 26 April 2002.

Options carrying the rights to subscribe for a total of 12,525,000 Shares were outstanding under the Share Option Scheme A, Share Option Scheme B and the Existing Share Option Scheme, representing about 12.24% of the issued share capital of the Company as at the Latest Practicable Date. The Directors confirm that as at the Latest Practicable Date, options to subscribe for 7,543,000 Shares has been granted under the Existing Share Option Scheme, of which options to subscribe for 1,571,000 Shares have been lapsed or cancelled, thereby leaving outstanding options to subscribe for 5,972,000 Shares.

Under the rules of the Existing Share Option Scheme and subject to the GEM Listing Rules:

• (1) the total number of Shares which may be issued upon the exercise of all options granted under the Existing Share Option Scheme and any other share option schemes of the Company (options lapsed in accordance with the terms of such scheme(s) will not be taken into account for such purpose) shall not in aggregate exceed 10% of the issued share capital of the Company at the date of adoption of the Existing Share Option Scheme;

• (2) The Company may seek Shareholders’ approval to refresh the Scheme Mandate Limit under the Existing Share Option Scheme as and when required. For this purpose, the total number of Shares which may be issued upon the exercise of all options granted under the Existing Share Option Scheme and any other share option schemes of the Company under the Scheme Mandate Limit as “refreshed” must not exceed 10% of the issued share capital of the Company as at the date of approval of the Scheme Mandate Limit as refreshed.

Options previously granted under the Existing Share Option Scheme and any other share option schemes of the Company including those outstanding, cancelled, lapsed in accordance with such scheme(s) or exercised options will not be counted for the purpose of calculating the Scheme Mandate Limit as “refreshed”; and

• (3) the maximum aggregate number of Shares which may be issued upon exercise of all outstanding options granted and yet to be exercised under the Existing Share Option Scheme and any other share option schemes of the Company shall not in aggregate exceed 30% of the issued share capital of the Company from time to time. In this regard, taking into account the maximum of 22,761,432 Shares which may be issued upon the exercise of all options (granted and to be granted) under the existing Scheme Mandate Limit and the refreshed Scheme Mandate Limit if approved under the Existing Share Option Scheme, such 30% limit will not be exceeded.

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LETTER FROM THE BOARD

Given that the existing Scheme Mandate Limit of the Existing Share Option Scheme is fully utilized, the Directors consider that it is in the interests of the Company and the Shareholders as a whole to refresh the Scheme Mandate Limit so that the total number of Shares which may be issued upon the exercise of all options to be granted under the Existing Share Option Scheme and any other share option schemes of the Company shall be re-set at 10% of the issued share capital of the Company as at the date of approval of the refreshed Scheme Mandate Limit.

If the Scheme Mandate Limit is refreshed, on the basis of 102,364,327 Shares in issue as at the Latest Practicable Date and assuming that no Shares will be issued or repurchased by the Company prior to the SGM, the Scheme Mandate Limit will be re-set to 10,236,432 Shares, representing 10% of the Shares which will be in issue at the date of obtaining Shareholders’ approval of refreshing the Scheme Mandate Limit, and the Company will be allowed to grant further options under the Existing Share Option Scheme and other share option schemes of the Company carrying the rights to subscribe for a maximum of 10,236,432 Shares.

The purpose of the Existing Share Option Scheme is to provide incentives or rewards to the eligible persons including employees, directors, advisors and consultants for their contribution to the Group. This in turn would achieve the Group’s aim to reward and retain quality people in long term. In order to continue with this purpose, the Scheme Mandate Limit of the Existing Share Option Scheme needs to be refreshed in accordance with the rules of Existing Share Option Scheme. For these reasons, the Directors will propose the passing of the ordinary resolution no. 5 for refreshing the Scheme Mandate Limit of the Existing Share Option Scheme at the SGM.

Application will be made to the Stock Exchange for the listing of, and the permission to deal in, the Shares representing a maximum of 10% of the issued share capital of the Company as at the date of obtaining the relevant Shareholders’ approval for refreshing the Scheme Mandate Limit, to be allotted and issued upon exercise of the options that may be granted within the Scheme Mandate Limit as refreshed.

AMENDMENTS TO THE BYE-LAWS

In view of the amendments to the GEM Listing Rules which became effective on 31 March 2004, a special resolution will be proposed at the SGM to amend the Bye-Laws. In general, the proposed amendments to the Bye-Laws include, inter alia, the following:

• (i) the minimum seven-day period for lodgment by Shareholders of the notice to nominate a Director shall commence no earlier than the day after the despatch of the notice of general meeting appointed for such election and end no later than seven days prior to the date of such general meeting;

• (ii) a Director shall abstain from voting at the Board meeting on any matter in which he or any of his associates has a material interest and not be counted towards the quorum of the relevant Board meeting; and

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LETTER FROM THE BOARD

• (iii) where any Shareholder is, under the GEM Listing Rules, required to abstain from voting on any particular resolution or restricted to voting only for or only against any particular resolution, any vote cast by or on behalf of such Shareholder in contravention of such requirement or restriction shall not be counted.

Full details of the proposed amendments to the Bye-Laws are contained in special resolution no. 1 of the Notice set out on pages 12 to 18 of this circular. The special resolution in relation to the proposed amendments to the Bye-Laws will be put forth as special business at the SGM to be considered and, if thought appropriate, approved by the Shareholders.

RECOMMENDATION

The Directors are of the view that the resolutions set out in the Notice are in the best interests of the Company and the Shareholders as a whole. Accordingly, the Directors recommend the Shareholders to vote in favour of the relevant resolutions to be proposed at the SGM.

SGM

Notice convening the SGM to be held at Function Room 1, Ground Floor, City Garden Hotel, 9 City Garden Road, North Point, Hong Kong on Wednesday, 4 May 2005 at 11:30 a.m. is set out on pages 12 to 18 of this circular.

A form of proxy for use at the SGM is enclosed with this circular. To be valid, the form of proxy must be completed in accordance with the instructions printed thereon and deposited together with the power of attorney or other authority (if any) under which it is signed or a notarially certified copy of such power of attorney or authority to the principal place of business and head office of the Company at Unit 808, 8th Floor, K. Wah Centre, 191 Java Road, North Point, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for holding of the SGM (or any adjournment thereof). Completion and return of the form of proxy will not preclude you from attending and voting at the SGM (or any adjournment thereof) should you so wish.

PROCEDURE BY WHICH A POLL MAY BE DEMANDED

A resolution put to the vote at the SGM will be decided on a show of hands unless a poll is (before or on the declaration of the result of the show of hands or on the withdrawal of any other demand for a poll) duly demanded. A poll may be demanded by:

• (a) the chairman of the SGM; or

• (b) at least three Shareholders present in person or by a duly authorised corporate representative or by proxy for the time being entitled to vote at the SGM; or

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LETTER FROM THE BOARD

• (c) any Shareholder or Shareholders present in person or by a duly authorised corporate representative or by proxy and representing not less than one-tenth of the total voting rights of all the Shareholders having the right to vote at the SGM; or

• (d) any Shareholder or Shareholders present in person or by a duly authorised corporate representative or by proxy and holding Shares conferring a right to vote at the SGM 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.

RESPONSIBILITY STATEMENT

This circular includes particulars given in compliance with the GEM Listing Rules for the purpose of giving information with regard to the Company. The Directors collectively and individually accept full responsibility for the accuracy of the information contained in this circular and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts the omission of which would make any statement herein misleading.

ADDITIONAL INFORMATION

Your attention is also drawn to the additional information set out in the appendix and the Notice set out in this circular.

MISCELLANEOUS

The English text of this circular shall prevail over the Chinese text for the purpose of interpretation.

Yours faithfully,

By order of the Board of

SYSCAN Technology Holdings Limited Chan Man Ching Executive Director

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APPENDIX

EXPLANATORY STATEMENT

This appendix serves as an explanatory statement, as required by the GEM Listing Rules, to provide requisite information relating to the Repurchase Mandate to all the Shareholders for their consideration.

1. SHARE CAPITAL

As at the Latest Practicable Date, the issued share capital of the Company comprised of 102,364,327 Shares.

Subject to the passing of the ordinary resolution to approve the Repurchase Mandate and on the basis that no further Shares are issued or repurchased by the Company prior to the SGM, the Company would be allowed under the Repurchase Mandate to repurchase a maximum of 10,236,432 Shares.

2. REASONS FOR REPURCHASES

The Directors believe that it is in the best interest of the Company and the Shareholders for the Directors to have general authority from the Shareholders to enable the Company to purchase Shares in the market. Such repurchases may, depending on market conditions and funding arrangements at the time, lead to an enhancement of the net asset per Share and/or earnings per Share and will only be made if the Directors believe such repurchase will benefit the Company and the Shareholders.

3. FUNDING OF REPURCHASES

In repurchasing Shares, the Company may only apply funds legally available for such purpose in accordance with the memorandum of association of the Company, the Bye-Laws, the GEM Listing Rules and the applicable laws and regulations of the Bermuda.

There might be material adverse impact on the working capital or gearing position of the Company (as compared with the position disclosed in the latest published audited accounts contained in the annual report of the Company for the year ended 31 December 2004) in the event that the Repurchase Mandate was to be carried out in full at any time during the proposed repurchase period. However, the Directors do not propose to exercise the Repurchase Mandate to such extent as would, in the circumstances, have a material adverse effect on the working capital requirements of the Company or the gearing levels which in the opinion of the Directors are from time to time appropriate for the Company.

4. CONNECTED PERSON

No connected person (as defined in the GEM Listing Rules) has notified the Company that he/she has a present intention to sell Shares to the Company, nor has undertaken not to do so, in the event that the granting of the Repurchase Mandate is approved by the Shareholders.

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APPENDIX

EXPLANATORY STATEMENT

None of the Directors nor, to the best of their knowledge having made all reasonable enquiries, any of their respective associates, have any present intention to sell any Shares to the Company in the event that the granting of the Repurchase Mandate is approved by the Shareholders.

5. MARKET PRICE OF SHARE

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

Month	Highest	Lowest
	HK$	HK$
2004
April	–	–
May	0.4100	0.2440
June	0.3800	0.2300
July	0.3300	0.2700
August	0.3300	0.2650
September	0.2950	0.2450
October	0.2850	0.2370
November	0.2270	0.1550
December	0.1700	0.1550
2005
January	0.1790	0.1500
February	0.1640	0.1500
March	0.1680	0.1120

6. UNDERTAKING

The Directors have undertaken to the Stock Exchange to exercise the Repurchase Mandate in accordance with the GEM Listing Rules and the applicable laws of Bermuda.

7. THE HONG KONG CODE ON TAKEOVERS AND MERGERS

If, on the exercise of the power to repurchase Shares pursuant to the 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 purpose of the Takeovers Code. As a result, a Shareholder, or a group of Shareholders acting in concert (within the meaning under the Takeovers Code), could obtain or consolidate control of the Company and become obliged to make a mandatory offer in accordance with Rule 26 of the Takeovers Code for all Shares not already owned by such Shareholder or group of Shareholders.

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APPENDIX

EXPLANATORY STATEMENT

As at the Latest Practicable Date, the Substantial Shareholder of the Company and the number of Shares held by him is:

			If Repurchase
			Mandate
	No. of	Approx.	exercised
Name of Shareholders	Shares	percentage	in full
Mr. Cheung Wai_(note 1)_	11,030,000	10.78%	11.97%

Note:

1. By virtue of his corporate interest in Haing Assets Limited and Simrita Investments Limited, Mr. Cheung Wai is deemed to be interested in 4,800,000 Shares and 5,510,000 Shares registered in the name of Haing Assets Limited and Simrita Investments Limited respectively. Save and except the above, 720,000 Shares are held personally by Mr. Cheung Wai. Both of Haing Assets Limited and Simrita Investments Limited are companies incorporated in the British Virgin Islands and are beneficially owned by Mr. Cheung Wai.

In the event that the Directors shall exercise in full the power to repurchase Shares in accordance with the Repurchase Mandate to be proposed at the SGM, the total interests/ deemed interests of the above substantial Shareholders would be increased to approximately the respective percentages shown in the last column above.

On the basis of the shareholdings held by the Substantial Shareholder of the Company named above, an exercise of the Repurchase Mandate in full will not have any implications under the Takeovers Code. In fact, the Directors do not have the intention to exercise the power to repurchase Shares to an extent which would make any of the Substantial Shareholders to be obliged to make a mandatory offer under Rule 26 of the Takeovers Code.

The Directors will not make repurchase of Shares on the Stock Exchange if the result of the repurchase would be less than 25% of the issued share capital of the Company would be in public hands.

8. SHARE REPURCHASE MADE BY THE COMPANY

No repurchase of Shares has been made by the Company nor any of its subsidiaries, (whether on the Stock Exchange or otherwise), during the last six months immediately preceding the Latest Practicable Date.

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NOTICE OF THE SGM

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SYSCAN Technology Holdings Limited 矽感科技控股有限公司[*]

(Incorporated in Bermuda with limited liability)

(Stock Code: 8083)

NOTICE IS HEREBY GIVEN that a special general meeting (the “ SGM ”) of SYSCAN Technology Holdings Limited (the “ Company ”) will be held at Function Room 1, Ground Floor, City Garden Hotel, 9 City Garden Road, North Point, Hong Kong on Wednesday, 4 May 2005 at 11:30 a.m. for the purpose of considering and, if thought fit, passing, with or without modifications, the following resolutions:–

SPECIAL RESOLUTION

1. “ THAT the Bye-laws of the Company be and are hereby amended in the following manner:

2. (a) Bye-law 1

   • (i) By deleting the definition of “associates” in its entirety and substituting therefor a new definition of “associates” as follows:

     • “associates” shall have the meaning as defined in the rules of the stock exchange in the Relevant Territory.

   • (ii) By deleting the first few words “a recognised clearing house within the meaning of Section 2 of the Securities and Futures (Clearing House) Ordinance (Chapter 420 of the Laws of Hong Kong) or” in the definition of “clearing house”.

   • (iii) By substituting the numerals “0.01” for the numerals “0.10” in the definition of “Ordinary Shares”.

   • (iv) By deleting the definition of “Preferred Shares” in its entirety.

• For identification purpose only

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NOTICE OF THE SGM

• (b) Bye-law 3A

By inserting the following as a new Bye-law 3A immediately after the existing Bye-law 3:

• “3A Where the Company purchases for redemption a redeemable share, purchases not made through the market or by tender shall be limited to a maximum price as may be determined by the Company in general meeting, either generally or with regard to specific purchases. If purchases are by tender, tenders shall available to shareholders alike.”

• (c) Bye-law 6

By deleting the existing paragraph A of Bye-law 6 in its entirety and substituting therefor a new paragraph A of Bye-law 6 as follows:

• “6(A) The authorised share capital of the Company is HK$200,000,000 divided into 20,000,000,000 Ordinary Shares of par value HK$0.01 each as at the date of the special general meeting of the Company held on 4 May 2005.”

• (d) Bye-law 6A

By deleting the existing Bye-law 6A in its entirety.

• (e) Bye-law 7

By deleting the second paragraph of the existing Bye-law 7 in its entirety.

• (f) Bye-law 76

By renumbering the existing Bye-law 76 as a new paragraph A of Byelaw 76 and inserting the following as a new paragraph B of Bye-law 76 immediately after the new paragraph A of Bye-law 76:

• “76(B) Where any shareholder is, under the rules of the stock exchange in the Relevant Territory, required to abstain from 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 shareholder in contravention of such requirement or restriction shall not be counted.”

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NOTICE OF THE SGM

• (g) Bye-law 98

By deleting the existing paragraph H of Bye-law 98 in its entirety and substituting therefor a new paragraph H of Bye-law 98 as follows:

• “98(H) A Director shall not vote (nor shall he be counted in the quorum) on any resolution of the Board approving any contract or arrangement or any other proposal in which he or any of his associate(s) has a material interest and if he shall do so his vote shall not be counted (nor shall he be counted in the quorum present in the meeting), but this prohibition shall not apply to any of the following matters namely:–

• (i) the giving by the Company of any security or indemnity to the Director or his associate(s) in respect of money lent 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 of any security to a third party in respect of a debt or obligation of the Company or any of its subsidiaries for which the Director or his associates(s) has himself/themselves assumed responsibility in whole or in part whether alone or jointly under a guarantee or indemnity or by the giving of security;

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

• (iv) any contract or arrangement concerning any other company in which the Director or his associate(s) is/are interested only, whether directly or indirectly, as an officer or executive or shareholder or in which the Director or his associate(s) is/are beneficially interested in shares of that company, provided that the Director and any of his associates are not in aggregate beneficially interested in five (5) per cent. or more of the issued shares of any class of such company (or of any third company through which his interest or that of any of his associates is derived) or of the voting rights;

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NOTICE OF THE SGM

• (v) any proposal or arrangement concerning the benefit of employees of the Company or its subsidiaries including the adoption, modification or operation of any employees’ share scheme or any share incentive or share option scheme under which the Director or his associate(s) may benefit;

• (vi) any proposal or arrangement concerning the benefit of employees of the Company or its subsidiaries including the adoption, modification or operation of a pension fund or retirement, death or disability benefit scheme which relates both to Directors, his associate(s) and employees of the Company or any of its subsidiaries and does not provide in respect of any Director, or his associate(s), as such privilege or advantage not generally accorded to the class of persons to whom such scheme or fund relates;

• (vii) any contract or arrangement in which the Director or his associate(s) is/are interested in the same manner as other holders of shares or debentures or other securities of the Company by virtue only of his/their interest in shares or debentures or other securities of the Company.”

• (h) Bye-law 99

By deleting the words “save any Director holding office as Chairman or Managing Director” and substituting therefor the words “provided that every Director shall be subject to retirement by rotation at least once every three years” in the fourth line of Bye-law 99.

• (i) Bye-law 103

By deleting the last few words “at least seven days before the date of the general meeting” in the existing Bye-law 103 and inserting the words “The minimum length of the period during which such notices are given shall be at least seven (7) days and the period for lodgment of such notices shall commence no earlier than the day after the dispatch of the notice of the general meeting appointed for such election and end no later than seven (7) days prior to the date of such general meeting.” at the end of the new Bye-law 103.”

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NOTICE OF THE SGM

ORDINARY RESOLUTIONS

1. “ THAT

2. (a) subject to paragraph (b) below, the directors of the Company (the “ Directors ”) be hereby generally and unconditionally authorised to exercise during the Relevant Period (as defined below) all the powers of the Company to issue, allot and deal with additional shares of the Company and to make or grant offers, agreements and options which would or might require the exercise of any of such powers during or after the end of the Relevant Period;

3. (b) the aggregate nominal amount of the shares allotted, issued or otherwise dealt with or agreed conditionally or unconditionally to be allotted, issued or otherwise dealt with (whether pursuant to an option or otherwise) by the Directors pursuant to the approval in paragraph (a) above, other than pursuant to (i) a Rights Issue (as defined below); or (ii) an issue of ordinary shares of the Company by way of scrip dividend pursuant to the Bye-laws of the Company from time to time; or the exercise of any option granted under any option scheme or similar arrangement for the time being adopted for the grant or issue to employees of the Company and/or its subsidiaries, of options to subscribe for, or rights to acquire, shares of the Company, shall not in total exceed 20% of the total nominal amount of the share capital of the Company in issue on the date of passing of this resolution; and

4. (c) 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 revocation or variation of the authority given under this resolution by ordinary resolution passed by the Company’s shareholders in general meeting; and

   • (iii) the expiration of the period within which the next annual general meeting of the Company is required by the Bye-laws of the Company or any applicable laws to be held; and

“ Right Issue ” means an offer of shares for subscription open for a fixed period by the Company to holders of shares on the register of members of the Company on a fixed record date in proportion to their then holdings of shares (subject to such exclusion 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 recognized regulatory body or any stock exchange in, any territory outside Hong Kong).”

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NOTICE OF THE SGM

1. “ THAT

2. (a) the directors of the Company be generally and unconditionally authorized to exercise during the Relevant Period (as defined below) all the powers of the Company to purchase its shares, subject to and in accordance with the applicable laws;

3. (b) the total nominal amount of shares which may be purchased pursuant to the approval in paragraph (a) above shall not exceed 10% of the aggregate nominal amount of the share capital of the Company in issue on the date of passing of this resolution; and

4. (c) 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 revocation or variation of the authority given under this resolution by ordinary resolution passed by the Company’s shareholders in general meeting; and

   • (iii) the expiration of the period within which the next annual general meeting of the Company is required by the Bye-laws of the Company or any applicable laws to be held.”

5. “ THAT conditional upon the ordinary resolutions no. 2 and no. 3 contained in the notice of the SGM of which this resolution forms part being approved, the aggregate nominal amount of the shares in the capital of the Company which are repurchased by the Company pursuant to and in accordance with ordinary resolution no. 3 shall be added to the aggregate nominal amount of the share capital of the Company that may be allotted or agreed unconditionally or unconditionally to be allotted by the directors of the Company pursuant to and in accordance with ordinary resolution no. 2.”

6. “ THAT pursuant to the terms of the share option scheme (the “ Share Option Scheme ”) of the Company adopted by the Company on 26 April 2002, approval be and is hereby generally and unconditionally granted for “refreshing” the 10% scheme mandate limit (“ Scheme Mandate Limit ”) provided that (i) the total number of shares of HK$0.01 each in the capital of the Company which may be issued upon the exercise of all options to be granted under the Share Option Scheme and other share option schemes of the Company under the limit as “refreshed” hereby shall not exceed 10% of the aggregate nominal amount of the share capital of the Company in issue on the date of the passing of this resolution and (ii) options previously granted under the Share Option Scheme and other share option schemes of the Company (including options outstanding, cancelled, lapsed or exercised in accordance with the terms of the Share Option Scheme or any other share option schemes of the Company)

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NOTICE OF THE SGM

shall not be counted for the purpose of calculating the Scheme Mandate Limited as “refreshed” hereby; and THAT any director of the Company be and is hereby authorised to take any step as he/she consider necessary, desirable or expedient in connection with the refreshment of the Scheme Mandate Limit and to grant options up to the refreshed Scheme Mandate Limit and to exercise all powers of the Company to allot, issue and deal with shares of the Company pursuant to the exercise of such options.”

By Order of the Board of SYSCAN Technology Holdings Limited Chan Man Ching Executive Director

Hong Kong, 11 April 2005

Principal place of business and head office in Hong Kong: Unit 808, 8th Floor K. Wah Centre 191 Java Road North Point, Hong Kong

Notes:

1. A member of the Company entitled to attend and vote at the SGM is entitled to appoint another person as his proxy to attend and, in the event of a poll vote in his stead. A member who is the holder of two or more shares may appoint more than one proxy to represent him and vote on his behalf at the SGM. If more than one proxy is so appointed, the appointment shall specify the number and class of shares in respect of which such proxy is so appointed. A proxy need not be a member of the Company, but must attend in person to represent you.

In order to be valid, the form of proxy must be deposited at the principal place of business and head office of the Company in Hong Kong at Unit 808, 8th Floor, K. Wah Centre, 191 Java Road, North Point, Hong Kong together with the power or attorney or other authority (if any) under which it is signed or a notarially certified copy of such power of attorney or authority, not less than 48 hours before the time appointed for holding the SGM or any adjournment thereof.

1. Where there are joint holders of any share, any one of such persons may vote at the SGM either personally or by proxy, in respect of such share as if he were solely entitled thereto, but if more than one of such joint holders be present at the SGM personally or by proxy, the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders, and for this purpose seniority shall be determined by the order in which the names stand in the register of members of the Company in respect of such joint holding.

2. A form of proxy for use in connection with the SGM is enclosed. Completion and delivery of the form of proxy will not preclude a member from attending and voting in person at the SGM if the member so desires and in such event, the instrument appointing a proxy shall be deemed to be revoked.

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