CHINA ASSETS (HOLDINGS) LIMITED (Incorporated in Hong Kong with limited liability)

Transcription

1 THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION If you are in 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 China Assets (Holdings) Limited, you should at once hand this circular and the accompanying proxy form to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or 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. CHINA ASSETS (HOLDINGS) LIMITED (Incorporated in Hong Kong with limited liability) PROPOSALS FOR (1) GENERAL MANDATES TO ISSUE AND REPURCHASE THE COMPANY S SHARES AND (2) CHANGE OF THE CHINESE NAME OF THE COMPANY AND ALTERATION OF THE ARTICLES OF ASSOCIATION AND NOTICE OF ANNUAL GENERAL MEETING A notice convening the Annual General Meeting of China Assets (Holdings) Limited to be held at 19th Floor, Wing On House, 71 Des Voeux Road Central, Hong Kong on Friday, 23rd May 2003 at 4:00 p.m. is set out on pages 8 to 11 of this circular. A form of proxy is also enclosed. Whether or not you are able to attend the Annual General Meeting, you are requested to complete and return the accompanying form of proxy in accordance with the instructions printed thereon to the registered office of the Company at 19th Floor, Wing On House, 71 Des Voeux Road Central, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for holding the Annual General Meeting (or any adjournment thereof). Completion of a form of proxy will not preclude you from attending and voting at the Annual General Meeting (or any adjournment thereof) in person if you so wish.

2 DEFINITIONS In this circular, unless the context otherwise requires, the following expressions have the following meanings: Annual General Meeting the annual general meeting of the Company to be held at 19th Floor, Wing On House, 71 Des Voeux Road Central, Hong Kong on Friday, 23rd May 2003 at 4:00 p.m. (and any adjournment thereof), notice of which is set out on pages 8 to 11 of this circular Companies Ordinance the Companies Ordinance (Chapter 32 of the Laws of Hong Kong) Company China Assets (Holdings) Limited, a company incorporated in Hong Kong with limited liability Director(s) director(s) of the Company General Mandate the general authority to be given by the Shareholders to the Directors in allotting and issuing Shares in the terms set out in Ordinary Resolutions 4A and 4C in the notice convening the Annual General Meeting Group the Company and its subsidiaries Latest Practicable Date 15th April 2003, being the latest practicable date prior to the printing of this circular Listing Rules the Rules Governing the Listing of Securities on the Stock Exchange Repurchase Mandate the authority to be given by the Shareholders to the Directors in exercising all the powers of the Company to repurchase Shares in the terms set out in Ordinary Resolution 4B in the notice convening the Annual General Meeting Share(s) share(s) of US$0.10 each in the share capital of the Company Shareholder(s) shareholder(s) of the Company Share Repurchase Rules the relevant rules set out in the Listing Rules to regulate the repurchase by companies with a primary listing on the Stock Exchange of their own securities on the Stock Exchange i

3 DEFINITIONS Stock Exchange Takeover Code HK$ The Stock Exchange of Hong Kong Limited The Code on Takeovers and Mergers of Hong Kong Hong Kong dollars % per cent. ii

4 LETTER FROM THE BOARD OF DIRECTORS CHINA ASSETS (HOLDINGS) LIMITED (Incorporated in Hong Kong with limited liability) Directors: Registered Office: LAO Yuan Yi (Chairman) 19th Floor Charlie Yucheng SHI Wing On House JIANG Wei 71 Des Voeux Road Central YEUNG Wai Kin Hong Kong WANG Jun Yan ZHAO Yu Qiao TSUI Che Yin, Frank Peter Duncan Neil ROBERTSON (Independent Non-Executive Director) FAN Jia Yan (Independent Non-Executive Director) WU Ming Yu (Independent Non-Executive Director) XIN Shu Lin (alternate director to LAO Yuan Yi) 23rd April 2003 To the shareholders Dear Sir or Madam, PROPOSALS FOR (1) GENERAL MANDATES TO ISSUE AND REPURCHASE THE COMPANY S SHARES AND (2) CHANGE OF THE CHINESE NAME OF THE COMPANY AND ALTERATION OF THE ARTICLES OF ASSOCIATION AND NOTICE OF ANNUAL GENERAL MEETING INTRODUCTION The purpose of this circular is to seek your approval of the resolutions, inter alia, relating to the General Mandate, the Repurchase Mandate, the change of the Chinese name of the Company and the alteration of its Articles of Association, to be proposed at the Annual General Meeting to be held on Friday, 23rd May 2003, notice of which is set out on pages 8 to 11 of this circular. MANDATE TO ISSUE SHARES At the Annual General Meeting, an ordinary resolution will be proposed to grant the Directors a General Mandate to allot, issue and deal in Shares up to 20% of the aggregate nominal amount of the issued share capital of the Company as at the date of passing the relevant 1

5 LETTER FROM THE BOARD OF DIRECTORS ordinary resolution. In addition, an ordinary resolution will also be proposed to authorise an extension of the General Mandate by adding thereto the aggregate nominal amount of any Shares repurchased under the Repurchase Mandate. The General Mandate is required since the existing general mandate will lapse at the conclusion of the forthcoming Annual General Meeting. REPURCHASE MANDATE At the Annual General Meeting, an ordinary resolution will be proposed to grant a general mandate to the Directors to exercise the powers of the Company to repurchase Shares up to 10% of the aggregate nominal amount of the issued share capital of the Company as at the date of passing the relevant ordinary resolution. An explanatory statement as required under the Share Repurchase Rules to provide all the information reasonably necessary to enable Shareholders to make an informed decision whether to vote for or against the resolution concerning the Repurchase Mandate is set out in the Appendix to this circular. CHANGE OF THE CHINESE NAME OF THE COMPANY The business of the Group is investment holding with the objective of achieving long term capital appreciation through investing in listed and unlisted enterprises in the People s Republic of China. The Directors believe that a change of the Chinese name of the Company to will more appropriately reflect the nature of its business. A special resolution will be proposed at the Annual General Meeting to approve such change. The English name of the Company will remain unchanged. If the proposed change of the Chinese name is approved at the forthcoming Annual General Meeting, and subject to the approval of the Registrar of Companies in Hong Kong, such change shall have effect from the date on which the Registrar of Companies in Hong Kong registers the proposed Chinese name and issues to the Company a certificate of incorporation on change of name. It is expected that the change of name will become effective on or about 10th June Announcement will be made by way of press notice as soon as practicable upon such change of Chinese name becoming effective. The change of name of the Company will not affect any of the rights of any Shareholders. All existing share certificates in issue bearing the present name of the Company will continue to be evidence of entitlement to the Shares and will be valid for trading and settlement after the change of name. 2

6 LETTER FROM THE BOARD OF DIRECTORS ALTERATION OF THE ARTICLES OF ASSOCIATION A special resolution will also be proposed at the Annual General Meeting to alter the definition of the Company in Article 1 of the Company s Articles of Association to China Assets (Holdings) Limited to reflect the aforesaid proposed change of the Chinese name of the Company. Furthermore, to reflect the change of name of the Manager of the Company from China Assets Management Limited to China Assets Investment Management Limited which became effective on 16th December 2002, the name of the Manager in the definition of the Management Agreement in Article 1 of the Company s Articles of Association will be proposed to be altered to China Assets Investment Management Limited accordingly by way of a special resolution to be proposed at the Annual General Meeting. SHARE CERTIFICATE EXCHANGE ARRANGEMENT If the Shareholders so wish, they may for a period of one month from the effective date of the change of the Chinese name of the Company deliver existing share certificates in respect of the Shares held by them to the registrars of the Company, Computershare Hong Kong Investor Services Limited, of Shops , 17th Floor, Hopewell Centre, 183 Queen s Road East, Hong Kong, to exchange, at the expense of the Company, for new share certificates bearing the new name of the Company. After the expiry of such one month period, share certificates of the Company will be accepted for exchange at the expense of the Shareholders. ANNUAL GENERAL MEETING On pages 8 to 11 of this circular, you will find a notice convening the Annual General Meeting at which ordinary resolutions will be proposed to approve, inter alia, the General Mandate and the Repurchase Mandate and special resolutions will be proposed to change the Chinese name of the Company to and to alter the Articles of Association of the Company. ACTION TO BE TAKEN A form of proxy for use at the Annual General Meeting is enclosed herewith. Whether or not you are able to attend the Annual General Meeting, you are requested to complete the form of proxy and return it to the registered office of the Company at 19th Floor, Wing On House, 71 Des Voeux Road Central, Hong Kong not less than 48 hours before the time appointed for holding the Annual General Meeting. Completion and return of a form of proxy will not preclude you from attending and voting at the Annual General Meeting (or any adjournment thereof) in person if you so wish. 3

7 LETTER FROM THE BOARD OF DIRECTORS RECOMMENDATION The Directors believe that the proposal for the General Mandate, the Repurchase Mandate, the change of the Chinese name of the Company and the alteration of the Articles of Association of the Company are all in the best interests of the Company and the Shareholders in general. Accordingly, the Directors recommend that you should vote in favour of all the resolutions set out in Resolutions 4 and 5 to be proposed at the Annual General Meeting. Yours faithfully, For and on behalf of the Board of CHINA ASSETS (HOLDINGS) LIMITED LAO Yuan Yi Chairman 4

8 APPENDIX EXPLANATORY STATEMENT This appendix serves both as the explanatory statement required to be sent to the Shareholders under the Listing Rules in connection with the proposed Ordinary Resolution set out in item 4B of the notice of the Annual General Meeting dated 11th April 2003 for the approval of the renewal of the Repurchase Mandate and as the memorandum required under section 49BA of the Companies Ordinance. EXERCISE OF THE REPURCHASE MANDATE Whilst the Directors do not presently intend to repurchase any Shares, they believe that the flexibility afforded by the Repurchase Mandate granted to them if the Ordinary Resolution set out in item 4B of the Notice of the Annual General Meeting is passed would be beneficial to the Company. It is proposed that up to 10% of the Shares in issue at the date of the passing of the resolution to approve the Repurchase Mandate may be repurchased. As at the Latest Practicable Date for determining such figure, 74,383,160 Shares were in issue. On the basis of such figure the Directors would be authorised to repurchase up to 7,438,316 Shares during the period up to the conclusion of the next annual general meeting in 2004 or the expiration of the period within which the next annual general meeting of the Company is required by law to be held or the revocation or variation of the Repurchase Mandate by an ordinary resolution of the Shareholders in general meeting, whichever occurs first. REASONS FOR REPURCHASES Repurchases of Shares will only be made when the Directors believe that such a repurchase will benefit the Company and the Shareholders. Such repurchases may, depending on the market conditions and funding arrangements at the time, lead to an enhancement of the net value of the Company and its assets and/or its earnings per Share. FUNDING OF REPURCHASES Repurchases pursuant to the Repurchase Mandate would be financed entirely from the Company s available cash flow or working capital facilities. Any repurchases will be made out of funds of the Company legally permitted to be utilised in this connection in accordance with its memorandum and articles of association and the laws of Hong Kong, including profits otherwise available for distribution. Under the Companies Ordinance, a company s profits available for distribution are its accumulated, realised profits, so far as not previously utilised by distribution or capitalisation, less its accumulated, realised losses, so far as not previously written off in a reduction or reorganisation of capital duly made. There might be a material adverse impact on the working capital or gearing position of the Company (as compared with the position disclosed in its most recent published audited accounts) in the event that the Repurchase Mandate is exercised in full. However, the Directors do not 5

9 APPENDIX EXPLANATORY STATEMENT 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. DISCLOSURE OF INTERESTS To the best of the knowledge of the Directors having made all reasonable enquiries, none of the Directors or their associates have any present intention, if the Repurchase Mandate is approved by the Shareholders and exercised, to sell any Shares to the Company or its subsidiaries. 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, if the Repurchase Mandate is approved by the Shareholders and exercised. DIRECTORS UNDERTAKING 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 all applicable laws of Hong Kong. SHARE REPURCHASES MADE BY THE COMPANY No repurchase of Shares has been made by the Company during the last six months (whether on the Stock Exchange or otherwise). TAKEOVER CODE CONSEQUENCES If as a result of a repurchase of Shares a Shareholder s proportionate interest in the voting rights of the Company increases, such increase will be treated as an acquisition for the purposes of the Takeover Code. As a result, a Shareholder, or group of Shareholders acting in concert, depending on the level of increase of the Shareholder s interest, could obtain or consolidate control of the Company and become obliged to make a mandatory offer in accordance with Rule 26 of the Takeover Code. As at the Latest Practicable Date, First Shanghai Investments Limited (through its indirect wholly-owned subsidiary, Golad Resources Limited) and Mr. Chen Dayou were beneficially interested in Shares representing approximately 33.83% and 11.30% respectively of the issued share capital of the Company. If the Repurchase Mandate were exercised in full, the shareholding interest of First Shanghai Investments Limited and Mr Chen Dayou would increase to approximately 37.59% and 12.56% respectively. In the opinion of the Directors, such increase in the shareholding interest of First Shanghai Investments Limited, whether by itself 6

10 APPENDIX EXPLANATORY STATEMENT or acting in concert with the other substantial Shareholder, may give rise to an obligation to make a mandatory offer under Rules 26 and 32 of the Takeover Code. The Directors have no present intention to exercise the Repurchase Mandate to such an extent as would result in takeover obligations. MARKET PRICES The highest and lowest prices at which the Shares have traded on the Stock Exchange during each of the previous twelve months before the printing of this explanatory statement were: Traded Market Price for Shares Highest Lowest HK$ HK$ 2002 April May June July August September October November December January February March

11 NOTICE OF ANNUAL GENERAL MEETING CHINA ASSETS (HOLDINGS) LIMITED (Incorporated in Hong Kong with limited liability) NOTICE OF ANNUAL GENERAL MEETING NOTICE IS HEREBY GIVEN that the Annual General Meeting of the Company will be held at 19th Floor, Wing On House, 71 Des Voeux Road Central, Hong Kong on Friday, 23rd May 2003 at 4:00 p.m. for the following purposes: 1. To receive and consider the Audited Consolidated Financial Statements and the Reports of the Directors and Auditors for the year ended 31st December To re-elect a retiring Director. 3. To re-appoint Auditors and to authorise the Directors to fix their remuneration. 4. As special business to consider and, if thought fit, to pass with or without modifications the following resolutions as Ordinary Resolutions: A. THAT: (a) subject to paragraph (c) and pursuant to section 57B of the Companies Ordinance, the exercise by the Directors of the Company during the Relevant Period of all the powers of the Company to allot, issue and deal with additional shares in the capital of the Company or securities convertible into such shares or options, warrants or similar rights to subscribe for any shares in the Company or convertible securities, and to make or grant offers, agreements and options which might require the exercise of such power be and is hereby generally and unconditionally approved; (b) the approval in paragraph (a) shall authorise the Directors of the Company during the Relevant Period (as defined in (d) below) to make or grant offers, agreements and options which would or might require the exercise of such power after the end of the Relevant Period; (c) the aggregate nominal amount of share capital allotted or agreed conditionally or unconditionally to be allotted (whether pursuant to an option or otherwise) by the Directors of the Company pursuant to the approval in paragraph (a), otherwise than pursuant to (i) a Rights Issue, (ii) the exercise of rights of subscription under the terms of any warrants issued by the Company or any securities which are convertible into shares of the Company, (iii) any option scheme or similar arrangement for the time being adopted for the grant or issue to officers and/or employees of the Company and/or 8

12 NOTICE OF ANNUAL GENERAL MEETING any of its subsidiaries of shares or rights to acquire shares of the Company or (iv) any scrip dividend or similar arrangement providing for the allotment of shares in lieu of the whole or part of a dividend on shares of the Company in accordance with the Articles of Association of the Company, shall not exceed 20 per cent. of the aggregate nominal amount of the share capital of the Company in issue as at the date of passing of this Resolution and the said approval shall be limited accordingly; and (d) for the purposes of this Resolution: Relevant Period means the period from the passing of this Resolution until whichever is the earliest of: (i) (ii) (iii) the conclusion of the next annual general meeting of the Company; the expiration of the period within which the next annual general meeting of the Company is required by law to be held; and the revocation or variation of the authority given under this Resolution by ordinary resolution of the shareholders in general meeting. Rights Issue means an offer of shares open for a period fixed by the Directors of the Company to holders of shares of the Company on the register on a fixed record date in proportion to their then holdings of such shares (subject to such exclusions or other arrangements as the Directors of the Company 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). B. THAT: (a) subject to paragraph (b) below, the exercise by the Directors of the Company during the Relevant Period (as defined in (c) below) of all the powers of the Company to repurchase its own shares on The Stock Exchange of Hong Kong Limited (the Stock Exchange ) or any other stock exchange on which the securities of the Company may be listed and recognised by the Securities and Futures Commission and the Stock Exchange for this purpose, subject to and in accordance with all applicable laws and the requirements of the Rules Governing the Listing of Securities on the Stock Exchange or of any other stock exchange as amended from time to time, be and is hereby generally and unconditionally approved; 9

13 NOTICE OF ANNUAL GENERAL MEETING (b) (c) the aggregate nominal amount of shares of the Company which may be repurchased by the Company pursuant to the approval in paragraph (a) during the Relevant Period shall not exceed 10 per cent. of the aggregate nominal amount of the share capital of the Company in issue on the date of passing of this Resolution and the said approval shall be limited accordingly; and for the purposes of this Resolution: Relevant Period means the period from the passing of this Resolution until whichever is the earliest of: (i) (ii) (iii) the conclusion of the next annual general meeting of the Company; the expiration of the period within which the next annual general meeting of the Company is required by law to be held; and the revocation or variation of the authority given under this Resolution by ordinary resolution of the shareholders in general meeting. C. THAT the general mandate granted to the Directors of the Company to allot, issue and deal with additional shares pursuant to Ordinary Resolution set out in Resolution 4A be and is hereby extended by the addition thereto of an amount representing the aggregate nominal amount of the share capital of the Company repurchased by the Company under the authority granted pursuant to Ordinary Resolution as set out in Resolution 4B, provided that such amount shall not exceed 10 per cent. of the aggregate nominal amount of the issued share capital of the Company at the date of this Resolution. 5. As special business to consider and, if thought fit, to pass with or without modifications the following resolutions as Special Resolutions: A. THAT, subject to the approval of the Registrar of Companies in Hong Kong, the name of the Company be changed from China Assets (Holdings) Limited to China Assets (Holdings) Limited. B. THAT subject to the passing of Resolution 5A and upon the change of name set out in such resolution becoming effective, Article 1 of the Articles of Association of the Company be amended by deleting the words China Assets (Holdings) Limited and substituting therefor the words China Assets (Holdings) Limited in the definition of Company or this company. 10

14 NOTICE OF ANNUAL GENERAL MEETING C. THAT Article 1 of the Articles of Association of the Company be amended by deleting the words China Assets Management Limited and substituting therefor the words China Assets Investment Management Limited in the definition of Management Agreement. By Order of the Board Lau On Kwok, Andrew Secretary Hong Kong, 11th April 2003 Notes: (1) A member entitled to attend and vote at the meeting convened by the above notice is entitled to appoint one or more proxies to attend and vote instead of him. A proxy need not be a member of the Company. (2) In order to be valid, the instrument appointing a proxy and the power of attorney or other authority (if any) under which it is signed, or a copy of such authority notarially certified, must be deposited at the Company s registered office at 19th Floor, Wing On House, 71 Des Voeux Road Central, Hong Kong not less than 48 hours before the time appointed for the holding of the meeting. (3) The register of members of the Company will be closed from 17th May 2003 to 23rd May 2003, both days inclusive, for the purpose of establishing entitlement of shareholders to vote at the meeting. During this period, no transfer of shares will be effected. All transfers of shares accompanied by the relevant share certificates must be lodged with the Company s registrars, Computershare Hong Kong Investor Services Limited, at Shops , 17th Floor, Hopewell Centre, 183 Queen s Road East, Hong Kong not later than 4:00 p.m. on 16th May (4) Concerning Resolutions 4A and 4B, the Directors wish to state that they have no immediate plans to issue any new shares or to repurchase any existing shares pursuant to the relevant mandate. 11