TAI FOOK SECURITIES GROUP LIMITED (Incorporated in Bermuda with limited liability) (Stock Code : 00665)

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 you should take, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser. If you have sold all your shares in TAI FOOK SECURITIES GROUP LIMITED, you should at once hand this circular and 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 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. TAI FOOK SECURITIES GROUP LIMITED (Incorporated in Bermuda with limited liability) (Stock Code : 00665) PROPOSALS FOR GENERAL MANDATES TO ISSUE SHARES AND TO REPURCHASE SHARES AND RE-ELECTION OF RETIRING DIRECTORS, AND NOTICE OF ANNUAL GENERAL MEETING The notice convening the annual general meeting (the Annual General Meeting ) of Tai Fook Securities Group Limited (the Company ) to be held at Tai Fook Training Centre, Unit D, 14/F., On Hing Building, 1 On Hing Terrace, Central, Hong Kong on Wednesday, 1 June 2005 at 11:00 a.m., at which the proposals for general mandates to issue shares and to repurchase shares of the Company and re-election of retiring directors of the Company will be considered, is set out on pages 17 to 20 of this circular. A form of proxy for use at the Annual General Meeting is enclosed with this circular. Whether or not you intend to attend the Annual General Meeting, you are requested to complete the form of proxy in accordance with the instructions printed thereon and return it to the Company s Branch Share Registrars and Transfer Office in Hong Kong, Tricor Investor Services Limited at G/F., BEA Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong as soon as possible and in any event not later than 48 hours before the time appointed for holding the Annual General Meeting or any adjourned meeting thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the Annual General Meeting or any adjourned meeting if you so wish. 27 April 2005

2 CONTENTS Definitions Page Letter from the Board 1. Introduction General mandate to issue Shares General mandate to repurchase Shares Re-election of retiring directors Annual General Meeting Procedures by which a poll may be demanded Recommendation Appendix I Explanatory Statement Appendix II Biographical Details of Retiring Directors Notice of Annual General Meeting i

3 DEFINITIONS In this circular, the following expressions have the following meanings unless the context requires otherwise: AGM Notice Annual General Meeting Board Bye-laws Company Companies Act Director(s) HK$ Hong Kong Issue Proposal Latest Practicable Date Listing Rules Ordinary Resolution(s) the notice for convening the Annual General Meeting set out on pages 17 to 20 of this circular the annual general meeting of the Company to be held at Tai Fook Training Centre, Unit D, 14/F., On Hing Building, 1 On Hing Terrace, Central, Hong Kong on Wednesday, 1 June 2005 at 11:00 a.m. the board of Directors the Bye-laws of the Company, as amended, supplemented or modified from time to time Tai Fook Securities Group Limited, an exempted company incorporated in Bermuda with limited liability with its Shares listed on the Stock Exchange the Companies Act 1981 of Bermuda the director(s) of the Company Hong Kong dollars, the lawful currency of Hong Kong the Hong Kong Special Administrative Region of the People s Republic of China a proposed general unconditional mandate to the Directors to exercise the power of the Company to allot, issue and deal with Shares during the period as set out in Ordinary Resolution no. 6.1 set out in item 6 in the AGM Notice up to 20% of the issued share capital of the Company as at the date of passing such Ordinary Resolution 20 April 2005, being the latest practicable date prior to the printing of this circular for ascertaining certain information referred to in this circular the Rules Governing the Listing of Securities on the Stock Exchange the proposed ordinary resolution(s) as referred to in the AGM Notice 1

4 DEFINITIONS Repurchase Proposal SFO Share(s) Shareholder(s) Share Repurchase Rules Stock Exchange Takeovers Code a proposed general unconditional mandate to the Directors to exercise the power of the Company to repurchase Shares during the period as set out in Ordinary Resolution no. 6.2 set out in item 6 in the AGM Notice up to 10% of the issued share capital of the Company as at the date of passing such Ordinary Resolution the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) share(s) of HK$0.10 each in the share capital of the Company holder(s) of Shares the relevant rules set out in the Listing Rules to regulate the repurchase by companies with primary listing of their own securities on the Stock Exchange The Stock Exchange of Hong Kong Limited the Hong Kong Code on Takeovers and Mergers % per cent. 2

5 LETTER FROM THE BOARD TAI FOOK SECURITIES GROUP LIMITED (Incorporated in Bermuda with limited liability) (Stock Code : 00665) Executive Directors: Registered Office: CHENG Kar Shun, Henry (Chairman) Clarendon House LO Lin Shing, Simon (Deputy Chairman) Church Street DOO Wai Hoi, William (Deputy Chairman) Hamilton HM 11 WONG Shiu Hoi, Peter (Managing Director) Bermuda LEE Yiu Wing, William CHAN Chi On, Derek Head Office and Principal Place of Business in Hong Kong: Non-executive Directors: 25th Floor WONG Kwok Kin, Andrew New World Tower LAM Wai Hon, Patrick Queen s Road Central CHEUNG Wing Yui, Edward Hong Kong HO Hau Chong, Norman TO Hin Tsun, Gerald 27 April 2005 Independent Non-executive Directors: MAN Mo Leung TSUI Hing Chuen, William WEI Chi Kuan, Kenny To the Shareholders Dear Sir or Madam PROPOSALS FOR GENERAL MANDATES TO ISSUE SHARES AND TO REPURCHASE SHARES AND RE-ELECTION OF RETIRING DIRECTORS, AND NOTICE OF ANNUAL GENERAL MEETING 1. INTRODUCTION The purpose of this circular is to provide you with information relating to the proposals for the grant of general mandates to issue Shares and to repurchase Shares and the reelection of retiring Directors, and to give you the AGM Notice. 3

6 LETTER FROM THE BOARD 2. GENERAL MANDATE TO ISSUE SHARES At the annual general meeting of the Company held on 25 May 2004, a general mandate was given by the Company to the Directors to exercise the powers of the Company to allot, issue and deal with Shares with a total nominal value not exceeding 20% of the total issued share capital of the Company as at the date of passing of the relevant ordinary resolution approving such general mandate. Such general mandate will lapse at the conclusion of the forthcoming Annual General Meeting. The Directors propose to seek your approval of the Ordinary Resolution in relation to the Issue Proposal to be proposed at the Annual General Meeting. In order to give flexibility for the Directors to issue any Shares in the event that it becomes desirable, approval is to be sought at the Annual General Meeting for passing an Ordinary Resolution for (i) granting to the Directors a general mandate to allot, issue and deal with Shares not exceeding 20% of the issued share capital of the Company as at the date of passing the Ordinary Resolution in relation to the Issue Proposal; and (ii) for adding to such general mandate so granted to the Directors any Shares representing the aggregate nominal amount of the Shares repurchased by the Company after the granting of the general mandate to repurchase up to a maximum of 10% of the issued share capital of the Company as at the date of passing the Ordinary Resolution in relation to the Repurchase Proposal. 3. GENERAL MANDATE TO REPURCHASE SHARES At the annual general meeting of the Company held on 25 May 2004, a general mandate was also given by the Company to the Directors to exercise the powers of the Company to repurchase Shares with a total nominal value not exceeding 10% of the total issued share capital of the Company as at the date of passing of the relevant ordinary resolution approving such general mandate. Such general mandate will lapse at the conclusion of the forthcoming Annual General Meeting. The Directors propose to seek your approval of the Ordinary Resolution in relation to the Repurchase Proposal to be proposed at the Annual General Meeting. An explanatory statement as required under the Share Repurchase Rules to provide the requisite information of the Repurchase Proposal is set out in the Appendix I hereto. 4. RE-ELECTION OF RETIRING DIRECTORS According to Bye-law 86(2) of the Bye-Laws, Messrs. Man Mo Leung and Tsui Hing Chuen, William who were appointed on 1 July 2004 shall retire from their offices at the Annual General Meeting and being eligible, shall offer themselves for re-election. In addition, pursuant to Bye-laws 87(1) and 87(2) of the Bye-Laws, Messrs. Lo Lin Shing, Simon, Doo Wai Hoi, William and Lam Wai Hon, Patrick shall retire from their offices by rotation at the Annual General Meeting and shall be eligible offer themselves for reelection. Biographical details of Messrs. Man Mo Leung, Tsui Hing Chuen, William, Lo Lin Shing, Simon, Doo Wai Hoi, William and Lam Wai Hon, Patrick are set out in Appendix II hereto. 4

7 LETTER FROM THE BOARD 5. ANNUAL GENERAL MEETING The AGM Notice is set out on pages 17 to 20 of this circular. At the Annual General Meeting, Ordinary Resolutions, among others, will be proposed to: re-elect each of Messrs. Man Mo Leung, Tsui Hing Chuen, William, Lo Lin Shing, Simon, Doo Wai Hoi, William and Lam Wai Hon, Patrick as Director; grant to the Directors a general mandate to exercise all the powers of the Company to allot, issue and deal with Shares not exceeding 20% of the issued share capital of the Company as at the date of passing such Ordinary Resolution; grant to the Directors a general mandate to exercise all the powers of the Company to repurchase on the Stock Exchange or any other stock exchange on which the securities of the Company may be listed and recognized by the Securities and Futures Commission of Hong Kong and the Stock Exchange for this purpose Shares representing up to a maximum of 10% of the issued share capital of the Company as at the date of passing such Ordinary Resolution; and extend the general mandate which will be granted to the Directors to allot, issue and deal with Shares by adding to it the number of Shares repurchased under the Repurchase Proposal after the granting of such general mandate. A form of proxy for use at the Annual General Meeting is enclosed with this circular. Whether or not you intend to attend the Annual General Meeting, you are requested to complete the form of proxy in accordance with the instructions printed thereon and return it to the Company s Branch Share Registrars and Transfer Office in Hong Kong, Tricor Investor Services Limited at G/F., BEA Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong as soon as possible and in any event not later than 48 hours before the time appointed for holding the Annual General Meeting or any adjourned meeting thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the Annual General Meeting or any adjourned meeting if you so wish. 6. PROCEDURES BY WHICH A POLL MAY BE DEMANDED Pursuant to Bye-law 66 of the Bye-laws, a resolution put to the vote of a general meeting shall be decided on a show of hands unless (before or on the declaration of the result of the show of hands or on the withdrawal of any other demand for a poll) a poll is demanded: (a) (b) (c) by the chairman of such meeting; or by at least three Shareholders present in person or in the case of a Shareholder being a corporation by its duly authorized representative or by proxy for the time being entitled to vote at the meeting; or by a Shareholder or Shareholders present in person or in the case of a Shareholder being a corporation by its duly authorized representative or by proxy and representing not less than one-tenth of the total voting rights of all Shareholders having the right to vote at the meeting; or 5

8 LETTER FROM THE BOARD (d) by a Shareholder or Shareholders present in person or in the case of a Shareholder being a corporation by its duly authorized representative or by proxy and holding shares in the Company 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 Shares conferring that right. A demand by a person as proxy for a Shareholder or in the case of a Shareholder being a corporation by its duly authorized representative shall be deemed to be the same as a demand by the Shareholder. 7. RECOMMENDATION The Directors are of the opinion that the proposals referred to in this circular are in the best interests of the Company and the Shareholders and therefore recommend the Shareholders to vote in favour of the Ordinary Resolutions to be proposed at the Annual General Meeting. By Order of the Board WONG Shiu Hoi, Peter Managing Director 6

9 APPENDIX I EXPLANATORY STATEMENT This appendix serves as an explanatory statement, as required by the Share Repurchase Rules, to provide requisite information to you for your consideration of the proposal to permit the repurchase of Shares up to a maximum of 10% of the issued share capital of the Company as at the date of passing the Ordinary Resolution in relation to the Repurchase Proposal. 1. SHARE CAPITAL As at the Latest Practicable Date, the issued share capital of the Company comprised 584,651,699 Shares. Subject to the passing of the Ordinary Resolution in relation to the Repurchase Proposal and on the basis that no further Shares are issued or repurchased prior to the Annual General Meeting, the Company would be allowed under the Repurchase Proposal to repurchase a maximum of 58,465,169 fully paid-up Shares representing not more than 10% of the issued share capital of the Company as at the date of passing of such Ordinary Resolution. 2. REASONS FOR REPURCHASES The Directors have no present intention to repurchase any Shares and it is not possible to anticipate in advance any specific circumstances in which the Directors might think it appropriate to repurchase Shares. Moreover, the Directors believe that the Repurchase Proposal would give the Company additional flexibility where situation warrants and is in the best interests of the Company and the Shareholders. Such repurchases may, depending on market conditions and funding arrangements at the time, lead to an enhancement in the net assets and/or earnings per Share of the Company and will only be made when the Directors believe that such a repurchase will benefit the Company and the Shareholders. 3. FUNDING OF REPURCHASES In repurchasing the Shares, the Company may only apply its available cash flow or working capital which are legally available for such purpose in accordance with its memorandum of association and Bye-Laws and the Companies Act. The Companies Act provides that the amount of capital repaid in connection with a share repurchase may only be derived from capital paid up on the relevant Shares to be repurchased, or funds of the Company that would otherwise be available for dividend or distribution or the proceeds of a fresh issue of Shares made for the purpose. The amount of premium payable on repurchases may only be derived from funds of the Company that would otherwise be available for dividend or distribution or the share premium account of the Company. There might be an adverse impact on the working capital or gearing position of the Company as compared with the position disclosed in the audited accounts contained in the annual report for the year ended 31 December 2004 of the Company in the event that the power to repurchase Shares pursuant to the Repurchase Proposal was to be exercised in full at any time during the proposed repurchase period. However, the Directors do not propose to exercise the power to repurchase Shares pursuant to the Repurchase Proposal 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. 7

10 APPENDIX I EXPLANATORY STATEMENT 4. SHARE PRICES The highest and lowest prices at which the Shares have traded on the Stock Exchange during each of the 12 months preceding the Latest Practicable Date were as follows: 2004 Share prices Highest Lowest HK$ HK$ April May June July August September October November December January February March UNDERTAKING The Directors have undertaken to the Stock Exchange that, so far as the same may be applicable, they will exercise the powers of the Company to make repurchases pursuant to the Repurchase Proposal and in accordance with the Listing Rules and the applicable laws of Bermuda. 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), have any present intention to sell any Shares to the Company or its subsidiaries under the Repurchase Proposal if such is approved by the Shareholders. 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 its subsidiaries, or have undertaken not to do so, in the event that the Repurchase Proposal is approved by the Shareholders. 8

11 APPENDIX I EXPLANATORY STATEMENT 6. TAKEOVERS CODE If on the exercise of the power to repurchase Shares pursuant to the Repurchase Proposal, 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 Rule 32 of the Takeovers Code. As a result, 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 Rules 26 and 32 of the Takeovers Code. As at the Latest Practicable Date, according to the register kept by the Company pursuant to Section 336(1) of the SFO, the following interests in the Shares were recorded: Approximate% of issued share capital of the Approximate Company % of existing if Repurchase Number of shares held issued share Proposal Name of and nature of interest capital of the was exercised substantial shareholders Notes Direct Deemed Company in full Chow Tai Fook Nominee 1 107,140, Limited Chow Tai Fook Enterprises 2 30,977, ,624, Limited New World Development 3 125,624, Company Limited ( NWD ) NWS Holdings Limited 4 125,624, ( NWS ) NWS Service Management 5 125,624, Limited (incorporated in the Cayman Islands) ( NWSSM (Cayman) ) NWS Service Management 6 125,624, Limited (incorporated in the British Virgin Islands) ( NWSSM (BVI) ) NWS Financial Management 125,624, Services Limited Lo Lin Shing, Simon 5,500,000 70,616, Ku Ming Mei, Rouisa 7 76,116, Wellington Equities Inc. 8 70,616,

12 APPENDIX I EXPLANATORY STATEMENT Notes: 1. Mr. Cheng Yu Tung beneficially owns all of the issued shares in Chow Tai Fook Nominee Limited. 2. Chow Tai Fook Enterprises Limited and its subsidiaries have interests in more than one-third of the issued shares of NWD and is accordingly deemed to have an interest in the shares in which NWD is deemed to be interested. 3. NWD has interests in more than one-third of the issued shares of NWS and is accordingly deemed to has an interest in the shares in which NWS is deemed to be interested. 4. NWSSM (Cayman) is a wholly-owned subsidiary of NWS and its interest in the Company is deemed to be held by NWS. 5. NWSSM (BVI) is a wholly-owned subsidiary of NWSSM (Cayman) and its interest in the Company is deemed to be held by NWSSM (Cayman). 6. NWS Financial Management Services Limited is a wholly-owned subsidiary of NWSSM (BVI) and its interest in the Company is deemed to be held by NWSSM (BVI). 7. These shares are deemed to be interested by Ms. Ku Ming Mei, Rouisa, the spouse of Mr. Lo Lin Shing, Simon. 8. These shares are held by Wellington Equities Inc., a company beneficially wholly-owned by Mr. Lo Lin Shing, Simon. Based on the above-mentioned shareholdings and in the event that the Directors exercise in full the power to repurchase Shares pursuant to the Repurchase Proposal, the aggregate interests of Chow Tai Fook Nominee Limited, Chow Tai Fook Enterprises Limited, Wellington Equities Inc. and Mr. Lo Lin Shing, Simon, acting in concert in exercising their respective voting rights in the Company, will be increased from approximately 58.14% to approximately 64.59% of the issued share capital of the Company and the Directors are not aware of any consequences which may arise under the Takeovers Code as a result of any repurchases made under the Repurchase Proposal. The Directors do not propose to repurchase shares which would result in the aggregate amount of the share capital of the Company in public hands reducing to below 25%. 10

13 APPENDIX I EXPLANATORY STATEMENT 7. SHARE REPURCHASES MADE BY THE COMPANY The Company had repurchased a total of 3,346,000 Shares (whether on the Stock Exchange or otherwise) in the six months preceding the Latest Practicable Date. Transaction date Number Purchase price Total of Shares of Shares paid per Share purchase repurchased repurchased Highest Lowest price paid HK$ HK$ HK$ 5 October , ,500 6 October , ,000 7 October , ,600 8 October , , October , , October , , October , , October , , October , , October , , October , , October , , October , , October , , October , ,200 1 November , ,500 2 November , ,600 4 November , ,000 5 November , , April , , April , ,400 Save as disclosed above, there was no other share repurchase made by the Company (whether on the Stock Exchange or otherwise) during the said six months period. 11

14 APPENDIX II BIOGRAPHICAL DETAILS OF RETIRING DIRECTORS This appendix provides you with biographical details of the Directors who will retire from their offices at the Annual General Meeting and being eligible, will offer themselves for re-election at the Annual General Meeting, for consideration of the proposal in relation to the re-election of retiring Directors: MAN Mo Leung (a) (b) (c) (d) (e) Mr. Man, aged 52, was appointed as an Independent Non-executive Director of the Company on 1 July He is also the chairman of the Audit Committee and a member of the Remuneration Committee of the Company. Save as disclosed herein, Mr. Man has not held any other positions with the Company and other members of the Group. Mr. Man has been a partner of Moores Rowland Mazars, Chartered Accountants and Certified Public Accountants since 1985 with extensive experience in assurance, business advisory and investigation works. He holds a Bachelor of Science Degree from the University College London and is a fellow of the Hong Kong Institute of Certified Public Accountants and the Institute of Chartered Accountants in England and Wales as well as a Certified Public Accountant in Hong Kong. Mr. Man is also an independent non-executive director of RBI Holdings Limited and First Sign International Holdings Limited, both of which are companies whose shares are listed on The Stock Exchange of Hong Kong Limited. Save as disclosed herein, Mr. Man has not held any other directorships in listed public companies in the last three years. Mr. Man had entered into a service contract with the Company on 27 July 2004 for a term of two years commencing on 1 July 2004 and subject to the retirement and reappointment provisions in the Bye-laws of the Company. Subject to approval of the shareholders in annual general meetings, Mr. Man is entitled to an annual director fee of HK$200,000 payable every half-yearly in equal amounts of HK$100,000 each. He is not entitled to any additional benefits unless decided by the board of directors of the Company otherwise. Mr. Man has no relationships with any directors, senior management or substantial or controlling shareholders of the Company. Mr. Man has no interests in shares of the Company within the meaning of Part XV of the Securities and Futures Ordinance. Save as disclosed above, there are no other matters that need to be brought to the attention of holders of securities of the Company. 12

15 APPENDIX II BIOGRAPHICAL DETAILS OF RETIRING DIRECTORS TSUI Hing Chuen, William (a) (b) (c) (d) (e) Mr. Tsui, aged 53, was appointed as an Independent Non-executive Director of the Company on 1 July He is also a member of the Audit Committee and the chairman of the Remuneration Committee of the Company. Save as disclosed herein, Mr. Tsui has not held any other positions with the Company and other members of the Group. Mr. Tsui is the founder partner of Messrs. Lo, Wong & Tsui, Solicitors & Notaries since He has been a solicitor of the High Court of Hong Kong since 1977, a solicitor of the Supreme Court of England & Wales since 1980 as well as a barrister and solicitor of the Supreme Court of Victoria, Australia since He has also been an advocate and solicitor in Singapore since 1985 and a notary public appointed by the Archbishop of Canterbury England since Mr. Tsui was appointed as a Justice of Peace by the Government of Hong Kong in He has not held any directorships in listed public companies in the last three years. Mr. Tsui had entered into a service contract with the Company on 27 July 2004 for a term of two years commencing on 1 July 2004 and subject to the retirement and reappointment provisions in the Bye-laws of the Company. Subject to approval of the shareholders in annual general meetings, Mr. Tsui is entitled to an annual director fee of HK$200,000 payable every half-yearly in equal amounts of HK$100,000 each. He is not entitled to any additional benefits unless decided by the board of directors of the Company otherwise. Mr. Tsui has no relationships with any directors, senior management or substantial or controlling shareholders of the Company. Mr. Tsui has no interests in shares of the Company within the meaning of Part XV of the Securities and Futures Ordinance. Save as disclosed above, there are no other matters that need to be brought to the attention of holders of securities of the Company. 13

16 APPENDIX II BIOGRAPHICAL DETAILS OF RETIRING DIRECTORS LO Lin Shing, Simon (a) (b) Mr. Lo, aged 49, was appointed as a Deputy-chairman and an Executive Director of the Company on 14 May He is also a member of the Credit Committee of the Company and an Executive Director of the Group. Save as disclosed herein, Mr. Lo has not held any other positions with the Company and other members of the Group. Mr. Lo possesses over 20 years of experience in the financial, securities and futures industries. He has been a member of the CME and IMM since Mr. Lo is the chairman of New World CyberBase Limited, the chairman and an executive director of Cheung Tai Hong Holdings Limited, and also an executive director of International Entertainment Corporation and The Kwong Sang Hong International Limited, as well as a non-executive director of Beijing Beida Jade Bird Universal Sci-Tech Company Limited and New World Mobile Holdings Limited, all of which are companies whose shares are listed on The Stock Exchange of Hong Kong Limited. Mr. Lo was also an executive director of Asean Resources Holdings Limited from 20 March 2000 to 21 July 2003 and NWS Holdings Limited from 27 May 1998 to 29 January 2003, both of which are companies whose shares are listed on The Stock Exchange of Hong Kong Limited. Save as disclosed herein, Mr. Lo has not held any other directorships in listed public companies in the last three years. (c) Mr. Lo had entered into a new service agreement with the Company on 10 December 2003 for a term of three years commencing on 1 January 2004 and thereafter continuing until terminated by either party giving to the other not less than six months prior written notice. He is also subject to retirement by rotation and re-election at the annual general meetings of the Company in accordance with the Bye-laws. The monthly salary of Mr. Lo specified in the service agreement is HK$225,000, which shall be adjusted from time to time at a rate to be determined by the independent non-executive directors of the Company. Mr. Lo is entitled to a management bonus as may be determined by the board of directors of the Company with the aggregate of the management bonuses payable to all the executive directors of the Company in respect of any financial year not exceeding 5% of the consolidated profit of the Group after tax and minority interests but before extraordinary items for the relevant financial year. (d) (e) Mr. Lo is the sole beneficial owner of Wellington Equities Inc., a substantial shareholder of the Company, which holds 70,616,222 shares of the Company. Save as disclosed herein, Mr. Lo has no other relationships with any directors, senior management or substantial or controlling shareholders of the Company. Mr. Lo holds a personal interest of 5,500,000 shares of the Company and a corporate interest of 70,616,222 shares of the Company through his beneficially wholly-owned company, Wellington Equities Inc.. Save as disclosed herein, Mr. Lo has no other interests in shares of the Company within the meaning of Part XV of the Securities and Futures Ordinance. Save as disclosed above, there are no other matters that need to be brought to the attention of holders of securities of the Company. 14

17 APPENDIX II BIOGRAPHICAL DETAILS OF RETIRING DIRECTORS DOO Wai Hoi, William (a) (b) (c) (d) (e) Mr. Doo, aged 60, joined the Group in June 1986, left in July 1988 and rejoined in May Mr. Doo was appointed as a Deputy-chairman and an Executive Director of the Company on 14 May 1996 and is also an Executive Director of the Group. Save as disclosed herein, Mr. Doo has not held any other positions with the Company and other members of the Group. Mr. Doo holds a Degree of Bachelor of Science from the University of Toronto, Canada, a Master Degree in Science from the University of California, U.S.A. and a Diploma of Graduate Gemologist from the Gemologist Institute of America. He is currently the vicechairman of New World China Land Limited and New World Mobile Holdings Limited; the deputy chairman of NWS Holdings Limited; and a director of Lifestyle International Holdings Limited, all of which are companies whose shares are listed on The Stock Exchange of Hong Kong Limited. Mr. Doo is also a director of NWD (Hotels Investments) Limited and Fung Seng Diamond Company Limited. He has been appointed by The People s Republic of China as a member of the Executive Committee of Chinese People s Political Consultative Conference in Shanghai and the Convener of the Shanghai Committee in Hong Kong. He has served as the Governor of the Canadian Chamber of Commerce in Hong Kong since 1995 and has been appointed as a Justice of Peace by the Government of the Hong Kong Special Administrative Region in Save as disclosed herein, Mr. Doo has not held any other directorships in listed public companies in the last three years. Mr. Doo has not entered into any service agreement which specifies his terms of appointment with the Company, but is subject to the retirement and reappointment provisions in the Bye-laws of the Company. Mr. Doo is entitled to an annual director fee of HK$300,000 payable every half-yearly in equal amounts of HK$150,000 each, such annual director fee, subject to approval of the shareholders in annual general meetings, shall be adjusted from time to time at a rate to be determined by the independent nonexecutive directors or Remuneration Committee, if any, of the Company at its discretion having regard to the operating results of the Group and his performance as a Deputychairman of the Company and an Executive Director of the Group. Mr. Doo is the brother-in-law of Dr. Cheng Kar Shun, Henry, the Chairman of the Company. Save as disclosed herein, Mr. Doo has no other relationships with any directors, senior management or substantial or controlling shareholders of the Company. Mr. Doo holds a corporate interest of 4,346,000 shares of the Company through his beneficially wholly-owned company, Grand Partners Group Limited. Save as disclosed herein, Mr. Doo has no other interests in shares of the Company within the meaning of Part XV of the Securities and Futures Ordinance. Save as disclosed above, there are no other matters that need to be brought to the attention of holders of securities of the Company. 15

18 APPENDIX II BIOGRAPHICAL DETAILS OF RETIRING DIRECTORS LAM Wai Hon, Patrick (a) Mr. Lam, aged 42, was appointed as a Non-executive Director of the Company on 1 February He is also a member of the Business Review Committee and Remuneration Committee of the Company. Save as disclosed herein, Mr. Lam has not held any other positions with the Company and other members of the Group. (b) (c) (d) (e) Mr. Lam is a Chartered Accountant by training and holds a Master of Business Administration Degree from the University of Edinburgh and a Bachelor Degree from the University of Essex, the United Kingdom. He is a fellow of the Hong Kong Institute of Certified Public Accountants, and of the Institute of Chartered Accountants of England and Wales, and a member of the Institute of Chartered Accountants of Ontario, Canada. Mr. Lam is presently Assistant General Manager of New World Development Company Limited, an executive director of NWS Holdings Limited and a director of Wai Kee Holdings Ltd., all of which are companies whose shares are listed on The Stock Exchange of Hong Kong Limited. He is also an executive director of Hong Kong Convention and Exhibition Centre (Management) Limited. Prior to joining the New World Group, Mr. Lam worked for an international accounting firm. Save as disclosed herein, Mr. Lam has not held any other directorships in listed public companies in the last three years. Mr. Lam had entered into a service contract with the Company on 27 July 2004 for a term of two years commencing on 1 July 2004 and subject to the retirement and reappointment provisions in the Bye-laws of the Company. Subject to approval of the shareholders in annual general meetings, Mr. Lam is entitled to an annual director fee of HK$200,000 payable every half-yearly in equal amounts of HK$100,000 each. He is not entitled to any additional benefits unless decided by the board of directors of the Company otherwise. Mr. Lam is presently Assistant General Manager of New World Development Company Limited and an executive director of NWS Holdings Limited, both of which are substantial shareholders of the Company. Save as disclosed herein, Mr. Lam has no other relationships with any directors, senior management or substantial or controlling shareholders of the Company. Mr. Lam has no interests in shares of the Company within the meaning of Part XV of the Securities and Futures Ordinance. Save as disclosed above, there are no other matters that need to be brought to the attention of holders of securities of the Company. 16

19 NOTICE OF ANNUAL GENERAL MEETING TAI FOOK SECURITIES GROUP LIMITED (Incorporated in Bermuda with limited liability) (Stock Code : 00665) NOTICE IS HEREBY GIVEN THAT an annual general meeting of Tai Fook Securities Group Limited (the Company ) will be held at Tai Fook Training Centre, Unit D, 14/F., On Hing Building, 1 On Hing Terrace, Central, Hong Kong on Wednesday, 1 June 2005 at 11:00 a.m. for the following purposes: 1. To receive and consider the audited financial statements and reports of the board of directors and auditors for the year ended 31 December 2004; 2. To declare a final dividend; 3. To re-elect the following retiring directors as directors: (a) (b) (c) (d) (e) Mr. Man Mo Leung who was appointed as an independent non-executive director during the year; Mr. Tsui Hing Chuen, William who was appointed as an independent non-executive director during the year; Mr. Lo Lin Shing, Simon who was an executive director retiring by rotation; Mr. Doo Wai Hoi, William who was an executive director retiring by rotation; and Mr. Lam Wai Hon, Patrick who was a non-executive director retiring by rotation. 4. To fix the remuneration of directors; 5. To re-appoint auditors and to authorise the board of directors to fix their remuneration; and 6. As special business, to consider and, if thought fit, pass with or without modifications the following resolutions as ordinary resolutions: 17

20 NOTICE OF ANNUAL GENERAL MEETING 6.1 THAT: ORDINARY RESOLUTIONS (a) (b) (c) (d) subject to paragraph (c) below, the exercise by the directors of the Company during the Relevant Period (as hereinafter defined) of all the powers of the Company to allot, issue and deal with additional shares of HK$0.10 each in the capital of the Company and to make or grant offers, agreements and options (including bonds, warrants and debentures convertible into shares of the Company) which would or might require the exercise of such power be and is hereby generally and unconditionally approved; the approval in paragraph (a) above shall authorise the directors of the Company during the Relevant Period (as hereinafter defined) to make or grant offers, agreements and options (including bonds, warrants and debentures convertible into shares of the Company) which would or might require the exercise of such power after the end of the Relevant Period; the aggregate nominal amount of share capital allotted or agreed conditionally or unconditionally to be allotted (whether pursuant to an option or otherwise) and issued by the directors of the Company pursuant to the approval in paragraph (a) above, otherwise than pursuant to (i) a Rights Issue (as hereinafter defined); (ii) an issue of shares upon the exercise of rights of subscription or conversion under the terms of any warrants of the Company or any securities which are convertible into shares of the Company; (iii) an issue of shares as scrip dividends pursuant to the Bye-laws of the Company from time to time; or (iv) an issue of shares upon the exercise of the subscription rights under any option scheme or similar arrangement for the grant or issue to employees of the Company and/or any of its subsidiaries of shares or rights to acquire shares of the Company, shall not exceed 20 per cent. of the aggregate nominal amount of the issued share capital of the Company as at the date of passing this resolution, and the said approval shall be limited accordingly; and for the purpose of this resolution, Relevant Period means the period from the passing of this resolution until whichever is the earliest of: (i) (ii) 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 or the Bye-laws of the Company to be held; and (iii) the date on which the authority set out in this resolution is revoked or varied by an ordinary resolution of the shareholders of the Company in general meeting; and 18

21 NOTICE OF ANNUAL GENERAL MEETING 6.2 THAT: Rights Issue means an offer of shares open for a period fixed by the directors of the Company to the holders of shares of the Company whose names appear on the register of members of the Company on a fixed record date in proportion to their then holdings of such shares as at that date (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 applicable to the Company). (a) (b) (c) subject to paragraph (b) below, the exercise by the directors of the Company during the Relevant Period (as hereinafter defined) of all the powers of the Company to repurchase shares of HK$0.10 each in the capital of the Company on The Stock Exchange of Hong Kong Limited (the Stock Exchange ) or on any other stock exchange on which the securities of the Company may be listed and recognised by the Securities and Futures Commission of Hong Kong 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; the aggregate nominal amount of the shares of the Company which the directors of the Company are authorised to repurchase pursuant to the approval in paragraph (a) above shall not exceed 10 per cent. of the aggregate nominal amount of the issued share capital of the Company as at the date of passing this resolution, and the said approval shall be limited accordingly; and for the purpose of this resolution, Relevant Period means the period from the passing of this resolution until whichever is the earliest of: (i) (ii) 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 or the Bye-laws of the Company to be held; and (iii) the date on which the authority set out in this resolution is revoked or varied by an ordinary resolution of the shareholders of the Company in general meeting. 19

22 NOTICE OF ANNUAL GENERAL MEETING 6.3 THAT subject to the passing of the resolutions no. 6.1 and 6.2 set out in item 6 in the notice convening this meeting, the general mandate granted to the directors of the Company to allot, issue and deal with additional shares pursuant to resolution no. 6.1 set out in item 6 in the notice convening this meeting be and is hereby extended by the addition thereto of an amount representing the aggregate nominal amount of shares in the capital of the Company repurchased by the Company under the authority granted pursuant to resolution no. 6.2 set out in item 6 in the notice convening this meeting, provided that such amount of shares so repurchased shall not exceed 10 per cent. of the aggregate nominal amount of the issued share capital of the Company as at the date of passing this resolution. Hong Kong, 27 April 2005 Head Office and Principal Place of Business in Hong Kong: 25th Floor New World Tower Queen s Road Central Hong Kong By Order of the Board LI Tung Wing, Mike Company Secretary Notes: 1. Any member of the Company entitled to attend and vote at the meeting is entitled to appoint another person as his/her proxy to attend and vote instead of him/her. A member of the Company who is the holder of two or more Shares may appoint more than one proxy to represent him/her and vote on his/her behalf at the meeting. 2. A proxy need not be a member of the Company. 3. In order to be valid, the form of proxy together with (if required by the Board) the power of attorney or other authority (if any) under which it is signed or a notarally certified copy of such power or authority, must be lodged with the Company s Branch Share Registrars and Transfer Office in Hong Kong, Tricor Investor Services Limited, at G/F., BEA Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong, not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof. 4. Delivery of a form of proxy shall not preclude a member of the Company from attending and voting in person at the meeting convened and in such event, the form of proxy shall be deemed to be revoked. 5. As at the date of this AGM Notice, the Board comprises six executive directors, namely Cheng Kar Shun, Henry (Chairman), Lo Lin Shing, Simon (Deputy Chairman), Doo Wai Hoi, William (Deputy Chairman), Wong Shiu Hoi, Peter (Managing Director), Lee Yiu Wing, William and Chan Chi On, Derek; and five nonexecutive directors, namely Wong Kwok Kin, Andrew, Lam Wai Hon, Patrick, Cheung Wing Yui, Edward, Ho Hau Chong, Norman and TO Hin Tsun, Gerald; and three independent non-executive directors, namely Man Mo Leung, Tsui Hing Chuen, William and Wei Chi Kuan, Kenny. 20

23 TAI FOOK SECURITIES GROUP LIMITED (Incorporated in Bermuda with limited liability) (Stock Code : 00665) Proxy Form for use at the Annual General Meeting to be held on Wednesday, 1 June 2005 at 11:00 a.m. or any adjournment thereof (note 1) I/We of (note 2) being the registered holder(s) of shares in the capital of TAI FOOK SECURITIES GROUP LIMITED (the Company ) hereby appoint (note 3) of of HK$0.10 each or failing him/her, of or failing him/her, the Chairman of the Meeting to act as my/our proxy to attend and vote for me/us at the Annual General Meeting of the Company to be held at Tai Fook Training Centre, Unit D, 14/F., On Hing Building, 1 On Hing Terrace, Central, Hong Kong on Wednesday, 1 June 2005 at 11:00 a.m. (or at any adjournment thereof) as directed below or, if no such indication is given, as my/our proxy thinks fit. 1. To receive and consider the audited financial statements and reports of the board of directors and auditors for the year ended 31 December To declare a final dividend 3. (a) To re-elect Mr. Man Mo Leung, the retiring director, as director (b) To re-elect Mr. Tsui Hing Chuen, William, the retiring director, as director (c) To re-elect Mr. Lo Lin Shing, Simon, the retiring director, as director (d) To re-elect Mr. Doo Wai Hoi, William, the retiring director, as director (e) To re-elect Mr. Lam Wai Hon, Patrick, the retiring director, as director 4. To fix the remuneration of directors 5. To re-appoint auditors and to authorize the board of directors to fix their remuneration 6. As special business, to consider and, if thought fit, pass with or without modifications the following resolutions as Ordinary Resolutions: 6.1 To give a general mandate to the Directors to allot, issue and deal with additional shares not exceeding 20% of the issued share capital of the Company 6.2 To give a general mandate to the Directors to repurchase shares of the Company not exceeding 10% of the issued share capital of the Company 6.3 To extend the general mandate granted to the Directors to allot, issue and deal with additional shares by the addition thereto of an amount not exceeding the amount of shares repurchased by the Company For (note 4) (note 4) Against Date: 2005 Shareholder s Signature (note 5) : Notes: 1. Full name(s) and address(es) to be inserted in BLOCK CAPITALS. 2. Please insert the number of shares of HK$0.10 each registered in your name(s); if no such number is inserted, this proxy form will be deemed to relate to all the shares in the capital of the Company registered in your name(s). 3. Please insert the name and address of the proxy desired. IF NO SUCH NAME IS INSERTED, THE CHAIRMAN OF THE MEETING WILL ACT AS YOUR PROXY. 4. IMPORTANT: IF YOU WISH TO VOTE FOR A RESOLUTION, PLEASE PLACE A IN THE RELEVANT BOX MARKED IN THE COLUMN HEADED FOR. IF YOU WISH TO VOTE AGAINST A RESOLUTION, PLEASE PLACE A IN THE RELEVANT BOX MARKED IN THE COLUMN HEADED AGAINST. Failure to complete the boxes will entitle your proxy to cast his/her vote at his/her discretion. Your proxy will also be entitled to vote at his/her discretion on any resolution properly put to the Meeting other than those referred to in the notice convening the Meeting. 5. This proxy form shall be in writing under the hand of the appointor or of his/her attorney duly authorised in writing or, if the appointor is a corporation, either under its seal or under the hand of an officer, attorney or other person authorised to sign the same. In the case of a proxy form purporting to be signed on behalf of a corporation by an officer thereof it shall be assumed, unless the contrary appears, that such officer was duly authorised to sign such proxy form on behalf of the corporation without further evidence of the fact. 6. If more than one of the joint holders of any share be present at the Meeting 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 the joint holding. 7. In order to be valid, the proxy form together with (if required by the Board) the power of attorney or other authority (if any) under which it is signed or a notarally certified copy of such power or authority, must be lodged with the Company s Branch Share Registrars and Transfer Office in Hong Kong, Tricor Investor Services Limited, at G/F., BEA Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong not less than 48 hours before the time appointed for holding the Meeting or any adjournment thereof. 8. A proxy need not be a member of the Company. 9. Any alterations made in this proxy form should be initialled by the person who signs it.