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) (Stock Code: 170) PROPOSALS FOR (1) GENERAL MANDATES TO ISSUE AND REPURCHASE THE COMPANY S SHARES, (2) AMENDMENTS TO THE MEMORANDUM AND ARTICLES OF ASSOCIATION AND (3) ADOPTION OF SHARE OPTION SCHEME 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 Wednesday, 19th May 2004 at 4:00 p.m. is set out on pages 33 to 36 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. 23rd April 2004

2 DEFINITIONS In this circular, unless the context otherwise requires, the following expressions have the following meanings: Annual General Meeting Annual Report and Accounts Articles of Association Board Companies Ordinance Company Director(s) General Mandate Group the annual general meeting of the Company to be held at 19th Floor, Wing On House, 71 Des Voeux Road Central, Hong Kong on Wednesday, 19th May 2004 at 4:00 p.m. (and any adjournment thereof), notice of which is set out on pages 33 to 36 of this circular annual report and accounts of the Company prepared pursuant to the Companies Ordinance the Articles of Association of the Company the Board of Directors of the Company the Companies Ordinance (Chapter 32 of the Laws of Hong Kong) China Assets (Holdings) Limited, a company incorporated in Hong Kong with limited liability director(s) of the Company 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 3A and 3C in the notice convening the Annual General Meeting the Company and its subsidiaries Invested Entity any entity in which the Group holds not less than 20% of its equity interest Latest Practicable Date Listing Rules Manager 21st April 2004, being the latest practicable date prior to the printing of this circular the Rules Governing the Listing of Securities on the Stock Exchange any firm or corporation appointed by the Company from time to time acting as investment manager of the Company s affairs 1

3 DEFINITIONS Memorandum of Association Repurchase Mandate Securities and Futures Ordinance Share(s) Share Option Scheme Share Repurchase Rules Shareholder(s) Stock Exchange subsidiary Takeovers Code HK$ the Memorandum of Association of the Company 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 3B in the notice convening the Annual General Meeting the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) share(s) of US$0.10 each in the share capital of the Company The share option scheme of the Company which is proposed to be adopted by an ordinary resolution of the Shareholders in the Annual General Meeting, a summary of the principal terms of the rules of which are set out in Appendix III on pages 22 to 32 of this circular 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 shareholder(s) of the Company The Stock Exchange of Hong Kong Limited has the meaning as acribed in the Listing Rules The Code on Takeovers and Mergers of Hong Kong Hong Kong dollars % per cent. 2

4 LETTER FROM THE BOARD OF DIRECTORS CHINA ASSETS (HOLDINGS) LIMITED (Incorporated in Hong Kong with limited liability) Directors: LAO Yuan Yi (Chairman) WANG Jun Yan JIANG Wei YEUNG Wai Kin ZHAO Yu Qiao 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) Registered Office: 19th Floor Wing On House 71 Des Voeux Road Central Hong Kong 23rd April 2004 To the Shareholders Dear Sir or Madam, PROPOSALS FOR (1) GENERAL MANDATES TO ISSUE AND REPURCHASE THE COMPANY S SHARES, (2) AMENDEMTS TO THE MEMORANDUM AND ARTICLES OF ASSOCIATION AND (3) ADOPTION OF SHARE OPTION SCHEME 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 amendments to the Memorandum and Articles of Association of the Company and the adoption of the Share Option Scheme to be proposed at the Annual General Meeting to be held on Wednesday, 19th May 2004, notice of which is set out on pages 33 to 36 of this circular. 3

5 LETTER FROM THE BOARD OF DIRECTORS 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 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 Appendix I to this circular. SPECIAL RESOLUTION AMENDMENTS TO THE MEMORANDUM AND ARTICLES OF ASSOCIATION Amendment to the Memorandum of Association Pursuant to a special resolution of the Company passed on 23rd May 2003, the name of the Company was changed from China Assets (Holdings) Limited to China Assets (Holdings) Limited. A special resolution will be proposed at the Annual General Meeting to add a remark to reflect such change to the Memorandum of Association. Amendments to the Articles of Association Due to the recent changes in the laws applicable to the Company and the Listing Rules, the Directors consider it desirable to amend such part of the Articles of Association to bring them in line with the contemporary requirements under the laws and the Listing Rules. The Directors would also like to take this opportunity to elaborate certain provisions in the existing Articles of Association with a view to ascertaining certain powers of the Company and the Directors and to increase the transparency in the operational and administrative practices of the Company. 4

6 LETTER FROM THE BOARD OF DIRECTORS Special resolution A new set of Memorandum and Articles of Association of the Company, in which all proposed amendments have been incorporated, will be proposed at the Annual General Meeting for adoption by the Shareholders as special resolution, with or without modification. A summary of the major proposed amendments to the Articles of Association are set out in Appendix II to this circular. The marked-up new Memorandum and Articles of Association will be available for inspection by the Shareholders at the Company s registered office during normal business hours from 21st April 2004 to 19th May, 2004 (both days inclusive). ORDINARY RESOLUTION ADOPTION OF SHARE OPTION SCHEME The proposed Share Option Scheme To enable the Company to grant options for its Shares to selected participants as incentives or rewards for their contribution to the Group, the Directors propose the Share Option Scheme be adopted by ordinary resolution of the Shareholders in the Annual General Meeting. The passing of the resolution to adopt the Share Option Scheme will authorize the Directors to grant to such selected participants options to subscribe for up to 7,438,316 Shares, being 10% of Shares in issue as at the date of the resolution (on the assumption that there will be no variation in the issued share capital of the Company during the period from the Latest Practicable Date up to the date of the resolution). No Director will be a trustee of the Share Option Scheme or has a direct or indirect interest in such a trustee. Under the rules of the Share Option Scheme, the minimum period for which an option must be held before it can be exercised is one day and if the Directors consider appropriate, the option holder may also be required to achieve performance targets before any options granted can be exercised. Regarding the exercise price of the options, the Directors will be authorized to determine the same at their absolute discretion by taking into account factors such as the contribution of the selected participants to the Group. Value of Options under the Share Option Scheme The Directors consider that it is not appropriate to state the value of all options that can be granted under the Share Option Scheme as if they had been granted at the Latest Practicable Date since a number of variations, which are crucial for the calculation or estimation of the option value, have not been determined. Such variations include the exercise price, exercise period, lock up period (if any) and performance targets (if any) for each option to be granted to each eligible participant. The Directors believe that any calculation or estimation of the value of the options as at the Latest Practicable Date would be based on a great number of speculative assumptions and would therefore not be meaningful, if not misleading, to the Shareholders. 5

7 LETTER FROM THE BOARD OF DIRECTORS Summary of the Principal Terms A summary of the principal terms of the Share Option Scheme is set out in Appendix III to this circular. The rules of the Share Option Scheme will be available for inspection by the Shareholders at the Company s registered office during normal business hours from 21st April 2004 to 19th May 2004 (both days inclusive). Application to the Stock Exchange Application has been made to the Stock Exchange for the listing of and permission to deal in the Shares (not exceeding 10% of Shares in issue as at the date of approval of the Share Option Scheme and also subject to the General Scheme Limit (as defined in Appendix III) being refreshed in accordance with the relevant requirements under the Listing Rules and approved by the Stock Exchange from time to time) to be issued pursuant to the exercise of the options granted under the Share Option Scheme. ANNUAL GENERAL MEETING On pages 33 to 36 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 resolution will be proposed to amend the Memorandum and Articles of Association of the Company. ACTIONS 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. Pursuant to the Articles of Association, the resolutions put to vote in a general meeting of the Company shall be decided by a show of hands unless a poll is demanded by (i) the Chairman of the Board, (ii) at least 3 Shareholders who are entitled to vote at the general meeting, (iii) a Shareholder or Shareholders representing not less than one-tenth of the total voting rights of all Shareholders entitled to vote at the general meeting or (iv) a Shareholder or Shareholders holding Shares conferring a right to vote at the general meeting, being shares on which an aggregate sum has been paid up equal to not less than one-tenth of the total sum paid up on all the Shares conferring that right. References to a Shareholder or Shareholder(s) above include shareholder(s) present in person or by proxy or representative at the general meeting. 6

8 LETTER FROM THE BOARD OF DIRECTORS If you (together with any other person, as the case may be) are entitled to demand a poll and wish to make such a demand in respect of any or all the proposed resolutions set out in the Notice of the Annual General Meeting, you (if applicable, jointly with other person(s) who are also entitled and wish to make a demand of poll) are required to make the demand in writing to the Chairman of the Board as soon as possible and in any event before or on the declaration of the result of the show of hands on the particular matter during the Annual General Meeting. The demand in writing must be made and signed by the person who is entitled to make the demand of poll or such person s proxy or authorized representative. Upon request of the Directors, evidence showing due authorization of the proxy or the representative is required to be submitted immediately after the demand is made. RECOMMENDATION The Directors believe that the proposals for the General Mandate, the Repurchase Mandate, the amendments to the Memorandum and Articles of Association of the Company and the adoption of the Share Option Scheme 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 3 to 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 7

9 APPENDIX I 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 3B of the notice of the Annual General Meeting for the approval of the renewal of the Repurchase Mandate and as the memorandum of the terms of the proposed purchase 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 3B 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 2005 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. 8

10 APPENDIX I EXPLANATORY STATEMENT 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 which are for the financial year ended 31st December 2003) in the event that the Repurchase Mandate is exercised in full. 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. 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 9

11 APPENDIX I EXPLANATORY STATEMENT 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 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$ 2003 April May June July August September October November December January February March

12 APPENDIX II SUMMARY OF MAJOR PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION The major proposed amendments to the Articles of Association are summarized as follows (references to Article in this Appendix II shall refer to the articles in the Articles of Association): 1. The following Articles 6(C), 6(D) and 6(E) are added: (C) (D) (E) Where redeemable shares are issued by the Company, the Company shall have the power to purchase such shares for redemption subject to the terms and conditions on which the redeemable shares are issued which must include provisions that (a) if the purchase by the Company is not made through the market or by tender, it shall be limited to a maximum price as determined by the terms and conditions on which the redeemable shares are issued and (b) if the purchase is by tender, the tender shall be available to all shareholders alike. Where shares are issued with no voting rights, the words non-voting must appear in the designation of such shares. Where shares are issued with voting rights different from those of ordinary shares of the Company, the designation of each class of such shares (other than those with the most favourable voting rights) must include the words restricted voting or limited voting. 2. Article 11 is re-paragraphed as Article 11(A) and is amended as follows (amendments are underlined for easy reference): 11. (A) After an allotment of shares, every allottee whose name is entered as a member in the register shall be entitled without payment to receive within two months after such allotment (or within such other period as the conditions of issue shall provide) one certificate for all his shares or, if he shall so request, in a case where the allotment is of a number of shares in excess of the number for the time being forming a stock exchange board lot, upon payment of HK$2.5 (which may be varied provided that the same shall not exceed the maximum fee prescribed by the Stock Exchange from time to time) for every certificate after the first such number of certificates for shares in stock exchange board lots or multiples thereof as he shall request and one for the balance (if any) of the shares in question, provided that in respect of a share or shares held jointly by several persons the Company shall not be bound to issue a certificate or certificates to each such person and the issue and delivery of a certificate or certificates to one of several joint holders shall be sufficient delivery to all such holders. 11

13 APPENDIX II SUMMARY OF MAJOR PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION 3. The following Article 11(B) is added: 11. (B) After a transfer of shares, every transferee whose name is entered as a member in the register shall be entitled upon payment of HK$2.5 (which may be varied provided that the same shall not exceed the maximum fee prescribed by the Stock Exchange from time to time) to receive within 10 business days after lodgment of such transfer (or within such other period as the conditions of issue shall provide) one certificate for all his shares or, if he shall so request, in a case where the transfer is of a number of shares in excess of the number for the time being forming a stock exchange board lot, upon payment of HK$2.5 (which may be varied provided that the same shall not exceed the maximum fee prescribed by the Stock Exchange from time to time) for every certificate after the first such number of certificates for shares in stock exchange board lots or multiples thereof as he shall request and one for the balance (if any) of the shares in question, provided that in respect of a share or shares held jointly by several persons the Company shall not be bound to issue a certificate or certificates to each such person and the issue and delivery of a certificate or certificates to one of several joint holders shall be sufficient delivery to all such holders. 4. The following Articles 40(A) and 40(B) are amended (amendments are underlined for easy reference): 40. (A) All transfers of shares may be effected by an instrument of transfer in any usual or common form or in such other form as may be prescribed by the Stock Exchange or in such form as the Directors may accept and may be under hand or by machine printed signatures or by such other manner of execution as the Directors may approve from time to time. Where applicable, the imprinted signatures on behalf of HKSCC Nominees Limited (or any successor thereto) on any instrument of transfer, whether as a transferor or a transferee, shall be accepted for transferring shares of the Company. (B) The instrument of transfer shall be executed by or on behalf of both the transferor and the transferee. Notwithstanding the foregoing, the Board may dispense with the execution of any instrument of transfer by the transferee in any case which it thinks fit in its discretion. The Board may also resolve, either generally or in any particular case, upon request by either the transferor or transferee, to accept mechanically executed transfers. 12

14 APPENDIX II SUMMARY OF MAJOR PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION 5. The following Article 40(D) is added: (D) All transfers of shares and other documents relating to or affecting the title to any registered securities must be registered with the Company, otherwise no person to which any shares are purported to transfer shall be recognised by the Company as its shareholders or to have any rights derived from any shares of the Company. 6. The following Article 68 is amended (amendments are underlined for easy reference): 68. At any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands, unless a poll is (before or on the declaration of the result of the show of hands): (i) (ii) (iii) (iv) demanded by the chairman; demanded by at least three members present in person or by proxy or representative for the time being entitled to vote at the meeting; demanded by any member or members present in person or by proxy or representative and representing not less than one-tenth of the total voting rights of all the members having the right to vote at the meeting; demanded by a member or members present in person or by proxy or representative 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 the shares conferring that right; or (v) required pursuant to the provisions of the Listing Rules. Unless a poll is so demanded and the demand is not withdrawn, or is so required, a declaration by the chairman that a resolution has, on a show of hands, been carried or carried unanimously or by a particular majority or lost and an entry to that effect in the book of the proceedings of the Company shall be conclusive evidence of the fact, without proof of the number or proportion of the votes recorded in favour of or against that resolution. 7. The following Articles 72A and 72B are added: 72A.On a poll taken at a meeting of the Company or a meeting of any class of members of the Company, a member entitled to more than 1 vote need not, if he votes, use all his votes or cast all the votes he uses in the same way. 13

15 APPENDIX II SUMMARY OF MAJOR PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION 72B. If voting at a general meeting is taken on a poll, the Company shall announce the results of the poll in accordance with the provisions of the Listing Rules. 8. Article 85 is deleted and replaced by the following Articles 85(A), 85(B) and 85(C): 85. (A) Any corporation which is a member of the Company may by resolution of its directors or other governing body authorise such person as it thinks fit to act as its representative at any meeting of the Company or of any class of members of the Company, and the person so authorised shall be entitled to exercise the same powers on behalf of the corporation which he represents as that corporation could exercise if it were an individual member of the Company. (B) (C) If a clearing house (or its nominee(s)) is a member of the Company, it may authorise such person or persons as it thinks fit to act as its representative(s) or proxy(ies) at any meeting of the Company or at any meeting of any class of members of the Company provided that, if more than one person is so authorised, the authorisation or proxy form shall specify the number and class of shares in respect of which each such person is so authorised. A person so authorised under the provisions of these Articles is not required to produce documents of title and notarized authorisation and shall be entitled to exercise the same rights and powers on behalf of the clearing house (or its nominee(s)) which he represents as that clearing house (or its nominee(s)) could exercise as if it were an individual member of the Company including the right to vote individually on a show of hands. Any reference in these Articles to a duly authorised representative of a member of the Company being a corporation shall mean a representative authorised under the provisions of these Articles. 9. The following Articles 85A, 85B and 85C are added: 85A. Notwithstanding any provisions in the Articles, where any shareholder is, under the Listing Rules, 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 except that where a shareholder is required to abstain from voting in favour at the general meeting, he may vote against the resolution at the general meeting and be counted in the quorum on the condition that his intention to do so has been stated in a circular of the Company to the shareholders, in which case, the Directors shall issue such circular and do whatever acts required under the Listing Rules, including without limitation, adjourn the general meeting if required. 14

16 APPENDIX II SUMMARY OF MAJOR PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION 85B. Where shareholders approval is, under the Listing Rules, required on any particular matter, such approval shall be given by a majority vote at a general meeting of the Company unless a written shareholders approval is obtained in the manner and subject to the conditions stipulated in the Listing Rules. 85C. If any shareholder is, under the Ordinance, the Listing Rules or the Articles, required to disclose his interest (direct or indirect) to the Company in respect of any matters which are resolved or to be resolved in a general meeting or are required the approval of the shareholders, none of his powers shall be taken to freeze or otherwise impair any of his rights attaching to any share by reason only that he fails to disclose his interest to the Company. 10. Article 88 is deleted and replaced by the following new Article 88: 88. No person, other than a retiring Director, shall be eligible for election to the office of the Director at any general meeting unless such person is recommended by: (i) (ii) the Directors for election; or a shareholder or shareholders who give(s) notice to the Company during the period commencing no earlier than the day after the dispatch of the notice of the meeting appointed for such election and ending no later than 7 days prior to the date of such meeting of his/their intention to propose that person for election as a Director, and notice in writing by that person of his willingness to be elected shall have been given to the Company at least 7 days and not more than 28 days before the date of the general meeting appointed for such election. 11. The following Article 89 is amended (amendments are underlined for easy reference): 89. The Company may by ordinary resolution remove any Director (including a managing director or other executive director, but without prejudice to any claim for damages under any contract) before the expiration of his period of office notwithstanding anything in the Articles or in any agreement between the Company and such Director and may elect another person in his stead. Any person so elected shall hold office for such time only as the Director in whose place he is elected would have held the same if he had not been removed. Special notice is required of a resolution to remove a director or to appoint somebody in place of the director so removed at the meeting at which he is removed. 15

17 APPENDIX II SUMMARY OF MAJOR PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION 12. The following Article 103(C) is added: 103.(C) Notwithstanding any provisions in the Articles, the Company and the Board shall, as long as the shares of the Company remain listed on the Stock Exchange, comply with the following requirements which may be modified from time to time under the Listing Rules (except in the case where waiver of the Stock Exchange is obtained): (i) (ii) (iii) (iv) (v) the Company will not either on its own or in conjunction with any connected person take legal, or effective, management control of underlying investments and that in any event the Company will not own or control more than 30% (or such other percentage as may from time to time be specified in the Code on Takeovers and Mergers approved by the Securities and Futures Commission of Hong Kong as being the level for triggering a mandatory general offer) of the voting rights in any one company or body, except in relation to wholly-owned subsidiaries of the Company; a reasonable spread of investments will be maintained by the Company, that is, in general the value of its holding of investments issued by any one company or body will not exceed 20% of the Company s net asset value at the time when such investment is made; the Company will convene and conduct its shareholders meetings in a manner which is acceptable to the Stock Exchange; any custodian, the Manager, any of their connected persons and every Director of the Company and the Manager shall be prohibited from voting their own shares at, or being part of a quorum for, any meeting to the extent that they have or any of their associates has, a material interest in the business to be conducted; and the Company s auditors shall be independent of the Company, the Manager and any custodian, to the same extent as that required of an auditor under the Ordinance and in accordance with the requirements on independence issued by the Hong Kong Society of Accountants. 16

18 APPENDIX II SUMMARY OF MAJOR PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION 13. Articles 111(C) and 111(D) are deleted and replaced by the following new Articles 111(C) and 111(D): (C) A Director shall not be entitled to vote on any board resolution approving any contract or arrangement or any other proposal in which he or any of his associates has a material interest nor shall he be counted in the quorum present at the meeting (except in the case where waiver of the Stock Exchange is obtained) but this prohibition shall not apply to any of the following matters (which may be varied under the Listing Rules from time to time): (i) the giving of any security or indemnity either: (a) (b) 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 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 associate(s) has himself/themselves assumed responsibility in whole or in part and whether alone or jointly under a guarantee or indemnity or by the giving of security; (ii) (iii) any proposal concerning an offer of 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; any proposal 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 5% or more of the issued shares of any class of such company (or of any third company through which his interest or that of his associates is derived) or of the voting rights; 17

19 APPENDIX II SUMMARY OF MAJOR PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION (iv) any proposal or arrangement concerning the benefit of employees of the Company or its subsidiaries including: (a) (b) 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; or the adoption, modification or operation of an insurance policy, a pension fund or retirement, death or disability benefits scheme which relates both to directors, his associates 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 any privilege or advantage not generally accorded to the class of persons to which such scheme or fund relates; and (v) 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; (D) For the purpose of Article 111(C)(iii), a company shall be deemed to be a company in which a Director together with any of his associates own 5% or more if and so long as (but only if and so long as) he together with any of his associates are (either directly or indirectly) the holders of or beneficially interested in 5% or more of any class of the equity share capital of such company or of the voting rights available to members of such company. For the purpose of this paragraph there shall be disregarded, unless the Listing Rules provide otherwise, any shares held by a Director as bare or custodian trustee and in which he has no beneficial interest, any shares comprised in a trust in which the Director s interest is in reversion or remainder if and so long as some other person is entitled to receive the income thereof, and any shares comprised in an authorised unit trust scheme in which the Director is interested only as a unit holder. 14. Article 149 is re-paragraphed as Article 149(A) and the following Article 149(B) is added: (B) The Company may cease sending dividend warrants by post to any shareholder if immediate before the cessation, the warrants to that shareholder have been left uncashed on 2 consecutive occasions or a warrant to that shareholder has been left uncashed after the first occasion on which such warrant is returned undelivered. 18

20 APPENDIX II SUMMARY OF MAJOR PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION 15. The following Article 158 is amended (amendments are underlined for easy reference): 158. Every balance sheet of the Company shall be signed pursuant to the provisions of the Ordinance and, subject to section 129G of the Ordinance, a printed copy of every balance sheet (including every document required by law to be annexed thereto) and profit and loss account or income and expenditure account which is to be laid before the Company in general meeting, together with a copy of the Directors report and a copy of the auditors report (collectively referred to as the Relevant Financial Documents hereinafter), shall not less than 21 days before the date of the meeting be sent to every member and every holder of debentures of the Company and to all persons other than members or holders of debentures of the Company, being persons entitled to receive notices of general meetings of the Company (together with the members and the holders of debentures of the Company, collectively referred to as the Entitled Persons hereinafter), provided that this Article shall not require a copy of the Relevant Financial Documents to be sent: (i) to a member of the Company or a holder of debentures of the Company, being in either case a person who is not entitled to receive notices of general meetings of the Company and of whose address the Company is unaware; or (ii) to more than one of the joint holders of any shares or debentures none of whom are entitled to receive such notices; or (iii) in the case of joint holders of any shares or debentures some of whom are and some of whom are not entitled to receive such notices, to those who are not so entitled; or (iv) subject to the Ordinance and Article 158A, to the Entitled Persons, if the Company has, pursuant to a notice of intent, duly sent to such Entitled Persons a copy of a summary financial report in place of a copy of those documents from which the report is derived (the Summary Financial Report ). Copies of each of the Relevant Financial Documents and/or the Summary Financial Report shall also be forwarded in appropriate number to the Stock Exchange in accordance with the Listing Rules. 19

21 APPENDIX II SUMMARY OF MAJOR PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION 16. The following Articles 158A and 158B are added: 158A.(i) (ii) Subject to the Ordinance, the Company may send to an Entitled Person, for the purpose of the Company s general meeting, a copy of the Summary Financial Report in place of a copy of the Relevant Financial Documents from which the report is derived provided that there is in force a notice of intent sent by the relevant Entitled Person to the Company, notifying the Company that he agrees to be sent a copy of the Summary Financial Report in place of a copy of the Relevant Financial Documents. For the purpose of this Article, an Entitled Person may be treated as having sent a notice of intent to the Company in cases specified under section 141CB of the Ordinance. For the purpose of Article 158A(i), a copy of the Summary Financial Report shall be sent to the Entitled Persons at least 21 days before the date of the general meeting. 158B. Where an Entitled Person has, in accordance with the Ordinance and the Listing Rules, consented to treat the publication of the Relevant Financial Documents and/or the Summary Financial Report on the Company s computer network as discharging the Company s obligations under the Ordinance and the Listing Rules to send a copy of the Relevant Financial Documents and/or the Summary Financial Report (the Consenting Person ), then publication by the Company on its computer network of the Relevant Financial Documents and/or the Summary Financial Report at least 21 days before the date of the general meeting shall, in relation to each Consenting Person, be deemed to discharge the Company s obligations under Article 158 or Article 158A (as the case may be). 17. The following Article 170A is added: 170A. Notwithstanding anything in these Articles, the Directors may, subject to the provisions in the Ordinance and the Listing Rules and without prejudice to any powers of the Directors, do the following acts in accordance with the requirements under the Listing Rules: (i) deliver any information or documents to the Stock Exchange, any other person(s) or the public by publishing or releasing the same in the newspapers or on the website of the Stock Exchange or by providing a means of access by any persons or the public to such information or documents by any other means as required or permitted by the Listing Rules; 20

22 APPENDIX II SUMMARY OF MAJOR PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION (ii) (iii) discharge the Company s obligations under the Listing Rules of sending, mailing, dispatching, issuing, publishing or otherwise making available any corporate communication by sending or otherwise making available the corporate communication by electronic means or other means as may be acceptable to the Stock Exchange; and discharge the Company s obligations under the Listing Rules of sending, mailing, dispatching, issuing, publishing or otherwise making available any corporate communication in both English and Chinese by making arrangements to ascertain whether or not a holder of its shares wishes to receive the English language version only or the Chinese version only and sending the English version only or the Chinese version only to the holder concerned in accordance with his stated wish. 21

23 APPENDIX III SUMMARY OF THE PRINCIPAL TERMS OF THE SHARE OPTION SCHEME This document includes particulars given in compliance with the 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 document 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. The following is a summary of the principal terms of the proposed Share Option Scheme: (A) Purpose of the Share Option Scheme The purpose of the Share Option Scheme is to enable the Group to grant options for the subscription of Shares in the Company to selected participants as incentives or rewards for their contribution to the Group. In achieving such purpose by way of offer of options under the Share Option Scheme, the Directors shall consider in respect of each offeree, among other things: (1) the performance targets or conditions which must be satisfied before the option can be exercised; (2) the minimum period for which an option must be held before it can be exercised; and (3) the exercise price determined in accordance with paragraph (F) below (subject to the provisions of the Share Option Scheme and the Listing Rules). (B) Eligible Participants The Directors may offer any person belonging to any of the following classes of participants options to subscribe for Shares at the exercise price determined in accordance with paragraph (F) below and subject to the other terms of the Share Option Scheme summarized below. (1) any employee or proposed employee (whether full time or part time) of the Company, any of its subsidiaries, the Manager or any Invested Entity, including any executive director of the Company, any of its subsidiaries, the Manager or any Invested Entity; in respect of any proposed employee, written confirmation (or copy thereof) of his acceptance to the employment by the Company, any of its subsidiaries, the Manager or any Invested Entity must be provided to the Company before he is eligible to participate in the Share Option Scheme; 22

24 APPENDIX III SUMMARY OF THE PRINCIPAL TERMS OF THE SHARE OPTION SCHEME (2) any non-executive directors (including independent non-executive directors) of the Company, any of its subsidiaries, the Manager or any Invested Entity; and (3) The basis of eligibility of any of the above class of participants to the grant of any options shall be determined by the Directors from time to time on the basis of their contribution and potential contribution to the development and growth of the Group. (C) Grant and Acceptance of Options Offers of options shall be made by the Company in the form of a written agreement or document (the Offer Document ) and issued to any of the above eligible participants on a business day. An option is deemed to have been accepted by the eligible participant upon his signing of the Offer Document and paying Hong Kong dollar One only (HK$1) to the Company, being consideration for the grant of his Option. The signed Offer Document and the consideration shall be received by the Company Secretary of the Company at or before close of business on the date determined by the Directors on case by case basis and specified in the Offer Document. Thereafter, any offers not accepted shall automatically lapse. (D) Maximum Number of Shares (1) The maximum number of Shares to be issued upon exercise of all outstanding options granted and yet to be exercised under the Share Option Scheme and any other schemes of the Group must not in aggregate exceed 30% of the Shares in issue of the Company (the Maximum Limit ) from time to time. In any event, no options may be granted under any schemes of the Group if this will result in the Maximum Limit being exceeded. (2) Subject to the overall limit specified in paragraph (1) above: (a) the total number of Shares which may be issued upon exercise of all options (excluding, for this purpose, options which have lapsed in accordance with the terms of the Share Option Scheme and any other schemes of the Group) to be granted under the Share Option Scheme and any other schemes of the Group (including without limitation any share option schemes to be adopted by the Company which are valid and subsisting) must not in aggregate exceed 7,438,316 Shares, being 10% of the Shares in issue (the General Scheme Limit ) as at the date of approval of the Share Option Scheme by the Shareholders in the Annual General Meeting, being the date of adoption of the Share Option Scheme (on the assumption that there will be no variation in the issued share capital of the Company during the period from the Latest Practicable Date up to the date of the resolution to adopt the Share Option Scheme). 23