THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

Transcription

1 THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION If you are in any doubt as to any aspect of this circular or as to the action 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 or transferred all your shares in AcrossAsia Limited, you should at once hand this circular and the enclosed 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. Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular. (Incorporated in the Cayman Islands with limited liability) (Stock Code: 8061) PROPOSED GROUP REORGANISATION BY WAY OF DISTRIBUTION IN SPECIE BY THE COMPANY OF SHARES IN PT MULTIPOLAR TBK, PROPOSED CAPITAL REDUCTION AND SHARE SUB-DIVISION OF THE COMPANY, AND PROPOSED CHANGE IN BOARD LOT SIZE A letter from the Board is set out on pages 4 to 21 of this circular. A notice convening an extraordinary general meeting of AcrossAsia Limited (the Company ) to be held at No. 4, Ground Floor, Lippo Centre, 89 Queensway, Hong Kong on Wednesday, 9th September, 2009 at 10: 00 a.m. is set out on pages 22 to 25 of this circular. Whether or not you are able to attend the extraordinary general meeting or any adjournment thereof, you are requested to read the notice and complete and return the enclosed proxy form in accordance with the instructions printed thereon to the Company s Head Office and Principal Place of Business in Hong Kong at Room 4302, 43rd Floor, Tower One, Lippo Centre, 89 Queensway, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for holding of the extraordinary general meeting or any adjournment thereof. Completion and return of the proxy form will not preclude you from attending, and voting in person at, the extraordinary general meeting or any adjournment thereof should you so wish. 17th August, 2009

2 CHARACTERISTICS OF GEM OF THE STOCK EXCHANGE The Growth Enterprise Market ( GEM ) of The Stock Exchange of Hong Kong Limited (the Stock Exchange ) has been positioned as a market designed to accommodate companies to which a higher investment risk may be attached than other companies listed on the Stock Exchange. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only after due and careful consideration. The greater risk profile and other characteristics of GEM mean that it is a market more suited to professional and other sophisticated investors. Given the emerging nature of companies listed on GEM, there is a risk that securities traded on GEM may be more susceptible to high market volatility than securities traded on the Main Board and no assurance is given that there will be a liquid market in the securities traded on GEM. i

3 CONTENTS Page DEFINITIONS... 1 LETTER FROM THE BOARD... 4 A. Introduction... 4 B. Details of the Distribution... 5 C. Details of the Capital Reduction, Sub-Division and Change in Board Lot Size D. Tentative Timetable for the Distribution and the Capital Reduction E. Extraordinary General Meeting and General Information F. Information on the Company and the Group G. Recommendation NOTICE OF EXTRAORDINARY GENERAL MEETING ii

4 DEFINITIONS In this circular, unless the context requires otherwise, the following terms and expressions shall have the following meanings: Board Board Meeting Capital Reduction CCASS Companies Law Company Court Directors Distribution EGM Existing Shares First Media GEM GEM Listing Rules the board of Directors a meeting of the Board held at Room 4301, 43rd Floor, Tower One, Lippo Centre, 89 Queensway, Hong Kong on Wednesday, 5th August, 2009 the proposed capital reduction of the Company whereby the nominal value of all the issued Existing Shares be reduced from a par value of HK$0.10 each to a par value of HK$0.01 each by cancelling HK$0.09 paid up capital on each issued Existing Share bywayofareductionofcapital Central Clearing and Settlement System established and operated by HKSCC the Companies Law, Cap. 22 (Law 3 of 1961, as consolidated and revised) of the Cayman Islands AcrossAsia Limited, a company incorporated in the Cayman Islands with limited liability and the issued shares of which are listedongem the Grand Court of the Cayman Islands the Directors of the Company the proposed distribution in specie of all of the Company s shareholdings in Multipolar the extraordinary general meeting of the Company proposed to be held to approve, the Distribution and/or the Capital Reduction, including any adjournment thereof the existing ordinary Shares of par value HK$0.10 each PT First Media Tbk, a company incorporated in Indonesia and listed on the Indonesia Stock Exchange and as at the Latest Practicable Date, a subsidiary directly owned as to approximately 55.11% by the Company and indirectly owned as to approximately 33.77% through Multipolar the Growth Enterprise Market of the Stock Exchange the Rules Governing the Listing of Securities on GEM and references to GEM Listing Rule shall be construed accordingly 1

5 DEFINITIONS Group HK cent HK$ HKSCC Hong Kong Latest Practicable Date Lippo Securities Matahari Multipolar Multipolar Group Multipolar Shares New Shares Overseas Shareholders the Company and its subsidiaries Hong Kong cent(s), the lawful currency of Hong Kong Hong Kong dollar(s), the lawful currency of Hong Kong Hong Kong Securities Clearing Company Limited Hong Kong Special Administrative Region of the People s Republic of China 13th August, 2009, being the latest practicable date prior to the printing of this circular for ascertaining certain information in this circular Lippo Securities Limited, a company incorporated in Hong Kong with limited liability and a licensed corporation to carry on Type 1 (dealing in securities), Type 4 (advising on securities), Type 6 (advising on corporate finance) and Type 9 (asset management) regulated activities under the Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong) PT Matahari Putra Prima Tbk, a company incorporated in Indonesia and the issued shares of which are listed on the Indonesia Stock Exchange and as at the Latest Practicable Date, an indirect non-wholly owned subsidiary of the Company PT Multipolar Tbk, a company incorporated in Indonesia and the issued shares of which are listed on the Indonesia Stock Exchange and as at the Latest Practicable Date, a subsidiary owned as to approximately 51.15% by the Company Multipolar together with its subsidiaries including Matahari and its subsidiaries Class A shares and Class B shares in the capital of Multipolar, being shares which are listed and traded on the Indonesia Stock Exchange Shares of HK$0.01 each in the capital of the Company upon the Capital Reduction becoming effective Shareholders whose addresses are shown in the register of members of the Company at the close of business on the Record Date as being outside of Hong Kong Record Date the record date for ascertaining the entitlements of the Shareholders to participate in the Distribution 2

6 DEFINITIONS Rp Share(s) Share Options Share Option Schemes Shareholders Stock Exchange Sub-Division Indonesian Rupiah, the lawful currency of the Republic of Indonesia share(s) of the Company (i.e. the Existing Shares and/or new shares of the Company after the Capital Reduction becoming effective(asthecasemaybe)) the outstanding shares options granted under the Share Option Schemes the share option schemes of the Company adopted from time to time, including the Pre-IPO Share Option Plan and 2002 Share Option Scheme of the Company registered holders of Shares The Stock Exchange of Hong Kong Limited the sub-division of each of the authorized but unissued Existing Shares of par value HK$0.10 each into 10 New Shares Unless otherwise stated, for illustration in this circular, figures denominated in Rp. are translated into HK$ at the approximate exchange rate of Rp.1,284 to HK$1. 3

7 (Incorporated in the Cayman Islands with limited liability) (Stock Code: 8061) Executive Director: Mr.MarshallWallaceCOOPER (Chief Executive Officer) Independent Non-executive Directors: Mr. Albert Saychuan CHEOK (Chairman) Dr. Boh Soon LIM Mr. Kwong Yiu MAK Registered Office: P.O. Box 309GT Ugland House George Town Grand Cayman Cayman Islands Head Office and Principal Place of Business in Hong Kong: Room 4302, 43rd Floor Tower One, Lippo Centre 89 Queensway Hong Kong 17th August, 2009 To the Shareholders Dear Sir or Madam, PROPOSED GROUP REORGANISATION BY WAY OF DISTRIBUTION IN SPECIE BY THE COMPANY OF SHARES IN PT MULTIPOLAR TBK, PROPOSED CAPITAL REDUCTION AND SHARE SUB-DIVISION OF THE COMPANY, AND PROPOSED CHANGE IN BOARD LOT SIZE A. INTRODUCTION At the Board Meeting, the Board passed a resolution to put forward to the Shareholders for consideration a proposed reorganisation of the business, assets and operations of the Company to, amongst other things, streamline its business activities to encourage a single focused line of business, to enhance corporate governance within the Group and to increase shareholders value. Such a proposed reorganisation and realignment has the objective of enabling investors to more easily appraise, assess and distinguish the value, potential and performance of each member of the Group including First Media and the Multipolar Group (including Matahari and its subsidiaries) as distinct listed groups, as it is anticipated that there will be a clearer differentiation between the businesses of each of them. The Company also proposes to effect the Capital Reduction, the benefits of which will include without limitation, the ability for the Company to conduct equity fund raising in the future. 4

8 Accordingly, the proposals to be put forward to the Shareholders at the EGM involve the following two independent matters: (1) the Distribution, being a distribution in specie of all of the Company s shareholdings in Multipolar, a subsidiary owned as to approximately 51.15% by the Company. Further details of the Distribution are set out in the section headed B. Details of the Distribution of this circular below; and (2) the Company will undergo (i) a Capital Reduction whereby the nominal value of all the issued Existing Shares will be reduced from a par value of HK$0.10 each to a par value of HK$0.01 each by cancelling HK$0.09 paid up capital on each issued Existing Share by way of a reduction of capital and (ii) a Sub-Division, whereby the nominal value of all the authorised but unissued Existing Shares will be subdivided into 10 New Shares. Further details of the Capital Reduction and Sub- Division are set out in the section headed C. Details of the Capital Reduction, Sub-Division and Change in Board Lot Size of this circular below. The Distribution, the Capital Reduction and Sub-Division being proposed are independent matters and are not inter-conditional. In addition, the Existing Shares are traded in board lots of 2,000. The Board proposes to change the board lot size for trading in the Shares from 2,000 Existing Shares to 20,000 New Shares only conditional on and after the Capital Reduction and Sub-Division becoming effective. The change of board lot size will not result in any change in the relative rights of the Shareholders. B. DETAILS OF THE DISTRIBUTION Background and Rationale for the Distribution The proposed reorganisation and realignment resulting from the Distribution has the objective of enabling investors to more easily appraise, assess and distinguish the value, potential and performance of each member of the Group (including First Media) and the Multipolar Group (including Matahari and its subsidiaries) as distinct listed groups, as it is anticipated that there will be a clearer differentiation between the businesses of each of them. Also, because of the current adverse economic climate, credit crunch and the Company s low share price, it is anticipated that it may be uneconomical or unduly onerous for the Company to meet the capital demands of certain of its subsidiaries, in particular, those of the Multipolar Group, to support such subsidiaries expected growth. The business of First Media, on the other hand, is expected to have a stable performance and be able to grow with the continued increase in penetration rate on its existing networks. Accordingly, the Company is considering streamlining its business activities with the objective of maintaining a more focused line of business through First Media and at the same time increasing shareholders value, by transferring its interest in the Multipolar Group directly to the Shareholders under the Distribution. In this connection, it is emphasised that upon the making of the Distribution, the Shareholders will maintain their respective interest, on a pro rata basis, in the Multipolar Group and there will be no dilutive effect on such interests. The Shareholders will then hold directly their pro rata portion of the equity interest in 5

9 Multipolar and may elect to deal with their respective interests as they see fit. Upon completion of the Distribution, First Media will remain an approximately 55.11% owned subsidiary of the Company. Group Structure As at the Latest Practicable Date, the Company is interested in approximately 51.15% of the issued share capital of Multipolar. The chart below illustrates the current and proposed group structures before and after the Distribution: Before Distribution After Distribution Indirect interest 6

10 Details of the Distribution It is currently contemplated by the Board that the Company, which has distributable reserves standing to the credit of its share premium account of approximately HK$625,916,000, will declare a special dividend to be satisfied by way of the Distribution in specie of all its holdings of the Multipolar Shares, comprising of approximately 938,328,300 Class A Shares of Multipolar and 2,532,308,178 Class B Shares of Multipolar (save for any fractional entitlements not distributed). Basis of the Distribution The Distribution will be on the basis of 370 Class A Multipolar Shares and 1,000 Class B Multipolar Shares for every 2,000 Shares held by the Shareholders whose names appear on the register of members of the Company on the Record Date. In case all the 11,939,000 outstanding Share Options are exercised on or before the Record Date, an additional 11,939,000 Shares will be issued pursuant to the exercise of these Share Options. As a result, the ratio of Multipolar Shares to be distributed to the Shareholders may change accordingly. However, the Board considers this to be an unlikely event as the lowest exercise price of the Share Options is HK$3.28 per Share, which is significantly higher than the existing trading price of the Shares. Fractional Multipolar Shares will not be distributed to Shareholders but will be aggregated and retained by the Company and may be disposed of by the Company for its own benefit. The aggregate market value of the Multipolar Shares to be distributed under the Distribution as at the Latest Practicable Date is approximately HK$167,585,000 based on the closing price of Rp.62 (or approximately HK cent 4.8) per Multipolar Share, being the closing price as quoted by the Indonesia Stock Exchange on the Latest Practicable Date. Accordingly, on the basis of 370 Class A Multipolar Shares and 1,000 Class B Multipolar Shares to be distributed for every 2,000 Shares held by the Shareholders, this is equivalent to a distribution of approximately HK cent 3.3 per Share before the Distribution (on the assumption that there is no change in the issued share capital of the Company from the Latest Practicable Date up to the Record Date). The Multipolar Shares to be distributed under the Distribution are credited as fully paid and will rank pari passu in all respects with all other Multipolar Shares of the same class in issue, save for any dividends/distributions declared, paid or made by Multipolar before the Record Date. The Company will bear all the stamp duty which may be payable as a result of the transfer of the Multipolar Shares by the Company to the Shareholders entitled to receive the same under the Distribution. 7

11 Overseas Shareholders Neither this circular nor any of documents relating to the Distribution will be registered or filed under applicable securities legislation of any jurisdiction. Based on the register of members of the Company as at the Latest Practicable Date, there were 8 Shareholders with registered addresses which were outside Hong Kong and in Singapore, the British Virgin Islands and the United States of America. The Board has made enquiries as to the applicable securities legislation of the relevant overseas jurisdiction or the requirements of any relevant regulatory body or stock exchange for the Distribution of the Multipolar Shares. Based on the advice provided by the legal advisers in these countries, the Directors have been advised by the relevant legal advisers that no local legal or regulatory compliance will be required with respect to the distribution of the Multipolar Shares to such Shareholders under the Distribution in Singapore, the British Virgin Islands and the United States of America. Therefore, such Shareholders will be qualified to receive the Multipolar Shares under the Distribution. In the event that as at the Record Date, there are any Shareholders with registered address outside Hong Kong, Singapore, the British Virgin Islands, and the United States of America, the Board will then proceed to make further enquiries as to the applicable securities legislation of the relevant overseas jurisdiction or the requirements of any relevant regulatory body or stock exchange for the Distribution of the Multipolar Shares to such Shareholders. In the event that based on advice provided by the legal advisers in those jurisdictions, the Board should take the view that it is necessary or expedient not to offer the Multipolar Shares to such overseas Shareholders, then the Board may, at its sole discretion, make further arrangements for the Multipolar Shares which would otherwise have been transferred to the overseas Shareholders to be sold in the market as soon as practicable after the Distribution, with the proceeds of such sale, less expenses and duty, of HK$100 or more to be paid to the relevant Shareholders in Hong Kong dollars. The Company will retain individual amounts of less than HK$100 for the benefit of the Company. It is the responsibility of any person (including but without limitation, a nominee, agent and trustee) receiving the circular and/or any other documents relating to the Distribution outside Hong Kong and wishing to receive the Multipolar Shares under the Distribution to satisfy himself/herself/itself as to the full observance of the laws of the relevant territory or jurisdiction including the obtaining of any consents for observing any formalities which may be required in such territory or jurisdiction, and to pay any taxes, duties and other amounts required to be paid in such territory or jurisdiction. Any acceptance of the Multipolar Shares under the Distribution by any Shareholder will be deemed to constitute a representation and warranty from such person to the Company that those local laws and requirements of the relevant territory or jurisdiction have been fully complied with. If you are in any doubt as to your position, you should consult your professional advisers. 8

12 Condition of the Distribution The Distribution will be subject to approval by the Shareholders at the EGM and to the Company being able to pay its debts as they fall due in the ordinary course of business immediately following the date on which the Distribution is proposed to be paid,ineachcaseinaccordancewiththearticlesofassociationofthecompanyand the Companies Law. No Shareholder is required to abstain from voting on the Distribution at the EGM. Proposed Arrangements to take delivery of the Multipolar Shares to be Distributed Any and all registered Shareholders should contact the Company Secretary of the Company at Room 4302, 43rd Floor, Tower One, Lippo Centre, 89 Queensway, Hong Kong (Tel: (852) ) from 9: 30 a.m. to 12: 45 p.m., and from 2: 00 p.m. to 5: 00 p.m. for the period commencing on the Record Date until 4: 30 p.m. on Wednesday, 23rdSeptember,2009toobtainanelectionformrelatingtomethodofdeliveryof Multipolar Shares and to complete and return such form to confirm the method in whichsuchshareholder(s)intendtotakedelivery of the Multipolar Shares which is either (1) by issue of physical share certificates or (2) through the transfer of the Multipolar Shares to a specified brokerage account (capable of holding Indonesian listed securities) nominated by such Shareholder or (3) through the custodian services offered by Lippo Securities as described in the section headed Custodian Services relating to the Multipolar Shares to be Distributed below. Registered Shareholders should and are only entitled to elect one only of the above mentioned options. However, notwithstanding the foregoing, nominee companies (including but not limited to HKSCC Nominees Limited) can elect one or more of the combination of the three options as referred to above. In the event that no election is made by the registered Shareholder and/or received by the Company on or before 4: 30 p.m. on Wednesday, 23rd September, 2009, the Company will by default automatically arrange for the delivery of Multipolar Shares under the Distribution by way of issue of physical share certificate(s) to be sent to the registered address of such Shareholder. Shareholders electing to receive physical share certificate(s) and/or those failing to provide instructions as to election, in each case by the abovementioned deadline will note that the relevant share certificate(s) relating to the Multipolar Shares under the Distribution will be sent to the registered address of the Shareholder by ordinary post at the Shareholder s own risk to such address or such other address as may be elected by the Shareholder in writing. Shareholders should seek the advice of their stockbroker or other professional adviser for details of those settlement arrangements and how such arrangements will affect the Shareholders rights and interests. The Company will bear all costs and duties payable in connection with the transfer of Multipolar Shares to the Shareholders pursuant to the Distribution. However, any subsequent dealings in the Multipolar Shares will currently be subject to the higher of standard brokerage charges of 1% in aggregate or Rp. 50,000 (approximately HK$38.94) minimum handling charge as well 9

13 as relevant duties payable in Indonesia in respect of transfer of such shares to be borne by the transferor and/or transferee of such Multipolar Shares, as applicable. The Shareholders are recommended to consult their professional advisers as to the tax implications on the Distribution as well as subsequent transfer of Multipolar Shares. It is emphasized that tax implications on the Distribution and the holding and subsequent sale of Multipolar Shares are a matter of the holders thereof and neither the Company nor any of the Directors accept any responsibility for any tax effect on, or liabilities of, the holders thereof. In the event that any holder of Multipolar Shares whom have elected to take delivery of physical share certificates should require further splitting of share certificates and/or transfer arrangements, such holder should directly contact the share registrar of Multipolar, PT Sharestar Indonesia located at Citra Graha Building 3rd Floor, Jl. Jendral Gatot Subroto Kav , Jakarta 12950, Indonesia (Phone: /Fax: ) or the Company Secretary of Multipolar (Phone: /Fax: ) for details and relevant procedures. Custodian Services relating to the Multipolar Shares to be Distributed In order to facilitate the Shareholders to hold and trade the Multipolar Shares, the Company has put in place arrangements with Lippo Securities, whereby upon election of a Shareholder by notification to the Company in accordance with the procedures and timing referred to above and upon the provision of requisite information from such Shareholder, Lippo Securities will provide custodian services to the relevant Shareholder in respect of the holding and/or trading of the relevant Multipolar Shares free of any account opening and/or monthly holding charge to the Shareholder for an initial period of two years or until all of the relevant Shareholders electing to use such services have sold their Multipolar Shares, whichever earlier and thereafter, subject to review by the Company as to the necessity of such services. However, relevant commission and taxation relating to the receipt, holding and trading of the Multipolar Shares are referred to in the section headed Proposed Arrangements to take delivery of the Multipolar Shares to be Distributed will continue to be applicable and borne by the relevant Shareholder. Shareholders who wish to elect to take advantage of this custodian facility should contact Ms. Rowinna Wu of Lippo Securities Limited at Room 2302, 23rd Floor, Tower One, Lippo Centre, 89 Queensway, Hong Kong (Tel: (852) ) from 9: 30 a.m. to 12: 45 p.m., and from 2: 00 p.m. to 6: 00 p.m. during normal business days for the period commencing from the Record Date until Wednesday, 7th October, In order to make use of such custodian services provided by Lippo Securities and to enable Lippo Securities to provide such services, Shareholders electing to make use of such services are required to provide required information to Lippo Securities, including without limitation, identification documents, sample signature and address proof. 10

14 Effects of the Distribution and Benefits to the Shareholders and Benefits to the Company As at the Latest Practicable Date, the Company owns an aggregate of approximately 938,328,300 Class A Shares of Multipolar and 2,532,308,178 Class B Shares of Multipolar, together representing approximately 51.15% of the issued share capital of Multipolar and will, upon completion of the Distribution, cease to hold any interest in Multipolar. Currently, Multipolar is a subsidiary of the Company and the results of the Multipolar Group are accounted for in the consolidated financial statements of the Company. Following the Distribution, the results of Multipolar will no longer be accounted for in the Company s consolidated financial statements as the Company will not own any shares in Multipolar (save for any fractional entitlements retained). The various benefits of the Distribution including without limitation, the streamlining of the businesses of the Group, increasing shareholders value and improving corporate governance are as respectively described and set out in the paragraph headed Background and Rationale for the Distribution in the section headed B. Details of the Distribution of this letter above. Furthermore, as a result of the streamlining of the Company s business and the Group after the proposed Distribution, the monitoring by the Company of activities of its subsidiaries will be more direct and efficient and accordingly, this is expected to enhance the corporate governance of the Group post-distribution. Also, given the different operating characteristics of the businesses of the Multipolar Group and First Media, the Distribution will enhance the transparency of the performance of their respective business operations, and will enable the respective management teams of the Group (including First Media) and the Multipolar Group to become more focused on their respective business areas and to implement financing and business development plans according to their specific needs. In addition, Multipolar is a listed company in Indonesia. As referred to above, the Distribution will have the effect of giving the Shareholders underlying assets of the Company without having any dilutive effect. The Distribution enables the Shareholders to hold a direct investment in the shares of Multipolar, and to participate in the prospects of the Multipolar Group. The Distribution has the benefit of offering the Shareholders greater flexibility to diversify and plan their investments. Financial Effects of the Distribution The audited consolidated net assets value of Multipolar Group as at 31st December, 2008 was approximately HK$1,065,287,000. For the purpose of considering the Distribution and its effect on the Company, it is appropriate to refer to the financial effects as set out in the Company s balance sheet rather than that as set out in the Group s balance sheet, although certain figures as extracted from both the Company s balance sheet and the Group s balance sheet are set out below for reference purposes. 11

15 Please see below certain figures extracted from the audited balance sheet of the Company before the Distribution, adjustments for the Distribution and the adjusted figures to reflect the financial effect of the Distribution, based on the audited balance sheetofthecompanyasat31stdecember,2008. Audited figures before the Distribution (as at 31st December, 2008) Adjustments for the Distribution Adjusted to reflect the Distribution (based on 31st December, 2008 audited figures) (Note) HK$ 000 HK$ 000 HK$ 000 NON-CURRENT ASSETS 639,625 (141,186) 498,439 CURRENT ASSETS 7,055 7,055 TOTAL ASSETS 646,680 (141,186) 505,494 CURRENT LIABILITIES 17,166 17,166 NON-CURRENT LIABILITIES 202, ,800 SHAREHOLDERS EQUITY Share Capital 506, ,462 Reserves (79,748) (141,186) (220,934) NET ASSETS 426,714 (141,186) 285,528 Note: Adjusted for the elimination of the carrying value in the Company s books of the Company s interests in Multipolar. 12

16 Please see below figures extracted from the audited consolidated balance sheet of the Group before the Distribution, adjustments for the Distribution and the adjusted figures to reflect the financial effect of the Distribution based on the audited consolidated balance sheet of the Group as at 31st December, Audited figures before the Distribution (as at 31st December, 2008) Adjustments for the Distribution and other factors Adjusted to reflect the Distribution (based on 31st December, 2008 audited figures) (Note) HK$ 000 HK$ 000 HK$ 000 NON-CURRENT ASSETS 4,616,954 (3,709,902) 907,052 CURRENT ASSETS 4,235,610 (4,088,428) 147,182 TOTAL ASSETS 8,852,564 (7,798,330) 1,054,234 CURRENT LIABILITIES 3,914,189 (3,509,423) 404,766 NON-CURRENT LIABILITIES 2,614,898 (1,927,528) 687,370 MINORITY INTEREST 1,904,252 (1,838,188) 66,064 SHAREHOLDERS EQUITY Share Capital 506, ,462 Reserves (87,237) (523,191) (610,428) NET ASSETS/(LIABILITIES) 419,225 (523,191) (103,966) Note: Adjustments comprise the effect of the deconsolidation from the Group s accounts of all the assets and liabilities of the Multipolar Group and certain other contemporaneous measures. Based on the audited balance sheet of the Company as at 31st December, 2008, the Company will have net assets of approximately HK$285,528,000 after the Distribution and based on the audited consolidated balance sheet of the Group as at 31st December, 2008, the remaining Group will have net liabilities of approximately HK$103,966,000 after the Distribution. The Group s net liabilities position on an adjusted basis at 31st December, 2008 is mainly attributable to two loss-making non-core limited liability subsidiaries of the remaining Group, one of which has already been disposed of. With the remaining subsidiary being a limited liability company and not being a core subsidiary of the Group, the Board considers it would be more relevant for 13

17 Shareholders to consider the financial position of the Group on the basis that a nominal value is attributed to such company rather than taking into account its net liabilities. As the subject company is a non-core subsidiary of the Group and a limited liability company which is not an active revenue generating subsidiary, in the event that such company is wound up, the Group would not be liable for its losses and/or liabilities as such liabilities are not guaranteed by the Company. Accordingly, the Board is of the view that it is more relevant to consider the balance sheet of the Group as if the Group had disposed of such subsidiary for a nominal value. Additionally, the liabilities of such subsidiary were historically recorded and will not directly impact on the Company s future financial performance. Assuming that such limited liability subsidiary of the remaining Group was disposed of at nominal value, based on the audited consolidated balance sheet of the Group as at 31st December, 2008, the remaining Group would, instead of the net liabilities, have net assets of approximately HK$163,580,000 after the Distribution. Possible Continuing Connected Transactions It is expected that certain continuing connected transactions between the post- Distribution Group and the Multipolar Group may occur after the Distribution. They include provision of certain internet services as well as other trade receivables. The Company will ensure that any such future transactions will comply with the requirements of the GEM Listing Rules. C. DETAILS OF THE CAPITAL REDUCTION, SUB-DIVISION AND CHANGE IN BOARD LOT SIZE Background and Rationale for the Capital Reduction The Existing Shares of the Company have been trading at a price below their nominal value of HK$0.10 each for most of the 6-month period prior to the Latest Practicable Date. Under the Companies Law, it is not permissible for a Cayman Islands incorporated company to issue shares at a discount to the nominal value of its shares, unless in compliance with section 35 of the Companies Law, which includes, amongst other things, requirements to obtain authorisation of members of the Company and sanction by the Court. Given the trading prices for the past 6 months, it may be difficult for the Company to conduct any equity fund raising. Consequently, due to the expected 4 to 6 months required to effect a capital reduction for a Cayman Islands incorporated company, the Company proposes to effect the Capital Reduction as soon as practicable to improve its balance sheet as well as to provide it with the flexibility to effect fund raising exercises as and when opportunities or the need should arise. Details of the Capital Reduction It is proposed that the nominal value of all the issued Existing Shares be reduced from HK$0.10 each to HK$0.01 each by cancelling HK$0.09 paid up capital on each issued Existing Share by way of the Capital Reduction. The credit arising from such 14

18 reduction will be applied towards cancelling the accumulated deficit of the Company with the balance (if any) to be transferred to the distributable capital reduction reserve or share premium account of the Company. Immediately following the Capital Reduction, each of the authorised but unissued shares in the capital of the Company of par value HK$0.10 each be sub-divided into 10 shares of par value HK$0.01 each, such that following the Sub-Division, the authorised share capital of the Company shall be HK$15,000,000,000 divided into 1,500,000,000,000 New Shares of nominal value of HK$0.01 each. The Capital Reduction (which will be effected in accordance with the Articles of Association of the Company and the Companies Law) and the Sub-Division will be conditional upon: (i) (ii) the passing of a special resolution to approve the Capital Reduction and the Sub-Division by the Shareholders at the EGM; the sanction of the Capital Reduction by the Court; (iii) the compliance with any conditions imposed by the Court; and (iv) the Listing Committee of the Stock Exchange granting the listing of, and permission to deal in, the New Shares upon the Capital Reduction becoming effective. No Shareholder is required to abstain from voting on the Capital Reduction and the Sub-Division at the EGM. The share capital of the Company consists of 5,064,615,385 Existing Shares in issue and the aggregate nominal value of the issued share capital of the Company is approximately HK$506.5 million. On the basis of 5,064,615,385 Existing Shares in issue as at the Latest Practicable Date (assuming no Existing Shares are issued from the date hereof until the effective date of the Capital Reduction), a total credit of approximately HK$455,815,385 will arise in the books of the Company as a result of the Capital Reduction as described above. The Company has no outstanding options, warrants or other securities convertible into or giving rights to subscribe for the Existing Shares other than options to subscribe for 11,939,000 Existing Shares which are outstanding under the Share Option Schemes. Effects of the Capital Reduction and Sub-Division Implementation of the Capital Reduction and the Sub-Division would not, of itself, alter the underlying assets, liabilities, businesses, management or financial position of the Company and/or the rights of the Shareholders, except for payment of the related expenses. The Existing Shares as adjusted by the Capital Reduction and the 15

19 Sub-Division will rank pari passu in all respects with each other and the Capital Reduction and the Sub-Division will not result in any change in the relative rights of the Shareholders. The various benefits of the Capital Reduction and the Sub-Division include without limitation, the ability for the Company to conduct equity fund raising in the future, are as respectively described and set out in the paragraph headed Background and Rationale for the Capital Reduction as set out in the section headed C. Details of the Capital Reduction, the Sub-Division and Change in Board Lot Size of this letter above. Free Exchange of New Share certificates and trading arrangements Subject to the Capital Reduction and the Sub-Division becoming effective, Shareholders may, during a period to be specified in a further announcement to be made by the Company, submit certificates for Existing Shares to the Company s registrar for exchange, at the expense of the Company, for certificates for New Shares. Thereafter, certificates for the Existing Shares will be accepted for exchange only on payment of a fee of HK$2.50 (or such other amount as may from time to time be allowed by the Stock Exchange) for each share certificate of the Existing Shares cancelled or each new certificate issued for New Shares, taking the higher number of certificates issued or cancelled. Nevertheless, certificates for the Existing Shares will continue to be good evidence of legal title and may be exchanged for certificates for New Shares at any time at the expense of the Shareholders in question. Listing and Dealings Application will be made to the Listing Committee of the Stock Exchange for the granting of the listing of, and permission to deal in, the New Shares arising from the Capital Reduction and the Sub-Division. Subject to the granting of the listing of, andpermissiontodealin,thenewshares on the Stock Exchange, the New Shares will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect from the commencement date of dealings in the New Shares on the Stock Exchange or such other date as determined by HKSCC. Settlement of transactions between participants of the Stock Exchange on any trading day is required to take place in CCASS on the second settlement day thereafter. All activities under CCASS are subject to the General Rules of CCASS and CCASS operational procedures in effect from time to time. The New Shares will be identical in all respects and rank pari passu in all respects with each other as to all future dividends and distributions which are declared, made or paid. The Capital Reduction and the Sub-Division will not result in any change in the relative rights of the Shareholders. All necessary arrangements will be made for the NewSharestobeadmittedintoCCASS. 16

20 The Company is listed on GEM. The Shares are not listed or dealt in and no listing of or permission to deal in the Shares are being, or are proposed to be, sought on any other stock exchange and no debt securities of the Company are listed or dealt in, and no listing of or permission to deal in the debt securities of the Company is being, or is proposed to be, sought on any other stock exchange. Change in Board Lot Size At present, the Existing Shares are traded in board lots of 2,000. The Board proposes to change the board lot size for trading in the Shares from 2,000 Existing Shares to 20,000 New Shares only conditional on and after the Capital Reduction and the Sub-Division become effective. The change will not result in any change in the relative rights of the Shareholders. D. TENTATIVE TIMETABLE FOR THE DISTRIBUTION AND THE CAPITAL REDUCTION Proposed Key Event Date Despatch of circular to the Shareholders together with notice of EGM and proxy form Last day of dealings in the Shares on a cum-entitlement basis Commencement of dealings in the Shares on an ex-entitlement basis Latest time for lodging transfer of the Shares in order to qualify for voting at the EGM and to qualify for entitlement pursuant to the Distribution Closure of the principal register and branch register of members of the Company Latest time for lodging of proxy form for voting at the EGM Expected date and time of EGM Date/Time Monday, 17th August, 2009 Wednesday, 2nd September, 2009 Thursday, 3rd September, : 30 p.m., Friday, 4th September, 2009 Saturday, 5th September, 2009 to Wednesday, 9th September, : 00 a.m., Monday, 7th September, : 00 a.m., Wednesday, 9th September, 2009 Announcement of results of EGM Wednesday, 9th September,

21 The following events are conditional on the results of the EGM in respect of the Capital Reduction and the relevant Court hearings. Proposed Key Event Date Record Date for determining entitlement to the Distribution Re-opening of the principal register and branch register of members of the Company Latest time for completion of election form regarding method of delivery of Multipolar Shares Latest date for despatch of Multipolar share certificates and for credit of electronic holdings of Multipolar Shares Announcement of expected effective date of the Capital Reduction Expected effective date of the Capital Reduction and the Sub-Division Effectivedateofchangeinboardlotsize from 2,000 Shares to 20,000 Shares First day for free exchange of existing share certificates for new share certificates for the New Shares commences Date/Time Wednesday, 9th September, 2009 Thursday, 10th September, : 30 p.m., Wednesday, 23rd September, 2009 Wednesday, 14th October, 2009 Monday, 14th December, 2009 Wednesday, 16th December, 2009 Wednesday, 16th December, 2009 Wednesday, 16th December, 2009 First day of odd lot trading arrangements Wednesday, 16th December, 2009 Last day of odd lot trading arrangements Wednesday, 13th January, 2010 Last day of free exchange of existing share certificates for new share certificates Wednesday, 13th January, 2010 Notes: (1) Dates and times specified in the above tentative timetable are Hong Kong dates and times. (2) The above tentative timetable is an indicative timetable for preliminary reference only and depends on the results of the EGM and the relevant Court hearings. Should there be any change to the above tentative timetable, further announcement will be made by the Company as and when necessary or appropriate. (3) The Capital Reduction is subject to the Court s approval. The Capital Reduction will become effective after the Court s approval and registration of the order of the Court confirming the reduction of issued share capital and the minutes approved by the Court at the Registrar of Companies in the Cayman Islands, which is expected to take approximately 4 to 6 months from the date hereof. 18

22 E. EXTRAORDINARY GENERAL MEETING AND GENERAL INFORMATION Extraordinary General Meeting As required under the Articles of Association of the Company, the Distribution will be subject to the sanction of the Shareholders by ordinary resolution at the EGM and the Capital Reduction and the Sub-Division will be subject to the sanction of the Shareholders by special resolution at the EGM. A notice convening the EGM is set out on pages 22 to 25. There is enclosed with the circular to which this letter forms part a proxy form for use at the EGM. Whether or not you are able to attend the EGM or any adjournment thereof, you are requested to read the notice and complete and return the proxy form in accordance with the instructions printed thereon to the Company s Head Office and Principal Place of Business in Hong Kong at Room 4302, 43rd Floor, Tower One, Lippo Centre, 89 Queensway, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for holding the EGM or any adjournment thereof. Completion and return of the proxy form will not preclude you from attending and voting in person at the EGM or any adjournment thereof should you so wish. In the event that a Shareholder having lodged a proxy form attends the EGM, his proxy form will be deemed to have been revoked. Vote by Poll Under Rule (4) of the GEM Listing Rules, any vote of Shareholders at a general meeting must be taken by poll. Closure of Register of Members and Registration Procedures The register of members of the Company will be closed from Saturday, 5th September, 2009 to Wednesday, 9th September, 2009 (both dates inclusive) for the purpose of determining the entitlements of the Shareholders under the Distribution. No transfer of Shares may be registered during the book close date. In order to qualify for the Distribution, all transfers accompanied by the relevant share certificates must be lodged with the branch share registrar of the Company in Hong Kong, Tricor Tengis Limited, by not later than 4: 30 p.m. on Friday, 4th September,

23 F. INFORMATION ON THE COMPANY AND THE GROUP The Group is engaged principally in the provision of retail services through department stores, hypermart stores, foodmart stores, healthcare outlets and family entertainment centres as well as cable television, broadband network, broadband Internet access and information technology solutions and services through its principal subsidiaries, Multipolar, Matahari and First Media. As at the Latest Practicable Date, the Company has an approximately 25.6% effective interest in Matahari. This interest is arrived at through its approximately 51.15% interest in a subsidiary, Multipolar, which holds an approximately 50.10% interest in Matahari. Accordingly, Matahari is an indirect non-wholly owned subsidiary of the Company. As at the Latest Practicable Date, the Company owns approximately 55.11% of First Media directly and approximately 33.77% indirectly through Multipolar. Multipolar is mainly engaged in the IT solutions business, being a prominent professional IT solutions provider in Indonesia with four core units: hardware and infrastructure, business solutions, consulting services and outsourcing services. Multipolar s listed subsidiary, Matahari, is mainly engaged in the retail business, being one of the largest retailers in Indonesia and operating various Matahari Department Stores, Hypermart stores, foodmart stores, Boston healthcare outlets, TimeZone family entertainment centres and book stores across various cities in Indonesia. The business of First Media which primarily involves the provision of high speed internet access service and cable television to customers in Indonesia, has grown significantly in recent years. In particular, it has approximately 126,300 cable TV subscribers, representing a market penetration rate of approximately 25%. In addition, the number of its broadband FastNet subscribers have grown to approximately 136,000 subscribers. First Media is also the sole network provider of the Indonesia Stock Exchange s JATS-Remote Trading project, enabling the stock brokers to trade remotely from their respective offices via the fibre-optic network. The Lippo group (a general reference to the companies (including Lippo Cayman Limited) in which Dr. Mochtar Riady and his family have a direct or indirect interest; the Lippo group is not a legal entity and does not operate as one; each of the companies in the Lippo group operates within its own legal, corporate and financial framework) might have had or developed interests in businesses in Hong Kong and other parts in Asia similar to those of the Group. There was and may be a chance that such businesses might have competed and/or will compete with the Group. Save as disclosed herein, the Directors are not aware of any business or interest of the Directors, the management shareholders and their respective associates (as defined under the GEM Listing Rules) that have competed or may compete with the business of the Group and any other conflicts of interests which any such person had or may have with the Group. 20

24 G. RECOMMENDATION The Directors consider that each of the Distribution and the Capital Reduction and the Sub-Division is in the interests of the Company and the Shareholders as a whole. Accordingly, the Board recommends all Shareholders to vote in favour of the relevant resolutions to be proposed in the EGM. By Order of the Board Marshall Wallace COOPER Director and Chief Executive Officer This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the GEM Listing Rules for the purpose of giving information with regard to the Group. The Directors, having made all reasonable enquiries, confirm that, to the best of their knowledge and belief: 1. the information contained in this circular is accurate and complete in all material respects and not misleading; 2. there are no other matters the omission of which would make any statement in this document misleading; and 3. all opinions expressed in this circular have been arrived at after due and careful consideration and are founded on bases and assumptions that are fair and reasonable. 21