CHUN WO HOLDINGS LIMITED (Incorporated in Bermuda 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 the Company, you should at once hand this Circular and the accompanying form of proxy 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 document, 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 document. CHUN WO HOLDINGS LIMITED (Incorporated in Bermuda with limited liability) (Stock Code: 711) RE-ELECTION OF DIRECTORS GENERAL MANDATES TO ISSUE AND REPURCHASE SHARES AMENDMENTS TO THE BYE-LAWS OF THE COMPANY AND NOTICE OF ANNUAL GENERAL MEETING A notice convening the Annual General Meeting of the Company to be held at Tang Room, 3rd Floor, Sheraton Hong Kong Hotel & Towers, 20 Nathan Road, Kowloon, Hong Kong on Tuesday, 31st August, 2004 at 10:00 a.m. is set out on pages 8 to 14 of this Circular. Whether or not you intend to attend the Annual General Meeting, you are requested to complete the form of proxy in accordance with the instructions printed thereon and return it to the principal place of business of the Company in Hong Kong at C2, 5th Floor, Hong Kong Spinners Industrial Building, Tai Nan West Street, Cheung Sha Wan Road, Kowloon, Hong Kong not less than 48 hours before the time appointed for the holding of the Meeting. Completion and return of the form of proxy will not preclude shareholders from attending and voting in person at the meeting or any adjournment thereof should they so wish. 30th July, 2004

2 LETTER FROM THE BOARD CHUN WO HOLDINGS LIMITED (Incorporated in Bermuda with limited liability) Directors: Registered Office: Clarendon House Executive Church Street PANG Kam Chun (Chairman) Hamilton HM 11 KWOK Yuk Chiu, Clement (Managing Director) Bermuda LI Wai Hang, Christina Head Office and Principal Independent Non-executive Place of Business: CHEN Po Sum C2, 5th Floor AU Son Yiu Hong Kong Spinners Industrial Building WONG Sai Wing, James Tai Nan West Street WOO Kam Wai Cheung Sha Wan Road Kowloon Hong Kong To the Shareholders Dear Sir or Madam, 30th July, 2004 RE-ELECTION OF DIRECTORS GENERAL MANDATES TO ISSUE AND REPURCHASE SHARES AMENDMENTS TO THE BYE-LAWS OF THE COMPANY AND NOTICE OF ANNUAL GENERAL MEETING The directors (the Directors ) of Chun Wo Holdings Limited (the Company ) wish to seek the approval of shareholders of the Company (the Shareholders ) of the grant of general mandates to the Directors for the issue of shares ( Share Issue Mandate ) and repurchase of shares of the Company ( Repurchase Mandate ) on the terms set out in the Ordinary Resolution 5 to be proposed at the Annual General Meeting of the Company to be held on 31st August, 2004 ( Annual General Meeting ), the amendments to the Bye-laws of the Company ( Bye-laws ) and re-election of Directors. The notice of the Annual General Meeting is set out on pages 8 to 14 of this Circular. 1

3 LETTER FROM THE BOARD This Circular sets out the explanatory statement to provide requisite information to you for your consideration of the Repurchase Mandate as required by the relevant rules set out in the Rules Governing the Listing of Securities ( Listing Rules ) on The Stock Exchange of Hong Kong Limited (the Stock Exchange ). This Circular also sets out the details in relation to the special resolution regarding the amendments to the Bye-laws to be proposed at the Annual General Meeting and details of the Directors proposed to be re-elected at the Annual General Meeting. THE REPURCHASE MANDATE Share Capital As at 26th July, 2004 (the latest practicable date for ascertaining information prior to the printing of this Circular) ( Latest Practicable Date ), the issued share capital of the Company comprised 725,545,896 shares of HK$0.10 each ( Shares ). The passing of the aforesaid Ordinary Resolution 5B will allow the Company to repurchase a maximum of 10% of the issued share capital of the Company, being 72,554,589 Shares, on the basis that no further Shares will be issued or repurchased prior to the date of the Annual General Meeting. Reasons for Repurchases The Directors believe that it is in the best interests of the Company and its Shareholders as a whole to have a general authority from Shareholders to enable the Directors to repurchase Shares in the market. Such repurchases may, depending on 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 and will only be made when the Directors believe that such repurchases will benefit the Company and its Shareholders as a whole. Funding of Repurchase Repurchases pursuant to the Repurchase Mandate would be funded from the available cash flow and/or working capital facilities of the Company. The funds employed by the Company in connection with a repurchase of Shares would be those legally available for such purpose under the Company s Memorandum of Association and Bye-laws and the laws of Bermuda. Bermuda law provides that the amount of capital repaid in connection with a share repurchase may only be paid out of either the capital paid up on the relevant shares, or funds of the Company that would otherwise be available for dividend or distribution or the proceeds of a new issue of shares made for the purpose of the repurchase. The amount of premium, if any, payable on repurchase may only be paid out of either the funds of the Company that would otherwise be available for dividend or distribution or out of the share premium or contributed surplus accounts of the Company. 2

4 LETTER FROM THE BOARD There might be material adverse impact on the working capital or gearing position of the Company (as compared with the position disclosed in the latest published audited financial statements for the year ended 31st March, 2004 contained in the Annual Report 2003/2004) in the event that the Repurchase Mandate to repurchase Shares were to be exercised in full at any time during the proposed repurchases period. However, the Directors do not propose to exercise the Repurchase Mandate to such extent as would, in the circumstances, have a material adverse effect on the working capital requirements or the gearing levels of the Company at the time of the relevant repurchases unless the Directors determined that such repurchases were, taking account of all relevant factors, in the best interests of the Company. General None of the Directors nor, to the best of their knowledge having made all reasonable enquiries, any of their associates currently intends to sell any Shares to the Company or its subsidiaries under the Repurchase Mandate if such Repurchase Mandate is approved by Shareholders. 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 the laws of Bermuda. No purchase has been made by the Company of its Shares (whether on the Stock Exchange or otherwise) in the six months preceding the date of this Circular. 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 in the event that the Repurchase Mandate is approved by Shareholders. If, as a result of a share repurchase, a Shareholder s proportionate interest in the voting rights of the Company increases, such increase will be treated as an acquisition for the purpose of the Hong Kong Code on Takeovers and Mergers and Share Repurchases (the Code ). Accordingly, a Shareholder or a group of Shareholders acting in concert, could, depending on the level of increase of the Shareholders interest, obtain or consolidate control of the Company and become obliged to make a mandatory offer in accordance with Rules 26 and 32 of the Code. To the best knowledge of the Company, as at the Latest Practicable Date, the substantial shareholders of the Company are Mr Pang Kam Chun ( Mr Pang ) and Midland Realty (Holdings) Limited ( Midland ) having respective interests of 270,721,825 (37.31%) Shares and 73,372,000 (10.11%) Shares in the issued share capital of the Company. On the basis that no further Shares will be issued or repurchased prior to the date of the Annual General Meeting, and in the event that the Repurchase Mandate is exercised in full, the interests of Mr Pang and Midland in the issued share capital of the Company will increase to 41.46% and 11.24% respectively and will result in a mandatory general offer obligation of Mr Pang and parties acting in concert with him. The Directors currently do not have any intention to repurchase Shares pursuant to the Repurchase Mandate. The Directors will consider all relevant circumstances before making a decision to repurchase if the repurchase will trigger any general offer obligations on the part of the Company s substantial shareholders. The Directors do not propose to exercise the Repurchase Mandate to such extent that will trigger the aforesaid mandatory offer obligation. 3

5 LETTER FROM THE BOARD The highest and lowest prices at which the Shares of the Company have been traded on the Stock Exchange during each of the previous twelve months were as follows: Share Prices Highest Lowest HK$ HK$ 2003 July August September October November December January February March April May June July (up to the Latest Practicable Date) SHARE ISSUE MANDATE Ordinary Resolution 5A to be proposed at the Annual General Meeting relates to the granting of the Share Issue Mandate which will empower the Directors to issue new Shares not exceeding 20 per cent. of the aggregate nominal amount of the share capital of the Company in issue at the date of passing of the resolution. EXTENSION OF SHARE ISSUE MANDATE Ordinary Resolution 5C to be proposed at the Annual General Meeting relates to the extension of the Share Issue Mandate to be granted. Subject to the passing at the Annual General Meeting of Ordinary Resolution 5A, 5B and 5C, the Directors will be given a general mandate to add all those number of Shares which may from time to time be purchased under the Repurchase Mandate to the Share Issue Mandate, thus, the limit of the Share Issue Mandate would include, in addition to the 20 per cent. limit as aforesaid, the number of Shares purchased under the Repurchase Mandate. 4

6 LETTER FROM THE BOARD AMENDMENTS TO THE BYE-LAWS In order to comply with the recent amendments to the Listing Rules, the Directors propose to make certain amendments to the Bye-laws, amongst other things: (a) (b) (c) to require that the minimum seven-day period for lodgment by Shareholders of the notice to nominate a director to commence no earlier than the day after the despatch of the notice of the meeting appointed for such election and end no later than seven days before the date of such meeting; to prohibit Director(s) from voting at and being counted towards the quorum of the board meeting on any matter in which he or any of his associates has a material interest; and to exclude the votes cast by a Shareholder in contravention of a requirement or restriction under the Listing Rules. Special Resolution 6 to be proposed at the Annual General Meeting is the specific amendments to the Bye-laws that are proposed. PROXY FORM A form of proxy for use at the Annual General Meeting is enclosed with this Circular. Whether or not you intend to attend the Annual General Meeting, you are requested to complete the form of proxy in accordance with the instructions printed thereon and return it to the principal place of business of the Company in Hong Kong at C2, 5th Floor, Hong Kong Spinners Industrial Building, Tai Nan West Street, Cheung Sha Wan Road, Kowloon, Hong Kong not less than 48 hours before the time appointed for the holding of the Meeting. Completion and return of the form of proxy will not preclude shareholders from attending and voting in person at the meeting or any adjournment thereof should they so wish. Pursuant to Bye-law 66 of the Bye-laws, a poll may be demanded by: (a) (b) (c) the chairman of such meeting; or at least three Shareholders present in person or in the case of a Shareholder being a corporation by its duly authorised representative or by proxy for the time being entitled to vote at the meeting; or a Shareholder or Shareholders present in person or in the case of a Shareholder being a corporation by its duly authorised representative or by proxy and representing not less than one-tenth of the total voting rights of all Shareholders having the right to vote at the meeting; or 5

7 LETTER FROM THE BOARD (d) a Shareholder or Shareholders present in person or in the case of a Shareholder being a corporation by its duly authorised representative or by proxy and holding Shares conferring a right to vote at the meeting being Shares on which an aggregate sum has been paid up equal to not less than one-tenth of the total sum paid up on all Shares conferring that right. RECOMMENDATION The Directors consider that the Repurchase Mandate, Share Issue Mandate, extension of Share Issue Mandate, amendments to the Bye-laws and re-election of Directors are in the best interests of the Company and Shareholders as a whole. The Directors recommend the Repurchase Mandate, Share Issue Mandate, extension of Share Issue Mandate, amendments to the Bye-laws and re-election of Directors to all Shareholders for their favourable consideration and urge them to vote in favour of the resolutions to be proposed at the Annual General Meeting. Yours faithfully, By Order of the Board Pang Kam Chun Chairman 6

8 APPENDIX I DETAILS OF DIRECTORS The details of the Directors proposed to be re-elected at the Annual General Meeting are set out below: Mr Au Son Yiu (Mr Au) Aged 59. Appointed as an Independent Non-executive Director of the Company in July 1992 and a member of the Audit Committee of the Company in December Has extensive experience in the securities industry. A director of The Association of Former Council Members of The Stock Exchange of Hong Kong Limited and The Institute of Securities Dealers Limited, a consultant to Dao Heng Securities Limited and a member of the Election Committee for the financial services subsector election for the 1998 Legislative Council. He is also an independent non-executive director of Frankie Dominion International Limited, Midland Realty (Holdings) Limited, Texwinca Holdings Limited, CEC International Holdings Limited and Sun East Technology (Holdings) Limited. Mr Au was an independent non-executive director of Pacific Plywood Holdings Limited (retired on 21st June, 2002) and Junefield Department Store Group Limited (previously known as Hudson Holdings Limited) (resigned on 30th December, 2002). In addition, he is the Ex-Deputy Chairman of the Hong Kong Securities Clearing Company Limited ( ) and Ex-Council member of the Stock Exchange ( ). Mr Au does not have any relationship with any Directors, senior management, substantial or controlling shareholders of the Company. As at the Latest Practicable Date, Mr Au holds a personal interest of 866,000 shares of the Company within the meaning of Part XV of the Securities and Futures Ordinance ( SFO ). There is a service agreement for a term of one year (24th July, 2004 to 23rd July, 2005) between the Company and Mr Au and his Director s fee is HK$150,000 per annum which is determined by reference to his duties and responsibilities with the Company, the Company s performance and profitability, the Company s remuneration policy and the market benchmark. There is no arrangement on the period of notice and compensation required for the termination of the service agreement. Mr Au is subject to retirement by rotation in accordance with the provisions of the Bye-laws. Mr Woo Kam Wai (Mr Woo) Aged 56. Appointed as an Independent Non-executive Director of the Company in July Holds a master of science degree in construction project management from the University of Hong Kong. A Fellow of each of the Royal Institution of Chartered Surveyors and the Hong Kong Institute of Surveyors, an Associate of the Chartered Institute of Arbitrators, a senior certified valuer of the International Real Estate Institute and an Authorised Person with the Government. He is a Chartered Surveyor and has over 25 years experience in the construction industry. Mr Woo does not have any relationship with any Directors, senior management, substantial or controlling shareholders of the Company. As at the Latest Practicable Date, Mr Woo holds a personal interest of 346,000 shares of the Company within the meaning of Part XV of the SFO. There is a service agreement for a term of one year (24th July, 2004 to 23rd July, 2005) between the Company and Mr Woo and his Director s fee is HK$60,000 per annum which is determined by reference to his duties and responsibilities with the Company, the Company s performance and profitability, the Company s remuneration policy and the market benchmark. There is no arrangement on the period of notice and compensation required for the termination of the service agreement. Mr Woo is subject to retirement by rotation in accordance with the provisions of the Bye-laws. 7

9 NOTICE OF ANNUAL GENERAL MEETING CHUN WO HOLDINGS LIMITED (Incorporated in Bermuda with limited liability) NOTICE OF ANNUAL GENERAL MEETING NOTICE IS HEREBY GIVEN that the Annual General Meeting of the Company will be held at Tang Room, 3rd Floor, Sheraton Hong Kong Hotel & Towers, 20 Nathan Road, Kowloon, Hong Kong on Tuesday, 31st August, 2004 at 10:00 a.m. for the following purposes: As ordinary business 1. To receive and consider the statement of accounts and the reports of the Directors and Auditors for the year ended 31st March, To declare a final dividend. 3. To re-elect Directors and authorise the Board of Directors to fix the remuneration of the Directors. 4. To re-appoint Auditors and authorise the Board of Directors to fix their remuneration. As special business 5. To consider and, if thought fit, pass the following resolutions as ordinary resolutions with or without amendments: A. THAT: (a) subject to paragraph (c) below, the exercise by the Directors of the Company during the Relevant Period (as hereinafter defined) of all the powers of the Company to allot, issue and deal with additional shares in the capital of the Company and to make or grant offers, agreements and options, including warrants to subscribe for shares, which might require the exercise of such powers be and is hereby generally and unconditionally approved; 8

10 NOTICE OF ANNUAL GENERAL MEETING (b) (c) (d) the approval in paragraph (a) above shall be in addition to any other authorisation given to the Directors of the Company and shall authorise the Directors of the Company during the Relevant Period to make or grant offers, agreements and options, including warrants to subscribe for shares, which might require the exercise of such powers after the end of the Relevant Period; the aggregate nominal amount of share capital allotted or agreed conditionally or unconditionally to be allotted (whether pursuant to an option or otherwise) by the Directors of the Company pursuant to the approval in paragraph (a) above, otherwise than pursuant to a Rights Issue (as hereinafter defined) or any issue of shares of the Company under the share option scheme of the Company, shall not exceed 20% of the aggregate nominal amount of the share capital of the Company in issue at the date of passing this resolution, and the said approval shall be limited accordingly; and for the purposes of this resolution: Relevant Period means the period from the passing of this resolution until whichever is the earliest of: (i) (ii) (iii) the conclusion of the next annual general meeting of the Company; the expiration of the period within which the next annual general meeting of the Company is required by any applicable law or the Bye-laws of the Company to be held; or the passing of an ordinary resolution of the Company in general meeting revoking or varying the authority set out in this resolution. Rights Issue means an offer of shares open for a period fixed by the Directors of the Company to holders of shares whose names appear on the Register of Members of the Company on a fixed record date in proportion to their then holdings of such shares (subject to such exclusions or other arrangements as the Directors of the Company may deem necessary or expedient in relation to fractional entitlements or having regard to any restrictions or obligations under the laws of, or the requirements of any recognised regulatory body or any stock exchange in, any territory applicable to the Company). 9

11 NOTICE OF ANNUAL GENERAL MEETING B. THAT: (a) (b) (c) subject to paragraph (b) below, the exercise by the Directors of the Company during the Relevant Period (as hereinafter defined) of all the powers of the Company to repurchase shares on The Stock Exchange of Hong Kong Limited (the Stock Exchange ) or on any other stock exchange on which the shares may be listed and which is recognised by the Securities and Futures Commission and the Stock Exchange for this purpose, subject to and in accordance with all applicable laws and/or the requirements of the Stock Exchange or of any other stock exchange as amended from time to time, be and is hereby generally and unconditionally approved; the aggregate nominal amount of shares authorised to be repurchased by the Company pursuant to the approval in paragraph (a) above during the Relevant Period shall not exceed 10% of the aggregate nominal amount of the share capital of the Company in issue at the date of passing this resolution, and the said approval shall be limited accordingly; and for the purposes of this resolution: Relevant Period means the period from the passing of this resolution until whichever is the earliest of: (i) (ii) (iii) the conclusion of the next annual general meeting of the Company; the expiration of the period within which the next annual general meeting of the Company is required by any applicable law or the Bye-laws of the Company to be held; or the passing of an ordinary resolution of the Company in general meeting revoking or varying the authority set out in this resolution. C. THAT conditional on the passing of the resolution set out in paragraph 5B of the notice convening this meeting, the general mandate granted to the Directors of the Company and for the time being in force to exercise the powers of the Company to allot, issue and deal with additional shares pursuant to the resolution set out in paragraph 5A of the notice convening this meeting be and is hereby extended by the addition to the aggregate nominal amount of the share capital of the Company which may be allotted or agreed conditionally or unconditionally to be allotted by the Directors of the Company pursuant to such general mandate of an amount representing the aggregate nominal amount of the share capital of the Company repurchased by the Company under the authority granted pursuant to the resolution set out in paragraph 5B of the notice convening this meeting. 10

12 NOTICE OF ANNUAL GENERAL MEETING 6. To consider and, if thought fit, pass the following resolution as a special resolution with or without amendments: THAT the Bye-laws of the Company be and are hereby amended in the following manner: (a) By adding the following new definitions in the existing Bye-law 1: associates holding company Hong Kong subsidiary the meaning ascribed to it under the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited from time to time. ; the meaning ascribed to it by the Act and/or the rules of the Designated Stock Exchange. ; the Hong Kong Special Administrative Region of the People s Republic of China. ; the meaning ascribed to it by the Act and/or the rules of the Designated Stock Exchange. ; (b) By adding the following new Bye-law 76A immediately after the existing Bye-law 76: 76A. Where the Company has knowledge that any Member is, under the applicable Statutes and/or the rules of the Designated Stock Exchange, 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 Member in contravention of such requirement or restriction shall not be counted. ; (c) By deleting the existing Bye-law 88 in its entirety and substituting therefor the following new Bye-law 88: 88. No person other than a Director retiring at the meeting shall, unless recommended by the Directors for election, be eligible for election as a Director at any general meeting unless a Notice signed by a Member (other than the person to be proposed) duly qualified to attend and vote at the meeting for which such notice is given of his intention to propose such person for election and also a Notice signed by the person to be proposed of his willingness to be elected shall have been lodged at the Office or at the head office provided that the minimum length of the period, during which such Notice(s) are given, shall be at least seven (7) days and that the period for lodgment of such Notice(s) shall commence no earlier than the day after the dispatch of the notice of the general meeting appointed for such election and end no later than seven (7) days prior to the date of such general meeting. ; and 11

13 NOTICE OF ANNUAL GENERAL MEETING (d) By deleting the existing Bye-law 103 in its entirety and substituting therefor the following new Bye-law 103: 103. (1) A Director shall not vote (nor be counted in the quorum) on any resolution of the Board in respect of any contract or arrangement or any other proposal in which he or any of his associates is, to his knowledge, materially interested, but this prohibition shall not apply to any of the following matters namely: (i) (ii) (iii) (iv) (v) (vi) any contract or arrangement for giving to such Director or his associate(s) any security or indemnity in respect of money lent by him or any of his associates or obligations incurred or undertaken by him or any of his associates at the request of or for the benefit of the Company or any of its subsidiaries; any contract or arrangement for the giving of any security or indemnity 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 whether alone or jointly under a guarantee or indemnity or by the giving of security; any contract or arrangement 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 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; any contract or arrangement concerning any other company in which the Director or his associate(s) is/are interested only, whether directly or indirectly, as an officer or executive or a shareholder or in which the Director and any of his associates are not in aggregate beneficially interested in five (5) per cent. or more of the issued shares or of the voting rights of any class of shares of such company (or of any third company through which such interest is derived); or any proposal concerning the adoption, modification or operation of any employee s share scheme or any share incentive or share option scheme under which the Director or his associate(s) may benefit; or 12

14 NOTICE OF ANNUAL GENERAL MEETING (vii) any proposal concerning the adoption, modification or operation of any pension fund or retirement, death or disability benefits scheme or other arrangement which relates both to Directors, his associates, consultants and employees of the Company or of any of its subsidiaries and does not provide in respect of any Director or his associate(s) as such any privilege or advantage not accorded to the employees to which such scheme or fund relates. (2) A company shall be deemed to be a company in which a Director and/ or his associate(s) owns five (5) per cent. or more if and so long as (but only if and so long as) he and/or his associates (either directly or indirectly) are the holders of or beneficially interested in five (5) per cent. or more of any class of the equity share capital of such company or of the voting rights available to members of such company (or of any third company through which his interest or that of his associates is derived). For the purpose of this paragraph there shall be disregarded any shares held by a Director or his associate(s) as bare or custodian trustee and in which he or any of them has no beneficial interest, any shares comprised in a trust in which the interests of the Director or his associate(s) is in reversion or remainder if any 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 or his associate(s) is/are interested only as a unit holder. (3) Where a company in which a Director and/or his associate(s) holds five (5) per cent. or more is materially interested in a transaction, then that Director and/or his associate(s) shall also be deemed materially interested in such transaction. (4) If any question shall arise at any meeting or the Board as to the materiality of the interest of a Director or his associates (other than the chairman of the meeting) or as to the entitlement of any Director (other than such chairman) to vote and such question is not resolved by his voluntarily agreeing to abstain from voting, such question shall be referred to the chairman of the meeting and his ruling in relation to such other Director shall be final and conclusive except in a case where the nature or extent of the interest of the Director concerned as known to such Director has not been fairly disclosed to the Board. If any question as aforesaid shall arise in respect of the chairman of the meeting such question shall be decided by a resolution of the Board (for which purpose such chairman shall not vote thereon) and such resolution shall be final and conclusive except in a case where the nature or extent of the interest of such chairman as known to such chairman has not been fairly disclosed to the Board.. 7. To transact other business, if any. Hong Kong, 30th July, By Order of the Board Fung Yee Man, Iris Company Secretary

15 NOTICE OF ANNUAL GENERAL MEETING Registered Office: Clarendon House Church Street Hamilton HM 11 Bermuda Principal Place of Business: C2, 5th Floor Hong Kong Spinners Industrial Building Tai Nan West Street Cheung Sha Wan Road Kowloon Hong Kong Notes: (1) A member entitled to attend and vote at the meeting is entitled to appoint one or more than one proxy to attend and vote in his stead. A proxy need not be a member of the Company. (2) To be valid, a form of proxy, together with the power of attorney (if any) or other authority (if any) under which it is signed or a notarially certified copy of that power of attorney or authority, must be deposited at the principal place of business of the Company not less than forty-eight hours before the time appointed for the holding of the meeting. (3) The register of members will be closed from Thursday, 26th August, 2004 to Tuesday, 31st August, 2004 (both days inclusive) during which period no transfer of shares will be effected. In order to qualify for the proposed final dividend, all transfers accompanied by the relevant share certificates must be lodged with the Hong Kong Branch Registrars of the Company, Secretaries Limited, at G/F, Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong not later than 4:00 p.m. on Wednesday, 25th August, Dividend warrants will be despatched to shareholders on or about Wednesday, 20th October, (4) Concerning the resolution set out in paragraph 5A above, the Directors wish to state that they have no immediate plans to issue any new shares of the Company. Approval is being sought from the members as a general mandate in compliance with the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the Listing Rules ). (5) Concerning the resolution set out in paragraph 5B above, the Directors wish to state that they will exercise the powers conferred thereby to repurchase shares of the Company in circumstances which they deem appropriate for the benefits of the shareholders. The Explanatory Statement containing the information necessary to enable the shareholders to make an informed decision on whether to vote for or against the resolution to approve the repurchase by the Company of its own shares, as required by the Listing Rules, will be set out in a circular to shareholders dated 30th July,