China Ocean Group Development Limited — Proxy Solicitation & Information Statement 2003

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt about this circular or as to the action to be taken, you should consult your stockbroker, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in IA International Holdings Limited (the “ Company ”), you should at once hand this circular to the purchaser or to the bank, stockbroker or other agent through whom the sale was effected for transmission to the purchaser.

The Stock Exchange of Hong Kong Limited (the “ Stock Exchange ”) 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.

This circular, for which the directors of the Company collectively and individually accept full responsibility, includes particulars given in compliance with the Rules Governing the Listing of Securities on the Growth Enterprise Market of the Stock Exchange for the purpose of giving information with regard to the Company. The directors of the Company, having made all reasonable enquiries, confirm that, to the best of their knowledge and belief: (i) the information contained in this circular is accurate and complete in all material respects and not misleading; (ii) there are no other matters the omission of which would make any statement in this circular misleading; and (iii) 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.

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IA International Holdings Limited 毅興科技國際控股有限公司[*]

(incorporated in Bermuda with limited liability)

PROPOSALS FOR GENERAL MANDATES TO ISSUE SHARES AND TO REPURCHASE SHARES

This circular is dispatched together with the annual report of the Company for the year ended 31st March, 2003 (the “Annual Report”) which comprises of the directors’ report, the auditors’ report by Messrs. Glass Radcliffe Chan and the financial statements of the Company for the year ended 31st March, 2003.

A notice convening the annual general meeting of the Company to be held at Room 1536, Pruton Prudential Hotel, 222 Nathan Road, Tsimshatsui, Kowloon, Hong Kong on 18th July, 2003 at 10:00 a.m. is contained in the Annual Report. Whether or not you are able to attend such meeting, please complete and return the form of proxy enclosed with the Annual Report in accordance with the instructions printed thereon to the branch share registrar of the Company, Tengis Limited, at Ground Floor, Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for holding such meeting or any adjourned meeting (as the case may be). Completion and return of the form of proxy will not preclude you from attending and voting at the meeting or any adjourned meeting (as the case may be) should you so wish.

This circular will remain on the GEM website with the domain name of www.hkgem.com on the “Latest Company Announcements” page for at least 7 days from the date of its posting.

* For identification purpose only

23rd June, 2003

CHARACTERISTICS OF THE GROWTH ENTERPRISE MARKET (“GEM”) OF THE STOCK EXCHANGE OF HONG KONG LIMITED (THE “STOCK EXCHANGE”)

GEM has been established as a market designed to accommodate companies to which a high investment risk may be attached. In particular, companies may list on GEM with neither a track record of profitability nor any obligation to forecast future profitability. Furthermore, there may be risks arising out of the emerging nature of companies listed on GEM and the business sectors or countries in which the companies operate. 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.

The principal means of information dissemination on GEM is publication on the Internet website operated by the Stock Exchange. Listed companies are not generally required to issue paid announcements in gazetted newspapers. Accordingly, prospective investors should note that they need to have access to the GEM website at www.hkgem.com in order to obtain up-to-date information on GEM-listed issuers.

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LETTER FROM THE BOARD OF DIRECTORS

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IA International Holdings Limited 毅興科技國際控股有限公司[*]

(incorporated in Bermuda with limited liability)

Executive Directors:

Mr. Chiu Ting San (Chairman) Mr. Cheng Kwong Chung Mr. Zhang Fulin Mr. Li Ting

Registered Office: Clarendon House 2 Church Street Hamilton HM11 Bermuda

Independent Non-executive Directors:

Ms. Leung Wai Ling, Wylie

Mr. Chung Tung Sau

Head Office and Principal Place of Business:

Units 1001-1004 10th Floor 238 Nathan Road Kowloon Hong Kong

23rd June, 2003

To the shareholders of IA International Holdings Limited

Dear Sir/Madam,

PROPOSALS FOR GENERAL MANDATES TO ISSUE SHARES AND TO REPURCHASE SHARES

1. INTRODUCTION

At the annual general meeting held on 1st August, 2002, the shareholders of the Company (the “ Shareholders ”) passed resolutions to give general mandates to the directors of the Company (the “Directors” ) to issue and allot Shares (as defined below) and to exercise the powers of the Company to repurchase its own Shares in accordance with the Rules Governing the Listing of Securities on GEM of the Stock Exchange (the “ GEM Listing Rules ”). Unless otherwise renewed, the existing mandates to issue Shares and to repurchase Shares will lapse at the conclusion of the forthcoming annual general meeting of the Company to be held on 18th July, 2003 (the “forthcoming Annual General Meeting” ).

In order to ensure flexibility when it is desirable to allot additional Shares or to repurchase Shares, the Directors will seek the approval of the Shareholders to grant new general mandates to issue Shares and to repurchase Shares at the forthcoming Annual General Meeting.

* For identification purpose only

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LETTER FROM THE BOARD OF DIRECTORS

The purpose of this circular is to provide you with information relating to the ordinary resolutions nos. 4, 5 and 6 (the “Ordinary Resolution nos. 4, 5 and 6” ) to be proposed at the forthcoming Annual General Meeting, namely, (i) to grant to the Directors a general mandate to issue new shares up to a maximum of 20% of the aggregate nominal amount of the issued share capital of the Company as at the date of passing of the Ordinary Resolution no. 4; (ii) to grant to the Directors a general mandate to exercise the powers of the Company to repurchase the Company’s fully paid up shares representing up to a maximum of 10% of the aggregate nominal amount of the issued share capital of the Company as at the date of passing of the Ordinary Resolution no. 5 and (iii) to increase the aggregate nominal amount of share capital of the Company which the Directors may issue under the general mandate if given in the Ordinary Resolution no. 4 by the aggregate nominal amount of share capital of the Company repurchased under the general mandate if given in the Ordinary Resolution no. 5 as at the date of passing of the Ordinary Resolution no. 6.

The GEM Listing Rules contain provisions to regulate the repurchase by companies with primary listings on GEM of their own securities on GEM (the “Securities Buyback Rules” ).

In accordance with the GEM Listing Rules, this circular also serves as the explanatory statement to provide you with the requisite information reasonably necessary to enable you to make an informed decision on whether to vote for or against the Ordinary Resolution nos. 4, 5 and 6 to be proposed at the forthcoming Annual General Meeting.

2. GENERAL MANDATE TO ISSUE SHARES

The Company has in issue an aggregate of 300,000,000 shares of HK$0.05 each (the “ Shares ”) as at 18th June, 2003, being the latest practicable date prior to the printing of this circular (the “ Latest Practicable Date ”).

Subject to the passing of the Ordinary Resolution no. 4 and in accordance with the terms therein, the Company would be allowed to issue and allot additional Shares up to the aggregate nominal amount of a maximum of 60,000,000 Shares, representing 20% of the Shares in issue, on the basis that no further Shares will be issued or repurchased prior to the forthcoming Annual General Meeting.

3. ACTION TO BE TAKEN

Details of the proposed Ordinary Resolution nos. 4, 5 and 6 are contained in the notice (the “Notice” ) convening the forthcoming Annual General Meeting. The Notice and a form of proxy for use at the forthcoming Annual General Meeting are enclosed with the annual report of the Company for the year ended 31st March, 2003. To be valid, the form of proxy must be completed in accordance with the instructions printed thereon and deposited, together with the power of attorney or other authority (if any) under which it is signed or a notarially certified copy of that power of attorney or authority, at the Company’s branch share registrar in Hong Kong, Tengis Limited, at Ground Floor, Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for holding the forthcoming Annual General Meeting or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the forthcoming Annual General Meeting.

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LETTER FROM THE BOARD OF DIRECTORS

4. RECOMMENDATION

The Directors believe that the granting of general mandates to issue Shares and to repurchase Shares are in the best interests of the Company and the Shareholders as a whole. Accordingly, the Directors recommend that all Shareholders should vote in favour of the Ordinary Resolution nos. 4, 5 and 6 to be proposed at the forthcoming Annual General Meeting.

5. FURTHER INFORMATION

Your attention is drawn to the appendix to this circular containing an explanatory statement as required pursuant to Rule 13.08 of the GEM Listing Rules.

Yours faithfully,

By Order of the Board IA International Holdings Limited Chiu Ting San Chairman

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EXPLANATORY STATEMENT

APPENDIX

This appendix serves as an explanatory statement, as required pursuant to Rule 13.08 of the GEM Listing Rules, to provide requisite information to you for your consideration of the proposal to permit the repurchase of Shares up to a maximum of 10% of the aggregate nominal amount of the issued share capital of the Company as at the date of passing of the Repurchase Resolution (as defined below).

GENERAL MANDATE TO REPURCHASE SHARES (the “Repurchase Mandate”)

The Repurchase Mandate

The resolution set out in Ordinary Resolution no. 5 of the Notice (the “Repurchase Resolution”) which will be proposed at the forthcoming Annual General Meeting relates to the granting of a general and unconditional mandate to the Directors to repurchase Shares on GEM up to a maximum of 10% of the aggregate nominal amount of the issued share capital of the Company as at the date of passing of the Repurchase Resolution.

The Repurchase Mandate would continue to be in force until the conclusion of the next annual general meeting of the Company or the expiration of the period within which the next annual general meeting of the Company is required by the bye-laws of the Company or any applicable laws of Bermuda to be held or the Repurchase Mandate is revoked or varied by an ordinary resolution passed in a general meeting by the Shareholders, whichever is the earliest.

Reasons for Share Repurchase

Although the Directors have no present intention of repurchasing any Shares, they believe that the flexibility afforded by the Repurchase Mandate would be beneficial to the Company and the Shareholders. Such repurchases may, depending on market conditions and funding arrangements at the relevant time, lead to an enhancement of the net asset value of the Company and/or earnings per Share.

Share Capital

As at the Latest Practicable Date, the Company has in issue an aggregate of 300,000,000 Shares which are fully paid.

Subject to the passing of the Repurchase Resolution and in accordance with the terms therein, the Company would be allowed to repurchase Shares up to the aggregate nominal amount of a maximum of 30,000,000 Shares, representing 10% of the Shares in issue, on the basis that no further Shares will be issued or repurchased prior to the forthcoming Annual General Meeting.

Funding of Repurchases

In repurchasing Shares, the Company may only apply funds legally available for such purpose in accordance with the memorandum of association and bye-laws of the Company and the applicable laws and regulations of Bermuda.

The Company may not purchase Shares on GEM for a consideration other than cash or for settlement otherwise than in accordance with the trading rules of the Stock Exchange from time to time.

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EXPLANATORY STATEMENT

APPENDIX

General

There might be a material adverse impact on the working capital or gearing position of the Company (as compared with the position disclosed in the audited accounts for the year ended 31st March, 2003) in the event that the proposed purchases pursuant to the Repurchase Mandate was to be carried out in full at any time during the proposed repurchase 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 of the Company or the gearing levels which in the opinion of the Directors are from time to time appropriate for the Company. The number of Shares to be repurchased on any occasion and the price and other terms upon which the same are repurchased will be decided by the Directors at the relevant time having regard to the circumstances then pertaining.

Share Prices

The highest and lowest prices at which Shares have been traded on GEM during each of the previous twelve months are as follows:

Shares Repurchases made by the Company

The Company has not purchased any of the Shares (whether on GEM or otherwise) in the previous six months.

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EXPLANATORY STATEMENT

APPENDIX

Directors’ Undertaking

The Directors have undertaken to the Stock Exchange to exercise the power of the Company to make repurchases under the Repurchase Mandate in accordance with the GEM Listing Rules and the laws of Bermuda and in accordance with the regulations set out in the memorandum of association and byelaws of the Company.

Effect of Hong Kong Code on Takeovers and Mergers

If, on the exercise of the power to repurchase Shares pursuant to the Repurchase Mandate, a Shareholder’s proportionate interest in 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 (the “Code” ). Accordingly, a Shareholder, or a group of Shareholders acting in concert, could obtain or consolidate control of the Company and become obliged to make a mandatory offer in accordance with Rule 26 of the Code.

As at the Latest Practicable Date and to the best of knowledge and belief of the Directors, the following person was interested in 10% or more of the issued share capital of the Company:

Note:

The issued share capital of IA Holdings is beneficially owned as follows:

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EXPLANATORY STATEMENT

APPENDIX

In the event that the Directors shall exercise in full the Repurchase Mandate, the total interests of IA Holdings would be increased to approximately the percentage shown in the last column above and such increase will not give rise to an obligation to make a mandatory offer under Rule 26 of the Code.

Assuming that there is no issue of Shares between the Latest Practicable Date and the date of a repurchase, an exercise of the Repurchase Mandate whether in whole or in part will result in less than the relevant prescribed minimum percentage of the Shares being held by the public as required by the Stock Exchange. The Directors have no intention to exercise the Repurchase Mandate to an extent as may result in a public shareholding of less than such prescribed minimum percentage.

Directors' Dealings

None of the Directors nor, to the best of their knowledge and having made all reasonable enquiries, any of their associates presently intends to sell any Shares to the Company under the Repurchase Mandate in the event that the Repurchase Resolution is passed by the Shareholders at the forthcoming Annual General Meeting.

Connected Persons

The Company has not been notified by any connected persons of the Company that they have a present intention to sell any Shares to the Company, nor have they undertaken not to sell any Shares held by them to the Company in the event that the Repurchase Resolution is passed by the Shareholders at the forthcoming Annual General Meeting.

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