Apollo Future Mobility Group Limited — Proxy Solicitation & Information Statement 2005

Jan 31, 2005

IMPORTANT

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 Ming Fung Jewellery Group Limited, you should at once hand this circular and the accompanying form of proxy to the purchaser or the transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this circular, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

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MING FUNG JEWELLERY GROUP LIMITED 明豐珠寶集團有限公司 *

(incorporated in the Cayman Islands with limited liability)

(Stock Code: 860)

PROPOSALS FOR GRANTING OF GENERAL MANDATES TO ISSUE NEW SHARES AND TO REPURCHASE SHARES AND AMENDMENTS TO ARTICLES OF ASSOCIATION AND

REFRESHMENT OF THE 10% GENERAL LIMIT ON THE GRANT OF OPTIONS UNDER THE SHARE OPTION SCHEME

AND

INFORMATION ON THE RETIRING DIRECTORS TO BE RE-ELECTED AT THE 2005 AGM

A letter from the Board of the Company is set out on page 1 to 10 of this circular. A notice convening the 2005 AGM of the Company to be held at 9:00 a.m. on Thursday, 3 March 2005 at Business Centre Meeting Room, PM/F, The Empire Hotel Hong Kong, 33 Hennessy Road, Wanchai, Hong Kong is enclosed in the annual report of the Company for the year ended 30 September 2004 accompanying this circular.

A form of proxy for the 2005 AGM is enclosed with this circular. Whether or not you desire to attend the 2005 AGM, you are requested to complete the form of proxy and return the same to 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 in accordance with the instructions printed thereon not less than 48 hours before the time appointed for the 2005 AGM or any adjournment thereof. Completion and delivery of the form of proxy will not preclude you from subsequently attending and voting at the 2005 AGM or any adjournment thereof if you so wish.

28 January 2005

• For identification purpose only

CONTENTS

	Page
RESPONSIBILITY STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	ii
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	iii
LETTER FROM THE BOARD
1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
2. The Issue Mandate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2
3. The Repurchase Mandate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2
4. Amendments to Articles of Association . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
5. Refreshment of the 10% General Limit on the Grant of Options
under the Share Option Scheme . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
6. Information of the Retiring Directors to be Re-elected at the 2005 AGM . . . . . . . . .	7
7. Procedures for Demanding a Poll . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
8. Action to be Taken . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
9. Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
10. Document Available for Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
APPENDIX – EXPLANATORY STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11

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RESPONSIBILITY STATEMENT

This circular includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Group. The Directors collectively and individually accept full responsibility for the accuracy of the information contained in this circular and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts the omission of which would make any statement herein misleading.

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DEFINITIONS

In this circular, unless the context otherwise requires, the following expressions have the following meanings:

• “2005 AGM”

the annual general meeting of the Company to be held at 9:00 a.m. on Thursday, 3 March 2005 at Business Centre Meeting Room, PM/F, The Empire Hotel Hong Kong, 33 Hennessy Road, Wanchai, Hong Kong and the notice of which is set out in the annual report for the year ended 30 September 2004

• “Articles of Association” the articles of association of the Company for the time being in force

• “associate(s)” has the same meaning as defined in the Listing Rules

• “Board” or “Directors” the board of directors of the Company

• “Company”

Ming Fung Jewellery Group Limited, a company incorporated in the Cayman Islands with limited liability and the Shares of which are listed on the Stock Exchange

• “Companies Law” the Companies Law, Cap. 22 (Law 3 of 1961, as consolidated and revised) of the Cayman Islands

• “Connected person” has the same meaning as defined in the Listing Rules

• “Group” the Company and its subsidiaries

• “Hong Kong” the Hong Kong Special Administration Region of the People’s Republic of China

• “HK$”

Hong Kong dollars, the lawful currency of Hong Kong

• “Invested Entity”

• any entity in which any member of the Group holds any equity interest

• “Issue Mandate”

• the general and unconditional mandate proposed to be granted to Directors to allot, issue and deal with new Shares not exceeding 20% of the aggregate nominal amount of the issued share capital of the Company as at the date of passing of the relevant resolution, as set out in the notice of the 2005 AGM, which is extended by the addition of the number of Shares purchased under the Repurchase Mandate

• “Latest Practicable Date”

• 24 January 2005, being the latest practicable date before the printing of this circular for ascertaining certain information for the purpose of inclusion in this circular

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DEFINITIONS

“Listing Rules” The Rules Governing the Listing of Securities on the Stock Exchange “Repurchase Mandate” the general and unconditional mandate proposed to be granted to Directors to exercise the power of the Company to repurchase fully paid Shares not exceeding 10% of the aggregate nominal amount of the issued share capital of the Company as at the date of passing of the relevant resolution, as set out in the notice of the 2005 AGM

• “Share(s)” share(s) of nominal value of HK$0.01 each in the capital of the Company

• “Shareholder(s)” holder(s) for the time being of the Share(s)

• “Share Option Scheme” the existing share option scheme of the Company adopted on or “Scheme” 12 August 2002

• “Stock Exchange” The Stock Exchange of Hong Kong Limited “Takeovers Code” Hong Kong Code on Takeovers and Mergers “%” per cent.

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LETTER FROM THE BOARD

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MING FUNG JEWELLERY GROUP LIMITED 明豐珠寶集團有限公司 *

(incorporated in the Cayman Islands with limited liability)

(Stock Code: 860)

Executive Directors: Wong Chi Ming, Jeffry (Chairman) Lui Ching Han, Magda Chung Yuk Lun Yu Fei Philip

Independent non-executive Directors: Lee Pak Chung Chen Nien Chong Chan Man Kiu

Registered office: Century Yard Cricket Square Hutchins Drive P.O. Box 2681GT George Town Grand Cayman Cayman Islands British West Indies

Principal office in Hong Kong: Room 1825, 18th Floor Hutchison House 10 Harcourt Road Central, Hong Kong 28 January 2005

To the Shareholders

Dear Sir or Madam,

PROPOSALS FOR

GRANTING OF GENERAL MANDATES TO ISSUE NEW SHARES AND TO REPURCHASE SHARES AND AMENDMENTS TO ARTICLES OF ASSOCIATION AND REFRESHMENT OF THE 10% GENERAL LIMIT ON THE GRANT OF OPTIONS UNDER THE SHARE OPTION SCHEME AND INFORMATION ON THE RETIRING DIRECTORS TO BE RE-ELECTED AT THE 2005 AGM

1. INTRODUCTION

The Directors will propose various resolutions at the 2005 AGM on the issues regarding i) proposed granting of the Issue Mandate and the Repurchase Mandate; ii) proposed amendments to the Company’s Articles of Association; iii) proposed refreshment of the 10% general limit on the

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LETTER FROM THE BOARD

grant of options under the Share Option Scheme and iv) proposed re-election of the retiring directors. The purpose of this circular is mainly to provide you with the necessary information on these issues for consideration on the related resolutions to be proposed at the 2005 AGM.

2. THE ISSUE MANDATE

The Company’s existing mandate to allot and issue Shares was approved by its Shareholders at the annual general meeting held on 8 March 2004. Unless otherwise renewed, the existing mandate to allot and issue Shares will lapse at the conclusion of the 2005 AGM.

In order to ensure flexibility when it is desirable to allot and issue or otherwise deal with additional shares, the Directors will seek the approval of Shareholders to grant the Issue Mandate at the 2005 AGM and will put forward the following resolutions as set out in the notice of 2005 AGM for the following purposes:

Ordinary resolution no. 5 – to grant a general mandate to the Directors to exercise the power of the Company to allot, issue and otherwise deal with new Shares up to a maximum of 20% of the aggregate nominal amount of the share capital of the Company in issue as at the date of passing of this resolution; and

Ordinary resolution no. 7 – to increase the aggregate nominal amount of share capital of the Company which the Directors may issue under the Issue Mandate as extended by adding thereto the aggregate nominal amount of share capital of the Company repurchased under the Repurchase Mandate.

The Directors have no immediate plans to allot and issue any new Shares other than Shares which may fall to be issued under the share option scheme(s) of the Company or pursuant to any scrip dividend scheme or under similar arrangement which may be approved by the Shareholders of the Company from time to time.

The Company has in issue an aggregate of 650,000,000 Shares of HK$0.01 each as at the Latest Practicable Date. Subject to the granting of the Issue Mandate and the terms therein, the Company would be allowed to issue new Shares up to the aggregate nominal amount of a maximum of 130,000,000 Shares on the basis that no further Shares will be issued or repurchased before and up to the date of 2005 AGM.

3. THE REPURCHASE MANDATE

The Company’s existing mandate to repurchase Shares was also approved at its annual general meeting held on 8 March 2004 and, unless otherwise renewed, such mandate will lapse at the conclusion of the 2005 AGM.

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LETTER FROM THE BOARD

In order to seek the approval of Shareholders to grant the Repurchase Mandate at the 2005 AGM, the Directors will put forward the following resolution as set out in the notice of 2005 AGM:

Ordinary resolution no. 6 – to grant a general mandate to the Directors to exercise the power of the Company to repurchase the fully paid Shares on the Stock Exchange representing up to a maximum of 10% of the aggregate nominal amount of the share capital of the Company in issue as at the date of passing of this resolution.

The Listing Rules contain provisions to regulate the repurchase by companies with primary listings on the Stock Exchange of their own securities on the Stock Exchange. The Company is required to give to its Shareholders all information which is reasonably necessary to enable them to make an informed decision as to whether to vote for or against the resolution to renew the grant of the Repurchase Mandate. In this regard, this circular contains an explanatory statement required by the Listing Rules as set out in the Appendix.

4. AMENDMENTS TO ARTICLES OF ASSOCIATION

With reference to the amendments made by the Stock Exchange to the Appendix 3 to the Listing Rules with effect from 31 March 2004, the Company is required to amend its Articles of Association to conform with these new requirements on its constitutive documents at the 2005 AGM, being the annual general meeting to be held next after the taking effect of such amendments. The Directors would seek Shareholders’ approval on the various necessary and corresponding amendments to the Articles of Association as proposed in the special resolution no. 8 set out in the notice of 2005 AGM.

For your further information, we set out below the background for each of the proposed amendments to the Articles of Association:

• (a) Article 1(A) (i) To adopt a definition of “associate(s)” with reference to the Listing Rules or other applicable rules.

• (ii) To delete the reference to the Securities and Futures (Clearing House) Ordinance which was repealed upon the commencement of the Securities and Futures Ordinance (“SFO”) with effect from 1 April 2003. Any recognized clearing house under the repealed ordinance shall be deemed to have been recognized as a clearing house under SFO.

• (iii) To adopt a definition of “Designated Stock Exchange” for application of the Articles of Association with reference to the rules of the relevant stock exchange(s).

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LETTER FROM THE BOARD

• (b) Article 72 and 73

• To reflect the need for Shareholders’ voting by poll, instead of by show of hands, if so required by the Listing Rules or other applicable regulations.

• (c) Article 83

• To reflect the restriction on voting by Shareholders as imposed by the new requirements in Appendix 3 to the Listing Rules.

• (d) Article 107(H), (I), (J) and (K)

• To be consistent with the new requirements in Appendix 3 to the Listing Rules which require the interests held by a Director’s associate(s) to be taken into account when considering the interests of that Director. Accordingly, subject to certain exceptions, a Director is not allowed to vote on any resolution of the board of directors approving any contract or arrangement or any other proposal in which he or any his associate has a material interest nor shall he be counted in the quorum present at the meeting.

• (e) Article 107(M)

• To make reference to the rules of the Designated Stock Exchange or any other applicable laws, rules or regulations for application of this Article.

• (f) Article 113

To be consistent with the new requirements in Appendix 3 to the Listing Rules which stipulates a minimum period for allowing a Shareholder to propose a person (other than a Director) for election as a Director by serving the requisite notices. Unless otherwise determined by the Directors and notified by the Company to the Shareholders, the minimum period fixed for this purpose is seven days commencing on the day after the dispatch of the notice of the meeting appointed for such election of Director(s) and ending on the date falling seven days prior to the date of the general meeting.

If the Directors should so determine and notify the Shareholders of a different period for lodgment of the said notice, such period shall in any event be a period of not less than seven days and should commence no earlier than the day after the dispatch of the notice of the meeting appointed for such election (or on such date earlier than aforesaid if so determined by the Directors) and end no later than seven days prior to the date of such meeting.

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LETTER FROM THE BOARD

5. REFRESHMENT OF THE 10% GENERAL LIMIT ON THE GRANT OF OPTIONS UNDER THE SHARE OPTION SCHEME

The Company conditionally adopted the Share Option Scheme pursuant to the written resolutions passed by the then Shareholders on 12 August 2002. As at the date of adoption of the Scheme, the total number of Shares which may be issued upon the exercise of all options granted under the rules of the Scheme was limited to 10% (i.e. 65,000,000 Shares) of the then issued share capital of the Company upon the commencement of dealings in its Shares on the Stock Exchange.

Options carrying rights to subscribe for these 65,000,000 Shares were fully granted to employees (excluding directors) and suppliers/consultant of the Group in accordance with the rules of the Scheme on 29 April 2003. Subsequently on 27 June 2003, the Shareholders passed an ordinary resolution to refresh the 10% general limit on the grant of options under the Scheme up to a maximum of 65,000,000 Shares based on the then total 650,000,000 issued Shares as at the date of approval of the “refreshed” limit.

At present, the Company has no other share option scheme apart from the Scheme. As at the Latest Practicable Date, options in respect of all the 65,000,000 Shares available under the existing 10% “refreshed” general limit were fully granted to employees (excluding directors) and suppliers, adviser and consultants of the Group on 3 March 2004.

Since adoption of the Scheme, options in respect of a total of 130,000,000 Shares were granted under the Scheme and the breakdown of category of grantees of such options is as follows:

• (i) options in respect of 55,000,000 Shares were granted to suppliers, adviser and consultants of the Group with the objective to fostering and securing better relationship with them and obtaining their continued support to the Group and its business and to providing continued business and marketing support to the Group; and

• (ii) options in respect of 75,000,000 Shares were granted to eligible employees of the Group whom are considered by the Directors to have good potential to continue their contribution in the expansion of the Group’s business.

All the aforesaid grantees of the options fell within the category of eligible participants under the Scheme.

Up to the Latest Practicable Date, none of options granted in respect of the aforesaid 130,000,000 Shares (representing 20% of the Shares of the Company now in issue) have been exercised nor lapsed or cancelled and all of them remained outstanding. Unless the existing 10% general limit is “refreshed” again, no further Shares may be issued pursuant to the grant of further options under the Scheme.

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LETTER FROM THE BOARD

In this regard, we refer to the following rules of the Scheme:

• (1) the Company may seek Shareholders’ approval to refresh the 10% general limit on the grant of options under the Scheme as and when required. For this purpose, the total number of Shares which may be issued upon the exercise of all options granted under the Scheme and any other share option schemes of the Company under the limit as “refreshed” must not exceed 10% of the Shares of the Company in issue as at the date of approval of the limit as refreshed.

Options previously granted under the Scheme and any other share option schemes of the Company including those outstanding, cancelled, lapsed or exercised in accordance with such schemes will not be counted for the purpose of calculating the limit as “refreshed”; and

• (2) the maximum number of Shares which may be issued upon exercise of all outstanding options granted and yet to be exercised under the Scheme and any other share option schemes of the Company must not in aggregate exceed 30% of the Shares of the Company in issue from time to time.

If the 10% general limit is “refreshed” on the basis of 650,000,000 Shares in issue as at the Latest Practicable Date and assuming that no Shares are issued or repurchased by the Company prior to the 2005 AGM, the general limit will be re-set to 65,000,000 Shares and the Company will be allowed to grant further options under the Scheme and any other share option schemes carrying rights to subscribe for a maximum of 65,000,000 Shares.

In this regard, taking into account the maximum of 195,000,000 Shares which may be issued upon the exercise of all options (granted and to be granted) under all the 10% general limit as approved and “refreshed” since adoption of the Scheme and the to be refreshed 10% general limit on the Scheme, if approved by the Shareholders, the Company has not exceeded 30% limit of the existing total 650,000,000 Shares of the Company in issue.

The purpose of the Scheme is to provide incentives or rewards to the eligible participants as prescribed in the rules of the Scheme including employees, directors, suppliers, advisors, consultants or shareholders of the Group or any Invested Entity. In order to continue with this purpose, the 10% general limit on the grant of options under the Scheme needs to be refreshed in accordance with the rules of the Scheme. For these reasons, the Directors will propose the ordinary resolution no. 9 for refreshing the 10% general limit of the Scheme at the 2005 AGM.

The refreshment of the 10% general limit on the grant of options under the Scheme will be proposed at the 2005 AGM and is conditional upon:

• (a) the passing of the relevant ordinary resolution by Shareholders; and

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LETTER FROM THE BOARD

• (b) the granting of approval by the Stock Exchange of the listing of, and permission to deal in any Shares, representing a maximum of 10% of the issued share capital of the Company as at the date of passing of the relevant resolution, which may be issued upon the exercise of the options to be granted under such 10% refreshed general limit of the Scheme.

Application will be made to the Stock Exchange for the granting of the aforesaid approval.

6. INFORMATION OF THE RETIRING DIRECTORS TO BE RE-ELECTED AT THE 2005 AGM

For your further information, we set out below the relevant details of the retiring directors proposed to be re-elected at the 2005 AGM:

Mr. Lee Pak Chung (“Mr. Lee”), aged 40, was appointed as an independent non-executive director in August 2002. Mr. Lee does not hold other position in the Group. He is a certified public accountant in Hong Kong practising under his name Lee Pak Chung, certified public accountant and has over 16 years of experience in accounting, auditing and corporate finance. He holds a bachelor of science degree in computer studies and a master of business administration degree in finance.

Mr. Lee has been appointed an independent non-executive director of Global Green Tech Group Limited, a publicly listed company in Hong Kong since September 2004. Other than this and the directorship in the Company, he did not hold directorship in other listed public companies in the last three years. Mr. Lee does not have any relationships with any directors, senior management, substantial or controlling Shareholder of the Company for the purpose of the Listing Rules. As at the Latest Practicable Date, Mr. Lee does not have any interests in shares of the Company within the meaning of Part XV of the Securities and Futures Ordinance.

There is no fixed term of appointment of Mr. Lee who is subject to retirement and re-election provisions in accordance with the Articles of Association. Mr. Lee’s annual remuneration is HK$60,000 which is based on mutual agreement between the Board and Mr. Lee with reference to the pertaining industry practice and Mr. Lee’s responsibilities and duties in the Company.

Mr. Chan Man Kiu (“Mr. Chan”), aged 43, was appointed as an independent non-executive director in March 2004. Mr. Chan does not hold other position in the Group. He is a fellow member of the Association of Chartered Certified Accountants and a member of the Hong Kong Institute of Certified Public Accountants. Mr. Chan possesses 17 years of experience in financial services sector, excelling in development and management of internal operations, business integration and financial controls.

Mr. Chan did not hold directorship in other listed public companies in the last three years other than the directorship in the Company. Mr. Chan does not have any relationships with any directors, senior management, substantial or controlling Shareholder of the Company for the purpose of the Listing Rules. As at the Latest Practicable Date, Mr. Chan does not have any interests in shares of the Company within the meaning of Part XV of the Securities and Futures Ordinance.

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LETTER FROM THE BOARD

There is no fixed term of appointment of Mr. Chan who is subject to retirement and re-election provisions in accordance with the Articles of Association. Mr. Chan’s annual remuneration is HK$100,000 which is based on mutual agreement between the Board and Mr. Chan with reference to the pertaining industry practice and Mr. Chan’s responsibilities and duties in the Company.

Mr. Yu Fei Philip (“Mr. Yu”), aged 47, was appointed as executive director of the Company in April 2004 for a term of two years. Mr. YU does not hold other position in the Group. Mr. Yu is responsible for the sales and marketing of the Group’s products. Mr. Yu obtained a Bachelor of Science degree from California State University, Los Angeles and has over 20 years of experience in trading businesses.

Mr. Yu did not hold directorship in other listed public companies in the last three years other than the directorship in the Company. Mr. Yu does not have any relationships with any directors, senior management, substantial or controlling Shareholder of the Company for the purpose of the Listing Rules. As at the Latest Practicable Date, Mr. Yu does not have any interests in shares of the Company with the meaning of Part XV of the Securities and Futures Ordinance.

According to the terms of appointment of Mr. Yu, his annual remuneration as executive director is HK$300,000, which is based on mutual agreement between the Board and Mr. Yu with reference to the pertaining industry practice and Mr. Yu’s responsibilities and duties in the Company.

The Board is not aware of any other matters that need to be brought to the attention of Shareholders in relation to the proposed re-election of the aforesaid retiring directors.

7. PROCEDURES FOR DEMANDING A POLL

For your further information as required by the Listing Rules, set forth below are the procedures for demanding a poll at general meeting of the Company. Pursuant to Article 73 of the Company’s Articles of Association, every resolution put to the vote of a general meeting shall be decided on a show of hands unless (before or on the declaration of the results of the show of hands or on the withdrawal of any other demand for a poll) a poll is duly demanded:

• (a) by the chairman of such meeting; or

• (b) by at least three shareholders present in person (or, in the case of a shareholder, being a corporation, by its duly authorized representative) or by proxy for the time being entitled to vote at the meeting; or

• (c) by any shareholder or shareholders present in person (or, in the case of a shareholder, being a corporation, by its duly authorized representative) or by proxy and representing not less than one-tenth of the total voting rights of all the shareholders having the right to vote at the meeting; or

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LETTER FROM THE BOARD

• (d) by any shareholder or shareholders present in person (or, in the case of a shareholder, being a corporation, by its duly authorized representative) or by proxy and holding shares in the Company conferring a right to vote at the meeting being shares on which an aggregate sum has been paid up equal to not less than one-tenth of the total sum paid up on all shares conferring that right.

A poll which is duly demanded shall be then held in such manner prescribed by the Articles of Association of the Company.

8. ACTION TO BE TAKEN

On pages 10 to 18 of the annual report of the Company in respect of the financial year ended 30 September 2004 is the notice of the 2005 AGM containing the resolutions to be put forward for the aforesaid proposed matters.

Whether or not you intend to attend the 2005 AGM, you are requested to complete and return the accompanying form of proxy in accordance with the instructions printed thereon to the Company’s Hong Kong branch share registrar, 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 later than 48 hours before the time appointed for holding the 2005 AGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from subsequently attending and voting in person at the 2005 AGM or any adjournment thereof if you so wish.

9. RECOMMENDATION

The Directors believe that the granting of the Issue Mandate and the Repurchase Mandate and the extension of the Issue Mandate, the refreshment of the 10% general limit on the grant of options under the Share Option Scheme are in the best interests of the Company and its shareholders as a whole. Moreover, the amendments to the Articles of Association shall be implemented in compliance with the Listing Rules. The necessary information for seeking Shareholders’ approval on the proposed matters is already set out herein for consideration. The Directors recommend that all Shareholders should vote in favour of the related ordinary and special resolutions to be proposed at the 2005 AGM.

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LETTER FROM THE BOARD

10. DOCUMENT AVAILABLE FOR INSPECTION

Copy of the Share Option Scheme is available for inspection at the principal office of the Company at Room 1825, 18th Floor, Hutchison House, 10 Harcourt Road, Central, Hong Kong during normal business hours on any business day up to and including the date of the 2005 AGM.

Yours faithfully, For and on behalf of the board of directors of Ming Fung Jewellery Group Limited Wong Chi Ming, Jeffry Chairman

• For identification purpose only

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EXPLANATORY STATEMENT

APPENDIX

This Appendix serves as an explanatory statement, as required by the Listing Rules, to provide requisite information to you for consideration as to whether to vote for or against the ordinary resolution to be proposed at the 2005 AGM for granting the Repurchase Mandate.

This explanatory statement contains all the information required pursuant to rule 10.06 of the Listing Rules which is set out as follows:

1. SHARE CAPITAL

As at the Latest Practicable Date, the issued share capital of the Company comprised 650,000,000 Shares.

Subject to the granting of the Repurchase Mandate and in accordance with the terms therein, on the basis that no Shares are issued or repurchased by the Company before and up to the date of 2005 AGM, the Company will be allowed under the Repurchase Mandate to repurchase fully paid Shares up to the aggregate nominal amount of a maximum of 65,000,000 Shares.

2. REASONS FOR THE REPURCHASE

The Directors believe that it is in the best interests of the Company and its Shareholders for the Directors to have general authority from its Shareholders to enable the Company to repurchase its Shares on the Stock Exchange as and when required. Such repurchases may, depending on market conditions and funding arrangements at the time, lead to an enhancement of the net asset value per Share and/or earnings per Share and will only be made when the Directors believe that such repurchases of Shares will benefit the Company and its shareholders as a whole.

3. FUNDING OF REPURCHASES

Repurchase must be funded out of funds which are legally available for such purpose in accordance with the memorandum and articles of association of the Company and the Companies Law. The Company may not repurchase its own securities on the Stock Exchange for a consideration other than cash or for settlement otherwise than in accordance with the trading rules of the Stock Exchange. Under the Cayman Islands law, repurchases by the Company may only be made out of profits of the Company or out of the proceeds of a fresh issue of shares made for the purpose, or, if so authorised by its articles of association and subject to the provisions of the Companies Law, out of capital under certain circumstances. Any premium payable on a redemption or purchase over the par value of the shares to be purchased must be provided for out of profits of the Company or out of the Company’s share premium account, or, if so authorised by its articles of association and subject to the provisions of the Companies Law, out of capital under certain circumstances.

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EXPLANATORY STATEMENT

APPENDIX

4. POSSIBLE MATERIAL ADVERSE IMPACT

Taking into account the current working capital position of the Company, the Directors consider that, if the Repurchase Mandate were to be exercised in full, it might have a material adverse effect on the working capital and/or the gearing position of the Company as compared with the position as at 30 September 2004, being the date of its latest audited consolidated financial statements. Therefore, the Directors do not intend to make any repurchases to such an extent as would, in the circumstances, have a material adverse effect on the appropriate working capital requirements or the gearing position of the Company as they would consider from time to time.

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.

5. SHARE PRICES

The highest and lowest prices at which the Shares have been traded on the Stock Exchange during each of the previous twelve months prior to the Latest Practicable Date were as follows:

	Highest	Lowest
	HK$	HK$
January 2004	0.27	0.20
February 2004	0.275	0.218
March 2004	0.33	0.249
April 2004	0.385	0.275
May 2004	0.28	0.23
June 2004	0.29	0.26
July 2004	0.34	0.285
August 2004	0.32	0.28
September 2004	0.36	0.28
October 2004	0.35	0.27
November 2004	0.31	0.28
December 2004	0.315	0.275

6. THE TAKEOVERS CODE AND MINIMUM PUBLIC HOLDING

If a Shareholder’s proportionate interest in the voting rights of the Company increases on the Company exercising its powers to repurchase securities pursuant to the Repurchase Mandate, such increase will be treated as an acquisition for the purposes of Rule 32 of the Takeovers Code. As a result, a Shareholder or group of Shareholders acting in concert could, depending on the level of such increase, obtain or consolidate control of the Company and become obliged to make a mandatory offer in accordance with Rule 26 and 32 of the Takeovers Code.

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EXPLANATORY STATEMENT

APPENDIX

As at the Latest Practicable Date, so far is known to the Directors and according to the register of interests and short positions of substantial shareholders maintained by the Company pursuant to section 336 of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong), Equity Base Holdings Limited, a company incorporated in the British Virgin Islands and 100% owned by Mr. Wong Chi Ming Jeffry, an executive director, was interested in 416,000,000 Shares, representing 64% of the entire issued capital of the Company.

Assuming that Equity Base Holdings Limited (being the controlling shareholder of the Company as at the Latest Practicable Date) does not dispose of its Shares, and if the Repurchase Mandate were exercised in full, the percentage shareholding of Equity Base Holdings Limited before and after such repurchase based on the issued share capital as at the Latest Practicable Date is 64% and would be increased to approximately 71.11% respectively.

On the basis of the aforesaid increase of shareholding held by Equity Base Holdings Limited set out above, the Directors are not aware of any consequences of such repurchases of Shares that would result in Equity Base Holdings Limited or any other Shareholder, or group of Shareholders acting in concert, becoming obliged to make a mandatory offer under Rule 26 and 32 of the Takeovers Code if the Repurchase Mandate were exercised in full. Moreover, the Directors have no intention to exercise the Repurchase Mandate to such an extent that will result in the number of Shares in the hands of public falling below the prescribed minimum percentage of 25%.

7. SHARE REPURCHASE MADE BY THE COMPANY

Neither the Company nor any of its subsidiaries has purchased any of the Company’s Shares (whether on the Stock Exchange or otherwise) in the six months immediately preceding the Latest Practicable Date.

8. DIRECTORS’ UNDERTAKING

The Directors have undertaken to the Stock Exchange to exercise the powers of the Company to make repurchases under the Repurchase Mandate pursuant to the relevant resolutions of the Company and in accordance with the Listing Rules and the applicable laws of the Cayman Islands and as permitted by the regulations in the memorandum and articles of association of the Company.

9. DIRECTORS’ DEALINGS

None of the Directors or, to the best of their knowledge, having made all reasonable enquiries, any of their associates, have any present intention to sell to the Company or its subsidiaries any of the shares if the Repurchase Mandate is approved at the 2005 AGM and exercised.

10. CONNECTED PERSONS

No connected person of the Company has notified the Company that he or she has a present intention to sell any securities to the Company nor has any such connected person undertaken not to sell any of the securities held by him or her to the Company in the event that the Repurchase Mandate is granted.

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