Founder Holdings Limited — Proxy Solicitation & Information Statement 2004

Jul 30, 2004

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 to be taken, you should consult your stockbroker, other licensed corporation or bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in New Century Group Hong Kong Limited , you should at once hand this circular and the accompanying form of proxy to the purchaser or transferee or to the bank, stockbroker, licensed corporation 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.

==> picture [116 x 57] intentionally omitted <==

NEW CENTURY GROUP HONG KONG LIMITED 新世紀集團香港有限公司[*]

(Incorporated in Bermuda with limited liability)

(Stock Code: 234)

PROPOSALS FOR RE-ELECTION OF DIRECTORS, GENERAL MANDATES TO ISSUE AND REPURCHASE SHARES

AND ADOPTION OF NEW BYE-LAWS OF THE COMPANY

A notice convening the annual general meeting of New Century Group Hong Kong Limited to be held at Plaza I-III, Lower Lobby, Novotel Century Hong Kong, 238 Jaffe Road, Wanchai, Hong Kong on Wednesday, 22 September 2004 at 10:00 a.m. (the “Annual General Meeting”) is set out on pages 4 to 15 of the annual report of the Company for the year ended 31 March 2004 (the “Annual Report”) which is sent to you on the same date as this circular.

A form of proxy for use at the Annual General Meeting is enclosed with the Annual Report. If you do not 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 New Century Group Hong Kong Limited in Hong Kong at Unit 3808, 38th Floor, West Tower, Shun Tak Centre, 168-200 Connaught Road Central, Hong Kong as soon as possible and in any event not less than forty-eight (48) hours before the time appointed for holding the Annual General Meeting. Completion and return of the form of proxy will not preclude you from attending and voting in person at the Annual General Meeting or any adjournment of it, if you so wish.

* For identification only

30 July 2004

CONTENTS

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
Re-election of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
General mandate to issue Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
General mandate to repurchase Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Adoption of new Bye-laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Right to demand poll . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
General information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
Appendix I – Details of Directors proposed to be re-elected
at the Annual General Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
Appendix II – Explanatory Statement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	13

DEFINITIONS

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

“Annual General Meeting”	the annual general meeting of the Company to be held at Plaza I-
	III, Lower Lobby, Novotel Century Hong Kong, 238 Jaffe Road,
	Wanchai, Hong Kong on Wednesday, 22 September 2004 at 10:00
	a.m.
“Board”	the board of Directors of the Company
“Bye-laws”	the bye-laws of the Company from time to time
“Company”	New Century Group Hong Kong Limited, a company incorporated
	in Bermuda with limited liability and the shares of which are
	listed on the Stock Exchange
“Companies Act”	the Companies Act 1981 of Bermuda
“Directors”	the directors of the Company
“Group”	the Company and its subsidiaries
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong
“Hong Kong”	The Hong Kong Special Administrative Region of the People’s
	Republic of China
“Latest Practicable Date”	27 July 2004, being the latest practicable date prior to the printing
	of this circular for ascertaining certain information contained herein
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock
	Exchange
“Repurchase Mandate”	a general mandate proposed to be granted to the Directors to
	exercise the power of the Company to repurchase Shares in the
	manner as set out in the notice of the Annual General Meeting
“SFO”	Securities and Futures Ordinance (Chapter 571 of the Laws of
	Hong Kong)
“Share(s)”	ordinary share(s) of HK$0.01 each in the share capital of the
	Company
“Share Issue Mandate”	a general mandate proposed to be granted to the Directors at the
	Annual General Meeting to exercise the power of the Company to
	allot and issue Shares in the manner as set out in the notice of the
	Annual General Meeting

– 1 –

DEFINITIONS

“Shareholder(s)” the holder(s) of the Shares “Stock Exchange” The Stock Exchange of Hong Kong Limited “Takeovers Code” the Hong Kong Code on Takeovers and Mergers

– 2 –

LETTER FROM THE BOARD

==> picture [116 x 57] intentionally omitted <==

NEW CENTURY GROUP HONG KONG LIMITED 新世紀集團香港有限公司[*]

(Incorporated in Bermuda with limited liability)

Executive Directors: Mr. Wilson Ng (Chairman) Mr. Ng Wee Keat (Chief executive officer) Mr. Lo Ming Chi, Charles Ms. Chen Ka Chee Ms. Lilian Ng Ms. Sio Ion Kuan Ms. Ng Siew Lang, Linda

Independent non-executive Directors: Mr. Wong Kwok Tai Mr. Kwan Kai Kin, Kenneth Mr. Ho Yau Ming

Registered Office: Clarendon House 2 Church Street Hamilton HM 11 Bermuda

Head Office and Principal Place of Business in Hong Kong: Unit 3808, 38th Floor West Tower, Shun Tak Centre 168-200 Connaught Road Central Hong Kong

30 July 2004

To the Shareholders

Dear Sir or Madam,

PROPOSALS FOR RE-ELECTION OF DIRECTORS, GENERAL MANDATES TO ISSUE AND REPURCHASE SHARES AND

ADOPTION OF NEW BYE-LAWS OF THE COMPANY

INTRODUCTION

This purpose of this circular is to provide you with information in respect of the proposed (i) re-election of Directors; (ii) Share Issue Mandate; (iii) Repurchase Mandate; and (iv) adoption of new Bye-laws in compliance with the Listing Rules to enable you to make a decision on whether to vote for or against the relevant resolutions at the forthcoming Annual General Meeting.

* For identification only

– 3 –

LETTER FROM THE BOARD

RE-ELECTION OF DIRECTORS

In accordance with Bye-law 87(2) of the Company’s Bye-laws, Ms. Chen Ka Chee, Ms. Lilian Ng and Mr. Wong Kwok Tai will retire at the Annual General Meeting and, being eligible, offer themselves for re-election.

Details of the above Directors required to be disclosed under Rule 13.51 of the Listing Rules are set out in Appendix I to this circular.

GENERAL MANDATE TO ISSUE SHARES

At the annual general meeting of the Company held on 5 September 2003, a general mandate was granted to the Directors to exercise the powers of the Company to allot, issue and deal with Shares with a total nominal value not exceeding 20% of the total issued share capital of the Company as at the date of passing the relevant ordinary resolution approving such general mandate. Such general mandate will lapse at the conclusion of the forthcoming Annual General Meeting. The Directors propose to seek your approval of the ordinary resolution in relation to the Share Issue Mandate to be proposed at the Annual General Meeting.

In order to provide flexibility to the Directors to issue Shares in the event that it is desirable to do so quickly, approval will be sought at the Annual General Meeting (i) to grant to the Directors a general mandate to allot, issue and deal with Shares not exceeding 20% of the issued share capital of the Company as at the date of passing the ordinary resolution in relation to the Share Issue Mandate; and (ii) for adding to such general mandate so granted to the Directors any Shares representing the aggregate nominal amount of Shares repurchased by the Company after the granting of the general mandate to repurchase up to a maximum of 10% of the issued share capital of the Company as at the date of passing the ordinary resolution in relation to the Repurchase Mandate.

GENERAL MANDATE TO REPURCHASE SHARES

At the annual general meeting of the Company held on 5 September 2003, a general mandate was also given to the Directors to exercise the powers of the Company to repurchase Shares with a total nominal value not exceeding 10% of the total issued share capital of the Company as at the date of passing the relevant ordinary resolution approving such mandate. Such mandate will lapse at the conclusion of the forthcoming Annual General Meeting.

An ordinary resolution will be proposed at the Annual General Meeting to grant the Directors authority to repurchase Shares with a total nominal value not exceeding 10% of the share capital of the Company as at the date of the passing of the relevant resolution approving the Repurchase Mandate.

An explanatory statement as required under the Listing Rules to provide the requisite information concerning the Repurchase Mandate is set out in Appendix II to this circular.

– 4 –

LETTER FROM THE BOARD

ADOPTION OF NEW BYE-LAWS

As a result of recent amendments to the securities laws of Hong Kong, the Listing Rules and companies laws of Bermuda, the Directors propose to amend Bye-laws in order to ensure compliance with all applicable laws. As the amendments will be substantial, it is more cost effective and efficient that a new set of Bye-laws (“New Bye-laws”) be adopted instead of amending the existing set of Byelaws on a piecemeal basis which may lead to confusion and complication in the future.

The main amendments to Bye-laws which will be reflected in New Bye-laws are as follows:

1. As a result of amendments to Appendix 3 of the Listing Rules regarding requirements of Main Board-listed companies’ articles of association/Bye-laws which came into effect on 31 March 2004:

2. (a) where the Company has knowledge that any member is, under the rules of The Stock Exchange of Hong Kong Limited (the “Designated Stock Exchange”), required to abstain from voting on any particular resolution of the Company or restricted to voting only for or only against any particular resolution of the Company, any votes cast by or on behalf of such member in contravention of such requirement or restriction shall not be counted (New Bye-law 76(2));

3. (b) to propose a person for appointment as a director at a meeting of the members of the Company, who is neither a director who is retiring at the meeting nor a person recommended by the directors for election, 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 must be lodged at the head office or at the office where the branch register of members is kept at any time and must be submitted during the period commencing on (and including) the day after despatch of the notice of the general meeting and ending at least seven (7) days before the general meeting (New Bye-law 88);

4. (c) a director shall not vote (nor be counted in the quorum) on any resolution of the Board approving any contract or arrangement or any other proposal in which he or any of his associates is materially interested, but this prohibition shall not apply to any of the following matters namely:

   • (i) any contract or arrangement for the 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;

   • (ii) 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

– 5 –

LETTER FROM THE BOARD

assumed responsibility in whole or in part whether alone or jointly under a guarantee or indemnity or by the giving of security;

• (iii) 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;

• (iv) 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;

• (v) 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 associate(s) 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 any third company through which his interest or that of any of his associates is derived); or

• (vi) any proposal or arrangement concerning the adoption, modification or operation of a share option scheme, a pension fund or retirement, death or disability benefits scheme or other arrangement which relates both to directors, his associates 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 generally to the class of persons to which such scheme or fund relates.

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 any 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 interest of the Director or his associate(s) is/are in reversion or remainder if and so long as some other person is entitled to receive the income thereof, and any shares comprised in an authorised unit trust scheme in which the Director or his associate(s) is/are interested only as a unit holder.

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.

– 6 –

LETTER FROM THE BOARD

If any question shall arise at any meeting of the Board as to the materiality of the interest of a Director (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 (New Bye-law 103).

1. As a result of the amendments to the Listing Rules which came into effect on 15 February 2002 pursuant to which Main Board listed companies are (i) permitted to send or otherwise make available corporate communications to members by electronic means; (ii) allowed to send corporate communications to members either in English language only, or Chinese language only, or both English and Chinese language in accordance with the wishes of their members and subject always to the Listing Rules and all applicable laws:

2. (a) any notice or document (including any “corporate communication” as defined in the Listing Rules) in writing or by cable, telex or facsimile transmission message or other form of electronic transmission or communication which may be served or delivered by the Company on or to any member either personally or by sending it through the post in a prepaid envelope addressed to such member at his registered address as appearing in the register of members of the Company or at any other address supplied by him to the Company for the purpose or, as the case may be, by transmitting it to any such address or transmitting it to any telex or facsimile transmission number or electronic number or address or website supplied by him to the Company for the giving of notice to him or which the person transmitting the notice reasonably and bona fide believes at the relevant time will result in the notice being duly received by the member or may also be served by advertisement in appointed newspapers (as defined in the Companies Act 1981) or in newspapers published daily and circulating generally in the territory of and in accordance with the requirements of the Designated Stock Exchange or, to the extent permitted by the applicable laws, by placing it on the Company’s website or the website of the Designated Stock Exchange, and giving to the member a notice stating that the notice or other document is available there (a “notice of availability”). The notice of availability may be given to the member by any of the means set out herein (New Bye-law 162);

3. (b) delivery by electronic communication shall be deemed to be given if sent by electronic communication, shall be deemed to be given on the day on which it is transmitted from the server of the Company or its agent. A notice placed on the Company’s website or the website of the Designated Stock Exchange, is deemed given by the

– 7 –

LETTER FROM THE BOARD

Company to a member on the day following that on which a notice of availability is deemed served on the member (New Bye-law 163(b)); and

• (c) notices or documents may be given to a member either in English or Chinese (New Bye-law 163(d)).

• As a result of the amendments to the Listing Rules which came into effect on 15 February 2002 and the Companies Act 1981 of Bermuda which came into effect on 14 February 2003 pursuant to which Main Board listed companies are permitted to send and distribute summary financial reports in place of the long form report:

• (a) the Company may now send a summary financial statement derived from the Company’s annual accounts and the directors’ report which shall be in the form and containing the information required by applicable laws and regulations, provided that any person who is otherwise entitled to the annual financial statements of the Company and the directors’ report thereon may, if he so requires by notice in writing served on the Company, demand that the Company sends to him, in addition to a summary financial statement, a complete printed copy of the Company’s annual financial statement and the directors’ report thereon (New Bye-law 154); and

• (b) the requirement to send a printed copy of the Directors’ report, accompanied by the balance sheet and profit and loss account, including every document required by law to be annexed thereto, made up to the end of the applicable financial year and containing a summary of the assets and liabilities of the Company under convenient heads and a statement of income and expenditure, together with a copy of the Auditors’ report as required under Bye-laws (Bye-law 153) or a summary financial report in accordance as detailed in sub-paragraph (a) above (Bye-law 154) shall be deemed satisfied where, in accordance with all applicable laws, rules and regulations, including, without limitation, the rules of the Designated Stock Exchange, the Company publishes copies of the documents referred to in Bye-law 153 and, if applicable, a summary financial report complying with Bye-law 154, on the Company’s computer network or in any other permitted manner (including by sending any form of electronic communication), and that person has agreed or is deemed to have agreed to treat the publication or receipt of such documents in such manner as discharging the Company’s obligation to send to him a copy of such documents (New Bye-laws 153 and 155).

• As a result of the amendments to the SFO which came into effect on 1 April 2003, the Securities and Futures (Clearing House) Ordinance (the “repealed Ordinance”) has been repealed with the coming into effect of the SFO. On commencement of the SFO, a recognized clearing house under the repealed Ordinance, Hong Kong Securities Clearing Company Limited, shall be deemed to have been recognized as a clearing house under the SFO:

• (a) the definition of “clearing house” in Bye-laws is amended to the effect that “clearing house” shall mean a clearing house recognised by the laws of the jurisdiction in which the shares of the Company are listed or quoted on a stock exchange in such jurisdiction (New Bye-law 1);

– 8 –

LETTER FROM THE BOARD

• (b) where a member is a clearing house (or its nominee(s) and, in each case, being a corporation), it may authorise such persons as it thinks fit to act as its representatives at any meeting of the Company or at any meeting of any class of members provided that the authorisation shall specify the number and class of shares in respect of which each such representative is so authorised. Each person so authorised thereunder shall be deemed to have been duly authorised without further evidence of the facts and be entitled to exercise the same rights and powers on behalf of the clearing house (or its nominee(s)) as if such person was the registered holder of the shares of the Company held by the clearing house (or its nominee(s)) in respect of the number and class of shares specified in the relevant authorisation including the right to vote individually on a show of hands (New Bye-law 84(2)); and

• (c) where more than one proxy is appointed by a member which is a clearing house (or its nominee(s)), each such proxy shall have one vote on a show of hands (New Byelaw 66).

• Directors may, at any time before the expiration of their period of office, be removed by an ordinary resolution of the members (New Bye-law 86(4)).

• The Company may apply its share premium in such manner as may be permitted by the Companies Act 1981 of Bermuda without the need for the sanction of a special resolution (New Bye-law 6).

• The remuneration of Directors shall be determined in such manner as resolved by the Company in general meeting (New Bye-law 96).

RIGHT TO DEMAND POLL

Pursuant to Bye-law 66 of Bye-laws, a 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 result of the show of hands or on the withdrawal of any other demand for a poll) a poll is demanded:

• (a) by the Chairman; or

• (b) by at least three Members present in person or by proxy for the time being entitled to vote at the meeting; or

• (c) by a Member or Members present in person or by proxy and representing not less than onetenth of the total voting rights of all Members having the right to vote at the meeting; or

• (d) by a Member or Members present in person 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 demand by a person as proxy for a Member shall be deemed to be the same as a demand by the Member.

– 9 –

LETTER FROM THE BOARD

ANNUAL GENERAL MEETING

The notice of the Annual General Meeting, which contains, inter alia, ordinary resolutions to approve the re-election of Directors, the Share Issue Mandate, the Repurchase Mandate and a special resolution to adopt New Bye-laws, is set out in the 2004 annual report of the Company despatched to the Shareholders on 30 July 2004.

A form of proxy for use at the Annual General Meeting is enclosed with the 2004 annual report of the Company. If you are not able to attend the Annual General Meeting, you are requested to complete the form of proxy and return it in accordance with the instructions printed thereon to the principal place of business of the Company in Hong Kong at Unit 3808, 38th Floor, West Tower, Shun Tak Centre, 168200 Connaught Road Central, Hong Kong as soon as possible but in any event not less than forty-eight (48) hours before the time appointed for holding the Annual General Meeting. Completion and return of the form of proxy will not preclude you from attending and voting in person at the Annual General Meeting or any adjournment of it, if you so wish.

RECOMMENDATION

The Directors consider that the re-election of the Directors, the Share Issue Mandate, the Repurchase Mandate and the proposed adoption of New Bye-laws are in the best interests of the Company and its shareholders. Accordingly, the Directors recommend that the Shareholders to vote in favour of the resolutions to be proposed at the Annual General Meeting.

GENERAL INFORMATION

Your attention is drawn to the additional information as set out in the Appendices to this circular.

Yours faithfully, On behalf of the Board

Wilson Ng Chairman

– 10 –

APPENDIX I DETAILS OF DIRECTORS PROPOSED TO BE RE-ELECTED AT THE ANNUAL GENERAL MEETING

The following are the particulars of the three Directors (as required by the Listing Rules) proposed to be re-elected at the Annual General Meeting.

(1) Ms. Chen Ka Chee

Ms. Chen Ka Chee, aged 39, joined the Company as an executive director in May 2000 and has served the Company for about 4 years. Ms. Chen holds a Bachelor of Commerce degree and is an associate member of the Australian Society of Certified Practising Accountants. Prior to joining the Company, she has 8 years of experience in the accounting field at a senior level.

Ms. Chen is a cousin of Mr. Wilson Ng, the chairman of the Company, Mr. Ng Wee Keat, Chief Executive Officer of the Company, Ms. Lilian Ng and Ms. Ng Siew Lang, Linda, executive directors of the Company. Ms. Chen is also a niece of Mr. Ng (Huang) Cheow Leng, the founder of the discretionary trust which is a substantial shareholder of the Company as referred to in the 2004 annual report of the Company despatched to the shareholders on 30 July 2004.

As at the Latest Practicable Date, Ms. Chen is interested in 37,500,000 Shares, of which 5,000,000 underlying Shares are to be granted on exercise of share options granted to her by the Company. In addition, there is no service contract between the Company and Ms. Chen. As an executive director, Ms. Chen is entitled to receive director’s fee of HK$20,000 per month and to be reviewed by the Board from time to time.

(2) Ms. Lilian Ng

Ms. Lilian Ng, aged 30, joined the Company as an executive director in July 2002 and has served the Company for about 2 years. Ms. Ng graduated from San Francisco State University with a Bachelor’s degree in Business Administration. She has extensive hotel management experience. Prior to joining the Company, Ms. Ng was the Finance and Operations Director of a conglomerate with businesses in tour industry and cruise liner management as well as hotel and property management in Southeast Asia.

Ms. Ng is a younger sister of Mr. Wilson Ng, the chairman of the Company and the elder sister of Mr. Ng Wee Keat, Chief Executive Officer of the Company, and Ms. Ng Siew Lang, Linda, executive director of the Company. Ms. Ng is also a cousin of Ms. Chen Ka Chee, executive director of the Company. She is also a director of New Century Worldwide Capital Limited which is the substantial shareholder (as defined in the Listing Rules) of the Company. She is also a daughter of Mr. Ng (Huang) Cheow Leng, the founder of the discretionary trust which is a substantial shareholder of the Company as referred to in the 2004 annual report of the Company despatched to the shareholders on 30 July 2004.

As at the Latest Practicable Date, Ms. Ng is interested in 492,496,952 Shares, of which 5,000,000 underlying Shares are to be granted on exercise of share options granted to her by the Company and 474,496,952 Shares of which are held by New Century Worldwide Capital Limited, a substantial shareholder (as defined in the Listing Rules) of the Company. New Century Worldwide Capital Limited is ultimately owned by a discretionary trust of which Ms. Ng is a discretionary beneficiary. In addition, there is no service contract between the Company and Ms. Ng. As an executive director, Ms. Ng is entitled to receive a director’s fee of HK$35,000 per month and to be reviewed by the Board from time to time.

– 11 –

DETAILS OF DIRECTORS PROPOSED TO BE RE-ELECTED AT THE ANNUAL GENERAL MEETING

APPENDIX I

(3) Mr. Wong Kwok Tai

Wong Kwok Tai, aged 65, joined the Company as an independent non-executive director in May 1999 and has served the Company for about 5 years. He is also an independent non-executive director of Xin Corporation Limited and CIL Holdings Limited, both are listed on the Stock Exchange. Mr. Wong was previously an independent non-executive director of Dah Hwa International (Holdings) Limited and resigned on 21 April 2004. Mr. Wong is a fellow member of the Australian Society of Certified Practising Accountants and the Hong Kong Society of Accountants and is a Certified Public Accountant. He has more than 39 years of financial experience. Mr. Wong is the company secretary of many listed companies in Hong Kong and is also the principal of W. Wong & Co., C.P.A.

Other than the relationship arising from his being an independent non-executive director, Mr. Wong does not have any relationship with any other Directors, senior management, substantial shareholders or controlling shareholders of the Company.

As at the Latest Practicable Date, Mr. Wong does not have any interest in shares of the Company within the meaning of Part XV of the SFO. In addition, there is no service contract between the Company and Mr. Wong. As an independent non-executive director, Mr. Wong is entitled to receive an annual director’s fee of HK$80,000 which is being reviewed annually by the Board.

– 12 –

EXPLANATORY STATEMENT

APPENDIX II

This appendix serves as an explanatory statement, as required by the Listing Rules, to provide requisite information for shareholders of the Company to consider the Repurchase Mandate.

1. STOCK EXCHANGE RULES FOR REPURCHASES OF SHARES

The Listing Rules permit companies with a primary listing on the Stock Exchange to repurchase their shares on the Stock Exchange subject to certain restrictions.

The Listing Rules provide that all proposed repurchases of shares by a company with a primary listing on the Stock Exchange must be approved by shareholders in advance by an ordinary resolution either by way of a general mandate or by a specific approval of a particular transaction and that the shares to be repurchased must be fully paid up.

2. SHARE CAPITAL

As at the Latest Practicable Date, the issued share capital of the Company comprised 837,029,914 Shares.

Subject to the passing of the relevant ordinary resolutions to approve the general mandates to issue and repurchase Shares and on the basis that no further Shares are issued or repurchased between the Latest Practicable Date and the Annual General Meeting, the Company would be allowed under the Repurchase Mandate to purchase a maximum of 83,702,991 Shares.

3. REASONS FOR REPURCHASES

The Directors believe that the Repurchase Mandate is in the best interest of the Company and its shareholders. Repurchases of Shares made under the Repurchase Mandate may, depending on market conditions and funding arrangements at the time, lead to an enhancement of the value of the Company’s net assets and/or its earnings per share and will only be when the Directors consider that such repurchases will benefit the Company and its shareholders.

4. FUNDING OF REPURCHASES

In repurchasing Shares, the Company may only apply funds legally available for such purpose in accordance with its memorandum of association and Bye-laws and the applicable laws of Bermuda. The Companies Act 1981 of Bermuda 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 out of funds of the Company that would otherwise be available for dividend or distribution or out of the proceeds of a fresh issue of shares made for the purpose. The amount of premium payable on repurchase may 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 account of the Company before the shares are repurchased.

There might be an adverse impact on the working capital or gearing position of the Company (as compared with the position disclosed in the audited financial statements for the year ended 31 March 2003) in the event that the Repurchase Mandate was to be exercised in full. However, the Directors do not propose to exercise the Repurchase Mandate to such extent as would, in the circumstances, have a

– 13 –

EXPLANATORY STATEMENT

APPENDIX II

material adverse affect 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.

5. SHARE PRICES

The highest and lowest prices at which the Shares of the Company were traded on the Stock Exchange during each of the twelve months preceding the Latest Practicable Date were as follows:

		Per Share
Month	Highest		Lowest
	HK$		HK$
2003
July	0.320		0.285
August	0.310		0.285
September	0.305		0.270
October	0.430		0.285
November	0.470		0.415
December	0.590		0.455
2004
January	0.750		0.580
February	0.700		0.490
March	0.660		0.610
April	0.760		0.680
May	0.860		0.710
June	0.880		0.810
July (up to Latest Practicable Date)	0.830		0.640

6. UNDERTAKING

The Directors have undertaken to the Stock Exchange to exercise the power of the Company to make repurchases pursuant to the proposed resolution in accordance with the Listing Rules and all applicable laws of Bermuda and in accordance with the regulations set out in the Memorandum of Association and Bye-laws of the Company.

7. EFFECT OF THE TAKEOVERS CODE

A repurchase of Shares by the Company may result in an increase in the proportionate interests of a substantial shareholder of the Company in the voting rights of the Company, which could give rise to an obligation to make a mandatory offer in accordance with Rule 26 of the Takeovers Code.

As at the Latest Practicable Date, to the best of the knowledge and belief of the Company, New Century Worldwide Capital Limited (“New Century Worldwide”), is interested in 474,496,952 Shares representing approximately 56.69% of the total issued share capital of the Company. New Century Worldwide is ultimately owned by Huang Group (BVI) Limited which is held by Mr. Kan Ka Chong,

– 14 –

EXPLANATORY STATEMENT

APPENDIX II

Frederick, as trustee of a discretionary trust. In the event that the Directors exercise in full the power to repurchase Shares which is proposed to be granted pursuant to the resolution, and assuming there is no change to the share capital of the Company and shareholding of New Century Worldwide between the Latest Practicable Date and the date of such exercise the shareholding of New Century Worldwide in the Company would be increased to approximately 62.99% of the issued share capital of the Company. Such increase would not give rise to an obligation to make a mandatory offer under Rule 26 of the Takeovers Code in relation to New Century Worldwide as it already held more than 50% of the total issued share capital of the Company as at the Latest Practicable Date. The Directors do not have any present intention to repurchase Shares to an extent which will result in the amount of Shares held by the public being reduced to less than 25%.

Any purchase of Shares which results in the number of Shares held by the public being reduced to less than 25% of Shares then in issue could only be implemented with the agreement of the Stock Exchange to waive the requirements of the Listing Rules regarding the public shareholding referred to above. It is believed that a waiver of this provision would not normally be given other than in exceptional circumstances.

8. DIRECTORS, THEIR ASSOCIATES AND CONNECTED PERSONS

None of the Directors nor, to the best of their knowledge and belief having made all reasonable enquiries, their respective associates (as defined in the Listing Rules), have a present intention, in the event that the proposal is approved by the shareholders, to sell Shares to the Company.

No connected person of the Company (as defined in the Listing Rules) has notified the Company that he/she has a present intention to sell Shares to the Company nor has he/she undertaken not to sell any Shares held by him/her to the Company in the event that the Company is authorized to make repurchases of Shares.

9. SHARE REPURCHASE MADE BY THE COMPANY

The Company had not repurchased any Shares (whether on the Stock Exchange or otherwise) in the six months preceding the Latest Practicable Date.

– 15 –