Founder Holdings Limited - Proxy Solicitation & Information Statement 2005

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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.

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 licensed securities dealer, 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 (the “Company”), you should at once hand this circular and the accompanying form of proxy to the purchaser or transferee or to the bank, licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

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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)

NON-EXEMPT CONTINUING CONNECTED TRANSACTIONS IN RELATION TO VESSELS CHARTER FOR CRUISE LINER OPERATIONS

Financial adviser to New Century Group Hong Kong Limited

SOMERLEY LIMITED

Independent financial adviser to the Independent Board Committee and the Independent Shareholders

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A letter from the Independent Board Committee to the Independent Shareholders and a letter from Dao Heng Securities Limited to the Independent Board Committee and the Independent Shareholders in connection with the Transactions and the New Caps (as respectively defined herein) are set out respectively on pages 14 and 15 to 24 of this circular.

A notice convening a special general meeting of the Company to be held at Plaza IV, Lower Lobby, Novotel Century Hong Kong, 238 Jaffe Road, Wanchai, Hong Kong on Thursday, 31st March, 2005 at 10:00 a.m. is set out on pages 31 to 32 of this circular. If you are not able to attend the meeting of the Company, you are requested to complete the enclosed form of proxy in accordance with the instructions printed thereon and return it to the principal place of business of the Company 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 later than forty-eight (48) hours before the time appointed for holding such meeting. Completion and return of the form of proxy will not preclude you from attending and voting at the meeting or any adjournment of it, if you so wish.

* For identification only

14th March, 2005

CONTENT

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Background of non-exempt continuing connected transactions and Existing Waiver . . . . . .	6
The New Charter Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
The New Sub-Charter Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
The Vessels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
Reasons for the New Charter Agreements and compliance with the Listing Rules . . . . . . . .	11
Special General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	13
Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	13
Further information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	13
Letter from the Independent Board Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	14
Letter from Dao Heng Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	15
Appendix – General information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	25
Notice of Special General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	31

– i –

DEFINITIONS

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

“associate(s)” has the same meaning ascribed to it under the Listing Rules “Board” the board of Directors
“BVI” the British Virgin Islands
“Charterparty Novation the charterparty novation deeds dated 15th July, 2004 relating to Deeds” the Vessels entered into between the Previous Owners, the Subsidiary, Queenston and Jackston whereby, among other things, the Vessels would continue to be chartered by Queenston and Jackston to the Subsidiary, details of which were set out in the announcement of the Company dated 1st April, 2004 and the circular of the Company dated 3rd May, 2004. The Charterparty Novation Deeds will be terminated upon all the conditions of New Charter Agreements having been fulfilled and the New Charter Agreements becoming effective on 1st April, 2005
“Company” New Century Group Hong Kong Limited, a company incorporated in Bermuda with limited liability whose issued shares are listed on the Main Board of the Stock Exchange
“connected person(s)” has the same meaning ascribed to it under the Listing Rules
“Dao Heng Securities” Dao Heng Securities Limited, independent financial adviser to the Independent Board Committee and the Independent Shareholders in connection with the Transactions and the New Caps, a corporation deemed licensed under the SFO to conduct type 1 (dealing in securities), 4 (advising on securities), 6 (advising on corporate finance), 7 (providing automated trading services) and 9 (asset management) regulated activities
“Directors” directors of the Company
“Discretionary Trust” the discretionary trust of which Mr. Kan Ka Chong, Frederick is the trustee and Mr. Huang, his family members and unspecified charities are the discretionary beneficiaries
“Evervalue” Evervalue Profits Limited, a company incorporated in the BVI which is an Independent Third Party. Evervalue is the existing sub-charterer of the Vessels pursuant to the Existing Sub-charter Agreements and will remain to be the sub-charterer of the Vessels under the New Sub-charter Agreements
“Existing Waiver” the waiver granted by the Stock Exchange on 22nd November, 2002 and referred to in the section headed “Background of nonexempt continuing connected transactions and Existing Waiver” in the “Letter from the Board” in this circular

– 1 –

DEFINITIONS

“Existing Charter Agreements”
“Existing Sub-charter Agreements”
“Group”
“Hong Kong”
“Huang Group”
“Huang Shipmanagement”
“Independent Board Committee”
“Independent Shareholders”
"Independent Third Party"
“Jackston”
“Latest Practicable Date”

two agreements both dated 17th October, 2002 entered into between (i) Queenston Investment Limited and the Subsidiary for chartering the vessel "Leisure World"; and (ii) Jackston Shipping Limited and the Subsidiary for chartering the vessel "Amusement World", details of which were set out in the announcement of the Company dated 17th October, 2002 and the circular of the Company dated 5th November, 2002

two agreements both dated 17th October, 2002 entered into between the Subsidiary and Evervalue in relation to sub-chartering of the Vessels by Evervalue, details of which were set out in the announcement of the Company dated 17th October, 2002 and the circular of the Company dated 5th November, 2002

the Company and its subsidiaries

the Hong Kong Special Administrative Region of the PRC

Huang Group (BVI) Limited, a company incorporated in the BVI and held by Mr. Kan Ka Chong, Frederick as the trustee of the Discretionary Trust

Huang Shipmanagement Pte Ltd. (formerly known as New Century Shipmanagement Pte Ltd.), a company incorporated in Singapore which is wholly-owned by the parents of Mr. Wilson Ng, Ms. Lilian Ng, Mr. Ng Wee Keat and Ms. Ng Siew Lang, Linda, who are all executive Directors

independent board committee of the Company constituted by the three independent non-executive Directors, comprising Mr. Wong Kwok Tai, Mr. Kwan Kai Kin, Kenneth and Mr. Ho Yau Ming
Shareholders other than New Century Worldwide, Mr. Huang and their respective associates
a company which, to the best of the Directors’ knowledge, information and belief and having made all reasonable enquiry, is a third party independent of the Company and its connected persons
Jackston Maritime Limited, a company incorporated in the BVI which is indirectly owned as to 55% by Huang Group and as to 45% by the Company. Jackston is the owner of the vessel “Amusement World”
9th March, 2005, being the latest practicable date prior to the printing of this circular for the purpose of ascertaining certain information for inclusion in this circular

– 2 –

DEFINITIONS

“Listing Rules”
“Management Agreements”
“Mr. Huang”
“New Caps”
“New Century Worldwide”
“New Charter Agreements”
“New Sub-charter Agreements”
“Previous Owners”
“PRC”
“Queenston”
“SFO”
the Rules Governing the Listing of Securities on the Stock Exchange
two agreements both dated 17th October, 2002 entered into between the Subsidiary and Huang Shipmanagement for the management of the operations of the Vessels which were terminated in January 2005, details of which were set out in the announcement of the Company dated 17th October, 2002 and the circular of the Company dated 5th November, 2002
Mr. Ng (Huang) Cheow Leng, the settlor and one of the discretionary beneficiaries of the Discretionary Trust
the aggregate amount of the maximum charter fees payable by the Subsidiary to Queenston and Jackston under the New Charter Agreements
New Century Worldwide Capital Limited, an indirect whollyowned subsidiary of Huang Group and the controlling Shareholder holding approximately 56.3% interest in the Company as at the Latest Practicable Date
two agreements both dated 8th March, 2005 entered into between (i) Queenston and the Subsidiary for chartering the vessel “Leisure World”; and (ii) Jackston and the Subsidiary for chartering the vessel “Amusement World”
two agreements both dated 8th March, 2005 entered into between the Subsidiary and Evervalue in relation to the sub-chartering of the Vessels by Evervalue
Queenston Investment Limited and Jackston Shipping Limited, companies incorporated in the BVI and indirect wholly-owned subsidiaries of Huang Group, which are the previous owners of the Vessels, details of which were out in the announcement of the Company dated 1st April, 2004 and the circular of the Company dated 3rd May, 2004

the People’s Republic of China

Queenston Maritime Limited, a company incorporated in the BVI which is indirectly owned as to 55% by Huang Group and as to 45% by the Company. Queenston is the owner of the vessel “Leisure World”
Securities and Futures Ordinance (Cap 571 of the Laws of Hong Kong)

– 3 –

DEFINITIONS

“Share(s)” ordinary share(s) of HK$0.01 each in the share capital of the Company “Shareholder(s)” holder(s) of Share(s) “Special General Meeting” the special general meeting of the Company to be held at Plaza IV, Lower Lobby, Novotel Century Hong Kong, 238 Jaffe Road, Wanchai, Hong Kong on Thursday, 31st March, 2005 at 10:00 a.m. for the purpose of considering, and if thought fit, approving the New Charter Agreements (including the Transactions and the New Caps) “Stock Exchange” The Stock Exchange of Hong Kong Limited “Subsidiary” Balance Profits Limited, a company incorporated in the BVI which is wholly-owned by the Company. The Subsidiary is the existing charterer of the Vessels pursuant to the Existing Charter Agreements and will remain to be the charterer of the Vessels under the New Charter Agreements “Transactions” the non-exempt continuing connected transactions regarding the chartering of the Vessels by Queenston and Jackston to the Subsidiary under the New Charter Agreements “Vessels” two cruise liners, namely “Leisure World” owned by Queenston and “Amusement World” owned by Jackston “HK$” Hong Kong dollars “S$” Singapore dollars “US$” United States dollars “%” per cent.

Throughout this circular, amounts in US$ and S$ have been translated, for illustration only, into HK$ at the exchange rates of US$1.0 = HK$7.8 and S$1.0 = HK$4.6, respectively.

– 4 –

LETTER FROM THE BOARD

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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)

Executive Directors: Mr. Wilson Ng (Chairman)

Ms. Sio Ion Kuan (Deputy chairman) Mr. Ng Wee Keat (Chief executive officer) Ms. Ng Siew Lang, Linda (Chief operating officer)

Ms. Lilian Ng Mr. Lo Ming Chi, Charles Ms. Chen Ka Chee Mr. Yu Wai Man

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

14th March, 2005

To the Shareholders and, for information only, the holder of convertible bonds

Dear Sir or Madam,

NON-EXEMPT CONTINUING CONNECTED TRANSACTIONS IN RELATION TO VESSELS CHARTER FOR CRUISE LINER OPERATIONS

INTRODUCTION

On 8th March, 2005, the Directors announced that the New Charter Agreements and the New Subcharter Agreements were entered into on 8th March, 2005 to replace the Existing Charter Agreements and the Existing Sub-charter Agreements respectively. Pursuant to the New Charter Agreements, charter fees will be charged by Queenston and Jackston to the Subsidiary for the chartering of the Vessels. On the other hand, sub-charter fees will be charged by the Subsidiary to Evervalue, an Independent Third Party, under the New Sub-charter Agreements for the sub-chartering of the Vessels.

* For identification only

– 5 –

LETTER FROM THE BOARD

By virtue of Huang Group’s interest in the Company, Queenston and Jackston, the Transactions constitute non-exempt continuing connected transactions to the Company and are subject to the reporting, announcement and Independent Shareholders’ approval requirements under Chapter 14A of the Listing Rules.

The Special General Meeting will be convened by the Company at which an ordinary resolution will be proposed to seek the approval of the Independent Shareholders for the New Charter Agreements (including the Transactions and the New Caps). At such meeting, votes of the Independent Shareholders will be taken on a poll and New Century Worldwide, Mr. Huang and their respective associates will abstain from voting. As at the Latest Practicable Date, New Century Worldwide, Mr. Huang and their respective associates controlled voting right in respect of their Shares.

The Independent Board Committee comprising Mr. Wong Kwok Tai, Mr. Kwan Kai Kin, Kenneth and Mr. Ho Yau Ming has been constituted to advise the Independent Shareholders on the Transactions and the New Caps. Dao Heng Securities has been appointed to advise the Independent Board Committee and the Independent Shareholders in this regard.

The purpose of this circular is to provide you with, among other things, (i) information on the Transactions and the New Caps; (ii) a letter of recommendation from the Independent Board Committee; (iii) a letter of advice from Dao Heng Securities; and (iv) the notice of the Special General Meeting.

BACKGROUND OF NON-EXEMPT CONTINUING CONNECTED TRANSACTIONS AND EXISTING WAIVER

In order to diversify into the Asian cruise line business, the Group entered into the Existing Charter Agreements, the Existing Sub-charter Agreements and the Management Agreements in October 2002. Below are the brief details of these agreements and the Existing Waiver. Further details of these agreements and the Existing Waiver were set out in the announcement of the Company dated 17th October, 2002 and the circular of the Company dated 5th November, 2002.

Existing Charter Agreements

On 17th October, 2002, the Group entered into the Existing Charter Agreements with the Previous Owners to charter the Vessels from the Previous Owners (which were subsequently substituted by Jackston and Queenston pursuant to the Charterparty Novation Deeds, details of which were set out in the announcement of the Company dated 1st April, 2004 and the circular of the Company dated 3rd May, 2004) at a fixed daily charge (subject to review after the expiration of the fifth year) for an indefinite period of time until termination by either party serving on the other party not less than 60 days’ written notice of termination or on the termination of the Existing Sub-charter Agreements.

Existing Sub-charter Agreements

On 17th October, 2002, the Group entered into the Existing Sub-charter Agreements with Evervalue, an Independent Third Party, pursuant to which, Evervalue sub-chartered the Vessels from the Group at relevant daily charges (subject to review after the expiration of the fifth year) for an indefinite period of time until termination by either party serving on the other party not less than 60 days’ written notice of termination or on the termination of the Existing Charter Agreements.

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LETTER FROM THE BOARD

Management Agreements

On 17th October, 2002, the Group entered into the Management Agreements with Huang Shipmanagement to appoint Huang Shipmanagement as the manager of the Vessels providing operational services including crewing, technical management, management services, procurement services and accounting for relevant daily charges (subject to review after the expiration of the fifth year). The Management Agreements shall continue until termination by either party serving on the other party written notice of termination. In November 2004, Huang Shipmanagement served a written notice to the Group to terminate the Management Agreements with effect from January 2005. Accordingly, the Group entered into two new management agreements with an Independent Third Party in December 2004 to appoint such Independent Third Party to be the new manager of the Vessels to provide the above operational services for the Vessels. The new management agreements have similar terms to the Management Agreements.

Existing Waiver

On 22nd November, 2002, the Company was granted a waiver from strict compliance with the then Listing Rules in respect of the disclosure and approval requirements relating to the Existing Charter Agreements and the Management Agreements for a period of three years ending on 31st March, 2005 provided that, among other things, the aggregate values of the charter fee and management charge do not exceed the amounts in accordance with the terms prescribed in the Existing Charter Agreements and the Management Agreements respectively. The Directors confirm that all the conditions to which the Existing Waiver is subject have been complied with by the Company.

THE NEW CHARTER AGREEMENTS

Pursuant to the New Charter Agreements which were entered on 8th March, 2005, the Subsidiary will charter the Vessels from Queenston and Jackston commencing on 1st April, 2005 until 24th November, 2007 (the end of the fifth year from the commencement date i.e. 25th November, 2002 under the Existing Charter Agreements) provided that either party may terminate the New Charter Agreements by serving on the other party not less than 60 days’ written notice of termination or the New Charter Agreements shall also terminate on the termination of the New Sub-charter Agreements.

Queenston is an investment holding company whose principal asset is the vessel “Leisure World”. Its principal business is chartering the vessel “Leisure World”.

Jackston is an investment holding company whose principal asset is the vessel “Amusement World”. Its principal business is chartering the vessel “Amusement World”.

Save for the duration of the charters which has been fixed under the New Charter Agreements, the terms of the New Charter Agreements and the Existing Charter Agreements are substantially the same. Set out below are the principal terms of the New Charter Agreements:

Duration of the New Charter Agreements

Effective from 1st April, 2005 to 24th November, 2007.

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LETTER FROM THE BOARD

Charter fees

The Subsidiary will pay a daily charter fee of S$50,000 (approximately HK$230,000) and S$32,500 (approximately HK$149,500) to Queenston and Jackston, respectively, which remain the same with those under the Existing Charter Agreements.

Set out below are the aggregate charter fees payable by the Subsidiary based on the aforesaid daily charter fees for the relevant years/period:

(i) the aggregate charter fee payable to Queenston by the Subsidiary:

Period	Aggregate	charter fee
	S$	HK$ equivalent
1st April, 2005 to 31st March, 2006	18,250,000	83,950,000
1st April, 2006 to 31st March, 2007	18,250,000	83,950,000
1st April, 2007 to 24th November, 2007	11,900,000	54,740,000

(ii) the aggregate charter fee payable to Jackston by the Subsidiary:

Period	Aggregate	charter fee
	S$	HK$ equivalent
1st April, 2005 to 31st March, 2006	11,862,500	54,567,500
1st April, 2006 to 31st March, 2007	11,862,500	54,567,500
1st April, 2007 to 24th November, 2007	7,735,000	35,581,000

Conditions

The New Charter Agreements are conditional on (i) compliance with the disclosure or any other relevant requirements in connection with the Transactions under the Listing Rules; and (ii) the approval of the Independent Shareholders at the Special General Meeting where voting will be taken on a poll in respect of the Transactions and the New Caps. The aforesaid conditions, which cannot be waived, must be fulfilled on or before 31st March, 2005 or such other date as shall be agreed by the contracting parties in writing.

Termination of the Charterparty Novation Deeds

Pursuant to the New Charter Agreements, the Charterparty Novation Deeds, for which Jackston and Queenston substituted the Previous Owners under the Existing Charter Agreements, will be terminated upon the conditions precedent to the New Charter Agreements having been fulfilled and the New Charter Agreements becoming effective on 1st April, 2005.

– 8 –

LETTER FROM THE BOARD

THE NEW SUB-CHARTER AGREEMENTS

In accordance with the terms of the Existing Sub-charter Agreements, upon the termination of the Existing Charter Agreements, the Existing Sub-charter Agreements will terminate. In order to continue the sub-chartering of the Vessels, the Subsidiary entered into the New Sub-charter Agreements on 8th March, 2005 with Evervalue, an Independent Third Party. Save for the duration of the sub-charters which has been fixed under the New Sub-charter Agreements, the terms of the New Sub-charter Agreements and the Existing Sub-charter Agreements are substantially the same.

Pursuant to the New Sub-charter Agreements, Evervalue will sub-charter the Vessels from the Subsidiary for the purpose of operating the food and beverage, leisure services, accommodation, entertainment, gaming and cruise tour services among Singapore, Malaysia and Indonesia. The Subsidiary has undertaken to provide or procure provision of services including crewing, technical management, management services, procurement services and accounting in respect of the operation of the Vessels at the costs and expenses of the Subsidiary.

The New Sub-charter Agreements shall commence on 1st April, 2005 until 24th November, 2007 (the end of the fifth year from the commencement date i.e. 25th November, 2002 under the Existing Subcharter Agreements) provided that either party may terminate such agreements by serving on the other party not less than 60 days’ written notice of termination or the New Sub-charter Agreements shall also terminate on the termination of the New Charter Agreements.

Since Evervalue is an Independent Third Party, the transactions under the New Sub-charter Agreements do not constitute continuing connected transactions to the Company under the Listing Rules.

Sub-charter fees

Set out below are the sub-charter fees payable by Evervalue to the Subsidiary which remain the same with those under the Existing Sub-charter Agreements:

(i) “Leisure World”

Evervalue will pay to the Subsidiary a daily sub-charter fee as follows:

Period	Daily	sub-charter fee
	S$	HK$ equivalent
1st April, 2005 to 24th November, 2005	77,700	357,420
25th November, 2005 to 24th November, 2006	80,200	368,920
25th November, 2006 to 24th November, 2007	82,700	380,420

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LETTER FROM THE BOARD

(ii) “Amusement World”

Evervalue will pay to the Subsidiary a daily sub-charter fee as follows:

Period	Daily	sub-charter fee
	S$	HK$ equivalent
1st April, 2005 to 24th November, 2005	64,500	296,700
25th November, 2005 to 24th November, 2006	67,000	308,200
25th November, 2006 to 24th November, 2007	69,500	319,700

Set out below are the aggregate sub-charter fees payable by Evervalue to the Subsidiary based on the above daily sub-charter fees for the relevant years/period:

(i) the aggregate sub-charter fee payable to the Subsidiary by Evervalue in respect of subchartering the vessel “Leisure World”:

Period	Aggregate	sub-charter fee
	S$	HK$ equivalent
1st April, 2005 to 31st March, 2006	28,678,000	131,918,800
1st April, 2006 to 31st March, 2007	29,590,500	136,116,300
1st April, 2007 to 24th November, 2007	19,682,600	90,539,960

(ii) the aggregate sub-charter fee payable to Subsidiary by Evervalue in respect of sub-chartering the vessel “Amusement World”:

Period	Aggregate	sub-charter fee
	S$	HK$ equivalent
1st April, 2005 to 31st March, 2006	23,860,000	109,756,000
1st April, 2006 to 31st March, 2007	24,772,500	113,953,500
1st April, 2007 to 24th November, 2007	16,541,000	76,088,600

Condition

The New Sub-charter Agreements are conditional on the New Charter Agreements coming into effect on or before 1st April, 2005.

THE VESSELS

The Vessels are the two cruise liners, namely “Leisure World” and “Amusement World”. “Leisure World” was built in 1969 with a carrying capacity of 1,252 persons. It has been operating as a cruise liner from Singapore, Malaysia and Indonesia for eleven years. “Amusement World” was built in 1967 with a carrying capacity of 874 persons. It has been operating as a cruise liner from Singapore, Malaysia

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LETTER FROM THE BOARD

and Indonesia for seven years. The Vessels possess accommodation, dining facilities and function rooms. Other facilities include sun decks, gaming rooms (casino), child care facilities, beauty salons, massage facilities, exercise facilities, lounges, bars, entertainment and shopping facilities. The Vessels attract customers from the Asian region.

Over the past 12 months, the Group acquired an aggregate of 45% indirect interest in each of the Vessels for a total consideration of approximately US$20.7 million (or approximately HK$161.5 million) from an indirect wholly-owned subsidiary of Huang Group through two acquisitions completed in July 2004 and March 2005 respectively. Details of the acquisitions were set out in the announcements of the Company dated 1st April, 2004 and 26th November, 2004 and the circulars of the Company dated 3rd May, 2004 and 31st January, 2005.

The operator of the gaming activities on the Vessels is Evervalue. The books and records of the gaming activities regarding its relevant revenue and expenses are kept by Evervalue. As the Group is not the operator of the gaming activities, the Group will not be exposed to any risk in relation to money laundering (if any) on the Vessels. As advised by the legal advisers to the Company, no licence is required under the Gambling Ordinance of Hong Kong for the operation of the gaming activities on board of the Vessels on the basis that the gaming activities will be conducted exclusively outside Hong Kong. The operations of the gaming activities on the Vessels outside Hong Kong do not contravene the Gambling Ordinance of Hong Kong. The Company will (insofar as it is able to in its capacity as a shareholder of New Century Maritime Limited which indirectly owns the Vessels) ensure that for so long as the Company has a direct and indirect interest in the Vessels, the gaming activities conducted on such Vessels will comply with the applicable laws and/or not contravene the Gambling Ordinance of Hong Kong insofar as it is applicable.

In the event that any of the gaming activities operated by Evervalue is illegal, the Group will terminate the Existing Sub-charter Agreements or the New Sub-charter Agreements (as the case may be) in accordance with their terms and seek another sub-charterer and given the improving economy of the Asia Pacific region, the Group does not anticipate any difficulty in locating a new sub-charterer.

Shareholders should be aware that under the Guidelines issued by the Stock Exchange in relation to “Gambling Activities undertaken by listed applicants and/or listed issuers” dated 11th March, 2003, should the Group be engaged in gambling activities and operation of such gambling activities (i) fail to comply with the applicable laws in the areas with such activities operate and/or (ii) contravene the Gambling Ordinance of Hong Kong such that the Company or its business may be considered unsuitable for listing under Rule 8.04 of the Listing Rules, the Stock Exchange may direct the Company to take remedial action, and/or may suspend the dealings in, or may cancel the listing of, its securities.

REASONS FOR THE NEW CHARTER AGREEMENTS AND COMPLIANCE WITH THE LISTING RULES

The principal activities of the Group comprise vessel-chartering and hotel operation in Asia Pacific region, property investment in Hong Kong, provision of property information and monitoring services through websites, and securities trading.

– 11 –

LETTER FROM THE BOARD

The Existing Waiver is due to expire on 31st March, 2005 and it is expected that the Transactions will continue in the years to come. Given that the vessel-chartering is one of the principal activities of the Group and the chartering and sub-chartering of the Vessels has been providing a promising and stable revenue source and income for the Group since its commencement, the Directors believe that it is in the commercial interest of the Company to seek approval of the Independent Shareholders for the continuation of the Transactions subject to the New Caps. The New Caps have been determined by the total number of days in the relevant years/period multiplied by the daily charter fees pursuant to the New Charter Agreements. The daily charter fees remain the same with those under the Existing Charter Agreements which have been determined with reference to the daily sub-charter fees of the Vessels under the Existing Sub-charter Agreements.

New Century Worldwide, which is the controlling Shareholder holding approximately 56.3% interest in the Company as at the Latest Practicable Date, is an indirectly wholly-owned subsidiary of Huang Group. Both Queenston and Jackston are indirectly owned as to 55% by Huang Group and as to 45% by the Company. By virtue of Huang Group’s interest in the Company, Queenston and Jackston, the Transactions constitute non-exempt continuing connected transactions to the Company under Chapter 14A of the Listing Rules. Accordingly, approval of the Independent Shareholders is proposed to be sought in respect of the New Charter Agreements (including the Transactions and the New Caps) subject to the following conditions:

(i) the maximum amounts of the aggregate charter fees under the New Charter Agreements payable to Queenston and Jackston by the Subsidiary shall be:

Period	Aggregate	charter fee
	S$	HK$ equivalent
For the year ending 31st March, 2006	30,112,500	138,517,500
For the year ending 31st March, 2007	30,112,500	138,517,500
For the period from 1st April, 2007 to
24th November, 2007	19,635,000	90,321,000
; and

(ii) the Company will comply with Rules 14A.36 to 14A.40 and 14A.46 of the Listing Rules in relation to the Transactions.

The Directors (including the independent non-executive Directors) consider that the Transactions will be entered into in the usual and ordinary course of business of the Group. They are also of the view that the terms of the Transactions were negotiated on an arm’s length basis and are normal commercial terms.

The Directors (including the independent non-executive Directors) consider that as far as the Shareholders are concerned, the Transactions and the terms thereof including the New Caps are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

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LETTER FROM THE BOARD

SPECIAL GENERAL MEETING

A notice convening the Special General Meeting, at which an ordinary resolution will be proposed to the Independent Shareholders for the purpose of considering, and if thought fit, approving the New Charter Agreements (including the Transactions and the New Caps) is set out on pages 31 to 32 of this circular. At such meeting, votes of the Independent Shareholders will be taken on a poll and New Century Worldwide, Mr. Huang and their respective associates will abstain from voting. As at the Latest Practicable Date, New Century Worldwide, Mr. Huang and their respective associates controlled voting right in respect of their Shares.

A form of proxy for use at the Special General Meeting is enclosed with this circular. If you are not able to attend the Special General Meeting, you are requested to complete the enclosed form of proxy in accordance with the instructions printed thereon and return it as soon as possible and in any event not later than forty-eight (48) hours before the time appointed for holding the Special General Meeting. Completion and return of the form of proxy will not preclude you from attending and voting in person at the Special General Meeting or any adjournment of it, if you so wish.

Announcement will be made by the Company following the conclusion of the Special General Meeting to inform you of the results thereof.

RECOMMENDATION

The Independent Board Committee comprising Mr. Wong Kwok Tai, Mr. Kwan Kai Kin, Kenneth and Mr. Ho Yau Ming has been constituted to advise the Independent Shareholders on the Transactions and the New Caps. Your attention is drawn to their letter of recommendation set out on page 14 of this circular.

Dao Heng Securities has been appointed to advise the Independent Board Committee and the Independent Shareholders on the Transactions and the New Caps. Your attention is drawn to its letter of advice set out on pages 15 to 24 of this circular.

FURTHER INFORMATION

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

Yours faithfully, For and on behalf of the Board

Wilson Ng Chairman

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LETTER FROM THE INDEPENDENT BOARD COMMITTEE

==> picture [99 x 49] 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)

14th March, 2005

To the Independent Shareholders

Dear Sir or Madam,

NON-EXEMPT CONTINUING CONNECTED TRANSACTIONS IN RELATION TO VESSELS CHARTER FOR CRUISE LINER OPERATIONS

We refer to the circular of the Company dated 14th March, 2005 (the "Circular"), of which this letter forms part. Unless specified otherwise, capitalised terms used herein have the same meanings as defined in the Circular.

We have been appointed as the Independent Board Committee to consider the terms of the New Charter Agreements (including the Transactions and the New Caps) and to advise you as to whether, in our opinion, such terms are fair and reasonable so far as the Company and the Independent Shareholders are concerned and the Transactions and the New Caps are in the interests of the Company and the Shareholders as a whole.

Dao Heng Securities has been appointed as the independent financial adviser to us and you as regards the Transactions and the New Caps. Details of its advice, together with the principal factors and reasons it has taken into consideration in giving such advice, are set out on pages 15 to 24 of the Circular. Your attention is drawn to the letter from the Board and the additional information set out in the appendix to the Circular.

Having considered the terms of the New Charter Agreements (including the Transactions and the New Caps) and the independent advice of Dao Heng Securities, we consider that such terms are fair and reasonable so far as the Company and the Independent Shareholders are concerned and the Transactions and the New Caps are in the interests of the Company and the Shareholders as a whole. On this basis, we recommend you to vote in favour of the ordinary resolution to be proposed at the Special General Meeting to approve the New Charter Agreements (including the Transactions and the New Caps).

Yours faithfully,

Independent Board Committee Wong Kwok Tai Kwan Kai Kin, Kenneth Ho Yau Ming

* For identification only

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LETTER FROM DAO HENG SECURITIES

The following is the text of the letter of advice to the Independent Board Committee and the Independent Shareholders from Dao Heng Securities in connection with the terms of the New Charter Agreements (including the Transactions and the New Caps), which has been prepared for the purpose of inclusion in this circular.

==> picture [130 x 37] intentionally omitted <==

14th March, 2005

To the Independent Board Committee and the Independent Shareholders New Century Group Hong Kong Limited Unit 3808, 38th Floor West Tower, Shun Tak Centre 168-200 Connaught Road Central Hong Kong

Dear Sirs,

NON-EXEMPT CONTINUING CONNECTED TRANSACTIONS IN RELATION TO VESSELS CHARTER FOR CRUISE LINER OPERATIONS

INTRODUCTION

We refer to our engagement by the Company as an independent financial adviser to advise the Independent Board Committee and the Independent Shareholders with respect to the New Charter Agreements (including the Transactions and the New Caps). Details of the principal terms of the New Charter Agreements are contained in the letter from the Board in the circular dated 14th March, 2005 to the Shareholders (the “Circular”), of which this letter forms part. Terms defined in the Circular bear the same meanings herein unless the context otherwise requires.

On 8th March, 2005, the Group entered into the New Charter Agreements with Queenston and Jackston respectively to replace the Existing Charter Agreements and the New Sub-charter Agreements with Evervalue, an Independent Third Party, to replace the Existing Sub-charter Agreements for cruise liner operations in the Southeast Asian region. By virtue of Huang Group’s interest in the Company, Queenston and Jackston, the Transactions constitute non-exempt continuing connected transactions and will be subject to reporting, announcement and the Independent Shareholders’ approval requirements under Chapter 14A of the Listing Rules. New Century Worldwide, Mr. Huang and their respective associates will abstain from voting in the Special General Meeting regarding the resolution to approve the New Charter Agreements (including the Transactions and the New Caps).

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LETTER FROM DAO HENG SECURITIES

Our role as the independent financial adviser to the Independent Board Committee and the Independent Shareholders is to give our opinion as to whether the terms of the New Charter Agreements (including the Transactions and the New Caps) are fair and reasonable so far as the Independent Shareholders are concerned.

In formulating our recommendations, we have relied on the accuracy of the information and representations contained in the Circular, which have been provided by the Directors and have assumed that all information and representations made or referred to in the Circular are true and accurate in all material respects. We have no reason to doubt the truth, accuracy and completeness of the information and representations provided to us by the Directors and have been advised by the Directors that no material facts have been omitted from the information provided and referred to in the Circular. We consider that we have reviewed sufficient information to reach an informed view and to justify relying on the accuracy of the information contained in the Circular and to provide a reasonable basis for our advice. We have not, however, conducted any independent investigation into the business and affairs or the future prospects of the Group.

PRINCIPAL FACTORS AND REASONS CONSIDERED

In arriving at our opinion regarding the transactions contemplated under the New Charter Agreements (including the Transactions and the Caps), we have considered the following principal factors and reasons:

A. Background of the Transactions and the grant of the Existing Waiver

In 2002, the principal activities of the Group were property investment, provision of property information and professional valuation services through website and securities trading and manufacture and sale of wireless headsets. In order to diversify into the Asian cruise line business, on 17th October, 2002, the Group entered into the Existing Charter Agreements to charter the Vessels from the Previous Owners (which were subsequently substituted by Jackston and Queenston pursuant to the Charterparty Novation Deeds). On the same date, the Group entered into the Existing Sub-charter Agreements to sub-charter the Vessels to Evervalue, an Independent Third Party. Pursuant to the Existing Sub-charter Agreements, the Subsidiary had undertaken to provide or procure provision of services including crewing, technical management, management services, procurement services and accounting in respect of the operation of the Vessels at the costs and expenses of the Subsidiary. Daily charter fees (under the Existing Charter Agreements) and daily sub-charter fees (under the Existing Sub-charter Agreements) are fixed for the first five years from the date of commencement of the charter of the Vessels (i.e. 25th November, 2002), and for the sixth year and beyond will be subject to review by contracting parties. Information of the Vessels has been set out in the letter from the Board in the Circular.

Since the Previous Owners were indirect wholly-owned subsidiaries of Huang Group (the ultimate holding company of the controlling Shareholder of the Company), the transactions contemplated under the Existing Charter Agreements constituted connected transactions for the Company under the Listing Rules. On 22nd November, 2002, the Stock Exchange granted the Existing Waiver from strict compliance to the disclosure and approval requirements under the then Listing Rules for a period of three years ending 31st March, 2005 provided

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LETTER FROM DAO HENG SECURITIES

that, among other things, the aggregate value of the charter fee does not exceed the amount in accordance with the terms prescribed in the Existing Charter Agreements. On 15th July, 2004, the Charterparty Novation Deed was entered into between the Previous Owners, the Subsidiary, Jackston and Queenston to substitute the Existing Charter Agreements. On 8th March, 2005, the Group entered into the New Charter Agreements with Jackston and Queenston to replace the Existing Charter Agreements and the New Sub-charter Agreements to replace the Existing Sub-charter Agreements. As stated in the letter from the Board in the Circular, pursuant to the New Charter Agreements, the Charterparty Novation Deed will be terminated upon all conditions precedent to the New Charter Agreements having been fulfilled and the New Charter Agreements becoming effective on 1st April, 2005.

B. Reasons for the Transactions

The following table summarised the overall operating performance of the Group and its vessel-chartering segment for the two years ended 31st March, 2004 (“FY2003” and “FY2004” respectively) as extracted from the Company’s annual report for FY2004 and the six months ended 30th September, 2004 (the “Interim Period”) as extracted from the Company’s interim report for the Interim Period:

Table 1: Operating performance of the Group and its vessel-chartering business

(in HK$ million)	FY2003	FY2003	FY2004	FY2004	Interim	Period
	Vessel–		Vessel–		Vessel–
	chartering	Group	chartering	Group	chartering	Group
Turnover	73.9	119.4	207.2	254.6	110.5	161.3
Percentage to
total turnover	61.9%	100.0%	81.4%	100.0%	68.5%	100.0%
Segment results
– profit/(loss)	14.8	(31.4)	31.1	48.2	24.3	25.8
Percentage to
total segment
results	N/A	N/A	64.5%	100.0%	94.2%	100.0%

The Group had been operating at losses for the past five years ended 31st March, 2002 and had recorded net losses of approximately HK$212.2 million attributable to the Shareholders for the year ended 31st March, 2002. Having diversified into the Asian cruise line business since November 2002 by entering into the Existing Charter Agreements, net losses attributable to the Shareholders reduced to approximately HK$24.6 million for FY2003. Thereafter, the Group turned from loss-making to profit-making during FY2004 and the Interim Period. As illustrated in Table 1, over 60% of the Group’s total revenue for each period of FY2003, FY2004 and the Interim Period was attributable to its vessel-chartering business and over 90% of the Group’s operating profit for the Interim Period was attributable to its vesselchartering business.

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LETTER FROM DAO HENG SECURITIES

The following table summarised the Group’s daily net revenue before other expenses based on the daily fees pursuant to the New Charter Agreements and the New Sub-charter Agreements in the period from 1st April, 2005 to 24th November, 2007, being the expiry date of the New Charter Agreements and the New Sub-charter Agreement (major terms of the New Charter Agreements and the New Sub-charter Agreements are summarised in the paragraph headed “C. Nature and terms of the Transactions” below):

Table 2: Daily net revenue before other expenses from the Vessels chartering

	For the period from	For the year from	For the year from
	1st April, 2005 to	25th November, 2005	25th November, 2006
	24th November, 2005	to 24th November, 2006	to 24th November, 2007
	(S$)	(S$)	(S$)
Daily sub-charter fee
income from the
sub-charterer
• Amusement World	64,500	67,000	69,500
• Leisure World	77,700	80,200	82,700
Less: daily charter fee
payable to Jackston
and Queenston
• Amusement World	(32,500)	(32,500)	(32,500)
• Leisure World	(50,000)	(50,000)	(50,000)
Less: daily management
fee payable by
the Subsidiary
• Amusement World	(1,300)	(1,450)	(1,750)
• Leisure World	(1,900)	(2,200)	(2,650)
Aggregate daily net
revenue before other expenses	56,500	61,050	65,300
(approximate equivalent
amount in HK$)	259,900	280,830	300,380

Based on the track record of the Group since its diversification into the Asian cruise line business in November 2002 and the daily net revenue before other expenses based on the contracted charter/ sub-contracted fee under the New Charter Agreements and the New Subcharter Agreements, we are of the opinion that carrying out the Transactions would provide a stable income source to the Group and is in the interest of the Company and the Independent Shareholders as a whole.

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LETTER FROM DAO HENG SECURITIES

As far as the existing transactions contemplated under the Existing Charter Agreements are concerned, we note from the annual report for FY2003 and FY2004 that the Directors have confirmed that, inter alia, in their opinion,

the chartering relationship was maintained on normal commercial terms, arm’s length basis and on terms that are fair and reasonable so far as the Shareholders are concerned;
the aggregate values of the charter fees were within the limits as set out in accordance with the terms prescribed in the Existing Charter Agreements governing such transactions; and
the connected transactions were entered into in the ordinary and usual course of business of the Group.

In addition, the auditors of the Company had reviewed the terms of the transactions under the Existing Charter Agreements for FY2003 and FY2004 and had confirmed that:

the connected transactions for both FY2003 and FY2004 had been made in accordance with the terms prescribed in the Existing Charter Agreements; and
the cap amounts of transactions under the Existing Charter Agreements had not been exceeded.

Based on the above, it can be demonstrated that the Company has a track record of endeavouring to fulfil strictly the requirements and conditions specified under the Existing Waiver granted by the Stock Exchange in 2002.

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LETTER FROM DAO HENG SECURITIES

C. Nature and terms of the Transactions

Save for the duration of the charters, which has been fixed under the New Charter Agreements and the New Sub-charter Agreements, the principal terms of the New Charter Agreements and the New Sub-charter Agreements remain substantially the same as those of the Existing Charter Agreements and the Existing Sub-charter Agreements. The key terms of the New Charter Agreements and the New Sub-charter Agreements are summarised as follows:

Table 3: Major terms under the New Charter Agreements and the New Sub-charter Agreements

		The New Charter Agreements	The New Sub-charter Agreements
Contract		Amusement World – Jackston	Evervalue
counter-party		Leisure World – Queenston
Duration		From 1st April, 2005 to	From 1st April, 2005 to
		24th November, 2007	24th November, 2007
		(being the end of the	(being the end of the
		fifth year from the	fifth year from the
		commencement date	commencement date
		under the Existing	under the Existing
		Charter Agreements)	Sub-Charter Agreements)
Purposes		For cruise liner operation	For operating the food and
		in the Southeast Asian region	beverage, leisure services,
			accommodation, gaming,
			entertainment and cruise tour
			services among Singapore,
			Malaysia and Indonesia
Charter fees		Daily charter fee	Daily sub-charter fee*
•	Amusement	S$32,500 (about HK$149,500)	Period 1: S$64,500 (about HK$296,700)
	World		Year 2: S$67,000 (about HK$308,200)
			Year 3: S$69,500 (about HK$319,700)
•	Leisure World	S$50,000 (about HK$230,000)	Period 1: S$77,700 (about HK$357,420)
			Year 2: S$80,200 (about HK$368,920)
			Year 3: S$82,700 (about HK$380,420)
Deposits
•	Amusement World	S$2,450,000 (about HK$11,270,000)	S$3,500,000 (about HK$16,100,000)
•	Leisure World	S$3,750,000 (about HK$17,250,000)	S$4,300,000 (about HK$19,780,000)
Termination		(i) 60 days’ written notice of	(i) 60 days’ written notice
		termination by either party; or	of termination by either party; or
		(ii) upon termination of the New	(ii) upon termination of
		Sub-charter Agreements	the New Charter Agreements

Note * : Period 1 represents the period from 1st April, 2005 to 24th November, 2005; Year 2 represents the year from 25th November, 2005 to 24th November, 2006; and Year 3 represents the year from 25th November, 2006 to 24th November, 2007.

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LETTER FROM DAO HENG SECURITIES

(i) Basis of determination of the charter fee

As stated in the letter from the Board in the Circular, the Directors consider that the Transactions will be entered into in the usual and ordinary course of business of the Group and the terms of the Transactions were negotiated on an arm’s length basis and are normal commercial terms.

As stated in the section headed “Letter from the Board” contained in the Company’s circular dated 5th November, 2002, the charter fees under the Existing Charter Agreements (which remain the same as those under the New Charter Agreements) had been agreed between the contracting parties by reference to the earning potentials of the Vessels. According to a written confirmation issued by an independent vessel broker (which has been active as shipping consultants and ship brokers for about 20 years) dated 8th March, 2005, “Leisure World” would be capable of achieving a charter hire and facilities fees in the region of S$47,000 to S$50,000 per day, while “Amusement World” would be capable of achieving a charter hire and facilities fees in the region of S$30,000 to S$33,500 per day on a willing charterer and owner basis subject always that the Vessels are fully class maintained and compliance to all prevailing statutory and government regulations.

Based on the foregoing, we consider that the charter fees under the New Charter Agreements are in line with the prevailing market charter hire rates as quoted by the independent vessel broker and as such, we consider that the basis of determination of the charter fees is fair and reasonable.

(ii) Charter fees

We obtained from the Company and reviewed the management account of the Subsidiary for the period from 1st November, 2002 to 31st March, 2003, FY2004 and the period from 1st April, 2004 to 31st January, 2005 (collectively, the “Relevant Period”). We noted that the expenses for charter hired for the Relevant Period are in line with the charter fees based on the daily charter fees stipulated under the Existing Charter Agreements. We also noted that the sub-charter fee income for the Relevant Period are generally in line with the sub-charter fees based on the daily sub-charter fees stipulated under the Existing Sub-charter Agreements except for the three months from April 2003 to June 2003. As advised by the Directors, the Group granted a special allowance to the sub-charterer, Evervalue, from 1st April, 2003 to 30th June, 2003 in view of the outbreak of SARS in South Asia and its adverse effects on the sub-charterer’s passenger cruise operations. Such special allowance for the Vessels was S$12,500 (approximately HK$57,500) per day for Amusement World and S$8,700 (approximately HK$40,020) per day for Leisure World. As a result, the Group’s revenue from sub-charter hire reduced by approximately S$1.93 million for the three months from 1st April, 2003 to 30th June, 2003. As confirmed by the Directors, no such special allowance has been granted by the Previous Owners to the Group during such period. We have reviewed the respective letters issued by the Subsidiary and Evervalue in respect of such special allowance and the normal sub-charter fees were resumed since 1st July, 2003. Details of the special allowance were set out in the

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LETTER FROM DAO HENG SECURITIES

Company’s announcements dated 14th May, 2003 and 9th July, 2003 in relation to (i) the effect of SARS on the Group’s operations; and (ii) the resumption of normal subcharter fees for cruise line division respectively.

Given that the daily sub-charter fee for Amusement World grew progressively from S$64,500 in Period 1 to S$69,500 in Year 3 and that for Leisure World grew progressively from S$77,700 in Period 1 to S$82,700 in Year 3, while the daily charter fee for Amusement World and Leisure World were fixed at S$32,500 and S$50,000 respectively throughout the contracted period under the New Charter Agreements, we consider that the fee structure under the charter arrangement pursuant to the New Charter Agreements and the New Sub-charter Agreements enable the Group to enjoy an increasing daily net revenue before other expenses, and therefore is in the interests of the Company and the Independent Shareholders as a whole.

(iii) Deposits

Pursuant to the New Charter Agreements, the Subsidiary had made a deposit of S$2,450,000 (approximately HK$11,270,000) and S$3,750,000 (approximately HK$17,250,000) with Jackston and Queenston respectively throughout the terms of the New Charter Agreements free of any interest to the Subsidiary. According to the Directors, this is in line with industry practice of having two to three months of charter hire as deposits. On the other hand, pursuant to the New Sub-charter Agreements, Evervalue had made a deposit S$3,500,000 (approximately HK$16,100,000) and S$4,300,000 (approximately HK$19,780,000) for Amusement World and Leisure World respectively with the Subsidiary throughout the terms of the New Sub-charter Agreements free of any interest to Evervalue. Therefore, the Group need not incur any outflow of cash in respect of the clauses on deposits in the performance of the New Charter Agreements. In addition, the Group can continue to earn an interest income on an amount of S$1,600,000 (approximately HK$7,360,000), being the difference between deposits received of S$7,800,000 (approximately HK$35,880,000) and deposits paid of S$6,200,000 (approximately HK$28,520,000).

(iv) Termination clauses

Both the terms of the New Charter Agreements and the New Sub-charter Agreements are terminable, without compensation (save for any rights and obligations of the parties prior to termination and termination attributable to fault or omission of the parties), by either party serving on the other party not less than 60 days’ written notice of termination. The New Charter Agreements shall also be terminated on the termination of the New Sub-charter Agreements and vice versa. We consider these terms fair and reasonable since the New Charter Agreements and the New Subcharter Agreements for each of the Vessels are entered into for the operation of chartering of the Vessels as cruise liners and any termination of one of these agreements will prevent the effective operations of chartering of the Vessels. The right of the Group to terminate the New Charter Agreements in the event of termination of the

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LETTER FROM DAO HENG SECURITIES

New Sub-charter Agreements will also protect the Group by promptly releasing its obligation to pay further charter fees when there are no further sub-charter fees to be earned.

Based on the above, we consider that the terms under the New Charter Agreements are fair and reasonable as far as the Company and the Independent Shareholders are concerned.

D. The New Caps

The following table summarises the aggregate charter fees payable by the Group to Jackston and Queenston based on the daily charter fees pursuant to the New Charter Agreements and the proposed New Caps of the Transactions for the two years ending 31st March, 2007 and the period from 1st April, 2007 to 24th November, 2007:

Table 4: Aggregate charter fees and the New Caps

		From 1st April, 2005	From 1st April, 2006	From 1st April, 2007
		to 31st March, 2006	to 31st March, 2007	to 24th November, 2007
		(S$)	(S$)	(S$)
Daily	charter fee:
•	Amusement World	32,500	32,500	32,500
•	Leisure World	50,000	50,000	50,000
Sub-total		82,500	82,500	82,500
Aggregate charter fee for
the	period which is
equivalent to the New Caps		30,112,500	30,112,500	19,635,000
(equivalent amount in HK$)		138,517,500	138,517,500	90,321,000

The proposed New Caps are equivalent to the aggregate charter fees payable to Jackston and Queenston by the Subsidiary pursuant to the New Charter Agreements for each of the two years ending 31st March, 2007 and the period from 1st April, 2007 to 24th November, 2007.

E. Independent Shareholders’ approval

The Transactions are expected to continue in the years to come. They will continue to constitute connected transactions under Chapter 14A of the Listing Rules for so long as Jackston and Queenston remain connected persons of the Company. In view of the fact that the Existing Waiver granted by the Stock Exchange in 2002 will expire on 31st March, 2005, the Directors believe that it is in the commercial interest of the Company to seek the approval of the Independent Shareholders for the continuation of the Transactions subject to the New Caps which is calculated based on the daily charter fees pursuant to the New Charter Agreements. On this basis, we consider that the Company has taken appropriate measures to govern itself in carrying out the Transactions, thereby safeguarding the interest of the Independent Shareholders thereunder.

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LETTER FROM DAO HENG SECURITIES

RECOMMENDATION

Having taken the above principal factors and reasons into account, we are of the view that the terms of the New Charter Agreements, including the Transactions and the New Caps, are fair and reasonable as far as the Company and the Independent Shareholders are concerned and are in the interests of the Company and the Shareholders as a whole. Accordingly, we recommend the Independent Board Committee to advise the Independent Shareholders to vote in favour of the ordinary resolution to be proposed at the Special General Meeting approving the New Charter Agreements (including the Transactions and the New Caps).

Yours faithfully, For and on behalf of Dao Heng Securities Limited Venus Choi Jenny Leung Executive Director Director, Corporate Finance

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GENERAL INFORMATION

APPENDIX

1. RESPONSIBILITY STATEMENT

This circular includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. 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 not contained herein the omission of which would make any statement contained in this circular misleading.

2. DISCLOSURE OF INTERESTS

As at the Latest Practicable Date, the interests and short positions of each Director and chief executive of the Company in the Shares, underlying Shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which require notification to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which he is deemed or taken to have under such provisions of the SFO) or which were required, pursuant to Section 352 of the SFO, to be entered in the register referred to therein, or which were required pursuant to the Model Code for Securities Transactions by Directors of Listed Companies to be notified to the Company and the Stock Exchange were as follows:

		Number of Shares	held		% of the
	Nature of	Long	Short		existing issued
Name of Directors	interests	position	position		share capital
Mr. Wilson Ng	Personal interest	18,000,000 (Note 1)		–
	Other interest	721,021,743 (Note 2)		–	86.7%
Ms. Sio Ion Kuan	Personal interest	31,000,000		–
	Other interest	721,021,743 (Note 2)		–	88.3%
Mr. Ng Wee Keat	Personal interest	18,000,000 (Note 1)		–
	Other interest	721,021,743 (Note 2)		–	86.7%
Ms. Ng Siew Lang, Linda	Personal interest	18,000,000 (Note 1)		–
	Other interest	721,021,743 (Note 2)		–	86.7%
Ms. Lilian Ng	Personal interest	18,000,000 (Note 1)		–
	Other interest	721,021,743 (Note 2)		–	86.7%
Ms. Chen Ka Chee	Personal interest	37,688,000 (Note 1)		–	4.4%
Mr. Yu Wai Man	Personal interest	2,500,000		–	0.3%

Notes:

Each of the personal interests of Mr. Wilson Ng, Mr. Ng Wee Keat, Ms. Ng Siew Lang, Linda, Ms. Lilian Ng and Ms. Chen Ka Chee comprises interest in 5,000,000 underlying Shares in respect of the share options granted by the Company.

479,617,422 Shares are held by New Century Worldwide and 241,404,321 underlying Shares are to be allotted and issued to New Century Cruise Line International Limited (“NCCL”) upon full conversion of two convertible bonds issued by the Company. Both New Century Worldwide and NCCL are ultimately owned by Huang Group under the Discretionary Trust of which Mr. Wilson Ng, Ms. Sio Ion Kuan, Mr. Ng Wee Keat, Ms. Ng Siew Lang, Linda and Ms. Lilian Ng are the discretionary beneficiaries.

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GENERAL INFORMATION

APPENDIX

Save as disclosed above, as at the Latest Practicable Date, none of the Directors or chief executive of the Company had any interests or short positions in the Shares, underlying Shares and debentures of the Company or any of its associated corporations which require notification to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which he is deemed or taken to have under such provisions of the SFO) or which were required, pursuant to Section 352 of the SFO, to be entered in the register referred to therein or which were required pursuant to the Model Code for Securities Transactions by Directors of Listed Companies to be notified to the Company and the Stock Exchange; and none of the Directors is a director or employee of a company which had an interest or short position in the Shares and underlying Shares which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO.

3. SUBSTANTIAL SHAREHOLDERS

So far as is known to any Director or chief executive of the Company and as at the Latest Practicable Date, the following persons, other than the Directors or chief executive of the Company as disclosed above, had interests or short positions in the Shares or underlying Shares which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or who was, directly or indirectly, interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other member of the Group and the amount of each such person’s interest in such securities, together with particulars of any options in respect of such capital:

				% of the
	Number of	Shares held		existing issued
Substantial Shareholders	Long position	Short position	Notes	share capital
New Century Worldwide	479,617,422	–	1	56.3%
Huang Worldwide	721,021,743	–	1	84.6%
Huang Group	721,021,743	–	1, 2	84.6%
Mr. Huang	735,837,786	–	2, 3	86.4%
Mr. Kan Ka Chong, Frederick	721,021,743	–	2, 3, 4	84.6%

Notes:

Huang Group is the ultimate holding company of New Century Worldwide and NCCL. New Century Worldwide holds 479,617,422 Shares and NCCL holds 241,404,321 underlying Shares to be allotted and issued to NCCL upon full conversion of two convertible bonds issued by the Company. Huang Worldwide is the immediate holding company of New Century Worldwide and NCCL. Accordingly, Huang Group and Huang Worldwide are deemed to be interested in totally 721,021,743 Shares.
Huang Group is held by Mr. Kan Ka Chong, Frederick, as the trustee of the Discretionary Trust, the settlor of which is Mr. Huang.
735,837,786 Shares are held by Mr. Huang, of which 14,816,043 Shares are in his personal interest and 721,021,743 Shares are held by the Discretionary Trust.
Mr. Kan Ka Chong, Frederick held 721,021,743 Shares as the trustee of the Discretionary Trust of which Mr. Wilson Ng, Ms. Sio Ion Kuan, Mr. Ng Wee Keat, Ms. Ng Siew Lang, Linda and Ms. Lilian Ng are the discretionary beneficiaries.

– 26 –

GENERAL INFORMATION

APPENDIX

Save as disclosed above, no other person as at the Latest Practicable Date had interests or short positions in the Shares or underlying Shares which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or who was, directly or indirectly, interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other members of the Group, or in any options in respect of such capital.

4. MATERIAL ADVERSE CHANGES

As at the Latest Practicable Date, the Directors were not aware of any material adverse change in the financial or trading position of the Group since 31st March, 2004 (being the date to which the latest published audited consolidated financial statements of the Company were made up).

5. PROCEDURES FOR DEMANDING A POLL BY SHAREHOLDERS

Pursuant to Bye-law 66 of the Bye-laws of the Company, 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:

(i) by the chairman of such meeting; or
(ii) by at least three members present in person (or in the case of a member being a corporation by its duly authorised representative) or by proxy for the time being entitled to vote at the meeting; or
(iii) by a member or members present in person (or in the case of a member being a corporation by its duly authorised representative) or by proxy and representing not less than one-tenth of the total voting rights of all members having the right to vote at the meeting; or
(iv) by a member or members present in person (or in the case of a member being a corporation by its duly authorised 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 demand by a person as proxy for a member or in the case of a member being a corporation by its duly authorised representative shall be deemed to be the same as a demand by a member.

– 27 –

GENERAL INFORMATION

APPENDIX

6. EXPERT AND CONSENT

The following is the qualification of the expert who has given its advice which is contained in this circular:

Name Qualification Dao Heng Securities Deemed licensed corporation under the SFO to conduct types 1 (dealing in securities), 4 (advising on securities), 6 (advising on corporate finance), 7 (providing automated trading services) and 9 (asset management) regulated activities under the SFO

Dao Heng Securities has given and has not withdrawn its written consent to the issue of this circular with the inclusion herein of its letter and references to its name in the form and context in which they respectively appear.

As at the Latest Practicable Date, Dao Heng Securities was not beneficially interested in the share capital of any member of the Group nor did it have any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group nor did it have any interest, either direct or indirect, in any assets which have been, since 31st March, 2004 (being the date to which the latest published audited consolidated financial statements of the Company were made up), acquired or disposed of by or leased to, or are proposed to be acquired or disposed of by or leased to, any member of the Group.

7. SERVICE CONTRACTS

As at the Latest Practicable Date, no Director had a service contract with any member of the Group which was not determinable by the Company within one year without payment of compensation (other than statutory compensation).

8. COMPETING INTERESTS

As at the Latest Practicable Date, save as disclosed below, none of the Directors nor their respective associates was considered to have an interest in a business which competes or is likely to compete, either directly or indirectly, with the business of the Group.

Mr. Wilson Ng, Ms. Sio Ion Kuan, Mr. Ng Wee Keat, Ms. Ng Siew Lang, Linda and Ms. Lilian Ng, being executive Directors, together with Huang Worldwide hold a controlling interest in a private group. The aforesaid Directors also hold directorships in such private group which is substantially managed by them. Such private group is interested in a vessel (“Third Vessel”) and its principal business is chartering of the Third Vessel. At present, it is the business strategy of the Group to focus on the existing business of the two Vessels instead of expanding into the Third Vessel.

– 28 –

GENERAL INFORMATION

APPENDIX

Given that the Third Vessel has a smaller carrying capacity of 375 persons and the facilities on board are relatively less extensive as compared with those of the Vessels, the target customers between the Vessels and the Third Vessel are different. Accordingly, the Directors consider that the Vessels and the Third Vessel are not in direct competition with each other.

The Directors confirm that the Group is capable of carrying on its businesses independently of, and at arm’s length from the competing business as mentioned above.

9. MISCELLANEOUS

(i) Save for the acquisitions of an aggregate 45% indirect interest in each of the Vessels by the Group as mentioned under the section headed “The Vessels” in the letter from the Board in this circular, none of the Directors has, or has had, any direct or indirect interest in any assets which have been acquired, disposed of by or leased to, or which are proposed to be acquired, disposed of by or leased to, any member of the Group since 31st March, 2004 (being the date to which the latest published audited consolidated financial statements of the Company were made up).
(ii) Save for the New Charter Agreements, the Existing Charter Agreements, the Charterparty Novation Deeds, the agreement dated 26th March, 2004 (as supplemented on 30th March, 2004) in relation to the acquisition of 25% indirect interest in the Vessels by the Group and the agreement dated 23rd November, 2004 (as supplemented on 7th January, 2005) in relation to the acquisition of a further 20% indirect interest in the Vessels by the Group, none of the Directors was materially interested in any contract or arrangement subsisting at the Latest Practicable Date, which is significant in relation to the business of the Group.
(iii) The branch share registrar of the Company in Hong Kong is Tengis Limited at Ground Floor, Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong.

10. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection during normal business hours at the office of Richards Butler at 20th Floor, Alexandra House, 16-20 Chater Road, Central, Hong Kong from the date of this circular up to and including 31st March, 2005, the date of the Special General Meeting to be held.

(i) the New Charter Agreements and the New Sub-charter Agreements;
(ii) the Charterparty Novation Deeds;
(iii) the Existing Charter Agreements and the Existing Sub-charter Agreements;
(iv) the Management Agreements;
(v) the letter from the Independent Board Committee, the text of which is set out on page 14 of this circular;

– 29 –

GENERAL INFORMATION

APPENDIX

(vi) the letter from Dao Heng Securities, the text of which is set out on pages 15 to 24 of this circular; and
(vii) the written consent from Dao Heng Securities as referred to in the section headed “Expert and consent” in this appendix.

– 30 –

NOTICE OF SPECIAL GENERAL MEETING

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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)

NOTICE IS HEREBY GIVEN that a special general meeting of New Century Group Hong Kong Limited (the “Company”) will be held at Plaza IV, Lower Lobby, Novotel Century Hong Kong, 238 Jaffe Road, Wanchai, Hong Kong on Thursday, 31st March, 2005 at 10:00 a.m., for the purpose of considering and, if thought fit, passing the following resolution, with or without amendments, as an ordinary resolution of the Company:

ORDINARY RESOLUTION

“THAT:

(a) the charter agreement dated 8th March, 2005 entered into between Balance Profits Limited (“Balance Profits”) and Queenston Maritime Limited (“Queenston”), pursuant to which Balance Profits agrees to charter from Queenston a vessel, namely “Leisure World”, for a period commencing from 1st April, 2005 to 24th November, 2007 at an amount not exceeding approximately S$18,250,000, S$18,250,000 and S$11,900,000 for each of the two years ending 31st March, 2007 and the period from 1st April, 2007 to 24th November, 2007 respectively, and all ancillary agreements contemplated thereunder, a draft of which has been produced to the meeting marked “A” and signed by the chairman of the meeting for the purpose of identification, be and are hereby approved, confirmed and ratified and that the directors of the Company be and are hereby authorised generally to do all such acts, deeds and things as they shall, in their absolute discretion, deem appropriate to effect and implement the foregoing; and
(b) the charter agreement dated 8th March, 2005 entered into between Balance Profits and Jackston Maritime Limited (“Jackston”), pursuant to which Balance Profits agrees to charter from Jackston a vessel, namely “Amusement World”, for a period commencing from 1st April, 2005 to 24th November, 2007 at an amount not exceeding approximately S$11,862,500, S$11,862,500 and S$7,735,000 for each of the two years ending 31st March, 2007 and the

* For identification only

– 31 –

NOTICE OF SPECIAL GENERAL MEETING

period from 1st April, 2007 to 24th November, 2007 respectively, and all ancillary agreements contemplated thereunder, a draft of which has been produced to the meeting marked “B” and signed by the chairman of the meeting for the purpose of identification, be and are hereby approved, confirmed and ratified and that the directors of the Company be and are hereby authorised generally to do all such acts, deeds and things as they shall, in their absolute discretion, deem appropriate to effect and implement the foregoing.”

By order of the Board Yu Wai Man Company Secretary

Hong Kong, 14th March, 2005

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

Notes:

Any member of the Company entitled to attend and vote at the meeting of the Company shall be entitled to appoint another person as his proxy to attend and vote instead of him. Unless otherwise required by statutes, a proxy need not be a member of the Company. A member who is the holder of two or more shares may appoint more than one proxy to represent him and vote on his behalf at the meeting of the Company.
The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorized in writing or, if the appointor is a corporation, either under its seal or under the hand of an officer, attorney or other person authorized to sign the same. In the case of an instrument of proxy purporting to be signed on behalf of a corporation by an officer thereof it shall be assumed, unless the contrary appears, that such officer was duly authorized to sign such instrument of proxy on behalf of the corporation without further evidence of the fact.
The instrument appointing a proxy and (if required by the board) the power of attorney or other authority (if any) under which it is signed, or a certified copy of such power or authority, shall be delivered to the principal place of business of the Company in Hong Kong at Unit 3808, 38th Floor, West Tower, Shun Tak Centre, 168-200 Connaught Road Central, Hong Kong not less than forty-eight (48) hours before the time appointed for holding the meeting or adjourned meeting at which the person named in the instrument proposes to vote and in default the instrument of proxy shall not be treated as valid.
In the case of joint holders of a share if more than one of such joint holders be present at the meeting the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders, and for this purpose seniority shall be determined by the order in which the names stand in the register of members in respect of the joint holding.

As at the date of this notice, the Board comprises Mr. Wilson Ng (Chairman), Ms. Sio Ion Kuan (Deputy chairman), Mr. Ng Wee Keat (Chief executive officer), Ms. Ng Siew Lang, Linda (Chief operating officer), Ms. Lilian Ng, Mr. Lo Ming Chi, Charles, Ms. Chen Ka Chee and Mr. Yu Wai Man as executive directors and Mr. Wong Kwok Tai, Mr. Kwan Kai Kin, Kenneth and Mr. Ho Yau Ming as independent executive directors.

– 32 –

AI assistant

Founder Holdings Limited — Proxy Solicitation & Information Statement 2005

49203_rns_2005-03-14_c6cde1a1-dcb2-4906-8de5-970c976a03af.pdf

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

NON-EXEMPT CONTINUING CONNECTED TRANSACTIONS IN RELATION TO VESSELS CHARTER FOR CRUISE LINER OPERATIONS

SOMERLEY LIMITED

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

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

NON-EXEMPT CONTINUING CONNECTED TRANSACTIONS IN RELATION TO VESSELS CHARTER FOR CRUISE LINER OPERATIONS

INTRODUCTION

BACKGROUND OF NON-EXEMPT CONTINUING CONNECTED TRANSACTIONS AND EXISTING WAIVER

Existing Charter Agreements

Existing Sub-charter Agreements

Management Agreements

Existing Waiver

THE NEW CHARTER AGREEMENTS

Duration of the New Charter Agreements

Charter fees

Conditions

Termination of the Charterparty Novation Deeds

THE NEW SUB-CHARTER AGREEMENTS

Sub-charter fees

Condition

THE VESSELS

LETTER FROM THE BOARD

REASONS FOR THE NEW CHARTER AGREEMENTS AND COMPLIANCE WITH THE LISTING RULES

LETTER FROM THE BOARD

SPECIAL GENERAL MEETING

RECOMMENDATION

FURTHER INFORMATION

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

NON-EXEMPT CONTINUING CONNECTED TRANSACTIONS IN RELATION TO VESSELS CHARTER FOR CRUISE LINER OPERATIONS

NON-EXEMPT CONTINUING CONNECTED TRANSACTIONS IN RELATION TO VESSELS CHARTER FOR CRUISE LINER OPERATIONS

INTRODUCTION

PRINCIPAL FACTORS AND REASONS CONSIDERED

A. Background of the Transactions and the grant of the Existing Waiver

B. Reasons for the Transactions

C. Nature and terms of the Transactions

Table 3: Major terms under the New Charter Agreements and the New Sub-charter Agreements

(i) Basis of determination of the charter fee

(ii) Charter fees

(iii) Deposits

(iv) Termination clauses

D. The New Caps

E. Independent Shareholders’ approval

RECOMMENDATION

1. RESPONSIBILITY STATEMENT

2. DISCLOSURE OF INTERESTS

APPENDIX

3. SUBSTANTIAL SHAREHOLDERS

APPENDIX

4. MATERIAL ADVERSE CHANGES

5. PROCEDURES FOR DEMANDING A POLL BY SHAREHOLDERS

6. EXPERT AND CONSENT

7. SERVICE CONTRACTS

8. COMPETING INTERESTS

APPENDIX

9. MISCELLANEOUS

10. DOCUMENTS AVAILABLE FOR INSPECTION

NOTICE OF SPECIAL GENERAL MEETING

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

(Stock Code: 234)

ORDINARY RESOLUTION

“THAT:

More from Founder Holdings Limited

Founder Holdings Limited Proxy Solicitation & Information Statement 2005