GenFleet Therapeutics (Shanghai) Inc. — Proxy Solicitation & Information Statement 2004

May 25, 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 or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Water Oasis Group Limited, you should at once hand this circular to the purchaser or the transferee or to the bank, stockbroker or other agent through whom the sale or the transfer was effected for transmission to the purchaser or the 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.

WATER OASIS GROUP LIMITED 奧思集團有限公司

(incorporated in the Cayman Islands with limited liability)

(Stock Code: 1161)

DISCLOSEABLE TRANSACTION

ACQUISITION OF PROPERTY

24th May, 2004

CONTENTS

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter From The Board. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2-3
Appendix – Statutory Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4-7

DEFINITIONS

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

“Agreement” the provisional agreement dated 28th April, 2004 between the Vendors and the Purchaser for the sale and purchase of the Property;

• “Company” Water Oasis Group Limited, a company incorporated in the Cayman Islands and the shares of which are listed on the Stock Exchange;

• “Directors” the directors of the Company;

• “Group” the Company and its subsidiaries;

• “Independent Third Party” an independent third party not connected with the Directors, chief executive or substantial shareholders of the Company or any of its subsidiaries or their respective associates as defined in the Listing Rules;

• “Latest Practicable Date” 20th May, 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;

• “Property” a property located at Flat B, 10th Floor, Tower 5, Residence Bel-Air Island South, Hong Kong;

• “Purchaser” Master Advance Limited, a company incorporated in Hong Kong with limited liability and a wholly-owned subsidiary of the Company;

• “SFO” Securities and Futures Ordinance (chapter 571 of the laws of Hong Kong);

• “Share(s)” ordinary share(s) of HK$0.10 each in the share capital of the Company;

• “Stock Exchange” The Stock Exchange of Hong Kong Limited;

• “Vendors” Lam Leung Miu Leo, Ching Siu Har and Ching Siu Fong who are Independent Third Parties and selling the Property as confirmors; and

• “Water Oasis” Water Oasis Company Limited, a company incorporated in Hong Kong with limited liability and a wholly-owned subsidiary of the Company

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LETTER FROM THE BOARD

WATER OASIS GROUP LIMITED 奧思集團有限公司

(incorporated in the Cayman Islands with limited liability)

Executive Directors: YU Lai Si Chief Executive Officer TAM Chie Sang YU Lai Chu, Eileen YU Kam Shui, Erastus LAI Yin Ping

Independent non-executive Directors: WONG Lung Tak, Patrick, J.P. WONG Chun Nam, Duffy

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

Head Office and Principal Place of Business: 18th Floor, World Trade Centre 280 Gloucester Road Causeway Bay Hong Kong 24th May, 2004

To the Shareholders of the Company

Dear Sir or Madam,

DISCLOSEABLE TRANSACTION ACQUISITION OF PROPERTY

1. INTRODUCTION

On 28th April, 2004, the Purchaser, a wholly-owned subsidiary of the Company, entered into the Agreement with the Vendors for the sale and purchase of the Property. The acquisition of the Property constitutes a discloseable transaction for the Company under Chapter 14 of the Listing Rules. The purpose of this circular is to provide you with further information relating to the Company and the Agreement.

2. THE PROPERTY

The Agreement was entered into between the Purchaser and the Vendors pursuant to which the parties have agreed on the sale and purchase of the Property, which has a gross floor area of approximately 1,700 square feet. The consideration for the acquisition of the Property by the Purchaser is HK$12,180,000. The parties have entered into a formal agreement for the sale and purchase of the Property on 5th May, 2004.

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LETTER FROM THE BOARD

The consideration for the purchase of the Property is payable in cash on completion. The Agreement is expected to be completed within 10 working days after the receipt of the notice of completion of the Property by the Purchaser.

3. REASONS FOR AND BENEFITS OF THE ACQUISITION OF THE PROPERTY

The Group is a skin-care and beauty group with exclusive distribution rights to the ~H2O+ brand skincare product range in the Greater China region and Singapore. It also operates spa and beauty centers in Hong Kong under the brand names of “Oasis Spa”, “Oasis Beauty” and “Oasis Beauty Homme”, which offer wide varieties of massage and beauty services.

The Property is located in the southern district of Hong Kong and it is the present intention of the Group to use it as staff quarters. The acquisition of the Property will be funded through a combination of internal resources and bank financing, which is expected to be in the proportion of approximately 30% and 70% respectively.

4. GENERAL

The Directors are of the view that the acquisition of the Property is in the interest of the Company and the terms of the Agreement are on normal commercial terms, which are fair and reasonable as far as the shareholders of the Company are concerned.

The transaction contemplated under the Agreement constitutes a discloseable transaction of the Company under Chapter 14 of the Listing Rules.

The Directors confirm that the consideration for the Property have been determined after arm’s length negotiations between the parties by reference to the market value of similar properties in the same location. The Directors consider that upon completion of the acquisition of the Property, the asset portfolio of the Group will be enriched by approximately HK$12,180,000. As approximately 70% of the consideration for the Property is expected to be funded by bank financing, the liability of the Group will be increased by approximately HK$8,500,000.

5. ADDITIONAL INFORMATION

Your attention is drawn to the Statutory Information incorporated in the appendix of this circular.

By order of the Board Yu Lai Si

Executive Director and Chief Executive Officer

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STATUTORY INFORMATION

APPENDIX I

1. RESPONSIBILITY STATEMENT

This circular includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Group. The Directors collectively and individually accept full responsibility for the accuracy of the information contained in this circular and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts not contained herein the omission of which would make any statement contained in this circular misleading.

2. DISCLOSURE OF INTERESTS

• (i) 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 associated corporation (within the meaning of Part XV of the SFO) which (a) were required to be notified 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 the Directors are taken or deemed to have under such provisions of the SFO); or (b) were required, pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (c) 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:

Long position in the shares of the Company and its associated corporations

								Percentage
Name of	Name of		Personal	Corporate	Family	Other		of issued
Director	company	Capacity	interests	interest	interest	interest	Total	share capital
Yu Lai Si	The	Beneficial	80,666,880	–	–	–	80,666,880	23.6%
	Company	owner	Shares				Shares
	Water	Beneficial	330,000	–	–	–	330,000
	Oasis	owner	non voting				non voting
			deferred shares				deferred
							shares
Tam Chie Sang	The	Interest of	–	–	–	77,666,880	77,666,880	22.7%
Company		a controlled				Shares_(1)_	Shares
		corporation
	Water	Beneficial	165,000	–	–	–	165,000
	Oasis	owner	non voting				non voting
			deferred shares				deferred shares
Yu Lai Chu,	The	Interest of	–	–	–	77,666,880	77,666,880	22.7%
Eileen	Company	a controlled				Shares_(1)_	Shares
		corporation
		Beneficial	900,000	–	–	–	900,000	0.3%
		owner	Shares				Shares
	Water	Beneficial	165,000	–	–	–	165,000
	Oasis	owner	non voting				non voting
			deferred shares				deferred shares
Yu Kam Shui,	The	Interest of	–	–	–	38,833,440	38,833,440	11.4%
Erastus	Company	a controlled				Shares_(2)_	Shares
		corporation
Lai Yin Ping	The	Interest of	–	–	–	38,833,440	38,833,400	11.4%
	Company	a controlled				Shares_(3)_	Shares
		corporation

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APPENDIX I

STATUTORY INFORMATION

Notes:

• (1) These Shares are registered in the name of Zinna Group Limited. All voting rights over Zinna Group Limited are held by Royalion Worldwide Limited, which is wholly-owned by Hitchin Trading Limited as trustee of Hitchin Unit Trust which in turn is ultimately held by Trident Trust Company (Cayman) Limited, which forms part of the discretionary trust set up by Tam Chie Sang and Yu Lai Chu, Eileen. Trident Trust Company (Cayman) Limited is the trustee of the discretionary trust, the beneficiaries of which are the family members of Tam Chie Sang and Yu Lai Chu, Eileen.

• (2) These Shares are registered in the name of Advance Favour Holdings Limited, a British Virgin Islands company beneficially owned by Yu Kam Shui, Erastus.

• (3) These Shares are registered in the name of Billion Well Holdings Limited, a British Virgin Islands company beneficially owned by Lai Yin Ping.

Long position in the underlying Shares

Name of Director	Name of Company	Personal Interests
Yu Lai Si	The Company	3,000,000
Tam Chie Sang	The Company	3,000,000
Yu Lai Chu, Eileen	The Company	2,100,000
Yu Kam Shui, Erastus	The Company	3,000,000
Lai Yin Ping	The Company	3,000,000
Wong Lung Tak, Patrick	The Company	600,000
Wong Chun Nam, Duffy	The Company	600,000
		15,300,000

Note: The above interests are share options obtained pursuant to the share option scheme of the Company.

Save as disclosed herein and as at the Latest Practicable Date, none of the Director or chief executive of the Company had any interest or short position in the Shares, underlying Shares and debentures of the Company or any associated corporations (within the meaning of Part XV of the SFO) which (a) were required to be notified 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 the Directors are taken or deemed to have under such provisions of the SFO); or (b) were required, pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (c) 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.

• (ii) Each of the executive Directors has entered into a service agreement with the Company. Each agreement is for a period of three years commencing on 1st October 2001 and shall continue thereafter until terminated by either party giving to the other not less than three calendar months’ prior notice in writing, so as to expire on 30th September 2004 or at any time thereafter provided that no such notice may be given before 30th June 2004.

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STATUTORY INFORMATION

APPENDIX I

Save as disclosed above, none of the Directors has entered into any service agreement with any member of the Group nor are there any other service agreements proposed which will not expire or be determinable by the Group within one year without payment of compensation (other than statutory compensation).

3. SUBSTANTIAL SHAREHOLDERS

So far as is known to the Directors or chief executive of the Company and as at the Latest Practicable Date, the following persons, other than a Director or chief executive of the Company, 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, 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 of such person’s interest in such securities, together with particulars of any option in respect of such capital:

		Approximate Percentage
Number	Number of Shares	of Voting Power
Zinna Group Limited(1)	77,666,880	22.7%
Advance Favour Holdings Limited(2)	38,833,440	11.4%
Billion Well Holdings Limited(3)	38,833,440	11.4%

Notes:

• (1) All voting rights of Zinna Group Limited are held by Royalion Worldwide Limited, which is wholly-owned by Hitchin Trading Limited as trustee of Hitchin Unit Trust which in turn is ultimately held by Trident Trust Company (Cayman) Limited, which forms part of a discretionary trust set up by Tam Chie Sang and Yu Lai Chu, Eileen. Trident Trust Company (Cayman) Limited is the trustee of the discretionary trust, the beneficiaries of which are the family members of Tam Chie Sang and Yu Lai Chu, Eileen.

• (2) Advance Favour Holdings Limited is a British Virgin Islands company beneficially owned by Yu Kam Shui, Erastus.

• (3) Billion Well Holdings Limited is a British Virgin Islands company beneficially owned by Lai Yin Ping.

Save as disclosed herein, the Directors and the chief executive of the Company are not aware of any person, other than a Director or chief executive of the Company, who, as at the Latest Practicable Date, had any 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, 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 member of the Group.

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APPENDIX I

STATUTORY INFORMATION

4. LITIGATION

As at the Latest Practicable Date, no member of the Group was engaged in any litigation or arbitration proceedings of material importance and there was no litigation or claim of material importance known to the Directors to be pending or threatened against any member of the Group.

5. GENERAL

• (i) The secretary and the qualified accountant of the Company is Cheng Chi Wai, FCCA, FHKSA, FCIS, FCS.

• (ii) The registered office of the Company is at Century Yard, Cricket Square, Hutchins Drive, P. O. Box 2681GT, George Town, Grand Cayman, Cayman Islands, British West Indies. The head office and principal place of business of the Company is at 18/F, World Trade Centre, 280 Gloucester Road, Causeway Bay, Hong Kong.

• (iii) The branch share registrars and transfer office of the Company in Hong Kong is Standard Registrars Limited located at G/F, Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong.

• (iv) The English text of this circular shall prevail over the Chinese text for the purpose of interpretation.

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