Grand Pharmaceutical Group Limited — Proxy Solicitation & Information Statement 2004

Mar 31, 2004

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect about 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 MAXX Bioscience Holdings Limited , you should at once hand this circular, together with the enclosed form of proxy, to the purchaser or the transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or the transferee.

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

MAXX BIOSCIENCE HOLDINGS LIMITED （曼盛生物科技集團有限公司[*] ）

(Stock Code : 512)

(Incorporated In Bermuda With Limited Liability)

PROPOSED CAPITAL REORGANISATION

A notice convening a special general meeting of MAXX Bioscience Holdings Limited to be held at 10:30 a.m. on Monday, 26 April 2004 at Rooms 1910 — 1913, Hutchison House, 10 Harcourt Road, Central, Hong Kong are set out on pages 14 and 15 of this circular. If you are not able to attend the meeting, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon as soon as possible to the Company Secretary, Mr. P.C. Lee at Room 3802, Wu Chung House, 213 Queen’s Road East, Wanchai, Hong Kong and in any event not less than 48 hours before the time for holding the meeting or any adjourned meeting (as the case may be). Completion and return of the proxy form will not preclude you from attending and voting in person at the meeting or any adjourned meeting should you so wish.

* For identification purpose only

31 March 2004

CONTENTS

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Expected timetable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Letter from the Board
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
Capital Reorganisation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Effect of the Capital Reorganisation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
Adjustment to the Options and the Convertible Notes . . . . . . . . . . . . . . . . . . . . . . .	9
Conditions of the Capital Reorganisation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
Reasons for the Capital Reorganisation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
Trading Arrangements and Free Exchange of New Share Certificates . . . . . . . . . .	10
Arrangements of Odd Lot Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
Listing and Dealings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12
Information on the Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12
SGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12
Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	13
Notice of SGM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	14

— i —

DEFINITIONS

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

• “Adjusted Share(s)” share(s) of HK$0.01 each in the share capital of the Company subject to and immediately after the Capital Reorganisation becoming effective

• “Announcement Date” 10 March 2004, the date of announcement of the Company in relation to, inter alia, the proposed Capital Reorganisation

• “associates” the meaning ascribed thereto in the Listing Rules “Board” the board of Directors “Business Day” a day on which banks in Hong Kong are open for general business other than a Saturday or Sunday or a day on which a black rainstorm warning or tropical cyclone warning signal number 8 or above is hoisted in Hong Kong at any time between 9:00 a.m. and 12:00 noon and is not lowered at or before 12:00 noon

“Bye-laws” the bye-laws of the Company in force from time to time “Capital Reduction” the proposed reduction of capital of the Company by way of the cancellation of the paid-up capital to the extent of HK$1.99 on each Consolidated Share then issued such that the nominal value of all of the Consolidated Shares then issued will be reduced from HK$2.00 each to HK$0.01 each “Capital Reorganisation” the proposed capital reorganisation of the Company involving the Share Consolidation, the Capital Reduction, the Share Premium Cancellation and the Subdivision “CCASS” the Central Clearing and Settlement System, established and operated by HKSCC “Companies Act” The Companies Act 1981 of Bermuda, as amended “Company” MAXX Bioscience Holdings Limited, an exempted company incorporated in Bermuda with limited liability, the Shares of which are listed on the Stock Exchange

— 1 —

DEFINITIONS

“Consolidated Share(s)”	share(s) of HK$2.00 each in the share capital of the
	Company immediately upon the Share Consolidation
	taking effect but before the Capital Reduction
“Convertible Notes”	together, the convertible debentures in the principal
	amounts of HK$30,000,000 issued by the Company on 9
	October 2002 and the convertible notes in the principal
	amounts of HK$50,000,000 issued by the Company on
	10 December 2003
“Directors”	the directors of the Company for the time being as at the
	date of this circular
“Effective Date”	the date upon which the Capital Reorganisation becomes
	unconditional and effective, which is expected to be 27
	April 2004
“Group”	the Company and its subsidiaries
“HKSCC”	Hong Kong Securities Clearing Company Limited
“Latest Practicable Date”	25 March 2004, being the latest practicable date for
	ascertaining certain information for inclusion in this
	circular
“Listing Rules”	the Rules Governing the Listing of Securities on the
	Stock Exchange (as amended from time to time)
“Options”	outstanding options granted by the Company pursuant to
	the Scheme
“Registrar”	Computershare Hong Kong Investor Services Limited,
	the branch registrar of the Company in Hong Kong
“Scheme”	the share option scheme adopted by the Company on 17
	May 2002
“SGM”	a special general meeting of the Company to be convened
	and held for the consideration and approval of, inter
	alia, the Capital Reorganisation
“Share(s)”	share(s) of HK$0.10 each in the share capital of the
	Company before the Capital Reorganisation becomes
	effective

— 2 —

	DEFINITIONS
“Shareholder(s)”	holder(s) of the Share(s) or of Adjusted Share(s), where
	appropriate
“Share Consolidation”	the proposed consolidation of every 20 Shares into one
	Consolidated Share
“Share Premium Cancellation”	the cancellation of the entire amount standing to the credit
	of the share premium account of the Company as at 31
	December 2003
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Subdivision”	the proposed subdivision of each authorised but unissued
	Consolidated Share into 200 Adjusted Shares
“HK$”	Hong Kong dollars

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EXPECTED TIMETABLE

Set out below is an indicative timetable for the implementation of the Capital Reorganisation and the associated trading arrangements. Shareholders will be informed of any significant changes to the expected timetable by press notice.

In respect of the Capital Reorganisation and associated trading arrangements 2004 (Note) Latest time for lodging forms of proxy for the SGM . . . . . . . 10:30 a.m. on Saturday, 24 April SGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10:30 a.m. on Monday, 26 April Capital Reorganisation becomes effective and dealings in Adjusted Shares commence . . . . . . . . . . . . . . . . . . . . . . . . 9:30 a.m. on Tuesday, 27 April Temporary closure of original counter for trading in Shares (represented by existing off-white share certificates) in board lot of 2,000 Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9:30 a.m. on Tuesday, 27 April Temporary counter for trading in Adjusted Shares (represented by existing off-white share certificates) in board lot of 100 Adjusted Shares opens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9:30 a.m. on Tuesday, 27 April First day of free exchange of existing off-white share certificates for new pink share certificates for Adjusted Shares . . . . . . . . . . . . . . . . . . . . . . Tuesday, 27 April Original counter for trading in Adjusted Shares (represented by new pink share certificates) in the board lot of 2,000 Adjusted Shares reopens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9:30 a.m. on Tuesday, 11 May Parallel trading in Adjusted Shares (in the form of new and existing certificates) commences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9:30 a.m. on Tuesday, 11 May Designated agent to stand in the market to provide matching service to facilitate the odd lots trading commences . . . . . . . . . . . . . 9:30 a.m. on Tuesday, 11 May Closure of temporary counter for trading in the Adjusted Shares (represented by existing off-white share certificates) in the board lot of 100 Adjusted Shares . . . . . . . . . . . . . . . . . . . . . . . . . . 4:00 p.m. on Wednesday, 2 June Designated agent to stand in the market to provide matching service ends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4:00 p.m. on Wednesday, 2 June

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EXPECTED TIMETABLE

2004

(Note)

Parallel trading in Adjusted Shares (in the form of new and

existing certificates) ends . . . . . . . . . . . . . . . . . . . . . . . . . . . 4:00 p.m. on Wednesday, 2 June

Last day for free exchange of existing off-white share certificates

for new pink share certificates for Adjusted Shares . . . . . . . . . . . . . . . . . . . . Monday, 7 June

Note: All times refer to Hong Kong local times.

— 5 —

LETTER FROM THE BOARD

MAXX BIOSCIENCE HOLDINGS LIMITED （曼盛生物科技集團有限公司[*] ）

(Incorporated In Bermuda With Limited Liability)

Executive Directors: Ms. LO Yuk Yee (Chairman) Ms. HE Jin Hong (Deputy Chairman) Prof. ZANG Jing-Wu Dr. CAO Wu Mr. SIU Siu-ling, Robert

Independent non-executive Directors: Mr. FONG Chi Wah Mr. WONG Wai Kin

Registered Office: Clarendon House Church Street Hamilton HM11 Bermuda

Principal Place of Business in Hong Kong: Room 3802 Wu Chung House 213 Queen’s Road East Wanchai Hong Kong

31 March 2004

To the Shareholders

Dear Sir or Madam,

PROPOSED CAPITAL REORGANISATION

INTRODUCTION

On 10 March 2004, the Company announced its proposal to implement the Capital Reorganisation which will involve (a) a consolidation of every 20 Shares of HK$0.1 each into 1 Consolidated Share of HK$2.00 each; (b) a reduction in the nominal value of the Consolidated Shares then issued from HK$2.00 each to HK$0.01 each; (c) a cancellation of the entire amount standing to the credit of the share premium account of the Company as at 31 December 2003; and (d) a subdivision of each authorised but unissued Consolidated Share into 200 Adjusted Shares of HK$0.01 each. The total credit arising from the Capital Reduction and Share Premium Cancellation will be credited to the contributed surplus account of the Company, which will be used, amongst others, to set off against the accumulated losses of the Company as at 31 December 2003.

* For identification purpose only

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LETTER FROM THE BOARD

Subject to the passing of the resolution at the SGM as set out in the notice convening the SGM on pages 14 and 15 of this circular and immediately after the Capital Reorganisation having become effective, the Adjusted Shares will continue to be traded in board lots of 2,000 Adjusted Shares.

CAPITAL REORGANISATION

The Capital Reorganisation involves the Share Consolidation, the Capital Reduction, the Share Premium Cancellation and the Subdivision.

Share Consolidation

The Share Consolidation will be implemented to consolidate every 20 Shares of HK$0.10 each into 1 Consolidated Share of HK$2.00 each.

As at the Latest Practicable Date, the authorised share capital of the Company is HK$1,000,000,000 divided into 10,000,000,000 Shares of HK$0.1 each and 1,381,430,000 Shares have been issued and fully paid. Immediately after the Share Consolidation, the authorised share capital of the Company will remain HK$1,000,000,000 but divided into 500,000,000 Consolidated Shares of HK$2.00 each. On the basis of the issued share capital of HK$138,143,000 as at the Latest Practicable Date, there will be 69,071,500 Consolidated Shares of HK$2.00 each in issue once the Share Consolidation becomes effective.

Any fractional entitlements to the Consolidated Shares will be aggregated and sold and the proceeds will be retained for the benefit of the Company. The Consolidated Shares will rank pari passu in all respects with each other.

Capital Reduction, Share Premium Cancellation and Subdivision

The Capital Reduction of HK$137,452,285 will involve a reduction of the nominal value of the then issued Consolidated Shares from HK$2.00 to HK$0.01 each by cancelling the paid up capital to the extent of HK$1.99 on each of the Consolidated Shares then issued. The Share Premium Cancellation will involve the cancellation of the entire amount standing to the credit of the share premium account of the Company as at 31 December 2003. The balance of share premium account as at 31 December 2002 was HK$219,931,000. The Subdivision will involve the subdivision of each authorised but unissued Consolidated Share into 200 Adjusted Shares of HK$0.01 each.

The credit arising from the Capital Reduction and the Share Premium Cancellation will be credited to the contributed surplus account of the Company. Based on the audited accounts of the Company as at 31 December 2002 and the issued share capital of HK$138,143,000 as at the Latest Practicable Date, a credit of an aggregate amount of HK$357,383,285 will arise in the books of the Company as a result of the Share Premium Cancellation and the Capital

— 7 —

LETTER FROM THE BOARD

Reduction, which amount will be transferred to the contributed surplus account of the Company. On the basis of the balance of the contributed surplus account of the Company of HK$409,520,000 as at 31 December 2002, the contributed surplus account of the Company will then become HK$766,903,285 after such transfer. The Board proposes to apply part of such contributed surplus to set off against the accumulated losses of the Company as at 31 December 2003. On the basis of the audited balance of the accumulated losses of the Company of HK$541,066,000 as at 31 December 2002, the balance of the contributed surplus account is expected to be HK$225,837,285 after setting off in full the accumulated losses of the Company and may be applied in future in such manner as is permitted by the laws of Bermuda and the Bye-laws, including for capitalisation issues, for distribution to Shareholders and to set off accumulated losses, if any, of the Company. The Company at present has no intention to distribute such remaining balance of the contributed surplus to Shareholders.

Based on the closing prices as quoted on the Stock Exchange for the last ten trading days up to and including the last day before the Announcement Date, the average closing price per Share is HK$0.0818, and the Shares are therefore traded below par value of HK$0.10. As it is the law in Bermuda that a company cannot issue any shares below par value, the Company is practically precluded from raising capital in the stock market. The Directors believe that it would be beneficial to the Company by reducing the par value of the Adjusted Shares from HK$2.00 to HK$0.01, which will improve flexibility in future for the Company to raise fund via the issue of Shares and any issue of Shares will no longer be affected by the par value of the Shares.

EFFECT OF THE CAPITAL REORGANISATION

Based on the Company’s authorised share capital of HK$1,000,000,000 divided by 10,000,000,000 Shares of HK$0.10 each and the issued share capital of HK$138,143,000 represented by 1,381,430,000 Shares, upon completion of the Capital Reorganisation, the authorised share capital of the Company will remain at HK$1,000,000,000 but divided by 100,000,000,000 Adjusted Shares, and the issued share capital will be HK$690,715 represented by 69,071,500 Adjusted Shares.

Following the Capital Reorganisation, the credits arising from both the Capital Reduction and the Share Premium Cancellation will be transferred to the contributed surplus account of the Company to set off the entire accumulated losses of the Company as at 31 December 2003.

The Adjusted Shares will rank pari passu in all respects with each other. Other than the expenses incurred in relation to the Capital Reorganisation, the implementation thereof will not alter the underlying assets, business operations, management or financial position of the Company or the relative interests or rights of the Shareholders, save that any fractional Adjusted Shares will not be issued to the Shareholders but will be aggregated and sold for the benefit of the Company. Save as disclosed above, the Capital Reorganisation itself will not have any material effect on the financial position of the Company or the Group.

— 8 —

LETTER FROM THE BOARD

ADJUSTMENT TO THE OPTIONS AND THE CONVERTIBLE NOTES

As at the Latest Practicable Date, the number of outstanding Options and Shares convertible under the Convertible Notes is 66,200,000 Options and 500,000,000 Shares, respectively. Save for the Options and the Convertible Notes, the Company has no outstanding options, warrants or other securities convertible into or giving rights to subscribe for Shares. Adjustments will be made to the exercise price and/or the number of Adjusted Shares, as the case may be, to be issued upon exercise of the Options and the Convertible Notes immediately after the Capital Reorganisation has become effective. The Company will make further announcement with respect to such adjustment after Capital Reorganisation has become effective.

CONDITIONS OF THE CAPITAL REORGANISATION

The Capital Reorganisation will be conditional upon:—

• (a) the passing of the special resolution by the Shareholders to approve the Capital Reorganisation at the SGM;

• (b) compliance with the relevant legal procedures and requirements under the Companies Act to effect the Capital Reorganisation;

• (c) the Listing Committee of the Stock Exchange granting listing of, and permission to deal in, the Adjusted Shares in issue and following the implementation of the Capital Reorganisation, the Adjusted Shares falling to be issued upon exercise of the conversion rights attaching to the Options and Convertible Notes; and

• (d) the obtaining of all necessary approvals from the regulatory authorities or otherwise as may be required in respect of the Capital Reorganisation.

Assuming that all conditions are fulfilled, it is expected that the Capital Reorganisation will be effective from 9:30 a.m. on the Effective Date.

REASONS FOR THE CAPITAL REORGANISATION

The audited financial statements of the Company as at 31 December 2002 showed that the Company had accumulated losses of approximately HK$541 million. The Directors believe that it is unlikely that the Company will be able to generate sufficient profits in the future to eliminate such deficit and that it would be inappropriate for the Company to pay dividends while the deficit remains. As under the Bye-laws and the Companies Act, the credit arising from the Capital Reduction and the Share Premium Cancellation may be applied to eliminate the accumulated losses of the Company partly or entirely, the Directors propose that the Capital Reduction and the Share Premium Cancellation to be adopted by the Company such that the amount arising from such reduction and cancellation will be applied to eliminate the

— 9 —

LETTER FROM THE BOARD

accumulated losses of the Company as at 31 December 2003. Based on the accumulated losses as at 31 December 2002, the number of Shares in issue as at the Latest Practicable Date and the balance of the share premium account and the contributed surplus account as at 31 December 2002, the Directors expect that the accumulated losses of the Company as at 31 December 2003 can be fully eliminated upon the Capital Reduction and Share Premium Cancellation becoming effective.

The Shares are currently traded below the par value. Under the laws of Bermuda, a company cannot issue any shares at a discount to the par value of its shares. In view of this, the Company is practically precluded from raising capital in the stock market. In order to provide flexibility for further issue of shares in the Company, the Directors believe that it would be beneficial to the Company to effect the Capital Reorganisation which would result in a reduction in par value of the Adjusted Shares in the Company from HK$2.00 to HK$0.01 each.

The Share Consolidation is also intended to reduce the transaction costs for dealing in the Adjusted Shares after completion of the Capital Reorganisation.

The Director consider that the Capital Reorganisation is in the interest of the Company and its shareholders as a whole.

TRADING ARRANGEMENTS AND FREE EXCHANGE OF NEW SHARE CERTIFICATES

In the event that the Capital Reorganisation becomes effective on the Effective Date, all existing share certificates for any number of Shares in issue immediately before the Capital Reorganisation becoming effective will be deemed to be share certificates, and will be effective as documents of title on the basis of every 20 Shares representing one Adjusted Share. Dealings in Adjusted Shares are expected to commence at 9:30 a.m. on the Effective Date. Subject to the Capital Reorganisation becoming effective, the arrangements for dealings in the Adjusted Shares are expected to be as follows:—

• (i) With effect from 9:30 a.m. on Tuesday, 27 April 2004, a temporary counter for trading in the Adjusted Shares in board lots of 100 Adjusted Shares will be established and only existing off-white share certificates for the Shares can be traded at this counter. All existing off-white share certificates for the Shares will be valid for settlement and delivery for trading transacted at this counter on the basis of every 20 Shares representing 1 Adjusted Shares. The original counter for trading in the Shares in board lots of 2,000 will be temporarily closed with effect from 9:30 a.m. on Tuesday, 27 April 2004;

• (ii) With effect from 9:30 a.m. on Tuesday, 11 May 2004, the original counter will be reopened and will become a counter for trading in the Adjusted Shares in new board lots of 2,000 Adjusted Shares. Only new pink share certificates for the Adjusted Shares can be traded at this counter;

— 10 —

LETTER FROM THE BOARD

• (iii) Parallel trading arrangements for the Adjusted Shares in the form of new share certificates (which will be pink in color) and existing off-white share certificates for the Shares will be established with the Stock Exchange and parallel trading will be permitted from 9:30 a.m. on Tuesday, 11 May 2004 to 4:00 p.m. on Wednesday, 2 June 2004 (both days inclusive) at the counters mentioned in (i) and (ii) above; and

• (iv) The temporary counter for trading in the Adjusted Shares in board lots of 100 Adjusted Shares (represented by existing off-white share certificates for the Shares) will be closed after 4:00 p.m. on Wednesday, 2 June 2004. Thereafter, trading will only be in new pink share certificates for the Adjusted Shares in board lots of 2,000. The existing offwhite share certificates for the Shares will then cease to be marketable and not be acceptable for delivery and settlement purposes but will remain effective as documents of title on the basis of every 20 Shares for 1 Adjusted Share.

If the Capital Reorganisation becomes effective at 9:30 a.m. on the Effective Date, Shareholders may from Tuesday, 27 April 2004 to Monday, 7 June 2004 (both days inclusive) submit their existing off-white certificates of existing Shares to the Registrar at Rooms 1712 — 1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, for exchange, at the expenses of the Company, for new pink certificates in respect of Adjusted Shares in issue. During this period, it is expected that new pink share certificates for Adjusted Shares will be available for collection within ten Business Days after the submission of the existing offwhite share certificates to the Registrar. Thereafter, existing off-white share certificates for Shares will be accepted for exchange only on payment of a fee of HK$2.50 (or such higher amount as may from time to time be allowed by the Stock Exchange) for each existing offwhite share certificate for the Shares cancelled or each new pink share certificate issued for the Adjusted Shares, whichever number of certificates cancelled/issued, is higher. Nevertheless, existing off-white certificates in respect of existing Shares will continue to be good evidence of title and may be exchanged for new pink shares certificates in respect of Adjusted Shares at any time. The new share certificates will be issued in board lots of 2,000 Adjusted Shares. Dealings in the Adjusted Shares on the Stock Exchange will be subject to Hong Kong stamp duty.

ARRANGEMENTS OF ODD LOT FACILITIES

In order to facilitate the trading of odd lots of the Adjusted Shares as a result of the Capital Reorganisation, the Company has appointed Peace Town Securities Limited as an agent to match, on a “best effort” basis, the sale and purchase of odd lots of the Adjusted Shares arising from the Share Consolidation from 9:30 a.m. on Tuesday, 11 May 2004 to 4:00 p.m. on Wednesday, 2 June 2004 (both days inclusive). Shareholders who wish to take advantage of this matching facility either to dispose of their odd lots of Adjusted Shares or top up to board lots of 2,000 Adjusted Shares should contact Mr. James Chou of Peace Town Securities Limited at 2/F Aon China Building, 29 Queen’s Road Central, Hong Kong (Tel: 2822 8309) during the aforesaid period. Shareholders should note that the matching of the sale and purchase of odd lots of Adjusted Shares is not guaranteed.

— 11 —

LETTER FROM THE BOARD

Shareholders are recommended to consult their licensed securities dealers, bank managers, solicitors, professional accountants or other professional advisers if they are in any doubt about the facility described above.

LISTING AND DEALINGS

The Company will apply to the Listing Committee of the Stock Exchange for the granting of the listing of, and permission to deal in, the Adjusted Shares in issue and the Adjusted Shares falling to be issued upon exercise of the conversion rights attaching to Options and the Convertible Notes, following the implementation of the Capital Reorganisation.

Subject to the granting of the listing of, and permission to deal in, the Adjusted Shares in issue and the Adjusted Shares falling to be issued upon exercise of the conversion rights attaching to Options and the Convertible Notes, the Adjusted Shares will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect from the commencement date of dealings in the Adjusted Shares on the Stock Exchange or such other date as determined by HKSCC. Settlement of transactions between participants of the Stock Exchange on any trading day is required to take place in CCASS on the second trading day thereafter. All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time.

INFORMATION ON THE GROUP

The principal business of the Company is investment holding. Its subsidiaries are principally engaged in the development, manufacture and sale of tonic and health products in The People’s Republic of China and drug development.

The audited consolidated net losses for the two years ended on 31 December 2002 and 31 December 2001 were approximately HK$30.1 million and HK$155.7 million respectively. As at 31 December 2002, the net asset value of the Group was approximately HK$186.2 million while the net tangible asset value of the Group was approximately HK$131.6 million.

SGM

Set out in this circular is a notice convening the SGM which will be held at 10:30 a.m. on Monday, 26 April 2004 at Rooms 1910 — 1913, 19th Floor, Hutchison House, 10 Harcourt Road, Central, Hong Kong at which a resolution will be proposed to approve the Capital Reorganisation.

A form of proxy for use at the SGM is enclosed with this circular. If you do not intend to attend the 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 to the Company Secretary, Mr. P. C. Lee at Room 3802, Wu Chung House, 213 Queen’s Road East, Wanchai, Hong

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LETTER FROM THE BOARD

Kong, and in any event not less than 48 hours before the time appointed for the holding of the meeting. Delivery of a form of proxy will not preclude you from attending and voting in person at the meeting or any adjourned meeting should you so desire.

RECOMMENDATIONS

The Directors are of the opinion that the proposed Capital Reorganisation is in the interests of the Company and its Shareholders as a whole. Accordingly, the Directors recommend you to vote in favour of the resolution to be proposed at the SGM.

By Order of the Board MAXX Bioscience Holdings Limited Lo Yuk Yee Chairman

— 13 —

NOTICE OF THE SGM

MAXX BIOSCIENCE HOLDINGS LIMITED （曼盛生物科技集團有限公司[*] ）

(Incorporated In Bermuda With Limited Liability)

NOTICE IS HEREBY GIVEN that a special general meeting of MAXX Bioscience Holdings Limited (the “Company”) will be held at 10:30 a.m. on Monday, 26 April 2004 at Rooms 1910 — 1913, Hutchison House, 10 Harcourt Road, Central, Hong Kong for the purpose of considering and, if thought fit, passing the following resolution which will be purposed as a special resolution (with or without modification), as indicated below:

“ THAT , subject to the fulfillment of the conditions in respect of the Capital Reorganisation (as defined below) as set out in the circular dated 31 March 2004 (the “Circular”) and a copy of which has been tabled at the meeting and initialed by the Chairman and for the purpose of identification marked “A” and with effect from 9:30 a.m. on the next business day (not being a Saturday or Sunday) following the date on which this resolution is passed (the “Effective Date”):

• (a) Every twenty (20) issued and unissued shares of HK$0.10 each in the capital of the Company be consolidated into one (1) share of HK$2.00 each (the “Consolidated Share”) in the capital of the Company (the “Share Consolidation”) and any fractional entitlements to the then issued Consolidated Shares resulting from the Share Consolidation shall be aggregated and sold in the form of Consolidated Shares for the benefit of the Company in such manner and on such terms as the directors of the Company (the “Directors”) may think fit;

• (b) subject to and forthwith upon the Share Consolidation taking effect, the issued share capital of the Company be reduced by cancelling paid up capital to the extent of HK$1.99 on each then issued Consolidated Share on the Effective Date such that the nominal value of all the issued Consolidated Shares will be reduced from HK$2.00 to HK$0.01 each (the “Adjusted Shares”) (the “Capital Reduction”);

• (c) subject to and forthwith upon the Capital Reduction taking effect, each of all the authorised but unissued Consolidated Shares in the capital of the Company be subdivided into two hundred (200) Adjusted Shares (the “Subdivision”)

* For identification purpose only

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NOTICE OF THE SGM

• (d) subject to the Capital Reduction and Subdivision taking effect, the entire credit amount standing to the credit of the share premium account of the Company as at 31 December 2003 be cancelled (the “Share Premium Cancellation”);

• (e) the credits arising from the Capital Reduction and the Share Premium Cancellation be transferred to the contributed surplus account of the Company where it will be utilised by the Directors in accordance with the Bye-laws of the Company and all applicable laws, including towards application thereafter against the accumulated losses of the Company as at 31 December 2003 (the “Credit Application”); and

• (f) the Directors be and are hereby authorised to do all things and acts and sign all documents which they consider necessary, desirable, or expedient in connection with the implementation of the Share Consolidation, the Capital Reduction, the Subdivision, the Share Premium Cancellation (collectively, the “Capital Reorganisation”) and the Credit Application.”

By Order of the Board Lo Yuk Yee Chairman

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