Green Energy Group Limited — Proxy Solicitation & Information Statement 2003

Apr 14, 2003

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in doubt as to any aspect of this Circular or as to the action to be taken, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Prosper eVision 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 transfer was effected for transmission to the purchaser.

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

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Prosper eVision Limited 盈盛數碼世紀有限公司[*]

(incorporated in Bermuda with limited liability)

DISCLOSEABLE TRANSACTION PROPOSED ACQUISITION OF SHARES IN

STARWOOD INVESTMENT LIMITED

* for identification purpose only

14 April 2003

CONTENTS

	Page
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD OF THE DIRECTORS. . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
APPENDIX I – GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
APPENDIX II – INDEPENDENT VALUATION REPORT . . . . . . . . . . . . . . . . . . . . . . . . .	14

DEFINITIONS

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

“Acquisition”	means the acquisition by the Company or its subsidiary
	from the Vendor of the Sale Shares pursuant to the
	Agreement;
“Aggregate Consideration”	means HK$22,500,000 comprising the consideration of the
	Sale Shares of HK$14,000,000 and HK$8,500,000 as
	consideration for the acquisition of Zhangchun’s 40%
	interest in Mandarin Garden;
“Agreement”	means a sale and purchase agreement entered into between
	the Company or its subsidiary as purchaser and the Vendor
	on 14 February 2003 in connection with the Acquisition;
“associate(s)”	has the meaning ascribed thereto under the Listing Rules;
“Board”	means board of directors of the Company;
“Company”	means Prosper eVision Limited, a company incorporated in
	Bermuda with limited liability, the ordinary share capital
	of which is listed on the Stock Exchange;
“Completion”	means completion of the Agreement, which is agreed to
	take place on 7 March 2003 or such other date as the parties
	may agree but in any event shall be no later than 31 March
	2003;
“Conditions”	means the conditions set out in the paragraph headed
	“Conditions of the Agreement”;
“Consideration”	means a total of HK$14 million for the Acquisition, subject
	to adjustment, if any, in accordance with the Agreement;
“Development Contract”	means the contractual arrangement made among Starwood,
	Dongguan City Fucheng Property Development Company
	(東莞市附城區房地產開發公司) and Dongguan City
	Fucheng Zhangchun Enterprises Development Company (東
	莞市附城樟村實業發展公司) (“Zhangchun” (樟村)) on
	21 July 1992 to jointly develop Mandarin Garden of which
	Starwood and Zhangchun respectively have 60% and 40%
	interest in the net profits or losses to be derived from this
	development;
“Director(s)”	means executive director(s) of the Company;
“Down Payment”	means RMB4,000,000 in cash representing approximately
	HK$3,809,523.81 to be paid by Starwood to Zhangchun
	(樟村) under the Zhangchun Contract effectively within
	eight days from Completion;

– 1 –

DEFINITIONS

“Fucheng”	means Dongguan City Fucheng Property Development
	Company (東莞市附城區房地產開發公司);
“Group”	means the Company and its subsidiaries;
“Hong Kong”	means the Hong Kong Special Administrative Region of
	the PRC;
“Independent Third Party”	person who is independent of and not connected with the
	directors, chief executive and substantial shareholders of
	the Company or any of its subsidiaries or the associates of
	any of them as defined in the Listing Rules;
“Independent Valuation Report”	means the independent valuation report on the value of the
	Development Contract as appended in Appendix II hereto;
“Latest Practicable Date”	means 18 March 2003 being the latest practicable date for
	the purpose of ascertaining certain information contained
	herein prior to the printing of this Circular;
“Listing Rules”	means the Rules Governing the Listing of Securities on the
	Stock Exchange;
“MOFTEC”	means the Ministry of Foreign Trade and Economic Co-
	operation;
“Mandarin Garden”	means the property development project located in
	Zhangchun, Fucheng, Dongguan City, PRC;
“New Completion”	means new completion as stated in the Supplemental
	Agreement on or before 15 May 2003;
“PRC”	means the People’s Republic of China;
“Sale Shares”	means 1,000,000 shares of HK$1.00 each representing 100%
	of the entire issued share capital of Starwood;
“Shareholder(s)”	mean shareholders of the Company;
“Starwood”	means Starwood Investment Limited, a private company
	incorporated on 26 May 1992 in Hong Kong with limited
	liability;
“Stock Exchange”	means The Stock Exchange of Hong Kong Limited;
“Supplemental Agreement”	means the supplemental agreement signed by the Purchaser
	and the Vendor on 9 April 2003;
“Vendor”	means Portman Properties Limited, a company incorporated
	in the British Virgin Islands with limited liability;

– 2 –

DEFINITIONS

“Zhangchun”	means Dongguan City Fucheng Zhangchun Enterprises
	Development Company (東莞市附城樟村實業發展公司);
“Zhangchun Contract”	means the contract entered into between Starwood and
	Zhangchun on 11 December 2002 to acquire from
	Zhangchun (樟村) all of its 40% interest in the net profits
	to be derived from the development of the Mandarin Garden;
“HK$”	means Hong Kong dollars, the lawful currency of Hong
	Kong;
“RMB”	means Renminbi the lawful currency of PRC.
	HK$1 = RMB1.05;
“%”	means per cent.

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LETTER FROM THE BOARD OF THE DIRECTORS

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Prosper eVision Limited 盈盛數碼世紀有限公司[*]

(incorporated in Bermuda with limited liability)

Executive Directors: Tam Jin Rong Yu Won Kong, Dennis Ko Chung Ting, Peter

Independent Non-Executive Directors: Yue Wai Keung Tang Cheung Fai Lee Sau Ying, Ellie Choy Sai Man

Registered office: Cedar House 41 Cedar Avenue Hamilton HM12 Bermuda

Head office and principal place of business in Hong Kong: 1801-3, 18th Floor, Hutchison House 10 Harcourt Road Central Hong Kong 14 April 2003

To the shareholders

Dear Sir/Madam,

DISCLOSEABLE TRANSACTION PROPOSED ACQUISITION OF SHARES IN STARWOOD INVESTMENT LIMITED

INTRODUCTION

The Directors announced on 19 February 2003 that the Company had entered into the Agreement with the Vendor on 14 February 2003 to acquire the Sale Shares for an aggregate consideration of HK$14,000,000 (subject to any adjustment described below) to be satisfied by a combination of cash in the sum of HK$1,400,000 and issue of the promissory notes in the sum of HK$12,600,000 by the Company in favour of the Vendor subject to and upon terms and conditions described below.

Upon completion of the Acquisition, the Company will hold 100% of the issued share capital of Starwood.

The Acquisition constitutes a discloseable transaction for the Company for the purposes of the Listing Rules under the modified test calculation as applied by the Company and approved by the Stock Exchange on 4 October 2002 as stated in the Company’s announcement dated 16 October 2002. The purpose of this Circular is to provide Shareholders further details of the Acquisition.

• for identification purpose only

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LETTER FROM THE BOARD OF THE DIRECTORS

THE AGREEMENT

Date of Agreement

14 February 2003

Parties involved

The Purchaser: the Company (or its subsidiary).

The Vendor: Portman Properties Limited, a company incorporated in the British Virgin Islands with limited liability. The Vendor, its beneficial owners and directors are Independent Third Parties.

Assets

The Sale Shares represent the entire issued share capital of Starwood, who has entered into a Development Contract regarding the development of the Mandarin Garden situated at Zhangchun, Fucheng, Dongguan City, PRC with unbuilt land area of approximately 12,580 square metres. Under the Development Contract, Starwood and Zhangchun respectively have 60% and 40% interest in the net profits or losses to be derived from the development of the Mandarin Garden. Under the Zhangchun Contract, and a supplemental agreement to be signed by Starwood and Zhangchun, the purpose of which is to (1) correct the description/title of the Zhangchun Contract, (2) clarify that the subject matter to be transferred under the Zhangchun Contract is actually the rights of Zhangchun under the Development Contract, and (iii) provide that, should the Development Contract be held invalid or void, all monies received by Zhangchun from Starwood under the Zhangchun Contract will be returned to Starwood as if it has never been entered into. Starwood will be entitled to 100% of all the contractual economical rights regarding the land pertaining to Mandarin Garden.

Consideration

The Consideration is in the sum of HK$14,000,000 (subject to adjustment, if any, as set out in Condition II (b) below) to be satisfied by a combination of cash in the sum of HK$1,400,000 and issue of the promissory note in the sum of HK$12,600,000 with the following redemption dates and redeemable amounts by the Company in favour of the Vendor:–

• (a) 9 months after Completion, HK$2,800,000

• (b) 12 months after Completion, HK$2,800,000

• (c) 15 months after Completion, HK$2,800,000

• (d) 18 months after Completion, HK$4,200,000

Such Consideration is to be financed by internal resources or by bank loans, if appropriate.

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LETTER FROM THE BOARD OF THE DIRECTORS

Terms of the Promissory Notes

• (a) The Company has the option to redeem earlier than the redemption dates;

• (b) If the Company commits any default on the payment to the Vendor under the Promissory Note, then the whole balance then unpaid, whether or not there has been any waiver of any previous payment, shall become immediately payable on demand from the Vendor.

The Board has satisfied themselves that the consideration is fair and reasonable as it was determined after arm’s length negotiation between the Company and the Vendor based on the Independent Valuation Report. According to the Independent Valuation Report, the fair market value of all the contractual rights in the Development Contract and the Zhangchun Contract as valued on 31 January 2003 is HK$28,000,000.

Conditions of the Agreement

According to the Agreement, Completion is conditional upon all of the following Conditions being satisfied on or before Completion:

• I. Conditions applicable to the Purchaser include, inter alia:

• (a) If necessary, all approvals by the board of directors of the Company, the Purchaser and all approval from the government and regulatory authorities in Hong Kong or PRC (including without limitation the Stock Exchange and the Bermuda Monetary Authority), corporate approvals and consents for the transactions contemplated under this Agreement having been obtained on or before Completion (including but not limited to the issue of the promissory notes pursuant to this Agreement); and if any of such shareholders’, governmental and regulatory and/or corporate approvals and consents are given subject to conditions, then PROVIDED THAT such conditions having been reasonably acceptable to the Purchaser, but the Purchaser shall not unreasonably refuse to accept the said conditions;

• (b) all relevant regulatory requirements (including without limitation to those under the listing rules of the Stock Exchange and all relevant regulatory requirements in Hong Kong) having been complied with and satisfied;

• (c) the Purchaser having informed the Vendor that the Purchaser is fully satisfied with the result of the due diligence. The Purchaser cannot, however, raise any unreasonable objection to or express any unreasonable dissatisfaction towards the result of the due diligence. In particular, the Purchaser is fully satisfied with the due diligence examination on taxation matters of the Company and government fees both paid and/or payable by the Company in Hong Kong and/ or abroad and undertake not to claim against the Vendor for any damages or remedies arising therefrom;

• (d) an independent legal opinion issued by a lawyer qualified to practice in the PRC on the legality of the Development Contract and the Zhangchun Contract with all necessary assistance to be provided by the Vendor; and

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LETTER FROM THE BOARD OF THE DIRECTORS

• (e) an independent valuation report on the unbuilt land under the Development Contract and the Zhangchun Contract showing that its value is greater than the Aggregate Consideration. with all necessary assistance to be provided by the Vendor.

• II. Conditions applicable to the Vendor include, inter alia:

• (a) Starwood has entered into the Zhangchun Contract;

• (b) Starwood shall use its reasonable endeavour to negotiate with Zhangchun (樟村) with a view to reducing the price as stated in the Zhangchun Contract to a new price which is not more than HK$8,500,000. If, on Completion, the new price is more than HK$8,500,000 then an adjustment shall be made against the Consideration such that the Consideration shall be reduced accordingly; and

• (c) The approval of the board of directors of the Vendor.

In the event any of the Conditions are not fulfilled or waived prior to 5:00 p.m. on 31 March 2003, the Company shall not be bound to proceed with the purchase of the Sale Shares provided it shall have used all reasonable endeavours to procure the fulfillment of the Conditions, and the agreement shall cease to have any effect.

As the Completion Date as stated in the Agreement has already expired, the Vendor and the Purchaser have entered into a Supplemental Agreement on 9 April 2003 as described below, to, inter alia, extend completion to a date on or before 15 May 2003.

Completion

Completion shall take place on or before 15 May 2003, as agreed by the parties in the Supplemental Agreement as described below.

Supplemental Agreement

The Vendor and the Purchaser have signed on 9 April 2003 a supplemental agreement for, inter alia, postponing the Completion Date to a date on or before 15 May 2003 and also to the effect that, should the Development Contract and the Zhangchun Contract be held by the PRC Court illegal or unenforceable:–

• (i) the Vendor agrees not to redeem any Promissory Note remain unredeemed and return any cash received from the Purchaser (including HK$1,400,000 in cash being the cash portion of the Consideration), without any interest thereon, back to the Purchaser pursuant to any previous redemption of the Promissory Note;

• (ii) the Purchaser agrees to transfer back the Sale Shares to the Vendor and re-assign any assigned debts and/or liabilities to the Vendor; and

• (iii) save and subject to the above, all the terms and conditions of the Agreement shall remain in full force and effect.

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LETTER FROM THE BOARD OF THE DIRECTORS

In light of (i) and (ii) above, the whole Agreement will effectively be terminated if the Development Contract and the Zhangchun Contract be held illegal or unenforceable.

The Board believes that the Company will suffer no loss in the unlikely event that there is any issue of enforceability in the Development Contract and/or the Zhangchun Contract.

INFORMATION ON STARWOOD AND MANDARIN GARDEN

Starwood is a company incorporated on 26 May 1992 in Hong Kong with limited liability. It is set up for entering into the Development Contract and the development of Mandarin Garden.

Under the Zhangchun Contract, Starwood has agreed to pay Zhangchun RMB9,204,200 in cash representing approximately HK$8,765,905 for Zhangchun’s 40% interest in the Mandarin Garden. Starwood was required under the Zhangchun Contract to pay the Down Payment effectively within eight days from Completion. The Zhangchun Contract also stipulates that Starwood is to pay Zhangchun (樟村 ) the remaining RMB5,204,200 in cash representing approximately HK$4,956,380.95 within 12 months and 10 days after paying the Down Payment. The Company or its subsidiary is required to finance the payments made in the Zhangchun Contract up to HK$8,500,000 by internal resources or by bank loans if appropriate.

The Company’s PRC lawyers have confirmed, based on relevant PRC law, that Fucheng has the land use right of the land regarding Mandarin Garden and that the Development Contract is legal and enforceable. In accordance with the common practice adopted by the parties in land development projects in Dongguan at the time, no approval was obtained from the MOFTEC regarding the Development Contract. Therefore the Development Contract may possibly be held void if there is any dispute. However, under the relevant PRC laws governing contractual agreements, the Development Contract and the Zhangchun Contract do reflect the true intention of all the relevant parties and are themselves legal. Further, after New Completion, the Purchaser will procure the completion of all necessary legal registration procedures under the relevant PRC laws in order to comply with all the relevant legal requirements including, forming a Foreign Investment Enterprise (外商投資企業 ) to be registered with the Dongguan MOFTEC, to develop Mandarin Garden. The Company’s PRC lawyers have confirmed that there is no legal impediment for such remedial procedures to be taken. Fucheng has no right under the Development Contract and the relevant PRC laws to transfer the land use rights without the consent of Starwood and Zhangchun. Moreover, according to the Development Contract, Starwood, Fucheng and Zhangchun agreed to jointly develop Mandarin Garden with Starwood and Zhangchun sharing profits of 60% and 40% respectively while Fucheng receives management fee of 8% on the sale proceeds in respect of the land use right. Such management fee was agreed among Starwood, Fucheng and Zhangchun in the Development Contract.

Based on the unaudited management account of Starwood, the unaudited net asset value as at 31 December 2002 was approximately RMB4,701,291 representing approximately HK$4,477,420. The unaudited net loss after tax for the year ended 31 December 2001 was RMB402,647 representing approximately HK$383,473 and the unaudited net profit after tax for the year ended 31 December 2002 was RMB1,624,396 representing approximately HK$1,547,044.

Mandarin Garden

Since 1992 and prior to the Acquisition, Starwood developed a total of 18 blocks of buildings with approximately 97 shop units and 496 residential units built on land measuring approximately

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LETTER FROM THE BOARD OF THE DIRECTORS

23,700 square metres out of a total site area of approximately 36,280 square metres. Out of the 18 blocks constructed, 15 blocks were mostly sold and occupied with the remaining 3 blocks pending the granting of occupation permits by PRC authorities. The Vendor has confirmed that Fucheng has the land use right on the said land which is subject to an independent legal opinion issued by a lawyer qualified to practice in the PRC under condition I(d). The legal opinion will confirm that Fucheng has the land use right of the said land and that the Development Contract and Zhangchun Contract are legally valid and binding.

Based on a preliminary design which may change depending on market conditions, the project will be developed on the remaining unbuilt land in Mandarin Garden measuring approximately 12,580 square metres in 4 stages. Tentatively, the first two stages of which will be the building of car parks and shops to be sold which may change subject to the progress of design and/or construction. It is expected that the first stage will cost around HK$5,000,000 to be financed by internal resources or by bank loans if appropriate. The proceeds received from the sale of the car parks and shops in the first stage will be used to finance the development for the second stage and this self-financing mechanism will be applied for the development of the remaining stages. The Development costs after the first stage is not yet determined by the Company at this stage.

REASON FOR THE ACQUISITION

The Company is principally engaged in investment holding and construction service and as stated in the 2002 interim report, in order to capitalize on the Company’s expertise in the construction field, the Company would look for opportunities in the construction and property related areas in PRC. In light of the Independent Valuation Report, the Directors and the independent non-executive directors believe that the Acquisition would improve the profitability of the operations of the Group.

ADDITIONAL INFORMATION

Your attention is drawn to the further information contained in the appendices to this Circular.

By Order of the Board Prosper eVision Limited Tam Jin Rong Executive Director

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GENERAL 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 the omission of which would make any statement herein misleading.

2. DISCLOSURE OF INTERESTS

As at the Latest Practicable Date, the interests of the Directors in the equity or debt securities of the Company or any associated corporation (within the meaning of the SDI Ordinance) which are required to be notified to the Company and the Stock Exchange pursuant to Section 28 of the SDI Ordinance (including interests which any such Director is deemed or taken to have under Section 31 or Part I of the Schedule to SDI Ordinance) or which are required pursuant to Section 29 of the SDI Ordinance to be entered in the register referred to therein, or which are required to be disclosed pursuant to the Model Code for Securities Transactions by Directors of Listed Companies were as follows:

(A) The Company

Ordinary Shares

Name of Director	Type of Interest	Number of Shares
Mr. Tam Jin Rong	Corporate_(Note)_	215,000,000
Mr. Yu Won Kong, Dennis	Personal	20,000,000

Note: These shares were held through Euro Concord Assets Limited (“Euro Concord”) in which Mr. Tam Jin Rong is the sole director and sole shareholder.

Save as disclosed above, none of the Directors or their associates had any personal, family, corporate or other interest in the equity or debt securities of the Company or any of its associated corporations as defined in the SDI Ordinance as at the Latest Practicable Date.

Other than the Company’s employee share option scheme, at no time during the period was the Company, its holding company, its subsidiaries or its fellow subsidiaries a party to any arrangements to enable the Directors or their associates to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.

As at the Latest Practicable Date, none of the Directors had any direct or indirect interest in any assets which had been acquired or disposed of by or leased to any member of the Group since 31 December 2001 (the date to which the latest published audited consolidated accounts of the Company were made up) or which are proposed to be so acquired, disposed of or leased.

There is no contract or arrangement subsisting at the date of this Circular in which any of the Directors is materially interested and which is significant in relation to the business of the Group.

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GENERAL INFORMATION

APPENDIX I

3. SUBSTANTIAL SHAREHOLDERS

As at the Latest Practicable Date, the following interest of 10% or more in the issued share capital of the Company were recorded in the register of interest required to be kept by the Company pursuant to Section 16(1) of the SDI Ordinance:

Shareholders	Number of Shares
Best Fortune Capital Ltd. (“Best Fortune”)(Note 1)	253,769,585
China Convergent Corporation Limited (“China Convergent”)(Note 2)	241,169,585
Gold Chief Investment Ltd. (“Gold Chief’)(Note 2)	241,169,585
Euro Concord	215,000,000

• Note 1: Best Fortune holding 49.96% interest in China Convergent is its controlling shareholder. The interests of Best Fortune in the Company are held through China Convergent and Gold Chief. In addition, Best Fortune also holds in its own namely 0.65% interest of the Company.

• Note 2: By virtue of the SDI Ordinance, China Convergent holding 100% interest in Gold Chief is deemed to be interested in the 241,169,585 shares held by Gold Chief.

4. LITIGATION

As disclosed in the Company’s annual report of Year 2001, a former employee of the Group has filed a claim against the Company on or about 23 June 2000 in respect of its failure to allot and issue certain shares pursuant to the 1997 Share Option Scheme of the Company. The amount of his claim against the Company is approximately HK$4,235,000. No further step has been taken by the former employee. According to the legal advice which takes into account of the merits of the case, the Company did not make any provision in respect of this claim in the financial statements.

As disclosed in the Company’s annual report of Year 2001, in or about July 2000, a subsidiary of the Company was sued by China Top Consultants Limited, a legal consultancy firm, for a dispute on unsettled consultancy fees of approximately HK$4,357,000. The Company has already filed its Counter-claim against China Top Consultants Limited for breach of professional code and conduct. The case has been set down for trial and an appointment has been made with the Court for fixing the dates of trial. For prudence’s sake, full provision has been made.

As disclosed in the announcement dated 19 November 2002, the Company’s two whollyowned subsidiaries namely Prosperity Construction and Decoration Limited (formerly known as OLS International Limited) and Prosperity Construction and Decoration (HK) Limited (formerly known as OLS International (HK) Limited), were involved in a litigation in relation to the interior fitting out works to hotel and services apartment of Beijing Oriental Plaza. The litigation is still proceeding and hearing will be postponed until 27 May 2003. The Company would be required to pay HK$8,700,000 if the litigation was not successful. The Company is seeking to stay the proceedings on the grounds of a dispute of the forum. According to the legal advice which takes into account the merits of this case, the Company did not make any provision.

As disclosed in the announcement dated 16 August 2002, an ex-director of the Company has issued a writ against the Company allegedly suffered loss and damage relating to purported share options exercised in 1999 amounting to HK$18,787,500. The Company has filed a Counter-claim

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GENERAL INFORMATION

APPENDIX I

against the ex-director for HK$140,000,000. According to the legal advice which takes into account the merits of this case, the Company did not make any provision.

Save as disclosed herein, no litigation or claim of material importance is known to the Directors to be pending or threatened against the Group.

5. SERVICE CONTRACTS

None of the Directors has any existing or proposed service contract with any member of the Group which is not expiring or terminable by the Group within one year without payment of compensation (other than statutory compensation).

6. MISCELLANEOUS

• (A) The secretary of the Company is Mr. Ko Chung Ting, Peter, who is an associate member of The Hong Kong Society of Accountants.

• (B) The Principal Share Registrar and Transfer office of the Company is at Reid Management Limited, Cedar House, 41 Cedar Avenue, Hamilton HM 12, Bermuda.

• (C) The Hong Kong Branch Share Registrar and Transfer Office of the Company is at Computershare Hong Kong Investor Services Limited, 1901-5, 19th Floor, Hopewell Centre, 183 Queen’s Road East, Hong Kong.

• (D) The Valuer is RHL Appraisal Ltd. whose address is located at Room 1010, Star House, Tsimshatsui, Kowloon.

7. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection during normal business hours at the principal place of business of the Company up to and including 30 April 2003:

• (A) the memorandum of association and bye-laws of the Company;

• (B) the audited financial statements of the Company for the two years ended 31 December 2000 and 2001; and

• (C) Independent Valuation Report referred to in Appendix II.

8. EXPERTS

• (A) The Valuer, directors of which, Ms. Serena S.W. Lau is an Associate of the Hong Kong Institute of Surveyors, an Associate of the Australian Property Institute, a Registered Professional Surveyor in General Practice and a qualified real estate appraiser in the PRC, and Mr. Tse Wai Leung is a member of the Royal Institution of Chartered Surveyors, a member of the Hong Kong Institute of Surveyor, a Registered Professional Surveyor in General Practice and a qualified real estate appraiser in the PRC, have over eight years’ experience in valuation of properties in Hong Kong, Macau and the PRC.

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GENERAL INFORMATION

APPENDIX I

• (B) The Valuer has given and have not withdrawn its written consent to the issue of this Circular with the inclusion of their statements, letters and reference to their names in the form and context in which they appear.

• (C) The Valuer is not beneficially interested in the share capital of any member of the Group and has no right, whether legally enforceable or not, to subscribe for or to nominate persons to subscribe for securities in any member of the Group.

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INDEPENDENT VALUATION REPORT

APPENDIX II

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香港九龍尖沙咀星光行1010室

11 April 2003

The Directors Prosper eVision Limited Room 1801-3 Hutchison House 10 Harcourt Road Central, Hong Kong

Dear Sirs,

• Re: Valuation of all the Contractual Economical Rights in a Development Contract Regarding a Parcel of Unbuilt Land at Mandarin Garden, Zhangchun, Fucheng, Dongguang City, Guangdong Province, in the People’s Republic of China (the “PRC”)

1. INSTRUCTION

In accordance with the instructions of Prosper eVision Limited (referred to the “Company”) for us to value all the contractual economical rights in a development contract (referred to as the “Development Contract”) regarding a parcel of unbuilt land at Mandarin Garden, Zhangchun, Fucheng, Dongguang City, Guangdong Province, the PRC (referred to as “the Development Project”), we confirm that we have carried out inspection of the Development Project, made relevant enquiries and obtained such further information as we consider necessary for the purpose of providing the fair market value of the Development Contract as at 31 January 2003 (the “valuation date”).

This letter which forms part of our valuation report explains the basis and methodology of valuation and clarifies nature of the Development Contract and the title of the Development Project and set out the assumptions made and other qualifications.

2. BASIS OF VALUATION

The land use rights in the Development Project are currently held by Dongguan City Fucheng Property Development Company (“Fucheng”). Pursuant to the Development Contract made among Starwood Investment Limited (referred to as “the Starwood”), Fucheng and Dongguan City Fucheng Zhangchun Enterprises Development Company (“Zhangchun”) on 21 July 1992, the parties agreed to jointly develop the Development Project. In return, 60% and 40% net profits/losses from the Development Project shall be shared by Starwood and Zhangchun respectively. By a contract entered into between Starwood and Zhangchun on 11 December 2002, Starwood acquired from Zhangchun all of its 40% interest in the Development Contract and hence Starwood is entitled to all the profits/losses from the Development Project.

The capital value of the Development Contract has been arrived at on the basis of “Fair Market Value” in the premise of continued use which, in our appraisal, reflects the future economic benefit to be derived from the Development Project . Fair Market Value in continued use premise is defined as the estimated amount at which an asset (i.e. all the contractual economical rights in the Development Contract) might be expected to exchange between a willing buyer and a willing

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INDEPENDENT VALUATION REPORT

APPENDIX II

seller, neither being under compulsion, each having reasonable knowledge of all relevant facts, and with the buyer and seller contemplating retention of the asset for continuation of current operations or implementation of its development proposal as planned.

3. VALUATION METHODOLOGY

In this valuation, we have adopted the income approach technique known as the discount cash flow method. In this method, development period of the project is equally subdivided into time intervals. Cash inflow by way of sales of the Development Project and cash outflow by way of development costs were estimated for each time interval. A net cashflow was then determined for the corresponding time interval. Indication of capital value is developed by discounting all the net cashflows throughout the development period at a market-derived rate of return appropriate for the risks and hazards for undertaking Development Project.

4. TITLE INVESTIGATION

We have been, in some instances, provided with extracts of title documents relating to the Development Project. However, we have not searched the original documents to verify ownership nor to verify the existence of any lease amendments which do not appear on the copies handed to us. We have been confirmed by the PRC legal advisor to the Starwood that the Development Contract and the Contract dated 11 December 2002 entered into between Starwood and Zhangchun are all valid and enforceable under the PRC law. All the documents are disclosed herewith for reference only.

5. ASSUMPTION

Our valuation included on-site inspection, discussions with the management of the Starwood over the Development Project; a review of the information provided by the Starwood in connection with the construction and sale programs of the project. We have assumed that such information, opinions and representation provided to us are true and accurate. Before arrived at our opinion of value, we have considered the following major factors:

• i. the property market conditions at which the Development Project is situated;

• ii. the development scheme for the Development project as provided by the Starwood; and

• iii. the market-derived investment returns of enterprises engaged in a similar project.

In view of the general environment and the particular situation in which the Development Project is situated, the following assumptions have been adopted in our valuation in order to sufficiently support our concluded value of the Development Contract:

• i. there will be no major change in the existing political, legal and economic conditions in the PRC in which the Business Enterprises is being operated;

• ii. there will be no major change in the current taxation law in the PRC, that the rates of tax payable remain unchanged and that all applicable laws and regulations will be complied with;

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• iii. the interest rates and exchange rates will not differ materially from those presently prevailing;

• iv. the availability of finance will not be a constraint on the ongoing of the Development Project;

• v. the Development Project is free from any charge, mortgage, land premium, resettlement compensation or amount owing on the Development Project;

• vi. Starwood shall have uninterrupted rights to develop and sell the Development Project throughout the land use rights period of the Development Project free from any additional land premium or fee of substantial amount payable to the Government authorities; and

• vii. Starwood has obtained all necessary permits and approvals to carry out the Development Project.

6. LIMITING CONDITIONS

We have inspected the Development Project. However, we must point out that we have not carried out site investigations to determine the suitability of the ground conditions or the services of the Development Project. Our valuation has been made on the basis that these aspects are satisfactory and that no extraordinary expenses or delays will be incurred during the construction period. All dimensions, measurements and areas are approximate.

We have relied to a considerable extent on the information provided by the Starwood and have accepted advice given to us by it on matters such as statutory notices, land use right, tenure, occupancy, site and floor areas and in the identification of the Development Project.

We have no reason to doubt the truth and accuracy of the information as provided to us by the Starwood. We have relied on the Starwood confirmation that no material facts have been omitted from the information supplied.

7. REMARKS

We have valued the Development Contract in Hong Kong Dollars (HK$). The conversion of Renminbi (RMB) into HK$ is based on the factor of RMB1.05 to HK$1.0 with reference to the prevailing exchange rate on the valuation date.

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8. VALUATION

In view of the above, we are of the opinion that the fair market value of the Development Contract as at the valuation date, in the existing state and free of any encumbrances, is in the sum of HK$28,000,000. – (HONG KONG DOLLARS TWENTY EIGHT MILLION ONLY) .

We enclose herewith the valuation certificate.

Yours faithfully, For and on behalf of RHL Appraisal Ltd.

Serena S.W. Lau Tse Wai Leung MHKIS AAPI RPS (GP) BSc MRICS MHKIS RPS(GP) Managing Director Director

Serena S. W. Lau, who is a member of the Hong Kong Institute of Surveyors, an Associate of the Australian Property Institute, a Registered Professional Surveyor in General Practice and a qualified real estate appraiser in the PRC, and Tse Wai Leung, who is a member of the Royal Institution of Chartered Surveyors, a member of the Hong Kong Institute of Surveyor, a Registered Professional Surveyor in General Practice and a qualified real estate appraiser in the PRC, have over eight years’ experience in valuation of properties in Hong Kong, in Macau and in the PRC.

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VALUATION CERTIFICATE

Subject Asset

Description of the Development Contract Fair Market Value and the Development Project as at 31 January 2003

The subject assets under consideration comprises all the contractual economical rights in a development contract (the “Development Contract”) regarding a parcel of unbuilt land at Mandarin Garden, Zhangchun, Fucheng, Dongguang City, Guangdong Province, the PRC.

Pursuant to the Development Contract dated 21 July 1992 entered into between Dongguan City Fucheng Property Development Company (“Party A”), Dongguan City Fucheng Zhangchun Enterprises Development Company (東莞市附城樟村實業發展公司 ) (“Party B”) and Starwood Investment Limited (Party C), the development project is jointly developed by the said parties.

Mandarin Garden is a large-scale residential development covering a total land area of 36,275 square metres and is erected with various medium-rise residential buildings.

HK$28,000,000

The development project under consideration comprises a parcel of unbuilt land within Mandarin Garden with an area of approximately 12,580 square metres.

According to the development scheme provided by the Starwood, the development project, upon completion, will comprise three blocks of 18-storey residential building. Commercial premises and resident clubhouse will be provided on the ground floor underneath. As advised by the Starwood, the development project will be completed in 2005.

Upon completion, the total gross floor area of the development project will be 26,100 square metres which is broken down as follows:

Users	Gross Floor Area
	(sq.m.)
Residential	23,970
Shop	1,680
Clubhouse	450
Total:	26,100

In addition, a 2-storey carport building accommodating 425 car parking spaces will also be provided within the development project.

Notes:

1. As stipulated in the Land Use Certificate dated 20 October 1992, the land use rights in the development project is held by Dongguan City Fucheng Property Development Company (東莞市附城區房地產開發公司) for commercial/ residential uses for a term of 70 years commencing from October 1992 and expiring in October 2062.

2. Pursuant to the Development Contract dated 21 July 1992 entered into between Dongguan City Fucheng Property Development Company (“Party A”), Dongguan City Fucheng Zhangchun Enterprises Development Company (東 莞市附城樟村實業發展公司 ) (“Party B”) and Starwood Investment Limited (Party C), the development project is jointly developed by the said parties.

3. The material conditions of the Development Contract are as follows:

4. 3.1 The land cost is borne by Party B and Party C in equal shares;

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• 3.2 Party C agreed to bear the first installment of construction cost at a sum of RMB10,000,000; and

• 3.3 Any profit from the development project shall be shared by Party B and Party C at a ratio of 40% and 60% respectively.

• By a contract entered into between Starwood Investment Limited (“Starwood”) and Dongguan City Fucheng Zhangchun Enterprises Development Company (“Zhangchun”) on 11 December 2002, Starwood acquired from Zhangchun all of its 40% interest in the Development Contract and hence Starwood is entitled to all the profits/ losses from the development project.

• The status of title and grant major approvals, licence in accordance with the information provided by the Company as at the valuation date are as follows:

Land Use Certificate Yes Title Realty Certificate N/A Red-line Drawing Yes Planning Permit for Construction Land Yes

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