Greenheart Group Limited — Proxy Solicitation & Information Statement 2004

Apr 30, 2004

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action you should take, you should consult a 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 renren Holdings Limited (the “Company”), you should at once hand this circular and the accompanying form of proxy to the purchaser or transferee, or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

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

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renren Holdings Limited 人人控股有限公司[*]

(Incorporated in Bermuda with limited liability)

(Stock Code: 059)

PROPOSALS FOR GENERAL MANDATES TO ISSUE AND REPURCHASE SHARES RE-ELECTION OF DIRECTOR AND AMENDMENTS TO THE BYE-LAWS

A notice convening the annual general meeting of renren Holdings Limited to be held at Gloucester Room I, 3/F., The Excelsior, 281 Gloucester Road, Causeway Bay, Hong Kong on Monday, 24 May 2004 at 10:00 a.m. (the “Annual General Meeting”), is set out on pages 11 to 18 of this circular. Whether or not you propose to attend the meeting, you are requested to complete the form of proxy in accordance with the instructions printed thereon and return the same to the Company’s registrar in Hong Kong at Abacus Share Registrars Limited at G/F., Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for the holding of the Annual General Meeting. Completion and returning of the form of proxy will not prevent you from subsequently attending and voting at the Annual General Meeting or any adjourned meetings should you so wish.

* for identification purpose only

30 April 2004

CONTENTS

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Chairman
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
General Mandates to Issue and Repurchase Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Amendments to the Bye-Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Re-election of Director . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Procedure by which a Poll may be Demanded . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
Responsibility Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Appendix I – Explanatory Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
Appendix II – Notice of Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11

• i -

DEFINITIONS

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

“AGM”

the annual general meeting of the Company to be held at Gloucester Room I, 3/F., The Excelsior, 281 Gloucester Road, Causeway Bay, Hong Kong on Monday, 24 May 2004 at 10:00 a.m., to consider and, if appropriate, to approve, amongst other things, the Ordinary Resolutions and the Special Resolution, or any adjournment thereof;

• “AGM Notice”

the notice of the AGM as set out on pages 11 to 18 of this circular;

• “Bye-Laws”

the bye-laws of the Company;

• “Companies Act”

the Companies Act 1981 of Bermuda;

• “Company”

renren Holdings Limited, a company incorporated in Bermuda with limited liability, the Shares of which are listed on the Stock Exchange;

• “Directors”

the directors of the Company;

• “Existing Issue Mandate”

• a general mandate granted to the Directors at the special general meeting of the Company held on 6 February 2004 to allot, issue and deal with Shares not exceeding 20 per cent. of the issued share capital of the Company as enlarged by the rights issue approved at the special general meeting of the Company held on 6 February 2004;

• “Existing Repurchase Mandate”

• a general mandate granted to the Directors at the annual general meeting of the Company held on 12 June 2003 to repurchase Shares not exceeding 10 per cent. of the aggregate number of Shares comprised in the share capital of the Company in issue as at 12 June 2003;

• “Group”

the Company and its subsidiaries from time to time;

• “HK$”

Hong Kong dollars, the lawful currency of Hong Kong;

• “Hong Kong”

the Hong Kong Special Administrative Region of the People’s Republic of China;

• “Latest Practicable Date”

• 27 April 2004, being the latest practicable date prior to the printing of this circular for ascertaining certain information in this circular;

• 1 -

DEFINITIONS

• “Listing Rules”

• The Rules Governing the Listing of Securities on the Stock Exchange;

• “Ordinary Resolutions”

the ordinary resolutions to be proposed and passed at the AGM for the matters as set out in the AGM Notice;

• “Proposed Issue Mandate”

• a general mandate proposed to be granted to the Directors at the AGM to allot, issue and deal with Shares of up to 20 per cent. of the aggregate nominal amount of the issued share capital of the Company as at the date of passing of the relevant resolution granting such mandate;

• “Proposed Repurchase Mandate”

• a general mandate proposed to be granted to the Directors at the AGM to repurchase Shares not exceeding 10 per cent. of the aggregate nominal amount of the issued share capital of the Company as at the date of passing of the relevant resolution granting such mandate;

• “Share(s)” ordinary share(s) of HK$0.01 each in the share capital of the Company;

• “Shareholder(s)” holder(s) of Share(s);

• “Special Resolution”

• the special resolution to be proposed and passed at the AGM for approving the proposed amendments to the Bye-Laws;

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

• “Takeovers Code” The Hong Kong Codes on Takeovers and Mergers.

• 2 -

LETTER FROM THE CHAIRMAN

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renren Holdings Limited 人人控股有限公司[*]

(Incorporated in Bermuda with limited liability)

(Stock Code: 059)

Executive Directors:

Mr. Mak Chi Yeung (Chairman) Mr. Cheng Wai Keung

Registered Office:

Clarendon House 2 Church Street Hamilton HM 11 Bermuda

Independent Non-Executive Directors:

Mr. Lo Chi Man, Joseph

Mr. Wong Kwong Lung, Terence

Principal Place of Business in

Hong Kong:

26 Floor

Wyndham Place

44 Wyndham Street Central

Hong Kong

30 April 2004

To the Shareholders

Dear Sir or Madam,

PROPOSALS FOR GENERAL MANDATES TO ISSUE AND REPURCHASE SHARES RE-ELECTION OF DIRECTOR AND AMENDMENTS TO THE BYE-LAWS

1. INTRODUCTION

The purpose of this circular is to provide the Shareholders with information in respect of the Ordinary Resolutions and the Special Resolution to be proposed at the AGM for, amongst other things:

• (i) granting to the Directors the Proposed Issue Mandate;

• (ii) granting to the Directors the Proposed Repurchase Mandate;

* for identification only

• 3 -

LETTER FROM THE CHAIRMAN

• (iii) extending the Proposed Issue Mandate by adding to it the aggregate number of the issued shares repurchased under the Proposed Repurchase Mandate; and

• (iv) the amendments to the Bye-Laws

and to give the AGM Notice to the Shareholders, at which resolutions approving the above items will be considered and voted upon.

2. GENERAL MANDATES TO ISSUE AND REPURCHASE SHARES

At the annual general meeting of the Company held on 12 June 2003, an ordinary resolution was passed granting the Existing Repurchase Mandate to the Directors. At the special general meeting of the Company held on 6 February 2004, an ordinary resolution was passed granting the Existing Issue Mandate to the Directors.

In accordance with the provisions of the Listing Rules and the terms of the Existing Issue Mandate and the Existing Repurchase Mandate, the Existing Issue Mandate and the Existing Repurchase Mandate shall lapse at the conclusion of the AGM.

Resolutions to consider and, if thought fit, to approve the Proposed Issue Mandate and the Proposed Repurchase Mandate as set out in Ordinary Resolutions numbered 4 to 6 will be proposed at the AGM. With reference to the Proposed Issue Mandate and the Proposed Repurchase Mandate, the Directors wish to state that they have no immediate plan to issue or repurchase any Shares pursuant thereto.

An explanatory statement required by the Listing Rules to be sent to the Shareholders in connection with the Proposed Repurchase Mandate is set out in Appendix I to this circular. The explanatory statement contains all information reasonably necessary to enable the Shareholders to make an informed decision on whether to vote for or against the relevant resolution for the Proposed Repurchase Mandate at the AGM.

3. AMENDMENTS TO THE BYE-LAWS

The Directors note that the Stock Exchange has recently announced amendments to the Listing Rules relating to, inter alia, the articles of association of listed issuers. The Directors therefore propose to amend the following clauses of the Bye-Laws to ensure compliance with the amended provisions of the Listing Rules:-

• (i) Bye-Law 76 shall be amended to the effect that where any Shareholder is, under the Listing Rules, required to abstain from voting on any particular resolution or restricted to voting only for or only against any particular resolution, any votes cast by or on behalf of such Shareholder in contravention of such requirement or restriction shall not be counted;

• 4 -

LETTER FROM THE CHAIRMAN

• (ii) Bye-Law 88 shall be amended to the effect that the minimum length of the period during which the notice of intention to propose a person for election as a director and the notice of the person to be proposed of his willingness to be elected are given shall be at least 7 days and that the period for lodgement of the aforesaid notice(s) shall commence no earlier than the day after the dispatch of the notice of the general meeting appointed for such election and end no later than 7 days prior to the date of such general meeting; and

• (iii) Bye-Law 103 shall be amended to the effect that Directors shall abstain from voting at the board meeting on any matter in which any of his associates has a material interest and shall not be counted towards the quorum of such board meeting.

With the repeal of the Securities and Futures (Clearing Houses) Ordinance and the coming into effect of the Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong) on 1st April 2003, it is also proposed that the definition of “clearing house” under Bye-Law 1 shall be amended such that its reference to the Securities and Futures (Clearing Houses) Ordinance shall be deleted. Bye-Law 66 shall also be amended to provide that where more than one proxy is appointed by a Shareholder which is a clearing house (or its nominee(s)), each such proxy shall have one vote on a show of hands. Moreover, Bye-Law 84(2) shall also be amended to provide that each corporate representative appointed by a Shareholder which is a clearing house (or its nominee(s)) shall have the right to vote individually on a show of hands.

4. ANNUAL GENERAL MEETING

Set out on pages 11 to 18 of this circular is a notice convening the AGM to consider and, if appropriate, to approve, amongst other things, the Ordinary Resolutions and the Special Resolution relating to the Proposed Issue Mandate, the Proposed Repurchase Mandate and the amendments to the Bye-Laws.

A form of proxy for use at the AGM is enclosed herewith. Whether or not you are able to attend the AGM, you are requested to complete the form of proxy and return it to the Company’s registrar in Hong Kong at Abacus Share Registrars Limited at G/F., Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong not less than 48 hours before the time appointed for holding of the AGM. Completion and returning of a form of proxy will not preclude you from attending and voting at the AGM or any adjourned meetings if you so wish.

5. RE-ELECTION OF DIRECTOR

Pursuant to Bye-Law 87 of the Bye-Laws, none of the Directors shall retire from office by rotation at the AGM. Mr. Cheng Wai Keung, who was appointed by the Directors after the annual general meeting held on 12 June 2003, will retire from office at the AGM pursuant to Bye-Law 86(2) of the Bye-Laws, and will offer himself for re-election.

Mr. Cheng, aged 39, was appointed as an executive Director of the Company since 2 December 2003.

• 5 -

LETTER FROM THE CHAIRMAN

Mr. Cheng graduated from The Hong Kong Baptist University and has over 10 years experience in corporate finance and management.

Other than in his capacity as a Director, Mr. Cheng has no business relationship with the other Directors or with any substantial shareholders of the Company.

As at the Latest Practicable Date, Mr. Cheng did not have any interests in Shares within the meaning of Part XV of the Securities and Futures Ordinance.

There is no service contract between the Company and Mr. Cheng. The emoluments of the Directors are determined by the board of Directors of the Company with reference to the Company’s performance and profitability, as well as remuneration benchmark in the industry and the prevailing market conditions.

There are no other matters which need to be brought to the attention of the Shareholders.

6. PROCEDURE BY WHICH A POLL MAY BE DEMANDED

In accordance with Bye-Law 66 of the Bye-Laws, the following persons may demand that the vote in respect of any resolution put to the general meeting be taken on a poll:

• (a) the chairman of the meeting; or

• (b) at least three members present in person or in the case of a member being a corporation by its duly authorised representative or by proxy entitled to vote at the meeting; or

• (c) any member or members present in person or in the case of a member being a corporation by its duly authorised representative or by proxy and representing not less than one-tenth of the total voting rights of all members having the right to vote at the meeting; or

• (d) any member or members present in person or in the case of a member being a corporation by its duly authorised representative or by proxy and holding shares in the Company conferring a right to vote at the meeting being shares on which an aggregate sum has been paid up equal to not less than one-tenth of the total sum paid up on all shares conferring that right.

A poll may be so demanded before or on the declaration of the result of the show of hands.

7. RESPONSIBILITY STATEMENT

This circular includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors collectively and individually accept full responsibility for the accuracy of the information contained in this circular and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief there are no other facts the omission of which would make any statement herein misleading.

• 6 -

LETTER FROM THE CHAIRMAN

8. RECOMMENDATION

Having considered the reasons set out herein, the Directors consider that the proposed Ordinary Resolutions for (a) granting to the Directors the Proposed Issue Mandate; (b) granting to the Directors the Proposed Repurchase Mandate; (c) extending the Proposed Issue Mandate by adding to it the aggregate number of the issued Shares repurchased under the Proposed Repurchase Mandate; as well as the proposed Special Resolution for (d) the amendments to the Bye-Laws; are in the best interests of the Company as a whole. The Directors therefore recommend the Shareholders to vote in favour of such Ordinary Resolutions and Special Resolution at the AGM.

9. GENERAL INFORMATION

Your attention is drawn to the additional information set out in Appendix I and Appendix II to this circular.

By Order of the Board renren Holdings Limited Mak Chi Yeung Chairman

• 7 -

EXPLANATORY STATEMENT

APPENDIX I

This Appendix contains the particulars that are required by the Listing Rules to be included in an explanatory statement to enable the Shareholders to make an informed decision on whether to vote for or against the resolution to be proposed at the AGM in relation to the Proposed Repurchase Mandate.

1. LISTING RULES

The Listing Rules permit companies with a primary listing on the Stock Exchange to repurchase their fully-paid shares on the Stock Exchange subject to certain restrictions, the most important of which are summarised below:

(a) Source of funds

Repurchases must be made out of funds which are legally available for such purpose in accordance with the company’s constitutional documents and the laws of the jurisdiction in which the company is incorporated or otherwise established.

(b) Maximum number of Shares to be repurchased

A maximum of 10% of the issued share capital of the Company as at the date of passing of the relevant resolution approving the Proposed Repurchase Mandate may be repurchased on the Stock Exchange.

2. SHARE CAPITAL

As at the Latest Practicable Date, the issued share capital of the Company comprised 6,779,577,885 Shares.

On the basis of the abovementioned number of Shares in issue and on the assumption that no further Shares will be issued or repurchased prior to the date of the AGM, the Directors would be authorised to repurchase up to a maximum of 677,957,788 Shares, subject to the passing of the resolution approving the Proposed Repurchase Mandate.

3. REASONS FOR REPURCHASE

The Directors believe that it is in the best interests of the Company and the Shareholders to have the Proposed Repurchase Mandate to enable the Directors to repurchase Shares on the market, and which can give the Company the flexibility to do so if and when appropriate. An exercise of the Proposed Repurchase Mandate may, depending on the market conditions and funding arrangement at the time, result in an enhancement of the net assets value per Share and/or earnings per Share. The number(s) and class(es) of Shares to be repurchased will be decided by the Directors at the relevant time having regard to the circumstances then pertaining and such repurchase will only be made when the Directors believe that such a purchase will benefit the Company and the Shareholders as a whole.

• 8 -

EXPLANATORY STATEMENT

APPENDIX I

4. FUNDING OF REPURCHASE

In repurchasing Shares, the Company shall only apply funds legally available for such purpose in accordance with the Company’s memorandum of association and the Bye-Laws and the applicable laws of Bermuda. It is envisaged that the funds required for any repurchase would be derived from the distributable profits of the Company.

5. IMPACT OF REPURCHASE

The Directors are aware that there may be an adverse impact on the working capital or gearing position of the Company (as compared with the position disclosed in the audited accounts contained in the annual report of the Company for the financial year ended 31st December, 2003) in the event that the proposed repurchase of Shares were to be carried out in full at any time during the proposed repurchase period. However, the Directors do not intend to exercise the Proposed Repurchase Mandate to such extent as would, in the circumstances, have a material adverse effect on the working capital of the Company or its gearing position which in the opinion of the Directors is from time to time appropriate for the Company.

6. UNDERTAKING

The Directors have undertaken to the Stock Exchange that they will exercise the power of the Company to make repurchases pursuant to the Proposed Repurchase Mandate in accordance with the Listing Rules and the applicable laws of Bermuda and in accordance with the Company’s memorandum of association and the Bye-Laws.

There are no Directors and, to the best of the knowledge of the Directors having made all reasonable enquiries, any of their associates (as defined in the Listing Rules), who have a present intention, in the event that the Proposed Repurchase Mandate is approved by the Shareholders, to sell Shares to the Company.

No connected person (as defined in the Listing Rules) of the Company has notified the Company of a present intention to sell Shares to the Company and no such person has undertaken not to sell any such Shares to the Company in the event that the Proposed Repurchase Mandate is approved by the Shareholders.

7. HONG KONG CODE ON TAKEOVERS AND MERGERS

If on the exercise of the power to repurchase Shares pursuant to the Proposed Repurchase Mandate, a Shareholder’s proportionate interest in voting rights of the Company increases, such increase in shareholding will be treated as an acquisition for the purpose of Rule 32 of the Takeovers Code. As a result, a Shareholder or group of Shareholders acting in concert, could obtain or consolidate control of the Company and become obliged to make a mandatory offer in accordance with Rules 26 and 32 of the Takeovers Code.

• 9 -

EXPLANATORY STATEMENT

APPENDIX I

As at the Latest Practicable Date, to the best knowledge and belief of the Directors, each of Rich Delta Development Limited (“Rich Delta”), Sky Concord Development Limited (“Sky Concord”) and Mr. Mak Chi Yeung (“Mr. Mak”) is taken to have an interest in the same block of 3,160,922,790 Shares (representing approximately 46.62 per cent. of the issued share capital of the Company). Rich Delta is the beneficial owner of 3,160,922,790 Shares. Rich Delta is a wholly owned subsidiary of Sky Concord which is in turn beneficially owned by Mr. Mak.

In the event that the Directors exercise in full the power to repurchase Shares in accordance with the term of the Proposed Repurchase Mandate to be proposed at the AGM, the interests of the aforesaid persons in the share capital of the Company would be increased to approximately 56.62 per cent. of the issued share capital of the Company. The Directors consider that such an increase would give rise to an obligation on the part of Rich Delta, Sky Concord and Mr. Mak to make a mandatory offer under Rule 26 of the Takeovers Code. The Directors would review the current position of the Company and consider from time to time whether to exercise the Proposed Repurchase Mandate in full. However, the Directors have no present intention to exercise the Proposed Repurchase Mandate to such an extent which would trigger a takeover obligation by Rich Delta, Sky Concord and Mr. Mak.

8. GENERAL

The Company has not repurchased any Shares (whether on the Stock Exchange or otherwise) in the six months prior to the date of this circular.

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

		Shares
	Highest		Lowest
	(HK$)		(HK$)
2003
April	0.015		0.012
May	0.013		0.011
June	0.012		0.011
July	0.013		0.011
August	0.018		0.012
September	0.021		0.017
October	0.020		0.016
November	0.034		0.020
December	0.023		0.014
2004
January	0.032		0.016
February	0.032		0.018
March	0.020		0.013

• 10 -

NOTICE OF ANNUAL GENERAL MEETING

APPENDIX II

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renren Holdings Limited 人人控股有限公司[*]

(Incorporated in Bermuda with limited liability)

(Stock Code: 059)

NOTICE IS HEREBY GIVEN that an annual general meeting (the “Meeting”) of the Company will be held at Gloucester Room I, 3/F., The Excelsior, 281 Gloucester Road, Causeway Bay, Hong Kong on Monday, 24 May 2004 at 10:00 a.m. for the following purposes:

1. To receive and consider the audited financial statements together with the reports of the Directors and the auditors for the year ended 31 December 2003;

2. To re-elect Directors and authorise the Board to fix the Directors’ remuneration;

3. To re-appoint Albert Lam & Co. as auditors of the Company for the ensuing year and to authorise the Directors to fix their remuneration;

4. As special business, to consider and, if thought fit, to pass with or without amendments, the following resolution as an Ordinary Resolution:-

“ THAT:–

• (a) subject to paragraph (c) of this Resolution, the exercise by the Directors during the Relevant Period (as defined in paragraph (d) below) of all the powers of the Company to allot, issue and otherwise deal with additional ordinary shares of the Company or securities convertible into shares, or options, warrants or similar rights to subscribe for any shares and to make or grant offers, agreements and options which would or might require the exercise of such powers, subject to and in accordance with all applicable laws, be and is hereby generally and unconditionally approved;

• (b) the approval in paragraph (a) of this Resolution shall be in addition to any other authorisations given to the Directors and shall authorise the Directors during the Relevant Period to make or grant offers, agreements and options which would or might require the exercise of such powers after the end of the Relevant Period;

• (c) the aggregate nominal amount of the share capital allotted, issued or otherwise dealt with or agreed conditionally or unconditionally to be allotted, issued or otherwise dealt with (whether pursuant to an option or otherwise) by the Directors pursuant to the approval in paragraph (a) of this Resolution, otherwise than pursuant to:

* for identification only

• 11 -

NOTICE OF ANNUAL GENERAL MEETING

APPENDIX II

• (i) a Rights Issue (as defined in paragraph (d) below); or

• (ii) the exercise of rights of subscription or conversion under the terms of any warrants issued by the Company or any securities which are convertible into shares of the Company; or

• (iii) the exercise of any option granted under the share option scheme or similar arrangement for the time being adopted or to be adopted for the grant or issue to officers and/or employees of the Company and/or any of its subsidiaries, of options to subscribe for, or rights to acquire shares of the Company; or

• (iv) any scrip dividend or similar arrangement providing for the allotment of shares in lieu of the whole or part of a dividend on shares of the Company in accordance with the bye-laws of the Company in force from time to time,

shall not exceed 20% of the aggregate nominal amount of the share capital of the Company in issue as at the date of the passing of this Resolution; and the said approval shall be limited accordingly; and

• (d) for the purpose of this Resolution:–

“ Relevant Period ” means the period from the passing of this Resolution until whichever is the earliest of:–

• (i) the conclusion of the next annual general meeting of the Company;

• (ii) the expiration of the period within which the next annual general meeting of the Company is required by any applicable laws or the Bye-Laws of the Company to be held; or

• (iii) the revocation or variation of the authority given under this Resolution by an ordinary resolution of the shareholders of the Company in general meeting.

“ Rights Issue ” means the allotment, issue or grant of shares pursuant to an offer of shares open for a period fixed by the Directors to holders of the shares or any class thereof on the register of members on a fixed record date in proportion to their then holdings of such shares or class thereof (subject to such exclusions or other arrangements as the Directors may deem necessary or expedient in relation to fractional entitlements or having regard to any restrictions or obligations under the laws of any relevant jurisdiction, or the requirements of any recognised regulatory body or stock exchange in any territory applicable to the Company).”

• 12 -

NOTICE OF ANNUAL GENERAL MEETING

APPENDIX II

1. As special business, to consider and, if thought fit, to pass with or without amendments, the following resolution as an Ordinary Resolution:

“ THAT:

• (a) subject to paragraph (b) of this Resolution, the exercise by the Directors during the Relevant Period (as defined in paragraph (c) below) of all the powers of the Company to repurchase shares of the Company on The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) or on any other stock exchange on which the shares of the Company may be listed and recognised by the Securities and Futures Commission and the Stock Exchange for this purpose, subject to and in accordance with all applicable laws and the requirements of the Rules Governing the Listing of Securities on the Stock Exchange as amended from time to time (the “Listing Rules”), be and is hereby generally and unconditionally approved;

• (b) the aggregate nominal amount of the shares of the Company to be repurchased pursuant to the approval in paragraph (a) of this Resolution shall not exceed 10% of the aggregate nominal amount of the share capital of the Company in issue as at the date of the passing of this Resolution, and the said approval shall be limited accordingly; and

• (c) for the purpose of this Resolution:

“ Relevant Period ” means the period from the passing of this Resolution until whichever is the earliest of:

• (i) the conclusion of the next annual general meeting of the Company;

• (ii) the expiration of the period within which the next annual general meeting of the Company is required by any applicable laws or the Bye-Laws of the Company to be held; or

• (iii) the revocation or variation of the authority given under this Resolution by an ordinary resolution of the shareholders of the Company in general meeting.”

• As special business, to consider and, if thought fit, to pass with or without amendments, the following resolution as an Ordinary Resolution:

“ THAT conditional upon Resolution no. 4 and Resolution no. 5 mentioned above being passed, the aggregate nominal amount of the share capital of the Company which shall have been repurchased by the Company under the authority granted to the Directors as mentioned in Resolution no. 5 above (up to a maximum of 10% of the aggregate nominal amount of the share capital of the Company as stated in Resolution no. 5 above) shall be added to the aggregate nominal amount of the share capital that may be allotted, issued or otherwise dealt with, or agreed conditionally and unconditionally to be allotted, issued or otherwise dealt with by the Directors pursuant to Resolution no. 4 above.”

• 13 -

NOTICE OF ANNUAL GENERAL MEETING

APPENDIX II

1. As special business, to consider and, if thought fit, to pass with or without amendments, the following resolution as a Special Resolution:

“THAT the Bye-Laws of the Company be amended in the following manner:–

• (a) Bye-Law 1

• (i) by inserting the definition of “associate” immediately after the definition of “Act” as follows:–

  • “associate” the meaning attributed to it in the rules of the Designated Stock Exchange;

• (ii) by deleting the words “a recognised clearing house within the meaning of Section 2 of the Securities (Clearing House) Ordinance of Hong Kong or” in the definition of “clearing house”;

• (b) Bye-Law 66

by inserting the sentence “Notwithstanding anything contained in these Bye-laws, where more than one proxy is appointed by a Member which is a clearing house (or its nominee(s)), each such proxy shall have one vote on a show of hands.” immediately after the words “the share” in line 8 of Bye-Law 66;

• (c) Bye-Law 76

by re-numbering the existing Bye-Law 76 as Bye-Law 76(1) and inserting a new ByeLaw 76(2) as follows:–

“Where any Member is, under the rules of the Designated Stock Exchange, required to abstain from voting on any particular resolution or restricted to voting only for or only against any particular resolution, any votes cast by or on behalf of such Member in contravention of such requirement or restriction shall not be counted.”;

• (d) Bye-Law 84

by deleting the existing Bye-Law 84 (2) in its entirety and substituting therefor a new Bye-Law 84(2) as follows:–

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

• (e) Bye-Law 88

by deleting the existing Bye-Law 88 in its entirety and substituting therefor a new Bye-Law 88 as follows:–

“No person other than a Director retiring at the meeting shall, unless recommended by the Directors for election, be eligible for election as a Director at any general meeting unless a Notice signed by a Member (other than the person to be proposed) duly qualified to attend and vote at the meeting for which such notice is given of his intention to propose such person for election and also a Notice signed by the person to be proposed of his willingness to be elected shall have been lodged at the head office or at the Registration Office provided that the minimum length of the period, during which such Notice(s) are given, shall be at least seven (7) days and that the period for lodgment of such Notice(s) shall commence no earlier than the day after the dispatch of the notice of the general meeting appointed for such election and end no later than seven (7) days prior to the date of such general meeting”;

• (f) Bye-Law 103

by deleting the existing Bye-Law 103 in its entirety and substituting therefor a new Bye-Law 103 as follows:–

• “(1) A Director shall not vote (nor be counted in the quorum) on any resolution of the Board approving any contract or arrangement or any other proposal in which he or any of his associates is materially interested, but this prohibition shall not apply to any of the following matters namely:

• (i) any contract or arrangement for the giving to such Director or his associate(s) any security or indemnity in respect of money lent by him or any of his associates or obligations incurred or undertaken by him or any of his associates at the request of or for the benefit of the Company or any of its subsidiaries;

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• (ii) any contract or arrangement for the giving of any security or indemnity to a third party in respect of a debt or obligation of the Company or any of its subsidiaries for which the Director or his associate(s) has himself/ themselves assumed responsibility in whole or in part whether alone or jointly under a guarantee or indemnity or by the giving of security;

• (iii) any contract or arrangement concerning an offer of shares or debentures or other securities of or by the Company or any other company which the Company may promote or be interested in for subscription or purchase, where the Director or his associate(s) is/are or is/are to be interested as a participant in the underwriting or sub-underwriting of the offer;

• (iv) any contract or arrangement in which the Director or his associate(s) is/ are interested in the same manner as other holders of shares or debentures or other securities of the Company or any of its subsidiaries by virtue only of his/their interest in shares or debentures or other securities of the Company;

• (v) any contract or arrangement concerning any other company in which the Director or his associate(s) is/are interested only, whether directly or indirectly, as an officer or executive or a shareholder other than a company in which the Director and/or associate(s) is/are beneficially interested in five (5) per cent. or more of the issued shares or of the voting rights of any class of shares of such company (or any third company through which his interest or that of any of his associate(s) is derived); or

• (vi) any proposal concerning the adoption, modification, or operation of a share option scheme, a pension fund or retirement, death or disability benefits scheme or other arrangement which relates both to directors, his associates and employees of the Company or any of its subsidiaries and does not provide in respect of any Director, or his associate(s), as such any privilege or advantage not accorded to the employees to which such scheme or fund relates.

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• (2) A company shall be deemed to be a company in which a Director and/or his associate(s) own(s) five (5) per cent. or more if and so long as (but only if and so long as) he and/or his associates (either directly or indirectly) is/are the holder(s) of or beneficially interested in five (5) per cent. or more of any class of the equity share capital of such company or of the voting rights available to members of such company (or of any third company through which his interest or that of any of his associates is derived). For the purpose of this paragraph there shall be disregarded any shares held by a Director or his associate(s) as bare or custodian trustee and in which he or any of them has no beneficial interest, any shares comprised in a trust in which the interest of the Director and/or his associate(s) is/are in reversion or remainder if and so long as some other person is entitled to receive the income thereof, and any shares comprised in an authorised unit trust scheme in which the Director and/or his associate(s) is/are interested only as a unit holder and any shares which carry no voting right at general meetings and very restrictive dividend and return of capital right.

• (3) Where a company in which a Director and/or his associate(s) hold(s) five (5) per cent. or more is materially interested in a transaction, then that Director and/or his associate(s) shall also be deemed materially interested in such transaction.

• (4) If any question shall arise at any meeting of the Board as to the materiality of the interest of a Director (other than the chairman of the meeting) or his associate(s) or as to the entitlement of any Director (other than such chairman) to vote and such question is not resolved by his voluntarily agreeing to abstain from voting, such question shall be referred to the chairman of the meeting and his ruling in relation to such other Director shall be final and conclusive except in a case where the nature or extent of the interest of the Director and/or his associate(s) concerned as known to such Director has not been fairly disclosed to the Board. If any question as aforesaid shall arise in respect of the chairman of the meeting such question shall be decided by a resolution of the Board (for which purpose such chairman shall not vote thereon) and such resolution shall be final and conclusive except in a case where the nature or extent of the interest of such chairman as known to such chairman has not been fairly disclosed to the Board.

• To transact any other business.

By Order of the Board

Mak Chi Yeung Chairman

Hong Kong, 27 April 2004

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Notes:

1. As at the date of this notice, the board of Directors of the Company comprises two executive Directors, namely Mr. Mak Chi Yeung and Mr. Cheng Wai Keung, and two independent non-executive Directors, namely, Mr. Lo Chi Man, Joseph and Mr. Wong Kwong Lung, Terence.

2. Any member of the Company entitled to attend and vote at the Meeting is entitled to appoint another person as his proxy to attend and vote on his behalf. A proxy need not be a member of the Company.

3. The register of members of the Company will be closed from Wednesday, 19 May 2004 to Monday, 24 May 2004, both days inclusive, during which period no transfer of shares of the Company will be registered. In order to qualify for attending and voting at the Meeting, all properly completed and signed transfer forms accompanied with the relevant share certificates must be lodged with the Company’s registrar in Hong Kong at Abacus Share Registrars Limited at G/F., Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong for registration not later than 4:30 p.m. on Tuesday, 18 May 2004.

4. In order to be valid, a form of proxy, together with any power of attorney or other authority (if any) under which it is signed or a certified copy thereof, must be lodged with the Company’s registrar in Hong Kong at Abacus Share Registrars Limited at G/F., Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong in accordance with the instructions printed thereon as soon as possible but in any event not less than 48 hours before the time appointed for holding the Meeting or any adjournment thereof. Delivery of an instrument appointing a proxy shall not preclude a member of the Company from attending and voting in person at the Meeting and, in such event, the instrument appointing a proxy shall be deemed to be revoked.

5. In relation to Ordinary Resolutions nos. 4 to 6 set out in the above notice, the Directors wish to state that they have no immediate plan to issue any new shares or repurchase any existing shares of the Company.

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