Hephaestus Holdings Limited — Proxy Solicitation & Information Statement 2003

Jun 27, 2003

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your shares in Panorama International Holdings Limited (the "Company"), you should at once hand this circular, together with the form of proxy, to the purchaser or the transferee or to the bank, stockbroker or other agent through whom the sale was effected for transmission to the purchaser or the transferee.

The Stock Exchange of Hong Kong Limited (the "Stock Exchange") 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.

PANORAMA INTERNATIONAL HOLDINGS LIMITED
銘射國際控股有限公司*
(Incorporated in the Cayman Islands with limited liability)

GENERAL MANDATES TO ISSUE AND REPURCHASE SHARES
AND AMENDMENT TO THE ARTICLES OF ASSOCIATION

This circular, for which the directors of the Company (the "Directors") collectively and individually accept full responsibility, includes particulars given in compliance with the Rules Governing the Listing of Securities on the Growth Enterprise Market ("GEM") of the Stock Exchange (the "GEM Listing Rules") for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that, to the best of their knowledge and belief: (i) the information contained in this circular is accurate and complete in all material respects and not misleading; (ii) there are no other matters the omission of which would make any statement in this circular misleading; and (iii) all opinions expressed in this circular have been arrived at after due and careful consideration and are founded on bases and assumptions that are fair and reasonable.

This circular will remain on the GEM website with the domain name of www.hkgem.com on the "Latest Company Announcements" page for at least 7 days from the date of its posting.

26 June, 2003

• For identification purpose only

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CHARACTERISTICS OF THE GROWTH ENTERPRISE MARKET OF THE STOCK EXCHANGE OF HONG KONG LIMITED

GEM has been established as a market designed to accommodate companies to which a high investment risk may be attached. In particular, companies may list on GEM with neither a track record of profitability nor any obligation to forecast future profitability. Furthermore, there may be risks arising out of the emerging nature of companies listed on GEM and the business sectors or countries in which the companies operate. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only after due and careful consideration. The greater risk profile and other characteristics of GEM mean that it is a market more suited to professional and other sophisticated investors.

Given the emerging nature of companies listed on GEM, there is a risk that securities traded on GEM may be more susceptible to high market volatility than securities traded on the main board of The Stock Exchange of Hong Kong Limited and no assurance is given that there will be a liquid market in the securities traded on GEM.

The principal means of information dissemination on GEM is publication on the Internet website operated by the Stock Exchange. Listed companies are not generally required to issue paid announcements in gazetted in newspapers. Accordingly, prospective investors should note that they need to have access to the GEM website in order to obtain up-to-date information on GEM-listed issues.

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TABLE OF CONTENTS

Page

Letter from the board of directors

Introduction ... 1
General Mandates to Issue and Repurchase Shares ... 2
Explanatory Statement ... 2
Amendment to the Articles of Association ... 2
General Information ... 3
Recommendation ... 3
Appendix — Explanatory statement ... 4-6

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LETTER FORM THE BOARD OF DIRECTORS

PiH

PANORAMA INTERNATIONAL HOLDINGS LIMITED

錫射國際控股有限公司*

(Incorporated in the Cayman Islands with limited liability)

Executive Directors:
Mr. Fung Yu Hing, Allan
(Chairman and chief executive officer)
Ms. Leung Siu Kuen, Janet
Mr. Fung Yee Sang
Mr. Au Lik Man, Simon

Non-executive Directors:
Dr. Lo Wing Yan, William, JP
Ms. Fung Suen Lai, Jacqueline

Independent non-executive Directors:
Mr. Chan Koon Chung, Johnny
Mr. Chau, Stephen

Registered office:
P.O. Box 309
Ugland House
South Church Street
George Town
Grand Cayman
Cayman Islands
British West Indies

Head office and principal
place of business in Hong Kong:
7th Floor, Union Building
112 How Ming Street
Kwun Tong
Kowloon
Hong Kong
26 June, 2003

To the shareholders of
Panorama International Holdings Limited

Dear Sir or Madam,

GENERAL MANDATES TO ISSUE AND REPURCHASE SHARES

AND AMENDMENT TO THE ARTICLES OF ASSOCIATION

INTRODUCTION

The purpose of this circular is to provide you with information regarding resolutions to be proposed at the forthcoming annual general meeting (the "Annual General Meeting") of the shareholders of Panorama International Holdings Limited (the "Company") to be held at 7th Floor, Union Building, 112 How Ming Street, Kwun Tong, Kowloon, Hong Kong on 25 July, 2003 at 4:00 p.m. These include: (i) the ordinary resolutions; and (ii) the special resolution according the Company's existing Articles of Association granting the Directors general mandates to issue and repurchase shares of the Company.

• For identification purpose only

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LETTER FORM THE BOARD OF DIRECTORS

GENERAL MANDATES TO ISSUE AND REPURCHASE SHARES

At the Annual General Meeting, separate ordinary resolutions will be proposed to grant to the Directors fresh general mandates (i) to allot, issue and otherwise deal with shares of HK$0.01 each in the capital of the Company (the “Shares”) not exceeding 20 per cent of the aggregate nominal amount of the share capital of the Company in issue at the date of passing the ordinary resolution no. 4A (the “Resolution No. 4A”) in the notice of the Annual General Meeting (the “Notice”); (ii) to repurchase the Shares up to a maximum of 10 per cent of the aggregate nominal amount of the share capital of the Company in issue at the date of passing the ordinary resolution no. 4B (“the Resolution No. 4B”) in the Notice (the “Repurchase Mandate”); and (iii) by extending the general mandate granted pursuant to the Resolution No. 4A, to allot, issue and otherwise deal with the Shares with an aggregate nominal amount not exceeding the aggregate nominal amount of the share capital of the Company purchased pursuant to the Repurchase Mandate (as more particularly described in the ordinary resolution no. 4C (the “Resolution No. 4C”) in the Notice) ((i), (ii) and (iii) are collectively described as the “Mandates”) during the period from the date of passing of the Resolutions No. 4A to 4C up to: (a) the conclusion of the next annual general meeting of the Company: (b) the expiration of the period within which the next annual general meeting of the Company is required by any applicable law or the articles of association of the Company to be held; or (c) the revocation, variation or renewal of the Mandates by ordinary resolution of the shareholders of the Company in a general meeting, whichever occurs first.

EXPLANATORY STATEMENT

An explanatory statement containing all relevant information relating to the Repurchase Mandate is set out in the appendix to this circular. The information in the explanatory statement is to provide you with the information reasonably necessary to enable you to make an informed decision on whether to vote for or against the resolution to grant to the Directors the Repurchase Mandate.

AMENDMENT TO THE ARTICLES OF ASSOCIATION

In view of the repeal of the Securities and Futures (Clearing Houses) Ordinance (Cap. 420 of the Laws of Hong Kong) (the "Old Ordinance") and the enactment of the Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong), the Directors proposed that the definition of "recognised clearing house" in the Company's existing Articles of Association which makes reference to the Old Ordinance be amended in the manner as set out in the Resolution No.5.

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LETTER FORM THE BOARD OF DIRECTORS

GENERAL INFORMATION

The Notice is set out in the annual report for the financial year ended 31 March, 2003 (the “Annual Report”) of the Company which is despatched to the shareholders of the Company with this circular.

A form of proxy for the Annual General Meeting is enclosed with the Annual Report. Whether or not you intend to be present at the Annual General Meeting, you are requested to complete and return the form of proxy in accordance with the instructions printed thereon to the Company’s share registrar in Hong Kong, Tengis Limited, at Ground Floor, Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for holding the Annual General Meeting or any adjourned meeting (as the case may be). Completion and deposit of the form of proxy will not preclude you from attending and voting at the Annual General Meeting or any adjourned meeting (as the case may be) should you so wish.

RECOMMENDATION

The Directors are of the opinion that the proposals referred to in this circular are in the best interests of the Company and its shareholders and therefore recommend you to vote in favour of the Resolutions Nos. 4A to 5 to be proposed at the Annual General Meeting.

Yours faithfully,

By order of the Board

Panorama International Holdings Limited

Fung Yu Hing, Allan

Chairman

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APPENDIX

EXPLANATORY STATEMENT

This is an explanatory statement given to all shareholders of the Company relating to the Resolution No. 4B to be proposed at the Annual General Meeting granting the Repurchase Mandate.

1. EXERCISE OF THE REPURCHASE MANDATE

As at 26 June, 2003, the issued and fully-paid share capital of the Company comprised 400,800,000 Shares.

Subject to the passing of the Resolution No. 4B and on the basis that no further Shares are issued or repurchased by the Company prior to the Annual General Meeting, the Company would be allowed under the Repurchase Mandate to repurchase a maximum of 40,080,000 Shares during the period from the date of passing of the Resolution No. 4B as set out in the Notice up to (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 law or the articles of association of the Company to be held; or (iii) the revocation, variation or renewal of the Repurchase Mandate by ordinary resolution of the shareholders of the Company in general meeting, whichever occurs first.

1. REASONS FOR REPURCHASES

Although the Directors have no present intention of repurchasing any Shares, they believe that the Repurchase Mandate is in the best interests of the Company and its shareholders. Such repurchases may, depending on market conditions and funding arrangements at the time, lead to an enhancement of the net asset value and/or earnings per Share of the Company and will only be made when the Directors believe that such repurchase will benefit the Company and its shareholders.

1. FUNDING OF REPURCHASES

In repurchasing Shares, the Company may only apply funds legally available for such purpose in accordance with its memorandum and articles of association, the GEM Listing Rules and the applicable laws and regulations of the Cayman Islands. The Company may not purchase its own securities on the GEM for a consideration other than cash or for settlement otherwise than in accordance with the trading rules of the Stock Exchange from time to time.

1. IMPACT ON WORKING CAPITAL OR GEARING POSITION

The Directors consider that there might be a material adverse impact on the working capital or gearing position of the Company (as compared with the position disclosed in the audited financial statements contained in the Annual Report) in the event that the Repurchase Mandate is exercised

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APPENDIX

EXPLANATORY STATEMENT

in full. However, the Directors do not propose to exercise the Repurchase Mandate to such an extent as would, in the circumstances, have a material adverse effect on the working capital requirements of the Company or on its gearing levels which in the opinion of the Directors are from time to time appropriate for the Company.

5. SHARE PRICES

The highest and lowest prices at which the Shares were traded on the GEM during each of the previous twelve months before 26 June, 2003 were as follows:

	Shares
	Highest
HK' $	Lowest
HK' $
July 2002	0.186	0.093
August 2002	0.110	0.068
September 2002	0.068	0.043
October 2002	0.065	0.050
November 2002	0.065	0.065
December 2002	0.096	0.065
January 2003	0.144	0.088
February 2003	0.144	0.120
March 2003	0.120	0.080
April 2003	0.080	0.080
May 2003	0.080	0.080
1 to 26 June 2003	0.080	0.080

6. UNDERTAKING

The Directors have undertaken to the Stock Exchange that, so far as the same may be applicable, they will exercise the Repurchase Mandate in accordance with the GEM Listing Rules, the memorandum and articles of association of the Company and the applicable laws and regulations of the Cayman Islands.

None of the Directors nor, to the best of their knowledge having made all reasonable enquiries, any of their associates (as defined in the GEM Listing Rules), has any present intention to sell any Shares to the Company under the Repurchase Mandate if such is approved by the shareholders of the Company.

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APPENDIX

EXPLANATORY STATEMENT

As at 26 June, 2003, no connected person (as defined in the GEM Listing Rules) has notified the Company that he/she/it has a present intention to sell his/her/its Shares to the Company, nor has undertaken not to do so, in the event that the Repurchase Mandate is approved by the shareholders of the Company.

7. THE HONG KONG CODE ON TAKEOVERS AND MERGERS

If a shareholder’s proportionate interest in the voting rights of the Company increases as a result of a share repurchase, such increase will be treated as an acquisition for the purposes of Rule 32 of the Hong Kong Code on Takeovers and Mergers (the “Code”). As a result, a shareholder, or a group of shareholders acting in concert (within the meaning under the Code), depending on the level of increase in the shareholders’s interests, could obtain or consolidate control of the Company and become(s) obliged to make a mandatory offer in accordance with Rule 26 of the Code.

As at 26 June, 2003, Mr. Fung Yu Hing, Allan and parties acting in concert with him are interested or deemed to be interested in an aggregate of 251,671,500 Shares, representing approximately 62.79% of the existing issued share capital of the Company. In the event that the Directors should exercise in full the power to repurchase Shares under the proposed Repurchase Mandate, the shareholding of Mr. Fung Yu Hing, Allan and parties acting in concert with him in the Company will be increased to approximately 69.75% of the issued share capital of the Company.

The Directors have no present intention to exercise the Repurchase Mandate to such an extent as would result in takeover obligations.

8. SHARE PURCHASE MADE BY THE COMPANY

No purchases of Shares have been made by the Company in the previous six months, whether on the Stock Exchange or otherwise.