JY GAS LIMITED — Proxy Solicitation & Information Statement 2005

Jul 14, 2005

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 all your securities in Nippon Asia Investments Holdings Limited, you should at once hand this circular and the accompanying form of proxy to the purchaser or to the bank manager, stockbroker or other agent through whom the sale 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.

==> picture [348 x 36] intentionally omitted <==

(Incorporated in Bermuda with limited liability) (Stock Code: 603)

PROPOSED CHANGES IN TERMS OF PLACING AGREEMENT AND SUBSCRIPTION AGREEMENT

Placing Agent

A notice convening a special general meeting of Nippon Asia Investments Holdings Limited to be held at Garden Rooms, 2/F, The Royal Garden, 69 Mody Road, Tsimshatsui East, Kowloon, Hong Kong on Tuesday, 2 August 2005 at 10:00 a.m. or any adjournment thereof is set out on pages 25 to 26 of this circular. If you do not intend to attend and vote at the meeting, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon to the Hong Kong branch share registrar of the Company, Computershare Hong Kong Investor Services Limited at 46/F, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong as soon as practicable and in any event not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the meeting or any adjournment thereof should you so wish.

14 July 2005

* for identification purposes only

CONTENTS

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Proposed issue of Convertible Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
Conditional Placing Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
Change in terms of Placing Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Conditions of the Placing Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
Termination and force majeure for the Placing Agreement . . . . . . . . . . . . . . . . . . . . .	8
Completion of the Placing Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
Conditional Subscription Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
Change in terms of Subscription Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
Conditions of the Subscription Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
Completion of the Subscription Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
Terms of the Convertible Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12
Effect on shareholding structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	14
Reasons for the proposed issue of the Convertible Notes and use of proceeds . . . . .	15
Funds raised by the Company during the 12 months period immediately
before the date of the Placing Agreement and the Subscription Agreement
and up to the Latest Practicable Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	16
Information on the Group and the Subscriber . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	18
Procedures by which a poll may be demanded . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	18
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	19
Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	19
Appendix – General information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	20
Notice of Special General Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	25

– i –

DEFINITIONS

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

• “Announcement”

• the announcement of the Company dated 3 June 2005 in respect of, among others, the proposed change in terms of Placing Agreement and Subscription Agreement and redemption of CPC Convertible Note

• “associate(s)” has the meaning ascribed thereto under the Listing Rules

• “Board”

• the board of Directors

• “Business Day”

• any day (excluding a Saturday) on which banks generally are open for business in Hong Kong

• “Capital Reduction”

• the reduction of the nominal value of each issued Old Share from HK$0.025 to HK$0.001 by cancelling paidup capital to the extent of HK$0.024 on each issued Old Share, as set out in the Circular and became effective on 6 April 2005

• “Capital Reorganisation”

• the reorganisation of the capital of the Company consisting of the Capital Reduction, the Unissued Share Subdivision and the Share Consolidation, as set out in the Circular and became effective on 6 April 2005

• “Circular”

• the circular of the Company dated 11 March 2005 in respect of the Capital Reorganisation, change in board lot size and the proposed issue of Convertible Notes pursuant to the Placing Agreement and the Subscription Agreement

• “Company”

• Nippon Asia Investments Holdings Limited, a company incorporated in Bermuda with limited liability and the shares of which are listed on the main board of the Stock Exchange

• “Convertible Notes”

• collectively, the GC Convertible Note and the Underwritten Convertible Notes

• “Conversion Shares”

• the New Shares to be issued upon exercise of the conversion rights attaching to the Convertible Notes

– 1 –

DEFINITIONS

• “CPC and icoupon the convertible notes in an aggregate principal amount of Convertible Notes” HK$25,000,000 with a conversion price of HK$0.025 per Old Share (subject to adjustments for share consolidation and subdivision) issued on 1 November 2004 by the Company to Cross Profit Capital Limited, icoupon Limited and the placees procured by the Placing Agent. Neither of them are connected persons (as defined in the Listing Rules) of the Company. Details of which were set out in the Company’s announcement dated 11 October 2004

• “CPC Convertible Note”

• the convertible note in an aggregate principal amount of HK$12,000,000 issued by the Company to Cross Profit Capital Limited on 1 November 2004 at an initial conversion price of HK$0.025 per Old Share (subject to adjustments for share consolidation and subdivision), details of which were set out in the Company’s announcement dated 11 October 2004

• “Director(s)” the director(s) of the Company

• “GC Convertible Note”

• the 1-year 1% convertible loan note to be issued by the Company to the Subscriber under the Subscription Agreement in the principal amount of JPY290,000,000 (i.e. equivalent to HK$21,750,000)

• “Group”

the Company and its subsidiaries

• “Hong Kong”

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

• “Issue Date”

• the date of issue of the Convertible Notes, which will be the date of completion of the Placing Agreement and the Subscription Agreement as supplemented by the Revised Placing Agreement and the Second Supplemental Agreement respectively

• “Latest Practicable Date”

• 11 July 2005, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained in this circular

• “Listing Rules”

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

• “Maturity Date”

• the date falling on the 365th day from and including the Issue Date

• “New Initial Conversion Price”

• HK$0.09 per Conversion Share, subject to adjustment provisions which are the same as those contained in the original Convertible Notes

– 2 –

DEFINITIONS

• “New Share(s)”

• ordinary share(s) of HK$0.01 each in the share capital of the Company after the Capital Reorganisation became effective on 6 April 2005

• “Old Share(s)”

• ordinary share(s) of HK$0.025 each in the share capital of the Company before the Capital Reorganisation became effective on 6 April 2005

• “Original Initial Conversion Price” HK$0.18 per Conversion Share, after adjustment to the initial conversion price of HK$0.018 per Old Share arising from the Capital Reorganisation becoming effective on 6 April 2005

• “Outstanding CN”

• the outstanding convertible notes in the aggregate principal amount of HK$4,000,000 held by independent investors with a conversion price of HK$0.25 per New Share (adjusted by the Capital Reorganisation) issued by the Company to independent investors on 1 November 2004, details of which were set out in the Company’s announcement dated 11 October 2004

• “Placees”

• any institutional, corporate or individual investors or any of their respective subsidiaries or associates procured by the Placing Agent to subscribe for the Underwritten Convertible Notes pursuant to the Placing Agreement

• “Placing Agent”

• Kingston Securities Limited, a licensed corporation to carry on business in type 1 regulated activity (dealing in securities) under the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)

• “Placing Agreement”

• the conditional placing agreement dated 28 January 2005 entered into between the Company and the Placing Agent in respect of the placing of the Underwritten Convertible Notes which was supplemented by a supplemental agreement dated 4 February 2005

• “Placing of 1,000 million Old Shares”

• the placing of 1,000,000,000 Old Shares to independent investors, details of which were set out in the announcement of the Company dated 23 December 2004 and the circular of the Company dated 17 January 2005

• “Possible Acquisition”

• the possible acquisition of a majority stake in Shanghai Holdfast Science & Technology Co., Ltd., details of which were set out in the announcement of the Company dated 20 October 2004 and issued pursuant to rule 13.09 of the Listing Rules

– 3 –

DEFINITIONS

• “Revised Placing Agreement”

the revised placing agreement dated 9 May 2005 subject to the Placing Agreement entered into between the Company and the Placing Agent in respect of the placing of the Underwritten Convertible Notes

• “Second Supplemental Agreement” the second supplemental subscription agreement dated 9 May 2005 entered into between the Company and the Subscriber in respect of the subscription of GC Convertible Note

• “SGM” the special general meeting of the Company to be convened to approve, among others, the Revised Placing Agreement; the Second Supplemental Agreement and the creation and issue of the Convertible Notes

• “SGM Notice” the notice convening the SGM set out on pages 25 to 26 of this circular

• “Shareholder(s)” holder(s) of the New Shares

• “Share Consolidation” the consolidation of every 10 shares of HK$0.001 each into 1 new share of HK$0.01 each in the share capital of the Company as set out in the Circular and became effective on 6 April 2005

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

• “Subscriber” Global Capital Management Inc., a company incorporated in Japan

• “Subscription Agreement” the original conditional subscription agreement dated 26 January 2005 which was supplemented by the supplemental agreement dated 4 February 2005

• “Underwritten Convertible Notes”

• the 1-year 1% convertible loan notes to be issued by the Company to the Placees under the Placing Agreement in the principal amount of HK$40,000,000

• “Unissued Share Subdivision”

• the subdivision of every Unissued Old Share into 25 New Shares of HK$0.01 each as set out in the Circular and became effective on 6 April 2005

• “HK$”

Hong Kong dollars, the lawful currency of Hong Kong

• “JPY”

• Japanese Yen, the lawful currency of Japan

• “US$”

• United States dollars, the lawful currency of the United States of America

• “%”

per cent.

– 4 –

LETTER FROM THE BOARD

==> picture [348 x 36] intentionally omitted <==

(Incorporated in Bermuda with limited liability)

(Stock Code: 603)

Executive Directors: WONG Kui Shing, Danny Masanori SUZUKI Eiji SATO WONG King Shiu, Daniel KAN Kwok Shu LIN Che Chu, George

Independent Non-executive Directors: CHEUNG Man Yau, Timothy CHUK Che Shing KIM Kwi Nam, Takao

Registered Office: Clarendon House 2 Church Street Hamilton HM 11 Bermuda

Head Office and Principal Place of Business in Hong Kong: Room 2703-2704, 27/F Nine Queen’s Road Central Central Hong Kong

14 July 2005

To the Shareholders of the Company,

and for information only, holders of the Outstanding CN

Dear Sir or Madam

PROPOSED CHANGES IN TERMS OF PLACING AGREEMENT AND SUBSCRIPTION AGREEMENT

INTRODUCTION

On 11 March 2005, the Company despatched the Circular to the shareholders regarding, among others, the proposed issue of Convertible Notes pursuant to the Placing Agreement and the Subscription Agreement. The resolutions in respect of the execution of the Placing Agreement made between the Company and the Placing Agent for the placing of the Underwritten Convertible Notes in the principal amount of HK$40,000,000 and the allotment and issue of 222,222,222 New Shares at the Original Initial Conversion Price of HK$0.18 per New Share and the execution of the Subscription Agreement made between the Company and the Subscriber for the subscription of the GC Convertible Note in the principal amount of JPY290,000,000 (i.e. equivalent to HK$21,750,000) and the allotment and issue of 120,833,333 New Shares at the Original Initial Conversion Price of HK$0.18 per New Share were proposed at the special general meeting of the Company held on 4 April 2005. The Board announced on 4 April 2005 that the resolutions were passed by a show of hands on 4 April 2005 and the Capital Reorganisation became effective on 6 April 2005.

* for identification purposes only

– 5 –

LETTER FROM THE BOARD

As set out in the Announcement, the Company and the Placing Agent have agreed by entering into the Revised Placing Agreement on 9 May 2005 to amend the terms of the Underwritten Convertible Notes by (i) altering the Original Initial Conversion Price of HK$0.18 per New Share to become the New Initial Conversion Price of HK$0.09 per New Share; and (ii) extending the long stop date from 27 April 2005 to 8 August 2005 (or such other date as agreed by the parties) for fulfilment of the conditions precedent of the Placing Agreement where additional time is required for procuring Placees by the Placing Agent. The Company and the Subscriber have also entered into the Second Supplemental Agreement pursuant to which the Company has conditionally agreed to amend the terms of the GC Convertible Note by (i) altering the Original Initial Conversion Price of HK$0.18 per New Share to become the New Initial Conversion Price of HK$0.09 per New Share; (ii) requiring written consent of the Company for the transfer of the GC Convertible Note to any third parties; and (iii) extending the long stop date from 25 April 2005 to 8 August 2005 (or such other date as agreed by the parties).

The purposes of this circular are to provide you with the information in relation to (i) the proposed change in terms of the Placing Agreement pursuant to the Revised Placing Agreement and the change in terms of the Subscription Agreement pursuant to the Second Supplemental Agreement, the issue of the Convertible Notes pursuant to the Placing Agreement as supplemented by a supplemental agreement dated 4 February 2005 and the Revised Placing Agreement and the Subscription Agreement as supplemented by a supplemental agreement dated 4 February 2005 and the Second Supplemental Agreement, and the issue of Conversion Shares upon exercise of the conversion rights attaching to the Convertible Notes; and (ii) the SGM Notice at which resolutions will be proposed to the Shareholders to consider and, if thought fit, approve (a) the Placing Agreement as supplemented by a supplemental agreement dated 4 February 2005 and the Revised Placing Agreement, the creation and issue of the Underwritten Convertible Notes in the principal amount of HK$40,000,000 and the issue of Conversion Shares upon exercise of the conversion rights attaching to the Underwritten Convertible Notes; and (b) the Subscription Agreement as supplemented by a supplemental agreement dated 4 February 2005 and the Second Supplemental Agreement, the creation and issue of the GC Convertible Note in the principal amount of JPY290,000,000 (i.e. equivalent to HK$21,750,000) and the issue of Conversion Shares upon exercise of the conversion rights attaching to the GC Convertible Note.

PROPOSED ISSUE OF CONVERTIBLE NOTES

The Company entered into the Placing Agreement on 28 January 2005 which was supplemented by a supplemental agreement dated 4 February 2005 and the Revised Placing Agreement dated 9 May 2005. The Company also entered into the Subscription Agreement on 26 January 2005 which was supplemented by a supplemental agreement dated 4 February 2005 and the Second Supplemental Agreement dated 9 May 2005.

CONDITIONAL PLACING AGREEMENT

Date : 28 January 2005, 4 February 2005 and 9 May 2005 Issuer : the Company Placing Agent : Kingston Securities Limited

– 6 –

LETTER FROM THE BOARD

As disclosed in the Circular, the Placing Agent has conditionally agreed with the Company to place, on a fully underwritten basis, to not fewer than six independent, corporate and/or individual investors the Underwritten Convertible Notes in the principal amount of HK$40,000,000. The Placing Agent will receive a placing commission of 2.5% on the gross proceeds of the placing of the Underwritten Convertible Notes in accordance with the aggregate amount underwritten by the Placing Agent, which was arrived at after arm’s length negotiations between the Company and the Placing Agent.

The Placing Agent and its ultimate beneficial owners (i) are not connected persons (as defined in the Listing Rules) of the Company and are third parties independent of and not connected with the Company and its connected persons (as defined in the Listing Rules); and (ii) are independent of and not connected with the Subscriber and its ultimate beneficial owner.

Placees

The Placing Agent will place the Underwritten Convertible Notes to not fewer than six Placees, each of whom and whose ultimate beneficial owners (i) are not connected persons (as defined in the Listing Rules) of the Company; and (ii) are independent of and not connected with the Company and its connected persons (as defined in the Listing Rules), the other Placees, the Subscriber and their respective ultimate beneficial owners. The Placees will be any of the institutional, corporate and/or individual investors to be procured by the Placing Agent. The Conversion Shares will be issued pursuant to the passing of the relevant resolutions at the SGM. As at the Latest Practicable Date, the placing of the Underwritten Convertible Notes is yet to be completed. In the event that the Placees may become substantial Shareholders upon full exercise of the conversion rights attaching to the Underwritten Convertible Notes, the Company will make further announcement upon completion of the Placing Agreement.

CHANGE IN TERMS OF PLACING AGREEMENT

The Company and the Placing Agent have agreed by entering into the Revised Placing Agreement on 9 May 2005 to amend the terms of the Underwritten Convertible Notes by:

• (i) altering the Original Initial Conversion Price of HK$0.18 per New Share to become the New Initial Conversion Price of HK$0.09 per New Share; and

• (ii) extending the long stop date from 27 April 2005 to 8 August 2005 (or such other date as agreed by the parties) for fulfilment of the conditions precedent of the Placing Agreement in relation to the Underwritten Convertible Notes where additional time is required for procuring Placees by the Placing Agent.

Save as the aforesaid, the terms and conditions, including the placing commission, as set out in the Circular for the placing of the Underwritten Convertible Notes pursuant to the Placing Agreement and the terms of the Underwritten Convertible Notes remain unchanged.

The New Initial Conversion Price was determined on an arm’s length basis between the Company and the Placing Agent, with reference to the market price of the New Shares under the prevailing market conditions where additional time is required for procuring Placees by the Placing Agent.

– 7 –

LETTER FROM THE BOARD

CONDITIONS OF THE PLACING AGREEMENT

Completion of the Placing Agreement supplemented by a supplemental agreement dated 4 February 2005 and the Revised Placing Agreement dated 9 May 2005 is conditional on:

• (1) the completion of the Capital Reorganisation, which was effective on 6 April 2005;

• (2) the approval by the shareholders of the Placing Agreement, the creation and issue of the Underwritten Convertible Notes in the principal amount of HK$40,000,000 and the issue of Conversion Shares upon exercise of the conversion rights attaching to the Underwritten Convertible Notes, resolutions of which were duly passed at the special general meeting of the Company held on 4 April 2005;

• (3) the passing of resolutions at the SGM approving the Revised Placing Agreement, the creation and issue of the Underwritten Convertible Notes in the principal amount of HK$40,000,000 and the issue of Conversion Shares upon conversion of the Underwritten Convertible Notes at HK$0.09 per New Share;

• (4) (if required) the Bermuda Monetary Authority having granted its permission for the issue of the Underwritten Convertible Notes and the free transferability of the New Shares which may fall to be issued upon exercise of the conversion rights attaching to the Underwritten Convertible Notes; and

• (5) the Listing Committee of the Stock Exchange granting (either unconditionally or subject to conditions to which the Company objects) listing of and permission to deal in the Conversion Shares upon exercise of the conversion rights attaching to the Underwritten Convertible Notes.

None of the above conditions can be waived by the Company and the Placing Agent. If the conditions are not fulfiled on or prior to 8 August 2005 or such other date as may be agreed between the Placing Agent and the Company, the Placing Agreement will lapse and become null and void.

TERMINATION AND FORCE MAJEURE FOR THE PLACING AGREEMENT

The Placing Agreement may be terminated by the Placing Agent if at any time prior to 12:00 noon on the date for completion of the Placing Agreement, there occurs:

• (i) the introduction of any new law or regulation or any change in existing laws or regulations or change in the interpretation or application thereof, or other occurrence of any nature whatsoever which may, in the reasonable opinion of the Placing Agent, materially and adversely affect the business or the financial or trading position or prospects of the Group as a whole; or

– 8 –

LETTER FROM THE BOARD

• (ii) the occurrence of any event, development or change (whether or not local, national or international or forming part of a series of events or changes occurring or continuing before, on and/or after the date of the Placing Agreement and including an event or change in relation to or a development of an existing state of affairs) of a political, military, industrial, financial, economic or other nature, whether or not sui generis with any of the foregoing, resulting in a material adverse change in, or which might be expected to result in a material adverse change in political, economic or stock market conditions; or

• (iii) the imposition of any moratorium, suspension or material restriction on trading in securities generally on the Stock Exchange occurring due to exceptional financial circumstances or otherwise; or

• (iv) a change or development involving a prospective change in taxation or the implementation of exchange controls which shall or might materially and adversely affect the Company or its present or prospective shareholders in their capacity as such; or

• (v) any change or deterioration in the conditions of local, national or international securities markets occurs,

then and in any such case, the Placing Agent may terminate the Placing Agreement without liability to the Company by giving notice in writing to the Company, provided that such notice is received prior to 10:00 a.m. on the date for completion of the Placing Agreement.

Upon giving of notice pursuant to the paragraph above, all obligations of each of the parties under the Placing Agreement shall cease and determine and no party shall have any claim against any other parties in respect of any matter arising out of or in connection with the Placing Agreement, except for any breach arising prior to such termination.

The Directors are not aware of the occurrence of any of such events as at the Latest Practicable Date.

COMPLETION OF THE PLACING AGREEMENT

Completion of the Placing Agreement shall take place on the third Business Day following the date on which the conditions thereto are fulfiled. Further announcement will be made if the completion of the Placing Agreement does not proceed or the conditions thereto are not fulfiled on 8 August 2005.

The completion of the Subscription Agreement and the Placing Agreement are not interconditional.

– 9 –

LETTER FROM THE BOARD

CONDITIONAL SUBSCRIPTION AGREEMENT

• Date : 26 January 2005, 4 February 2005 and 9 May 2005

• Issuer : the Company

• Subscriber : Global Capital Management Inc., is a company incorporated in Japan on 20 June 2000, and its ultimate beneficial owner is Mr Shigeta Yasumitsu who is a Japanese investor. To the best of the Directors’ knowledge, information, belief and having made all reasonable enquiry, Global Capital Management Inc. and Mr Shigeta Yasumitsu (i) are not connected persons (as defined in the Listing Rules) of the Company and are third parties independent of and not connected with the Company and its connected persons (as defined in the Listing Rules); and (ii) are independent of and not connected with any of the Placees, the Placing Agent and their respective ultimate beneficial owners.

As disclosed in the Circular and pursuant to the Subscription Agreement, the Company will issue the GC Convertible Note to the Subscriber in the principal amount of JPY290,000,000 (i.e. equivalent to HK$21,750,000) with the exchange rate fixed at JPY1=HK$0.075.

CHANGE IN TERMS OF SUBSCRIPTION AGREEMENT

The Company and the Subscriber entered into the Second Supplemental Agreement on 9 May 2005 to revise the terms and conditions of the Subscription Agreement, pursuant to which the Company has conditionally agreed to amend the terms of the GC Convertible Note by:

• (i) altering the Original Initial Conversion Price of HK$0.18 per New Share to become the New Initial Conversion Price of HK$0.09 per New Share;

• (ii) requiring prior written consent of the Company for the assignment or transfer of the GC Convertible Note by the holder of the GC Convertible Note to any third parties, which is a new requirement imposed on the Subscriber. The details of transferability of the Convertible Notes were set out in the paragraph headed “Transferability” under the section headed “Terms of the Convertible Notes”; and

• (iii) extending the long stop date from 25 April 2005 to 8 August 2005 (or such other date as agreed by the parties).

Save as the aforesaid, the terms and conditions for the GC Convertible Note pursuant to the Subscription Agreement and the terms of the GC Convertible Notes remain unchanged.

The New Initial Conversion Price was determined on an arm’s length basis between the Company and the Subscriber, with reference to the market price of the New Shares under the prevailing market conditions.

– 10 –

LETTER FROM THE BOARD

CONDITIONS OF THE SUBSCRIPTION AGREEMENT

Completion of the Subscription Agreement supplemented by the supplemental agreement dated 4 February 2005 and the Second Supplemental Agreement dated 9 May 2005 is conditional on:

• (1) the completion of the Capital Reorganisation, which was effective on 6 April 2005;

• (2) the approval by the shareholders of the Subscription Agreement, the creation and the issue of the GC Convertible Note in the principal amount of JPY290,000,000 (i.e. equivalent to HK$21,750,000) and the issue of Conversion Shares upon exercise of the conversion rights attaching to the GC Convertible Note, resolutions of which were duly passed at the special general meeting of the Company held on 4 April 2005;

• (3) the passing of resolutions at the SGM approving the Second Supplemental Agreement, the creation and issue of the GC Convertible Note in the principal amount of JPY290,000,000 (i.e. equivalent to HK$21,750,000) and the issue of Conversion Shares upon conversion of the GC Convertible Note at HK$0.09 per New Share;

• (4) (if required) the Bermuda Monetary Authority having granted its permission for the issue of the GC Convertible Note and the free transferability of the New Shares which may fall to be issued upon exercise of the conversion rights attaching to the GC Convertible Note; and

• (5) the Listing Committee of the Stock Exchange having granted listing of and permission to deal in the Conversion Shares upon exercise of the conversion rights attaching to the GC Convertible Note.

None of the above conditions can be waived by the Company and the Subscriber. In the event that the conditions are not fulfiled on or before 8 August 2005 (or such other date as the parties to the Subscription Agreement may agree in writing), the Subscription Agreement shall lapse.

COMPLETION OF THE SUBSCRIPTION AGREEMENT

Completion of the Subscription Agreement shall take place within five Business Days following the date on which the above conditions are fulfiled. Further announcement will be made if the completion of the Subscription Agreement does not proceed or the above conditions are not fulfiled on 8 August 2005.

– 11 –

LETTER FROM THE BOARD

TERMS OF THE CONVERTIBLE NOTES

New Initial Conversion Price:

The New Initial Conversion Price, being HK$0.09 per Conversion Share, is subject to adjustment by reason of any consolidation or subdivision such that the par value of a New Share becomes of a different nominal amount.

The New Initial Conversion Price, which was determined on an arm’s length basis between the Company and the Subscriber and between the Company and the Placing Agent, with regard to the trading price of the New Shares.

The New Initial Conversion Price represents:

• (i) a discount of 50% to the Original Initial Conversion Price of HK$0.18 per New Share;

• (ii) a discount of 50% to the closing price of HK$0.18 per New Share (taking into account the Share Consolidation) on 26 January 2005, being the last trading day before the date of the Placing Agreement and the Subscription Agreement;

• (iii) a premium of approximately 2.3% to the closing price of HK$0.088 per New Share on 25 April 2005, being the last trading day before the date of the Revised Placing Agreement and the Second Supplemental Agreement;

• (iv) the same as the average closing price of HK$0.09 per New Share of the last 5 trading days from 19 April 2005 to 25 April 2005, being the last trading day before the suspension of trading in the New Shares on 26 April 2005;

• (v) a discount of approximately 18.2% to the net asset value per New Share of HK$0.11 calculated on the basis of the unaudited net asset value of HK$187,462,000 as at 31 January 2005 and the existing total issued 1,734,676,213 New Shares (taking into account the Share Consolidation); and

• (vi) a premium of approximately 45.2% to the closing price of HK$0.062 per New Share as quoted on the Stock Exchange as at the Latest Practicable Date.

Interest:

The Convertible Notes bear an annual interest of 1%, which will be payable on the Maturity Date.

Maturity Date:

The maturity of the Convertible Notes will be the date falling on the last day of a period of 365 days from and including the Issue Date. Any outstanding principal amount of the Convertible Notes together with interest accrued thereon will be repaid by the Company on maturity.

– 12 –

LETTER FROM THE BOARD

• Conversion provisions:

• The Convertible Notes are convertible in whole or in part representing JPY50,000,000 (for the GC Convertible Note) and HK$100,000 (for the Underwritten Convertible Notes) an integral multiple thereof at any time after the Issue Date but before the Maturity Date at the New Initial Conversion Price, subject to adjustment by reason of any consolidation or subdivision such that the par value of a New Share becomes of a different nominal value. The exchange rate for translation of JPY to HK$ is fixed at JPY1 to HK$0.075.

Transferability:

• The Convertible Notes may not be assigned or transferred to a connected person (as defined in the Listing Rules) of the Company.

Any transfer or assignment of the GC Convertible Note to any third parties (being not connected person of the Company) is subject to prior written consent of the Company.

Voting rights: The Convertible Notes do not confer any voting rights at general meetings of the Company on the holders.

• Redemption:

• The Company shall, at any time before the Maturity Date, have the option to redeem the Convertible Notes in whole or in part at its principal amount outstanding together with accrued interest thereon.

No early redemption right is conferred on the Subscriber pursuant to the Subscription Agreement and the terms of the GC Convertible Note or on the Placees pursuant to the Placing Agreement and the terms of the Underwritten Convertible Notes.

Listing:

No application will be made for the listing of the Convertible Notes on the Stock Exchange or any other stock exchange.

Application has been made by the Company for the listing of and permission to deal in the New Shares to be issued pursuant to the exercise of the conversion rights attaching to the Convertible Notes.

Based on the New Initial Conversion Price:

• (1) the maximum number of Conversion Shares which may be issued upon full conversion of the GC Convertible Note is 241,666,666 New Shares, representing:

• (i) approximately 13.9% of the existing issued share capital of the Company comprising 1,734,676,213 New Shares;

• (ii) approximately 12.2% of the Company’s issued share capital comprising 1,976,342,879 New Shares as enlarged by the full conversion of the GC Convertible Note; and

• (iii) approximately 9.98% of the Company’s issued share capital comprising 2,420,787,323 New Shares as enlarged by the full conversion of the Convertible Notes.

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LETTER FROM THE BOARD

• (2) the maximum number of Conversion Shares which may be issued upon full conversion of the Underwritten Convertible Notes is 444,444,444 New Shares, representing:

• (i) approximately 25.6% of the existing issued share capital of the Company comprising 1,734,676,213 New Shares;

• (ii) approximately 20.4% of the Company’s issued share capital comprising 2,179,120,657 New Shares as enlarged by the full conversion of the Underwritten Convertible Notes; and

• (iii) approximately 18.4% of the Company’s issued share capital comprising 2,420,787,323 New Shares as enlarged by the full conversion of the Convertible Notes.

• (3) the total number of the Conversion Shares will be issued upon full conversion of the Convertible Notes which will be double as compared to the Original Initial Conversion Price of HK$0.18 per New Share.

EFFECT ON SHAREHOLDING STRUCTURE

The effect on the shareholding structure of the Company upon full conversion of the Convertible Notes is as follows:

Noble Islands Int’l Limited (Note 1) Wong Kui Shing, Danny The Placees_(Note 2)_ The Subscriber Public shareholders Total	Existing shareholding as at the Latest Practicable Date % to the Number of total issued New Shares New Shares 327,018,300 18.85 2,310,000 0.13 – – – – 1,405,347,913 81.02 1,734,676,213 100.00	Assume immediately after full conversion of the GC Convertible Note at the conversion price of HK$0.09 but before conversion of the Underwritten Convertible Notes at the conversion price of HK$0.09 % to the Number of total issued New Shares New Shares 327,018,300 16.55 2,310,000 0.12 – – 241,666,666 12.23 1,405,347,913 71.10 1,976,342,879 100.00	Assume immediately after full conversion of the Underwritten Convertible Notes at the conversion price of HK$0.09 but before conversion of the GC Convertible Note Assume full at the conversion conversion of the price of HK$0.09 Convertible Notes % to the % to the Number of total issued Number of total issued New Shares New Shares New Shares New Shares 327,018,300 15.01 327,018,300 13.51 2,310,000 0.11 2,310,000 0.09 444,444,444 20.40 444,444,444 18.36 – – 241,666,666 9.98 1,405,347,913 64.48 1,405,347,913 58.06 2,179,120,657 100.00 2,420,787,323 100.00	Assume immediately after full conversion of the Underwritten Convertible Notes at the conversion price of HK$0.09 but before conversion of the GC Convertible Note Assume full at the conversion conversion of the price of HK$0.09 Convertible Notes % to the % to the Number of total issued Number of total issued New Shares New Shares New Shares New Shares 327,018,300 15.01 327,018,300 13.51 2,310,000 0.11 2,310,000 0.09 444,444,444 20.40 444,444,444 18.36 – – 241,666,666 9.98 1,405,347,913 64.48 1,405,347,913 58.06 2,179,120,657 100.00 2,420,787,323 100.00
				100.00

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LETTER FROM THE BOARD

Notes:

1. Noble Islands Int’l Limited is wholly-owned by Power Honest Holdings Limited which in turn is wholly-owned by Mr Wong Kui Shing, Danny, a Director.

2. The Underwritten Convertible Notes will be placed to not fewer than six Placees, each of whom and whose ultimate beneficial owners (i) are not connected persons of the Company (within the meaning ascribed thereto in the Listing Rules); and (ii) are independent of and not connected with the Company and its connected persons (within the meaning ascribed thereto in the Listing Rules), the other Placees, the Subscriber and their respective ultimate beneficial owners. The Placees will be any of the institutional, corporate and/or individual investors to be procured by the Placing Agent.

3. As at the Latest Practicable Date, the Company has Outstanding CN of HK$4,000,000 with a conversion price of HK$0.25 per New Share convertible into 16,000,000 New Shares, representing approximately 0.92% of the existing issued share capital of the Company.

REASONS FOR THE PROPOSED ISSUE OF THE CONVERTIBLE NOTES AND USE OF PROCEEDS

The estimated net proceeds from the issue of the Convertible Notes will be approximately HK$60.7 million, which is, together with the unutilised proceeds from previous fund raising activities of approximately HK$45 million (HK$15.5 million from the issue of ICP Convertible Notes and the remaining HK$29.5 million from the issue of 2,048,368,284 rights shares), intended to be utilised for the possible acquisition of a majority stake (51%) in Shanghai Holdfast Science & Technology Co., Ltd. (“Shanghai Holdfast”).

A non-legally binding Memorandum of Understanding in relation to the proposed acquisition of Shanghai Holdfast (“Possible Acquisition”) was executed on 20 October 2004, details of which were set out in the Company’s announcement dated 20 October 2004 and issued pursuant to rule 13.09 of the Listing Rules. The due diligence exercises on Shanghai Holdfast are still carrying on, providing the due diligence results are satisfied, the consideration will be based on the estimated business value as at 31 December 2004 for the 2004 financial year calculated by applying a P/E ratio ranging from 8 to 15 to the net profit of Shanghai Holdfast for the financial year ended 31 December 2004. Currently, the final terms and conditions of the Possible Acquisition (including the final consideration and settlement of the consideration) are still in negotiation and the negotiation is still on-going. Should the final terms and conditions for the Possible Acquisition be concluded, a final and definitive agreement will be entered which may result in a notifiable transaction under the Listing Rules, further announcement will be made as and when appropriate. If the existing available fund is not sufficient for the Possible Acquisition, the Directors may consider further fund raising activities.

In the event that the Possible Acquisition does not proceed, or there is proceeds remained after the Possible Acquisition, the proceeds/remaining proceeds will be preserved, and the application may be firstly for investments projects in relation to internet and information technology or secondly for other suitable investments projects which are generally in line with the Group’s existing business, and/or thirdly for general working capital. As at the Latest Practicable Date, no other potential investments except Shanghai Holdfast are identified or targeted. Further announcement will be made if the proceeds are not utilised for the Possible Acquisition.

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LETTER FROM THE BOARD

The Board is of the view that the postponement of the long stop date for the Placing Agreement and the Subscription Agreement will not have material impact on the financial and operational position of the Group, as it intended to use the proceeds from the issue of Convertible Notes for the Possible Acquisition which is not imminent while the final terms and conditions of the Possible Acquisition are subject to further negotiation.

Outstanding CN

As at the Latest Practicable Date, an aggregate of 16,000,000 New Shares are subject to the Outstanding CN at the conversion price of HK$0.25 each.

FUNDS RAISED BY THE COMPANY DURING THE 12 MONTHS PERIOD IMMEDIATELY BEFORE THE DATE OF THE PLACING AGREEMENT AND THE SUBSCRIPTION AGREEMENT AND UP TO THE DATE OF THE LATEST PRACTICABLE DATE

The following table summarises the capital raising activities of the Group for the 12 months period immediately before the date of the Placing Agreement and the Subscription Agreement and up to the Latest Practicable Date:

	Gross	Date of		Intended use of	Actual use	Date of relevant
Description	Amount raised	mandate granted	Date of completion	proceeds as announced	of proceeds	announcement
Issue of the ICP Convertible	US$2 million	Granted at annual	27.10.2004	Net proceeds of approximately	Intended for the Possible	7.10.2004
Notes in principal amount	(equivalent to	general meeting		HK$15.5 million for future	Acquisition but not yet
of US$2 million at	approximately	held on 23.12.2003		investment or development	utilised_(Note 1)_
conversion price of	HK$15.6 million)			of suitable projects related
HK$0.025 per share				to the principal business
(assuming full conversion,				of the Company when
the maximum no.				opportunities are identified
of shares to be issued				and the Directors think
is 624 million)(Note 1)				appropriate
Issue of the CPC and	HK$25 million	Granted at annual	1.11.2004	Net proceeds of approximately	HK$6 million was utilised	11.10.2004
icoupon Convertible Notes		general meeting		HK$24.9 million for future	for the acquisition of
in principal amount of		held on 23.12.2003		investment or development	a company engaged in
HK$25 million at				of natural gas projects or	information technology
conversion price of				other suitable projects	business, HK$3.7 million
HK$0.025 per Old Share					was utilised in existing
(assuming full conversion,					business, and HK$12.3
the maximum no. of shares					million was utilised for
to be issued is 1,000 million)					securities investments, and
(Note 2)					the remaining HK$2.9 million
					was originally planned to	be
					utilised for the Possible
					Acquisition but was utilised
					on 29 April 2005 for
					redemption of the CPC
					Convertible Note
					(Notes 2 & 3)

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LETTER FROM THE BOARD

	Gross	Date of		Intended use of	Actual use	Date of relevant
Description	Amount raised	mandate granted	Date of completion	proceeds as announced	of proceeds	announcement
Issue of 2,048,368,284 rights	HK$51.2 million	Approved at special	28.12.2004	Net proceeds of approximately	HK$20.5 million was utilised	25.10.2004
shares at HK$0.025 per		general meeting		HK$50 million is intended	on 24 December 2004 to
Old Share on		held on 1.12.2004		to be fully applied for the	redeem the FHL CN, and
the basis of two rights				Possible Acquisition	the balance of HK$29.5
shares for every ten existing					million is remained for the
shares with bonus shares					intended usage for the
issued with rights shares					Possible Acquisition
on the basis of three bonus					(Note 4)
shares for every two fully
paid rights shares
Placing of 1,000 million	HK$25 million	Granted at special	13.2.2005	Net proceeds of approximately	The whole net proceeds was	23.12.2004
Old Shares		general meeting		HK$24.6 million is intended	originally planned to be
		held on 2.2.2005		to be utilised for general	used for general working
				working capital	capital butHK$9.2 million
					was utilised on 29 April
					2005 for redemption of the
					CPC Convertible Note,
					the balance of HK$15.8
					million was not yet utilised
					which will be for the original
					intended use, i.e. general
					working capital
					(Note 3)

Notes:

1. The ICP Convertible Notes are the 1-year 1% convertible notes in an aggregate principal amount of US$2 million (HK$15.6 million) (“ICP Proceeds”) issued by the Company to ICP Inc. on 27 October 2004, entitling the holder to convert up to 624,000,000 shares during the period from 27 October 2004 to 27 October 2005 at the conversion price of HK$0.025 per share. ICP Inc. and its beneficial owners are not connected persons (as defined in the Listing Rules) of the Company. The net ICP Proceeds of HK$15.5 million was originally kept in a finance company in the name of the Company and charged by the Company as a security to ICP Inc. pursuant to the terms and conditions of ICP Convertible Notes, details of which were set out in the Company’s announcement dated 7 October 2004. The ICP Convertible Notes were fully converted into 624,000,000 shares at the conversion price of HK$0.025 on 22 December 2004, as such, the security over the ICP Proceeds was released and the ICP Proceeds is freely usable by the Company. The market value of the total shares converted was HK$15.6 million based on the closing price of HK$0.025 per share on 21 December 2004, being the last trading day immediately prior to the suspension of trading of shares on 22 December 2004.

2. Among the CPC and icoupon Convertible Notes, HK$9,000,000 convertible notes was converted at the conversion price of HK$0.025 per share on 22 December 2004 by icoupon Limited and certain placees procured by the Placing Agent, and as a result of the conversion, a total number of 360,000,000 New Shares were issued, and on 29 April 2005, as requested by CPC, the Company redeemed the CPC Convertible Note of HK$12,000,000. Accordingly, there are Outstanding CN of HK$4,000,000 with a conversion price of HK$0.25 per New Share (adjusted by the Capital Reorganisation) convertible into 16,000,000 New Shares, representing approximately 0.92% of the existing issued share capital of the Company.

3. On 2 November 2004, HK$6 million was utilised for the acquisition of an information technology company (“IT Company Acquisition”) which holds a protocol to provide solution/tool to automatically convert the contents of a web page for display on different wireless access protocol enabled products. The IT Company

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LETTER FROM THE BOARD

Acquisition did not constitute a notifiable transaction under the Listing Rules, and the Directors considered the IT Company Acquisition is not of price sensitive nature which require disclosure under rule 13.09 under the Listing Rules. The HK$12.3 million was invested in listed securities in Hong Kong during the period from November to December 2004 which can be easily liquidated to release the resources for suitable investments projects. The HK$3.7 million was utilised on the Company’s existing business during the period from November to December 2004 for the relocation and setting up of the new factory for the silicon rubber business.

Given the request from CPC for redemption of the CPC Convertible Note on 29 April 2005, the remaining HK$2.9 million from the issue of the CPC and icoupon Convertible Notes, together with HK$9.2 million from the Placing of 1,000 million Old Shares, were utilised on the redemption of the CPC Convertible Note. Given that the proceeds from the said Placing of 1,000 million Old Shares are for general working capital purpose, the Company decided to apply such proceeds for the redemption of the CPC Convertible Note and considered that such use of proceeds will not have any impact on its financial position in view of its having sufficient general working capital.

1. The FHL CN is the 3% interest convertible notes in an aggregate principal amount of HK$20,000,000 convertible into Old Shares at the conversion price of HK$0.04 per share issued by the Company to Feishang Holdings Limited on 14 January 2004, redemption of the FHL CN enables the Company to save interest expenses, while the proposed issue of the Convertible Notes, which bear 1% annual interest, provides an alternative capital of lower costs.

Save for the Outstanding CN, the Company has no other convertible note in issue or outstanding as at the Latest Practicable Date.

INFORMATION ON THE GROUP AND THE SUBSCRIBER

The principal activity of the Company is investment holding and the Group is principally engaged in investments in Internet, information technology, investment in natural gas business and investment in securities.

The principal activity of the Subscriber is investment holding mainly with medium to long term investment strategy.

PROCEDURES BY WHICH A POLL MAY BE DEMANDED

Pursuant to Bye-law 66 of the Company’s Bye-laws, a resolution put to the vote of a meeting shall be decided on a show of hands unless (before or on the declaration of the result of the show of hands or on the withdrawal of any other demand for a poll) a poll is demanded:

• (a) by the chairman of such meeting; or

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

• (c) by a Shareholder or Shareholders present in person or in the case of a Shareholder 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 Shareholders having the right to vote at the meeting; or

• (d) by a Shareholder or Shareholders present in person or in the case of a Shareholder being a corporation by its duly authorised representative or by proxy and holding Shares 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.

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LETTER FROM THE BOARD

GENERAL

Relevant resolutions were passed by the Shareholders at the special general meeting of the Company held on 4 April 2005 for approving (i) the Subscription Agreement, the creation and issue of the GC Convertible Note and the issue of Conversion Shares upon exercise of the conversion rights attaching to the GC Convertible Note; and (ii) the Placing Agreement, the creation and issue of the Underwritten Convertible Notes and the issue of Conversion Shares upon exercise of the conversion rights attaching to the Underwritten Convertible Notes. Since certain terms of the Subscription Agreement and the Placing Agreement have been changed as mentioned in the previous paragraphs, the SGM will be convened and relevant resolutions will be proposed to consider, if thought fit, to approve (i) the Placing Agreement as supplemented by a supplemental agreement dated 4 February 2005 and the Revised Placing Agreement, the creation and issue of the Underwritten Convertible Notes and the issue of Conversion Shares upon exercise of the conversion rights attaching to Underwritten Convertible Notes; and (ii) the Subscription Agreement as supplemented by a supplemental agreement dated 4 February 2005 and the Second Supplemental Agreement, the creation and issue of the GC Convertible Note and the issue of Conversion Shares upon exercise of the conversion rights attaching to the GC Convertible Note.

To the best of the Directors’ knowledge, information, belief and having made all reasonable enquires, no Shareholders and their associates have any interests in the Placing Agreement as supplemented by a supplemental agreement dated 4 February 2005 and the Revised Placing Agreement and the Subscription Agreement as supplemented by a supplemental agreement dated 4 February 2005 and the Second Supplemental Agreement which are different from other Shareholders and none of the Subscriber, the Placees, the Placing Agent and their respective ultimate beneficial owners hold any New Shares of the Company. Hence, no Shareholders are required to abstain from voting in respect of the relevant resolutions to be proposed at the SGM.

RECOMMENDATION

Save as the aforesaid amended terms of the Placing Agreement and the Subscription Agreement and the Convertible Notes, terms and conditions of the Placing Agreement, the Subscription Agreement, the Underwritten Convertible Notes and the GC Convertible Note respectively remain unchanged. The Directors consider that the terms and conditions of the Placing Agreement as supplemented by a supplemental agreement dated 4 February 2005 and the Revised Placing Agreement and the Subscription Agreement as supplemented by a supplemental agreement dated 4 February 2005 and the Second Supplemental Agreement and the Convertible Notes are fair and reasonable and in the best interest of the Company and the Shareholders as a whole, as the issue of Convertible Notes provides low cost of funding and enhance the financial position of the Group which are required for the Possible Acquisition once the final terms and conditions are determined, and the New Initial Conversion Price of HK$0.09 per New Share, which is commercially sensible and acceptable given the current market price of New Shares of the Company, will increase the likelihood of conversion rather than redemption of the Convertible Notes at maturity, and the shareholder base will as well be broadened as a result of the conversion. The Directors recommend the Shareholders to vote in favour of the resolutions to be proposed at the SGM.

Your attention is also drawn to the Appendix to this circular and the SGM Notice set out in this circular.

By Order of the Board Nippon Asia Investments Holdings Limited Wong Kui Shing, Danny Chairman

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GENERAL INFORMATION

APPENDIX

1. 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.

2. SHARE CAPITAL

(a) Share Capital

The authorised and issued share capital of the Company as at the Latest Practicable Date were as follows:

New Shares of HK$0.01 each

Authorised: 125,000,000,000 New Shares Issued and fully paid: 1,734,676,213 New Shares	HK$ 1,250,000,000
	HK$ 17,346,762

Subject to completion of the Placing Agreement and the Subscription Agreement and immediately after full conversion of the Convertible Notes at the New Initial Conversion Price, the issued share capital of the Company will be as follows:

ssued and to be issued (fully paid): 1,734,676,213 New Shares 444,444,444 Conversion Shares falling to be issued from the Underwritten Convertible Notes 241,666,666 Conversion Shares falling to be issued from the GC Convertible Note 16,000,000 conversion shares falling to be issued from the Outstanding CN 2,436,787,323	HK$ 17,346,762 4,444,444 2,416,667 160,000
	24,367,873

Issued and to be issued (fully paid):

All the New Shares presently in issue rank pari passu in all respects as regards voting, dividends and return of capital. The Conversion Shares (when allotted, fully paid and issued) will rank pari passu in all respects with the New Shares.

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GENERAL INFORMATION

APPENDIX

No part of the share capital of the Company is listed or dealt in on any stock exchange other than the Stock Exchange and no application is being made or is currently proposed or sought for the New Shares to be listed or dealt in on any other stock exchange.

(b) Share Options

As at the Latest Practicable Date, there was no share options outstanding under the share option scheme adopted by the Company on 31 January 2002.

Save for the aforesaid Outstanding CN, there are no other outstanding convertible debts, options or warrants of the Company as at the Latest Practicable Date.

3. DISCLOSURE OF INTERESTS

(a) Directors’ and Chief Executive’s interests and short positions in New Shares and underlying New Shares

As at the Latest Practicable Date, the interests or short positions of each Director and chief executive of the Company in the New Shares, underlying New Shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which he is taken or deemed to have under such provisions of the SFO), or which were required, pursuant to Section 352 of the SFO, to be entered in the register maintained by the Company referred to therein, or which were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers contained in the Listing Rules, to be notified to the Company and the Stock Exchange, were as follows:

Nature Name of Director Capacity of Interest Wong Kui Shing, Danny Having an interest in Corporation (Note) a controlled corporation Being a beneficial owner Personal Total:	Number % of Issued of New Shares New Shares 327,018,300 18.85 2,310,000 0.13 329,328,300 18.98	Number % of Issued of New Shares New Shares 327,018,300 18.85 2,310,000 0.13 329,328,300 18.98
		18.98

Note: Please refer to Note 1 of part (b) below.

Save as aforesaid, none of the Directors or chief executive of the Company had any interests or short position in the New Shares, underlying New Shares or debentures of the Company or any of its associated corporations (within the meaning of the SFO) which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including any interests and short positions which he was taken or deemed to have under such provisions of the SFO) or which were required, pursuant to section 352 of the SFO, to be entered in the register referred to therein, or which were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers contained in the Listing Rules, to be notified to the Company and the Stock Exchange.

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GENERAL INFORMATION

APPENDIX

• (b) Persons who have interests or short positions which are discloseable under Divisions 2 and 3 of Part XV of the SFO and substantial shareholders

As at the Latest Practicable Date, so far as is known to the Directors or chief executive of the Company, the following persons (other than a Director or chief executive of the Company) had, or were deemed or taken to have interests or short positions in the New Shares or underlying New Shares which would fall to be disclosed to the Company and the Stock Exchange pursuant to Divisions 2 and 3 of Part XV of the SFO or, who were, directly or indirectly, interested in 5% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other member of the Group or had any option in respect of such capital:

			Number of	% of Issued
Name	Notes	Capacity	New Shares	New Shares
Noble Islands Int’l Limited	1	Being a beneficial owner	327,018,300	18.85
(“Noble Islands”)
Power Honest Holdings	1	Having an interest in	327,018,300	18.85
Limited (“Power Honest”)		a controlled corporation
Kingston Finance Limited	1, 2	Having a security interest	206,772,200	11.92
Kingston Securities Limited	3	Being Placing Agent	444,444,444	25.62
Chu Yuet Wah	1, 2, 3, 4	Having an interest in	651,216,644	37.54
		a controlled corporation
Ma Siu Fong	1, 2, 3, 4	Having an interest in	651,216,644	37.54
		a controlled corporation
Global Capital	5	Being a beneficial owner	241,666,666	13.93
Management Inc.
Hikari Power Limited	5	Having an interest in	241,666,666	13.93
		a controlled corporation
Shigeta Yasumitsu	5	Having an interest in	241,666,666	13.93
		a controlled corporation

Notes:

1. Out of the 327,018,300 New Shares held by Noble Islands, 206,772,200 New Shares are charged to Kingston Finance Limited. The entire issued share capital of Noble Islands is held by Power Honest which is in turn held by Mr Wong Kui Shing, Danny, a Director. Hence, each of Mr Wong Kui Shing, Danny and Power Honest is deemed to be interested in 327,018,300 New Shares owned by Noble Islands. Other than the deemed interest of 327,018,300 New Shares, Mr Wong Kui Shing, Danny also has a personal interest of 2,310,000 New Shares and accordingly, is aggregately interested in 329,328,300 New Shares.

2. Kingston Finance Limited has a security interest in 206,772,200 New Shares owned by Noble Islands, which relate to the same block of New Shares held by Noble Islands as mentioned in Note 1 above.

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GENERAL INFORMATION

APPENDIX

1. Based on the New Initial Conversion Price of HK$0.09 per New Share, the Conversion Shares which may be issued pursuant to the Underwritten Convertible Notes are equivalent to 444,444,444 New Shares.

2. Ms Chu Yuet Wah and Ms Ma Siu Fong are controlling shareholders of Kingston Finance Limited and Kingston Securities Limited. Each of Ms Chu and Ms Ma is deemed to be interested in the 206,772,200 New Shares interested by Kingston Finance Limited and the derivative of 444,444,444 New Shares interested by Kingston Securities Limited as mentioned in Notes 2 and 3 above.

3. Global Capital Management Inc., being the Subscriber, and its controlling shareholders are deemed to be interested in 241,666,666 New Shares derived from the New Shares to be issued under the GC Convertible Note based on the New Initial Conversion Price of HK$0.09 per New Share.

Save as disclosed above, none of the Directors knows of any person (not being a Director or chief executive of the Company) who had interests or short positions in New Shares or underlying New Shares which would fall to be disclosed to the Company and the Stock Exchange pursuant to Divisions 2 and 3 of Part XV of the SFO, or who was, directly or indirectly, interested in 5% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other member of the Group or held any option in respect of such capital.

4. DIRECTORS’ SERVICE CONTRACTS

As at the Latest Practicable Date, no Director has an unexpired service contract with any member of the Group which is not determinable within one year without payment of compensation (other than normal statutory obligations).

5. LITIGATION

As previously disclosed in the Company’s circular dated 18 August 2003 and various subsequent circulars, on 11 August 2003, legal proceedings were brought by GP Batteries International Limited and its subsidiary, Geewin Industrial Limited (collectively the “GP Group”) against the Company for an alleged breach of an arrangement relating to a proposed sale and purchase of certain subsidiaries of the Company including an exclusivity arrangement as set out in the Company’s announcement dated 25 July 2003. The amount claimed by GP Group against the Company are damages of (i) the opportunity to acquire HK$129 million worth of assets being the combined net asset value of those disposed subsidiaries as at 31 March 2003 at the consideration of HK$40 million; and (ii) breach of terms in the relevant agreements for a sum of HK$3 million. As at the Latest Practicable Date, the Company has paid HK$3 million to settle the legal proceedings.

Golite International Limited (“Golite”) is a wholly-owned subsidiary of the Group engaged in the manufacturing and trading of silicone rubber products, where manufacturing operation is carried out in Qishi, Dongguan, the PRC together with Golden Power Industries Limited (“Golden Power”), an ex-subsidiary of the Company engaged in the manufacturing of batteries which was disposed on 23 July 2003, by virtue of a feeding processing arrangement made between Dongguan Qishi Micro Battery Factory (東莞企石微型電池廠 ) (“Micro Battery Factory”) and Golden Power. Since the disposal of Golden Power, Golite has no relationship with Mico Battery Factory and decided to detach its operation from Micro Battery Factory. Requests were made to Golden Power on releasing the plants and machineries and

– 23 –

GENERAL INFORMATION

APPENDIX

related trading records, but such requests were unreasonably rejected by Golden Power. Golite has taken legal action against Golden Power and as at the Latest Practicable Date, most of the trading records were returned to Golite and having consulted with its legal advisor, Golite was going to take legal action to retrieve the plants and machineries and its stock held by Golden Power. A new factory was set up for the silicone rubber business in July 2004 by Golite, there is impact on Golite’s operation, due to the relocation and setting up of the new factory, but the impact will be temporary and yet to be quantified.

Save as the above, none of the Company nor any of its subsidiaries is engaged in any litigation or arbitration of material importance and no other litigation or claim of material importance is known to the Directors to be pending or threatened against either the Company or any of its subsidiaries.

6. MISCELLANEOUS

• (a) The principal place of business of the Company in Hong Kong is Room 2703-2704, 27/F, Nine Queen’s Road Central, Central, Hong Kong.

• (b) The Hong Kong branch share registrar of the Company is Computershare Hong Kong Investor Services Limited at 46/F, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong.

• (c) The qualified accountant of the Company is Mr To Kwan, CPA Australia .

• (d) The secretary of the Company is Miss Man Tsz Sai, Lavender who is an associate member of both The Institute of Chartered Secretaries and Administrators and The Hong Kong Institute of Company Secretaries.

• (e) The English text of the circular shall prevail over the Chinese text.

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NOTICE OF SPECIAL GENERAL MEETING

==> picture [348 x 36] intentionally omitted <==

(Incorporated in Bermuda with limited liability)

(Stock Code: 603)

NOTICE IS HEREBY GIVEN THAT a special general meeting of Nippon Asia Investments Holdings Limited (the “Company”) will be held at Garden Rooms, 2/F, The Royal Garden, 69 Mody Road, Tsimshatsui East, Kowloon, Hong Kong on Tuesday, 2 August 2005 at 10:00 a.m. to consider and, if thought fit, pass with or without modifications, the following resolutions as ordinary resolutions:

1. “ THAT :

2. (a) the execution of the Revised Placing Agreement dated 9 May 2005 which supplemented to the conditional placing agreement dated 28 January 2005 and the supplemental agreement dated 4 February 2005 between the Company and Kingston Securities Limited (the “Placing Agent”) in relation to the placing of, on a fully underwritten basis, the 1-year 1% convertible loan note (the “Underwritten Convertible Notes”) by the Placing Agent in the principal amount of HK$40,000,000 (the “Placing Agreement”), copies of which have been produced to this meeting and marked “A” and initialed by the chairman of the meeting for identification purpose and the transactions contemplated under the Placing Agreement and the performance by the Company thereof be and are hereby ratified, confirmed and approved;

3. (b) the directors of the Company be and are hereby authorised to issue the Underwritten Convertible Notes and allot and issue ordinary shares of the Company of HK$0.01 each in the capital of the Company upon exercise of the conversion right attaching to the Underwritten Convertible Notes; and

4. (c) any one director of the Company be and is hereby authorised to do such act or execute such other documents by hand, or, in case of execution of documents under seal, to do so jointly with either the secretary of the Company or duly appointed representative of the directors of the Company or a second director of the Company so as to give effect to any or all other transactions contemplated in this resolution.”

5. “ THAT :

6. (a) the execution of the Second Supplemental Agreement dated 9 May 2005 which supplemented to the conditional subscription agreement dated 26 January 2005 and the supplemental agreement dated 4 February 2005 between the Company and Global Capital Management Inc. (the “Subscriber”) in relation to the subscription of 1-year 1% convertible loan note (the “GC Convertible Note”) by the Subscriber in the principal amount of JPY290,000,000 (i.e. equivalent to HK$21,750,000) (the “Subscription Agreement”), copies of which have been produced to this meeting and marked “B” and initialed by the chairman of the meeting for identification purpose and the transactions contemplated under the Subscription Agreement and the performance by the Company thereof be and are hereby ratified, confirmed and approved;

* for identification purposes only

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NOTICE OF SPECIAL GENERAL MEETING

• (b) the directors of the Company be and are hereby authorised to issue the GC Convertible Note and allot and issue ordinary shares of the Company of HK$0.01 each in the capital of the Company upon exercise of the conversion rights attaching to the GC Convertible Note; and

• (c) any one director of the Company be and is hereby authorised to do such act or execute such other documents by hand, or, in case of execution of documents under seal, to do so jointly with either the secretary of the Company or duly appointed representative of the directors of the Company or a second director of the Company so as to give effect to any or all other transactions contemplated in this resolution.”

By Order of the Board Nippon Asia Investments Holdings Limited Wong Kui Shing, Danny Chairman

Hong Kong, 14 July 2005

Notes:

1. Any member of the Company entitled to attend and vote at the meeting convened by this notice shall be entitled to appoint one or more proxies to attend and vote in his stead in accordance with the Bye-laws of the Company. A proxy need not be a member of the Company but must present in person to represent the member.

2. A form of proxy for use at the above meeting is enclosed.

3. To be valid, the form of proxy, together with the 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 branch share registrar in Hong Kong, Computershare Hong Kong Investor Services Limited at 46/F, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof. Completion and return of the form of proxy will not preclude members from attending and voting in person at the meeting or any adjourned meeting should they so wish.

4. As at the date of this notice, the Board comprises six executive Directors, namely Mr Wong Kui Shing, Danny, Mr Masanori Suzuki, Mr Eiji Sato, Mr Wong King Shiu, Daniel, Mr Kan Kwok Shu and Mr Liu Che Chu, George; and three independent non-executive Directors, namely Mr Cheung Man Yau, Timothy, Mr Chuk Che Shing and Mr Kim Kwi Nam, Takao.

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