Midland Holdings Limited — Proxy Solicitation & Information Statement 2004

Apr 15, 2004

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your shares in Midland Realty (Holdings) Limited, you should at once hand this circular, together with the enclosed form of proxy, to the purchaser or transferee or to the bank, licensed securities dealer 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.

MIDLAND REALTY (HOLDINGS) LIMITED

(Incorporated in Bermuda with limited liability)

(Stock code: 1200)

PROPOSED AMENDMENTS TO BYE-LAWS AND GENERAL MANDATES TO ISSUE AND PURCHASE SHARES

A letter from the Chairman and Managing Director of Midland Realty (Holdings) Limited is set out on pages 3 to 6 of this circular.

A notice convening a special general meeting of Midland Realty (Holdings) Limited to be held on 11 May 2004 at Rooms 2505-8, 25th Floor, Worldwide House, 19 Des Voeux Road Central, Hong Kong at 10:45 a.m. (or so soon thereafter as the annual general meeting of Midland Realty (Holdings) Limited convened at the same place and date at 10:30 a.m. shall have been concluded or adjourned) is set out on pages 10 to 25 of this circular.

If you are not able to attend such meeting, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return the same to the branch share registrar and transfer office of Midland Realty (Holdings) Limited in Hong Kong, Abacus Share Registrars Limited of 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 forty-eight (48) hours before the time appointed for the holding of such meeting or any adjournment thereof.

Completion and return of the form of proxy shall not preclude you from attending and voting in person at the meeting or any adjourned meeting should you so desire.

14 April 2004

CONTENTS

		Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1
Letter from the Chairman and Managing Director
–	Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
–	Proposed amendments to the Bye-Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
–	General Mandates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
–	SGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
–	Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
–	Additional information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
Appendix	– Explanatory statement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Notice of	SGM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10

DEFINITIONS

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

“AGM”	the annual general meeting of the Company to be held at
	Rooms 2505-8, 25th Floor, Worldwide House, 19 Des Voeux
	Road Central, Hong Kong on 11 May 2004 at 10:30 a.m.
“Board”	the board of Directors
“Bye-Laws”	the existing bye-laws of the Company
“Company”	Midland Realty (Holdings) Limited, a company incorporated
	in Bermuda with limited liability
“Directors”	the directors of the Company
“General Mandates”	the Issue Mandate and the Purchase Mandate to be sought
	at the SGM as set out in the Notice of SGM
“Hong Kong”	the Hong Kong Special Administrative Region of the
	People’s Republic of China
“Issue Mandate”	the mandate to allot and issue Shares as set out in the
	Notice of SGM
“Latest Practicable Date”	7 April 2004, being the latest practicable date prior to the
	printing of this circular for the purpose of ascertaining
	certain information contained herein
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock
	Exchange
“Notice of SGM”	the notice convening the SGM set out on pages 10 to 25 of
	this circular
“Purchase Mandate”	the mandate to purchase Shares as described in the
	explanatory statement set out in the Appendix to this circular
“SGM”	the special general meeting of the Company to be held at
	Rooms 2505-8, 25th Floor, Worldwide House, 19 Des Voeux
	Road Central, Hong Kong on 11 May 2004 at 10:45 a.m.
	(or so soon thereafter as the AGM shall have been concluded
	or adjourned) for the purpose of considering and, if thought
	fit, approving the proposed amendments to the Bye-Laws
	and the grant of the General Mandates

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DEFINITIONS

“Share(s)” ordinary share(s) of HK$0.10 each in the capital of the Company “Shareholder(s)” holder(s) of the Share(s) “Stock Exchange” The Stock Exchange of Hong Kong Limited “Takeovers Code” the Hong Kong Code on Takeovers and Mergers “HK$” Hong Kong dollars, the lawful currency of Hong Kong “%” per cent.

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LETTER FROM THE CHAIRMAN AND MANAGING DIRECTOR

MIDLAND REALTY (HOLDINGS) LIMITED

(Incorporated in Bermuda with limited liability)

Executive Directors: Mr. Wong Kin Yip, Freddie (Chairman and Managing Director) Ms. Ip Kit Yee, Kitty (Deputy Chairman) Mr. Cheung Kam Shing (Deputy Chairman) Ms. Lam Fung Fong

Registered office: Clarendon House Church Street Hamilton HM 11 Bermuda

Head office and principal place

Independent non-executive Directors: Mr. Au Son Yiu Mr. Chung Kam Wing, Calvin Mr. Kan Chung Nin, Tony Mr. Lai Dominic

of business in Hong Kong: Rooms 2505-8, 25th Floor Worldwide House 19 Des Voeux Road Central Hong Kong

14 April 2004

To the Shareholders

Dear Sir or Madam,

PROPOSED AMENDMENTS TO BYE-LAWS AND

GENERAL MANDATES TO ISSUE AND PURCHASE SHARES

INTRODUCTION

The purpose of this circular is to provide you with information on the proposals to:

• (a) amend the Bye-Laws; and

• (b) grant the Directors the General Mandates, and

to give you the notice of the SGM to be held on 11 May 2004 at which resolutions approving the proposed amendments to the Bye-Laws and the grant of the General Mandates will be considered and voted upon.

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LETTER FROM THE CHAIRMAN AND MANAGING DIRECTOR

PROPOSED AMENDMENTS TO THE BYE-LAWS

The following is a summary of the more significant changes to the Bye-Laws to be proposed at the SGM:

New Listing Rules Requirements

The Stock Exchange has recently revised the Listing Rules based on the results of the Consultation Conclusions on Proposed Amendments to the Listing Rules Relating to Corporate Governance Issues issued in January 2003. With the coming into effect of the revised Listing Rules on 31 March 2004, the Board considers that changes to the Bye-Laws need to be made in order to keep in line with the changes required under the revised Listing Rules. These changes basically require that:

• (a) if a Director or his associate (as defined in the Listing Rules) has a material interest in any contract, transaction, arrangement or other matters that requires the approval of the Board, the relevant Director shall not vote for the relevant matter at the meeting of the Board and shall not be counted as part of the quorum;

• (b) the minimum period for lodgment of nomination of Directors by Shareholders shall commence no earlier than the day after the despatch of the notice of general meeting appointed for such election and end no later than seven (7) days prior to the date of such meeting; and

• (c) where any Shareholder is subject to voting restrictions under the Listing Rules, any votes cast by or on behalf of such Shareholder in contravention of such restrictions shall not be counted.

Provisions relating to Clearing House

With the coming into effect of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) on 1 April 2003, the Board also proposes to amend the Bye-Laws by (i) updating the definition of “clearing house”; (ii) accepting the imprinted signature of recognised clearing house and/or its nominee(s) to be used on the transfer deed; and (iii) allowing a recognised clearing house and/or its nominee(s) to appoint multiple proxies or corporate representatives to attend and vote at any shareholders’ meeting of the Company as if they were individual members.

Retirement of Directors

Besides, the Board also proposes to amend the Bye-Laws so that, instead of requiring all directors (other than the chairman of the Board and/or the managing director of the Company) to retire from office by rotation at each annual general meeting, only two Directors (other than the chairman of the Board and/or the managing director of the Company) would need to retire from office by rotation at each annual general meeting in the manner set out in the proposed new bye-law 87(2). The Board considers that this proposed amendment to

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LETTER FROM THE CHAIRMAN AND MANAGING DIRECTOR

the Bye-Laws will provide for better coherence in the management of the Company and increase its operational efficiency by way of removing the burdensome rotation requirement.

Summary Financial Reports and Corporate Communications

The Board also recommends that amendments be made to the Bye-Laws so as to allow the Company to offer the Shareholders (subject to adequate arrangements having been made by the Company to ascertain the wishes of Shareholders) with the choice to elect:

• (a) to receive summary financial reports of the Company (which are derived from and summarise the annual reports and accounts and in such form as may be required by law from time to time) instead of the full version of the annual reports and accounts;

• (b) to be treated as having been sent a copy of either the summary financial reports or the annual reports and accounts by having access to the version of those documents published on the Company’s website; and

• (c) to receive various corporate communications, including but not limited to annual and interim reports, circulars and notices of meeting by electronic means and in English, Chinese or in both languages.

These amendments are in line with the requirements of the Listing Rules, details of which are set out in the Notice of SGM.

GENERAL MANDATES

At the special general meeting of the Company held on 25 April 2003, the Directors were granted general mandates to issue and purchase Shares. Such mandates will lapse at the conclusion of the forthcoming AGM. At the SGM, ordinary resolutions will therefore be proposed:

• (a) to grant to the Directors the Purchase Mandate to enable them to purchase Shares up to a maximum of 10% of the issued share capital of the Company as at the date of the passing of such resolution;

• (b) to grant to the Directors the Issue Mandate to exercise the powers of the Company to allot, issue and otherwise deal with additional Shares up to a maximum of 20% of the aggregate nominal share capital of the Company in issue as at the date of the passing of such resolution; and

• (c) to increase the number of Shares to be allotted and issued under the Issue Mandate by an additional number representing such number of Shares purchased under the Purchase Mandate.

Under the Listing Rules, the Company is required to give to the Shareholders all information which is reasonably necessary to enable the Shareholders to make an informed decision as to whether to vote for or against the resolution to grant to the Directors the Purchase Mandate. The explanatory statement required by the Listing Rules is set out in the Appendix to this circular.

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LETTER FROM THE CHAIRMAN AND MANAGING DIRECTOR

SGM

Set out on pages 10 to 25 of this circular is a notice of the SGM to be held on 11 May 2004 for the purpose of considering and, if thought fit, passing the special resolution to approve the amendments to the Bye-Laws and the ordinary resolutions to approve the grant of the General Mandates.

A form of proxy is herewith enclosed for use at the SGM. If you are not able to attend the SGM in person, please complete the accompanying form of proxy in accordance with the instructions printed thereon and return the same to the branch share registrar and transfer office of the Company in Hong Kong, Abacus Share Registrars Limited of 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 forty-eight (48) hours before the time appointed for the holding of such meeting or any adjournment thereof. Completion and return of the form of proxy shall not preclude you from attending and voting in person at the meeting or any adjourned SGM should you so desire.

RECOMMENDATION

The Directors believe that the proposed amendments to the Bye-Laws and the grant of the General Mandates are in the interests of the Company and the Shareholders as a whole and accordingly recommend the Shareholders to vote in favour of the resolutions to be proposed at the SGM.

ADDITIONAL INFORMATION

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

Yours faithfully, Wong Kin Yip, Freddie

Chairman and Managing Director

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EXPLANATORY STATEMENT

APPENDIX

The following information is provided to enable the Shareholders to make an informed decision on whether to vote for or against the resolution to approve the grant of the Purchase Mandate to the Directors to exercise the powers of the Company to purchase its own Shares:

(a) Reasons for the Purchase Mandate

The Directors believe that it is in the best interests of the Company and the Shareholders as a whole to have the Purchase Mandate from the Shareholders to enable the Directors to purchase its own Shares in the markets. Such purchases may, depending on market conditions and funding arrangements at the time, lead to an enhancement of the net assets value of the Company and/or its earnings per Share and will only be made when the Directors believe that such purchases will benefit the Company and the Shareholders.

(b) Funding of Purchases

Purchases must be funded out of funds legally available for such purpose. A company may not purchase its own shares on the Stock Exchange for a consideration other than cash or for settlement otherwise than in accordance with the trading rules of the Stock Exchange. Purchases must be made in accordance with the memorandum of association of the Company and the ByeLaws and applicable laws of Bermuda. Under Bermuda law, the amount of capital repaid in connection with a share purchase may only be paid out of the capital paid up on the purchased shares or out of the funds of the company otherwise available for dividend or distribution or out of

the proceeds of a fresh issue of shares made for the purpose. Any premium payable on a purchase over the par value of the shares to be purchased must be provided for out of funds of the company otherwise available for dividend or distribution or out of the company’s share premium account before the shares are repurchased.

(c) Impact on Working Capital or Gearing Position

As compared with the position disclosed in the audited accounts contained in the annual report of the Company for the year ended 31 December 2003, the Directors consider that there might be material adverse impact on the working capital and on the gearing position of the Company in the event that the Purchase Mandate were exercised in full during the proposed purchase period. Nevertheless, the Directors do not propose to exercise the Purchase Mandate to such an extent as would, in the circumstances, have a material adverse effect on the working capital requirements or the gearing levels which in the opinion of the Directors are from time to time appropriate for the Company.

(d) Directors, their Associates and Connected Persons

None of the Directors nor, to the best of their knowledge and belief having made all reasonable enquiries, any of their associates (as defined in the Listing Rules) has any present intention, in the event that the Purchase Mandate is approved by the Shareholders, to sell their Shares to the Company or its subsidiaries under the Purchase Mandate.

No connected persons (as defined in the Listing Rules) of the Company have notified the Company that they have a present intention to sell their Shares to the Company or its subsidiaries

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EXPLANATORY STATEMENT

APPENDIX

nor have they undertaken not to sell any of the Shares to the Company or its subsidiaries in the event that the Company is authorised to make purchases of Shares.

(e) Undertaking of the Directors

The Directors have undertaken to the Stock Exchange to exercise the powers of the Company to make purchases pursuant to the proposed resolution in accordance with the Listing Rules and all applicable laws of Bermuda.

(f) Share Capital

As at the Latest Practicable Date, the number of Shares in issue was 704,390,000. Subject to the passing of the relevant resolution and on the basis that no further Shares are issued or purchased prior to the SGM, the Company would be allowed under the relevant resolution to purchase a maximum of 70,439,000 Shares.

(g) Purchases of Shares made by the Company

The Company had not purchased any Shares (whether on the Stock Exchange or otherwise) during the six months period ending on the Latest Practicable Date.

(h) Share Prices

During each of the previous twelve months, the highest and lowest traded prices of the Shares on the Stock Exchange were as follows:

	Highest	Lowest
	HK$	HK$
2003
April	0.540	0.440
May	0.540	0.455
June	0.630	0.495
July	0.700	0.550
August	1.010	0.670
September	2.025	1.000
October	2.125	1.540
November	1.880	1.400
December	2.125	1.710
2004
January	3.275	2.150
February	3.125	1.970
March	2.350	1.860

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EXPLANATORY STATEMENT

APPENDIX

(i) Takeovers Code

If, on the exercise of the powers to purchase Shares pursuant to the Purchase Mandate, a Shareholder’s proportionate interest in the voting rights of the Company increases, such an increase will be treated as an acquisition for the purposes of Rule 32 of the Takeovers Code. As a result, a shareholder or a 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 Rule 26 of the Takeovers Code. As at the Latest Practicable Date, Mr. Wong Kin Yip, Freddie (“Mr. Wong”) held approximately 18.40% of the entire issued share capital of the Company. In the event that the Directors exercise in full the powers to purchase the Shares pursuant to the Purchase Mandate, the shareholding of Mr. Wong would be increased to approximately 20.44%. The Directors are not aware of any consequence which may arise under the Takeovers Code as a result of any purchases made by the Company under the Purchase Mandate.

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NOTICE OF SGM

MIDLAND REALTY (HOLDINGS) LIMITED

(Incorporated in Bermuda with limited liability)

(Stock code: 1200)

NOTICE IS HEREBY GIVEN that a special general meeting of Midland Realty (Holdings) Limited (the “Company”) will be held on 11 May 2004 at Rooms 2505-8, 25th Floor, Worldwide House, 19 Des Voeux Road Central, Hong Kong at 10:45 a.m. (or so soon thereafter as the annual general meeting of the Company convened at the same place and date at 10:30 a.m. shall have concluded or adjourned) for the purpose of considering and, if thought fit, passing resolution numbered 1 as special resolution and resolutions numbered 2 to 4 as ordinary resolutions:

SPECIAL RESOLUTION

1. “ THAT the bye-laws of the Company be amended as follows:

2. (a) by inserting the following new definition in bye-law 1:

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

3. (b) by substituting the existing definitions of “Act”, “Board” or “Directors” and “clearing house” with the following new definitions in bye-law 1:

   • ““Act” the Companies Act 1981 of Bermuda.

   • “Board” or “Director” the board of directors of the Company or the directors present at a meeting of directors of the Company at which a quorum is present.

   • “clearing house” a clearing house recognised by the laws of the jurisdiction in which the shares of the Company are listed or quoted on a stock exchange in such jurisdiction.”;

4. (c) by substituting the existing bye-law 2(e) with the following new bye-law 2(e):

“expressions referring to writing shall, unless the contrary intention appears, be construed as including printing, lithography, photography and other modes of representing words or figures in a visible form, and including where the representation takes the form of electronic display, provided that both the mode of service of the relevant document or notice and the Member’s election comply with all applicable Statutes, rules and regulations;”;

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NOTICE OF SGM

• (d) by inserting on the twelfth line of bye-law 2(h) after the words “being a majority together holding not less than ninety-five (95) per cent. in nominal value of the shares giving that right”, the words “and in the case of an annual general meeting, if it is so agreed by all Members entitled to attend and vote thereat”;

• (e) by replacing the full stop “.” appearing at the end of bye-law 2(j) with a semicolon “;”, by inserting the word “and” immediately after the semi-colon and by inserting the following new bye-law 2(k):

• “(k) references to a document being executed include references to it being executed under hand or under seal or by electronic signature or by any other method and references to a notice or document include a notice or document recorded or stored in any digital, electronic, electrical, magnetic or other retrievable form or medium and information in visible form whether having physical substance or not.”;

• (f) by substituting the existing bye-law 3(1) with the following new bye-law 3(1):

• “(1) The share capital of the Company at the date on which these Bye-laws come into effect shall be divided into shares of $0.10 each.”;

• (g) by substituting the existing bye-law 6 with the following new bye-law 6:

• “6. The Company may from time to time by special resolution, subject to any confirmation or consent required by law, reduce its authorised or issued share capital or, save for the use of share premium as expressly permitted by the Act, any share premium account or other undistributable reserve.”;

• (h) (a) by inserting after the words “Subject to Sections 42 and 43 of the Act,” appearing in the beginning of bye-law 9, the words “these Bye-laws, and to any special rights conferred on the holders of any shares or attaching to any class of shares,”; and

• (b) by inserting the following new sentences at the end of bye-law 9:

  • “Where the Company purchases for redemption a redeemable share, purchases not made through the market or by tender shall be limited to a maximum price as may from time to time be determined by the Company in general meeting, either generally or with regard to specific purchases. If purchases are by tender, tenders shall be available to all Members alike.”;

• (i) (a) by substituting the words “two persons” appearing in the second line of bye-law 10(a) with the words “two holders present in person (or in the case of a Member being a corporation, its duly authorised representative)”; and

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NOTICE OF SGM

• (b) by inserting after the words “two holders present in person” appearing in the fourth line of bye-law 10(a), the words “(or in the case of a Member being a corporation, its duly authorised representative)”;

• (j) by substituting in bye-law 12(1), the words “Subject to the Act and these Byelaws” with the following words:

“Subject to the Act, these Bye-laws, any direction that may be given by the Company in general meeting”;

• (k) by substituting the existing bye-law 19 with the following new bye-law 19:

“Share certificates shall be issued within the relevant time limit as prescribed in the Act or as the Designated Stock Exchange may from time to time determine, whichever is the shorter, after allotment or, except in the case of a transfer which the Company is for the time being entitled to refuse to register and does not register, after lodgment of a transfer with the Company.”

• (l) by substituting, in bye-law 20(2), the words “$2 or such other maximum” with the words “the relevant maximum”;

• (m) by deleting the sentence “The Directors may make arrangements on the issue of shares for a difference between the shareholders in the amount of calls to be paid and in the times of payment.” appearing at the end of bye-law 26;

• (n) by inserting, in bye-law 43(1)(a), after the words “the name and address of each Member, the number and class of shares held by him and” the words “in respect of any shares that are not fully paid,”;

• (o) by inserting, in bye-law 44, after the words “any other newspapers in accordance with the requirements of any Designated Stock Exchange”, the following words:

“or by any means and in such manner as may be accepted by the Designated Stock Exchange”;

• (p) by deleting the existing bye-law 46 in its entirety and replacing therewith the following new bye-law 46:

• “46. Subject to these Bye-laws, any Member may transfer all or any of his shares by an instrument of transfer in the usual or common form or in a form prescribed by the Designated Stock Exchange or in any other form approved by the Board and may be under hand or, if the transferor or transferee is a clearing house or its nominee(s), by hand or by machine imprinted signature or by such other manner of execution as the Board may approve from time to time.”;

• (q) by substituting the word “The” appearing at the beginning of the second sentence in bye-law 47 with the words “Without prejudice to Bye-law 46, the”;

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NOTICE OF SGM

• (r) by inserting, in bye-law 51, after the words “by advertisement in an appointed newspaper and, where applicable, any other newspapers in accordance with the requirements of any Designated Stock Exchange”, the following words:

“or by any means and in such manner as may be accepted by the Designated Stock Exchange”;

• (s) by substituting the words “of incorporation” appearing in the second line of bye-law 56 with the words “in which its statutory meeting is convened”;

• (t) by substituting the second sentence in bye-law 61(2) with the following new sentence:

“Two (2) Members entitled to vote and present in person (or in the case of a Member being a corporation by its duly authorised representative) or by proxy shall form a quorum for all purposes.”;

• (u) by substituting the existing bye-law 66 of the Company’s bye-laws with the following new bye-law 66:

• “66. Subject to any special rights or restrictions as to voting for the time being attached to any shares by or in accordance with these Bye-laws, at any general meeting on a show of hands every Member present in person (or being a corporation, is present by a representative duly authorised under Section 78 of the Act), or by proxy shall have one vote and on a poll every Member present in person or by proxy or, in the case of a Member being a corporation, by its duly authorised representative shall have one vote for every fully paid share of which he is the holder but so that no amount paid up or credited as paid up on a share in advance of calls or instalments is treated for the foregoing purposes as paid up on the share. 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. 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 Members present in person (or in the case of a Member 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 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

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NOTICE OF SGM

voting rights of all Members having the right to vote at the meeting; or

• (d) by a 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 demand by a person as proxy for a Member or in the case of a Member being a corporation by its duly authorised representative shall be deemed to be the same as a demand by a Member.”;

• (v) by re-numbering the existing bye-law 76 as bye-law 76(1) and by inserting the following new bye-law 76(2):

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

• (w) by substituting the existing bye-law 78 with the following new bye-law 78:

• “78. Any Member entitled to attend and vote at a meeting of the Company shall be entitled to appoint another person as his proxy to attend and vote instead of him. A Member who is the holder of two or more shares may appoint more than one proxy to represent him and vote on his behalf at a general meeting of the Company or at a class meeting. A proxy need not be a Member. In addition, a proxy or proxies representing either a Member who is an individual or a Member which is a corporation shall be entitled to exercise the same powers on behalf of the Member which he or they represent as such Member could exercise.”;

• (x) by substituting the existing bye-law 84(2) with the following new bye-law 84(2):

• “(2) 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

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NOTICE OF SGM

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.”;

• (y) by substituting the existing bye-law 86(1) with the following new bye-law 86(1):

• “(1) Unless otherwise determined by the Company in general meeting, the number of Directors shall not be less than two (2). There shall be no maximum number of Directors unless otherwise determined from time to time by the Members in general meeting. The Directors shall be elected or appointed in the first place at the statutory meeting of Members and thereafter at the annual general meeting in accordance with Bye-law 87 or at any special general meeting and shall hold office until the next appointment of Directors or until their successors are elected or appointed. Any general meeting may authorise the Board to fill any vacancy in their number left unfilled at a general meeting.”;

• (z) by substituting the words “special resolution” appearing in bye-law 86(4) with the words “ordinary resolution”;

• (aa) by substituting the existing bye-law 87 with the following new bye-laws 87(1) and 87(2):

• “87. (1) Notwithstanding any other provisions in the Bye-laws, at each annual general meeting, two Directors for the time being shall retire from office by rotation provided that notwithstanding anything herein, the chairman of the Board and/or the managing director of the Company shall not, whilst holding such office, be subject to such retirement by rotation.

  • (2) A retiring Director shall be eligible for re-election. The Directors to retire by rotation shall include any Director who wishes to retire and not to offer himself for re-election. Any further Directors so to retire shall be those of the other Directors subject to retirement by rotation who have been longest in office since their last re-election or appointment and so that as between persons who became or were last re-elected Directors on the same day those to retire shall (unless they otherwise agree among themselves) be determined by lot. Any Director appointed pursuant to Bye-laws 86(2) shall not be taken into account in determining which particular Directors are to retire by rotation.”;

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• (bb) by substituting the existing bye-law 88 with the following new bye-law 88:

• “88. 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 despatch 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.”;

• (cc) by deleting the words “whereupon the Board resolves to accept such resignation” appearing at the end of bye-law 89(1);

• (dd) by substituting the word “Directors” appearing in the twelfth line of bye-law 100(c) with the word “directors”;

• (ee) by substituting the existing bye-law 103 with the following new bye-law 103:

• “103. (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 associate 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;

  • (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

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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 subunderwriting of the offer;

• (iv) any contract or arrangement in which he is 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 together with any of his associates (as defined by the rules, where applicable, of the Designated Stock Exchange) and/or his 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 associates 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 of 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.

• (2) A company shall be deemed to be a company in which a Director and/or his associate(s) owns five (5) per cent. or more if and so long as (but only if and so long as) he and/or his associates (as defined by the rules, where applicable, of the Designated Stock Exchange), (either directly or indirectly) are the holders 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 Director’s interest of the Director or his associate(s) is/are in reversion or remainder if and so long as some other person is

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entitled to receive the income thereof, and any shares comprised in an authorised unit trust scheme in which the Director is 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 together with and/or his associate(s) (as defined by the rules, where applicable, of the Designated Stock Exchange) holds five (5) per cent. or more is/ are 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 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 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.”;

• (ff) by deleting the sentence “Any Director may waive notice of any meting either prospectively or retrospectively” appearing at the end of bye-law 115;

• (gg) by inserting the word “, electronic” after the words “conference telephone” appearing in the second line of bye-law 116(2);

• (hh) by substituting the existing bye-law 122 with the following new bye-law 122:

• “122. A resolution in writing signed by all the Directors except such as are temporarily unable to act through ill-health or disability, and all the alternate Directors, if appropriate, whose appointors are temporarily unable to act as aforesaid shall be as valid and effectual as if a resolution had been passed at a meeting of the Board duly convened and held provided that such number is sufficient to constitute a quorum and that a copy of such resolution has been given or the contents thereof communicated to all the Directors for the time being entitled to receive notices of Board meetings in the same manner as notices of meetings

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are required to be given by these Bye-laws and further provided that no Director is aware of or has received any objection to the resolution from any Director. Such resolution may be contained in one document or in several documents in like form each signed by one or more of the Directors or alternate Directors and for this purpose a facsimile signature of a Director or an alternate Director shall be treated as valid.”;

• (ii) by substituting the word “or” appearing before the words “the Board” in the third line of bye-law 123 with the word “of”;

• (jj) by substituting the existing bye-law 127(4) with the following new bye-law 127(4):

• “(4) Where the Company appoints and maintains a resident representative ordinarily resident in Bermuda in accordance with the Act, the resident representative shall comply with the provisions of the Act.

The Company shall provide the resident representative with such documents and information as the resident representative may require in order to be able to comply with the provisions of the Act.

The resident representative shall be entitled to have notice of, attend and be heard at all meetings of the Directors or of any committee of such Directors or general meetings of the Company.”;

• (kk) by substituting the existing bye-laws 132(1)(a) and 132(1)(b) with the following new bye-laws 132(1)(a) and 132(1)(b):

• “132. (1) The Board shall cause to be kept in one or more books at the Office a Register of Directors and Officers and shall enter therein the following particulars with respect to each Director and Officer, that is to say:

  • (a) in the case of an individual, his or her present first name, surname and address; and

  • (b) in the case of a company, its name and registered office.”;

• (ll) by renumbering the existing bye-law 133 as bye-law 133(1) and by inserting the following new bye-law 133(2):

• “(2) Minutes prepared in accordance with the Act and these Bye-laws shall be kept by the Secretary at the Office.”;

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• (mm) by renumbering the existing bye-law 136 as bye-law 136(1) and by inserting the following new bye-law 136(2):

• “(2) Notwithstanding any provision contained in these Bye-laws, the Directors may, if permitted by applicable law, authorise the destruction of documents set out in sub-paragraphs (a) to (e) of paragraph (1) of this Bye-law and any other documents in relation to share registration which have been microfilmed or electronically stored by the Company or by the share registrar on its behalf provided always that this Bye-law shall apply only to the destruction of a document in good faith and without express notice to the Company and its share registrar that the preservation of such document was relevant to a claim.”;

• (nn) by inserting, in bye-law 153, after the words “Subject to Section 88 of the Act”, the following words:

• “and Bye-law 153(A)”;

• (oo) by inserting the following new bye-law 153(A):

• “153. (A) To the extent permitted by and subject to due compliance with all applicable Statutes, rules and regulations, including, without limitation, the rules of the Designated Stock Exchange, and to obtaining all necessary consents, if any, required thereunder, the requirements of Bye-law 153 shall be deemed satisfied in relation to any person by sending to the person in any manner not prohibited by the Statutes, a summary financial statement derived from the Company’s annual accounts and the directors’ report which shall be in the form and containing the information required by applicable laws and regulations, provided that any person who is otherwise entitled to the annual financial statements of the Company and the directors’ report thereon may, if he so requires by notice in writing served on the Company, demand that the Company sends to him, in addition to a summary financial statement, a complete printed copy of the Company’s annual financial statement and the directors’ report thereon.”

• (pp) by inserting the following new bye-law 153(B):

• “153. (B) The requirement to send to a person referred to in Bye-law 153 the documents referred to in that provision or a summary financial report in accordance with Bye-law 153(A) shall be deemed satisfied where, in accordance with all applicable Statutes, rules and regulations, including, without limitation, the rules of the Designated Stock Exchange, the Company publishes copies of the documents referred to in Bye-law 153 and, if applicable, a summary financial report complying with Bye-law 153(A), on the

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Company’s computer network or in any other permitted manner (including by sending any form of electronic communication), and that person has agreed or is deemed to have agreed to treat the publication or receipt of such documents in such manner as discharging the Company’s obligation to send to him a copy of such documents.”;

• (qq) by substituting the words “fourteen (14) days” appearing in the fourth line of bye-law 154(2) with the words “twenty-one (21) days”;

• (rr) by deleting the word “given” appearing in the first line of bye-law 160 and by inserting, in bye-law 160, the following:

• (a) after the words “Any Notice” appearing at the beginning of bye-law 160, the following words:

  • “or document (including any “corporate communication” within the meaning ascribed thereto under the rules of the Designed Stock Exchange), whether or not, to be given or issued under these Bye-laws”;

• (b) after the words “cable, telex or facsimile transmission message”, the words “or other form of electronic transmission or communication”;

• (c) after the words “by transmitting it to any such address or transmitting it to any telex or facsimile transmission number”, the words “or electronic number or address or website”;

• (d) after the words “by advertisement in appointed newspapers (as defined in the Act) or”, the words “in newspapers published daily and circulating generally in the territory of and”; and

• (e) after the words “in accordance with the requirements of the Designated Stock Exchange”, the words “or, to the extent permitted by the applicable laws, by placing it on the Company’s website and giving to the member a notice stating that the notice or other document is available there (a “notice of availability”). The notice of availability may be given to the Member by any of the means set out above.”;

• (ss) by deleting the word “and” appearing at the end of bye-law 161(a) and by substituting the existing bye-law 161(b) with the following new bye-laws 161 (b), 161(c) and 161(d):

• “(b) if sent by electronic communication, shall be deemed to be given on the day on which it is transmitted from the server of the Company or its agent. A notice placed on the Company’s website is deemed given by the Company to a Member on the day following that on which a notice of availability is deemed served on the Member;

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• (c) if served or delivered in any other manner contemplated by these Bye-laws, shall be deemed to have been served or delivered at the time of personal service or delivery or, as the case may be, at the time of the relevant despatch, transmission or publication; and in proving such service or delivery a certificate in writing signed by the Secretary or other officer of the Company or other person appointed by the Board as to the fact and time of such service, delivery, despatch, transmission or publication shall be conclusive evidence thereof; and

• (d) may be given to a Member either in the English language or the Chinese language, subject to due compliance with all applicable Statutes, rules and regulations.”;

• (tt) by inserting, in bye-law 163, after the words “a cable or telex or facsimile”, the following words, “or electronic”; and

• (uu) by substituting the word “respecting” with the words “in respect of” in bye-law 168,

and that the directors of the Company be and are hereby authorised to do all such acts, deeds and things as they shall, in their absolute discretion deem fit, in order to effect and complete the foregoing.”.

ORDINARY RESOLUTIONS

1. “ THAT :

2. (a) subject to paragraph (c) below, the exercise by the Directors during the Relevant Period (as hereinafter defined) of all powers of the Company to allot, issue and deal with additional shares in the capital of the Company and to make or grant offers, agreements and options (including warrants, bonds, debentures, notes and other securities which carry rights to subscribe for or are convertible into shares of the Company) which would or might require the exercise of such powers be and is hereby generally and unconditionally approved;

3. (b) the approval in paragraph (a) above, shall authorise the Directors during the Relevant Period to make and grant offers, agreements and options (including warrants, bonds, debentures, notes and other securities which carry rights to subscribe for or are convertible into shares of the Company) which would or might require the exercise of such powers after the end of the Relevant Period;

4. (c) the aggregate nominal amount of share capital allotted or agreed conditionally or unconditionally to be allotted (whether pursuant to an option or otherwise) by the Directors pursuant to the approval in paragraph (a) above, otherwise than pursuant to (i) a Rights Issue (as hereinafter defined); or (ii) the exercise of rights of subscription or conversion under the terms of any existing warrants, bonds, debentures, notes and other securities of the Company; or (iii) the

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exercise of options granted under any share option scheme or any similar arrangement for the time being adopted for the grant or issue to eligible persons prescribed thereunder of shares or rights to acquire shares in 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, shall not exceed twenty (20) per cent. of the aggregate nominal amount of the issued share capital of the Company as at the date of passing this resolution, and the said approval shall be limited accordingly; and

• (d) for the purposes 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 the bye-laws of the Company or any applicable laws of Bermuda to be held; and

• (iii) the date on which the authority set out in this resolution is revoked or varied by an ordinary resolution of the shareholders of the Company in general meeting; and

“Rights Issue” means an offer of shares of the Company or issue of options, warrants or other securities giving the right to subscribe for shares of the Company open for a period fixed by the Directors to holders of shares whose names appear in the register of members of the Company (and, where appropriate, to holders of other securities of the Company entitled to the offer) on a fixed record date in proportion to their then holdings of such shares of the Company or, where appropriate, such other securities (subject in all cases to such exclusions or other arrangements as the Directors may deem necessary or expedient in relation to fractional entitlements or having regard to any legal or practical restrictions or obligations under the laws of, or the requirements of any recognised regulatory body or any stock exchange in, any territory outside Hong Kong).”

3. “ THAT :

• (a) subject to paragraph (b) below, the exercise by the Directors during the Relevant Period (as hereinafter defined) of all powers of the Company to purchase the shares in the capital 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 of Hong Kong and the Stock Exchange for this purpose, subject to and in accordance with all applicable laws and the requirements of

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the Rules Governing the Listing of Securities on the Stock Exchange or of any other stock exchange as amended from time to time, be and is hereby generally and unconditionally approved;

• (b) the aggregate nominal amount of the shares of the Company which the Company is authorised to purchase pursuant to the approval in paragraph (a) above shall not exceed ten (10) per cent. of the aggregate nominal amount of the share capital of the Company in issue at the date of passing this resolution, and the said approval be limited accordingly; and

• (c) for the purposes 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 the bye-laws of the Company or any applicable laws of Bermuda to be held; and

• (iii) the date on which the authority set out in this resolution is revoked or varied by an ordinary resolution of the shareholders of the Company in general meeting.”

• “ THAT subject to the passing of resolutions numbered 2 and 3 set out in the notice of this meeting, the aggregate nominal amount of shares which are to be purchased by the Company pursuant to the authority granted to the Directors as mentioned in resolution numbered 3 set out in the notice of this meeting shall be added to the aggregate nominal amount of share capital that may be allotted or agreed to be allotted by the Directors pursuant to resolution numbered 2 set out in the notice of this meeting.”

By order of the board Midland Realty (Holdings) Limited Chan Kin Chu, Harry Company Secretary

Hong Kong, 14 April 2004

Head office and principal place

of business in Hong Kong: Rooms 2505-8, 25th Floor Worldwide House 19 Des Voeux Road Central Hong Kong

Registered office:

Clarendon House Church Street Hamilton HM 11 Bermuda

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Notes:

1. A member of the Company entitled to attend and vote at the meeting convened by the above notice is entitled to appoint one or more proxies to attend and vote instead of such member. Vote may be given either personally or by proxy. A proxy need not be a member of the Company.

2. A form of proxy in respect of the meeting is enclosed. If you are not able to attend the meeting in person, you are requested to complete and return the form of proxy in accordance with the instructions printed thereon.

3. In order to be valid, a form of proxy together with a power of attorney or other authority, if any, under which it is signed, or a certified copy of such power or authority must be deposited with the branch share registrars and transfer office of the Company in Hong Kong, Abacus Share Registrars Limited of Ground Floor, Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong, not less than forty-eight (48) hours before the time appointed for holding the meeting or any adjournment thereof.

4. Where there are joint holders of a share of the Company, any one of such holders may vote at the meeting either personally or by proxy in respect of such share as if he were solely entitled thereto, but if more than one of such holders are present at the meeting personally or by proxy, that one of such holders so present whose name stands first on the register of members of the Company in respect of such shares shall alone be entitled to vote in respect thereof. Several executors or administrators of a deceased member in whose name any share stands shall for this purpose be deemed joint holders thereof.

5. According 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:

6. (a) by the chairman of the meeting; or

7. (b) by 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 for the time being entitled to vote at the meeting; or

8. (c) by a 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

9. (d) by a 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 demand by a person as proxy for a member or in the case of a member being a corporation by its duly authorised representative shall be deemed to be the same as a demand by a member.

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