Min Xin Holdings Limited — Proxy Solicitation & Information Statement 2003

Apr 28, 2003

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your shares in China Investments Holdings Limited, you should at once hand this circular and the accompanying form of proxy to the purchaser or to the bank, stockbroker or other agent through whom the sale was effected for transmission to the purchaser or transferee.

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

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CHINA INVESTMENTS HOLDINGS LIMITED ( )*

(Incorporated in Bermuda with limited liability)

PROPOSALS FOR ADOPTION OF CHINESE NAME

TERMINATION OF THE EXISTING SHARE OPTION SCHEME ADOPTION OF THE NEW SHARE OPTION SCHEME AND GENERAL MANDATES TO REPURCHASE ITS OWN SHARES AND TO ISSUE SHARES

The notice convening a Special General Meeting of China Investments Holdings Limited (the “Company”) to be held at the Garden Rooms, 2nd Floor, the Royal Garden, 69 Mody Road, Tsimshatsui, Kowloon, Hong Kong, on Tuesday, 20th May, 2003 at 10:35 a.m. (or as soon as practicable immediately after the conclusion or adjournment of the Annual General Meeting of the Company convened at the same place and date) or any adjournment thereof, is set out on pages 22 to 26 of this circular.

Whether you are able to attend or not, please complete and return the form of proxy sent together with this circular in accordance with the instructions printed thereon and return the same to the principal place of business of the Company in Hong Kong at Unit 901, Wing On Plaza, 62 Mody Road, Tsimshatsui, Kowloon, Hong Kong as soon as possible and in any event not less than 48 hours before the time for holding the meeting or any adjournment thereof.

Completion and return of the proxy form will not preclude you from attending and voting in person at the meeting should you so wish.

• For identification purpose only

25th April, 2003

CONTENTS

		Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1
Letter from the Chairman
1.	Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
2.	Adoption of Chinese name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
3.	Termination of the Existing Share Option Scheme and
	adoption of the New Share Option Scheme . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
4.	Conditions precedent of the New Share Option Scheme . . . . . . . . . . . . . . . . . . . . .	6
5.	Explanation of the terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
6.	Value of the Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
7.	General mandate to repurchase Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
8.	General mandate to issue Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
9.	Special General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
10.	Action to be taken . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
11.	Document available for inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
12.	Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
**Appendix **	I — Summary of the principal terms of the New Share Option Scheme . .	10
**Appendix **	II — Explanatory Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	19
**Notice of **	Special General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	22

— i —

DEFINITIONS

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

“associates”	as such term is defined under the Listing Rules;
“Board”	the board of Directors of the Company or a duly authorised
	committee thereof for the time being;
“Business Associate”	any professional advisor or business consultant (in the areas
	of legal, technical, financial or corporate managerial)
	(including any executive and employee of such advisor or
	consultant) which/who has rendered service(s) to any member
	of the Group as absolutely determined by the Board;
“Business Day”	a day (other than a Saturday or a Sunday) on which licensed
	banks are generally open for business in Hong Kong and the
	Stock Exchange is open for business of dealing in securities;
“Commencement Date”	in respect of any particular Option, the date upon which the
	Option is accepted in accordance with the New Share Option
	Scheme;
“Company”	China Investments Holdings Limited;
“Companies Ordinance”	Companies Ordinance (Chapter 32 of the Laws of Hong
	Kong);
“connected person”	as such term is defined under the Listing Rules;
“day”	calendar day;
“Directors”	the directors of the Company from time to time;
“Employee”	any employee of the Company or any Subsidiary and any
	executive and non-executive director of the Company or any
	Subsidiary;
“Existing Share Option Scheme”	the share option scheme adopted by the Company at its
	general meeting on 28th June, 1994 for its employees and
	executive directors;
“Grantee”	any Participant who accepts an offer in accordance with the
	terms of the New Share Option Scheme or (where the context
	so permits) a person who is entitled to any such Option in
	consequence of the death of the original Grantee;
“Group”	the Company and its Subsidiaries from time to time;
“Hong Kong”	the Hong Kong Special Administrative Region of the People’s
	Republic of China;

— 1 —

	DEFINITIONS
“Latest Practicable Date”	22nd April, 2003, being the latest practicable date prior to the
	printing of this circular for ascertaining certain information
	contained herein;
“Listing Rules”	Rules Governing the Listing of Securities on the Stock
	Exchange;
“month”	calendar month;
“New Share Option Scheme”	the new share option scheme proposed to be adopted by the
	Company at the SGM, a summary of the principal terms of the
	rules of which are set out in Appendix I to this circular;
“Offer”	the offer of the grant of an Option made by the Board in
	accordance with the New Share Option Scheme;
“Offer Date”	the date on which an offer is made to a Participant, which date
	must be a Business Day;
“Option”	a right to subscribe for Shares on terms determined by the
	Board and granted pursuant to the terms of the New Share
	Option Scheme;
“Option Period”	in respect of any particular Option, the period to be
	determined by the Board at its absolute discretion and notified
	by the Board to each Grantee as being the period during which
	an Option may be exercised and in any event such period of
	time shall not exceed a period of 2 years which shall
	commence on the expiry of 1 month after the Commencement
	Date and shall expire on the last day of such period. The
	Board may also provide restrictions on the exercise of such
	Option during the period an Option may be exercised;
“Ordinary Resolutions”	the proposed ordinary resolutions nos. 2 to 5 as referred to in
	the SGM Notice;
“Participant”	any Employees and Business Associates, to be determined by
	the Board by taking into account of factor(s), such as, the
	experience of the Participants on the Group’s business, the
	length of service of the Participant with the Group or the
	length of business relationship the Participant has established
	with the Group, the amount of contribution the Participant has
	made or is likely to make towards the success of the Group
	and/or such other factors as the Board may at its absolute
	discretion consider appropriate;

— 2 —

DEFINITIONS

• “Repurchase Mandate” a general mandate to the Directors to exercise the power of the Company to repurchase Shares during the period as set out in Ordinary Resolution no. 4 up to 10 per cent. of the issued share capital of the Company as at the date of passing Ordinary Resolution no. 4;

• “SGM” the Special General Meeting of the Company to be held at the Garden Rooms, 2nd Floor, the Royal Garden, 69 Mody Road, Tsimshatsui, Kowloon, Hong Kong, on Tuesday, 20th May, 2003 at 10:35 a.m. (or as soon as practicable immediately after the conclusion or adjournment of the Annual General Meeting of the Company convened at the same place and date) or any adjournment thereof;

• “SGM Notice” the notice convening the SGM which is set out on pages 22 to 26 of this circular;

• “Shares” shares of HK$0.10 each in the capital of the Company (or of such other nominal amount as shall result from a sub-division, consolidation, reclassification or reconstruction of the share capital of the Company from time to time);

• “Share Buyback Rules” the relevant rules set out in the Listing Rules to regulate the repurchase by companies with primary listing on the Stock Exchange of their own securities;

• “Share Issue Mandate” a general mandate to the Directors to exercise the power of the Company to allot and issue Shares during the period as set out in Ordinary Resolution no. 3 up to 20 per cent. of the issued share capital of the Company as at the date of passing Ordinary Resolution no. 3;

• “Special Resolution” the proposed special resolution as referred to in the SGM Notice;

• “Stock Exchange” The Stock Exchange of Hong Kong Limited; “Subsidiary” a company which is for the time being and from time to time a subsidiary (within the meaning of the Companies Act 1981 of Bermuda or within the meaning of the Companies Ordinance of Hong Kong (as amended from time to time)) of the Company whether incorporated in Bermuda, Hong Kong or elsewhere;

• “substantial shareholder” as such term is defined under the Listing Rules; “Takeovers Code” the Hong Kong Code on Takeovers and Mergers; “HK$” Hong Kong dollars; and “%” per cent.

— 3 —

LETTER FROM THE CHAIRMAN

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CHINA INVESTMENTS HOLDINGS LIMITED ( )*

(Incorporated in Bermuda with limited liability)

Executive Directors: Mr. Leung Siu Fai Mr. Sun Pak Fun Mr. Kam Hung Chung Mr. He Yongwen

Registered office: Clarendon House 2 Church Street Hamilton HM11 Bermuda

Independent Non-Executive Directors:

Mr. Eddie Mui Ho Chow Mr. Peter Lee Yip Wah

Principal Place of Business: Unit 901, Wing On Plaza 62 Mody Road, Tsimshatsui Kowloon, Hong Kong 25th April, 2003

To the shareholders of the Company

Dear Sir or Madam,

PROPOSALS FOR ADOPTION OF CHINESE NAME

TERMINATION OF THE EXISTING SHARE OPTION SCHEME ADOPTION OF THE NEW SHARE OPTION SCHEME AND GENERAL MANDATES TO REPURCHASE ITS OWN SHARES AND TO ISSUE SHARES

1. INTRODUCTION

The purpose of this circular is to provide you with information regarding the proposed adoption of Chinese name, the proposed termination of the Existing Share Option Scheme, the proposed adoption of the New Share Option Scheme and the proposed renewal of the general mandates to allot, issue and deal with Shares and to repurchase Shares and to seek your approval of the Special Resolution and the Ordinary Resolutions relating to these matters at the SGM.

• For identification purpose only

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LETTER FROM THE CHAIRMAN

2. ADOPTION OF CHINESE NAME

The Company has been using the Chinese name of for identification purpose since 1993. In order to formalize the use of such Chinese name and to reflect the identity of the Company better, the Directors propose to adopt as the Chinese name of the Company.

The proposed adoption of Chinese name of the Company will be subject to the passing of the Special Resolution no. 1 by the shareholders of the Company at the SGM. Upon the registration of the Chinese name with the Registrar of Companies in Hong Kong, the adoption of the Chinese name will become effective and the Chinese name of will form part of the Company’s name in Hong Kong. The Company will apply for registration of the Chinese name with the Registrar of Companies in Hong Kong under Part XI of the Companies Ordinance once the Special Resolution no. 1 is passed at the SGM.

The proposed adoption of Chinese name of the Company will not affect any of the rights of any shareholders of the Company. The existing share certificates of the Company bear only the English name of the Company, but the Company will not issue any replacement share certificates following adoption of the Chinese name. All existing share certificates in issue bearing only the English name of the Company will after the proposed adoption of Chinese name continue to be evidence of title to the Shares and will be valid for trading, settlement, delivery and registration for the same number of Shares. There will be no change to the existing English and Chinese stock short name of the Company used in the trading system of the Stock Exchange.

A further announcement will be made when the proposed adoption of Chinese name of the Company becomes effective.

3. TERMINATION OF THE EXISTING SHARE OPTION SCHEME AND ADOPTION OF THE NEW SHARE OPTION SCHEME

The Existing Share Option Scheme was adopted by the Company on 28th June, 1994. It will expire on 27th June, 2004. To be in line with the changes of the Listing Rules in relation to share option schemes which became effective in September 2001, the Board proposes that the Existing Share Option Scheme be terminated and the New Share Option Scheme for the Participants be approved and adopted at the SGM.

At the SGM, Ordinary Resolution no. 2 will be proposed that the Existing Share Option Scheme be terminated and the New Share Option Scheme be approved and adopted at the SGM. A summary of the principal terms of the New Share Option Scheme is set out in Appendix I hereto. The Existing Share Option Scheme will terminate with effect from the conclusion of the SGM and the New Share Option Scheme will take effect, subject to the fulfillment of all the conditions precedent as referred to in paragraph 4 below, on the date of its adoption at the SGM. Operation of the New Share Option Scheme will commence after all conditions precedent as referred to in paragraph 4 below have been fulfilled.

— 5 —

LETTER FROM THE CHAIRMAN

The Board had granted options pursuant to the Existing Share Option Scheme to eligible participants to subscribe for a total of 51,600,000 Shares representing approximately 5.64% of the issued share capital of the Company as at the Latest Practicable Date. Save as aforesaid and up to the Latest Practicable Date, no other options had been granted to any participant under the Existing Share Option Scheme. As at the Latest Practicable Date, there were 29,500,000 Shares representing outstanding options, 22,100,000 Shares representing options lapsed and no option had been exercised under the Existing Share Option Scheme. There is no option cancelled under the Existing Share Option Scheme. Besides the Existing Share Option Scheme, there was no other subsisting share option scheme of the Company as at the Latest Practicable Date. The Board confirms that prior to the SGM, it will not grant any further options under the Existing Share Option Scheme.

Upon termination of the Existing Share Option Scheme, no further options may be offered thereunder. However, in respect of the outstanding options mentioned in the preceding paragraph, the provisions of the Existing Share Option Scheme shall remain in force. The abovementioned outstanding options granted under the Existing Share Option Scheme shall continue to be subject to the provisions of the Existing Share Option Scheme. The provisions of Chapter 17 of the Listing Rules which took effect from 1st September, 2001 and the adoption of the New Share Option Scheme will not in any event affect the terms of grant of such outstanding options.

As at the Latest Practicable Date, the issued share capital of the Company comprised 914,995,817 Shares. Assuming that there is no change in the issued share capital between the period from the Latest Practicable Date and the date of the adoption of the New Share Option Scheme, the number of Shares issuable pursuant to the New Share Option Scheme on the date of its adoption will be 91,499,581 Shares.

4. CONDITIONS PRECEDENT OF THE NEW SHARE OPTION SCHEME

The New Share Option Scheme will take effect upon satisfaction of the following conditions:

• (i) the passing of the necessary resolution approving the termination of the Existing Share Option Scheme by the shareholders of the Company in general meeting;

• (ii) the passing of the necessary resolution approving the adoption of the New Share Option Scheme by the shareholders of the Company in general meeting authorising the Directors to grant Options to subscribe for Shares thereunder and to allot and issue Shares pursuant to the exercise of any Options granted under the New Share Option Scheme; and

• (iii) the Listing Committee of the Stock Exchange granting approval of the listing of, and permission to deal in, the Shares (not exceeding 10% of the issued share capital of the Company as at the date of approval of the New Share Option Scheme) to be issued and allotted pursuant to the exercise of the Options granted under the New Share Option Scheme.

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LETTER FROM THE CHAIRMAN

Upon satisfaction of the above conditions, the Board will have the right to grant to the Participants Options to subscribe for Shares under the New Share Option Scheme, representing up to 10 per cent. of the total number of Shares in issue as at the date of approval of the New Share Option Scheme, unless the Company obtains a fresh approval from its shareholders to refresh the 10 per cent. limit. The maximum number of Shares which may be issued upon exercise of all outstanding Options granted and yet to be exercised under the New Share Option Scheme and any other share option schemes of the Company (if any) shall not exceed 30 per cent. of the total number of Shares in issue from time to time.

Application will be made to the Stock Exchange for the listing of, and permission to deal in, the Shares (not exceeding 10% of the issued share capital of the Company as at the date of approval of the New Share Option Scheme) to be issued and allotted pursuant to the exercise of the Options granted under the New Share Option Scheme.

Once the New Share Option Scheme is adopted, any alterations to the terms and conditions thereof, which are of a material nature, must be approved by the shareholders of the Company, except where the alterations take effect automatically pursuant to the terms originally provided in the New Share Option Scheme.

5. EXPLANATION OF THE TERMS

The terms of the New Share Option Scheme are in line with the provisions of the revised Chapter 17 of the Listing Rules, which govern the terms of the share option schemes of listed companies. By offering Options to the Participants in such flexible terms under the New Share Option Scheme, in particular, the subscription price of the Options will be determined with reference to the market value of the share price of the Company and there is no pre-requisite performance target to be achieved by the Participants before the Option can be exercised, such Participants may exercise their Options at anytime within the Option Period to acquire a monetary gain or ownership interest in the Company which may in turn provide a further incentive to the Participants to better serve the Group. Therefore, the New Share Option Scheme, if adopted, will be in the interest of the Company as a whole in terms of management and operation. Accordingly, the Board proposes to recommend the shareholders of the Company to approve the adoption of the New Share Option Scheme and simultaneously terminate the Existing Share Option Scheme at the SGM. In Appendix I, you will find a summary of the principal terms of the rules of the New Share Option Scheme.

6. VALUE OF THE OPTIONS

Since the New Share Option Scheme is yet to be approved by the shareholders of the Company, the Board has not yet determined the time frame on the granting of the Options under the New Share Option Scheme and the number of Shares for which any Grantee may subscribe upon exercise of an Option. Accordingly, the Board considers that it is premature and inappropriate to state the value of the Option for the time being in this circular. The Board also considers that it is inappropriate to value all the Options that may be granted under the New Share Option Scheme as if they had been granted at the Latest Practicable Date. Such value would not be meaningful and could also be misleading to the shareholders of the Company as it would necessarily be based on many speculative assumptions including the exercise price, the exercise period and other variables, all of which would be difficult to speculate on.

— 7 —

LETTER FROM THE CHAIRMAN

7. GENERAL MANDATE TO REPURCHASE SHARES

At the special general meeting of the Company held on 30th May, 2002, resolutions were passed giving general mandates to the Directors to issue and allot Shares and to exercise the powers of the Company to repurchase its own Shares in accordance with the Share Buyback Rules. These general mandates will lapse at the conclusion of the SGM. It is therefore proposed to renew the general mandates to issue and allot Shares and to repurchase Shares at the SGM.

An ordinary resolution will be proposed at the SGM to grant to the Directors the Repurchase Mandate, details of which are set out in Ordinary Resolution no. 4 in the SGM Notice. The Shares which may be repurchased pursuant to the Repurchase Mandate is up to 10 per cent. of the issued share capital of the Company at the date of passing of the resolution approving the Repurchase Mandate.

An explanatory statement as required under the Share Buyback Rules, giving certain information regarding the Repurchase Mandate, is set out in Appendix II hereto.

8. GENERAL MANDATE TO ISSUE SHARES

An ordinary resolution will be proposed at the SGM to grant to the Directors the Share Issue Mandate. In addition, an ordinary resolution will also be proposed to authorise an extension of the Share Issue Mandate by adding to the aggregate number of Shares which may be allotted or agreed conditionally or unconditionally to be allotted by the Directors pursuant to the Share Issue Mandate the number of Shares purchased under the Repurchase Mandate, if granted.

Details of the Share Issue Mandate and the extension of the Share Issue Mandate are set out in Ordinary Resolutions no. 3 and no. 5 in the SGM Notice.

9. SPECIAL GENERAL MEETING

The SGM Notice set out on pages 22 to 26 of this circular at which the Special Resolution and the Ordinary Resolutions will be proposed to approve the adoption of the Chinese name of the Company, the termination of the Existing Share Option Scheme, the adoption of the New Share Option Scheme, the Repurchase Mandate, the Share Issue Mandate and the extension of the Share Issue Mandate.

10. ACTION TO BE TAKEN

A form of proxy for use at the SGM is also enclosed together with this circular. Whether or not you intend to be present at the SGM, you are requested to complete the form of proxy and return it to the Company’s principal place of business in Hong Kong at Unit 901, Wing On Plaza, 62 Mody Road, Tsimshatsui, Kowloon, Hong Kong in accordance with the instructions printed thereon not less than 48 hours before the time fixed for holding the SGM. Completion and return of the proxy form will not preclude you from attending and voting in person at the SGM if you so wish.

— 8 —

LETTER FROM THE CHAIRMAN

11. DOCUMENT AVAILABLE FOR INSPECTION

Copy of the New Share Option Scheme will be available for inspection at the principal place of business of the Company in Hong Kong during normal business hours up to and including the date of the SGM.

12. RECOMMENDATION

The Directors believe that the adoption of Chinese name of the Company, the termination of the Existing Share Option Scheme, the adoption of the New Share Option Scheme, the Repurchase Mandate, the Share Issue Mandate and the extension of the Share Issue Mandate are in the best interests of the Company as well as its shareholders. Accordingly, the Directors recommend that all shareholders of the Company should vote in favour of the Special Resolution and the Ordinary Resolutions as set out in the SGM Notice.

Yours faithfully, On behalf of the Board Leung Siu Fai Chairman

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SUMMARY OF THE PRINCIPAL TERMS OF THE NEW SHARE OPTION SCHEME

APPENDIX I

1. RESPONSIBILITY STATEMENT

This document 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 document and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts not contained herein the omission of which would make any statement contained in this document misleading.

2. SUMMARY OF THE NEW SHARE OPTION SCHEME

The following is a summary of the principal terms of the rules of the New Share Option Scheme to be adopted at the SGM:

• (a) The purpose of the New Share Option Scheme is to provide the Company with a flexible means of giving incentive to, rewarding, remunerating, compensating and/or providing benefits to the Participants.

• (b) The New Share Option Scheme is conditional upon (i) the passing of the necessary resolution approving the termination of the Existing Share Option Scheme by the shareholders of the Company in general meeting, (ii) the passing of the necessary resolution approving the adoption of the New Share Option Scheme by the shareholders of the Company in general meeting and authorising the Directors to grant Options to subscribe for Shares thereunder and to allot and issue Shares pursuant to the exercise of any Options granted under the New Share Option Scheme, and (iii) the Listing Committee of the Stock Exchange granting approval of the listing of, and permission to deal in, the Shares (not exceeding 10% of the issued share capital of the Company as at the date of approval of the New Share Option Scheme) to be issued and allotted pursuant to the exercise of the Options granted under the New Share Option Scheme.

• (c) On and subject to the terms of the New Share Option Scheme, the Board may at any time within 10 years from the date of adoption of the New Share Option Scheme invite any Participant to take up Options. An Option is deemed to have been granted and accepted by the Grantee on the Offer Date upon his or her signing the duplicate letter comprising acceptance of the Option and paying HK$1 by way of consideration for the grant thereof within 28 days from the Offer Date. The subscription price for Shares in the Company is calculated in accordance with paragraph (d) below.

• (d) The subscription price for Shares in the Company under the New Share Option Scheme will be determined by the Board and shall be at least the higher of (i) the closing price of the Shares as stated in the Stock Exchange’s daily quotations sheet on the Offer Date, (ii) a price being the average of the closing prices of the Shares as stated in the Stock Exchange’s daily quotations sheets for the five Business Days immediately preceding the Offer Date, and (iii) the nominal value of a Share.

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SUMMARY OF THE PRINCIPAL TERMS OF THE NEW SHARE OPTION SCHEME

APPENDIX I

• (e) (i) Subject to (iv) below, the total number of Shares which may be issued upon exercise of all Options to be granted under the New Share Option Scheme and any other share option schemes of the Company shall not in aggregate exceed 10 per cent. of the total number of Shares in issue as at the date of approval of the New Share Option Scheme unless the Company obtains a fresh approval from its shareholders pursuant to (ii) below. Options lapsed in accordance with the terms of the New Share Option Scheme shall not be counted for the purpose of calculating such 10 per cent. limit.

• (ii) Subject to (iv) below, the Company may seek approval of its shareholders in general meeting to refresh the 10 per cent. limit set out in (i) above such that the total number of Shares which may be issued upon exercise of all Options to be granted under all of the schemes of the Company shall not exceed 10 per cent. of the total number of Shares in issue as at the date of approval of the refreshed limit. Options previously granted under any share option schemes of the Company (including those outstanding, cancelled, lapsed in accordance with the New Share Option Scheme or exercised Options) will not be counted for the purpose of calculating such refreshed 10 per cent. limit. A circular containing the information required under rule 17.02(2)(d) of the Listing Rules and the disclaimer required under rule 17.02(4) of the Listing Rules must be sent to shareholders of the Company in connection with the general meeting at which their approval is sought.

• (iii) Subject to (iv) below, the Company may seek separate approval by its shareholders in general meeting for granting Options beyond the 10 per cent. limit provided the Options in excess of such limit are granted only to Participants specifically identified by the Company before such approval is sought. In such a case, the Company shall send a circular to its shareholders containing, amongst other terms, a generic description of the specified Participant(s) who may be granted such Options, the number and terms of the Options to be granted, the purpose of granting Options to the specified Participant(s) with an explanation as to how these Options serve such purpose and the information required under rule 17.02(2)(d) of the Listing Rules and the disclaimer required under rule 17.02(4) of the Listing Rules.

• (iv) Notwithstanding (i), (ii) and (iii) above, and subject to paragraph (g) below, the maximum number of Shares which may be issued upon exercise of all outstanding Options granted and yet to be exercised under the New Share Option Scheme and any other share option schemes of the Company shall not exceed 30 per cent. (or such higher percentage as may be allowed under the Listing Rules) of the total number of Shares in issue from time to time.

• (f) Subject to the provisions of the New Share Option Scheme, the Board may at its discretion when making an Offer impose any conditions, restrictions or limitations in relation thereto as it may think fit.

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SUMMARY OF THE PRINCIPAL TERMS OF THE NEW SHARE OPTION SCHEME

APPENDIX I

• (g) (i) The maximum entitlement for any one Participant is that the total number of Shares issued and to be issued upon exercise of the options granted to such Participant under the New Share Option Scheme and any other option schemes of the Company (including both exercised and outstanding options) in any 12-month period shall not exceed 1 per cent. of the total number of Shares in issue.

• (ii) Any further grant of Options to such Participant in excess of the 1 per cent. limit shall be separately approved by the shareholders of the Company in general meeting with such Participant and such Participant’s associates abstaining from voting. The number and terms (including the subscription price) of the Options to be granted to such Participants shall be fixed before shareholders’ approval and the date of the Board meeting for proposing such further grant should be taken as the date of grant for the purpose of calculating the subscription price. In such case, the Company shall send a circular to its shareholders containing, amongst other terms, the identity of such Participant, the number and the terms of the Options to be granted (and Options previously granted to such Participant) and such other information as required under the Listing Rules.

• (h) (i) Any grant of Options to a Participant who is a director, chief executive or substantial shareholder (all with the meaning as ascribed under the Listing Rules) of the Company or their respective associates must be approved by the independent non-executive Directors of the Company (excluding the independent non-executive Director who is the Grantee).

• (ii) Where the Board proposes to grant any Option to a Participant who is a substantial shareholder of the Company or an independent non-executive Director or any of their respective associates would result in the Shares issued and to be issued upon exercise of all Options already granted and to be granted (including Options exercised, cancelled and outstanding) to him or her under the New Share Option Scheme and any other option schemes in the 12-month period up to and including the date of such grant:

  • (1) representing in aggregate more than 0.1 per cent. of the total number of Shares in issue; and

  • (2) having an aggregate value, based on the closing price of the Shares at the date of each grant, in excess of HK$5,000,000,

such proposed grant of Options must be approved by the shareholders of the Company in general meeting with all other connected persons of the Company abstaining from voting (except where any connected person may vote against the relevant resolution at such general meeting provided that his intention to do so is stated in the circular to the shareholders). In such a case, the Company shall send a circular to its shareholders containing all those terms as required under the Listing Rules. Any vote taken at the meeting to approve the grant of such Options must be taken on a poll.

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SUMMARY OF THE PRINCIPAL TERMS OF THE NEW SHARE OPTION SCHEME

APPENDIX I

• (i) An Option may be exercised in accordance with the terms of the New Share Option Scheme at any time during the period to be determined by the Board at its absolute discretion and notified by the Board to each Grantee as being the period during which an Option may be exercised and in any event such period of time shall not exceed a period of 2 years which shall commence on the expiry of 1 month after the Commencement Date and shall expire on the last day of such period. There is and shall be a minimum period of one month for which an Option must be held before it can be exercised. No performance target needs to be achieved by the Grantee before an Option can be exercised.

• (j) An Option may be exercised in whole or in part in the manner as set out in paragraphs (l), (m), (n), (p), (q) and (r) below by the Grantee (or his or her legal personal representative(s)) giving notice in writing to the Company stating that the Option is thereby exercised and the number of Shares in respect of which it is exercised. Each such notice must be accompanied by (an) Option certificate(s) sufficient to cover the number of Shares in respect of which the Option is being exercised and a remittance for the full amount of the subscription price for the Shares in respect of which the notice is given. Within 28 days after receipt of the notice, the Option certificate(s) and the remittance and, where appropriate, receipt of the Auditors’ certificate pursuant to paragraph (t) below, the Company shall allot the relevant Shares to the Grantee (or his or her legal personal representative(s)) credited as fully paid and issue to the Grantee (or his or her legal personal representative(s)) a share certificate in respect of the Shares so allotted.

• (k) An Option shall be personal to the Grantee and shall not be assignable and no Grantee shall in any way sell, transfer, charge, mortgage, encumber or create any interest in favour of any third party over or in relation to any Option or enter into any agreement to do so. Any breach of the foregoing shall entitle the Company to cancel any outstanding Options or part thereof granted to such Grantee.

• (l) In the case where the Grantee is an Employee, if the Grantee ceases to be an employee or a director of the Group for any reason other than on his or her death or the termination of his or her employment or directorship on one or more of the grounds specified in paragraph (o) below, the Grantee may exercise the Option in accordance with paragraph (j) above up to the Grantee’s entitlement at the date of cessation (to the extent he or she is entitled to exercise at the date of cessation but not already exercised) within the period of 3 months following the date of such cessation, which date shall be the Grantee’s last actual working day with the Company whether salary is paid in lieu of notice or not.

• (m) In the case (1) where the Grantee is a Business Associate who is an advisor or consultant to any member of the Group under a fixed term contract, if the Grantee ceases to be a Business Associate by reason of termination or expiry of the term of the relevant fixed term contract without any extension or renewal by the Group for reasons other than (i) on one or more grounds specified in paragraph (o), or (ii) on his or her death if the Business Associate is a natural person, or (2) where the Grantee is a Business Associate who is an advisor or consultant to any member of the Group not under any fixed term contract, if the Grantee ceases to be a Business Associate by reason of the Grantee ceasing to provide any

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SUMMARY OF THE PRINCIPAL TERMS OF THE NEW SHARE OPTION SCHEME

APPENDIX I

further advisory or consultancy services to the Group as may be determined by the Board in its absolute discretion and notified to such Business Associate in writing within one month after the provision of its last services to the Group for reasons other than (i) on one or more of the grounds specified in paragraph (o), or (ii) on his or her death if the Business Associate is a natural person, the Grantee may exercise the Option up to his or her entitlement at the date of cessation (to the extent he or she is entitled to exercise at the date of cessation but not already exercised) within such period (as the Board may determine) following the date of such cessation, which date shall, in the case of (1) above, be the date of expiry of the relevant term contract; and in the case of (2) above, be the date of the aforesaid written notification to the Business Associate, failing which the Option shall lapse.

• (n) In the case where the Grantee is an Employee or a Business Associate (in the case, being an individual) dies before exercising the Option in full and none of the events which would be a ground for termination of his or her employment or directorship or office under paragraph (o) below arises, the legal personal representative(s) of the Grantee shall within a period of 6 months from the date of the death of the Grantee, or such longer period as the Board may determine, exercise the Option up to the entitlement of such Grantee at the date of his/her death (to the extent which has become exercisable but not already exercised).

• (o) An Option (including any Option which has not become exercisable or which has become exercisable but not already exercised) shall lapse automatically and not be exercisable on the date on which:

• (i) the Grantee being an Employee, ceases to be an employee or director of the Group by reason of the termination of his or her employment or directorship on the grounds that he or she has been guilty of misconduct, or has committed any act of bankruptcy or has become insolvent, or has made any arrangements or composition with his or her creditors generally, or has been convicted of any criminal offence involving his or her integrity or honesty or (if so determined by the Board) on any other ground on which an employer would be entitled to terminate his or her employment at common law or pursuant to any applicable laws or under the Grantee’s service contract with the Company or the relevant Subsidiary. A resolution of the Board or the board of directors of the relevant Subsidiary to the effect that the employment of a Grantee has or has not been terminated on one or more of the grounds specified in this paragraph (o) shall be conclusive; or

• (ii) the Grantee being a Business Associate who is an advisor or consultant to any member of the Group, and the Business Associate is under any contract with the Group, such contract is terminated by reason of breach of contract on the part of the Business Associate; or

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SUMMARY OF THE PRINCIPAL TERMS OF THE NEW SHARE OPTION SCHEME

APPENDIX I

• (iii) the Grantee being a Business Associate, has committed any act of bankruptcy or has become insolvent, or has made any arrangements or composition with his or her creditors generally, or ceases or threaten to cease to carry on its business, or is wound up, or has an administrator or liquidator being appointed for the whole or any part of its undertaking or assets; or has been convicted of any criminal offence involving integrity or honesty;

provided that whether any one or more of the events specified in the above occur in relation to a Grantee shall be solely and conclusively determined by the Board.

• (p) In the event a notice is given by the Company to its shareholders to convene a shareholders’ meeting for the purposes of considering, and if thought fit, approving a resolution to voluntarily wind-up the Company, the Company shall on the same date as or soon after it despatches such notice to convene the shareholders’ meeting, give notice thereof to the Grantee and the Grantee (or his or her legal personal representatives(s)) shall be entitled to exercise the Option (to the extent which has become exercisable and not already exercised) either to its full extent or to the extent specified in such notice at any time not later than 4 Business Days prior to the proposed date of the shareholders’ meeting of the Company by giving notice in writing to the Company, accompanied by a remittance for the full amount of the aggregate subscription price for the Shares in respect of which the notice is given, whereupon the Company shall as soon as possible and, in any event, no later than the Business Day immediately prior to the date of the proposed shareholders’ meeting, allot and issue such number of Shares which falls to be issued on such exercise to the Grantee credited as fully paid. Subject to the above, an Option will lapse automatically (to the extent not already exercised) upon the expiry of the period in which to exercise an Option referred to above.

• (q) In the case where a general offer by way of take-over is made to all the holders of Shares (or all such holders other than the offeror and/or any person controlled by the offeror and/or any person acting in association or concert with the offeror) with the terms of the offer having been approved by the holders of not less than nine-tenths in value of the Shares comprised in the offer within 4 months from the date of the offer and the offeror thereafter gives a notice pursuant to the Companies Act 1981 of Bermuda to acquire the remaining Shares, the Grantee (or his or her legal personal representative(s)) may by notice in writing to the Company within 21 days of such notice exercise the Option (to the extent which has become exercisable and not already exercised) to its full extent or to the extent specified in such notice. Subject to the Supreme Court of Bermuda not making an order prohibiting the offeror from acquiring the remaining Shares in the offer, an Option will lapse automatically (to the extent not already exercised) upon the expiry of the period in which to exercise an Option referred to above.

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SUMMARY OF THE PRINCIPAL TERMS OF THE NEW SHARE OPTION SCHEME

APPENDIX I

• (r) In the case where a compromise or arrangement between the Company and its shareholders or creditors is proposed for the purposes of or in connection with a scheme for the reconstruction of the Company or its amalgamation with any other company or companies, the Company shall give notice thereof to the Grantee on the same date as it despatches the notice which is sent to each shareholder or creditor of the Company summoning the meeting to consider such a compromise or arrangement, and thereupon the Grantee (or his or her legal personal representative(s)) may forthwith and until the expiry of the period commencing with such date and ending with the earlier of the end of 2 months thereafter and the date on which such compromise or arrangement is sanctioned by the Court, provided that the relevant Options are not subject to a term or condition precedent to them being exercisable which has not been fulfilled, exercise any of his or her Options whether in full or in part, but the exercise of an Option as aforesaid shall be conditional upon such compromise or arrangement being sanctioned by the Court and becoming effective. Upon such compromise or arrangement becoming effective, all Options shall lapse except insofar as previously exercised under the New Share Option Scheme. The Company may require the Grantee (or his or her legal personal representative(s)) to transfer or otherwise deal with the Shares issued as a result of the exercise of Options in these circumstances so as to place the Grantee in the same position as nearly as would have been the case had such Shares been subject to such compromise or arrangement.

• (s) The Shares to be allotted upon the exercise of an Option will be subject to all the provisions of the Bye-Laws of the Company for the time being in force and will rank pari passu with the fully paid Shares in issue on the date of allotment or, if that date falls on a day when the register of members of the Company is closed, the first day of the re-opening of the register of members and accordingly will entitle the holders to participate in all dividends or other distributions paid or made on or after the date of allotment or, if that date falls on a day when the register of members of the Company is closed, the first day of the re-opening of the register of members, other than any dividend or other distribution previously declared or recommended or resolved to be paid or made with respect to a record date which shall be before the date of allotment, or if later, before the date of registration of the allotment in the register of members of the Company.

• (t) In the event of a capitalization issue, rights issue, consolidation, subdivision, or reduction of the share capital of the Company excluding any alteration in the capital structure of the Company as a result of an issue of Shares as consideration in respect of a transaction to which the Company is a party, such corresponding alterations (if any) shall be made to:

• (i) the number of Shares subject to the Option so far as unexercised; and/or

• (ii) the subscription price,

as an independent financial adviser or the Auditors shall confirm in writing to the Directors, either generally or as regards any particular Grantee that any such alterations shall satisfy the requirements set out in note to rule 17.03(13) of the Listing Rules and shall give a Grantee the same proportion of the issued share capital of the Company as that to which the

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SUMMARY OF THE PRINCIPAL TERMS OF THE NEW SHARE OPTION SCHEME

APPENDIX I

Grantee was previously entitled, provided that no such alterations shall be made the effect of which would be to enable a Share to be issued at less than its nominal value. The capacity of the independent financial adviser or the Auditors in this paragraph is that of experts and not of arbitrators and their confirmation shall, in the absence of manifest error, be final and binding on the Company and the Grantees. The costs of the independent financial adviser or the Auditors shall be borne by the Company.

• (u) The New Share Option Scheme will be valid and remain in force for a period of 10 years commencing on the date of adoption of the New Share Option Scheme, after which period no further Options will be granted but in all other respects the provisions of the New Share Option Scheme shall remain in full force and effect.

• (v) The board may effect the cancellation of any Options granted but not exercised on such terms as may be agreed with the relevant Grantee, as the Board may in its absolute discretion see fit and in a manner that complies with all applicable legal requirements for such cancellation. Where the Company cancels Options and offers new Options to the same Option holder, the offer of such new Options may only be made under the Scheme with available Options to the extent not yet issued (excluding the cancelled Options) within the limit approved by the shareholders of the Company as mentioned in paragraph (e) above.

• (w) The Company by resolution in general meeting or the Board may at any time terminate the operation of the New Share Option Scheme and in such event no further Options will be offered but in all other respects the provisions of the New Share Option Scheme shall remain in full force and effect.

• (x) The provisions of the New Share Option Scheme may be altered in any respect by resolution of the Board except that the definitions of “Employee”, “Business Associate”, “Grantee”, “Option Period” and “Participant” in sub-paragraph 1.1 thereof and the provisions of sub-paragraphs 4.1, 5.1, 5.2, 5.3, 5.4, 6, 7, 8, 9, 10, 11, 14, 15 and 16 thereof, being the matters set out in Rule 17.03 of the Listing Rules, shall not be altered to extend the class of persons eligible for the grant of Options or to the advantage of Grantees or prospective Grantees except with the prior sanction of a resolution of the Company in general meeting, provided that no such alteration shall operate to affect adversely the terms of issue of any Option granted or agreed to be granted prior to such alteration except with the consent or sanction of such majority of the Grantees as would be required of the shareholders of the Company under the Bye-Laws for the time being of the Company for a variation of the rights attached to the Shares.

• (y) Any alteration to the terms and conditions of the New Share Option Scheme, which are of a material nature or any change to the terms of Options granted (other than any alterations or changes which take effect automatically under the existing terms of the New Share Option Scheme) shall be approved by the shareholders of the Company in general meeting.

• (z) The amended terms of the New Share Option Scheme or the Options must still comply with the relevant requirements of Chapter 17 of the Listing Rules.

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SUMMARY OF THE PRINCIPAL TERMS OF THE NEW SHARE OPTION SCHEME

APPENDIX I

• (aa) Any change to the authority of the Directors or scheme administrators in relation to any alteration to the terms of the New Share Option Scheme must be approved by the shareholders of the Company in general meeting.

• (bb) A grant of Option may not be made after a price sensitive event has occurred or a price sensitive matter has been the subject of a decision until such price sensitive information has been published as required by the Listing Rules. In particular, during such period of time as specified by the Listing Rules immediately preceding the earlier of (i) the date of the meeting of the Board (as such date is first notified to the Stock Exchange in accordance with paragraph 12 of the listing agreement (as set out in Part B of Appendix 7 of the Listing Rules)) for the approval of the Company’s interim or annual results; and (ii) the deadline for the Company to publish its interim or annual results announcement under the listing agreement (as set out in the Part B of Appendix 7 of the Listing Rules) and ending on the date of the results announcements, no Options may be granted. The period during which no option may be granted will cover any period of delay in the publication of a results announcement.

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EXPLANATORY STATEMENT

APPENDIX II

This Appendix serves as an explanatory statement, as required by the Share Buyback Rules, to provide the requisite information to you for your consideration of the Repurchase Mandate.

1. THE LISTING RULES

The Listing Rules permit a company whose primary listing is on the Stock Exchange to repurchase its securities on the Stock Exchange or on another stock exchange on which the securities of the company may be listed and recognised for this purpose by the Securities and Futures Commission and the Stock Exchange subject to certain restrictions, the most important of which are summarised in the following paragraphs.

2. SHARE CAPITAL

As at the Latest Practicable Date, the issued share capital of the Company comprised 914,995,817 Shares. Subject to the passing of Ordinary Resolution no. 4 approving the Repurchase Mandate at the SGM and on the basis that no further Shares are issued or repurchased prior to the SGM, exercise in full of the Repurchase Mandate could accordingly result in up to 91,499,581 Shares, representing up to not more than 10 per cent. of the issued share capital of the Company, being repurchased by the Company during the course of the period from the passing of Ordinary Resolution no.4 at the SGM until whichever is the earliest of:

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

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

• (iii) the passing of an ordinary resolution by shareholders of the Company in general meeting revoking, varying or renewing the authority given to the Directors by Ordinary Resolution no. 4.

3. REASONS FOR AND INTENTION ON REPURCHASES

The Directors believe that it is in the best interests of the Company and its shareholders to have a general authority from shareholders to enable the Directors to repurchase Shares in the market. Such repurchases may, depending on market conditions and funding arrangements at the time, lead to an enhancement of the net assets and/or earnings per Share of the Company and will only be made when the Directors believe that such repurchases will benefit the Company and its shareholders.

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EXPLANATORY STATEMENT

APPENDIX II

4. FUNDING OF REPURCHASES

Repurchases of Shares will be funded entirely from the Company’s available cash flow or working capital facilities, and will be made out of funds legally available for the purpose in accordance with the Companies Act 1981 of Bermuda, the Memorandum of Association and Bye-Laws of the Company (as amended from time to time).

There might be a material adverse effect on the working capital or gearing levels of the Company (as compared with the position disclosed in the audited accounts contained in the Annual Report of the Company for the year ended 31st December, 2002) in the event that the Repurchase Mandate were to be exercised in full at any time during the proposed repurchase period. However, the Directors do not intend to exercise the Repurchase Mandate to such an extent as would, in the circumstances, have a material adverse effect on the working capital requirements or the gearing levels of the Company which in the opinion of the Directors are from time to time appropriate for the Company.

5. UNDERTAKING

The Directors have undertaken to the Stock Exchange that, so far as the same may be applicable, they will exercise the powers of the Company to make repurchases pursuant to the Repurchase Mandate and in accordance with the Listing Rules and any applicable laws of Bermuda.

None of the Directors nor, to the best of their knowledge having made all reasonable enquiries, their associates, have any present intention to sell any Shares to the Company under the Repurchase Mandate if such Repurchase Mandate is approved by the shareholders of the Company.

No other connected persons have notified the Company that they have a present intention to sell Shares to the Company or its subsidiaries, in the event that the Repurchase Mandate is approved by the shareholders of the Company.

6. SHARE REPURCHASE MADE BY THE COMPANY

The Company has not repurchased any Shares, whether from the Stock Exchange or otherwise, during the six months preceding the Latest Practicable Date.

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EXPLANATORY STATEMENT

APPENDIX II

7. SHARE PRICES

The highest and lowest prices at which the Shares have traded on the Stock Exchange during each of the previous twelve months before the Latest Practicable Date were as follows:

Month	Highest	Lowest
	HK$	HK$
2002
April	0.350	0.250
May	0.510	0.310
June	0.470	0.380
July	0.450	0.370
August	0.370	0.300
September	0.375	0.290
October	0.310	0.285
November	0.340	0.255
December	0.325	0.285
2003
January	0.320	0.295
February	0.315	0.290
March	0.300	0.280

8. TAKEOVERS CODE

If a shareholder’s proportionate interest in the voting rights of the Company increases as a result of the Directors exercising the power to repurchase Shares pursuant to the Repurchase Mandate, such increase will be treated as an acquisition for the purposes 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 thereby become obliged to make a mandatory general offer in accordance with Rules 26 and 32 of the Takeovers Code.

As at the Latest Practicable Date, (i) Mighty Management Limited, a company controlled by Mr. Leung Siu Fai, the Chairman and managing director of the Company, is interested in 151,610,779 Shares representing 16.57% of the issued share capital of the Company and (ii) Ms. Lu Biru is interested in 131,657,142 Shares of the Company, representing 14.39% of the issued share capital of the Company. In the event that the Directors exercise in full the power to repurchase Shares of the Company in accordance with the terms of the Repurchase Mandate, the interest of Mighty Management Limited and Ms. Lu Biru in the issued share capital of the Company would be increased to approximately 18.41% and 15.99% of the issued share capital of the Company respectively. So far as the Directors are aware, the persons referred to in (i) and (ii) are not acting in concert with each other.

The Directors are not aware of any consequences which may arise under the Takeovers Code as a result of any repurchases under the Repurchase Mandate. In the event that the power to repurchase Shares pursuant to the Repurchase Mandate is exercised in full, the number of Shares held by the public would not fall below 25%.

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NOTICE OF SPECIAL GENERAL MEETING

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CHINA INVESTMENTS HOLDINGS LIMITED ( )*

(Incorporated in Bermuda with limited liability)

NOTICE IS HEREBY GIVEN that the Special General Meeting of China Investments Holdings Limited (the “Company”) will be held at the Garden Rooms, 2nd Floor, the Royal Garden, 69 Mody Road, Tsimshatsui, Kowloon, Hong Kong, on Tuesday, 20th May, 2003 at 10:35 a.m. (or as soon as practicable immediately after the conclusion or adjournment of the Annual General Meeting of the Company convened at the same place and date) for the purpose of considering and, if thought fit, passing the following resolutions, with or without modification, as Special Resolution and Ordinary Resolutions of the Company (as the case may be):

SPECIAL RESOLUTION

1. “ THAT “ ” be adopted as the Chinese name of the Company and THAT such Chinese name be filed and/or registered with the Registrar of Companies in Hong Kong under Part XI of the Companies Ordinance (Chapter 32 of the Laws of Hong Kong) and the directors of the Company be and are hereby authorised to do all such acts, deeds and things as they may, in their absolute discretion, deem fit, to effect and implement such adoption of Chinese name of the Company.”

ORDINARY RESOLUTION

1. “ THAT :

   • (A) the existing share option scheme which was adopted by the Company at its general meeting on 28th June, 1994 be and is hereby terminated with immediate effect; and

   • (B) subject to and conditional upon the Listing Committee of The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) granting approval for the listing of, and permission to deal in, the shares in the Company to be issued and allotted pursuant to the exercise of any options granted under the new share option scheme of the Company (the “New Share Option Scheme”), the rules of which are contained in the document marked “A” produced to the meeting and for the purposes of identification signed by the Chairman thereof, the New Share Option Scheme be and is hereby approved and adopted and the Board of Directors be and is hereby authorised to do all

2. For identification purpose only

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NOTICE OF SPECIAL GENERAL MEETING

such acts and to enter into all such transactions, arrangements and agreements as may be necessary or expedient in order to give full effect to the New Share Option Scheme including but without limitation:

  - (i) to administer the New Share Option Scheme under which options will be granted to participants eligible under the New Share Option Scheme to subscribe for shares in the Company;

  - (ii) to modify and/or amend the New Share Option Scheme from time to time provided that such modification and/or amendment is effected in accordance with the provisions of the New Share Option Scheme relating to modification and/or amendment;

  - (iii) to issue and allot from time to time such number of shares in the Company as may be required to be issued and allotted pursuant to the exercise of the options under the New Share Option Scheme and subject to the Rules Governing the Listing of Securities on the Stock Exchange (the “Listing Rules”);

  - (iv) to make application at the appropriate time or times to the Stock Exchange and any other stock exchanges upon which the issued shares of the Company may for the time being be listed, for listing of, and permission to deal in, any shares in the Company which may hereafter from time to time be issued and allotted pursuant to the exercise of the options under the New Share Option Scheme; and

  - (v) to consent, if it so deems fit and expedient, to such conditions, modifications and/or variations as may be required or imposed by the relevant authorities in relation to the New Share Option Scheme.”

1. “ THAT :

2. (A) subject to paragraph (C) below, and pursuant to the Listing Rules, the exercise by the Directors of the Company during the Relevant Period (as hereinafter defined) of all the powers of the Company to allot, issue and deal with any unissued shares in the capital of the Company and to make or grant offers, agreements or options (including warrants, bonds and debentures convertible into shares of the Company) which would or might require the exercise of such power be and is hereby generally and unconditionally approved;

3. (B) the approval in paragraph (A) shall authorise the Directors of the Company during the Relevant Period to make or grant offers, agreements and options (including warrants, bonds and debentures convertible into shares of the Company) which would or might require the exercise of such power 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 or issued (whether pursuant to an option or otherwise) and issued by the Directors of the Company pursuant to the approval in paragraph (A)

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NOTICE OF SPECIAL GENERAL MEETING

above, otherwise than pursuant to (i) a Rights Issue (as hereinafter defined); (ii) an issue of shares as scrip dividends pursuant to the Bye-Laws of the Company from time to time; or (iii) an issue of shares under any option scheme or similar arrangement for the time being adopted for the grant or issue of shares or rights to acquire shares of the Company, shall not exceed the aggregate of 20 per cent. of the aggregate nominal amount of the share capital of the Company in issue as at the date of passing this Resolution, and such 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 any applicable law or the Company’s Bye-Laws to be held; or

• (iii) the passing of an ordinary resolution by shareholders of the Company in general meeting revoking, varying or renewing the authority given to the Directors of the Company by this Resolution.

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

4. “ THAT :

• (A) subject to paragraph (B) below, the exercise by the Directors of the Company during the Relevant Period (as hereinafter defined) of all powers of the Company to repurchase securities of the Company on the Stock Exchange or on any other stock exchange on which the securities of the Company may be listed and is recognised by the Securities and Futures Commission and the Stock Exchange for this purpose, subject to and in accordance with all applicable laws and/or the requirements of the Listing Rules or of any other stock exchange as amended from time to time, be and is hereby generally and unconditionally approved;

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NOTICE OF SPECIAL GENERAL MEETING

• (B) the aggregate nominal amount of securities of the Company repurchased by the Company pursuant to the approval in paragraph (A) above during the Relevant Period shall in the case of shares of the Company, not exceed 10 per cent. of the aggregate nominal amount of the share capital of the Company in issue as at the date of passing this Resolution, and such approval shall 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 any applicable law or the Company’s Bye-Laws to be held; or

  • (iii) the passing of an ordinary resolution by shareholders of the Company in general meeting revoking, varying or renewing the authority given to the Directors of the Company by this Resolution.”

• “ THAT the general mandate granted to the Directors of the Company and for the time being in force to exercise the power of the Company to allot, issue and deal with any unissued shares of the Company pursuant to Resolution No. 3 as set out in the notice convening this meeting be and is hereby extended by the addition to the aggregate nominal amount of share capital which may be allotted or agreed conditionally or unconditionally to be allotted by the Directors of the Company pursuant to such general mandate of an amount representing the aggregate nominal amount of the share capital of the Company repurchased by the Company under the authority granted pursuant to Resolution No. 4 as set out in the notice convening this meeting, provided that such extended amount shall not exceed 10 per cent. of the aggregate nominal amount of the share capital of the Company in issue as at the date of passing this Resolution.”

By order of the Board LEUNG Chong Shun Company Secretary

Hong Kong, 25th April, 2003

Registered Office: Clarendon House 2 Church Street Hamilton HM11 Bermuda

Principal Place of Business: Unit 901, Wing On Plaza 62 Mody Road Tsimshatsui Kowloon Hong Kong

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NOTICE OF SPECIAL GENERAL MEETING

Notes:

1. A member entitled to attend and vote at the above meeting is entitled to appoint one or more proxies to attend and vote, on a poll, on his/her behalf. A proxy need not be a member of the Company.

2. A form of proxy for use in connection with the special general meeting is enclosed with this circular. The form of proxy shall be deposited at the Company’s principal place of business in Hong Kong at Unit 901, Wing On Plaza, 62 Mody Road, Tsimshatsui, Kowloon, Hong Kong not less than 48 hours before the time for holding the meeting.

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