Minmetals Land Limited — Proxy Solicitation & Information Statement 2002

Aug 6, 2002

If you are in any doubt about this document you should consult a stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold all your shares in Mascotte Holdings Limited, you should at once hand this document to the purchaser or the bank, stockbroker or other agent through whom the sale was effected for transmission to the purchaser.

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this document, 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 document.

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MASCOTTE HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

Executive Directors: Chan Oi Ling, Maria Olimpia (Chairman) Lam Yu Ho, Daniel (Managing Director) Cheng Lok Hing Cheng Chun Kit Liu Ji Hong

Independent Non-executive Directors: Wong Yui Leung, Larry Tsang Heman

Principal Place of Business in Hong Kong: 1st Floor Po Chai Industrial Building 28 Wong Chuk Hang Road Aberdeen Hong Kong

Registered Office: Clarendon House 2 Church Street Hamilton HM11 Bermuda

31st July, 2002

To the shareholders

Dear Sir/Madam,

GENERAL MANDATES TO REPURCHASE SHARES AND TO ISSUE SHARES

INTRODUCTION

The Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (“the Listing Rules”) contain provisions to regulate the repurchase by companies with primary listings on the Stock Exchange of their own securities on the Stock Exchange (“the Share Buyback Rules”).

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The purpose of this circular is to provide you with information relating to the ordinary resolutions (“Ordinary Resolutions”) to be proposed at the forthcoming annual general meeting of the Company to be held on 22nd August, 2002 (“the Annual General Meeting”) to grant the directors of the Company (“the Directors”) a general mandate to exercise the powers of the Company to (i) undertake repurchases of the Company’s fully paid up shares representing up to a maximum of 10% of the existing issued share capital of the Company on the date of the Ordinary Resolution; and (ii) allot, issue and deal with additional shares not exceeding a maximum of 20% of the existing issued share capital of the Company on the date of the Ordinary Resolution and the nominal amount of any shares repurchased by the Company pursuant to the general repurchase of shares mandate aforementioned.

In accordance with the Listing Rules, this circular also serves as the explanatory statement, to provide you with requisite information reasonably necessary to enable you to make an informed decision on whether to vote for or against Resolutions 5A, 5B and 5C to be proposed at the Annual General Meeting.

SHARE REPURCHASE MANDATE

Shareholders’ Approval

All on-market share repurchases by a company must be approved in advance by an ordinary resolution, either by way of a general mandate or by a specific approval in relation to specific transactions.

Reasons for Share Buyback

Although the Directors have no present intention of repurchasing any shares, they believe that the flexibility afforded by the buyback mandate would be beneficial to the Company and its shareholders. Trading conditions on the Stock Exchange have sometimes been volatile in recent years. At any time in the future when shares are trading at a discount to their underlying value, the ability of the Company to repurchase shares will be beneficial to those shareholders who retain their investment in the Company since their percentage interest in the assets of the Company would increase in proportion to the number of shares repurchased by the Company and thereby resulting in an increase in net assets and/or earnings per share of the Company. Such repurchases will only be made when the Directors believe that such repurchases will benefit the Company and its shareholders.

Share Capital

As at 25th July, 2002, the latest practicable date prior to the printing of this circular, the issued share capital of the Company comprised 424,000,100 shares of HK$0.10 each (“Shares”).

Subject to the passing of the Ordinary Resolution 5A, the Company would be allowed under the buyback mandate to repurchase a maximum of 42,400,010 Shares on the basis that no further shares will be issued or repurchased prior to the date of the Annual General Meeting.

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Funding of Repurchases

In repurchasing Share, the Directors proposes that the Company may only apply funds legally available for such purpose in accordance with the Memorandum of Association, Byelaws of the Company and the laws of Bermuda.

The Company is empowered by its Memorandum of Association and Bye-laws to purchase its Shares. Bermuda law provides that the amount of capital paid in connection with a share repurchase may only be paid out of either the capital paid up on the relevant shares, or the funds of the Company that would otherwise be available for dividend or distribution or the proceeds of a fresh issue of shares made for such purpose. The amount of premium payable on repurchase may only be paid out of funds of the Company that would otherwise be available for dividend or distribution or out of the share premium account of the Company. Under Bermuda law, the Shares so repurchased will be treated as cancelled but the aggregate amount of authorised share capital will not be reduced.

There might be material adverse impact on the working capital or gearing position of the Company (as compared with the position disclosed in the audited accounts contained in the Annual Report for the year ended 31st March, 2002) in the event that the repurchase mandate was to be carried out in full at any time during the proposed repurchase period. However, the Directors do not propose to exercise the repurchase mandate to such extent as would, in the circumstances, have a material adverse effect on the working capital requirements of the Company or the gearing levels which in the opinion of the Directors are from time to time appropriate for the Company. The number of Shares to be repurchased on any occasion and the price and other terms upon which the same are purchased will be decided by the Directors at the relevant time having regard to the circumstances then pertaining.

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MARKET PRICES

The highest and lowest prices at which Shares have been traded on the Stock Exchange during each of the previous 12 months from July 2001 to June 2002 were as follows:

			Shares
		Highest		Lowest
		HK$		HK$
July 2001		0.255		0.255
August 2001	Note	–		–
September 2001	Note	–		–
October 2001		0.305		0.240
November 2001		0.280		0.260
December 2001		0.245		0.237
January 2002		0.250		0.250
February 2002		0.250		0.240
March 2002		0.390		0.280
April 2002		0.375		0.300
May 2002		0.375		0.300
June 2002	Note	–		–

Note: During these months, there were no Shares of the Company traded on the Stock Exchange.

SHARE PURCHASE MADE BY THE COMPANY

No purchase of Shares has been made by the Company during the last 12 months (whether on the Stock Exchange or otherwise).

RESOLUTIONS TO BE PROPOSED AT THE ANNUAL GENERAL MEETING

The Ordinary Resolution 5A to be proposed at the Annual General Meeting relates to the granting of a general mandate to the Directors to repurchase, on the Stock Exchange, Shares up to a maximum of 10% of the issued share capital of the Company as at the date of passing the Ordinary Resolution. (“the Repurchase Proposal”).

The Ordinary Resolution 5B to be proposed at the Annual General Meeting relates to the granting of a general mandate to the Directors to issue new shares up to a maximum of 20% of the issued share capital of the Company as at the date of passing the Ordinary Resolution.

The Ordinary Resolution 5C to be proposed at the Annual General Meeting relates to the extension of the general mandate to be granted to the Directors to issue new Shares during the relevant period by adding to it the number of Shares purchased by the Company under the Repurchase Proposal, if any.

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DISCLOSURE OF INTERESTS

The Directors have undertaken to the Stock Exchange to exercise the powers of the Company to make purchases under the Repurchase Proposal in accordance with the Listing Rules and laws of Bermuda.

If as a result of a share repurchase by the Company, a substantial shareholder’s proportionate interest in the voting rights of the Company increases, such increase will be treated as an acquisition for the purpose of The Hong Kong Code on Takeovers and Mergers (“the Code”). Accordingly, a shareholder or group of shareholders acting in concert, could obtain or consolidate control of the Company and become obliged to make a mandatory offer in accordance with Rules 26 of the Code.

As at 25th July, 2002, the latest practicable date prior to the printing of this circular, Ms. Chan Oi Ling, Maria Olimpia, Director of the Company, was interested in approximately 44.14% of the Shares issued by the Company. In the event that the Directors exercised in full the power to repurchase Shares of the Company in accordance with the terms of the Ordinary Resolution to be proposed at the Annual General Meeting, the interests of Ms. Chan Oi Ling, Maria Olimpia in the Shares of the Company would be increased to approximately 49.04% of the issued Shares of the Company and such increase would give rise to an obligation to make a mandatory offer under Rule 26 of the Code. However, the Directors do not propose to exercise the buyback mandate to such an extent. Subject to the aforesaid, the Directors are not aware of any consequences which will arise under the Code as a result of any purchases to be made under the Repurchase Proposal. In addition, the Directors do not intend to exercise the power to repurchase Shares pursuant to the repurchase mandate to the extent that such repurchase would result in the number of Shares which are in the hands of the public falling below 25% of the issued Shares of the Company.

None of the Directors nor, to the best of their knowledge having made all reasonable enquiries, any of their associates presently intends to sell Shares to the Company under the Repurchase Proposal in the event that the Repurchase Proposal is approved by the shareholders.

The Company has not been notified by any connected persons of the Company that they have a present intention to sell any Shares, or that they have undertaken not to sell any Shares held by them to the Company in the event that the Repurchase Proposal is approved by its shareholders.

PROXY ARRANGEMENT

A form of proxy for use at the Annual General Meeting is enclosed with the Annual Report for the year ended 31st March, 2002. To be valid, the form of proxy must be completed in accordance with the instructions printed thereon and deposited, together with the power of attorney or other authority (if any) under which it is signed or a notarially certified copy of that power of attorney or authority at the Company’s Share Registrar in Hong Kong, Secretaries Limited, at 5th Floor, Wing On Centre, 111 Connaught Road Central, Hong Kong not less

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than 48 hours before the time appointed for holding the meeting. Completion and delivery of the form of proxy will not prevent you from attending and voting at the Annual General Meeting.

RECOMMENDATION

The Directors consider that the Repurchase Proposal and the granting of the general mandate to issue new shares are in the best interests of the Company and its shareholders and accordingly recommend that all shareholders should vote in favour of Resolutions 5A, 5B and 5C to be proposed at the Annual General Meeting as they intend to do themselves in respect of the Shares controlled by them.

Yours faithfully, Chan Oi Ling, Maria Olimpia Chairman

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