Multifield International Holdings Limited

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in doubt about this circular, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitors, professional accountant or other professional adviser.

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

The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing Company Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim 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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Multifield International Holdings Limited ( )[*]

(Incorporated in Bermuda with limited liability)

PROPOSED CAPITAL REDUCTION AND INCREASE IN AUTHORISED SHARE CAPITAL

A notice convening the Special General Meeting of Multifield International Holdings Limited to be held at 4:00 p.m. on Wednesday, 17 April 2002 is set out on pages 5 and 6 of this circular. Whether or not you are able to attend the meeting, shareholders should please complete and return the enclosed form of proxy to the Company’s principal place of business in Hong Kong at 3rd Floor, Multifield Centre, 426 Shanghai Street, Kowloon, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for the holding of the meeting. Completion and delivery of the form of proxy will not prevent shareholders from attending and voting at the Special General Meeting if they so wish.

For identification purposes only

22 March 2002

Multifield International Holdings Limited

		Page
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		ii
EXPECTED TIMETABLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		iii
LETTER	FROM THE BOARD
A.	Capital Reduction and Increase in Authorised Share Capital . . . . . . . . . . . . . . . . . .	1
	1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
	2. Reason for the Capital Reduction and Increase in Authorised Share Capital . .	2
	3. Effect of the Capital Reduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2
	4. Conditions of the Capital Reduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
	5. Free Exchange of New Share Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
B.	Special General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
C.	Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
APPENDIX I NOTICE OF SPECIAL GENERAL MEETING . . . . . . . . . . . . . . . . .		5

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Multifield International Holdings Limited

DEFINITIONS

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

“Board”	the board of Directors
“Capital Reduction”	the proposed reduction of the nominal value of each issued
	Share from HK$0.10 to HK$0.01 and the reduction of the
	authorised share capital of the Company from
	HK$500,000,000.00 to HK$50,000,000.00
“CCASS”	the Central Clearing and Settlement System established and
	operated by Hongkong Clearing
“Companies Act”	the Companies Act 1981 of Bermuda (as amended)
“Company”	Multifield International Holdings Limited, an exempted
	company incorporated in Bermuda with limited liability, the
	shares of which are listed on the Stock Exchange
“Directors”	the directors, including the independent non-executive
	directors, of the Company
“Group”	the Company and its subsidiaries
“Hongkong Clearing”	Hong Kong Securities Clearing Company Limited
“Latest Practicable Date”	19 March 2002, being the latest practicable date prior to the
	printing of this circular for ascertaining certain information
	contained herein
“Listing Rules”	The Rules Governing the Listing of Securities on the Stock
	Exchange
“New Share(s)”	new share(s) of HK$0.01 each in the capital of the Company
	to be created pursuant to the Capital Reduction
“Share(s)”	existing share(s) of HK$0.10 each in the capital of the
	Company
“Shareholders”	holders of Shares or New Shares, as the case may be
“Special General Meeting”	the special general meeting of the Company convened to be
	held at 4:00 p.m. on Wednesday, 17 April 2002, notice of
	which is set out on pages 5 and 6 of this circular, and any
	adjournment thereof
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“HK$”	Hong Kong dollar(s), the lawful currency of Hong Kong

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Multifield International Holdings Limited

EXPECTED TIMETABLE
Year 2002
Latest time for Shareholders to lodge forms of proxy
in respect of the Special General Meeting . . . . . . . . . . . . . . . . . . Monday, 15 April at 4:00 p.m.
The Special General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . Wednesday, 17 April at 4:00 p.m.
The Effective Date for Capital Reduction . . . . . . . . . . . . . . . . . . Wednesday, 17 April at 6:00 p.m.
Dealings in the New Shares commence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Thursday, 18 April
First day for free exchange of certificates for existing
Shares for new certificates for the New Shares . . . . . . . . . . . . . . . . . . . . . . . Thursday, 18 April
Last day for free exchange of certificates for existing
Shares for new certificates for the New Shares . . . . . . . . . . . . . . . . . . . . . . . . Tuesday, 21 May

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Multifield International Holdings Limited

LETTER FROM THE BOARD

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( ) *

(Incorporated in Bermuda with limited liability)

Executive Directors: Lau Chi Yung, Kenneth (Chairman) Tsang Pak Chung, Eddy (Vice-Chairman) Lau Chi Kei, Michael Luu Duc Chi, Kevin Cho Po Hong, Jimmy

Non-Executive Directors: Tong Wui Tung, Ronald Choy Tak Ho, Milano Lee Siu Man, Ervin

Registered Office: Cedar House 41 Cedar Avenue Hamilton HM 12 Bermuda

Principal Place of Business: 3rd Floor Multifield Centre 426 Shanghai Street Kowloon Hong Kong

** Independent Non-Executive Directors

22 March 2002

To the Shareholders

Dear Sir or Madam,

The purpose of this Circular is to provide you with information regarding a resolution to be proposed at the Special General Meeting to be held at 4:00 p.m. on Wednesday, 17 April 2002 at 1st Floor, Multifield Centre, 426 Shanghai Street, Kowloon, Hong Kong to approve the Capital Reduction.

A. CAPITAL REDUCTION AND INCREASE IN AUTHORISED SHARE CAPITAL

1. Introduction

The Board proposes to put forward a proposal to carry out the Capital Reduction. The Capital Reduction will be effected in the following manner (on the basis of 3,333,771,936 Shares in issue as at Latest Practicable Date):

(i) the nominal value of each of the issued and unissued shares in the capital of the Company will be reduced from HK$0.10 each to HK$0.01 each so that the authorised capital is reduced from HK$500,000,000.00 by HK$450,000,000.00 to HK$50,000,000.00 and the issued capital is reduced from HK$333,377,193.60 by HK$300,039,474.24 to HK$33,337,719.36; and
For identification purposes only

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Multifield International Holdings Limited

LETTER FROM THE BOARD

(ii) the credit of HK$300,039,474.24 arising from the Capital Reduction will be transferred to the contributed surplus account of the Company.

It is further proposed that immediately after the Capital Reduction, the authorised share capital of the Company will be increased to HK$500,000,000.00 by the creation of 45,000,000,000 New Shares.

Upon the Capital Reduction and an increase of authorised share capital as mentioned above becoming effective and on the basis of 3,333,771,936 Shares in issue as at the Latest Practicable Date, the authorised share capital of the Company will be HK$500,000,000.00 comprising 50,000,000,000 New Shares, of which 3,333,771,936 New Shares will be issued and fully paid. There will be no change in the size of each board lot of shares in the Company, being 2,000 shares in the Company, before or after the Capital Reduction.

The principal activity of the Company is investment holding. The Group’s business activities comprise property investment, property development, the provision of service apartment and property management service, property agency and project management.

2. Reason for the Capital Reduction and Increase in Authorised Share Capital

The Directors believe that as the current balances in the Company’s retained profits, share premium and contributed surplus accounts are insufficient for any bonus issue of shares in the future, the proposed Capital Reduction allows greater flexibility for the Company to propose bonus issue of shares in the future by possibly applying the balance in the contributed surplus account for any bonus issue of shares.

The Directors also believe that the increase in authorised share capital will provide the Company with greater flexibility to accommodate future issue of New Shares, if necessary.

As at 31 December 2000, the audited consolidated balances in the Group’s retained profits, share premium and contributed surplus accounts are HK$96,584,000.00, HK$0.00 and HK$0.00 respectively. Since 31 December 2000, the Company issued 505,116,960 bonus Shares and 303,070,176 bonus Shares on 20 July 2001 and 20 November 2001 respectively, in each case, credited as fully paid at par.

Although no final decision has been made at this stage, the Board intends to propose bonus issue of shares, where appropriate, in the near future.

3. Effect of the Capital Reduction

Other than the expenses of approximately HK$250,000.00 incurred relating to the implementation of the Capital Reduction, implementation of the Capital Reduction will not, in itself, materially alter the net asset value, the underlying assets, business operations, management or financial position of the Company or the Group or the proportional interests of the Shareholders in the

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Multifield International Holdings Limited

LETTER FROM THE BOARD

Company. The Directors believe that the Capital Reduction will not have a material adverse effect on the financial position of the Company. The New Shares will rank pari passu in all respects with each other and the Capital Reduction will not result in any change in the respective rights of the Shareholders.

4. Conditions of the Capital Reduction

Implementation of the Capital Reduction will be conditional, inter alia, on:

(i) the passing of a special resolution by Shareholders at the forthcoming Special General Meeting to approve the Capital Reduction;
(ii) compliance with the requirements of section 46 of the Companies Act, including the publication of a notice in an appointed newspaper in Bermuda in respect of the Capital Reduction; and
(iii) the Listing Committee of the Stock Exchange granting listing of, and permission to deal in, the New Shares.

Under the Bye-laws of the Company, the Company may by special resolution reduce its share capital, subject to compliance with the requirements of section 46 of the Companies Act.

Application will be made to the Listing Committee of the Stock Exchange for the listing of, and permission to deal in, the New Shares.

Subject to the conditions being fulfilled, it is expected that the Capital Reduction will become effective immediately after the close of business on the day of the Special General Meeting. A further announcement will be made informing Shareholders of the effective date of the Capital Reduction.

Subject to the granting of listing of and permission to deal in the New Shares on the Stock Exchange, the New Shares will be accepted as eligible securities by Hongkong Clearing for deposit, clearance and settlement in CCASS with effect from the date of commencement of dealings in the New Shares on the Stock Exchange or such other date as determined by Hongkong Clearing. Settlement of transactions between participants of the Stock Exchange is required to take place in CCASS on the second trading day thereafter. All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time.

5. Free Exchange of New Share Certificates

Subject to the passing of the resolution approving the Capital Reduction, Shareholders may, on or after 18 April 2002 until 21 May 2002, submit certificates for Shares to Tengis Limited at 4th Floor, Hutchison House, 10 Harcourt Road, Central, Hong Kong (Telephone No.: 2846 9666), the branch share registrar of the Company for exchange, at the expenses of the Company, for certificates for the New Shares. Thereafter, certificates for Shares will be accepted for exchange for certificates for New

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Multifield International Holdings Limited

LETTER FROM THE BOARD

Shares only on payment of a fee of HK$2.50 (or such higher amount as may be stipulated in the Listing Rules from time to time) for each new certificate to be issued or each old certificate submitted, whichever number of certificates is higher. Nonetheless, certificates for Shares will continue to be good evidence of legal title for all purposes and may be exchanged for New Shares at any time.

In order to distinguish between the existing and the new certificates, certificates for New Shares will be light grey in colour, which is different from the existing certificates for the Shares, which are yellow in colour.

B. SPECIAL GENERAL MEETING

A notice convening the Special General Meeting of the Company to be held on Wednesday, 17 April 2002 is set out on pages 5 and 6 of this circular and a form of proxy for use at the Special General Meeting is also enclosed. Whether or not you intend to be present at the Special General Meeting, you are requested to complete the form of proxy and return it to the Company’s principal place of business in Hong Kong at 3rd Floor, Multifield Centre, 426 Shanghai Street, Kowloon, Hong Kong in accordance with the instructions printed thereon not later than 48 hours before the time for the Special General Meeting. Completion and delivery of the form of proxy will not prevent Shareholders from attending and voting at the Special General Meeting if they so wish.

C. RECOMMENDATION

The Directors believe that the proposed resolution as aforesaid is in the best interests of the Company and the Shareholders as a whole and, accordingly, recommend the Shareholders to vote in favour of the aforesaid resolution to be proposed at the Special General Meeting.

Yours faithfully, Tsang Pak Chung, Eddy Vice-Chairman

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Multifield International Holdings Limited

NOTICE OF SPECIAL GENERAL MEETING

APPENDIX I

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