New City Development Group Limited — Proxy Solicitation & Information Statement 2003

Apr 30, 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 Everbright International Limited , you should at once hand this circular to the purchaser or transferee 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.

CHINA EVERBRIGHT INTERNATIONAL LIMITED 中國光大國際有限公司

(Incorporated in Hong Kong with limited liability)

PROPOSALS FOR

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

A notice convening an extraordinary general meeting of China Everbright International Limited to be held at Concord Rooms 2-3, 8th Floor, Renaissance Harbour View Hotel, 1 Harbour Road, Wanchai, Hong Kong on Monday, 26 May 2003 at 3:05 p.m. (or so soon thereafter as the annual general meeting of the Company convened for the same place and date at 3:00 p.m. shall have been concluded or adjourned) is set out on pages 19 to 22 of this circular. Whether or not you propose to attend the meeting, you are requested to complete the accompanying proxy form in accordance with the instructions printed thereon and return the same to the registered office of the Company at Room 2703, 27th Floor, Far East Finance Centre, 16 Harcourt Road, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for holding of the meeting or any adjournment thereof. Completion and return of the proxy form will not preclude Shareholders from attending and voting in person at the meeting should they so wish.

Hong Kong, 30 April 2003

CONTENTS

		Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1
Letter from the Board
1.	Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
2.	Adoption of the New Share Option Scheme and
	termination of the Existing Share Option Scheme . . . . . . . . . . . . . . . . . . . . . .	4
	(a) Conditions precedent of the New Share Option Scheme . . . . . . . . . . . . . .	5
	(b) Explanation of the terms of the New Share Option Scheme . . . . . . . . . . .	6
	(c) Value of the Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
3.	General mandate to issue Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
4.	General mandate to repurchase Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
	(a) Share capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
	(b) Reasons for repurchase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
	(c) Funding of repurchase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
	(d) Share price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
	(e) Undertaking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
	(f) Takeovers Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
	(g) Share repurchase made by the Company . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
5.	Responsibility statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
6.	Extraordinary general meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
7.	Action to be taken . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
8.	Document available for inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
9.	Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
Appendix	– Summary of the principal terms of the rules of
	the New Share Option Scheme . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12
Notice of	extraordinary general meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	19

DEFINITIONS

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

“AGM”	the annual general meeting of the Company to be held at
	Concord Rooms 2-3, 8th Floor, Renaissance Harbour View
	Hotel, 1 Harbour Road, Wanchai, Hong Kong on Monday,
	26 May 2003 at 3:00 p.m.
“Adoption Date”	the date on which the New Share Option Scheme is
	conditionally adopted by resolution of the Shareholders at
	general meeting
“Board”	the board of directors of the Company or a duly authorised
	committee thereof for the time being
“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 on which the
	Option is accepted or deemed to be accepted by the Grantee
	in accordance with the terms of New Share Option Scheme
“Company”	China Everbright International Limited, a company
	incorporated in Hong Kong with limited liability, the Shares
	of which are listed on the Stock Exchange
“Companies Ordinance”	the Companies Ordinance (Chapter 32 of the Laws of Hong
	Kong)
“Directors”	the directors of the Company for the time being
“EGM”	the extraordinary general meeting of the Company to be
	held at Concord Rooms 2-3, 8th Floor, Renaissance Harbour
	View Hotel, 1 Harbour Road, Wanchai, Hong Kong on
	Monday, 26 May 2003 at 3:05 p.m. (or so soon thereafter
	as the AGM to be convened for the same place and date at
	3:00 p.m. shall have been concluded or adjourned), the
	notice of which is enclosed with this circular
“EGM Notice”	the notice dated 30 April 2003 convening the EGM as set
	out in pages 19 to 22 of this circular
“Existing Share Option Scheme”	the existing share option scheme of the Company for any
	employees (including any directors) of the Company and
	its subsidiaries adopted by the Company at its general
	meeting on 30 September 1993

– 1 –

DEFINITIONS

“Grantee”	any Participant who accepts an offer in accordance with
	the terms of the New Share Option Scheme or (where the
	context so permits) the lawful personal representative(s)
	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
“Issue Mandate”	a general mandate to the Directors to exercise the power of
	the Company to allot, issue and deal with Shares during
	the period as set out in the Ordinary Resolution No. 2 up to
	20% of the issued share capital of the Company as at the
	date of passing the Ordinary Resolution No. 2
“Latest Practicable Date”	24 April 2003, 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 Option Scheme”	the share option scheme in its present or any amended form
	proposed to be adopted by the Company at the EGM, a
	summary of the principal terms of the rules of which is set
	out in the Appendix to this circular
“Option(s)”	a right(s) to subscribe for Shares pursuant to the terms of
	the New Share Option Scheme
“Option Period”	a period to be determined by the Board and notified to each
	Grantee in the relevant offer of grant of an Option during
	which an Option may be exercised and in any event, such
	period of time shall not exceed a period of 91/2years
	commencing on the expiry of six months after the
	Commencement Date and expiring on the last day of such
	period or 10 years after the Adoption Date, whichever is
	earlier
“Ordinary Resolution(s)”	the proposed ordinary resolution(s) as referred to in the
	EGM Notice

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DEFINITIONS

“Participant”	any employees and directors (including non-executive
	directors) of the Company or any of its subsidiaries, as to
	be determined by the Board at its absolute discretion, taking
	into account of the experience of the Participant on the
	Group’s business, the length of service of the Participant
	with the Group and the calibre and qualities of each
	individual Participant
“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 the Ordinary Resolution No. 3 up to 10% of the
	issued share capital of the Company as at the date of passing
	the Ordinary Resolution No. 3
“Share(s)”	share(s) of HK$0.10 each in the capital of the Company (or
	of such other nominal amount as shall result from a sub-
	division, consolidation, reclassification or reconstruction of
	the share capital of the Company from time to time)
“Shareholder(s)”	holder(s) of Share(s)
“Share Repurchase Rules”	the relevant rules set out in the Listing Rules to regulate
	the repurchase by companies with primary listing of their
	own securities on the Stock Exchange
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“subsidiary”	a company which is for the time being and from time to
	time a subsidiary (within the meaning of the Companies
	Ordinance of Hong Kong (Chapter 32 of the Laws of Hong
	Kong))
“Takeovers Code”	the Hong Kong Codes on Takeovers and Mergers
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong
“%”	per cent.

– 3 –

LETTER FROM THE BOARD

CHINA EVERBRIGHT INTERNATIONAL LIMITED 中國光大國際有限公司

(Incorporated in Hong Kong with limited liability)

Directors: WANG Mingquan (Chairman) CHEN Xiaoping (Chief Executive Officer) FAN Yan Hok, Philip (General Manager) HUANG Chaohua WONG Kam Chung, Raymond CHEN Shuang ZHANG Weiyun Sir David AKERS-JONES LEE Ka Sze, Carmelo LI Kwok Sing, Aubrey*

Registered Office: Room 2703, 27th Floor Far East Finance Centre 16 Harcourt Road Hong Kong

• Independent Non-executive Directors

30 April 2003

To the Shareholders

Dear Sir or Madam,

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

1. INTRODUCTION

The purpose of this circular is to provide you with information regarding the proposed adoption of the New Share Option Scheme, the proposed termination of the Existing 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 Ordinary Resolutions relating to these matters at the EGM.

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

The Existing Share Option Scheme was adopted by the Company on 30 September 1993 and will soon expire on 29 September 2003. To be in line with the current Listing Rules in relation to share option schemes and in order for the Company to attract, retain and motivate talented Participants to strive for the future developments and expansion of the Group and to provide the Company with a flexible means of giving incentive to, rewarding, remunerating, compensating

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LETTER FROM THE BOARD

and/or providing benefits to the Participants, the Board proposes that the New Share Option Scheme for the Participants be approved and adopted at the EGM and the Existing Share Option Scheme be terminated.

At the EGM, the Ordinary Resolution No. 1 will be proposed that the New Share Option Scheme be approved and adopted and the Existing Share Option Scheme be terminated. A summary of the principal terms of the rules of the New Share Option Scheme is set out in the Appendix hereto. The New Share Option Scheme will take effect, subject to the fulfillment of all conditions precedent as referred to in sub-paragraph (a) below, on the Adoption Date. The Existing Share Option Scheme will terminate immediately upon all the conditions for the adoption of the New Share Option Scheme having been fully satisfied.

The Board had granted options pursuant to the Existing Share Option Scheme to eligible participants to subscribe for a total of 89,946,200 Shares representing approximately 3.53% of the issued share capital of the Company as at the Latest Practicable Date. As at the Latest Practicable Date, there were 8,500,000 Shares representing options which have been exercised, 2,000,000 Shares representing options which were outstanding, 79,446,200 Shares representing options which have lapsed and no Share had been cancelled under the Existing Share Option Scheme. The 2,000,000 outstanding options are exercisable at any time during the period from 1 May 1998 to 29 September 2003. Save as aforesaid and up to the Latest Practicable Date, no other options have been granted to any eligible participant under the Existing Share Option Scheme. The Board confirms that prior to the EGM, it will not grant any further option under the Existing Share Option Scheme. Besides the Existing Share Option Scheme, there is no other subsisting share option scheme of the Company as at the Latest Practicable Date.

Upon termination of the Existing Share Option Scheme, no further options may be offered but in all other respects the provisions of the Existing Share Option Scheme shall continue to be in full force and effect. The above outstanding options under the Existing Share Option Scheme shall continue to be subject to the provisions of the Existing Share Option Scheme and the adoption of the New Share Option Scheme will not in any event affect the terms of the grant of such outstanding options.

As at the Latest Practicable Date, the issued share capital of the Company comprised of 2,548,311,700 Shares. Assuming that there is no change in the issued share capital between the period from the Latest Practicable Date and the Adoption Date, the number of Shares issuable pursuant to the New Share Option Scheme on the date of its adoption will be 254,831,170 Shares, being 10% of the total issued share capital of the Company as at the date of passing of the Ordinary Resolution No. 1. The above exercised, outstanding and lapsed options under the Existing Share Option Scheme will not be counted when calculating such 10% limit under the New Share Option Scheme.

(a) Conditions precedent of the New Share Option Scheme

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

• (i) passing of the Ordinary Resolution No. 1 to adopt the New Share Option Scheme by the Shareholders in general meeting and to authorise the Directors to grant Options to subscribe for Shares thereunder and to allot, issue and deal with Shares pursuant to the exercise of any Options granted under the New Share Option Scheme and to terminate the Existing Share Option Scheme by the Shareholders in general meeting; and

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LETTER FROM THE BOARD

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

Upon satisfaction of the above conditions, the Board will have the right to grant to the Participants Options to subscribe for Shares, which when aggregated with Shares to be granted under any other share option schemes of the Company, representing up to 10% 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% 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 shall not exceed 30% of the issued share capital of the Company from time to time.

Application will be made to the Stock Exchange for the 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 Adoption Date to be issued 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 or any change to the terms of the Options granted, must be approved by the Shareholders, except where the alterations take effect automatically pursuant to the terms originally provided in the New Share Option Scheme.

(b) Explanation of the terms of the New Share Option Scheme

In the Appendix hereto, you will find a summary of the principal terms of the rules of the New Share Option Scheme. 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 on a fair basis, the Participants may exercise their Options at any time 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.

In particular, under the terms of the New Share Option Scheme, there is a minimum holding period of the Options wherein a Grantee may only exercise his/her Options upon the expiry of six months after the Commencement Date. Further, the terms of the New Share Option Scheme also allow the Board to impose, when granting Options to Participants, such performance target(s) which a Grantee may be required to achieve before he/she may exercise his/her Options. The Board is of the hope that these terms may in turn provide an incentive to retain high calibre employees and directors within the Group and for the Grantees to work towards achieving the goals of the Group.

(c) Value of the Options

The Board considers that it is not appropriate to state in this circular the value of all the Options that can be granted under the New Share Option Scheme as if they had been granted at the Latest Practicable Date prior to the adoption of the New Share Option Scheme given that the variables which are crucial for the calculation of the value of the Options cannot be determined at this juncture. The variables which are critical for the determination of the value of the Options include the subscription price for the Shares upon the exercise of

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LETTER FROM THE BOARD

the subscription rights attaching to the Options, whether or not Options will be granted under the New Share Option Scheme, and the timing of the grant of the Options, the period during which the subscription rights may be exercised, and any other conditions that the Board may impose on the Options and whether or not such Options, if granted, will be exercised by the Grantees. The subscription price payable for the Shares depends on the price of the Shares as quoted on the Stock Exchange, which in turn depends on when the Board are to grant Options under the New Share Option Scheme. With a scheme life of ten years, the Board is of the view that it is premature to state whether or not Options will be granted under the New Share Option Scheme, and if so, the number of Options that may be granted. It is also difficult to ascertain with accuracy the subscription price of the Shares given that the share price may fluctuate during the 10-year life span of the New Share Option Scheme. In the premises, the Board is of the view that the value of the Options depends on a number of variables which are difficult to be ascertained as at the date of this circular. Accordingly, the Board considers that it is premature and inappropriate to state the value of the Options for the time being in this circular.

3. GENERAL MANDATE TO ISSUE SHARES

At the extraordinary general meeting of the Company held on 30 May 2002, general mandates were given to the Directors to allot, issue and deal with Shares and to exercise the powers of the Company to repurchase its own Shares in accordance with the Share Repurchase Rules. Such general mandates will lapse at the conclusion of the AGM. It is therefore proposed to seek your approval to renew these general mandates to allot, issue and deal with Shares and to repurchase Shares at the EGM.

Therefore, it will be proposed at the EGM the Ordinary Resolutions Nos. 2 and 4 for granting to the Directors general mandates to allot, issue and deal with new Shares not exceeding 20% of the issued share capital of the Company as at the date of passing the Ordinary Resolution No. 2 and adding to such general mandate so granted to the Directors any Shares representing the aggregate nominal amount of the Shares repurchased by the Company after the granting of the general mandate to repurchases Shares up to 10% of the issued share capital of the Company as at the date of passing the Ordinary Resolution No. 3. The Issue Mandate shall be exercisable during the period from the passing of the Ordinary Resolution No. 2 until whichever is the earliest of:

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

• (ii) the expiration of the period within which the next annual general meeting of the Company is required by the articles of association of the Company or any applicable law to be held; or

• (iii) the date on which the authority set out in such Ordinary Resolution is revoked or varied by an ordinary resolution of the Shareholders in general meeting.

4. GENERAL MANDATE TO REPURCHASE SHARES

It will also be proposed at the EGM the Ordinary Resolution No. 3 for granting to the Directors to exercise the powers of the Company to repurchase Shares up to 10% of the issued share capital of the Company as at the date of passing the Ordinary Resolution No. 3.

The following is an explanatory statement as required to be sent to the Shareholders under the Share Repurchase Rules to provide requisite information to you for your consideration of the Ordinary Resolution No. 3 in respect of the Repurchase Mandate.

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LETTER FROM THE BOARD

(a) Share capital

As at the Latest Practicable Date, the issued share capital of the Company comprised of 2,548,311,700 Shares.

Subject to the passing of the Ordinary Resolution No. 3 and on the basis that no further Shares are issued or repurchased prior to the EGM, the Company would be allowed under the Repurchase Mandate to repurchase a maximum of 254,831,170 Shares during the period from the passing of the Ordinary Resolution No. 3 until whichever is the earliest of:

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

• (ii) the expiration of the period within which the next annual general meeting of the Company is required by the articles of association of the Company or any applicable law to be held; or

• (iii) the date on which the authority set out in such Ordinary Resolution is revoked or varied by an ordinary resolution of the Shareholders in general meeting.

(b) Reasons for the repurchase

The Directors believe that the Repurchase Mandate is in the best interests of the Company and its Shareholders. Such repurchases may, depending on the market conditions and funding arrangements at the time, lead to an enhancement of the net assets of the Company and/or its earnings per Share and will only be made when the Directors believe that a repurchase will benefit the Company and its Shareholders.

(c) Funding of repurchase

In repurchasing Shares, the Company may only apply funds legally available for such purpose in accordance with its memorandum and articles of association and the applicable laws and regulations of Hong Kong. Hong Kong law provides that the amount of capital repaid in connection with a share repurchase may only be paid out of either the capital paid up on the relevant shares, or out of the funds of the Company otherwise available for dividend or distribution or the proceeds of a fresh issue of shares made for the purpose. The amount of premium payable on repurchase may only be paid out of either the funds of the Company that would otherwise be available for dividend or distribution or out of the share premium of the Company.

There might be a 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 31 December 2002 in the event that the power to repurchase Shares pursuant to the Repurchase Mandate were to be carried out in full at any time during the proposed repurchase period. However, the Directors do not propose to exercise the power to repurchase Shares pursuant to 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.

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LETTER FROM THE BOARD

(d) Share price

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:

	Highest	Lowest
	HK$	HK$
2002
April	0.315	0.290
May	0.405	0.295
June	0.375	0.290
July	0.315	0.230
August	0.265	0.182
September	0.226	0.182
October	0.200	0.150
November	0.204	0.170
December	0.215	0.175
2003
January	0.212	0.175
February	0.232	0.191
March	0.218	0.185

(e) Undertaking

The Directors have undertaken to the Stock Exchange that, so far as the same may be applicable, they will exercise the Repurchase Mandate in accordance with the Listing Rules, the applicable laws and regulations of Hong Kong and the memorandum and articles of association of the Company.

None of the Directors nor, to the best of their knowledge having made all reasonable enquiries, any of their associates (as defined in the Listing Rules) have any present intention to sell any Shares to the Company or its subsidiaries under the Repurchase Mandate if such is approved by the Shareholders.

No connected person (as defined in the Listing Rules) of the Company has notified the Company that he/she has a present intention to sell Shares to the Company or its subsidiaries, or has undertaken not to do so, in the event that the Repurchase Mandate is approved by the Shareholders.

(f) Takeovers Code

If on the exercise of the power to repurchase Shares pursuant to the Repurchase Mandate, a shareholder’s proportionate interest in the voting rights of the Company increases, such increase will be treated as an acquisition for the purposes of Rule 32 of the Takeovers Code. As a result, a Shareholder or group of Shareholders acting in concert could obtain or consolidate control of the Company or become obliged to make a mandatory offer in accordance with Rules 26 and 32 of the Takeovers Code.

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LETTER FROM THE BOARD

As at the Latest Practicable Date, China Everbright Holdings Company Limited together with its associates are beneficially interested in 1,758,595,910 Shares representing approximately 69.01% of the issued share capital of the Company. In the event that the Directors exercise in full the power to repurchase Shares pursuant to the Repurchase Mandate, then (if the present shareholdings remain the same), the shareholdings of China Everbright Holdings Company Limited together with its associates will be increased to approximately 76.68% of the issued share capital of the Company.

The Directors are not aware of any consequences which may arise under the Takeovers Code as a result of any repurchases made under the Repurchase Mandate. In the event that the Repurchase Mandate is exercised in full, the number of Shares held by the public will fall below 25%. The Directors have no present intention to repurchase Shares to such extent as to result in the number of Shares held by public being reduced to less than 25%.

(g) Shares repurchase made by the Company

The Company and its subsidiaries had not repurchased any Shares (whether on the Stock Exchange or otherwise) in the six months preceding the date of this circular.

5. RESPONSIBILITY STATEMENT

This circular includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Group. The Directors collectively and individually accept full responsibility for the accuracy of the information contained in this circular and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts the omission of which would make any statement herein misleading.

6. EXTRAORDINARY GENERAL MEETING

Set out on pages 19 to 22 of this circular is the EGM Notice at which the Ordinary Resolutions will be proposed to approve the adoption of the New Share Option Scheme, the termination of the Existing Share Option Scheme, the Issue Mandate, the Repurchase Mandate and the extension of the Issue Mandate.

7. ACTION TO BE TAKEN

A proxy form for use at the EGM is enclosed with this circular. Whether or not you intend to attend the EGM, you are requested to complete the proxy form and return it to the registered office of the Company in Hong Kong at Room 2703, 27th Floor, Far East Finance Centre, 16 Harcourt Road, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for holding of the EGM or any adjournment thereof. Completion and return of the proxy form will not preclude Shareholders from attending and voting in person at the EGM if they so wish.

8. DOCUMENT AVAILABLE FOR INSPECTION

Copy of the New Share Option Scheme will be available for inspection at the registered office of the Company during normal business hours for a period of 14 days before and at the EGM.

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LETTER FROM THE BOARD

9. RECOMMENDATION

The Board believes that the adoption of the New Share Option Scheme in replacement of the Existing Share Option Scheme, the Issue Mandate, the Repurchase Mandate and the extension of the Issue Mandate as set out in the EGM Notice are all in the best interests of the Company and its Shareholders. Accordingly, the Directors recommend that all Shareholders should vote in favour of all the Ordinary Resolutions as set out in the EGM Notice.

Yours faithfully, WANG Mingquan Chairman

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SUMMARY OF THE PRINCIPAL TERMS OF THE RULES OF THE NEW SHARE OPTION SCHEME

APPENDIX

The following is a summary of the principal terms of the rules of the New Share Option Scheme. It does not form part of, nor is it intended to be part of the rules of the New Share Option Scheme and it should not be taken as affecting the interpretation of the rules of the New Share Option Scheme. The Directors reserve the right at any time prior to the EGM to make such amendments to the New Share Option Scheme as they may consider necessary or appropriate provided that such amendments do not conflict with any material aspects with the summary in this Appendix:

(A) Purpose

The purpose of the New Share Option Scheme is for the Company to attract, retain and motivate talented Participants to strive for the future developments and expansion of the Group and to provide the Company with a flexible means of giving incentive to, rewarding, remunerating, compensating and/or providing benefits to the Participants.

(B) Conditions

The New Share Option Scheme is conditional upon (i) the passing of the Ordinary Resolution No. 1 to adopt the New Share Option Scheme by the Shareholders in general meeting and to authorise the Directors to grant Options to subscribe for Shares thereunder and to allot, issue and deal with Shares pursuant to the exercise of any Options granted under the New Share Option Scheme and to terminate the Existing Share Option Scheme by the Shareholders in general meeting; and (ii) the Listing Committee of the Stock Exchange granting approval of the listing of, and permission to deal in, any Shares (not exceeding 10% of the issued share capital of the Company as at the Adoption Date) to be issued pursuant to the exercise of Options under the New Share Option Scheme.

(C) Eligibility of Participants

The Board may, at its absolute discretion, invite any Participant to take up Options. In determining the basis of eligibility of each Participant, the Board would mainly take into account of the experience of the Participant on the Group’s business, the length of service of the Participant with the Group and the calibre and qualities of each individual Participant.

(D) Acceptance of Offer

Offer of an Option shall be deemed to have been accepted by the Grantee and the Option to which the offer relates shall be deemed to have been granted when the letter comprising acceptance of the Option duly signed by the Grantee together with a remittance in favour of the Company of HK$1.00 by way of consideration for the granting thereof is received by the Company within 28 days from the date of the offer. The subscription price for Shares is calculated in accordance with paragraph (E) below.

(E) Subscription price

The subscription price for Shares under the New Share Option Scheme will be at least the highest of (i) the closing price of the Shares as stated in the Stock Exchange’s daily quotations sheet on the date on which an Option is granted, which date must be a

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SUMMARY OF THE PRINCIPAL TERMS OF THE RULES OF THE NEW SHARE OPTION SCHEME

APPENDIX

Business Day; (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 date on which an Option is granted; and (iii) the nominal value of a Share.

(F) Maximum number of Shares available for subscription

• (i) Subject to sub-paragraph (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 scheme of the Company shall not in aggregate exceed 10% of the total number of Shares in issue as at the date of approval of the New Share Option Scheme, unless the Company obtains an approval from the Shareholders pursuant to (ii) below.

• (ii) Subject to sub-paragraph (iv) below, the Company may seek approval of its Shareholders in general meeting for refreshing the 10% limit set out in subparagraph (i) above such that the total number of Shares which may be issued upon exercise of all Options to be granted under the New Share Option Scheme or any other share option schemes of the Company under the limit as refreshed shall not exceed 10% of the total number of Shares in issue as at the date of approval to refresh such limit.

• (iii) Subject to sub-paragraph (iv) below, the Company may seek separate approval by its Shareholders in general meeting for granting Options beyond the 10% 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 such information as may be required under the Listing Rules.

• (iv) Notwithstanding any other provisions of the New Share Option Scheme, the limit on the 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 (including the Existing Share Option Scheme) shall not exceed 30% of the total number of Shares in issue from time to time.

(G) Conditions, restrictions or limitations on Offer

Grantees may only exercise their Options in accordance with the terms of the New Share Option Scheme during the Option Period which is a period to be determined by the Board and such period of time shall not exceed a period of 9[1] /2 years commencing on the expiry of six months after the Commencement Date and expiring on the last day of such period or 10 years after the Adoption Date, whichever is earlier. In other words, under the New Share Option Scheme, there is a minimum holding period of six months for the Options before the Options can be exercised. The terms of the New Share Option Scheme also allow the Board to impose, when granting Options to Participants, such performance target(s) which a Grantee may be required to achieve before he/she may exercise his/her Options.

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SUMMARY OF THE PRINCIPAL TERMS OF THE RULES OF THE NEW SHARE OPTION SCHEME

APPENDIX

Subject to the provisions of the New Share Option Scheme and the Listing Rules, the Board may when making an offer of grant of an Option impose any conditions, restrictions or limitations in relation thereto as it may at its absolute discretion think fit, which may include, without limitation, any such additional minimum period for which an Option must be held by a Grantee before the Option can be exercised (on top of the six-month minimum period described aforesaid) and/or any such performance targets that need to be achieved by a Grantee before an Option can be exercised.

(H) Maximum entitlement of Shares of each Participant

• (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 each Participant (including both exercised, cancelled and outstanding Options) in any 12-month period shall not exceed 1% of the total number of Shares in issue.

• (ii) Any further grant of Options to a Participant in excess of the 1% limit must be separately approved by Shareholders in general meeting with such Participant and his/her associates (as defined in the Listing Rules) abstaining from voting. The Company shall send a circular to its Shareholders containing such information as may be required under the Listing Rules. The number of Shares subject to the Options to be granted and the terms of the Options to be granted to such Participant 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.

(I) Grant of Options to a Director, chief executive or substantial Shareholder

• (i) Any grant of Options to a Participant who is a Director, chief executive or substantial Shareholder (all as defined in the Listing Rules) of the Company or their respective associates (as defined in the Listing Rules) must be approved by the independent non-executive Directors (excluding independent nonexecutive Director who is the Grantee).

• (ii) Where the Board proposes to grant any Option to a Participant who is a substantial Shareholder (as defined in the Listing Rules) or an independent non-executive Director, or any of their respective associates (as defined in the Listing Rules), 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 in the 12-month period up to and including the date of such grant:

• (1) representing in aggregate more than 0.1% 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 in general meeting with all other connected persons (as defined in the Listing Rules) of the Company abstaining from voting (except where any connected person may vote against the relevant resolution). The Company shall send a circular to its Shareholders containing such information as may be 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 RULES OF THE NEW SHARE OPTION SCHEME

APPENDIX

(J) Exercise of Options

An Option may be exercised in accordance with the terms of the New Share Option Scheme and subject to any conditions, restrictions and limitations imposed by the Board when making an offer of grant of an Option at any time during the Option Period after the Option has been granted by the Board. An Option shall lapse automatically and not be exercisable (to the extent not already exercised) on the expiry of the Option Period.

(K) Transferability of Options

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. Any breach of the foregoing by a grantee shall entitle the Company to cancel any outstanding Options or any part thereof.

(L) Termination of employee by a Grantee

If the Grantee ceases to be a Participant for any reason other than on his/her death or the termination of his/her employment or directorship on one or more of the grounds specified in paragraph (N) below, the Grantee may exercise the Option up to his/her entitlement at the date of cessation (to the extent he/she is entitled to exercise at the date of cessation but not already exercised) within the period of six months (or such longer period as the Board may at it absolute discretion determine) following the date of such cessation, which date shall be the last actual working day with the relevant company whether salary is paid in lieu of notice or not, or the last date of employment or directorship in the relevant company, as the case may be. Subject to the above, an Option shall lapse automatically and not be exercisable (to the extent not already exercised) on the expiry of the period referred to above.

(M) On the death of a Grantee

If the Grantee dies before exercising the Option in full and none of the events which would be a ground for termination of his/her employment or directorship under paragraph (N) below arises, the lawful personal representative(s) of the Grantee shall be entitled to exercise the Option up to the entitlement of such Grantee at the date of death (to the extent not already exercised) within a period of twelve months (or such longer period as the Board may at its absolute discretion determine from the date of death). Subject to the above, an Option shall lapse automatically and not be exercisable (to the extent not already exercised) on the expiry of the period referred to above.

(N) Termination of employment or directorship of a Grantee by reason of misconduct etc.

An Option shall lapse automatically (to the extent not already exercised) on the date on which the Grantee ceases to be an employee or director of the Group by reason of the termination of his/her employment or directorship on the grounds that he/she has been guilty of misconduct, or appears either to be unable to pay or have no reasonable prospect to pay debts, or has become insolvent, or has made any arrangements or composition with his/ her creditors generally, or has been convicted of any criminal offence involving his/her integrity or honesty.

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SUMMARY OF THE PRINCIPAL TERMS OF THE RULES OF THE NEW SHARE OPTION SCHEME

APPENDIX

(O) Voluntary winding-up of the Company

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, other than for the purposes of a reconstruction, amalgamation or scheme of arrangement, the Company shall on the same date as or soon after it despatches such notice to convene the Shareholders’ meeting, give notice thereof to all Grantees and thereupon, each Grantee (or his/her lawful personal representatives(s)) shall be entitled to exercise all or any of his/her Option at any time not later than seven Business Days prior to the proposed general meeting of the Company by giving notice in writing to the Company, accompanied by a payment 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 general meeting referred to above, allot the relevant Shares to the Grantee credited as fully paid. Subject to the above, an Option shall lapse automatically and not be exercisable (to the extent not already exercised) on the expiry of the period referred to above.

(P) General offer by way of take-over

In the event a general offer by way of take-over is made to all the holders of Shares and the terms and conditions of such offer have, within four months after the making of the offer on that behalf by the offeror, been approved by the holders of not less than nine-tenths in value of the Shares whose transfer is involved (other than Shares already held at the date of the offer by, or by a nominee for, the offeror or its subsidiary), and the offeror has, pursuant to the Companies Ordinance, at any time within two months beginning with the date on which such approval is obtained, given notice to any dissenting Shareholder that it desires to acquire the Shares, the Grantee (or his/her lawful personal representative(s)) may by notice in writing to the Company within 21 days of such notice exercise the Option to its full extent or to the extent specified in such notice. Subject to the above, an Option shall lapse automatically and not be exercisable (to the extent not already exercised) on the expiry of the period referred to above.

(Q) Rank pari passu

The Shares to be allotted upon the exercise of an Option will be subject to all the provisions of the memorandum and articles of association of the Company for the time being in force and will rank pari passu in all respects with the fully paid Shares in issue on the date of allotment and issue, and accordingly will entitle the holders to participate in all dividends or other distributions paid or made on or after the date of allotment and issue other than any dividend or other distribution previously declared or recommended or resolved to be paid or made if the record date therefor shall be before the date of allotment and issue.

(R) Alteration in capital structure

In the event of a capitalisation issue, rights issue, sub-division or consolidation of Shares or reduction of capital, an independent financial adviser of the Company or the Company’s auditors for the time being must confirm to the Directors in writing that any corresponding adjustments (if any) made in respect of the aggregate number of Shares in respect of which outstanding Options may be granted and/or the subscription price for the

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SUMMARY OF THE PRINCIPAL TERMS OF THE RULES OF THE NEW SHARE OPTION SCHEME

APPENDIX

Shares in respect of each outstanding Option (other than any made on a capitalisation issue) are in their opinion fair and reasonable and that such adjustments are in compliance with Rule 17.03(13) of the Listing Rules and shall give a Grantee the same proportion of the equity capital as that to which that Grantee was previously entitled and no such adjustments may be made to the extent that a Share would be issued at less than its nominal value. The issue of securities as consideration in a transaction may not be regarded as a circumstance requiring adjustments.

(S) Duration of the New Share Option Scheme

Subject to paragraphs (B) and (U), the New Share Option Scheme shall be valid and effective for a period of 10 years commencing on the Adoption Date (i.e. within 10 years from 26 May 2003 to 25 May 2013), 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 to the extent necessary to give effect to the exercise of any Options granted prior thereto or otherwise as may be required in accordance with the provisions of the New Share Option Scheme, and Options which are granted during the life of the New Share Option Scheme may continue to be exercisable in accordance with their terms of issue.

(T) Cancellation of Options granted

The Board may, with the consent of the relevant Grantee, at any time at its absolute discretion cancel any Option granted but not exercised. Where the Company cancels Options and makes an offer of the grant of new Options to the same Option holder, the offer of the grant of such new Options may only be made, under the New Share Option Scheme with available Options (to the extent not yet granted and excluding the cancelled Options) within the limit approved by the Shareholders as mentioned in paragraph (F) above. An Option shall lapse automatically and not be exercisable (to the extent not already exercised) on the date on which the Option is cancelled by the Board as provided above.

(U) Termination of the New Share Option Scheme

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 granted but in all other respects the provisions of the New Share Option Scheme shall remain in full force and effect.

(V) Alteration of provisions of the New Share Option Scheme

The provisions of the New Share Option Scheme may be altered in any respect by resolution of the Board except that the definitions of “Grantee”, “Option Period” and “Participant” of the New Share Option Scheme and any other provisions of the New Share Option Scheme in relation to the matters set out in Rule 17.03 of the Listing Rules cannot be altered to the advantage of the Participants without the prior approval of the Shareholders in general meeting.

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SUMMARY OF THE PRINCIPAL TERMS OF THE RULES OF THE NEW SHARE OPTION SCHEME

APPENDIX

Any alterations to the terms and conditions of the New Share Option Scheme which are of a material nature or any change to the terms of the Options granted must be approved by the Shareholders in general meeting, except where the alterations take effect automatically under the existing terms of the New Share Option Scheme. 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. 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 in general meeting.

(W) Trustees

The Company confirms that none of the Directors will be trustees of the New Share Option Scheme and accordingly, none of the Directors will have any direct or indirect interest in such trustees.

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NOTICE OF EXTRAORDINARY GENERAL MEETING

CHINA EVERBRIGHT INTERNATIONAL LIMITED 中國光大國際有限公司

(Incorporated in Hong Kong with limited liability)

NOTICE IS HEREBY GIVEN that an Extraordinary General Meeting of China Everbright International Limited (the “Company”) will be held at Concord Rooms 2-3, 8th Floor, Renaissance Harbour View Hotel, 1 Harbour Road, Wanchai, Hong Kong on Monday, 26 May 2003 at 3:05 p.m. (or so soon thereafter as the Annual General Meeting of the Company to be convened for the same day and place shall have been concluded or adjourned) for the purpose of considering and, if thought fit, passing the following ordinary resolutions, with or without modifications:

ORDINARY RESOLUTIONS

1. “ THAT :

2. (A) subject to and conditional upon the Listing Committee of The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) granting approval of the listing of, and permission to deal in, the shares of HK$0.10 each in the share capital of the Company (“Shares”) to be issued pursuant to the exercise of any options to be granted under the share option scheme of the Company (the “New Share Option Scheme”) (the rules of the New Share Option Scheme 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 of the Company be and is hereby authorised to do all 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;

   • (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 allot, issue and deal with from time to time such number of Shares as may be required to be issued 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;

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NOTICE OF EXTRAORDINARY GENERAL MEETING

  - (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 which may hereafter from time to time be allotted and issued 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.; and

• (B) the Existing Share Option Scheme (as defined in the Company’s circular to its shareholders dated 30 April 2003 of which this notice forms part) be and is hereby terminated upon the New Share Option Scheme becoming effective.”

• “ THAT :

• (A) subject to paragraph (C) of this Resolution, the exercise by the directors of the Company (“Directors”) during the Relevant Period (as hereinafter defined) of all the powers of the Company to allot, issue and deal with additional shares of HK$0.10 each in the capital of the Company (“Shares”) and to make or grant offers, agreements and options (including warrants, bonds, notes and other securities which carry rights to subscribe for or are convertible into shares of the Company) which would or might require shares to be allotted be and hereby generally and unconditionally approved;

• (B) the approval in paragraph (A) above shall authorize the Directors during the Relevant Period (as hereinafter defined) to make and grant offers, agreements and options (including warrants, bonds, debentures, notes and other securities which carry rights to subscribe for or are convertible into shares of the Company) which would or might require shares to be allotted after the end of the Relevant Period;

• (C) the aggregate nominal amount of share capital allotted or agreed conditionally or unconditionally to be allotted (whether pursuant to an option or otherwise) by the Directors pursuant to the approval in paragraph (A) above, otherwise than pursuant to (i) a Rights Issue (as hereinafter defined); or (ii) an issue of Shares upon the exercise of subscription rights under any option scheme or similar arrangement for the time being adopted for the grant or issue to the grantee as specified in such scheme or similar arrangement of Shares or rights to acquire the Shares; or (iii) an issue of Shares pursuant to any scrip dividends or similar arrangement providing for allotment of Shares in lieu of the whole or part of the dividend on Shares in accordance with the articles of association of the Company, shall not exceed 20 per cent. of the aggregate nominal amount of the issued share capital of the Company as at the date of passing this Resolution, and the said approval shall be limited accordingly; and

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NOTICE OF EXTRAORDINARY GENERAL MEETING

• (D) for the purpose 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; or

• (ii) the expiration of the period within which the next annual general meeting of the Company is required by the articles of association of the Company and the applicable laws of Hong Kong to be held; or

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

“Rights Issue” means an offer of Shares or issue of option, warrants or other securities giving the right to subscribe for Shares, open for a period fixed by the Directors the holders of Shares, or any class of Shares, whose name 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 holdings of such Shares (or, where appropriate, such other securities) as at that date (subject to such exclusions or other arrangements as the Directors 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 recognized regulatory body or any stock exchange in, any territory outside Hong Kong applicable to the Company).”

1. “ THAT :

2. (A) subject to paragraph (B) of this Resolution, the exercise by the directors of the Company during the Relevant Period (as hereinafter defined) of all the powers of the Company to repurchase shares of HK$0.10 each in the capital of the Company (“Shares”) on the Stock Exchange or on any other stock exchange on which the shares of the Company may be listed and recognised by the Securities and Futures Commission and the Stock Exchange for this purpose, subject to and in accordance with all applicable laws and the requirements of the Rules Governing the Listing of Securities on the Stock Exchange or of any other stock exchange as amended from time to time, be and is hereby generally and unconditionally approved;

3. (B) the aggregate nominal amount of the Shares to be repurchased by the Company pursuant to the approval in paragraph (A) of this Resolution shall not exceed 10 per cent. of the aggregate nominal amount of the issued share capital of the Company as at the date of passing this Resolution and the said approval shall be limited accordingly; and

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NOTICE OF EXTRAORDINARY GENERAL MEETING

• (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; or

• (ii) the expiration of the period within which the next annual general meeting of the Company is required by the articles of association of the Company and the applicable laws of Hong Kong to be held; or

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

• “ THAT the general mandate granted to the directors of the Company to exercise the powers of the Company to allot, issue and deal with additional shares of HK$0.10 each in the Company (“Shares”) pursuant to the Ordinary Resolution No. 2 set out in the notice convening this meeting be and is hereby extended by the addition thereto of an amount representing the aggregate nominal amount of Shares in the capital of the Company repurchased by the Company under the authority granted pursuant to the Ordinary Resolution No. 3 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 issued share capital of the Company as at the date of passing the Ordinary Resolution No. 3.”

By Order of the Board POON Yuen Ling Company Secretary

Hong Kong, 30 April 2003

Registered office:

Room 2703, 27th Floor Far East Finance Centre 16 Harcourt Road Hong Kong

Notes:

1. Any member of the Company entitled to attend and vote at the meeting is entitled to appoint one or more proxies to attend and vote instead of him. A proxy need not be a member of the Company but must be present in person to represent the member.

1. To be valid, a proxy form together with any power of attorney or other authority (if any) under which it is signed or a notarially certified copy of such power or authority must be deposited at the registered office of the Company at Room 2703, 27th Floor, Far East Finance Centre, Hong Kong not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof.

2. Where there are joint holders of any share in the Company, any one of such joint holders may vote at the meeting, either in person or by proxy, in respect of such share as if he were solely entitled thereto, but if more than one of such joint holders be present at the meeting, the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders and, for this purpose, seniority shall be determined by the order in which the names stand in the register of members of the Company in respect of the joint holding.

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