Paradise Entertainment Limited — Proxy Solicitation & Information Statement 2004

May 3, 2004

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 licensed securities dealer, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in or warrants of LifeTec Group Limited (the “Company”), you should at once hand this circular and, if applicable, the accompanying form of proxy to the purchaser or to the bank, licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

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

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(Incorporated in Bermuda with limited liability) (Stock Code: 1180)

GENERAL MANDATES TO REPURCHASE AND ISSUE SECURITIES

RE-ELECTION OF DIRECTORS

AMENDMENTS TO THE BYE-LAWS

AND

NOTICE OF THE ANNUAL GENERAL MEETING

A notice convening the annual general meeting of the Company to be held at 26th Floor, Central Tower, 28 Queen’s Road Central, Hong Kong on Monday, 24th May 2004 at 11:00 a.m. (the “Annual General Meeting”) is set out on pages 11 to 19 of this circular. Whether or not you are able to attend the Annual General Meeting, please complete and return the enclosed form of proxy in accordance with the instructions printed thereon and return it to the branch share registrars of the Company in Hong Kong, Secretaries Limited at Ground Floor, Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong as soon as possible and in any event, not less than 48 hours before the time appointed for holding the Annual General Meeting or any adjourned meeting. Completion and return of the form of proxy will not preclude you from attending and voting in person at the Annual General Meeting or any adjourned meeting should you so wish.

29th April 2004

* For identification purposes only

CONTENTS

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
General mandates to repurchase and issue Securities . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Re-election of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Amendments to the Bye-Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
Procedure for demanding a poll . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Appendix. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
Notice of the Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11

– i –

DEFINITIONS

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

• “Annual General Meeting”

the annual general meeting of the Company to be held at 26th Floor, Central Tower, 28 Queen’s Road Central, Hong Kong on Monday, 24th May 2004 at 11:00 a.m., notice of which is set out on pages 11 to 19 of this circular

• “Board”

the board of Directors

• “Bye-laws” the bye-laws of the Company

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

• “Company”

• LifeTec Group Limited, an exempt company incorporated in Bermuda with limited liability, the securities of which are listed on the Stock Exchange

• “Directors” the directors of the Company

• “Group”

• the Company and its subsidiaries

• “Hong Kong”

• the Hong Kong Special Administrative Region of the People’s Republic of China

• “Issue Mandate”

• a general and unconditional mandate proposed to be granted to the Directors to exercise all powers of the Company to allot and issue Securities as set out in resolution no.6 in the notice convening the Annual General Meeting

• “Latest Practicable Date”

• 26th April 2004, being the latest practicable date prior to the printing of this circular for the purpose of ascertaining certain information contained herein

• “Listing Rules”

• The Rules Governing the Listing of Securities on the Stock Exchange

• “Repurchase Mandate”

• a general and unconditional mandate proposed to be granted to the Directors to exercise all powers of the Company to repurchase Securities as set out in resolution no.5 in the notice convening the Annual General Meeting

• “Securities”

any securities of the Company, including Shares, securities convertible into share capital, Warrants to subscribe for Shares and options to subscribe for Shares

– 1 –

DEFINITIONS

“SFO”	the Securities and Futures Ordinance (Cap. 571 of the
	Laws of Hong Kong)
“Shares”	ordinary shares of HK$0.01 each in the capital of the
	Company
“Shareholders”	holders of the Shares
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Takeovers Code”	The Hong Kong Code on Takeovers and Mergers
“Warrantholders”	holders of the Warrants
“Warrants”	warrants issued by the Company entitling the holders
	thereof to subscribe for Shares at an initial subscription
	price of HK$0.102 per Share, subject to adjustment,
	exercisable from 23rd February 2004 to 26th February
	2005, both days inclusive
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong
“%”	per cent

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LETTER FROM THE BOARD

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(Incorporated in Bermuda with limited liability)

Executive Directors: Mr. Jay Chun (Chairman and Managing Director) (alternate director to Mr. Shan Shiyong) Mr. Shan Shiyong, alias, Sin Sai Yung Dr. Ma Xianming, alias, Ma Yin Ming

Head Office and Principal Place of Business: 26th Floor Central Tower 28 Queen’s Road Central Hong Kong

Independent Non-executive Directors: Mr. Frank Hu Mr. Wang Faqi

Registered Office: Clarendon House 2 Church Street Hamilton HM 11 Bermuda 29th April 2004

To the Shareholders, and for information only, the Warrantholders

Dear Sir or Madam,

GENERAL MANDATES TO REPURCHASE AND ISSUE SECURITIES

RE-ELECTION OF DIRECTORS

AMENDMENTS TO THE BYE-LAWS

AND

NOTICE OF THE ANNUAL GENERAL MEETING

INTRODUCTION

The Directors wish to seek the approval of the Shareholders at the Annual General Meeting for (i) the grant of the Repurchase Mandate and the Issue Mandate and (ii) the amendments to the Bye-laws.

The purpose of this circular is to (i) provide you with details of the Repurchase Mandate and the Issue Mandate, (ii) set out an explanatory statement regarding the Repurchase Mandate as required under the Listing Rules and (iii) provide you with details of amendments to the Bye-laws.

* For identification purposes only

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LETTER FROM THE BOARD

GENERAL MANDATES TO REPURCHASE AND ISSUE SECURITIES

The Directors wish to propose ordinary resolutions at the Annual General Meeting to give to the Directors new general mandates:

• (i) to repurchase Securities with an aggregate nominal amount not exceeding (a) 10% of the aggregate nominal amount of the issued share capital of the Company as at the date of passing the proposed resolution at the Annual General Meeting and (b) 10% of the Warrants to subscribe for Shares as at the date of passing the proposed resolution at the Annual General Meeting; and

• (ii) to allot, issue and otherwise deal with new Securities with an aggregate nominal amount not exceeding 20% of the aggregate nominal amount of the issued share capital of the Company as at the date of passing the proposed resolution at the Annual General Meeting.

In addition, a separate ordinary resolution will also be proposed at the Annual General Meeting to add to the mandate to issue those Securities purchased by the Company pursuant to the Repurchase Mandate granted to the Directors at the Annual General Meeting.

An explanatory statement containing information regarding the Repurchase Mandate is set out in the appendix to this circular.

RE-ELECTION OF DIRECTORS

In relation to resolution no.2 in the notice convening the Annual General Meeting regarding re-election of Directors, Mr. Shan Shiyong, alias, Sin Sai Yung and Mr. Wang Faqi will retire at the Annual General Meeting pursuant to the Bye-laws, and, being eligible, will offer themselves for re-election. Biographical details of the retiring Directors are set out below:

• (i) Mr. Shan Shiyong, alias, Sin Sai Yung, aged 40, executive Director and former Chairman of the Company, is an entrepreneur with strong business vision. After completing his studies in economics at the University of Agriculture, Shandong, he started his own business in manufacturing and export and subsequently diversified to trading, property development and venture capital investment in China. He has over 17 years of dedicated business, investment and management experience at the owner level. He was appointed as an executive Director in October 1998 and became Chairman of the Company in May 1999. He resigned from Chairmanship in July 2002. Mr. Shan also holds directorships in other members of the Group. Except for being an executive Director, Mr. Shan does not hold any directorships in other listed public companies in the last three years.

Mr. Shan is the sole beneficial owner of Best Top Offshore Limited which held 353,190,000 Shares (representing approximately 13.60% of the existing issued share capital of the Company). Save as aforesaid, he does not have any relationship with any other directors, senior management, substantial shareholders or controlling shareholders of the Company. He has an existing service contract with the Company for an indeterminate term, which is terminable upon 3 months’ written notice given

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LETTER FROM THE BOARD

by either himself or the Company. Under his service contract, he is entitled to a monthly salary of HK$200,000, a double pay of HK$200,000 for every completed year of service, accommodation, entertainment and medical allowances and discretionary share options and bonuses determined by the Board. No share option had been granted and no discretionary bonus had been paid to Mr. Shan in the financial year ended 31st December 2003. The amount of his emoluments, including discretionary bonus, is determined by the Company with reference to the level and/or range of remuneration package normally granted by employers in Hong Kong to a senior executive of comparable calibre and job responsibilities and the Company’s performance and profitability.

• (ii) Mr. Wang Faqi, aged 47, has over 25 years of extensive experience in the banking and finance sector. Since 1975, he has been holding various positions in the China Construction Bank (the “Bank”). He had been the General Manager of the International Business Department and Head of Investment Banking of the Bank’s Yantai Branch, as well as the Head of the Bank’s Yantai Mitsubishi Cement Specific Branch. He was awarded the Bachelor Degree in Economics from the Xiamen University. He also holds the professional qualification of Senior Economist accredited by the Bank’s Senior Professional and Technical Positions Supervisory Committee. He was appointed as an independent non-executive Director in August 2003. In addition, he does not hold any directorships in any member of the Group nor does he have any relationships with any other directors, senior management or substantial shareholders or controlling shareholders of the Company. Mr. Wang does not have any interests in the securities of the Company or any of its associated corporation within the meaning of Part XV of the SFO. Prior to his appointment as an independent non-executive Director, Mr. Wang has no experience as a director of listed public companies. He has no service contract with the Company and he is entitled to a director’s fee of HK$120,000 per annum. Other than the director’s fee, Mr. Wang is not entitled to any other payment or discretionary bonus. There is no fixed term for his appointment and he is subject to retirement by rotation in accordance with the Bye-laws. The amount of his emoluments is determined by the Company with reference to prevailing market conditions.

AMENDMENTS TO THE BYE-LAWS

In light of the enactment of the SFO and the amendments to the Listing Rules, effective on 31st March 2004, the Directors propose to amend the existing Bye-laws. In principle, the Bye-laws will be amended in the following respects:

• (a) “clearing house” shall be amended to mean a clearing house or authorised share depository recognised by the laws of the jurisdiction in which the shares are listed or quoted on a stock exchange in such jurisdiction;

• (b) in compliance with rule 13.46(2) and rule 2.07A(1) of the Listing Rules, the offer to allow Shareholders the chance to elect to receive in place of the complete annual report and accounts of the Group, a summary financial report of the Group and the distribution of corporate communications by electronic means;

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LETTER FROM THE BOARD

• (c) in compliance with paragraphs 4(4) and 4(5) of appendix 3 to the Listing Rules, the minimum length of the period during which notice to the Company of the intention to propose a person for election as a director and during which notice to the Company by such person of his willingness to be elected may be given will be at least 7 days, commencing no earlier than the day after the despatch of the notice of the meeting appointed for such election and ending no later than 7 days prior to the date of such meeting;

• (d) in compliance with paragraph 4(1) of appendix 3 to the Listing Rules, the Directors shall not vote on any board resolution approving any contract or arrangement or any other proposal in which he or any of his associates has a material interest and he shall not be counted in the quorum at the relevant board meeting; and

• (e) in compliance with paragraph 14 of appendix 3 to the Listing Rules, where any Shareholder is, under the Listing Rules, required to abstain from voting on any particular resolution or restricted to voting only for or against any particular resolution, any votes cast by or on behalf of such Shareholder in contravention of such requirement or restriction shall not be counted.

A special resolution will be proposed at the Annual General Meeting to seek the Shareholders’ approval of the above amendments to the Bye-laws.

ANNUAL GENERAL MEETING

A notice convening the Annual General Meeting to be held at 26th Floor, Central Tower, 28 Queen’s Road Central, Hong Kong on Monday, 24th May 2004 at 11:00 a.m. is set out on pages 11 to 19 of this circular for the purpose of considering and, if thought fit, passing the resolutions set out therein.

A form of proxy for use by the Shareholders at the Annual General Meeting is enclosed. Whether or not you are able to attend the Annual General Meeting, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon to the branch share registrars of the Company in Hong Kong, Secretaries Limited at Ground Floor, Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong as soon as possible but in any event, not less than 48 hours before the time appointed for holding the Annual General Meeting. Completion and return of the form of proxy will not preclude you from attending and voting in person at the Annual General Meeting or any adjournment thereof should you so wish.

PROCEDURE FOR DEMANDING A POLL

Pursuant to Bye-law 66 of the Bye-laws, at any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands unless (before or on the declaration of the result of the show of hands or on the withdrawal of any other demand for a poll) a poll is demanded (i) by the chairman of the meeting; or (ii) by at least three Shareholders present in person (or in the case of a Shareholder being a corporation by its duly authorised representative) or by proxy for the time being entitled to vote at the meeting; or (iii) by a Shareholder or Shareholders present in person (or in the case of a Shareholder being a

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LETTER FROM THE BOARD

corporation by its duly authorised representative) or by proxy and representing not less than one-tenth of the total voting rights of all Shareholders having the right to vote at the meeting; or (iv) by a Shareholder or Shareholders present in person (or in the case of a Shareholder being a corporation by its duly authorised representative) or by proxy and holding shares in the Company conferring a right to vote at the meeting being shares on which an aggregate sum has been paid up equal to not less than one-tenth of the total sum paid up on all shares conferring that right.

RECOMMENDATION

The Directors consider that the grant of the Repurchase Mandate and the Issue Mandate and the amendments to the Bye-laws are in the interests of the Company and the Shareholders. Accordingly, the Directors recommend that the Shareholders vote in favour of the resolutions as set out in the notice of the Annual General Meeting.

GENERAL

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

Yours faithfully, For and on behalf of LifeTec Group Limited Jay Chun Chairman

– 7 –

EXPLANATORY STATEMENT

APPENDIX

This appendix includes an explanatory statement required by the Stock Exchange to be presented to Shareholders concerning the Repurchase Mandate proposed to be granted to the Directors.

SHARE CAPITAL

As at the Latest Practicable Date, the issued share capital of the Company comprised 2,597,112,919 Shares and 340,000,000 units of Warrants in an aggregate amount of HK$34,680,000 on the basis of the subscription price of HK$0.102 per Share (subject to adjustment), entitling the Warrantholders to subscribe for 340,000,000 Shares

Subject to the passing of the relevant ordinary resolution to approve the Repurchase Mandate and on the basis that no further Shares are issued or repurchased between the Latest Practicable Date and the Annual General Meeting, the Company would be allowed under the Repurchase Mandate to repurchase a maximum of 259,711,291 Shares and a maximum of 34,000,000 Warrants.

REASONS FOR REPURCHASES

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

FUNDING OF REPURCHASES

Any repurchase will be made out of funds which are legally available for the purpose in accordance with the memorandum of association and bye-laws of the Company and the Companies Act. As compared with the financial position of the Company as at 31st December 2003 (being the date of its latest audited accounts), the Directors consider that there might be a material adverse impact on the working capital and on the gearing position of the Company in the event that the proposed repurchases were to be carried out in full during the proposed repurchase period.

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 of the Company or the gearing position which in the opinion of the Directors are from time to time appropriate for the Company.

UNDERTAKING OF THE DIRECTORS

The Directors have undertaken to the Stock Exchange to exercise the powers of the Company to make repurchases pursuant to the Repurchase Mandate in accordance with the Listing Rules, the applicable laws of Bermuda and the memorandum of association and byelaws of the Company.

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EXPLANATORY STATEMENT

APPENDIX

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

No connected persons (as defined in the Listing Rules) of the Company have notified the Company that they have a present intention to sell Securities to the Company nor have they undertaken not to sell any of the Securities held by them to the Company in the event that the Company is authorised to make repurchases of Securities.

EFFECT OF THE TAKEOVERS CODE

If as a result of a repurchase of Shares, a 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 Takeovers Code. As a result, a shareholder or a group of shareholders acting in concert, depending on the level of increase of the shareholder’s interest, could obtain or consolidate control of the Company and become obliged to make a mandatory offer in accordance with rule 26 of the Takeovers Code.

As at the Latest Practicable Date, Mr. Jay Chun has personal and corporate interests of 352,128,000 Shares and Mr. Shan Shiyong, alias, Sin Sai Yung has corporate interests of 353,190,000 Shares, representing approximately 13.56% and 13.60% of the existing issued share capital of the Company respectively. In the event that the Directors exercise in full the power to repurchase Shares pursuant to the Repurchase Mandate, the interests of Mr. Chun and Mr. Shan in the Company would be increased to approximately 15.06% and 15.11% respectively of the issued share capital of the Company. In the opinion of the Directors, such increases may not give rise to an obligation to make a mandatory offer under rule 26 of the Takeovers Code. The Directors are not aware of any consequence which the exercise in full of the Repurchase Mandate would have under the Takeovers Code.

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EXPLANATORY STATEMENT

APPENDIX

MARKET PRICE

The highest and lowest prices at which the Shares and Warrants were traded on the Stock Exchange in each of the previous twelve months immediately prior to the Latest Practicable Date were as follows:

	Shares	Shares	Warrants*	Warrants*
	Highest	Lowest	Highest	Lowest
	HK$	HK$	HK$		HK$
2003
April	0.1350	0.1080	–		–
May	0.1300	0.1000	–		–
June	0.1150	0.0930	–		–
July	0.1140	0.1000	–		–
August	0.1110	0.0710	–		–
September	0.1100	0.0870	–		–
October	0.0990	0.0780	–		–
November	0.0970	0.0810	–		–
December	0.0980	0.0870	–		–
			–		–
2004
January	0.1850	0.0940	–		–
February	0.2280	0.1560	0.1480	0.1100
March	0.2200	0.1460	0.1220	0.0740
April (up to the Latest Practicable Date)	0.2030	0.1850	0.1080	0.0900

* Dealings in the Warrants commenced on 27th February 2004.

SECURITIES REPURCHASES MADE BY THE COMPANY

The Company has repurchased an aggregate of 36,506,000 Shares on the Stock Exchange during the six months preceding the Latest Practicable Date, details of which are as follows:

		Highest	Lowest	Total
	No. of Shares	price paid	price paid	consideration
Date	repurchased	per Share	per Share	paid
9th March 2004	24,830,000	HK$0.157	HK$0.150	HK$3,809,330
10th March 2004	11,676,000	HK$0.149	HK$0.146	HK$1,718,696

Save as disclosed above, no repurchase of Securities has been made by the Company in the preceding six months (whether on the Stock Exchange or otherwise) ending on the Latest Practicable Date.

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NOTICE OF THE ANNUAL GENERAL MEETING

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(Incorporated in Bermuda with limited liability)

NOTICE IS HEREBY GIVEN that the annual general meeting of the shareholders of LifeTec Group Limited (the “Company”) will be held at 26th Floor, Central Tower, 28 Queen’s Road Central, Hong Kong on Monday, 24th May 2004 at 11:00 a.m. for the following purposes:

1. To receive and consider the audited financial statements, the directors’ report and the auditors’ report for the year ended 31st December 2003.

2. To re-elect the retiring directors.

3. To authorise the board of directors to fix their remuneration.

4. To re-appoint auditors and to authorise the board of directors to fix their remuneration.

5. To consider as special business, and if thought fit, pass with or without amendments, the following resolution as an Ordinary Resolution:

“ THAT :

• (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 securities of the Company on The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) or on any other stock exchange on which the securities 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 any other stock exchange as amended from time to time, be and is hereby generally and unconditionally approved;

• (b) the aggregate nominal amount of the securities of the Company to be repurchased by the Company pursuant to the approval in paragraph (a) above shall not exceed (i)10 per cent of the aggregate nominal amount of the issued share capital of the Company as at the date of this Resolution and (ii) 10 per cent of the warrants issued by the Company to subscribe for shares of the Company as at the date of this Resolution, and the said 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 earlier of:

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

* For identification purposes only

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NOTICE OF THE ANNUAL GENERAL MEETING

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

• (iii) the revocation or variation of the authority given under this Resolution by an ordinary resolution of the shareholders of the Company in general meeting.”

• To consider as special business, and if thought fit, pass with or without amendments, the following resolution as an Ordinary Resolution:

“ THAT :

• (a) subject to paragraph (c) 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 issue, allot and deal with additional securities of the Company, and 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 be and is hereby generally and unconditionally approved;

• (b) the approval in paragraph (a) of this Resolution 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;

• (c) the aggregate nominal amount of share capital allotted or agreed conditionally or unconditionally to be allotted (whether pursuant to an option or otherwise) and issued by the directors of the Company pursuant to the approval in paragraph (a) of this Resolution, otherwise than pursuant to (i) a Rights Issue (as hereinafter defined); or (ii) an issue of shares of the Company upon the exercise of rights of subscription or conversion under the terms of any warrants of the Company; or (iii) an issue of shares of the Company as scrip dividends pursuant to the bye-laws of the Company from time to time; or (iv) an issue of shares of the Company under any share option scheme or similar arrangement providing for the grant to employees (including executive directors) of the Company and/or any of its subsidiaries of the rights to subscribe for shares of the Company, shall not exceed 20 per cent of the aggregate nominal amount of the share capital of the Company in issue as at the date of this Resolution, and the said approval shall be limited accordingly; and

• (d) for the purposes of this Resolution:

“Relevant Period” means the period from the passing of this Resolution until whichever is the earlier of:

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

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

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NOTICE OF THE ANNUAL GENERAL MEETING

• (iii) the revocation or variation of the authority given under this Resolution by an ordinary resolution of the shareholders of the Company in general meeting.

“Rights Issue” means an offer of shares of the Company open for a period fixed by the directors of the Company to the holders of shares whose names appear on the register of members of the Company on a fixed record date in proportion to their then holdings of such shares as at that date (subject 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 law of, or the requirements of any recognised regulatory body or any stock exchange in, any territory applicable to the Company).”

1. To consider as special business, and if thought fit, pass with or without amendments, the following resolution as an Ordinary Resolution:

“ THAT the general mandate granted to the directors of the Company and for the time being in force to exercise the powers of the Company to allot shares and to make or grant offers, agreements and options which might require the exercise of such powers be and is hereby extended by addition thereto of an amount representing the aggregate nominal amount of securities in the capital of the Company which has been repurchased by the Company since the granting of such general mandate pursuant to the exercise by the directors of the Company of the powers of the Company to repurchase such amount of securities, provided that such amount shall not exceed (i) 10 per cent of the aggregate nominal amount of the issued share capital of the Company as at the date of this Resolution and (ii) 10 per cent of the warrants issued by the Company to subscribe for shares of the Company as at the date of passing this Resolution.”

1. To consider as special business, and if thought fit, pass with or without amendments, the following resolution as a Special Resolution:

“ THAT the following amendments to the bye-laws of the Company be and are hereby approved:

• (a) by adding the following definition after the definition of “Act” and before the definition of “Auditor”:

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

• (b) by deleting the definition of “clearing house” in its entirety and replacing it with the following definition:

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

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NOTICE OF THE ANNUAL GENERAL MEETING

• (c) by deleting the existing bye-law 2(e) in its entirety and replacing with the following new bye-law 2(e):

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

• (d) by replacing the “.” at the end of bye-law 2(j) with “; and”;

• (e) by adding the following wording as a new bye-law 2(k):

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

• (f) by adding the following new bye-law 75(3) after the existing bye-law 75(2):

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

• (g) by deleting the existing bye-law 88 in its entirety and replacing with the following new bye-law 88:

• “88. No person other than a Director retiring at the meeting shall, unless recommended by the Directors for election, be eligible for election as a Director at any general meeting unless a Notice signed by a Member (other than the person to be proposed) duly qualified to attend and vote at the meeting for which such notice is given of his intention to propose such person for election and also a Notice signed by the person to be proposed of his willingness to be elected shall have been lodged at the Office or the head office provided that the minimum length of the period, during which such notice(s) are given, shall be at least seven (7) days and that the period for lodgement of such notice(s) shall commence no earlier than the day after the dispatch of the notice of the general meeting appointed for such election and end no later than seven (7) days prior to the date of such general meeting.”;

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• (h) by deleting the existing bye-law 103 in its entirety and replacing with the following new bye-law 103:

• “103.(1) A Director shall not vote (nor be counted in the quorum) on any resolution of the Board approving any contract or arrangement or any other proposal in which he or any of his associates is materially interested, but this prohibition shall not apply to any of the following matters namely:

  • (i) any contract or arrangement for giving to such Director or his associate(s) any security or indemnity in respect of money lent by him or any of his associate(s) or obligations undertaken by him or any of his associate(s) at the request of or for the benefit of the Company or any of its subsidiaries;

  • (ii) any contract or arrangement for the giving of any security or indemnity to a third party in respect of a debt or obligation of the Company or any of its subsidiaries for which the Director or his associate(s) has himself/themselves assumed responsibility in whole or in part whether alone or jointly under a guarantee or indemnity or by the giving of security;

  • (iii) any contract or arrangement concerning an offer of shares or debentures or other securities of or by the Company or any other company which the Company may promote or be interested in for subscription or purchase, where the Director or his associate(s) is/are or is/are to be interested as a participant in the underwriting or subunderwriting of the offer;

  • (iv) any contract or arrangement in which the Director or his associate(s) is/are interested in the same manner as other holders of shares or debentures or other securities of the Company by virtue only of his/ their interest in shares or debentures or other securities of the Company;

  • (v) any contract or arrangement concerning any other company in which the Director or his associate(s) is/are interested only, whether directly or indirectly, as an officer or executive or shareholder other than a company in which the Director and/or his associate(s) is/are beneficially interested in shares of that company, provided that the Director and any of his associates are not in aggregate beneficially interested in five (5) per cent. or more of the issued shares or of the voting rights of any class of shares of such company (or any third company through which his interest or that of any of his associates is derived); or

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• (vi) any proposal concerning the adoption, modification or operation of a share option or share incentive scheme, a pension fund or retirement, death or disability benefits scheme or other arrangement which relates both to directors, his associates and employees of the Company or any of its subsidiaries and does not provide in respect of any Director or his associates(s) as such any privilege or advantage not generally accorded to the class of persons to which such scheme or fund relates.

• (2) A company shall be deemed to be a company in which a Director and/or his associate(s) owns five (5) per cent. or more if and so long as (but only if and so long as) he and/or his associates (either directly or indirectly) are the holders of or beneficially interested in five (5) per cent. or more of any class of the equity share capital of such company of the voting rights available to members of such company (or of any third company through which his interest or that of any of his associates is derived). For the purpose of this paragraph there shall be disregarded any shares held by a Director or his associate(s) as bare or custodian trustee and in which he or any of them has no beneficial interest, any shares comprised in a trust in which the interests of the Director or his associate(s) is/are in reversion or remainder if and so long as some other person is entitled to receive the income thereof, and any shares comprised in an authorised unit trust scheme in which the Director or his associate(s) is/are interested only as a unit holder and any shares which carry no voting right at general meetings and very restrictive dividend and return of capital right.

• (3) Where a company in which a Director and/or his associate(s) holds five (5) per cent. or more is/are materially interested in a transaction, then that Director and/or his associate(s) shall also be deemed materially interested in such transaction.

• (4) If any question shall arise at any meeting of the Board as to the materiality of the interest of a Director (other than the chairman of the meeting) or his associate(s) or as to the entitlement of any Director (other than such chairman) to vote and such question is not resolved by his voluntarily agreeing to abstain from voting, such question shall be referred to the chairman of the meeting and his ruling in relation to such other Director shall be final and conclusive except in a case where the nature or extent of the interest of the Director and/or his associate(s) concerned as known to such Director has not been fairly disclosed to the Board. If any question as aforesaid shall arise in respect of the chairman of the meeting such question shall be decided by a resolution of the Board (for which purpose such chairman shall not vote thereon) and such resolution shall be final and conclusive except in a case where the nature or extent of the interest of such chairman and/or his associates as known to such chairman has not been fairly disclosed to the Board.”;

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• (i) by inserting the words “and Bye-law 153A” after the words “Subject to Section 88 of the Act” in bye-law 153;

• (j) by inserting the following bye-law as a new bye-law 153A:

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

• (k) by inserting the following bye-law as a new bye-law 153B:

• “153B. The requirement to send to a person referred to in Bye-law 153 the documents referred to in that provision or a summary financial report in accordance with Bye-law 153A shall be deemed satisfied where, in accordance with all applicable Statutes, rules and regulations, including, without limitation, the rules of the Designated Stock Exchange, the Company publishes copies of the documents referred to in Bye-law 153 and, if applicable, a summary financial report complying with Bye-law 153A, on the Company’s computer network or in any other permitted manner (including by sending any form of electronic communication), and that person has agreed or is deemed to have agreed to treat the publication or receipt of such documents in such manner as discharging the Company’s obligation to send to him a copy of such documents.”; and

• (l) by deleting the existing bye-laws 160 and 161 in their entirety and replacing them with the following bye-laws:

• “160. Any Notice or document (including any “corporate communication” within the meaning ascribed thereto under the rules of the Designated Stock Exchange), whether or not, to be given or issued under these Bye-laws from the Company to a Member shall be in writing or by cable, telex or facsimile transmission message or other form of electronic transmission or communication and any such Notice and document may be served or delivered by the Company on or to any Member either personally or by sending it through the post in a prepaid envelope addressed to such Member at his registered address as appearing in the Register or at any other address supplied by him to the Company for the purpose or, as the case may be, by

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transmitting it to any such address or transmitting it to any telex or facsimile transmission number or electronic number or address or website supplied by him to the Company for the giving of Notice to him or which the person transmitting the notice reasonably and bona fide believes at the relevant time will result in the Notice being duly received by the Member or may also be served by advertisement in appointed newspapers (as defined in the Act) or in newspapers published daily and circulating generally in the territory of and in accordance with the requirements of the Designated Stock Exchange or, to the extent permitted by the applicable laws, by placing it on the Company’s website and giving to the member a notice stating that the notice or other document is available there (a “notice of availability”). The notice of availability may be given to the Member by any of the means set out above. In the case of joint holders of a share all notices shall be given to that one of the joint holders whose name stands first in the Register and notice so given shall be deemed a sufficient service on or delivery to all the joint holders.

1. Any Notice or other document:

2. (a) if served or delivered by post, shall where appropriate be sent by airmail and shall be deemed to have been served or delivered on the day following that on which the envelope containing the same, properly prepaid and addressed, is put into the post; in proving such service or delivery it shall be sufficient to prove that the envelope or wrapper containing the notice or document was properly addressed and put into the post and a certificate in writing signed by the Secretary or other officer of the Company or other person appointed by the Board that the envelope or wrapper containing the notice or other document was so addressed and put into the post shall be conclusive evidence thereof;

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

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

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

By Order of the Board Poon Yick Pang, Philip Company Secretary

23rd April 2004

Head Office and Principal Place of Business: 26th Floor Central Tower 28 Queen’s Road Central Hong Kong

Registered Office: Clarendon House 2 Church Street Hamilton HM 11 Bermuda

Notes:

• (1) A shareholder entitled to attend and vote at the meeting may appoint one or more than one proxy to attend and to vote instead of him. A proxy need not be a shareholder of the Company.

• (2) In the case of joint holders of any share, any one of such persons may vote at the said meeting, either personally or by proxy, in respect of such share as if he was solely entitled thereto, but if more than one of such joint holders is present at the said meeting, personally or by proxy, that one of the said persons so present whose name stands first on the register of members in respect of such share shall alone be entitled to vote in respect thereof.

• (3) In order to be valid, the form of proxy together with the power of attorney or other authority (if any) under which it is signed or a notarially certified copy of that power or authority, must be deposited at the branch share registrars of the Company in Hong Kong, Secretaries Limited at Ground Floor, Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong not less than 48 hours before the time appointed for holding the meeting. Completion and return of a form or proxy will not preclude shareholders from attending and voting in person should they so desire.

• (4) A form of proxy for use at the meeting is enclosed herewith.

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